Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2020 | Apr. 22, 2020 | |
Document And Entity Information [Abstract] | |||
Document Transition Report | false | ||
Document Quarterly Report | true | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 75-2969997 | ||
Entity Address, Address Line One | 200 CRESCENT COURT, SUITE 1200 | ||
Title of 12(b) Security | Common stock, par value $0.01 per share | ||
Entity Registrant Name | WESTWOOD HOLDINGS GROUP, INC. | ||
City Area Code | 214 | ||
Local Phone Number | 756-6900 | ||
Entity Central Index Key | 0001165002 | ||
Document Type | 10-Q | 10-Q | |
Document Period End Date | Jun. 30, 2020 | ||
Entity File Number | 1-31234 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | Q2 | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Shell Company | true | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 8,445,149 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Trading Symbol | WHG | ||
Security Exchange Name | NYSE | ||
Entity Address, City or Town | DALLAS, | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 75201 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Operating Lease, Liability, Current | $ 1,666,000 | $ 1,584,000 |
Current Assets: | ||
Cash and cash equivalents | 43,926,000 | 49,766,000 |
Accounts receivable | 10,751,000 | 13,177,000 |
Investments, at fair value | 30,228,000 | 50,324,000 |
Income Taxes Receivable, Current | 709,000 | 1,150,000 |
Other current assets | 1,764,000 | 2,544,000 |
Total current assets | 87,378,000 | 116,961,000 |
Long-term Investments | 8,154,000 | 8,154,000 |
Long-term Investments Carried at Fair Value | 3,401,000 | 4,238,000 |
Goodwill | 19,804,000 | 19,804,000 |
Deferred income taxes | 3,139,000 | 2,216,000 |
Operating lease right-of-use assets | 6,981,000 | 7,562,000 |
Intangible assets, net | 14,398,000 | 15,256,000 |
Property and equipment, net of accumulated depreciation of $7,827 and $7,395 | 3,741,000 | 4,152,000 |
Other long-term assets | 425,000 | 364,000 |
Total assets | 147,421,000 | 178,707,000 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 1,781,000 | 2,145,000 |
Dividends payable | 1,127,000 | 7,362,000 |
Compensation and benefits payable | 3,912,000 | 9,975,000 |
Income taxes payable | 192,000 | 289,000 |
Total current liabilities | 8,678,000 | 21,355,000 |
Accrued dividends | 371,000 | 1,303,000 |
Operating Lease, Liability, Noncurrent | 6,943,000 | 7,762,000 |
Total liabilities | 15,992,000 | 30,420,000 |
Commitments and contingencies | ||
Stockholders' Equity: | ||
Common stock, $0.01 par value, authorized 25,000,000 shares, issued 10,558,111 and outstanding 8,382,342 shares at June 30, 2020; issued 10,306,570 and outstanding 8,881,086 shares at December 31, 2019 | 106,000 | 103,000 |
Additional paid-in capital | 208,572,000 | 203,441,000 |
Treasury stock, at cost - 2,175,758 shares at June 30, 2020; 1,425,483 shares at December 31, 2019 | (78,050,000) | (63,281,000) |
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | (4,814,000) | (2,943,000) |
Retained earnings | 5,615,000 | 10,967,000 |
Total stockholders' equity | 131,429,000 | 148,287,000 |
Total liabilities and stockholders' equity | $ 147,421,000 | $ 178,707,000 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation | $ 7,144 | $ 6,462 |
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 | 10,314,305 | 10,182,583 |
Common stock, shares outstanding | 8,906,152 | 8,904,902 |
Treasury stock, shares | 1,408,152 | 1,277,681 |
Long-term Investments Carried at Fair Value | $ 3,401 | $ 4,238 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
REVENUES: | ||||
Other Revenue, Net | $ 155 | $ 450 | $ (229) | $ 1,187 |
Total revenues | 15,875 | 21,709 | 32,544 | 45,571 |
EXPENSES: | ||||
Employee compensation and benefits | 10,787 | 11,378 | 23,455 | 25,988 |
Sales and marketing | 253 | 514 | 731 | 1,044 |
Westwood mutual funds | 434 | 661 | 949 | 1,507 |
Information technology | 2,030 | 2,282 | 4,061 | 4,259 |
Professional services | 991 | 1,169 | 2,184 | 2,318 |
General and administrative | 2,191 | 2,402 | 4,497 | 4,836 |
Foreign Currency Transaction Gain (Loss), before Tax | 1,323 | 724 | (1,615) | 1,544 |
Total expenses | 18,009 | 19,130 | 34,262 | 41,496 |
Operating Income (Loss) | (2,134) | 2,579 | (1,718) | 4,075 |
Unrealized gains (losses) on private investments | 159 | (836) | 0 | |
Gain on sale of operations | 668 | 0 | ||
Other Income | 34 | 68 | 77 | |
Income (loss) before income taxes | (1,817) | 2,656 | (1,818) | 4,152 |
Income tax expense (benefit) | 758 | 795 | (345) | 1,899 |
Net income (loss) | (2,575) | 1,861 | (1,473) | 2,253 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 1,371 | 735 | (1,871) | 1,566 |
Total comprehensive income (loss) | $ (1,204) | $ 2,596 | $ (3,344) | $ 3,819 |
Earnings (loss) per share: | ||||
Basic (dollars per share) | $ (0.33) | $ 0.22 | $ (0.18) | $ 0.27 |
Diluted (dollars per share) | $ (0.33) | $ 0.22 | $ (0.18) | $ 0.27 |
Weighted average shares outstanding: | ||||
Basic (shares) | 7,879,698 | 8,446,610 | 8,147,045 | 8,406,367 |
Diluted (shares) | 7,879,698 | 8,476,777 | 8,147,045 | 8,467,589 |
Investment Income, Investment Expense | $ 124 | $ 0 | ||
Asset Management [Member] | ||||
Revenue from Contract with Customer, Including Assessed Tax | $ 9,328 | $ 14,695 | 20,430 | 31,101 |
Investment Performance [Member] | ||||
Revenue from Contract with Customer, Including Assessed Tax | 120 | 695 | 300 | |
Fiduciary and Trust [Member] | ||||
Revenue from Contract with Customer, Including Assessed Tax | 5,657 | 6,444 | 11,608 | 12,983 |
Trust performance-based fees [Member] | ||||
Revenue from Contract with Customer, Including Assessed Tax | $ 40 | $ 0 | $ 40 | $ 0 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] |
BALANCE at Dec. 31, 2018 | $ 161,149 | $ 104 | $ 197,598 | $ (62,077) | $ (4,052) | $ 24,537 |
BALANCE, shares at Dec. 31, 2018 | 8,975,865 | |||||
Net Income (Loss) Attributable to Parent | 2,253,000 | |||||
Foreign currency translation adjustments | 1,566,000 | |||||
Other Comprehensive Income (Loss), Net of Tax | 1,566 | 1,566 | ||||
Issuance of restricted stock, net of forfeitures | 0 | $ 2 | (2) | |||
Issuance of restricted stock, net of forfeitures, shares | 153,780 | |||||
Dividends declared | (12,724) | (12,724) | ||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 5,683 | 5,683 | ||||
Adjustments to Additional Paid in Capital, Other | 231 | 231 | ||||
Purchases of treasury stock, shares | (51,913) | |||||
Purchases of treasury stock | (1,787) | (1,787) | ||||
Restricted stock returned for payment of taxes | (2,385) | (2,385) | ||||
Restricted stock returned for payment of taxes, shares | 62,036 | |||||
BALANCE at Jun. 30, 2019 | 153,986 | $ 104 | 200,028 | (62,883) | (3,317) | 20,054 |
BALANCE, shares at Jun. 30, 2019 | 8,944,733 | |||||
BALANCE at Mar. 31, 2019 | 138,389,000 | $ 102 | 194,116 | (58,711) | (4,883) | 30,525 |
BALANCE, shares at Mar. 31, 2019 | 8,904,902 | |||||
Net Income (Loss) Attributable to Parent | 1,861,000 | |||||
Foreign currency translation adjustments | 735,000 | |||||
Other Comprehensive Income (Loss), Net of Tax | 735 | 735 | ||||
Issuance of restricted stock, net of forfeitures, shares | (4,266) | |||||
Dividends declared | (6,344) | (6,344) | ||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 2,430 | 2,430 | ||||
Purchases of treasury stock, shares | (26,866) | |||||
Purchases of treasury stock | (806) | (806) | ||||
BALANCE at Jun. 30, 2019 | 153,986 | $ 104 | 200,028 | (62,883) | (3,317) | 20,054 |
BALANCE, shares at Jun. 30, 2019 | 8,944,733 | |||||
BALANCE at Dec. 31, 2019 | $ 148,287,000 | $ 106,000 | 206,267,000 | (69,965,000) | (6,185,000) | 8,166,000 |
BALANCE, shares at Dec. 31, 2019 | 8,904,902 | 8,780,041 | ||||
Net Income (Loss) Attributable to Parent | $ (1,473,000) | |||||
Foreign currency translation adjustments | (1,871,000) | |||||
Other Comprehensive Income (Loss), Net of Tax | (1,871,000) | (1,871,000) | ||||
Issuance of restricted stock, net of forfeitures | 0 | $ 3,000 | (3,000) | |||
Issuance of restricted stock, net of forfeitures, shares | 251,531 | |||||
Dividends declared | (3,879,000) | (3,879,000) | ||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 4,921,000 | 4,921,000 | ||||
Adjustments to Additional Paid in Capital, Other | 213,000 | 213,000 | ||||
Purchases of treasury stock, shares | (679,756) | |||||
Purchases of treasury stock | (12,952,000) | (12,952,000) | ||||
Restricted stock returned for payment of taxes | (1,120,000) | (1,120,000) | ||||
Purchase of treasury stock under employee stock plans (in shares) | (27,474) | |||||
Purchase of treasury stock under employee stock plans | (697,000) | (697,000) | ||||
Restricted stock returned for payment of taxes, shares | 43,045 | |||||
BALANCE at Jun. 30, 2020 | $ 131,429,000 | $ 106,000 | 208,572,000 | (78,050,000) | (4,814,000) | 5,615,000 |
BALANCE, shares at Jun. 30, 2020 | 8,906,152 | 8,382,342 | ||||
BALANCE at Mar. 31, 2020 | $ 148,287,000 | $ 103,000 | 203,441,000 | (63,281,000) | (2,943,000) | 10,967,000 |
BALANCE, shares at Mar. 31, 2020 | 8,881,086 | |||||
Net Income (Loss) Attributable to Parent | (2,575,000) | |||||
Foreign currency translation adjustments | 1,371,000 | |||||
Other Comprehensive Income (Loss), Net of Tax | 1,371,000 | 1,371,000 | ||||
Issuance of restricted stock, net of forfeitures | $ 0 | 0 | ||||
Issuance of restricted stock, net of forfeitures, shares | 9,998 | |||||
Dividends declared | 24,000 | 24,000 | ||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 2,305,000 | 2,305,000 | ||||
Purchases of treasury stock, shares | (407,697) | |||||
Purchases of treasury stock | (8,085,000) | (8,085,000) | ||||
BALANCE at Jun. 30, 2020 | $ 131,429,000 | $ 106,000 | $ 208,572,000 | $ (78,050,000) | $ (4,814,000) | $ 5,615,000 |
BALANCE, shares at Jun. 30, 2020 | 8,906,152 | 8,382,342 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared per share (dollars per share) | $ 0 | $ 0.72 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Income (Loss) Attributable to Parent | $ (1,473) | $ 2,253 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation | 465 | 425 |
Amortization of intangible assets | 858 | 836 |
Unrealized (gains) losses on investments | 904 | (600) |
Stock based compensation expense | 4,921 | 5,683 |
Deferred income taxes | (939) | 763 |
Non-cash lease expense | 615 | 561 |
Change in operating assets and liabilities: | ||
Net sales of investments - trading securities | 20,029 | 18,779 |
Accounts receivable | 2,350 | 4,891 |
Other current assets | 709 | (589) |
Accounts payable and accrued liabilities | (361) | (604) |
Compensation and benefits payable | (5,790) | (10,357) |
Income taxes payable | 307 | (288) |
Other liabilities | (771) | (692) |
Net Cash Provided by (Used in) Operating Activities | 21,824 | 21,061 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (56) | (402) |
Payments to Acquire Intangible Assets | 0 | (250) |
Net Cash Provided by (Used in) Investing Activities | (56) | (652) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Purchases of treasury stock | (12,952) | (806) |
Payment for Repurchases of Stock for Benefit Plan | (697) | (981) |
Restricted stock returned for payment of taxes | (1,120) | (2,385) |
Cash dividends paid | (11,043) | (13,860) |
Net Cash Provided by (Used in) Financing Activities | (25,812) | (18,032) |
Effect of currency rate changes on cash | (1,796) | 1,484 |
Net Change in Cash and Cash Equivalents | (5,840) | 3,861 |
Cash and cash equivalents, beginning of period | 49,766 | 52,449 |
Cash and cash equivalents, end of period | 43,926 | 56,310 |
Supplemental cash flow information: | ||
Cash paid during the period for income taxes | 288 | 1,417 |
Accrued dividends | 1,498 | 8,150 |
Accrued purchase of property and equipment | $ 0 | $ 203 |
DESCRIPTION OF THE BUSINESS
DESCRIPTION OF THE BUSINESS | 6 Months Ended |
Jun. 30, 2020 | |
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 wholly-owned subsidiaries, Westwood Management Corp. and Westwood Advisors, L.L.C. (referred to hereinafter together as “Westwood Management”), Westwood Trust and Westwood International Advisors Inc. (“Westwood International Advisors”). Westwood Management provides investment advisory services to institutional clients, a family of mutual funds called the Westwood Funds®, other mutual funds, individual investors and clients of Westwood Trust. Westwood International Advisors provides investment advisory services to institutional clients, the Westwood Funds®, other mutual funds, the UCITS Fund (which was liquidated in June 2020), individual investors and clients of Westwood Trust. Westwood Trust provides trust and custodial services and participation in self-sponsored common trust funds (“CTFs”) 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 registered with the Securities and Exchange Commission ("SEC") as an investment advisor ("RIA") under the Investment Advisers Act of 1940. Westwood Trust is chartered and regulated by the Texas Department of Banking. Westwood International Advisors is registered as a portfolio manager and exempt market dealer with the Ontario Securities Commission and the Autorité des marchés financiers in Québec. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 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 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, 2019, filed with the SEC. Operating results for the periods in these Condensed Consolidated Financial Statements are not necessarily indicative of 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 August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement . The purpose of this amendment is to modify, remove and add certain disclosure requirements for fair value measurements. Under ASU 2018-13, entities are required to disclose the amount of total gains or losses recognized in other comprehensive income attributable to assets and liabilities categorized within Level 3 of the fair value hierarchy. The ASU includes an incremental requirement about significant unobservable inputs for Level 3 fair value measurements. The requirement to disclose reasons for transfers between Level 1 and Level 2 was removed. Various requirements for Level 3 disclosure were also modified. The amendments in this ASU are effective for all entities for fiscal years and interim periods beginning after December 15, 2019. We adopted this ASU as of January 1, 2020, and further information is included in Note 6 "Fair Value." There was no significant impact on our Condensed Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Topic 350): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The purpose of this amendment is to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The amendments in this update are effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. We adopted this ASU as of January 1, 2020 under the prospective transition method. Incremental costs related to hosting arrangements will be recorded on the Condensed Consolidated Balance Sheets in either other current or other long-term assets, instead of intangible assets, net. Related amortization will be recorded in information technology expense on the Condensed Consolidated Statements of Comprehensive Income (Loss), amortization of previously capitalized costs were recorded in general and administrative expense. In May 2019, the FASB issued ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief. The purpose of this amendment is to amend ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments , to allow companies to irrevocably elect, upon adoption of ASU 2016-13, the fair value option on financial instruments that were previously recorded at amortized cost and are within the scope of ASC 326-20, Financial Instruments-Credit Losses: Amortization Cost , if the instruments are eligible for the fair value option under Accounting Standards Codification 825 - Financial Instruments . The fair value option election does not apply to held-to-maturity debt securities. The amendments in this update are effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. We adopted this ASU as of January 1, 2020, and it did not have a significant impact on our Condensed Consolidated Financial Statements. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS (LOSS) PER SHARE Basic earnings (loss) per common share is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares outstanding for the applicable period. Diluted earnings (loss) 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 326,000 and 131,000 anti-dilutive restricted shares outstanding for the three months ended June 30, 2020 and June 30, 2019, respectively. There were approximately 229,000 and 91,000 anti-dilutive restricted shares outstanding for the six months ended June 30, 2020 and June 30, 2019, respectively. The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except per share and share amounts): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net income (loss) $ (2,575) $ 1,861 $ (1,473) $ 2,253 Weighted average shares outstanding - basic 7,879,698 8,446,610 8,147,045 8,406,367 Dilutive potential shares from unvested restricted shares — 30,167 — 61,222 Weighted average shares outstanding - diluted 7,879,698 8,476,777 8,147,045 8,467,589 Earnings (loss) per share: Basic $ (0.33) $ 0.22 $ (0.18) $ 0.27 Diluted $ (0.33) $ 0.22 $ (0.18) $ 0.27 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS 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 Our strategic investment in InvestCloud, discussed in Note 5 “Investments,” is excluded from the recurring fair value table shown below because we have elected to apply the measurement alternative for this investment. The following table summarizes the values of our investments measured at fair value on a recurring basis within the fair value hierarchy as of the dates indicated (in thousands): Level 1 Level 2 Level 3 Investments Measured at NAV (1) Total As of June 30, 2020: Investments in trading securities $ 30,228 $ — $ — $ — $ 30,228 Private investment fund — — — 87 87 Private equity — — 3,314 — 3,314 Total assets measured at fair value $ 30,228 $ — $ 3,314 $ 87 $ 33,629 As of December 31, 2019: Investments in trading securities $ 50,324 $ — $ — $ — $ 50,324 Private investment fund — — — 263 263 Private equity — — 3,975 — 3,975 Total assets measured at fair value $ 50,324 $ — $ 3,975 $ 263 $ 54,562 (1) Comprised of certain investments measured at fair value using net asset value ("NAV") as a practical expedient. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on our Condensed Consolidated Balance Sheets. Our investment in Charis is included within Level 3 of the fair value hierarchy as we value that investment utilizing inputs not observable in the market. Our investment is measured at fair value on a recurring basis using a market approach based on a price to tangible book value multiple range that is determined to be reasonable in the current environment, or market transactions. Management believes this valuation methodology is consistent with the banking industry and we will reevaluate our methodology and inputs on a quarterly basis. The following table summarizes the changes in Level 3 investments measured at fair value on a recurring basis for the periods presented (in thousands): Fair Value using Significant Unobservable Inputs (Level 3) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Beginning balance $ 2,980 $ — $ 3,975 $ — Unrealized gains (losses) on private investments 334 — (661) — Ending balance $ 3,314 $ — $ 3,314 $ — |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
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 most recent annual goodwill impairment assessment during the third quarter of 2019 and determined that no impairment loss was required. No impairments on goodwill were recorded during the six months ended June 30, 2020 or 2019. A continued trend of weaker than anticipated Company financial performance, significant net outflows of AUM, a decline in the Company’s share price for a sustained period of time, or an increase in the market-based weighted average cost of capital, any of which could be caused or exacerbated in the future by the effects of COVID-19, among other factors, could significantly impact our annual impairment analysis and may result in future goodwill impairment charges that, if incurred, could have a material adverse effect on the Company’s financial condition and results of operations. Other Intangible Assets |
REVENUE (Notes)
REVENUE (Notes) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer, Excluding Assessed Tax | REVENUE Revenue Recognition Revenues are recognized when the performance obligation (the investment management and advisory or trust services provided to the client) defined by the investment advisory or sub-advisory agreement is satisfied. For each performance obligation, we determine at contract inception whether the revenue satisfies over time or at a point in time. We derive our revenues from investment advisory fees, trust fees and other sources of revenues. Advisory and trust fees are calculated based on a percentage of AUM and the performance obligation is realized over the current calendar quarter. Once clients receive our investment advisory services we have an enforceable right to payment. Advisory Fee Revenues Our advisory fees are generated by Westwood Management and Westwood International Advisors, which manage client accounts under investment advisory and sub-advisory agreements. Advisory fees are typically calculated based on a percentage of AUM and are paid in accordance with the terms of the agreements. Advisory fees are paid quarterly in advance based on AUM on the last day of the preceding quarter, quarterly in arrears based on AUM on the last day of the quarter just ended or are based on a daily or monthly analysis of AUM for the stated period. We recognize advisory fee revenues as services are rendered. Since our advance paying clients' billing periods coincide with the calendar quarter to which such payments relate, revenue is recognized within the quarter and our Condensed Consolidated Financial Statements contain no deferred advisory fee revenues. Advisory clients typically consist of institutional and mutual fund accounts. Institutional investors include separate accounts of (i) corporate pension and profit sharing plans, public employee retirement funds, Taft-Hartley plans, endowments, foundations and individuals; (ii) subadvisory relationships where Westwood provides investment management services for funds offered by other financial institutions; (iii) pooled investment vehicles, including the UCITS Fund and collective investment trusts; and (iv) managed account relationships with brokerage firms and other registered investment advisors that offer Westwood products to their customers. The UCITS Fund was liquidated in June 2020. Mutual funds include the Westwood Funds®, a family of mutual funds for which Westwood Management serves as advisor. These funds are available to individual investors, as well as offered as part of our investment strategies for institutional investors and wealth management accounts. Arrangements with Performance-Based Obligations A limited number of our advisory clients have a contractual performance-based fee component in their contracts, which generates additional revenues if we outperform a specified index over a specific period of time, and a limited number of our mutual fund offerings have fees that generate additional revenues if we outperform specified indices over specific periods of time. The revenue is based on future market performance and is subject to factors outside our control. We cannot conclude that a significant reversal in the cumulative amount of revenue recognized will not occur during the measurement period, and therefore the revenue is recorded at the end of the measurement period when the performance obligation has been satisfied. Trust Fee Revenues Our trust fees are generated by Westwood Trust pursuant to trust or custodial agreements. Trust fees are separately negotiated with each client and are generally based on a percentage of AUM. Westwood Trust also provides trust services to a small number of clients on a fixed fee basis. The fees for most of our trust clients are calculated quarterly in arrears, based on a daily average of AUM for the quarter, or monthly, based on the month-end value of AUM. Since billing periods for most of Westwood Trust’s clients coincide with the calendar quarter, revenue is fully recognized within the quarter and our Condensed Consolidated Financial Statements contain no deferred advisory fee revenues. Revenue Disaggregated Sales taxes are excluded from revenues. The following table presents our revenue disaggregated by account type (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Advisory Fees: Institutional $ 6,857 $ 9,372 $ 14,757 $ 19,811 Mutual Funds 2,393 5,212 5,464 11,077 Wealth Management 78 111 209 213 Performance-based 695 120 695 300 Trust Fees 5,657 6,444 11,608 12,983 Trust performance-based Fees 40 — 40 — Other, net 155 450 (229) 1,187 Total revenues $ 15,875 $ 21,709 $ 32,544 $ 45,571 We serve clients in various locations around the world. The following table presents our revenue disaggregated by our clients' geographical locations (in thousands): Three Months Ended June 30, 2020 Advisory Trust Performance-based Other Total Asia $ 312 $ — $ — $ — $ 312 Canada 407 — — — 407 Europe 814 — 94 — 908 United States 7,795 5,657 641 155 14,248 Total $ 9,328 $ 5,657 $ 735 $ 155 $ 15,875 Three Months Ended June 30, 2019 Advisory Trust Performance-based Other Total Asia $ 407 $ — $ — $ — $ 407 Canada 702 — — 44 746 Europe 872 — 120 — 992 United States 12,714 6,444 — 406 19,564 Total $ 14,695 $ 6,444 $ 120 $ 450 $ 21,709 |
INCOME TAXES (Notes)
INCOME TAXES (Notes) | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | INCOME TAXESOur income tax rate differed from the 21% statutory rate for the second quarter of 2020 primarily due to the impact of certain deferred tax assets that offset the discrete benefit adjustment related to the remeasurement of certain deferred taxes following the enactment of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") recorded in the first quarter of 2020. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Some of our directors, executive officers and their affiliates invest personal funds directly in trust accounts that we manage. For both the three months ended June 30, 2020 and 2019, we recorded trust fees from these accounts of $0.1 million. For both the six months ended June 30, 2020 and 2019, we recorded trust fees from these accounts of $0.2 million. There was approximately $0.1 million due from these accounts as of both June 30, 2020 and December 31, 2019. The Company engages in transactions with its affiliates in the ordinary course of business. Westwood International Advisors 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 (the fund has been liquidated as of June 2020), 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 by the funds directly. The fees are based on negotiated fee schedules applied to AUM. For the three months ended June 30, 2020 and 2019, the Company earned approximately $0.2 million and $0.8 million, respectively, in fees from the affiliated funds. As of June 30, 2020, all of these fees had been collected. As of December 31, 2019, $0.2 million, of these fees were outstanding and included in “Accounts receivable” on our Condensed Consolidated Balance Sheets. |
LEASES (Notes)
LEASES (Notes) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
LEASES | LEASESAs of June 30, 2020, there have been no material changes outside the ordinary course of business to our leases since December 31, 2019. For information regarding our leases, refer to Note 15 “Leases” in Part IV, Item 15. “Exhibits, Financial Statement Schedules” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2020 | |
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. Refer to the "Supplemental Financial Information" section in Item 2. "Management Discussion and Analysis of Financial Conditions and Results" for the Economic Earnings calculation. 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 (i) corporate pension and profit sharing plans, public employee retirement funds, Taft-Hartley plans, endowments, foundations and individuals, (ii) subadvisory relationships where Westwood provides investment management services to the Westwood Funds®, funds offered by other financial institutions and funds offered by our Trust segment and (iii) pooled investment vehicles, including the UCITS Fund (which was liquidated in June 2020) and collective investment trusts. Westwood Management and Westwood International Advisors, which provide investment advisory services to similar clients, are included in our Advisory segment. 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. (in thousands) Advisory Trust Westwood Eliminations Consolidated Three Months Ended June 30, 2020 Net fee revenues from external sources $ 10,023 $ 5,697 $ — $ — $ 15,720 Net intersegment revenues 595 68 — (663) — Net interest and dividend revenue 10 — — — 10 Other, net 145 — — — 145 Total revenues $ 10,773 $ 5,765 $ — $ (663) $ 15,875 Segment assets $ 239,726 $ 50,955 $ 17,534 $ (160,794) $ 147,421 Segment goodwill $ 3,403 $ 16,401 $ — $ — $ 19,804 Three Months Ended June 30, 2019 Net fee revenues from external sources $ 14,815 $ 6,444 $ — $ — $ 21,259 Net intersegment revenues 866 71 — (937) — Net interest and dividend revenue 192 91 — — 283 Other, net 174 (7) — — 167 Total revenues $ 16,047 $ 6,599 $ — $ (937) $ 21,709 Segment assets $ 232,380 $ 64,771 $ 19,338 $ (137,003) $ 179,486 Segment goodwill $ 3,403 $ 16,401 $ — $ — $ 19,804 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Event [Line Items] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Westwood International Advisors On July 27, 2020, our Board of Directors approved the closure of Westwood International Advisors and our Toronto office. As a result of those closures, we currently expect to incur net expenses of approximately $0.4 million in the second half of 2020. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
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, with adjustments for forfeitures recorded as they occur. |
Restricted Stock Subject To Service And Performance Conditions Policy [Text Block] | 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 specific goals for that year’s vesting of the restricted shares. The date that the Compensation Committee establishes annual goals 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 specific performance goals 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. |
Revenue [Policy Text Block] | Revenue Recognition Revenues are recognized when the performance obligation (the investment management and advisory or trust services provided to the client) defined by the investment advisory or sub-advisory agreement is satisfied. For each performance obligation, we determine at contract inception whether the revenue satisfies over time or at a point in time. We derive our revenues from investment advisory fees, trust fees and other sources of revenues. Advisory and trust fees are calculated based on a percentage of AUM and the performance obligation is realized over the current calendar quarter. Once clients receive our investment advisory services we have an enforceable right to payment. Advisory Fee Revenues Our advisory fees are generated by Westwood Management and Westwood International Advisors, which manage client accounts under investment advisory and sub-advisory agreements. Advisory fees are typically calculated based on a percentage of AUM and are paid in accordance with the terms of the agreements. Advisory fees are paid quarterly in advance based on AUM on the last day of the preceding quarter, quarterly in arrears based on AUM on the last day of the quarter just ended or are based on a daily or monthly analysis of AUM for the stated period. We recognize advisory fee revenues as services are rendered. Since our advance paying clients' billing periods coincide with the calendar quarter to which such payments relate, revenue is recognized within the quarter and our Condensed Consolidated Financial Statements contain no deferred advisory fee revenues. Advisory clients typically consist of institutional and mutual fund accounts. Institutional investors include separate accounts of (i) corporate pension and profit sharing plans, public employee retirement funds, Taft-Hartley plans, endowments, foundations and individuals; (ii) subadvisory relationships where Westwood provides investment management services for funds offered by other financial institutions; (iii) pooled investment vehicles, including the UCITS Fund and collective investment trusts; and (iv) managed account relationships with brokerage firms and other registered investment advisors that offer Westwood products to their customers. The UCITS Fund was liquidated in June 2020. Mutual funds include the Westwood Funds®, a family of mutual funds for which Westwood Management serves as advisor. These funds are available to individual investors, as well as offered as part of our investment strategies for institutional investors and wealth management accounts. Arrangements with Performance-Based Obligations A limited number of our advisory clients have a contractual performance-based fee component in their contracts, which generates additional revenues if we outperform a specified index over a specific period of time, and a limited number of our mutual fund offerings have fees that generate additional revenues if we outperform specified indices over specific periods of time. The revenue is based on future market performance and is subject to factors outside our control. We cannot conclude that a significant reversal in the cumulative amount of revenue recognized will not occur during the measurement period, and therefore the revenue is recorded at the end of the measurement period when the performance obligation has been satisfied. Trust Fee Revenues Our trust fees are generated by Westwood Trust pursuant to trust or custodial agreements. Trust fees are separately negotiated with each client and are generally based on a percentage of AUM. Westwood Trust also provides trust services to a small number of clients on a fixed fee basis. The fees for most of our trust clients are calculated quarterly in arrears, based on a daily average of AUM for the quarter, or monthly, based on the month-end value of AUM. Since billing periods for most of Westwood Trust’s clients coincide with the calendar quarter, revenue is fully recognized within the quarter and our Condensed Consolidated Financial Statements contain no deferred advisory fee revenues. |
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 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, 2019, filed with the SEC. Operating results for the periods in these Condensed Consolidated Financial Statements are not necessarily indicative of 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 August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement . The purpose of this amendment is to modify, remove and add certain disclosure requirements for fair value measurements. Under ASU 2018-13, entities are required to disclose the amount of total gains or losses recognized in other comprehensive income attributable to assets and liabilities categorized within Level 3 of the fair value hierarchy. The ASU includes an incremental requirement about significant unobservable inputs for Level 3 fair value measurements. The requirement to disclose reasons for transfers between Level 1 and Level 2 was removed. Various requirements for Level 3 disclosure were also modified. The amendments in this ASU are effective for all entities for fiscal years and interim periods beginning after December 15, 2019. We adopted this ASU as of January 1, 2020, and further information is included in Note 6 "Fair Value." There was no significant impact on our Condensed Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Topic 350): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The purpose of this amendment is to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The amendments in this update are effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. We adopted this ASU as of January 1, 2020 under the prospective transition method. Incremental costs related to hosting arrangements will be recorded on the Condensed Consolidated Balance Sheets in either other current or other long-term assets, instead of intangible assets, net. Related amortization will be recorded in information technology expense on the Condensed Consolidated Statements of Comprehensive Income (Loss), amortization of previously capitalized costs were recorded in general and administrative expense. In May 2019, the FASB issued ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief. The purpose of this amendment is to amend ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments , to allow companies to irrevocably elect, upon adoption of ASU 2016-13, the fair value option on financial instruments that were previously recorded at amortized cost and are within the scope of ASC 326-20, Financial Instruments-Credit Losses: Amortization Cost , if the instruments are eligible for the fair value option under Accounting Standards Codification 825 - Financial Instruments . The fair value option election does not apply to held-to-maturity debt securities. The amendments in this update are effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. We adopted this ASU as of January 1, 2020, and it did not have a significant impact on our Condensed Consolidated Financial Statements. |
EARNINGS PER SHARE Policies (Po
EARNINGS PER SHARE Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share, Policy [Policy Text Block] | Basic earnings (loss) per common share is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares outstanding for the applicable period. Diluted earnings (loss) 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. |
VARIABLE INTEREST ENTITIES Poli
VARIABLE INTEREST ENTITIES Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Variable Interest Entities [Abstract] | |
Consolidation, Variable Interest Entity, Policy [Policy Text Block] | Based on our analyses of our investments in these entities for the periods ending June 30, 2020 and December 31, 2019, we have not consolidated the CTFs or Private Funds under the VIE method or the Westwood Funds® or Private Equity under the VOE method. |
REVENUE Policies (Policies)
REVENUE Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue [Policy Text Block] | Revenue Recognition Revenues are recognized when the performance obligation (the investment management and advisory or trust services provided to the client) defined by the investment advisory or sub-advisory agreement is satisfied. For each performance obligation, we determine at contract inception whether the revenue satisfies over time or at a point in time. We derive our revenues from investment advisory fees, trust fees and other sources of revenues. Advisory and trust fees are calculated based on a percentage of AUM and the performance obligation is realized over the current calendar quarter. Once clients receive our investment advisory services we have an enforceable right to payment. Advisory Fee Revenues Our advisory fees are generated by Westwood Management and Westwood International Advisors, which manage client accounts under investment advisory and sub-advisory agreements. Advisory fees are typically calculated based on a percentage of AUM and are paid in accordance with the terms of the agreements. Advisory fees are paid quarterly in advance based on AUM on the last day of the preceding quarter, quarterly in arrears based on AUM on the last day of the quarter just ended or are based on a daily or monthly analysis of AUM for the stated period. We recognize advisory fee revenues as services are rendered. Since our advance paying clients' billing periods coincide with the calendar quarter to which such payments relate, revenue is recognized within the quarter and our Condensed Consolidated Financial Statements contain no deferred advisory fee revenues. Advisory clients typically consist of institutional and mutual fund accounts. Institutional investors include separate accounts of (i) corporate pension and profit sharing plans, public employee retirement funds, Taft-Hartley plans, endowments, foundations and individuals; (ii) subadvisory relationships where Westwood provides investment management services for funds offered by other financial institutions; (iii) pooled investment vehicles, including the UCITS Fund and collective investment trusts; and (iv) managed account relationships with brokerage firms and other registered investment advisors that offer Westwood products to their customers. The UCITS Fund was liquidated in June 2020. Mutual funds include the Westwood Funds®, a family of mutual funds for which Westwood Management serves as advisor. These funds are available to individual investors, as well as offered as part of our investment strategies for institutional investors and wealth management accounts. Arrangements with Performance-Based Obligations A limited number of our advisory clients have a contractual performance-based fee component in their contracts, which generates additional revenues if we outperform a specified index over a specific period of time, and a limited number of our mutual fund offerings have fees that generate additional revenues if we outperform specified indices over specific periods of time. The revenue is based on future market performance and is subject to factors outside our control. We cannot conclude that a significant reversal in the cumulative amount of revenue recognized will not occur during the measurement period, and therefore the revenue is recorded at the end of the measurement period when the performance obligation has been satisfied. Trust Fee Revenues Our trust fees are generated by Westwood Trust pursuant to trust or custodial agreements. Trust fees are separately negotiated with each client and are generally based on a percentage of AUM. Westwood Trust also provides trust services to a small number of clients on a fixed fee basis. The fees for most of our trust clients are calculated quarterly in arrears, based on a daily average of AUM for the quarter, or monthly, based on the month-end value of AUM. Since billing periods for most of Westwood Trust’s clients coincide with the calendar quarter, revenue is fully recognized within the quarter and our Condensed Consolidated Financial Statements contain no deferred advisory fee revenues. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except per share and share amounts): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net income (loss) $ (2,575) $ 1,861 $ (1,473) $ 2,253 Weighted average shares outstanding - basic 7,879,698 8,446,610 8,147,045 8,406,367 Dilutive potential shares from unvested restricted shares — 30,167 — 61,222 Weighted average shares outstanding - diluted 7,879,698 8,476,777 8,147,045 8,467,589 Earnings (loss) per share: Basic $ (0.33) $ 0.22 $ (0.18) $ 0.27 Diluted $ (0.33) $ 0.22 $ (0.18) $ 0.27 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Balances | Investments carried at fair value are presented in the table below (in thousands): Cost Gross Gross Estimated June 30, 2020: U.S. Government and Government agency obligations $ 16,234 $ 165 $ — $ 16,399 Money market funds 9,150 — — 9,150 Equity funds 4,254 40 (9) 4,285 Equities 261 — (4) 257 Exchange-traded bond funds 137 — — 137 Total trading securities 30,036 205 (13) 30,228 Private investment fund 250 — (163) 87 Private equity 3,420 — (106) 3,314 Total investments carried at fair value $ 33,706 $ 205 $ (282) $ 33,629 December 31, 2019: U.S. Government and Government agency obligations $ 39,074 $ 174 $ — $ 39,248 Money market funds 4,592 — — 4,592 Equity funds 6,399 85 — 6,484 Total trading securities $ 50,065 $ 259 $ — $ 50,324 Private investment fund 250 13 — 263 Private equity 3,420 555 — 3,975 Total investments carried at fair value $ 53,735 $ 827 $ — $ 54,562 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Table Text Block] | The following table summarizes the values of our investments measured at fair value on a recurring basis within the fair value hierarchy as of the dates indicated (in thousands): Level 1 Level 2 Level 3 Investments Measured at NAV (1) Total As of June 30, 2020: Investments in trading securities $ 30,228 $ — $ — $ — $ 30,228 Private investment fund — — — 87 87 Private equity — — 3,314 — 3,314 Total assets measured at fair value $ 30,228 $ — $ 3,314 $ 87 $ 33,629 As of December 31, 2019: Investments in trading securities $ 50,324 $ — $ — $ — $ 50,324 Private investment fund — — — 263 263 Private equity — — 3,975 — 3,975 Total assets measured at fair value $ 50,324 $ — $ 3,975 $ 263 $ 54,562 (1) Comprised of certain investments measured at fair value using net asset value ("NAV") as a practical expedient. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on our Condensed Consolidated Balance Sheets. |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following table summarizes the changes in Level 3 investments measured at fair value on a recurring basis for the periods presented (in thousands): Fair Value using Significant Unobservable Inputs (Level 3) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Beginning balance $ 2,980 $ — $ 3,975 $ — Unrealized gains (losses) on private investments 334 — (661) — Ending balance $ 3,314 $ — $ 3,314 $ — |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | The following table displays the AUM, the amounts of our seed investments included in “Investments” on our consolidated balance sheets, and the risk of loss in each vehicle (in millions): As of June 30, 2020 Assets Corporate Amount at Risk VIEs/VOEs: Westwood Funds® $ 1,740 $ 4.2 $ 4.2 Common Trust Funds 1,118 — — Private Funds 9 0.1 0.1 Private Equity — 11.5 11.5 All other assets: Wealth Management 2,858 Institutional 6,183 Total Assets Under Management $ 11,908 |
REVENUE Table (Tables)
REVENUE Table (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Disaggregation of Revenue [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The following table presents our revenue disaggregated by account type (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Advisory Fees: Institutional $ 6,857 $ 9,372 $ 14,757 $ 19,811 Mutual Funds 2,393 5,212 5,464 11,077 Wealth Management 78 111 209 213 Performance-based 695 120 695 300 Trust Fees 5,657 6,444 11,608 12,983 Trust performance-based Fees 40 — 40 — Other, net 155 450 (229) 1,187 Total revenues $ 15,875 $ 21,709 $ 32,544 $ 45,571 |
Revenue Disaggregation by Geographic Location [Table Text Block] | The following table presents our revenue disaggregated by our clients' geographical locations (in thousands): Three Months Ended June 30, 2020 Advisory Trust Performance-based Other Total Asia $ 312 $ — $ — $ — $ 312 Canada 407 — — — 407 Europe 814 — 94 — 908 United States 7,795 5,657 641 155 14,248 Total $ 9,328 $ 5,657 $ 735 $ 155 $ 15,875 Three Months Ended June 30, 2019 Advisory Trust Performance-based Other Total Asia $ 407 $ — $ — $ — $ 407 Canada 702 — — 44 746 Europe 872 — 120 — 992 United States 12,714 6,444 — 406 19,564 Total $ 14,695 $ 6,444 $ 120 $ 450 $ 21,709 |
LONG-TERM INCENTIVE COMPENSATIO
LONG-TERM INCENTIVE COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
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, with adjustments for forfeitures recorded as they occur. |
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 June 30, Six Months Ended June 30, 2020 2019 2020 2019 Service condition stock-based compensation expense $ 1,765 $ 1,760 $ 3,832 $ 3,948 Performance condition stock-based compensation expense 287 490 706 1,418 Stock-based compensation expense under the Plan 2,052 2,250 4,538 5,366 Canadian Plan stock-based compensation expense 253 180 383 317 Total stock-based compensation expense $ 2,305 $ 2,430 $ 4,921 $ 5,683 |
Restricted Stock Subject To Service And Performance Conditions Policy [Text Block] | 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 specific goals for that year’s vesting of the restricted shares. The date that the Compensation Committee establishes annual goals 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 specific performance goals 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. |
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 six months ended June 30, 2020: Shares Weighted Average Non-vested, January 1, 2020 396,598 $ 48.31 Granted 262,373 $ 27.39 Vested (140,974) $ 53.06 Forfeited (10,832) $ 42.72 Non-vested, June 30, 2020 507,165 $ 36.29 |
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 six months ended June 30, 2020: Shares Weighted Average Non-vested, January 1, 2020 80,975 $ 49.73 Vested (35,275) $ 55.11 Non-vested, June 30, 2020 45,700 $ 45.58 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | (in thousands) Advisory Trust Westwood Eliminations Consolidated Three Months Ended June 30, 2020 Net fee revenues from external sources $ 10,023 $ 5,697 $ — $ — $ 15,720 Net intersegment revenues 595 68 — (663) — Net interest and dividend revenue 10 — — — 10 Other, net 145 — — — 145 Total revenues $ 10,773 $ 5,765 $ — $ (663) $ 15,875 Segment assets $ 239,726 $ 50,955 $ 17,534 $ (160,794) $ 147,421 Segment goodwill $ 3,403 $ 16,401 $ — $ — $ 19,804 Three Months Ended June 30, 2019 Net fee revenues from external sources $ 14,815 $ 6,444 $ — $ — $ 21,259 Net intersegment revenues 866 71 — (937) — Net interest and dividend revenue 192 91 — — 283 Other, net 174 (7) — — 167 Total revenues $ 16,047 $ 6,599 $ — $ (937) $ 21,709 Segment assets $ 232,380 $ 64,771 $ 19,338 $ (137,003) $ 179,486 Segment goodwill $ 3,403 $ 16,401 $ — $ — $ 19,804 |
EARNINGS PER SHARE (Details Tex
EARNINGS PER SHARE (Details Textual) - shares shares in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Restricted Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive restricted shares | 326 | 131 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Computation of Basic and Diluted Shares | ||||
Net Income (Loss) Attributable to Parent | $ (2,575) | $ 1,861 | $ (1,473) | $ 2,253 |
Weighted average shares outstanding - basic (shares) | 7,879,698 | 8,446,610 | 8,147,045 | 8,406,367 |
Dilutive potential shares from unvested restricted shares (shares) | 0 | 30,167 | 0 | 61,222 |
Weighted average shares outstanding - diluted (shares) | 7,879,698 | 8,476,777 | 8,147,045 | 8,467,589 |
Earnings per share: | ||||
Basic (dollars per share) | $ (0.33) | $ 0.22 | $ (0.18) | $ 0.27 |
Diluted (dollars per share) | $ (0.33) | $ 0.22 | $ (0.18) | $ 0.27 |
INVESTMENTS (Details)
INVESTMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Debt Securities, Trading, Gain (Loss) [Abstract] | |||||
Cost | $ 30,036 | $ 30,036 | $ 50,065 | ||
Gross Unrealized Gains | $ 259 | 205 | |||
Gross Unrealized Losses | 0 | (13) | |||
Debt Securities, Trading | 30,228 | 30,228 | 50,324 | ||
Equity Securities, FV-NI, Gain (Loss) [Abstract] | |||||
Cost | 33,706 | 33,706 | 53,735 | ||
Gross Unrealized Gains | 827 | 205 | |||
Gross Unrealized Losses | 0 | (282) | |||
Estimated Fair Value | 33,629 | 33,629 | 54,562 | ||
Unrealized gains (losses) on private investments | 159 | 2,800 | (836) | $ 0 | |
Investments carried at fair value, unrealized loss | (700) | ||||
U.S. Government and Government agency obligations | |||||
Debt Securities, Trading, Gain (Loss) [Abstract] | |||||
Cost | 16,234 | 16,234 | 39,074 | ||
Gross Unrealized Gains | 174 | 165 | |||
Gross Unrealized Losses | 0 | 0 | |||
Debt Securities, Trading | 16,399 | 16,399 | 39,248 | ||
Money market funds | |||||
Debt Securities, Trading, Gain (Loss) [Abstract] | |||||
Cost | 9,150 | 9,150 | 4,592 | ||
Gross Unrealized Gains | 0 | 0 | |||
Gross Unrealized Losses | 0 | 0 | |||
Debt Securities, Trading | 9,150 | 9,150 | 4,592 | ||
Equity funds | |||||
Debt Securities, Trading, Gain (Loss) [Abstract] | |||||
Cost | 4,254 | 4,254 | 6,399 | ||
Gross Unrealized Gains | 85 | 40 | |||
Gross Unrealized Losses | 0 | (9) | |||
Debt Securities, Trading | 4,285 | 4,285 | 6,484 | ||
Private investment fund | |||||
Equity Securities, FV-NI, Gain (Loss) [Abstract] | |||||
Cost | 250 | 250 | 250 | ||
Gross Unrealized Gains | 13 | 0 | |||
Gross Unrealized Losses | 0 | (163) | |||
Estimated Fair Value | 87 | 87 | 263 | ||
Private equity | |||||
Equity Securities, FV-NI, Gain (Loss) [Abstract] | |||||
Cost | 3,420 | 3,420 | 3,420 | ||
Gross Unrealized Gains | 555 | 0 | |||
Gross Unrealized Losses | $ 0 | (106) | |||
Estimated Fair Value | 3,314 | 3,314 | $ 3,975 | ||
Equity Securities | |||||
Debt Securities, Trading, Gain (Loss) [Abstract] | |||||
Cost | 261 | 261 | |||
Gross Unrealized Gains | 0 | ||||
Gross Unrealized Losses | (4) | ||||
Debt Securities, Trading | 257 | 257 | |||
us-gaap_EquitySecuritiesMember [Member] | |||||
Debt Securities, Trading, Gain (Loss) [Abstract] | |||||
Cost | 137 | 137 | |||
Gross Unrealized Gains | 0 | ||||
Gross Unrealized Losses | 0 | ||||
Debt Securities, Trading | $ 137 | $ 137 |
INVESTMENTS (Details Textual)
INVESTMENTS (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2020 | Dec. 31, 2019 | May 31, 2018 | |
Schedule of Investments [Line Items] | |||
Long-term Investments | $ 8,154 | $ 8,154 | $ 5,400 |
Estimated Fair Value | 33,629 | 54,562 | |
Investments carried at fair value, unrealized gain | 300 | ||
Cost | 30,036 | $ 50,065 | |
us-gaap_EquitySecuritiesMember [Member] | |||
Schedule of Investments [Line Items] | |||
Cost | $ 137 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020USD ($)$ / shares | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)$ / shares | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Investments in securities: | |||||
Investments in trading securities | $ 30,228,000 | $ 30,228,000 | $ 50,324,000 | ||
Total assets measured at fair value | 33,629,000 | 33,629,000 | 54,562,000 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | 2,980,000 | $ 0 | 3,975,000 | $ 0 | |
Unrealized gains (losses) on private investments | 334,000 | 0 | (661,000) | 0 | |
Ending balance | $ 3,314,000 | $ 0 | $ 3,314,000 | $ 0 | |
Fair Value Inputs [Abstract] (Deprecated 2018-01-31) | |||||
Unobservable input -book value multiple - minimum | $ / shares | 1.06 | 1.06 | |||
Unobservable input -book value multiple - maximum | 1.31 | 1.31 | |||
Unobservable input -book value multiple - weighted average | 1.20 | 1.20 | |||
Level 1 | |||||
Investments in securities: | |||||
Investments in trading securities | $ 30,228,000 | $ 30,228,000 | 50,324,000 | ||
Total assets measured at fair value | 30,228,000 | 30,228,000 | 50,324,000 | ||
Level 2 | |||||
Investments in securities: | |||||
Investments in trading securities | 0 | 0 | 0 | ||
Total assets measured at fair value | 0 | 0 | 0 | ||
Level 3 | |||||
Investments in securities: | |||||
Investments in trading securities | 0 | 0 | 0 | ||
Total assets measured at fair value | 3,314,000 | 3,314,000 | 3,975,000 | ||
Investments Measured at NAV | |||||
Investments in securities: | |||||
Investments in trading securities | 0 | 0 | 0 | ||
Total assets measured at fair value | 87,000 | 87,000 | 263,000 | ||
Private investment fund | |||||
Investments in securities: | |||||
Private | 87,000 | 87,000 | 263,000 | ||
Private investment fund | Level 1 | |||||
Investments in securities: | |||||
Private | 0 | 0 | 0 | ||
Private investment fund | Level 2 | |||||
Investments in securities: | |||||
Private | 0 | 0 | 0 | ||
Private investment fund | Level 3 | |||||
Investments in securities: | |||||
Private | 0 | 0 | 0 | ||
Private investment fund | Investments Measured at NAV | |||||
Investments in securities: | |||||
Private | 87,000 | 87,000 | 263,000 | ||
Private equity | |||||
Investments in securities: | |||||
Private | 3,314,000 | 3,314,000 | 3,975,000 | ||
Private equity | Level 1 | |||||
Investments in securities: | |||||
Private | 0 | 0 | 0 | ||
Private equity | Level 2 | |||||
Investments in securities: | |||||
Private | 0 | 0 | 0 | ||
Private equity | Level 3 | |||||
Investments in securities: | |||||
Private | 3,314,000 | 3,314,000 | 3,975,000 | ||
Private equity | Investments Measured at NAV | |||||
Investments in securities: | |||||
Private | $ 0 | $ 0 | $ 0 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Textual) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill, Impairment Loss | $ 0 | $ 0 |
Impairment of Intangible Assets (Excluding Goodwill) | $ 0 | $ 0 |
STOCKHOLDERS' EQUITY Share Repu
STOCKHOLDERS' EQUITY Share Repurchase Program (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2020 | Apr. 27, 2020 | Dec. 31, 2016 | |
Equity [Abstract] | ||||
Stock Repurchase Program, Authorized Amount | $ 10 | $ 10,000,000 | ||
Stock Repurchased During Period, Shares | 407,697 | 679,756 | ||
Treasury Stock Acquired, Average Cost Per Share | $ 19.83 | $ 19.05 | ||
Stock Repurchased During Period, Value | $ 8,100,000 | $ 13,000,000 |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Variable Interest Entity [Line Items] | |||||
Estimated Fair Value | $ 33,629 | $ 33,629 | $ 54,562 | ||
Fee revenues from Westwood VIEs | 4,500 | $ 8,400 | 10,200 | $ 17,100 | |
Common Trust Funds | |||||
Variable Interest Entity [Line Items] | |||||
Estimated Fair Value | $ 0 | $ 0 |
VARIABLE INTEREST ENTITIES (D_2
VARIABLE INTEREST ENTITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Variable Interest Entities | ||
Assets Under Management | $ 11,908,000 | |
Estimated Fair Value | 33,629 | $ 54,562 |
Variable Interest Entity, Consolidated, Assets, Noncurrent | 4,200 | $ 6,400 |
Westwood Funds® | ||
Variable Interest Entities | ||
Assets Under Management | 1,740,000 | |
Estimated Fair Value | 4,200 | |
Amount at Risk | 4,200 | |
Common Trust Funds | ||
Variable Interest Entities | ||
Assets Under Management | 1,118,000 | |
Estimated Fair Value | 0 | |
Amount at Risk | 0 | |
Westwood Hospitality Fund I LLC [Member] | ||
Variable Interest Entities | ||
Assets Under Management | 9,000 | |
Estimated Fair Value | 100 | |
Amount at Risk | 100 | |
Private equity | ||
Variable Interest Entities | ||
Assets Under Management | 0 | |
Estimated Fair Value | 11,500 | |
Amount at Risk | 11,500 | |
Wealth Management | ||
Variable Interest Entities | ||
Assets Under Management | 2,858,000 | |
Institutional | ||
Variable Interest Entities | ||
Assets Under Management | $ 6,183,000 |
REVENUE Disaggregation of Reven
REVENUE Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | REVENUE Revenue Recognition Revenues are recognized when the performance obligation (the investment management and advisory or trust services provided to the client) defined by the investment advisory or sub-advisory agreement is satisfied. For each performance obligation, we determine at contract inception whether the revenue satisfies over time or at a point in time. We derive our revenues from investment advisory fees, trust fees and other sources of revenues. Advisory and trust fees are calculated based on a percentage of AUM and the performance obligation is realized over the current calendar quarter. Once clients receive our investment advisory services we have an enforceable right to payment. Advisory Fee Revenues Our advisory fees are generated by Westwood Management and Westwood International Advisors, which manage client accounts under investment advisory and sub-advisory agreements. Advisory fees are typically calculated based on a percentage of AUM and are paid in accordance with the terms of the agreements. Advisory fees are paid quarterly in advance based on AUM on the last day of the preceding quarter, quarterly in arrears based on AUM on the last day of the quarter just ended or are based on a daily or monthly analysis of AUM for the stated period. We recognize advisory fee revenues as services are rendered. Since our advance paying clients' billing periods coincide with the calendar quarter to which such payments relate, revenue is recognized within the quarter and our Condensed Consolidated Financial Statements contain no deferred advisory fee revenues. Advisory clients typically consist of institutional and mutual fund accounts. Institutional investors include separate accounts of (i) corporate pension and profit sharing plans, public employee retirement funds, Taft-Hartley plans, endowments, foundations and individuals; (ii) subadvisory relationships where Westwood provides investment management services for funds offered by other financial institutions; (iii) pooled investment vehicles, including the UCITS Fund and collective investment trusts; and (iv) managed account relationships with brokerage firms and other registered investment advisors that offer Westwood products to their customers. The UCITS Fund was liquidated in June 2020. Mutual funds include the Westwood Funds®, a family of mutual funds for which Westwood Management serves as advisor. These funds are available to individual investors, as well as offered as part of our investment strategies for institutional investors and wealth management accounts. Arrangements with Performance-Based Obligations A limited number of our advisory clients have a contractual performance-based fee component in their contracts, which generates additional revenues if we outperform a specified index over a specific period of time, and a limited number of our mutual fund offerings have fees that generate additional revenues if we outperform specified indices over specific periods of time. The revenue is based on future market performance and is subject to factors outside our control. We cannot conclude that a significant reversal in the cumulative amount of revenue recognized will not occur during the measurement period, and therefore the revenue is recorded at the end of the measurement period when the performance obligation has been satisfied. Trust Fee Revenues Our trust fees are generated by Westwood Trust pursuant to trust or custodial agreements. Trust fees are separately negotiated with each client and are generally based on a percentage of AUM. Westwood Trust also provides trust services to a small number of clients on a fixed fee basis. The fees for most of our trust clients are calculated quarterly in arrears, based on a daily average of AUM for the quarter, or monthly, based on the month-end value of AUM. Since billing periods for most of Westwood Trust’s clients coincide with the calendar quarter, revenue is fully recognized within the quarter and our Condensed Consolidated Financial Statements contain no deferred advisory fee revenues. Revenue Disaggregated Sales taxes are excluded from revenues. The following table presents our revenue disaggregated by account type (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Advisory Fees: Institutional $ 6,857 $ 9,372 $ 14,757 $ 19,811 Mutual Funds 2,393 5,212 5,464 11,077 Wealth Management 78 111 209 213 Performance-based 695 120 695 300 Trust Fees 5,657 6,444 11,608 12,983 Trust performance-based Fees 40 — 40 — Other, net 155 450 (229) 1,187 Total revenues $ 15,875 $ 21,709 $ 32,544 $ 45,571 We serve clients in various locations around the world. The following table presents our revenue disaggregated by our clients' geographical locations (in thousands): Three Months Ended June 30, 2020 Advisory Trust Performance-based Other Total Asia $ 312 $ — $ — $ — $ 312 Canada 407 — — — 407 Europe 814 — 94 — 908 United States 7,795 5,657 641 155 14,248 Total $ 9,328 $ 5,657 $ 735 $ 155 $ 15,875 Three Months Ended June 30, 2019 Advisory Trust Performance-based Other Total Asia $ 407 $ — $ — $ — $ 407 Canada 702 — — 44 746 Europe 872 — 120 — 992 United States 12,714 6,444 — 406 19,564 Total $ 14,695 $ 6,444 $ 120 $ 450 $ 21,709 | ||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 15,875 | $ 21,709 | $ 32,544 | $ 45,571 | |
Asia [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 312 | 407 | 729 | 813 | |
Australia | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 591 | ||||
Canada | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 407 | 746 | 897 | 1,610 | |
Europe [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 908 | 992 | 1,918 | 2,149 | |
United States [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 14,248 | 19,564 | 29,000 | 40,408 | |
Investment Advisory Services [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 9,328 | 14,695 | 20,430 | 31,101 | |
Investment Advisory Services [Member] | Asia [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 312 | 407 | 729 | 813 | |
Investment Advisory Services [Member] | Australia | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 591 | ||||
Investment Advisory Services [Member] | Canada | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 407 | 702 | 897 | 1,526 | |
Investment Advisory Services [Member] | Europe [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 814 | 872 | 1,824 | 1,849 | |
Investment Advisory Services [Member] | United States [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 7,795 | 12,714 | 16,980 | 26,322 | |
Investment Advisory Services [Member] | Advisory | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 6,857 | 9,372 | 19,811 | $ 14,757 | |
Mutual Fund Advisory [Member] | Advisory | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 2,393 | 5,212 | 5,464 | 11,077 | |
Private Wealth Advisory [Member] | Advisory | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 78 | 111 | 209 | 213 | |
Performance-based fees [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 735 | 120 | 735 | 300 | |
Performance-based fees [Member] | Asia [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 | |
Performance-based fees [Member] | Australia | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | ||||
Performance-based fees [Member] | Canada | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 | |
Performance-based fees [Member] | Europe [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 94 | 120 | 94 | 300 | |
Performance-based fees [Member] | United States [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 641 | 0 | 641 | 0 | |
Performance-based fees [Member] | Advisory | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 695 | 120 | 695 | 300 | |
Trust Fees [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 5,657 | 6,444 | 11,608 | 12,983 | |
Trust Fees [Member] | Asia [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 | |
Trust Fees [Member] | Australia | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | ||||
Trust Fees [Member] | Canada | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 | |
Trust Fees [Member] | Europe [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 | |
Trust Fees [Member] | United States [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 5,657 | 6,444 | 11,608 | 12,983 | |
Trust Fees [Member] | Trust | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 5,657 | 6,444 | 11,608 | 12,983 | |
Other Revenue Misc Services [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 155 | 450 | (229) | 1,187 | |
Other Revenue Misc Services [Member] | Asia [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 | |
Other Revenue Misc Services [Member] | Australia | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | ||||
Other Revenue Misc Services [Member] | Canada | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 44 | 0 | 84 | |
Other Revenue Misc Services [Member] | Europe [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 | |
Other Revenue Misc Services [Member] | United States [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 155 | 406 | (229) | 1,103 | |
Other Revenue Misc Services [Member] | Advisory | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 155 | 450 | (229) | 1,187 | |
Trust performance-based | Advisory | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 40 | $ 0 | $ 40 | $ 0 |
LONG-TERM INCENTIVE COMPENSAT_2
LONG-TERM INCENTIVE COMPENSATION (Details Textual) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2020CAD ($)shares | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($)shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Amount of shares purchased in the open market | $ 12,952,000 | $ 806,000 | ||||
Remaining unrecognized compensation cost recognized over a remaining weighted average period | 2 years 9 months 18 days | 2 years 9 months 18 days | ||||
Accrued liability | $ 37,000 | $ 37,000 | $ 79,000 | |||
Mutual Fund [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Expense related to mutual fund share incentive awards | $ 17,000 | |||||
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 | 5,398,100 | 5,398,100 | ||||
Shares remain available for issuance | shares | 626,000 | 626,000 | ||||
Remaining unrecognized compensation cost | $ 15,600,000 | $ 15,600,000 | ||||
Nonvested restricted shares | shares | 507,165 | 507,165 | 396,598 | |||
Expense related to mutual fund share incentive awards | $ 2,305,000 | $ 2,430,000 | $ 4,921,000 | $ 5,683,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | shares | 350,000 | |||||
Canadian Plan | Westwood International Advisors Inc | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares remain available for issuance | shares | 63,000 | 63,000 | ||||
Share Based Compensation Arrangement By Share Based Payment Award Available For Grant, Original | $ 7,400,000 | $ 10 | ||||
Fund purchases of common stock | $ 63,712 | 63,712 | ||||
Purchases of common stock with respect to awards granted | $ 1,000,000 | $ 1.4 | ||||
Share price | $ / shares | $ 15.75 | $ 15.75 | ||||
Amount of shares purchased in the open market | $ 700,000 | |||||
Purchases of treasury stock, shares | shares | 27,474 | 27,474 | ||||
Remaining unrecognized compensation cost | $ 800,000 | $ 800,000 | ||||
Remaining unrecognized compensation cost recognized over a remaining weighted average period | 1 year 9 months 18 days | 1 year 9 months 18 days | ||||
Mutual Fund Share Incentive Awards | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Service period of mutual fund share incentive award | 3 years | 3 years | ||||
Expense related to mutual fund share incentive awards | $ 9,000 | $ 14,000 |
LONG-TERM INCENTIVE COMPENSAT_3
LONG-TERM INCENTIVE COMPENSATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
DomesticEmployeeServiceAward [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based Payment Arrangement, Expense | $ 1,765 | $ 1,760 | $ 3,832 | $ 3,948 |
Performance Shares [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based Payment Arrangement, Expense | 287 | 490 | 706 | 1,418 |
DomesticServiceAndPerformanceAward [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based Payment Arrangement, Expense | 2,052 | 2,250 | 4,538 | 5,366 |
CanadianEmployeeServiceAward [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based Payment Arrangement, Expense | 253 | 180 | 383 | 317 |
Restricted Stock | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based Payment Arrangement, Expense | $ 2,305 | $ 2,430 | $ 4,921 | $ 5,683 |
LONG-TERM INCENTIVE COMPENSAT_4
LONG-TERM INCENTIVE COMPENSATION (Details 1) - Restricted Shares Subject Only to a Service Condition | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Restricted shares subject only to a service condition: | |
Non-vested, beginning balance, shares | shares | 396,598 |
Granted (shares) | shares | 262,373 |
Vested (shares) | shares | (140,974) |
Forfeited (shares) | shares | (10,832) |
Non-vested, ending balance, shares | shares | 507,165 |
Non-vested, beginning balance, (dollars per share) | $ / shares | $ 48.31 |
Granted (dollars per share) | $ / shares | 27.39 |
Vested (dollars per share) | $ / shares | 53.06 |
Forfeited (dollars per share) | $ / shares | 42.72 |
Non-vested, ending balance, (dollars per share) | $ / shares | $ 36.29 |
LONG-TERM INCENTIVE COMPENSAT_5
LONG-TERM INCENTIVE COMPENSATION (Details 2) - Restricted Shares Subject to Service and Performance Conditions | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Restricted shares subject only to a service condition: | |
Non-vested, beginning balance, shares | shares | 80,975 |
Vested (shares) | shares | (35,275) |
Non-vested, ending balance, shares | shares | 45,700 |
Non-vested, beginning balance, (dollars per share) | $ / shares | $ 49.73 |
Vested (dollars per share) | $ / shares | 55.11 |
Non-vested, ending balance, (dollars per share) | $ / shares | $ 45.58 |
INCOME TAXES Effective tax rate
INCOME TAXES Effective tax rate (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Discrete tax expense from stock-based compensation | $ 0.6 | |
Effective Income Tax Rate Reconciliation, Percent | 19.00% | 45.70% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | |
UCITS Fund | ||||
Related Party Transaction [Line Items] | ||||
Fees earned from related party | $ 200,000 | $ 800,000 | ||
Fees unpaid from related party | $ 200,000 | |||
Trust | ||||
Related Party Transaction [Line Items] | ||||
Due from related party | 100,000 | $ 100,000 | ||
Fees earned from related party | $ 100,000 | $ 200,000 |
SEGMENT REPORTING (Details Text
SEGMENT REPORTING (Details Textual) | 6 Months Ended |
Jun. 30, 2020Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||||
Net fee revenues from external sources | $ 15,720 | $ 21,259 | $ 32,773 | $ 44,384 | |
Net intersegment revenues | 0 | 0 | 0 | 0 | |
Net interest and dividend revenue | 10 | 283 | 31 | 595 | |
Other, net | 145 | 167 | (260) | 592 | |
Total revenues | 15,875 | 21,709 | 32,544 | 45,571 | |
Segment assets | 147,421 | 179,486 | 147,421 | 179,486 | $ 178,707 |
Goodwill | 19,804 | 19,804 | 19,804 | 19,804 | $ 19,804 |
Operating Segments | Advisory | |||||
Segment Reporting Information [Line Items] | |||||
Net fee revenues from external sources | 10,023 | 14,815 | 21,125 | 31,401 | |
Net intersegment revenues | 595 | 866 | 1,218 | 1,883 | |
Net interest and dividend revenue | 10 | 192 | 31 | 417 | |
Other, net | 145 | 174 | (260) | 606 | |
Total revenues | 10,773 | 16,047 | 22,114 | 34,307 | |
Segment assets | 239,726 | 232,380 | 239,726 | 232,380 | |
Goodwill | 3,403 | 3,403 | 3,403 | 3,403 | |
Operating Segments | Trust | |||||
Segment Reporting Information [Line Items] | |||||
Net fee revenues from external sources | 5,697 | 6,444 | 11,648 | 12,983 | |
Net intersegment revenues | 68 | 71 | 118 | 142 | |
Net interest and dividend revenue | 0 | 91 | 0 | 178 | |
Other, net | 0 | (7) | 0 | (14) | |
Total revenues | 5,765 | 6,599 | 11,766 | 13,289 | |
Segment assets | 50,955 | 64,771 | 50,955 | 64,771 | |
Goodwill | 16,401 | 16,401 | 16,401 | 16,401 | |
Westwood Holdings | |||||
Segment Reporting Information [Line Items] | |||||
Net fee revenues from external sources | 0 | 0 | 0 | 0 | |
Net intersegment revenues | 0 | 0 | 0 | 0 | |
Net interest and dividend revenue | 0 | 0 | 0 | 0 | |
Other, net | 0 | 0 | 0 | 0 | |
Total revenues | 0 | 0 | 0 | 0 | |
Segment assets | 17,534 | 19,338 | 17,534 | 19,338 | |
Goodwill | 0 | 0 | 0 | 0 | |
Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Net fee revenues from external sources | 0 | 0 | 0 | 0 | |
Net intersegment revenues | (663) | (937) | (1,336) | (2,025) | |
Net interest and dividend revenue | 0 | 0 | 0 | 0 | |
Other, net | 0 | 0 | 0 | 0 | |
Total revenues | (663) | (937) | (1,336) | (2,025) | |
Segment assets | (160,794) | (137,003) | (160,794) | (137,003) | |
Goodwill | $ 0 | $ 0 | $ 0 | $ 0 |
SUBSEQUENT EVENTS (Details Text
SUBSEQUENT EVENTS (Details Textual) - USD ($) | 3 Months Ended | 5 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Apr. 27, 2020 | Dec. 31, 2016 | |
Subsequent Event [Line Items] | |||||||
Dividends declared per share (dollars per share) | $ 0 | $ 0.72 | |||||
Stock Repurchased During Period, Shares | 407,697 | 679,756 | |||||
Stock Repurchased During Period, Value | $ 8,100,000 | $ 13,000,000 | |||||
Stock Repurchase Program, Authorized Amount | $ 10 | $ 10,000,000 | |||||
Subsequent Event, Description | 0.4 million | ||||||
Trust performance-based fees [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Revenue from Contract with Customer, Including Assessed Tax | $ 40,000 | $ 0 | $ 40,000 | $ 0 |