Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 24, 2015 | Jun. 30, 2014 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | WESTWOOD HOLDINGS GROUP INC | ||
Entity Central Index Key | 1165002 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $371,336,264 | ||
Entity Common Stock, Shares Outstanding | 8,404,585 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current Assets: | ||
Cash and cash equivalents | $18,131 | $10,864 |
Accounts receivable | 14,540 | 14,468 |
Investments, at fair value | 79,620 | 64,554 |
Deferred income taxes | 4,060 | 3,812 |
Other current assets | 2,413 | 2,521 |
Total current assets | 118,764 | 96,219 |
Goodwill | 11,255 | 11,255 |
Deferred income taxes | 3,792 | 2,041 |
Intangible assets, net | 3,430 | 3,789 |
Property and equipment, net of accumulated depreciation of $2,720 and $2,155 | 2,633 | 2,746 |
Total assets | 139,874 | 116,050 |
Current Liabilities: | ||
Accounts payable and accrued liabilities | 2,334 | 2,082 |
Dividends payable | 4,868 | 3,935 |
Compensation and benefits payable | 18,504 | 17,805 |
Income taxes payable | 1,498 | 1,031 |
Total current liabilities | 27,204 | 24,853 |
Accrued dividends | 1,450 | 1,266 |
Deferred rent | 1,213 | 1,268 |
Total long-term liabilities | 2,663 | 2,534 |
Total liabilities | 29,867 | 27,387 |
Commitments and contingencies (Note 14) | ||
Stockholders’ Equity: | ||
Common stock, $0.01 par value, authorized 25,000,000 shares, issued 9,010,255 and outstanding 8,308,460 shares at December 31, 2014; issued 8,778,613 and outstanding 8,176,417 shares at December 31, 2013 | 90 | 88 |
Additional paid-in capital | 119,859 | 103,853 |
Treasury stock, at cost – 701,795 shares at December 31, 2014; 602,196 shares at December 31, 2013 | -29,028 | -23,169 |
Accumulated other comprehensive loss | -1,231 | -257 |
Retained earnings | 20,317 | 8,148 |
Total stockholders’ equity | 110,007 | 88,663 |
Total liabilities and stockholders’ equity | $139,874 | $116,050 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement Of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation | $2,720 | $2,155 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 9,010,255 | 8,778,613 |
Common stock, shares outstanding | 8,308,460 | 8,176,417 |
Treasury stock, shares | 701,795 | 602,196 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Advisory fees | |||
Asset-based | $88,473 | $70,027 | $57,936 |
Performance-based | 3,806 | 2,561 | 1,251 |
Trust fees | 20,525 | 18,367 | 14,969 |
Other revenues, net | 437 | 870 | 3,339 |
Total revenues | 113,241 | 91,825 | 77,495 |
EXPENSES: | |||
Employee compensation and benefits | 52,847 | 47,864 | 43,698 |
Sales and marketing | 1,673 | 1,252 | 1,132 |
Westwood mutual funds | 2,543 | 2,153 | 1,153 |
Information technology | 3,469 | 2,882 | 2,555 |
Professional services | 4,905 | 4,223 | 4,420 |
General and administrative | 5,768 | 5,266 | 4,517 |
Total expenses | 71,205 | 63,640 | 57,475 |
Income before income taxes | 42,036 | 28,185 | 20,020 |
Provision for income taxes | 14,787 | 10,348 | 7,934 |
Net income | 27,249 | 17,837 | 12,086 |
Available-for-sale investments: | |||
Change in unrealized gain on investment securities | -40 | ||
Less: reclassification adjustment for net gains included in earnings | -1,900 | ||
Net change (net of income taxes of $0, $0 and ($1,058), respectively) | -1,940 | ||
Foreign currency translation adjustments | -974 | -287 | 30 |
Other comprehensive loss | -974 | -287 | -1,910 |
Total comprehensive income | $26,275 | $17,550 | $10,176 |
Earnings per share: | |||
Basic | $3.63 | $2.43 | $1.69 |
Diluted | $3.45 | $2.32 | $1.65 |
Weighted average shares outstanding: | |||
Basic | 7,512,348 | 7,331,874 | 7,145,701 |
Diluted | 7,906,545 | 7,692,756 | 7,307,035 |
Recovered_Sheet1
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||
Net change, income taxes | $0 | $0 | $1,058 |
CONSOLIDATED_STATEMENT_OF_STOC
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (USD $) | Total | Westwood Holdings Group, Inc. Common Stock, Par | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
In Thousands, except Share data | ||||||
BALANCE at Dec. 31, 2011 | $71,062 | $81 | $80,084 | ($14,706) | $1,940 | $3,663 |
BALANCE, shares at Dec. 31, 2011 | 7,707,189 | |||||
Net income | 12,086 | 12,086 | ||||
Other comprehensive loss | -1,910 | -1,910 | ||||
Issuance of restricted stock, net of forfeitures | 4 | -4 | ||||
Issuance of restricted stock, net of forfeitures, shares | 405,330 | |||||
Stock based compensation expense | 10,521 | 10,521 | ||||
Tax benefit related to stock based compensation | 488 | 488 | ||||
Dividends declared ($1.82 per share in 2014, $1.64 per share in 2013, $1.51 per share in 2012) | -12,108 | -12,108 | ||||
Stock options exercised | 210 | 210 | ||||
Stock options exercised, shares | 16,250 | |||||
Restricted stock returned for payment of taxes | -3,796 | -3,796 | ||||
Restricted stock returned for payment of taxes, shares | -97,724 | |||||
BALANCE at Dec. 31, 2012 | 76,553 | 85 | 91,299 | -18,502 | 30 | 3,641 |
BALANCE, shares at Dec. 31, 2012 | 8,031,045 | |||||
Net income | 17,837 | 17,837 | ||||
Other comprehensive loss | -287 | -287 | ||||
Issuance of restricted stock, net of forfeitures | 3 | -3 | ||||
Issuance of restricted stock, net of forfeitures, shares | 252,015 | |||||
Stock based compensation expense | 11,679 | 11,679 | ||||
Reclassification of compensation liability to be paid in shares | 120 | 120 | ||||
Tax benefit related to stock based compensation | 758 | 758 | ||||
Dividends declared ($1.82 per share in 2014, $1.64 per share in 2013, $1.51 per share in 2012) | -13,330 | -13,330 | ||||
Purchases of treasury stock | -878 | -878 | ||||
Purchases of treasury stock, shares | -20,251 | |||||
Restricted stock returned for payment of taxes | -3,789 | -3,789 | ||||
Restricted stock returned for payment of taxes, shares | -86,392 | |||||
BALANCE at Dec. 31, 2013 | 88,663 | 88 | 103,853 | -23,169 | -257 | 8,148 |
BALANCE, shares at Dec. 31, 2013 | 8,176,417 | 8,176,417 | ||||
Net income | 27,249 | 27,249 | ||||
Other comprehensive loss | -974 | -974 | ||||
Issuance of restricted stock, net of forfeitures | 2 | -2 | ||||
Issuance of restricted stock, net of forfeitures, shares | 231,642 | |||||
Stock based compensation expense | 13,685 | 13,685 | ||||
Reclassification of compensation liability to be paid in shares | 170 | 170 | ||||
Tax benefit related to stock based compensation | 2,153 | 2,153 | ||||
Dividends declared ($1.82 per share in 2014, $1.64 per share in 2013, $1.51 per share in 2012) | -15,080 | -15,080 | ||||
Purchases of treasury stock | -669 | -669 | ||||
Purchases of treasury stock, shares | -11,476 | |||||
Restricted stock returned for payment of taxes | -5,190 | -5,190 | ||||
Restricted stock returned for payment of taxes, shares | -88,123 | |||||
BALANCE at Dec. 31, 2014 | $110,007 | $90 | $119,859 | ($29,028) | ($1,231) | $20,317 |
BALANCE, shares at Dec. 31, 2014 | 8,308,460 | 8,308,460 |
CONSOLIDATED_STATEMENT_OF_STOC1
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement Of Stockholders Equity [Abstract] | |||
Dividends declared, per share | $1.82 | $1.64 | $1.51 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $27,249 | $17,837 | $12,086 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 579 | 410 | 349 |
Amortization of intangible assets | 359 | 359 | 472 |
Gain on sale of available for sale investment | -1,900 | ||
Unrealized losses (gains) on trading investments | -75 | 325 | -344 |
Stock based compensation expense | 13,685 | 11,679 | 10,521 |
Deferred income taxes | -2,133 | -937 | -1,819 |
Excess tax benefits from stock based compensation | -1,850 | -696 | -981 |
Net purchases of investments – trading securities | -14,991 | -4,993 | -7,692 |
Other | 1 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | -369 | -5,702 | -1,208 |
Other current assets | 70 | -887 | 61 |
Accounts payable and accrued liabilities | 353 | 450 | -39 |
Compensation and benefits payable | 1,307 | 3,598 | 1,846 |
Income taxes payable and prepaid taxes | 2,406 | 160 | 2,147 |
Other liabilities | -67 | 102 | -25 |
Net cash provided by operating activities | 26,523 | 21,705 | 13,475 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Sales of available for sale investments | 1,900 | ||
Purchases of property and equipment | -478 | -1,201 | -264 |
Net cash (used in) provided by investing activities | -478 | -1,201 | 1,636 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Purchases of treasury stock | -669 | -878 | |
Restricted stock returned for payment of taxes | -5,190 | -3,789 | -3,796 |
Excess tax benefits from stock based compensation | 1,850 | 696 | 981 |
Proceeds from exercise of stock options | 210 | ||
Cash dividends | -13,962 | -9,330 | -13,981 |
Net cash used in financing activities | -17,971 | -13,301 | -16,586 |
Effect of currency rate changes on cash | -807 | -156 | 28 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 7,267 | 7,047 | -1,447 |
Cash and cash equivalents, beginning of year | 10,864 | 3,817 | 5,264 |
Cash and cash equivalents, end of year | 18,131 | 10,864 | 3,817 |
Supplemental cash flow information: | |||
Cash paid during the year for income taxes | $14,418 | $11,031 | $7,600 |
Description_of_the_Business
Description of the Business | 12 Months Ended |
Dec. 31, 2014 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of the Business | 1. DESCRIPTION OF THE BUSINESS: |
Westwood Holdings Group, Inc. (“Westwood”, “the Company”, we”, “us” or “our”) was incorporated under the laws of the State of Delaware on December 12, 2001. Westwood manages investment assets and provides services for its clients through its subsidiaries, Westwood Management Corp. (“Westwood Management”), Westwood Trust (“Westwood Trust”) and Westwood International Advisors Inc. (“Westwood International”). Westwood Management provides investment advisory services to corporate retirement plans, public retirement plans, endowments and foundations, mutual funds, individuals and clients of Westwood Trust. Westwood Trust provides institutions and high net worth individuals with trust and custodial services and participation in its sponsored common trust funds. Westwood International provides investment advisory services to corporate retirement plans, public retirement plans, endowments and foundations, mutual funds and other pooled investment vehicles. Revenue is largely dependent on the total value and composition of assets under management (“AUM”). Accordingly, fluctuations in financial markets and in the composition of AUM impact our revenues and results of operations. | |
Westwood Management is a registered investment adviser under the Investment Advisers Act of 1940. Westwood Trust is chartered and regulated by the Texas Department of Banking. Westwood International is registered as a portfolio manager and exempt market dealer with the Ontario Securities Commission and the Autorité des marchés financiers (“AMF”) in Québec. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: |
Principles of consolidation | |
The accompanying consolidated financial statements include the accounts of Westwood and its subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation. | |
We assess each legal entity that we manage to determine whether consolidation is appropriate at the onset of the relationship. We first determine whether the entity is a variable interest entity (“VIE”), or a voting interest entity (“VOE”), under U.S. generally accepted accounting principles (“GAAP”) and then whether we have a controlling financial interest in the entity. Assessing whether or not an entity is a VOE or VIE and if it requires consolidation involves judgment and analysis. Factors considered in this assessment include, but are not limited to, the legal organization of the entity, our equity ownership and contractual involvement with the entity and any related party or de facto agent implications of our involvement with the entity. We reconsider whether entities are a VIE or VOE whenever contractual arrangements change, the entity receives additional equity or returns equity to its investors or changes in facts and circumstances occur that change the investors’ ability to direct the activities of the entity. | |
A VIE is an entity in which (i) the total equity investment at risk is not sufficient to enable the entity to finance its activities without subordinated financial support or (ii) the at-risk equity holders do not have the normal characteristics of a controlling financial interest. That is, the at-risk equity holders do not have the obligation to absorb losses, the right to receive residual returns and/or the right to direct the activities of the entity that most significantly impact the entity’s economic performance. An enterprise must consolidate all VIEs of which it is the primary beneficiary. We determine if a sponsored investment meets the definition of a VIE by considering whether the fund’s equity investment at risk is sufficient to finance its activities without additional subordinated financial support and whether the fund’s at-risk equity holders absorb any losses, have the right to receive residual returns and have the right to direct the activities of the entity most responsible for the entity’s economic performance. For VIEs that are investment companies, the primary beneficiary of the VIE is the party that absorbs a majority of the expected losses of the VIE, receives a majority of the expected residual returns of the VIE, or both. For VIEs that are not investment companies, the primary beneficiary of a VIE is defined as the party who, considering the involvement of related parties and de facto agents, has (i) the power to direct the activities of the VIE that most significantly affect its economic performance and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. This evaluation is updated continuously. | |
Westwood Investment Funds PLC (the “UCITS Fund”), which was authorized by the Central Bank of Ireland on June 18, 2013 pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011, is an Ireland domiciled umbrella-type open-ended self-managed investment company. The UCITS Fund is an umbrella fund with segregated assets and liabilities between sub-funds, and notwithstanding the segregation of assets and liabilities within each sub-fund, the UCITS Fund is a single legal entity and no sub-fund constitutes a legal entity separate from the UCITS Fund. The Company’s first UCITS sub-fund is focused on Westwood’s Emerging Markets strategy. Shares of the sub-fund, all of which are owned by the third-party investors, are listed on the Irish Stock Exchange. The base currency of the UCITS Fund is the British pound sterling. We determined that the UCITS Fund was a VIE as its at-risk equity holders do not have the ability to direct the activities of the UCITS Fund that most significantly impact the entity’s economic performance. Although the Company does not have an equity investment in the UCITS Fund, its representatives having a majority control of the UCITS Fund’s Board of Directors can influence the UCITS Fund’s management and affairs. The UCITS Fund’s Board of Directors maintains this control through its duties, which are stated in the UCITS Fund’s Memorandum, and Articles of Association, which have no expiration date. We concluded that the Company was not the primary beneficiary of the UCITS Fund because, even though it has the power to direct the activities of the UCITS Fund that most significantly impact the fund’s economic performance, it does not absorb a majority of the UCITS Fund’s expected losses and does not receive a majority of the UCITS Fund’s expected residual returns. Therefore, the results of the UCITS Fund are not included in the Company’s consolidated financial results. | |
We have also evaluated all of our advisory relationships with the Westwood Funds ®, collective investment trusts and limited liability companies and our relationship as sponsor of the common trust funds to determine whether or not we qualify as the primary beneficiary based on whether there is an obligation to absorb the majority of expected losses or a right to receive the majority of residual returns. Since all losses and returns are distributed to the shareholders of these VIEs, we are not the primary beneficiary and consequently these VIEs are not included in our consolidated financial statements. We have included the disclosures related to VIEs in Note 12. | |
A VOE is an entity that is outside the scope of the guidance for VIEs. Consolidation of a VOE is required when a reporting entity owns a controlling financial interest in a VOE. Ownership of a majority of the voting interests is the usual condition for a controlling financial interest. At December 31, 2014, none of our sponsored investment entities were VOEs subject to this assessment by the Company. | |
Use of Estimates | |
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
Our consolidated financial statements include all necessary reclassification adjustments to conform prior year results to the current period presentation. | |
Correction of Immaterial Errors | |
Pursuant to Staff Accounting Bulletin (“SAB”) No. 99, Materiality, the Company concluded that certain misstatements were not material to any of its prior period financial statements, including its financial statements for the first and second quarters of 2014. Although the misstatements were immaterial to prior periods, the prior period financial statements have been adjusted in this report in accordance with SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements due to the significance of the out-of-period correction of this non-cash adjustment to the third quarter of 2014. See Note 3 for further discussion. | |
Cash and Cash Equivalents | |
Cash and cash equivalents consist of money market funds and other short-term, highly liquid investments with maturities of three months or less, other than pooled investment vehicles that are considered investments. We maintain some cash and cash equivalents balances with financial institutions that are in excess of Federal Deposit Insurance Corporation insurance limits. The Company has not experienced losses on uninsured cash accounts. | |
Accounts Receivable | |
Accounts receivable represents balances arising from services provided to customers and are recorded on an accrual basis, net of any allowance for doubtful accounts. Accounts receivable are written off when they are determined to be uncollectible. Any allowance for doubtful accounts is estimated based on the Company’s historical amounts written off, existing conditions in the industry, and the financial stability of the customer. The majority of our accounts receivable balances consist of advisory and trust fees receivable from customers that we believe and have experienced to be fully collectible. Accordingly our consolidated financial statements do not include an allowance for bad debt nor any bad debt expense. | |
Investments | |
Investments are classified as trading securities and are carried at quoted market values on the accompanying consolidated balance sheets. Net unrealized holding gains or losses on investments classified as trading securities are reflected as a component of other revenues. We measure realized gains and losses on investments using the specific identification method. | |
We may make initial seed investments in sponsored investments at the strategy’s formation. If the seed investment results in a controlling financial interest, we will consolidate the investment, and the underlying individual securities will be accounted for as trading securities. Seed investments in which we do not have a controlling financial interest are classified as available-for-sale investments. These investments are measured at fair value in the consolidated balance sheets. Unrealized holding gains and losses for available-for-sale securities would be excluded from earnings and reported in other comprehensive income until realized. Realized gains would be recognized in non-operating income (loss). | |
Fair Value of Financial Instruments | |
We determined the estimated fair values of our financial instruments using available information. The fair value amounts discussed in Notes 4 and 5 are not necessarily indicative of either the amounts realizable upon disposition of these instruments or our intent or ability to dispose of these assets. The estimated fair value of cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued liabilities, dividends payable, compensation and benefits payable and income taxes payable approximates their carrying value due to their short-term maturities. The carrying amount of investments designated as “trading” securities, primarily U.S. Government and Government agency obligations, money market funds, Westwood Funds ® mutual funds and Westwood Trust common trust fund shares, equals fair value based on prices quoted in active markets and, with respect to funds, the reported net asset value of the shares held. Market values of our money market holdings generally do not fluctuate. | |
Goodwill and Other Intangible Assets | |
Goodwill represents the excess of the cost of acquired assets over the fair value of the underlying identifiable assets at the date of acquisition. Goodwill is not amortized but is tested at least annually for impairment. | |
We test more frequently if indicators are present or changes in circumstances suggest that impairment may exist. These indicators include, among others, declines in sales, earnings or cash flows, or the development of a material adverse change in the business climate. We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. We have identified two reporting units, which are consistent with our reporting segments: Advisory and Trust. The Company is not required to calculate the fair value of a reporting unit unless we determine that it is more likely than not that its fair value is less than the carrying amount. We assess goodwill for impairment using either a qualitative or quantitative assessment. The qualitative assessment includes consideration of the current trends in the industry in which we operate, macroeconomic conditions, recent financial performance of our reporting units and a market multiple approach valuation. In performing the annual impairment test during the third quarter, or more frequently when impairment indicators exist, and after assessing the qualitative factors, we may be required to utilize the two-step approach prescribed by ASC 350 “Goodwill and Other Intangible Assets”. We may also elect to skip the qualitative assessment and proceed directly to the quantitative analysis. The quantitative analysis requires a comparison of each reporting unit’s carrying value to the fair value of the respective unit. If the carrying value exceeds the fair value, a second step is performed to measure the amount of impairment loss, if any. The fair value of each reporting unit is estimated, entirely or predominantly, using a market multiple approach. During the third quarter of 2014, we completed our annual goodwill impairment assessment and determined that no impairment loss was required. No impairments were recorded during any of the periods presented. | |
Our intangible assets represent the acquisition date fair value of the acquired client relationships, trade names and non-compete agreements and are reflected net of amortization. In valuing these assets, we made significant estimates regarding the useful lives, growth rates and potential attrition. We periodically review our intangible assets for events or circumstances that would indicate impairment. See Note 6. | |
Property and Equipment | |
Property and equipment are stated at cost less accumulated depreciation. Depreciation of furniture and equipment is provided over the estimated useful lives of the assets (from 3 to 11 years), and depreciation on leasehold improvements is provided over the lesser of the estimated useful life or lease term using the straight-line method. We capitalize leasehold improvements, furniture and fixtures, computer hardware and most office equipment purchases. | |
Revenue Recognition | |
Investment advisory and trust fees are recognized as services are provided. These fees are determined in accordance with contracts between our subsidiaries and their clients and are generally based on a percentage of assets under management. A limited number of our clients have contractual performance-based fee arrangements, which would pay us an additional fee if we outperform a specified index over a specific period of time. We record revenue for performance-based fees at the end of the measurement period. Most advisory and trust fees are payable in advance or in arrears on a calendar quarterly basis. Advance payments are deferred and recognized over the periods services are performed. Since billing periods for most of our advance paying clients coincide with the calendar quarter to which payment relates, revenue is fully recognized within the quarter. Consequently no significant amount of deferred revenue is contained in our consolidated financial statements. Deferred revenue is shown on the consolidated balance sheets under the heading of “Accounts payable and accrued liabilities”. Other revenues generally consist of interest and investment income and are recognized as earned. | |
Stock-Based Compensation | |
We account for stock-based compensation in accordance with ASC No. 718, Compensation-Stock Compensation. Under ASC 718, stock-based compensation expense reflects the fair value of stock-based awards measured at grant date, is recognized over the relevant service period, and adjusted each period for anticipated forfeitures. We expense the fair value of stock-based compensation awards granted to our employees and directors in our consolidated financial statements on a straight-line basis over the period that services are required to be provided in exchange for the award (“requisite service period”), which is typically the period over which the award vests. Stock-based compensation is recognized only for awards that vest, and our periodic accrual of compensation cost is based on the estimated number of awards expected to vest. We measure the fair value of compensation cost related to restricted stock awards based on the closing market price of our common stock on the grant date. For performance-based share awards, we assess actual performance versus the predetermined performance goals and record compensation expense once we conclude it is probable that we will meet the performance goals required to vest the applicable performance-based awards. | |
We have issued restricted stock in accordance with our Third Amended and Restated Westwood Holdings Group, Inc. Stock Incentive Plan (the “Plan”). We apply judgment in developing an expectation of awards of restricted stock that may be forfeited. If actual experience differs significantly from these estimates, stock-based compensation expense and our results of operations could be materially affected. | |
The Share Award Plan of Westwood Holdings Group, Inc. for Service provided in Canada to its Subsidiaries (the “Canadian Plan”) provides compensation in the form of common stock for services performed by persons to Westwood International. We record compensation costs for these awards on a straight-line basis over the vesting period, once we determine it is probable that the award will be earned. Awards expected to be settled in shares are funded into a trust pursuant to an established Canadian employee benefit plan. Generally, the Canadian trust subsequently acquires Westwood common shares in market transactions and holds such shares until the shares are vested and distributed, or forfeited. Shares held in the trust are shown on our consolidated balance sheet as treasury shares. Until shares are acquired by the trust, we record compensation costs and measure the liability as a cash-based award, which is included in “Compensation and benefits payable” on our consolidated balance sheets. For the years ended December 31, 2014, 2013 and 2012, the compensation expense recorded for these awards was $359,000, $344,000 and $124,000, respectively. When the number of shares related to an award is determinable, the award becomes an equity award accounted for in a manner similar to restricted stock, which is described in Note 10. | |
Tax benefits realized upon the vesting of restricted shares that exceed the expense previously recognized for reporting purposes are recorded in stockholder’s equity and reflected as a financing activity in our Consolidated Statements of Cash Flows. If the tax benefit upon vesting is less than the expense previously recorded, the shortfall is recorded in stockholder’s equity. If the shortfall exceeds available windfall benefits in equity, they are recorded in our Consolidated Statements of Comprehensive Income and as an operating activity on our Consolidated Statements of Cash Flows. | |
Long-term Compensation Agreements | |
We entered into employment agreements with certain employees of Westwood International that provide for specified payments over four years. In certain circumstances, these payments would be forfeited to us if the employment of these individuals is terminated before completion of the contractual earning period. Payments made in advance under these agreements are included in “Other current assets” on our Consolidated Balance Sheets, net of amounts already amortized. | |
Currency Translation | |
Assets and liabilities of Westwood International, our non-U.S. dollar functional currency subsidiary, are translated at exchange rates as of applicable reporting dates. Revenues and expenses are translated at average exchange rates during the periods indicated. The gains and losses resulting from translating non-U.S. dollar functional currency into U.S. dollars are recorded through other comprehensive income. | |
Income Taxes | |
We file a United States federal income tax return as a consolidated group for Westwood and its subsidiaries based in the US. We file a Canadian income tax return for Westwood International. Deferred income tax assets and liabilities are determined based on temporary differences between the financial statements and income tax bases of assets and liabilities as measured at enacted income tax rates. Deferred income tax expense is generally the result of changes in deferred tax assets and liabilities. Deferred taxes relate primarily to incentive compensation and stock-based compensation expense. | |
We record net deferred tax assets to the extent we believe such assets will more likely than not be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. In the event we were to determine that we would not be able to realize our deferred income tax assets in the future, we would record a valuation allowance. No valuation allowance has been recorded in our consolidated financial statements. | |
We account for uncertain tax positions by recognizing the impact of a tax position in our consolidated financial statement when we believe it is more likely than not that the tax position would not be sustained upon examination by the appropriate tax authority, based on the merits of the position. We include penalties and interest on income-based taxes, if any, in the “General and administrative” line on our consolidated statements of comprehensive income. At December 31, 2014 and 2013, the Company had not established any reserves for, nor recorded any unrecognized tax benefits related to, uncertain tax positions. | |
Recent Accounting Pronouncements | |
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. The ASU is intended to reduce the frequency of disposals reported as discontinued operations by focusing on strategic shifts that have (or will have) a major effect on an entity’s operations and financial results. The standard will be effective for annual reporting periods beginning after December 15, 2014, although early adoption is permitted. We do not currently expect the adoption of this ASU to have a significant impact on our financial statements. | |
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which resulted from a joint project by the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards. The issuance of a comprehensive and converged standard on revenue recognition is expected to improve the ability of financial statement users to understand and consistently analyze an entity’s revenue across industries, transactions, and geographies. The standard will require additional disclosures to help financial statement users better understand the nature, amount, timing, and potential uncertainty of the revenue being recognized. ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2016, and will require either retrospective application to each prior reporting period presented or retrospective application with the cumulative effect of initially applying the standard recognized at the date of adoption. Early application is prohibited. We are currently evaluating the impact that the application of ASU 2014-09 will have on our financial statements and disclosures. | |
In June 2014, the FASB issued ASU 2014-12 Compensation—Stock Compensation (Topic 718) Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which establishes specific guidance on how to account for share-based payments for awards with performance targets after the employee completes the requisite service period. Current U.S. GAAP does not contain explicit guidance on how to account for those share-based payments. The standard will be effective for annual reporting periods beginning after December 15, 2015, although early adoption is permitted. We do not currently expect the adoption of this ASU to have a significant impact on our financial statements. | |
In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The ASU will explicitly require management to assess an entity’s ability to continue as a going concern and to provide related footnote disclosure in certain circumstances. The new guidance will be effective for the year ending December 31, 2016. Earlier adoption is permitted. We do not expect the adoption of this ASU to have an impact on our consolidated financial statements. | |
Correction_of_Immaterial_Error
Correction of Immaterial Error | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Changes And Error Corrections [Abstract] | |||||||||||||
Correction of Immaterial Error | 3. CORRECTION OF IMMATERIAL ERROR: | ||||||||||||
During the third quarter of 2014, we discovered an understatement of non-cash stock based compensation expense for restricted stock grants subject to both service and performance conditions that had no net effect on total stockholders’ equity. Measurement dates used for fair value determination of the non-cash expense for such grants between 2006 and the second quarter of 2014 were not set in accordance with ASC No. 718, Compensation-Stock Compensation, and non-cash stock based compensation was thereby understated during such periods. | |||||||||||||
The cumulative non-cash impact of additional stock based compensation expense for all years impacted resulted in an approximate $3.3 million overstatement of net income. The non-cash net income impact for each of the years ended December 31, 2013 and 2012 was less than $0.1 million. | |||||||||||||
A reconciliation of the effects of the adjustments to the previously reported consolidated balance sheet and consolidated statement of stockholders' equity at December 31, 2013 and 2012 follows (in millions): | |||||||||||||
31-Dec-13 | |||||||||||||
As Previously Reported | Adjustment | As Adjusted | |||||||||||
Additional paid-in capital | $ | 101 | $ | 2.9 | $ | 103.9 | |||||||
Retained earnings | 11 | (2.9 | ) | 8.1 | |||||||||
Total stockholder’s equity | 88.7 | — | 88.7 | ||||||||||
31-Dec-12 | |||||||||||||
As Previously Reported | Adjustment | As Adjusted | |||||||||||
Additional paid-in capital | $ | 88.4 | $ | 2.9 | $ | 91.3 | |||||||
Retained earnings | 6.5 | (2.9 | ) | 3.6 | |||||||||
Total stockholder’s equity | 76.6 | — | 76.6 | ||||||||||
Investments
Investments | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Investments Debt And Equity Securities [Abstract] | |||||||||||||||||
Investments | 4. INVESTMENTS: | ||||||||||||||||
Investments are presented below (in thousands). All investments are carried at fair value, and all investments are accounted for as trading securities. | |||||||||||||||||
Cost | Gross | Gross | Estimated | ||||||||||||||
Unrealized | Unrealized | Fair | |||||||||||||||
Gains | Losses | Value | |||||||||||||||
December 31, 2014: | |||||||||||||||||
U.S. Government and Government agency | $ | 66,761 | $ | 20 | $ | (8 | ) | $ | 66,773 | ||||||||
obligations | |||||||||||||||||
Money market funds | 8,250 | — | — | 8,250 | |||||||||||||
Equity funds | 4,477 | 223 | (103 | ) | 4,597 | ||||||||||||
Fixed income funds | — | — | — | — | |||||||||||||
Marketable securities | $ | 79,488 | $ | 243 | $ | (111 | ) | $ | 79,620 | ||||||||
Cost | Gross | Gross | Estimated | ||||||||||||||
Unrealized | Unrealized | Fair | |||||||||||||||
Gains | Losses | Value | |||||||||||||||
December 31, 2013: | |||||||||||||||||
U.S. Government and Government agency | $ | 42,595 | $ | 16 | $ | — | $ | 42,611 | |||||||||
obligations | |||||||||||||||||
Money market funds | 8,584 | — | — | 8,584 | |||||||||||||
Equity funds | 2,130 | 200 | (54 | ) | 2,276 | ||||||||||||
Fixed income funds | 10,984 | 99 | — | 11,083 | |||||||||||||
Marketable securities | $ | 64,293 | $ | 315 | $ | (54 | ) | $ | 64,554 | ||||||||
The following amounts, except for income tax amounts, are included in our consolidated statements of comprehensive income under the heading “Other revenues” for the years indicated (in thousands): | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Realized gains | $ | 156 | $ | 629 | $ | 2,467 | |||||||||||
Realized losses | (50 | ) | (4 | ) | (13 | ) | |||||||||||
Net realized gains | 106 | 625 | 2,454 | ||||||||||||||
Income tax expense from gains | 37 | 225 | 891 | ||||||||||||||
Interest income – trading | 51 | 28 | 27 | ||||||||||||||
Dividend income | 212 | 541 | 514 | ||||||||||||||
Unrealized gains/(losses) | 75 | (325 | ) | 344 | |||||||||||||
Realized gains in 2012 includes a gain of $1.9 million related to the sale of our investment in Teton shares, which was accounted for as available-for-sale securities. | |||||||||||||||||
As of December 31, 2014, corporate funds totaling $2.7 million were invested in the Westwood Funds® and Westwood Common Trust Funds and corporate funds aggregating $ 1.9 million were invested in a UCITS fund. See Note 13. | |||||||||||||||||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Fair Value of Financial Instruments | 5. FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||||
ASC No. 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value and requires additional disclosures regarding certain fair value measurements. ASC 820 establishes a three-tier hierarchy for measuring fair value as follows: | |||||||||||||||||
· | Level 1 – quoted market prices in active markets for identical assets and liabilities, | ||||||||||||||||
· | Level 2 – inputs other than quoted prices that are directly or indirectly observable | ||||||||||||||||
· | Level 3 – unobservable inputs where there is little or no market activity. | ||||||||||||||||
The following table summarizes the values of our assets as of the dates indicated within the fair value hierarchy (in thousands). | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
As of December 31, 2014 | |||||||||||||||||
Investments in securities: | |||||||||||||||||
Trading | $ | 77,327 | $ | 2,293 | $ | — | $ | 79,620 | |||||||||
Total Financial instruments | $ | 77,327 | $ | 2,293 | $ | — | $ | 79,620 | |||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
As of December 31, 2013 | |||||||||||||||||
Investments in securities: | |||||||||||||||||
Trading | $ | 64,554 | $ | — | $ | — | $ | 64,554 | |||||||||
Total Financial instruments | $ | 64,554 | $ | — | $ | — | $ | 64,554 | |||||||||
Investments categorized as level 2 assets consist of investments in common trust funds sponsored by Westwood Trust. Common trust funds are private investment vehicles comprised of commingled investments held in trusts that are valued using the Net Asset Value (“NAV”) we calculate as administrator of the funds. The NAV is calculated using indirectly observed inputs, as the unit price is based on the market value of the underlying investments traded on an active market. We can make withdrawals from the common trust funds on a daily basis, as needed for liquidity, and there are no restrictions on redemption as of December 31, 2014. | |||||||||||||||||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||
Goodwill and Intangible Assets | 6. GOODWILL AND INTANGIBLE ASSETS | ||||||||||||||||
Changes in goodwill for the last two years were as follows (in thousands): | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Beginning balance | $ | 11,255 | $ | 11,255 | |||||||||||||
Acquired goodwill | — | — | |||||||||||||||
Ending balance | $ | 11,255 | $ | 11,255 | |||||||||||||
Intangible Assets | |||||||||||||||||
The following is a summary of intangible assets at December 31, 2014 and 2013 (in thousands, except years): | |||||||||||||||||
Weighted | Gross | Accumulated | Net | ||||||||||||||
Average | Carrying | Amortization | Carrying | ||||||||||||||
Amortization | Amount | Amount | |||||||||||||||
Period | |||||||||||||||||
(years) | |||||||||||||||||
2014 | |||||||||||||||||
Client relationships | 14.2 | $ | 5,005 | $ | (1,575 | ) | $ | 3,430 | |||||||||
Trade names | 2 | 256 | (256 | ) | — | ||||||||||||
Non-compete agreements | 2.3 | 26 | (26 | ) | — | ||||||||||||
Total | $ | 5,287 | $ | (1,857 | ) | $ | 3,430 | ||||||||||
2013 | |||||||||||||||||
Client relationships | 14.2 | $ | 5,005 | $ | (1,216 | ) | $ | 3,789 | |||||||||
Trade names | 2 | 256 | (256 | ) | — | ||||||||||||
Non-compete agreements | 2.3 | 26 | (26 | ) | — | ||||||||||||
Total | $ | 5,287 | $ | (1,498 | ) | $ | 3,789 | ||||||||||
Amortization expense, which is included in “General and administrative” expense on our consolidated statements of comprehensive income, was $359,000, $359,000 and $472,000 for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||
Estimated amortization expense for intangible assets over the next five years is as follows (in thousands): | |||||||||||||||||
Estimated | |||||||||||||||||
Amortization | |||||||||||||||||
Expense | |||||||||||||||||
For the Year ending December 31, | |||||||||||||||||
2015 | $ | 359 | |||||||||||||||
2016 | 359 | ||||||||||||||||
2017 | 359 | ||||||||||||||||
2018 | 359 | ||||||||||||||||
2019 | 359 | ||||||||||||||||
Balance_Sheet_Components
Balance Sheet Components | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||||||||
Balance Sheet Components | 7. BALANCE SHEET COMPONENTS: | ||||||||
Property and Equipment | |||||||||
The following table reflects information about our property and equipment as of December 31, 2014 and 2013 (in thousands): | |||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Leasehold improvements | $ | 2,274 | $ | 2,068 | |||||
Furniture and fixtures | 1,516 | 1,453 | |||||||
Computer hardware and office equipment | 1,563 | 1,380 | |||||||
Accumulated depreciation | (2,720 | ) | (2,155 | ) | |||||
Net property and equipment | $ | 2,633 | $ | 2,746 | |||||
Accumulated Other Comprehensive Income | |||||||||
The components of accumulated other comprehensive loss were as follows (in thousands): | |||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Foreign currency translation adjustment | $ | (1,231 | ) | $ | (257 | ) | |||
Accumulated other comprehensive loss | $ | (1,231 | ) | $ | (257 | ) | |||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||
Income Taxes | 8. INCOME TAXES: | ||||||||||||||||||||||||
Income Tax Provision | |||||||||||||||||||||||||
Income (loss) before income taxes by jurisdiction is as follows (in thousands): | |||||||||||||||||||||||||
Years ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
United States | $ | 36,104 | $ | 30,799 | $ | 26,844 | |||||||||||||||||||
Canada | 5,932 | (2,614 | ) | (6,824 | ) | ||||||||||||||||||||
Total | $ | 42,036 | $ | 28,185 | $ | 20,020 | |||||||||||||||||||
Income tax expense differs from the amount that would otherwise have been calculated by applying the U.S. Federal corporate tax rate of 35% to income before income taxes. | |||||||||||||||||||||||||
The difference between the Federal corporate tax rate and the effective tax rate is comprised of the following (in thousands): | |||||||||||||||||||||||||
Years ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Income tax provision computed at US federal statutory rate | $ | 14,712 | 35 | % | $ | 9,864 | 35 | % | $ | 7,007 | 35 | % | |||||||||||||
Canadian rate differential | (520 | ) | (1.2 | ) | 222 | 0.7 | 580 | 2.9 | |||||||||||||||||
State and local income taxes, net of federal income taxes | 442 | 1.1 | 386 | 1.4 | 305 | 1.5 | |||||||||||||||||||
Other, net | 153 | 0.3 | (124 | ) | (0.4 | ) | 42 | 0.2 | |||||||||||||||||
Total income tax expense | $ | 14,787 | 35.2 | % | $ | 10,348 | 36.7 | % | $ | 7,934 | 39.6 | % | |||||||||||||
Effective income tax rate | 35.2 | % | 36.7 | % | 39.6 | % | |||||||||||||||||||
We include penalties and interest on income-based taxes in the “General and administrative” line on our consolidated statements of comprehensive income. We recorded $16,000 of penalties and interest in 2014. There were no penalties and interest in 2013 or 2012. | |||||||||||||||||||||||||
Income tax provision (benefit) as set forth in the consolidated statements of comprehensive income consisted of the following components (in thousands): | |||||||||||||||||||||||||
Years ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Current taxes: | |||||||||||||||||||||||||
US Federal | $ | 16,230 | $ | 10,683 | $ | 9,280 | |||||||||||||||||||
State and local | 690 | 602 | 473 | ||||||||||||||||||||||
Total | 16,920 | 11,285 | 9,753 | ||||||||||||||||||||||
Deferred taxes: | |||||||||||||||||||||||||
State and local | (40 | ) | (5 | ) | (2 | ) | |||||||||||||||||||
US Federal | (3,590 | ) | (240 | ) | (6 | ) | |||||||||||||||||||
Non-US | 1,497 | (692 | ) | (1,811 | ) | ||||||||||||||||||||
Total | (2,133 | ) | (937 | ) | (1,819 | ) | |||||||||||||||||||
Total income tax expense | $ | 14,787 | $ | 10,348 | $ | 7,934 | |||||||||||||||||||
Deferred Income Taxes | |||||||||||||||||||||||||
The tax effects of temporary differences that give rise to the deferred tax assets and deferred tax liabilities are presented below (in thousands): | |||||||||||||||||||||||||
As of December 31, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Deferred tax assets: | |||||||||||||||||||||||||
Share-based compensation expense | $ | 5,210 | $ | 4,226 | |||||||||||||||||||||
Net operating loss | 166 | 2,244 | |||||||||||||||||||||||
Deferred rent | 186 | 204 | |||||||||||||||||||||||
Compensation and benefits payable | 3,280 | 58 | |||||||||||||||||||||||
Other | 112 | 39 | |||||||||||||||||||||||
Total deferred tax assets | 8,954 | 6,771 | |||||||||||||||||||||||
Deferred tax liabilities: | |||||||||||||||||||||||||
Property and equipment | (334 | ) | (390 | ) | |||||||||||||||||||||
Intangibles | (645 | ) | (449 | ) | |||||||||||||||||||||
Unrealized gains on investments | (123 | ) | (79 | ) | |||||||||||||||||||||
Total deferred tax liabilities | (1,102 | ) | (918 | ) | |||||||||||||||||||||
Net deferred tax assets | $ | 7,852 | $ | 5,853 | |||||||||||||||||||||
Net deferred tax assets and liabilities are as follows (in thousands): | |||||||||||||||||||||||||
As of December 31, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Net current deferred tax asset | $ | 6,268 | $ | 3,812 | |||||||||||||||||||||
Net current deferred tax liabilities | (2,208 | ) | — | ||||||||||||||||||||||
Net current deferred tax assets reflected on the balance sheets | 4,060 | 3,812 | |||||||||||||||||||||||
Net non-current deferred tax assets | 4,782 | 2,275 | |||||||||||||||||||||||
Net non-current deferred tax liabilities | (990 | ) | (234 | ) | |||||||||||||||||||||
Net non-current deferred tax assets reflected on the balance sheets | 3,792 | 2,041 | |||||||||||||||||||||||
Total net deferred tax assets | $ | 7,852 | $ | 5,853 | |||||||||||||||||||||
As of December 31, 2014, we have Canadian net operating loss carry forwards of approximately $627,000 that are subject to limitation and account for the deferred tax asset of $166,000. These net operating loss carryforwards begin to expire in 2033. We believe that it is more likely than not that we will realize the benefit of our deferred tax assets. | |||||||||||||||||||||||||
The Company is subject to taxation in the United States and various state and foreign jurisdictions. As of December 31, 2014, the Company’s tax years of 2011, 2012 and 2013 are open for examination by the tax authorities. The 2010 tax year for Texas is also open for examination; with this exception, as of December 31, 2014, the Company is no longer subject to U.S. federal, state, local, or foreign examinations by tax authorities for years before 2011. We are not currently under audit by any taxing jurisdiction. | |||||||||||||||||||||||||
Regulatory_Capital_Requirement
Regulatory Capital Requirements | 12 Months Ended |
Dec. 31, 2014 | |
Banking And Thrift [Abstract] | |
Regulatory Capital Requirements | 9. REGULATORY CAPITAL REQUIREMENTS: |
Westwood Trust is subject to the capital requirements of the Texas Department of Banking and has a minimum capital requirement of $1.25 million. At December 31, 2014, Westwood Trust had approximately $12 million in excess of its minimum capital requirement. | |
Westwood Trust is limited under applicable Texas law in the payment of dividends of undivided profits, which is that part of equity capital equal to the balance of net profits, income, gains and losses since formation minus subsequent distributions to stockholders and transfers to surplus or capital under share dividends or appropriate Board resolutions. At the discretion of its board of directors, Westwood Trust has made quarterly and special dividend payments to us out of its undivided profits. | |
Westwood International is subject to the working capital requirements of the Ontario Securities Commission, which requires that combined cash and receivables exceed current liabilities by at least $200,000 CDN. At December 31, 2014 Westwood International had combined cash and receivables that were $14.9 million CDN (or $12.9 million in U.S. Dollars using the exchange rate on December 31, 2014) in excess of its current liabilities, which satisfies this requirement. |
Employee_Benefits
Employee Benefits | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Employee Benefits And Share Based Compensation [Abstract] | |||||||||||||
Employee Benefits | 10. EMPLOYEE BENEFITS: | ||||||||||||
Stock Based Compensation | |||||||||||||
Restricted Stock Awards | |||||||||||||
We have issued restricted shares to our employees and non-employee directors. The Plan reserves shares of Westwood common stock for issuance to eligible employees, directors and consultants of Westwood or its subsidiaries in the form of restricted stock and stock options. The total number of shares that may be issued under the Plan (including predecessor plans to the Plan) may not exceed 3,898,100 shares. In the event of a change in control of Westwood, the Plan contains provisions providing for the acceleration of the vesting of restricted stock and stock options. At December 31, 2014, approximately 485,000 shares remain available for issuance under the Plan. | |||||||||||||
Canadian Plan | |||||||||||||
As discussed in Note 2, the Canadian Plan provides compensation in the form of common stock for services performed by employees of Westwood International. Under the Canadian Plan, no more than $10 million CDN (or $8.6 million in U. S. Dollars using the exchange rate on December 31, 2014) may be funded to the Plan Trustee to fund purchases of common stock with respect to awards granted under the Canadian Plan. At December 31, 2014, approximately $7.2 million remains available for issuance under the Canadian Plan, or approximately 116,000 shares based on the closing share price of our stock of $61.82 as of the last business day of 2014. During the first quarter of 2014, the trust formed pursuant to the Canadian Plan purchased in the open market 11,476 Westwood common shares for approximately $670,000. As of December 31, 2014, the trust holds 31,727 shares of Westwood common stock. As of December 31, 2014, unrecognized compensation cost related to restricted stock grants under the Canadian Plan totaled $635,000, which we expect to recognize over a weighted-average period of 1.6 years. | |||||||||||||
The following table presents the total stock-based compensation expense recorded and the total income tax benefit recognized for stock-based compensation arrangements for the years indicated (in thousands): | |||||||||||||
For the years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Service condition restricted stock expense | $ | 7,580 | $ | 7,602 | $ | 7,546 | |||||||
Performance-based restricted stock expense | 5,718 | 3,842 | 2,975 | ||||||||||
Restricted stock expense under the Plan | 13,298 | 11,444 | 10,521 | ||||||||||
Canadian Plan restricted stock expense | 387 | 235 | — | ||||||||||
Total stock based compensation expense | $ | 13,685 | $ | 11,679 | $ | 10,521 | |||||||
Total income tax benefit recognized related to stock-based | $ | 5,764 | $ | 4,384 | $ | 4,535 | |||||||
compensation | |||||||||||||
Restricted Stock | |||||||||||||
Under the Plan, we have granted to employees and non-employee directors restricted stock subject to service conditions, and to certain key employees restricted stock subject to both service and performance conditions. | |||||||||||||
As of December 31, 2014, there was approximately $16.3 million of unrecognized compensation cost for restricted stock grants under the Plan, which we expect to recognize over a weighted-average period of 2.4 years. In order to satisfy tax liabilities that employees will owe on their shares that vest, we may withhold a sufficient number of vested shares from employees on the date vesting occurs. We withheld 88,123 shares in 2014 for this purpose. Our two types of restricted stock grants under the Plan are discussed below. | |||||||||||||
Restricted Stock Subject Only to a Service Condition | |||||||||||||
For the years ended December 31, 2014, 2013 and 2012, we granted restricted stock to employees and non-employee directors. Employee shares vest over four years and Director shares vest over one year. We calculate compensation cost for restricted stock grants using the fair market value of our common stock at the date of grant, the number of shares issued, an adjustment for restrictions on dividends and an estimate of shares that will not vest due to forfeitures. This compensation cost is amortized on a straight-line basis over the applicable vesting period. | |||||||||||||
The following table details the status and changes in our restricted stock grants that are subject only to a service condition for the year ended December 31, 2014: | |||||||||||||
Shares | Weighted Average | ||||||||||||
Grant Date Fair | |||||||||||||
Value | |||||||||||||
Restricted shares subject only to a service condition: | |||||||||||||
Non-vested, January 1, 2014 | 511,060 | $ | 40.49 | ||||||||||
Granted | 205,768 | 58.7 | |||||||||||
Vested | (186,680 | ) | 38.76 | ||||||||||
Forfeited | (33,691 | ) | 48.65 | ||||||||||
Non-vested, December 31, 2014 | 496,457 | 48.14 | |||||||||||
The following table shows the weighted-average grant date fair value for shares granted and the total fair value of shares vested during the years indicated: | |||||||||||||
Years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Restricted shares subject only to a service condition: | |||||||||||||
Weighted-average grant date fair value | $ | 58.7 | $ | 43.68 | $ | 39.26 | |||||||
Fair value of shares vested (in thousands) | $ | 7,236 | $ | 7,568 | $ | 8,115 | |||||||
Restricted Stock Subject to Service and Performance Conditions | |||||||||||||
Under the Plan, certain key employees were provided agreements for grants of restricted shares that vest over a five-year period subject to achieving annual performance goals established by the Compensation Committee of Westwood’s board of directors. Each year the Compensation Committee establishes a specific goal for that year’s vesting of the restricted shares, which historically has been based upon Westwood’s adjusted pre-tax income, as defined. The date that the Compensation Committee establishes the annual goal is considered to be the grant date and the fair value measurement date to determine expense on the shares that are likely to vest. The vesting period ends when the Compensation Committee formally approves the performance-based restricted stock vesting based on the final calculation of adjusted pre-tax income as derived from the Company’s audited financial statements. If a portion of the performance-based restricted shares does not vest, no compensation expense is recognized for that portion and any previously recognized compensation expense related to shares that do not vest is reversed. In February 2014, the Compensation Committee established the 2014 goal as adjusted pre-tax income of at least $34 million, representing a five-year compound annual growth rate in excess of 10% over annual adjusted pre-tax income recorded in 2009. Adjusted pre-tax income is determined based on our audited financial statements and is equal to income before income taxes increased by expenses incurred for the year for (i) incentive compensation for all officers and employees, (ii) performance-based restricted stock awards, and (iii) mutual fund share incentive awards, excluding start-up, non-recurring, and similar expense items, at the Committee’s discretion. In the first quarter of 2014, we concluded that it was probable that we would meet the performance goals required to vest the applicable percentage of the performance-based restricted shares this year and began recording expense related to those shares. | |||||||||||||
Shares | Weighted Average | ||||||||||||
Grant Date Fair | |||||||||||||
Value | |||||||||||||
Restricted shares subject to service and performance conditions: | |||||||||||||
Non-vested, January 1, 2014 | 93,000 | $ | 44.55 | ||||||||||
Granted | 101,313 | 58.59 | |||||||||||
Vested | (93,000 | ) | 44.55 | ||||||||||
Forfeited | — | — | |||||||||||
Non-vested, December 31, 2014 | 101,313 | $ | 58.59 | ||||||||||
The following table shows the weighted-average grant date fair value for shares granted and the total fair value of shares vested during the years indicated: | |||||||||||||
Years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Restricted shares subject to a service and performance condition: | |||||||||||||
Weighted-average grant date fair value | $ | 58.59 | $ | 44.55 | $ | 39.31 | |||||||
Fair value of shares vested (in thousands) | $ | 4,143 | $ | 2,948 | $ | 3,111 | |||||||
The above amounts as of December 31, 2014 do not include 185,252 non-vested restricted shares that potentially vest over performance years subsequent to 2014, as the annual performance goals for those years have not been set by the Compensation Committee and therefore no grant date has been established. | |||||||||||||
Stock Options | |||||||||||||
Options granted under the Plan had a maximum ten-year term and vested over a period of four years. Options exercised represent newly-issued shares. There are no options currently outstanding or exercisable as of December 31, 2014. | |||||||||||||
Options representing 16,250 shares of Westwood’s common stock were exercised in 2012 at a weighted average exercise price of $12.90 per share. The total intrinsic value of these exercised options was $364,000, and cash received from the exercise of stock options was $210,000. | |||||||||||||
Deferred Share Units | |||||||||||||
We have a deferred share unit (“DSU”) plan for employees Westwood International. A DSU is an award linked to the value of Westwood’s common stock and is represented by a notional credit to a participant account. The value of a DSU is initially equal to the value of a share of our common stock. DSUs vest 20%, 40%, 60%, and 80% after two, three, four and five years of service, respectively. DSUs become fully vested after six years of service and the liability for these units is settled in cash upon termination of the participant’s service. We record expense for DSUs based on the number of units vested on a straight line basis, which may increase or decrease based on changes in the price of our common shares, and will increase for additional units received from dividends declared on our shares. As of December 31, 2014, we had an accrued liability of $98,000 for 3,756 deferred share units related to the 2012 and 2013 awards issued in 2013 and 2014, respectively, which is based on the$ 61.82 per share closing price of our common stock on the last trading day of the year ended December 31, 2014. | |||||||||||||
Mutual Fund Share Incentive Awards | |||||||||||||
Each year we grant mutual fund incentive awards to certain employees based on our mutual funds achieving certain performance goals. Awards granted are notionally credited to a participant account maintained by us that contains a number of mutual fund shares equal to the award amount divided by the net closing value of a fund share on the date the amount is credited to the account. | |||||||||||||
These awards vest after approximately one year of service following the year in which the participant earns the award. We begin accruing a liability for mutual fund incentive awards when we determine it is probable that the award will be earned and record expense for these awards over the service period of the award, which is approximately two years. During the year in which the amount of the award is determined, we record expense based on the expected value of the award. After the award is earned, we record expense based on the value of the shares awarded and the percentage of the vesting period that has transpired. Our liability under these awards may increase or decrease based on changes in the value of the mutual fund shares awarded, including reinvested income from the mutual funds during the vesting period. Upon vesting, participants receive the value of the mutual fund share awards adjusted for earnings or losses attributable to the underlying mutual funds. For the years ended December 31, 2014 and 2013, we recorded expense of $863,000 and $1.8 million, respectively, related to mutual fund share incentive awards. We did not record any expense related to mutual fund share incentive awards in 2012. As of December 31, 2014 and 2013, we had an accrued liability of $844,000 and $1.9 million, respectively, related to mutual fund incentive awards. | |||||||||||||
Benefit Plans | |||||||||||||
Westwood has a defined contribution 401(k) and profit-sharing plan that was adopted in July 2002 and covers substantially all of our U.S. employees. Discretionary employer profit-sharing contributions become fully vested after six years of service by the participant. For the 401(k) portion of the plan, Westwood provides a match of up to 6% of eligible compensation. These 401(k) matching contributions vest immediately. | |||||||||||||
The following table displays our profit-sharing and 401(k) contributions for the periods presented (in thousands): | |||||||||||||
Years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Profit-sharing contributions | $ | 816 | $ | 674 | $ | 648 | |||||||
401(k) matching contributions | 928 | 871 | 744 | ||||||||||
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Earnings Per Share | 11. EARNINGS PER SHARE | ||||||||||||
Basic earnings per common share (“EPS”) is computed by dividing net income available to common stockholders by the weighted average number of shares outstanding. Diluted EPS is computed based on the weighted average shares of common stock outstanding plus the effect of any dilutive shares of restricted stock and stock options granted to employees and non-employee directors. There were 5,993 anti-dilutive restricted shares as of December 31, 2014 and no anti-dilutive restricted shares or options as of December 31, 2013 or 2012. | |||||||||||||
The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share and share amounts): | |||||||||||||
Years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Net income | $ | 27,249 | $ | 17,837 | $ | 12,086 | |||||||
Weighted average shares outstanding – basic | 7,512,348 | 7,331,874 | 7,145,701 | ||||||||||
Dilutive potential shares from unvested restricted shares | 394,197 | 360,882 | 158,200 | ||||||||||
Dilutive potential shares from stock options | — | — | 3,134 | ||||||||||
Weighted average shares outstanding – diluted | 7,906,545 | 7,692,756 | 7,307,035 | ||||||||||
Earnings per share: | |||||||||||||
Basic | $ | 3.63 | $ | 2.43 | $ | 1.69 | |||||||
Diluted | $ | 3.45 | $ | 2.32 | $ | 1.65 | |||||||
Variable_Interest_Entities
Variable Interest Entities | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Variable Interest Entities [Abstract] | |||||||||||||
Variable Interest Entities | 12. VARIABLE INTEREST ENTITIES | ||||||||||||
Westwood Trust sponsors common trust funds (“CTFs”) for its clients. These funds allow clients to commingle assets to achieve economies of scale. Westwood Management provides investment advisory services to the Westwood Funds ®, a family of mutual funds, and two collective investment trusts (“CITs”). Some clients of Westwood Management hold their investments in ten limited liability companies (“LLCs”). The CTFs, Westwood Funds ®, CITs and LLCs (“Westwood VIEs”) are considered VIEs because our clients, who hold the equity at risk, do not have direct or indirect ability through voting or similar rights to make decisions about the funds that may have a significant effect on their economic performance. We receive fees for managing assets in these entities commensurate with market rates. | |||||||||||||
We evaluate all of our advisory relationships and CTFs to determine whether or not we qualify as the primary beneficiary based on whether there is an obligation to absorb the majority of the expected losses or a right to receive the majority of the expected residual returns or both. Since all losses and returns are distributed to the shareholders of the Westwood VIEs, we are not the primary beneficiary and consequently, the Westwood VIEs are not consolidated into our financial statements. | |||||||||||||
In June 2013, the Company provided €300,000, or $406,000, to the UCITS Fund for the sole purpose of meeting the minimum capital requirements (and showing economic substance) needed to complete the application process to establish the fund. In August 2013, the UCITS Fund refunded this amount in full. In January 2014, the Company provided $1.0 million to a common trust fund for the sole purpose of meeting the minimum capital requirements (and showing economic substance) to establish the fund, which is included in “Investments, at fair value” on our consolidated balance sheet at December 31, 2014. In October 2014, the Company provided €1.6 million, or $2.0 million, to an additional UCITS Fund for the sole purpose of meeting the minimum capital requirements (and showing economic substance) needed to complete the application process to establish the fund, which is included in “Investments, at fair value” on our consolidated balance sheet at December 31, 2014. | |||||||||||||
Otherwise, we have not provided any financial support that we were not previously contractually obligated to provide and there are no arrangements that would require us to provide additional financial support to any of these variable interest entities. Our investments in the Westwood Funds ® and the CTFs are accounted for as investments in accordance with our other investments described in Note. 4. We recognized fee revenue from the Westwood VIEs of approximately $48.2 million, $36.2 million and $30.2 million for the twelve months ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||
The following table displays the assets under management, amount of corporate money invested that are included in “Investments, at fair value” on the consolidated balance sheets, and the risk of loss in each vehicle (in millions): | |||||||||||||
As of December 31, 2014 | |||||||||||||
Assets | Corporate | Risk | |||||||||||
Under | Investment | of | |||||||||||
Management | Loss | ||||||||||||
Westwood Funds ® | $ | 3,722 | $ | 1 | $ | 1 | |||||||
Common Trust Funds | 2,659 | 2 | 2 | ||||||||||
Collective Investment Trusts | 289 | — | — | ||||||||||
LLCs | 142 | — | — | ||||||||||
UCITS Fund | 811 | 2 | 2 | ||||||||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 13. RELATED PARTY TRANSACTIONS |
Some of our directors, executive officers and their affiliates invest their personal funds directly in trust accounts that we manage. There were no amounts due from these accounts as of December 31, 2014 and 2013. For the years ended December 31, 2014, 2013 and 2012, we recorded trust fees from these accounts of $264,000, $278,000, and $314,000, respectively. | |
The Company engages in transactions with its affiliates in the ordinary course of business. Westwood International provides investment advisory services to the UCITS Fund. Certain members of the Company’s management and board of directors serve on the board of directors of the UCITS Fund, which began operations in August 2013. Under the terms of the investment advisory agreements, the Company earns quarterly fees paid by either clients of the UCITS Fund or directly by the UCITS Fund. The fees are based on negotiated fee schedules applied to AUM. These fees are commensurate with market rates and are negotiated and contracted at arm’s length. For the year ended December 31, 2014, we recorded fees from the UCITS Fund of $1.1 million, which are included in “Asset-based advisory fees” on our consolidated statement of comprehensive income. As of December 31, 2014, $256,000 of these fees were unpaid and included in “Accounts receivable” on our consolidated balance sheet. For the year ended December 31, 2013, we did not earn or receive any fees from the UCITS Fund. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments And Contingencies Disclosure [Abstract] | |||||
Commitments and Contingencies | 14. COMMITMENTS AND CONTINGENCIES: | ||||
Leases | |||||
We lease our offices under non-cancelable operating lease agreements with expiration dates that run through 2021. Rental expense for facilities and equipment leases for years ended December 31, 2014, 2013 and 2012 aggregated approximately $1.5 million, $1.6 million and $1.3 million, respectively, and is included in general and administrative and information technology expenses in the accompanying consolidated statements of comprehensive income. | |||||
At December 31, 2014, the future contractual rental payments for non-cancelable operating leases for each of the following five years and thereafter follow (in thousands): | |||||
Year ending: | |||||
2015 | $ | 1,534 | |||
2016 | 1,558 | ||||
2017 | 1,378 | ||||
2018 | 1,186 | ||||
2019 | 1,109 | ||||
Thereafter | 1,992 | ||||
Total payments due | $ | 8,757 | |||
Litigation | |||||
On August 3, 2012, AGF Management Limited and AGF Investments Inc. (“AGF”) filed a lawsuit in the Ontario Superior Court of Justice against Westwood, certain Westwood employees and executive recruiting firm Warren International, LLC. The action relates to the hiring of certain members of Westwood’s global and emerging markets investment team previously employed by AGF. AGF is alleging that the former employees breached certain obligations when they resigned from AGF and that Westwood and Warren induced such breaches. AGF is seeking an unspecified amount of damages and punitive damages of $10 million (CAD) in the lawsuit. On November 5, 2012, Westwood issued a response to AGF’s lawsuit with a counterclaim against AGF for defamation. Westwood is seeking $1 million (CAD) in general damages, $10 million (CAD) in special damages, $1 million (CAD) in punitive damages, and costs. On November 6, 2012, AGF filed a second lawsuit against Westwood, Westwood Management and an employee of a Westwood subsidiary, alleging that the employee made defamatory statements about AGF. In this second lawsuit, AGF is seeking $5 million (CAD) in general damages, $1 million (CAD) per defendant in punitive damages, unspecified special damages, interest and costs. The pleadings phase was completed in 2013, and we are currently in the discovery phase, which we hope to complete by the end of 2015. | |||||
While we intend to vigorously defend both actions and pursue our counterclaims, we are currently unable to estimate the ultimate aggregate amount of monetary gain, loss or financial impact of these actions and counterclaims. Defending these actions and pursuing these counterclaims may be expensive for us and time consuming for our personnel. While we do not currently believe these proceedings will have a material impact, adverse resolution of these actions and counterclaims could have a material adverse effect on our business, financial condition or results of operations. | |||||
Our policy is to not accrue legal fees and directly related costs as part of potential loss contingencies. We have agreed with our Directors & Officers insurance provider that 50% of the defense costs related to both AGF claims, excluding Westwood’s counterclaim against AGF, will be covered by insurance. We expense legal fees and directly-related costs as they are incurred. We received insurance proceeds of $379,000 during 2014 and have recorded a receivable of $210,000 as of December 31, 2014, which represents our current minimum estimate of the related expenses that we expect to recover under our insurance policies. This receivable is part of “Other current assets” on our consolidated balance sheets. |
Segment_Reporting
Segment Reporting | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||
Segment Reporting | 15. SEGMENT REPORTING: | ||||||||||||||||||||
We operate two segments: Advisory and Trust. These segments are managed separately based on the types of products and services offered and their related client bases. The Company’s segment information is prepared on the same basis that management reviews the financial information for operational decision-making purposes. Our Chief Operating Decision Maker evaluates the performance of our segments based primarily on fee revenues and economic earnings. Westwood Holdings Group, Inc., the parent company of Advisory and Trust, does not have revenues and is the entity in which we record typical holding company expenses including employee compensation and benefits for holding company employees, directors’ fees and investor relations costs. All segment accounting policies are the same as those described in the summary of significant accounting policies. Intersegment balances that eliminate in consolidation have been applied to the appropriate segment. | |||||||||||||||||||||
Advisory | |||||||||||||||||||||
Our Advisory segment provides investment advisory services to corporate retirement plans, public retirement plans, endowments, foundations, individuals and the Westwood Funds®, as well as investment subadvisory services to mutual funds and our Trust segment. Westwood Management and Westwood International, which provide investment advisory services to clients of similar type, are included in our Advisory segment, along with Westwood Advisors, LLC. | |||||||||||||||||||||
Trust | |||||||||||||||||||||
Westwood Trust provides trust and custodial services to its clients and to our Advisory segment and sponsors common trust funds to institutions and high net worth individuals. | |||||||||||||||||||||
Advisory | Trust | Westwood | Eliminations | Consolidated | |||||||||||||||||
Holdings | |||||||||||||||||||||
2014 | |||||||||||||||||||||
Net fee revenues from external sources | $ | 92,279 | $ | 20,525 | $ | - | $ | - | $ | 112,804 | |||||||||||
Net intersegment revenues | 13,527 | - | - | (13,527 | ) | - | |||||||||||||||
Net interest and dividend revenue | 261 | 2 | - | - | 263 | ||||||||||||||||
Other revenue | 173 | 1 | - | - | 174 | ||||||||||||||||
Total revenues | 106,240 | 20,528 | - | (13,527 | ) | 113,241 | |||||||||||||||
Expenses: | |||||||||||||||||||||
Depreciation and amortization | 603 | 302 | 33 | - | 938 | ||||||||||||||||
Other operating expenses | 51,265 | 19,867 | 12,662 | (13,527 | ) | 70,267 | |||||||||||||||
Total expenses | 51,868 | 20,169 | 12,695 | (13,527 | ) | 71,205 | |||||||||||||||
Income (loss) before income taxes | 54,372 | 359 | (12,695 | ) | - | 42,036 | |||||||||||||||
Income tax expense (benefit) | 19,057 | 132 | (4,402 | ) | - | 14,787 | |||||||||||||||
Net income | $ | 35,315 | $ | 227 | $ | (8,293 | ) | $ | - | $ | 27,249 | ||||||||||
Add: | |||||||||||||||||||||
Restricted stock expense | $ | 9,074 | $ | 1,847 | $ | 2,764 | $ | - | $ | 13,685 | |||||||||||
Intangible amortization | 161 | 198 | - | - | 359 | ||||||||||||||||
Deferred taxes on goodwill | 38 | 114 | - | - | 152 | ||||||||||||||||
Economic Earnings | $ | 44,588 | $ | 2,386 | $ | (5,529 | ) | $ | - | $ | 41,445 | ||||||||||
Segment assets | $ | 144,385 | $ | 18,133 | $ | 10,435 | $ | (33,079 | ) | $ | 139,874 | ||||||||||
Segment goodwill | $ | 5,219 | $ | 6,036 | $ | - | $ | - | $ | 11,255 | |||||||||||
Expenditures for long-lived assets | $ | 226 | $ | 29 | $ | 223 | $ | - | $ | 478 | |||||||||||
2013 | |||||||||||||||||||||
Net fee revenues from external sources | $ | 72,588 | $ | 18,367 | $ | - | $ | - | $ | 90,955 | |||||||||||
Net intersegment revenues | 10,402 | 14 | - | (10,416 | ) | - | |||||||||||||||
Net interest and dividend revenue | 568 | 1 | - | - | 569 | ||||||||||||||||
Other revenue | 301 | - | - | - | 301 | ||||||||||||||||
Total revenues | 83,859 | 18,382 | - | (10,416 | ) | 91,825 | |||||||||||||||
Expenses: | |||||||||||||||||||||
Depreciation and amortization | 468 | 301 | - | - | 769 | ||||||||||||||||
Other operating expenses | 46,545 | 16,943 | 9,799 | (10,416 | ) | 62,871 | |||||||||||||||
Total expenses | 47,013 | 17,244 | 9,799 | (10,416 | ) | 63,640 | |||||||||||||||
Income (loss) before income taxes | 36,846 | 1,138 | (9,799 | ) | - | 28,185 | |||||||||||||||
Income tax expense (benefit) | 13,738 | 408 | (3,798 | ) | — | 10,348 | |||||||||||||||
Net income | $ | 23,108 | $ | 730 | $ | (6,001 | ) | $ | - | $ | 17,837 | ||||||||||
Add: | |||||||||||||||||||||
Restricted stock expense | $ | 7,586 | $ | 1,803 | $ | 2,290 | $ | - | $ | 11,679 | |||||||||||
Intangible amortization | 161 | 198 | - | - | 359 | ||||||||||||||||
Deferred taxes on goodwill | 38 | 114 | - | - | 152 | ||||||||||||||||
Economic Earnings | $ | 30,893 | $ | 2,845 | $ | (3,711 | ) | $ | - | $ | 30,027 | ||||||||||
Segment assets | $ | 114,871 | $ | 14,190 | $ | 6,354 | $ | (19,365 | ) | $ | 116,050 | ||||||||||
Segment goodwill | $ | 5,219 | $ | 6,036 | $ | - | $ | - | $ | 11,255 | |||||||||||
Expenditures for long-lived assets | $ | 962 | $ | 239 | $ | - | $ | - | $ | 1,201 | |||||||||||
2012 | |||||||||||||||||||||
Net fee revenues from external sources | $ | 59,187 | $ | 14,969 | $ | - | $ | - | $ | 74,156 | |||||||||||
Net intersegment revenues | 5,858 | 16 | - | (5,874 | ) | - | |||||||||||||||
Net interest and dividend revenue | 539 | 2 | - | - | 541 | ||||||||||||||||
Other revenue | 2,798 | - | - | - | 2,798 | ||||||||||||||||
Total revenues | 68,382 | 14,987 | - | (5,874 | ) | 77,495 | |||||||||||||||
Expenses: | |||||||||||||||||||||
Depreciation and amortization | 450 | 371 | - | - | 821 | ||||||||||||||||
Other operating expenses | 38,954 | 13,720 | 9,854 | (5,874 | ) | 56,654 | |||||||||||||||
Total expenses | 39,404 | 14,091 | 9,854 | (5,874 | ) | 57,475 | |||||||||||||||
Income (loss) before income taxes | 28,978 | 896 | (9,854 | ) | - | 20,020 | |||||||||||||||
Income tax expense (benefit) | 11,132 | 316 | (3,514 | ) | - | 7,934 | |||||||||||||||
Net income | $ | 17,846 | $ | 580 | $ | (6,340 | ) | $ | - | $ | 12,086 | ||||||||||
Add: | |||||||||||||||||||||
Restricted stock expense | $ | 6,366 | $ | 1,735 | $ | 2,420 | $ | - | $ | 10,521 | |||||||||||
Intangible amortization | 189 | 283 | - | - | 472 | ||||||||||||||||
Deferred taxes on goodwill | 39 | 115 | - | - | 154 | ||||||||||||||||
Economic Earnings | $ | 24,440 | $ | 2,713 | $ | (3,920 | ) | $ | - | $ | 23,233 | ||||||||||
Segment assets | $ | 91,619 | $ | 13,657 | $ | 3,906 | $ | (12,565 | ) | $ | 96,617 | ||||||||||
Segment goodwill | $ | 5,219 | $ | 6,036 | $ | - | $ | - | $ | 11,255 | |||||||||||
Expenditures for long-lived assets | $ | 228 | $ | 36 | $ | - | $ | - | $ | 264 | |||||||||||
The segment presentation above has been updated from the prior year presentation to show Economic Earnings, a non-U.S. generally accepted accounting principles (“non-GAAP”) performance measure of segment profit or loss. We provide this measure in addition to, but not as a substitute for, net income reported on a U.S. GAAP basis. Our management and Board of Directors review Economic Earnings to evaluate our ongoing performance, allocate resources and review dividend policy. We believe that this non-GAAP performance measure of segment profit or loss, while not a substitute for GAAP net income, is useful for management and investors when evaluating our underlying operating and financial performance and our available resources. We do not advocate that investors consider this non-GAAP measure of segment profit or loss without considering the financial information prepared in accordance with GAAP. | |||||||||||||||||||||
In calculating Economic Earnings, we add to net income the non-cash expense associated with equity-based compensation awards of restricted stock and stock options, amortization of intangible assets and the deferred taxes related to the tax-basis amortization of goodwill. Although depreciation on property and equipment is a non-cash expense, we do not add it back when calculating Economic Earnings because depreciation charges represent a decline in the value of the related assets that will ultimately require replacement. | |||||||||||||||||||||
In addition, we have reclassified the 2013 and 2012 periods for Economic Earnings of Westwood Holdings to include typical holding company expenses in order to be comparable to amounts reported in 2014. | |||||||||||||||||||||
Geographical information | |||||||||||||||||||||
Years ended December 31, | |||||||||||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||
Analysis of revenues by geographic location of client: | |||||||||||||||||||||
U.S. | $ | 94,955 | $ | 83,622 | $ | 73,255 | |||||||||||||||
Canada | 8,635 | 5,567 | 2,542 | ||||||||||||||||||
Europe | 8,146 | 1,843 | 1,698 | ||||||||||||||||||
Japan | 21 | - | - | ||||||||||||||||||
Australia | 1,484 | 793 | - | ||||||||||||||||||
Total | $ | 113,241 | $ | 91,825 | $ | 77,495 | |||||||||||||||
As of | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||||||||||
Analysis of property and equipment, net by geographic area: | |||||||||||||||||||||
U.S. | $ | 2,057 | $ | 2,102 | |||||||||||||||||
Canada | 576 | 644 | |||||||||||||||||||
Total | $ | 2,633 | $ | 2,746 | |||||||||||||||||
Concentration
Concentration | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Risks And Uncertainties [Abstract] | |||||||||||||
Concentration | 16. CONCENTRATION: | ||||||||||||
For the years ended December 31, 2014, 2013 and 2012, our ten largest clients accounted for over 20% of our fee revenue. | |||||||||||||
No single customer accounted for 10% or more of our fee revenues in any of these years. | |||||||||||||
Years ended December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Advisory fees from Westwood Management’s largest client: | |||||||||||||
Asset-based fees | $ | 2,183 | $ | 1,729 | $ | 1,452 | |||||||
Performance-based fees | 3,806 | 2,561 | 1,251 | ||||||||||
Percent of fee revenue | 5.3 | % | 4.7 | % | 3.7 | % | |||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. SUBSEQUENT EVENTS: |
Merger Agreement | |
On January 15, 2015, we entered into an agreement to acquire Woodway Financial Advisors (“Woodway”), a Houston-based private wealth and trust company that manages assets of approximately $1.6 billion at December 31, 2014. The acquisition will occur pursuant to a Reorganization Agreement and Agreement and Plan of Merger (the “Merger Agreement”), by and among Westwood, Westwood Trust, Woodway and certain shareholders of Woodway. | |
Pursuant to the Merger Agreement, Woodway will merge with Westwood Trust, with Westwood Trust being the surviving entity (the “Merger”). The total merger consideration consists of (i) $32 million, subject to adjustment for the amount of Woodway’s working capital at closing, and subject to reduction for Woodway’s outstanding indebtedness and unpaid transaction expenses as of closing, and (ii) an earn-out amount equal to the annualized revenue from the post-closing business of Woodway for the twelve month period following the effective time of the Merger (the “Earn-Out Period”), adjusted for clients or accounts that have terminated, and capped at $15 million (the “Earn-Out Amount”). | |
Approximately 73% of the total merger consideration will be paid in cash with the remaining 27% paid through issuance of shares of Westwood common stock. The stock portion of the initial merger consideration payable at closing will be determined by using the average closing price of Westwood common stock over the 15 business days prior to the Signing Date. The stock portion of the Earn-Out Amount will be determined by using the average closing price of Westwood common stock for the last 30 days of the Earn-Out Period. The shares of Westwood common stock issued pursuant to the Merger will be issued only to “accredited investors” within the meaning of Regulation D promulgated under the Securities Act of 1933 (the “Securities Act”). | |
The Merger Agreement contains customary representations, warranties and covenants by the parties, as well as indemnification rights. Subject to customary loss baskets and caps, losses resulting from breach of the representations, warranties or covenants of Woodway or the Woodway shareholders may be recouped or set off against the Earn-Out Amount. Each of the board of directors of Westwood, Westwood Trust and Woodway, as well as the shareholders of Woodway, has approved the Merger and Merger Agreement. The Merger is subject to approval by the Texas Department of Banking, as well as customary closing conditions. | |
Dividends Declared | |
On February 4, 2015, we declared a quarterly cash dividend of $0.50 per share on common stock payable on April 1, 2015 to stockholders of record on March 13, 2015. | |
Restricted Stock Grants | |
On February 23, 2015, we issued 186,522 shares of restricted stock to employees. On February 23, 2015, shares of our stock closed at a price of $61.82 per share. The shares are subject to vesting conditions described in Note 10 of these consolidated financial statements. |
Quarterly_Financial_Data
Quarterly Financial Data | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Quarterly Financial Data | 18. QUARTERLY FINANCIAL DATA (Unaudited): | ||||||||||||||||
The following is a summary of unaudited quarterly results of operations for the years ended December 31, 2014 and 2013 (in thousands, except per share amounts): | |||||||||||||||||
Quarter | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
2014(1) | |||||||||||||||||
Revenues | $ | 25,949 | $ | 30,905 | $ | 28,122 | $ | 28,265 | |||||||||
Income before income taxes | 8,613 | 13,356 | 10,592 | 9,475 | |||||||||||||
Net income | 5,562 | 8,591 | 7,118 | 5,978 | |||||||||||||
Basic earnings per common share | 0.74 | 1.14 | 0.95 | 0.79 | |||||||||||||
Diluted earnings per common share | 0.72 | 1.12 | 0.92 | 0.77 | |||||||||||||
2013(2) | |||||||||||||||||
Revenues | $ | 20,100 | $ | 23,475 | $ | 22,998 | $ | 25,252 | |||||||||
Income before income taxes | 4,696 | 7,851 | 6,738 | 8,900 | |||||||||||||
Net income | 2,818 | 4,955 | 4,301 | 5,763 | |||||||||||||
Basic earnings per common share | 0.39 | 0.67 | 0.58 | 0.78 | |||||||||||||
Diluted earnings per common share | 0.38 | 0.66 | 0.57 | 0.75 | |||||||||||||
________________ | |||||||||||||||||
-1 | Results for the first and second quarter of 2014 have been adjusted for the immaterial error discussed in Note 3. The non-cash net income impact for each of the first and second quarters of 2014 was an overstatement of approximately $0.2 million for an overstatement of approximately $0.4 million for the first half of 2014. | ||||||||||||||||
-2 | Results for each of the quarters of 2013 have been adjusted for the immaterial error discussed in Note 3. The non-cash net income impact for each of the quarters of 2013 was an overstatement of less than $0.1 million, representing less than $0.1 million for the year ended December 31, 2013. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Principles of consolidation | Principles of consolidation |
The accompanying consolidated financial statements include the accounts of Westwood and its subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation. | |
We assess each legal entity that we manage to determine whether consolidation is appropriate at the onset of the relationship. We first determine whether the entity is a variable interest entity (“VIE”), or a voting interest entity (“VOE”), under U.S. generally accepted accounting principles (“GAAP”) and then whether we have a controlling financial interest in the entity. Assessing whether or not an entity is a VOE or VIE and if it requires consolidation involves judgment and analysis. Factors considered in this assessment include, but are not limited to, the legal organization of the entity, our equity ownership and contractual involvement with the entity and any related party or de facto agent implications of our involvement with the entity. We reconsider whether entities are a VIE or VOE whenever contractual arrangements change, the entity receives additional equity or returns equity to its investors or changes in facts and circumstances occur that change the investors’ ability to direct the activities of the entity. | |
A VIE is an entity in which (i) the total equity investment at risk is not sufficient to enable the entity to finance its activities without subordinated financial support or (ii) the at-risk equity holders do not have the normal characteristics of a controlling financial interest. That is, the at-risk equity holders do not have the obligation to absorb losses, the right to receive residual returns and/or the right to direct the activities of the entity that most significantly impact the entity’s economic performance. An enterprise must consolidate all VIEs of which it is the primary beneficiary. We determine if a sponsored investment meets the definition of a VIE by considering whether the fund’s equity investment at risk is sufficient to finance its activities without additional subordinated financial support and whether the fund’s at-risk equity holders absorb any losses, have the right to receive residual returns and have the right to direct the activities of the entity most responsible for the entity’s economic performance. For VIEs that are investment companies, the primary beneficiary of the VIE is the party that absorbs a majority of the expected losses of the VIE, receives a majority of the expected residual returns of the VIE, or both. For VIEs that are not investment companies, the primary beneficiary of a VIE is defined as the party who, considering the involvement of related parties and de facto agents, has (i) the power to direct the activities of the VIE that most significantly affect its economic performance and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. This evaluation is updated continuously. | |
Westwood Investment Funds PLC (the “UCITS Fund”), which was authorized by the Central Bank of Ireland on June 18, 2013 pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011, is an Ireland domiciled umbrella-type open-ended self-managed investment company. The UCITS Fund is an umbrella fund with segregated assets and liabilities between sub-funds, and notwithstanding the segregation of assets and liabilities within each sub-fund, the UCITS Fund is a single legal entity and no sub-fund constitutes a legal entity separate from the UCITS Fund. The Company’s first UCITS sub-fund is focused on Westwood’s Emerging Markets strategy. Shares of the sub-fund, all of which are owned by the third-party investors, are listed on the Irish Stock Exchange. The base currency of the UCITS Fund is the British pound sterling. We determined that the UCITS Fund was a VIE as its at-risk equity holders do not have the ability to direct the activities of the UCITS Fund that most significantly impact the entity’s economic performance. Although the Company does not have an equity investment in the UCITS Fund, its representatives having a majority control of the UCITS Fund’s Board of Directors can influence the UCITS Fund’s management and affairs. The UCITS Fund’s Board of Directors maintains this control through its duties, which are stated in the UCITS Fund’s Memorandum, and Articles of Association, which have no expiration date. We concluded that the Company was not the primary beneficiary of the UCITS Fund because, even though it has the power to direct the activities of the UCITS Fund that most significantly impact the fund’s economic performance, it does not absorb a majority of the UCITS Fund’s expected losses and does not receive a majority of the UCITS Fund’s expected residual returns. Therefore, the results of the UCITS Fund are not included in the Company’s consolidated financial results. | |
We have also evaluated all of our advisory relationships with the Westwood Funds ®, collective investment trusts and limited liability companies and our relationship as sponsor of the common trust funds to determine whether or not we qualify as the primary beneficiary based on whether there is an obligation to absorb the majority of expected losses or a right to receive the majority of residual returns. Since all losses and returns are distributed to the shareholders of these VIEs, we are not the primary beneficiary and consequently these VIEs are not included in our consolidated financial statements. We have included the disclosures related to VIEs in Note 12. | |
A VOE is an entity that is outside the scope of the guidance for VIEs. Consolidation of a VOE is required when a reporting entity owns a controlling financial interest in a VOE. Ownership of a majority of the voting interests is the usual condition for a controlling financial interest. At December 31, 2014, none of our sponsored investment entities were VOEs subject to this assessment by the Company. | |
Use of Estimates | Use of Estimates |
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
Our consolidated financial statements include all necessary reclassification adjustments to conform prior year results to the current period presentation. | |
Correction of Immaterial Errors | Correction of Immaterial Errors |
Pursuant to Staff Accounting Bulletin (“SAB”) No. 99, Materiality, the Company concluded that certain misstatements were not material to any of its prior period financial statements, including its financial statements for the first and second quarters of 2014. Although the misstatements were immaterial to prior periods, the prior period financial statements have been adjusted in this report in accordance with SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements due to the significance of the out-of-period correction of this non-cash adjustment to the third quarter of 2014. See Note 3 for further discussion. | |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Cash and cash equivalents consist of money market funds and other short-term, highly liquid investments with maturities of three months or less, other than pooled investment vehicles that are considered investments. We maintain some cash and cash equivalents balances with financial institutions that are in excess of Federal Deposit Insurance Corporation insurance limits. The Company has not experienced losses on uninsured cash accounts. | |
Accounts Receivable | Accounts Receivable |
Accounts receivable represents balances arising from services provided to customers and are recorded on an accrual basis, net of any allowance for doubtful accounts. Accounts receivable are written off when they are determined to be uncollectible. Any allowance for doubtful accounts is estimated based on the Company’s historical amounts written off, existing conditions in the industry, and the financial stability of the customer. The majority of our accounts receivable balances consist of advisory and trust fees receivable from customers that we believe and have experienced to be fully collectible. Accordingly our consolidated financial statements do not include an allowance for bad debt nor any bad debt expense. | |
Investments | Investments |
Investments are classified as trading securities and are carried at quoted market values on the accompanying consolidated balance sheets. Net unrealized holding gains or losses on investments classified as trading securities are reflected as a component of other revenues. We measure realized gains and losses on investments using the specific identification method. | |
We may make initial seed investments in sponsored investments at the strategy’s formation. If the seed investment results in a controlling financial interest, we will consolidate the investment, and the underlying individual securities will be accounted for as trading securities. Seed investments in which we do not have a controlling financial interest are classified as available-for-sale investments. These investments are measured at fair value in the consolidated balance sheets. Unrealized holding gains and losses for available-for-sale securities would be excluded from earnings and reported in other comprehensive income until realized. Realized gains would be recognized in non-operating income (loss). | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments |
We determined the estimated fair values of our financial instruments using available information. The fair value amounts discussed in Notes 4 and 5 are not necessarily indicative of either the amounts realizable upon disposition of these instruments or our intent or ability to dispose of these assets. The estimated fair value of cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued liabilities, dividends payable, compensation and benefits payable and income taxes payable approximates their carrying value due to their short-term maturities. The carrying amount of investments designated as “trading” securities, primarily U.S. Government and Government agency obligations, money market funds, Westwood Funds ® mutual funds and Westwood Trust common trust fund shares, equals fair value based on prices quoted in active markets and, with respect to funds, the reported net asset value of the shares held. Market values of our money market holdings generally do not fluctuate. | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets |
Goodwill represents the excess of the cost of acquired assets over the fair value of the underlying identifiable assets at the date of acquisition. Goodwill is not amortized but is tested at least annually for impairment. | |
We test more frequently if indicators are present or changes in circumstances suggest that impairment may exist. These indicators include, among others, declines in sales, earnings or cash flows, or the development of a material adverse change in the business climate. We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. We have identified two reporting units, which are consistent with our reporting segments: Advisory and Trust. The Company is not required to calculate the fair value of a reporting unit unless we determine that it is more likely than not that its fair value is less than the carrying amount. We assess goodwill for impairment using either a qualitative or quantitative assessment. The qualitative assessment includes consideration of the current trends in the industry in which we operate, macroeconomic conditions, recent financial performance of our reporting units and a market multiple approach valuation. In performing the annual impairment test during the third quarter, or more frequently when impairment indicators exist, and after assessing the qualitative factors, we may be required to utilize the two-step approach prescribed by ASC 350 “Goodwill and Other Intangible Assets”. We may also elect to skip the qualitative assessment and proceed directly to the quantitative analysis. The quantitative analysis requires a comparison of each reporting unit’s carrying value to the fair value of the respective unit. If the carrying value exceeds the fair value, a second step is performed to measure the amount of impairment loss, if any. The fair value of each reporting unit is estimated, entirely or predominantly, using a market multiple approach. During the third quarter of 2014, we completed our annual goodwill impairment assessment and determined that no impairment loss was required. No impairments were recorded during any of the periods presented. | |
Our intangible assets represent the acquisition date fair value of the acquired client relationships, trade names and non-compete agreements and are reflected net of amortization. In valuing these assets, we made significant estimates regarding the useful lives, growth rates and potential attrition. We periodically review our intangible assets for events or circumstances that would indicate impairment. See Note 6. | |
Property and Equipment | Property and Equipment |
Property and equipment are stated at cost less accumulated depreciation. Depreciation of furniture and equipment is provided over the estimated useful lives of the assets (from 3 to 11 years), and depreciation on leasehold improvements is provided over the lesser of the estimated useful life or lease term using the straight-line method. We capitalize leasehold improvements, furniture and fixtures, computer hardware and most office equipment purchases. | |
Revenue Recognition | Revenue Recognition |
Investment advisory and trust fees are recognized as services are provided. These fees are determined in accordance with contracts between our subsidiaries and their clients and are generally based on a percentage of assets under management. A limited number of our clients have contractual performance-based fee arrangements, which would pay us an additional fee if we outperform a specified index over a specific period of time. We record revenue for performance-based fees at the end of the measurement period. Most advisory and trust fees are payable in advance or in arrears on a calendar quarterly basis. Advance payments are deferred and recognized over the periods services are performed. Since billing periods for most of our advance paying clients coincide with the calendar quarter to which payment relates, revenue is fully recognized within the quarter. Consequently no significant amount of deferred revenue is contained in our consolidated financial statements. Deferred revenue is shown on the consolidated balance sheets under the heading of “Accounts payable and accrued liabilities”. Other revenues generally consist of interest and investment income and are recognized as earned. | |
Stock Based Compensation | Stock-Based Compensation |
We account for stock-based compensation in accordance with ASC No. 718, Compensation-Stock Compensation. Under ASC 718, stock-based compensation expense reflects the fair value of stock-based awards measured at grant date, is recognized over the relevant service period, and adjusted each period for anticipated forfeitures. We expense the fair value of stock-based compensation awards granted to our employees and directors in our consolidated financial statements on a straight-line basis over the period that services are required to be provided in exchange for the award (“requisite service period”), which is typically the period over which the award vests. Stock-based compensation is recognized only for awards that vest, and our periodic accrual of compensation cost is based on the estimated number of awards expected to vest. We measure the fair value of compensation cost related to restricted stock awards based on the closing market price of our common stock on the grant date. For performance-based share awards, we assess actual performance versus the predetermined performance goals and record compensation expense once we conclude it is probable that we will meet the performance goals required to vest the applicable performance-based awards. | |
We have issued restricted stock in accordance with our Third Amended and Restated Westwood Holdings Group, Inc. Stock Incentive Plan (the “Plan”). We apply judgment in developing an expectation of awards of restricted stock that may be forfeited. If actual experience differs significantly from these estimates, stock-based compensation expense and our results of operations could be materially affected. | |
The Share Award Plan of Westwood Holdings Group, Inc. for Service provided in Canada to its Subsidiaries (the “Canadian Plan”) provides compensation in the form of common stock for services performed by persons to Westwood International. We record compensation costs for these awards on a straight-line basis over the vesting period, once we determine it is probable that the award will be earned. Awards expected to be settled in shares are funded into a trust pursuant to an established Canadian employee benefit plan. Generally, the Canadian trust subsequently acquires Westwood common shares in market transactions and holds such shares until the shares are vested and distributed, or forfeited. Shares held in the trust are shown on our consolidated balance sheet as treasury shares. Until shares are acquired by the trust, we record compensation costs and measure the liability as a cash-based award, which is included in “Compensation and benefits payable” on our consolidated balance sheets. For the years ended December 31, 2014, 2013 and 2012, the compensation expense recorded for these awards was $359,000, $344,000 and $124,000, respectively. When the number of shares related to an award is determinable, the award becomes an equity award accounted for in a manner similar to restricted stock, which is described in Note 10. | |
Tax benefits realized upon the vesting of restricted shares that exceed the expense previously recognized for reporting purposes are recorded in stockholder’s equity and reflected as a financing activity in our Consolidated Statements of Cash Flows. If the tax benefit upon vesting is less than the expense previously recorded, the shortfall is recorded in stockholder’s equity. If the shortfall exceeds available windfall benefits in equity, they are recorded in our Consolidated Statements of Comprehensive Income and as an operating activity on our Consolidated Statements of Cash Flows. | |
Long-term Compensation Agreements | Long-term Compensation Agreements |
We entered into employment agreements with certain employees of Westwood International that provide for specified payments over four years. In certain circumstances, these payments would be forfeited to us if the employment of these individuals is terminated before completion of the contractual earning period. Payments made in advance under these agreements are included in “Other current assets” on our Consolidated Balance Sheets, net of amounts already amortized. | |
Currency Translation | Currency Translation |
Assets and liabilities of Westwood International, our non-U.S. dollar functional currency subsidiary, are translated at exchange rates as of applicable reporting dates. Revenues and expenses are translated at average exchange rates during the periods indicated. The gains and losses resulting from translating non-U.S. dollar functional currency into U.S. dollars are recorded through other comprehensive income. | |
Income Taxes | Income Taxes |
We file a United States federal income tax return as a consolidated group for Westwood and its subsidiaries based in the US. We file a Canadian income tax return for Westwood International. Deferred income tax assets and liabilities are determined based on temporary differences between the financial statements and income tax bases of assets and liabilities as measured at enacted income tax rates. Deferred income tax expense is generally the result of changes in deferred tax assets and liabilities. Deferred taxes relate primarily to incentive compensation and stock-based compensation expense. | |
We record net deferred tax assets to the extent we believe such assets will more likely than not be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. In the event we were to determine that we would not be able to realize our deferred income tax assets in the future, we would record a valuation allowance. No valuation allowance has been recorded in our consolidated financial statements. | |
We account for uncertain tax positions by recognizing the impact of a tax position in our consolidated financial statement when we believe it is more likely than not that the tax position would not be sustained upon examination by the appropriate tax authority, based on the merits of the position. We include penalties and interest on income-based taxes, if any, in the “General and administrative” line on our consolidated statements of comprehensive income. At December 31, 2014 and 2013, the Company had not established any reserves for, nor recorded any unrecognized tax benefits related to, uncertain tax positions. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. The ASU is intended to reduce the frequency of disposals reported as discontinued operations by focusing on strategic shifts that have (or will have) a major effect on an entity’s operations and financial results. The standard will be effective for annual reporting periods beginning after December 15, 2014, although early adoption is permitted. We do not currently expect the adoption of this ASU to have a significant impact on our financial statements. | |
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which resulted from a joint project by the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards. The issuance of a comprehensive and converged standard on revenue recognition is expected to improve the ability of financial statement users to understand and consistently analyze an entity’s revenue across industries, transactions, and geographies. The standard will require additional disclosures to help financial statement users better understand the nature, amount, timing, and potential uncertainty of the revenue being recognized. ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2016, and will require either retrospective application to each prior reporting period presented or retrospective application with the cumulative effect of initially applying the standard recognized at the date of adoption. Early application is prohibited. We are currently evaluating the impact that the application of ASU 2014-09 will have on our financial statements and disclosures. | |
In June 2014, the FASB issued ASU 2014-12 Compensation—Stock Compensation (Topic 718) Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which establishes specific guidance on how to account for share-based payments for awards with performance targets after the employee completes the requisite service period. Current U.S. GAAP does not contain explicit guidance on how to account for those share-based payments. The standard will be effective for annual reporting periods beginning after December 15, 2015, although early adoption is permitted. We do not currently expect the adoption of this ASU to have a significant impact on our financial statements. | |
In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The ASU will explicitly require management to assess an entity’s ability to continue as a going concern and to provide related footnote disclosure in certain circumstances. The new guidance will be effective for the year ending December 31, 2016. Earlier adoption is permitted. We do not expect the adoption of this ASU to have an impact on our consolidated financial statements. |
Correction_of_Immaterial_Error1
Correction of Immaterial Error (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Changes And Error Corrections [Abstract] | |||||||||||||
Reconciliation of Effects of Adjustments to Previously Reported Consolidated Balance Sheet and Consolidated Statement of Stockholders' Equity | A reconciliation of the effects of the adjustments to the previously reported consolidated balance sheet and consolidated statement of stockholders' equity at December 31, 2013 and 2012 follows (in millions): | ||||||||||||
31-Dec-13 | |||||||||||||
As Previously Reported | Adjustment | As Adjusted | |||||||||||
Additional paid-in capital | $ | 101 | $ | 2.9 | $ | 103.9 | |||||||
Retained earnings | 11 | (2.9 | ) | 8.1 | |||||||||
Total stockholder’s equity | 88.7 | — | 88.7 | ||||||||||
31-Dec-12 | |||||||||||||
As Previously Reported | Adjustment | As Adjusted | |||||||||||
Additional paid-in capital | $ | 88.4 | $ | 2.9 | $ | 91.3 | |||||||
Retained earnings | 6.5 | (2.9 | ) | 3.6 | |||||||||
Total stockholder’s equity | 76.6 | — | 76.6 | ||||||||||
Investments_Tables
Investments (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Investments Debt And Equity Securities [Abstract] | |||||||||||||||||
Investment Balances | Investments are presented below (in thousands). All investments are carried at fair value, and all investments are accounted for as trading securities. | ||||||||||||||||
Cost | Gross | Gross | Estimated | ||||||||||||||
Unrealized | Unrealized | Fair | |||||||||||||||
Gains | Losses | Value | |||||||||||||||
December 31, 2014: | |||||||||||||||||
U.S. Government and Government agency | $ | 66,761 | $ | 20 | $ | (8 | ) | $ | 66,773 | ||||||||
obligations | |||||||||||||||||
Money market funds | 8,250 | — | — | 8,250 | |||||||||||||
Equity funds | 4,477 | 223 | (103 | ) | 4,597 | ||||||||||||
Fixed income funds | — | — | — | — | |||||||||||||
Marketable securities | $ | 79,488 | $ | 243 | $ | (111 | ) | $ | 79,620 | ||||||||
Cost | Gross | Gross | Estimated | ||||||||||||||
Unrealized | Unrealized | Fair | |||||||||||||||
Gains | Losses | Value | |||||||||||||||
December 31, 2013: | |||||||||||||||||
U.S. Government and Government agency | $ | 42,595 | $ | 16 | $ | — | $ | 42,611 | |||||||||
obligations | |||||||||||||||||
Money market funds | 8,584 | — | — | 8,584 | |||||||||||||
Equity funds | 2,130 | 200 | (54 | ) | 2,276 | ||||||||||||
Fixed income funds | 10,984 | 99 | — | 11,083 | |||||||||||||
Marketable securities | $ | 64,293 | $ | 315 | $ | (54 | ) | $ | 64,554 | ||||||||
Other Revenue | The following amounts, except for income tax amounts, are included in our consolidated statements of comprehensive income under the heading “Other revenues” for the years indicated (in thousands): | ||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Realized gains | $ | 156 | $ | 629 | $ | 2,467 | |||||||||||
Realized losses | (50 | ) | (4 | ) | (13 | ) | |||||||||||
Net realized gains | 106 | 625 | 2,454 | ||||||||||||||
Income tax expense from gains | 37 | 225 | 891 | ||||||||||||||
Interest income – trading | 51 | 28 | 27 | ||||||||||||||
Dividend income | 212 | 541 | 514 | ||||||||||||||
Unrealized gains/(losses) | 75 | (325 | ) | 344 | |||||||||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Values of Assets Within Fair Value Hierarchy | The following table summarizes the values of our assets as of the dates indicated within the fair value hierarchy (in thousands). | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
As of December 31, 2014 | |||||||||||||||||
Investments in securities: | |||||||||||||||||
Trading | $ | 77,327 | $ | 2,293 | $ | — | $ | 79,620 | |||||||||
Total Financial instruments | $ | 77,327 | $ | 2,293 | $ | — | $ | 79,620 | |||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
As of December 31, 2013 | |||||||||||||||||
Investments in securities: | |||||||||||||||||
Trading | $ | 64,554 | $ | — | $ | — | $ | 64,554 | |||||||||
Total Financial instruments | $ | 64,554 | $ | — | $ | — | $ | 64,554 | |||||||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||
Changes in Goodwill | Changes in goodwill for the last two years were as follows (in thousands): | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Beginning balance | $ | 11,255 | $ | 11,255 | |||||||||||||
Acquired goodwill | — | — | |||||||||||||||
Ending balance | $ | 11,255 | $ | 11,255 | |||||||||||||
Summary of Intangible Assets | The following is a summary of intangible assets at December 31, 2014 and 2013 (in thousands, except years): | ||||||||||||||||
Weighted | Gross | Accumulated | Net | ||||||||||||||
Average | Carrying | Amortization | Carrying | ||||||||||||||
Amortization | Amount | Amount | |||||||||||||||
Period | |||||||||||||||||
(years) | |||||||||||||||||
2014 | |||||||||||||||||
Client relationships | 14.2 | $ | 5,005 | $ | (1,575 | ) | $ | 3,430 | |||||||||
Trade names | 2 | 256 | (256 | ) | — | ||||||||||||
Non-compete agreements | 2.3 | 26 | (26 | ) | — | ||||||||||||
Total | $ | 5,287 | $ | (1,857 | ) | $ | 3,430 | ||||||||||
2013 | |||||||||||||||||
Client relationships | 14.2 | $ | 5,005 | $ | (1,216 | ) | $ | 3,789 | |||||||||
Trade names | 2 | 256 | (256 | ) | — | ||||||||||||
Non-compete agreements | 2.3 | 26 | (26 | ) | — | ||||||||||||
Total | $ | 5,287 | $ | (1,498 | ) | $ | 3,789 | ||||||||||
Estimated Amortization Expense for Intangible Assets over the Next Five Years | Estimated amortization expense for intangible assets over the next five years is as follows (in thousands): | ||||||||||||||||
Estimated | |||||||||||||||||
Amortization | |||||||||||||||||
Expense | |||||||||||||||||
For the Year ending December 31, | |||||||||||||||||
2015 | $ | 359 | |||||||||||||||
2016 | 359 | ||||||||||||||||
2017 | 359 | ||||||||||||||||
2018 | 359 | ||||||||||||||||
2019 | 359 | ||||||||||||||||
Balance_Sheet_Components_Table
Balance Sheet Components (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||||||||
Property and Equipment | The following table reflects information about our property and equipment as of December 31, 2014 and 2013 (in thousands): | ||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Leasehold improvements | $ | 2,274 | $ | 2,068 | |||||
Furniture and fixtures | 1,516 | 1,453 | |||||||
Computer hardware and office equipment | 1,563 | 1,380 | |||||||
Accumulated depreciation | (2,720 | ) | (2,155 | ) | |||||
Net property and equipment | $ | 2,633 | $ | 2,746 | |||||
Components of Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss were as follows (in thousands): | ||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Foreign currency translation adjustment | $ | (1,231 | ) | $ | (257 | ) | |||
Accumulated other comprehensive loss | $ | (1,231 | ) | $ | (257 | ) | |||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||
Income (Loss) Before Income Taxes by Jurisdiction | Income (loss) before income taxes by jurisdiction is as follows (in thousands): | ||||||||||||||||||||||||
Years ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
United States | $ | 36,104 | $ | 30,799 | $ | 26,844 | |||||||||||||||||||
Canada | 5,932 | (2,614 | ) | (6,824 | ) | ||||||||||||||||||||
Total | $ | 42,036 | $ | 28,185 | $ | 20,020 | |||||||||||||||||||
Difference between the Federal Corporate Tax Rate and the Effective Tax Rate | The difference between the Federal corporate tax rate and the effective tax rate is comprised of the following (in thousands): | ||||||||||||||||||||||||
Years ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Income tax provision computed at US federal statutory rate | $ | 14,712 | 35 | % | $ | 9,864 | 35 | % | $ | 7,007 | 35 | % | |||||||||||||
Canadian rate differential | (520 | ) | (1.2 | ) | 222 | 0.7 | 580 | 2.9 | |||||||||||||||||
State and local income taxes, net of federal income taxes | 442 | 1.1 | 386 | 1.4 | 305 | 1.5 | |||||||||||||||||||
Other, net | 153 | 0.3 | (124 | ) | (0.4 | ) | 42 | 0.2 | |||||||||||||||||
Total income tax expense | $ | 14,787 | 35.2 | % | $ | 10,348 | 36.7 | % | $ | 7,934 | 39.6 | % | |||||||||||||
Effective income tax rate | 35.2 | % | 36.7 | % | 39.6 | % | |||||||||||||||||||
Income Tax Provision (Benefit) as Set Forth in the Consolidated Statements of Income | Income tax provision (benefit) as set forth in the consolidated statements of comprehensive income consisted of the following components (in thousands): | ||||||||||||||||||||||||
Years ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Current taxes: | |||||||||||||||||||||||||
US Federal | $ | 16,230 | $ | 10,683 | $ | 9,280 | |||||||||||||||||||
State and local | 690 | 602 | 473 | ||||||||||||||||||||||
Total | 16,920 | 11,285 | 9,753 | ||||||||||||||||||||||
Deferred taxes: | |||||||||||||||||||||||||
State and local | (40 | ) | (5 | ) | (2 | ) | |||||||||||||||||||
US Federal | (3,590 | ) | (240 | ) | (6 | ) | |||||||||||||||||||
Non-US | 1,497 | (692 | ) | (1,811 | ) | ||||||||||||||||||||
Total | (2,133 | ) | (937 | ) | (1,819 | ) | |||||||||||||||||||
Total income tax expense | $ | 14,787 | $ | 10,348 | $ | 7,934 | |||||||||||||||||||
Deferred Tax Assets and Deferred Tax Liabilities | The tax effects of temporary differences that give rise to the deferred tax assets and deferred tax liabilities are presented below (in thousands): | ||||||||||||||||||||||||
As of December 31, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Deferred tax assets: | |||||||||||||||||||||||||
Share-based compensation expense | $ | 5,210 | $ | 4,226 | |||||||||||||||||||||
Net operating loss | 166 | 2,244 | |||||||||||||||||||||||
Deferred rent | 186 | 204 | |||||||||||||||||||||||
Compensation and benefits payable | 3,280 | 58 | |||||||||||||||||||||||
Other | 112 | 39 | |||||||||||||||||||||||
Total deferred tax assets | 8,954 | 6,771 | |||||||||||||||||||||||
Deferred tax liabilities: | |||||||||||||||||||||||||
Property and equipment | (334 | ) | (390 | ) | |||||||||||||||||||||
Intangibles | (645 | ) | (449 | ) | |||||||||||||||||||||
Unrealized gains on investments | (123 | ) | (79 | ) | |||||||||||||||||||||
Total deferred tax liabilities | (1,102 | ) | (918 | ) | |||||||||||||||||||||
Net deferred tax assets | $ | 7,852 | $ | 5,853 | |||||||||||||||||||||
Net Deferred Tax Assets and Liabilities are Reflected on Our Balance Sheet | Net deferred tax assets and liabilities are as follows (in thousands): | ||||||||||||||||||||||||
As of December 31, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Net current deferred tax asset | $ | 6,268 | $ | 3,812 | |||||||||||||||||||||
Net current deferred tax liabilities | (2,208 | ) | — | ||||||||||||||||||||||
Net current deferred tax assets reflected on the balance sheets | 4,060 | 3,812 | |||||||||||||||||||||||
Net non-current deferred tax assets | 4,782 | 2,275 | |||||||||||||||||||||||
Net non-current deferred tax liabilities | (990 | ) | (234 | ) | |||||||||||||||||||||
Net non-current deferred tax assets reflected on the balance sheets | 3,792 | 2,041 | |||||||||||||||||||||||
Total net deferred tax assets | $ | 7,852 | $ | 5,853 | |||||||||||||||||||||
Employee_Benefits_Tables
Employee Benefits (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Total Expense Recorded for Stock Based Compensation | The following table presents the total stock-based compensation expense recorded and the total income tax benefit recognized for stock-based compensation arrangements for the years indicated (in thousands): | ||||||||||||
For the years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Service condition restricted stock expense | $ | 7,580 | $ | 7,602 | $ | 7,546 | |||||||
Performance-based restricted stock expense | 5,718 | 3,842 | 2,975 | ||||||||||
Restricted stock expense under the Plan | 13,298 | 11,444 | 10,521 | ||||||||||
Canadian Plan restricted stock expense | 387 | 235 | — | ||||||||||
Total stock based compensation expense | $ | 13,685 | $ | 11,679 | $ | 10,521 | |||||||
Total income tax benefit recognized related to stock-based | $ | 5,764 | $ | 4,384 | $ | 4,535 | |||||||
compensation | |||||||||||||
Profit Sharing and 401(k) Contributions for the Periods | The following table displays our profit-sharing and 401(k) contributions for the periods presented (in thousands): | ||||||||||||
Years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Profit-sharing contributions | $ | 816 | $ | 674 | $ | 648 | |||||||
401(k) matching contributions | 928 | 871 | 744 | ||||||||||
Restricted Stock Subject Only to a Service Condition | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Status and Changes in Restricted Stock Grants that Subject to Service Condition | The following table details the status and changes in our restricted stock grants that are subject only to a service condition for the year ended December 31, 2014: | ||||||||||||
Shares | Weighted Average | ||||||||||||
Grant Date Fair | |||||||||||||
Value | |||||||||||||
Restricted shares subject only to a service condition: | |||||||||||||
Non-vested, January 1, 2014 | 511,060 | $ | 40.49 | ||||||||||
Granted | 205,768 | 58.7 | |||||||||||
Vested | (186,680 | ) | 38.76 | ||||||||||
Forfeited | (33,691 | ) | 48.65 | ||||||||||
Non-vested, December 31, 2014 | 496,457 | 48.14 | |||||||||||
Weighted-Average Grant Date Fair Value for Shares Granted and the Total Fair Value of Shares Vested | The following table shows the weighted-average grant date fair value for shares granted and the total fair value of shares vested during the years indicated: | ||||||||||||
Years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Restricted shares subject only to a service condition: | |||||||||||||
Weighted-average grant date fair value | $ | 58.7 | $ | 43.68 | $ | 39.26 | |||||||
Fair value of shares vested (in thousands) | $ | 7,236 | $ | 7,568 | $ | 8,115 | |||||||
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 | Under the Plan, certain key employees were provided agreements for grants of restricted shares that vest over a five-year period subject to achieving annual performance goals established by the Compensation Committee of Westwood’s board of directors. Each year the Compensation Committee establishes a specific goal for that year’s vesting of the restricted shares, which historically has been based upon Westwood’s adjusted pre-tax income, as defined. The date that the Compensation Committee establishes the annual goal is considered to be the grant date and the fair value measurement date to determine expense on the shares that are likely to vest. The vesting period ends when the Compensation Committee formally approves the performance-based restricted stock vesting based on the final calculation of adjusted pre-tax income as derived from the Company’s audited financial statements. If a portion of the performance-based restricted shares does not vest, no compensation expense is recognized for that portion and any previously recognized compensation expense related to shares that do not vest is reversed. In February 2014, the Compensation Committee established the 2014 goal as adjusted pre-tax income of at least $34 million, representing a five-year compound annual growth rate in excess of 10% over annual adjusted pre-tax income recorded in 2009. Adjusted pre-tax income is determined based on our audited financial statements and is equal to income before income taxes increased by expenses incurred for the year for (i) incentive compensation for all officers and employees, (ii) performance-based restricted stock awards, and (iii) mutual fund share incentive awards, excluding start-up, non-recurring, and similar expense items, at the Committee’s discretion. In the first quarter of 2014, we concluded that it was probable that we would meet the performance goals required to vest the applicable percentage of the performance-based restricted shares this year and began recording expense related to those shares. | ||||||||||||
Shares | Weighted Average | ||||||||||||
Grant Date Fair | |||||||||||||
Value | |||||||||||||
Restricted shares subject to service and performance conditions: | |||||||||||||
Non-vested, January 1, 2014 | 93,000 | $ | 44.55 | ||||||||||
Granted | 101,313 | 58.59 | |||||||||||
Vested | (93,000 | ) | 44.55 | ||||||||||
Forfeited | — | — | |||||||||||
Non-vested, December 31, 2014 | 101,313 | $ | 58.59 | ||||||||||
Weighted-Average Grant Date Fair Value for Shares Granted and the Total Fair Value of Shares Vested | The following table shows the weighted-average grant date fair value for shares granted and the total fair value of shares vested during the years indicated: | ||||||||||||
Years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Restricted shares subject to a service and performance condition: | |||||||||||||
Weighted-average grant date fair value | $ | 58.59 | $ | 44.55 | $ | 39.31 | |||||||
Fair value of shares vested (in thousands) | $ | 4,143 | $ | 2,948 | $ | 3,111 | |||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Computation of Basic and Diluted Shares | The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share and share amounts): | ||||||||||||
Years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Net income | $ | 27,249 | $ | 17,837 | $ | 12,086 | |||||||
Weighted average shares outstanding – basic | 7,512,348 | 7,331,874 | 7,145,701 | ||||||||||
Dilutive potential shares from unvested restricted shares | 394,197 | 360,882 | 158,200 | ||||||||||
Dilutive potential shares from stock options | — | — | 3,134 | ||||||||||
Weighted average shares outstanding – diluted | 7,906,545 | 7,692,756 | 7,307,035 | ||||||||||
Earnings per share: | |||||||||||||
Basic | $ | 3.63 | $ | 2.43 | $ | 1.69 | |||||||
Diluted | $ | 3.45 | $ | 2.32 | $ | 1.65 | |||||||
Variable_Interest_Entities_Tab
Variable Interest Entities (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Variable Interest Entities [Abstract] | |||||||||||||
Variable Interest Entities | The following table displays the assets under management, amount of corporate money invested that are included in “Investments, at fair value” on the consolidated balance sheets, and the risk of loss in each vehicle (in millions): | ||||||||||||
As of December 31, 2014 | |||||||||||||
Assets | Corporate | Risk | |||||||||||
Under | Investment | of | |||||||||||
Management | Loss | ||||||||||||
Westwood Funds ® | $ | 3,722 | $ | 1 | $ | 1 | |||||||
Common Trust Funds | 2,659 | 2 | 2 | ||||||||||
Collective Investment Trusts | 289 | — | — | ||||||||||
LLCs | 142 | — | — | ||||||||||
UCITS Fund | 811 | 2 | 2 | ||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments And Contingencies Disclosure [Abstract] | |||||
Future Contractual Rental Payments for Non-Cancelable Operating Leases | At December 31, 2014, the future contractual rental payments for non-cancelable operating leases for each of the following five years and thereafter follow (in thousands): | ||||
Year ending: | |||||
2015 | $ | 1,534 | |||
2016 | 1,558 | ||||
2017 | 1,378 | ||||
2018 | 1,186 | ||||
2019 | 1,109 | ||||
Thereafter | 1,992 | ||||
Total payments due | $ | 8,757 | |||
Segment_Reporting_Tables
Segment Reporting (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||
Intersegment Balances | |||||||||||||||||||||
Advisory | Trust | Westwood | Eliminations | Consolidated | |||||||||||||||||
Holdings | |||||||||||||||||||||
2014 | |||||||||||||||||||||
Net fee revenues from external sources | $ | 92,279 | $ | 20,525 | $ | - | $ | - | $ | 112,804 | |||||||||||
Net intersegment revenues | 13,527 | - | - | (13,527 | ) | - | |||||||||||||||
Net interest and dividend revenue | 261 | 2 | - | - | 263 | ||||||||||||||||
Other revenue | 173 | 1 | - | - | 174 | ||||||||||||||||
Total revenues | 106,240 | 20,528 | - | (13,527 | ) | 113,241 | |||||||||||||||
Expenses: | |||||||||||||||||||||
Depreciation and amortization | 603 | 302 | 33 | - | 938 | ||||||||||||||||
Other operating expenses | 51,265 | 19,867 | 12,662 | (13,527 | ) | 70,267 | |||||||||||||||
Total expenses | 51,868 | 20,169 | 12,695 | (13,527 | ) | 71,205 | |||||||||||||||
Income (loss) before income taxes | 54,372 | 359 | (12,695 | ) | - | 42,036 | |||||||||||||||
Income tax expense (benefit) | 19,057 | 132 | (4,402 | ) | - | 14,787 | |||||||||||||||
Net income | $ | 35,315 | $ | 227 | $ | (8,293 | ) | $ | - | $ | 27,249 | ||||||||||
Add: | |||||||||||||||||||||
Restricted stock expense | $ | 9,074 | $ | 1,847 | $ | 2,764 | $ | - | $ | 13,685 | |||||||||||
Intangible amortization | 161 | 198 | - | - | 359 | ||||||||||||||||
Deferred taxes on goodwill | 38 | 114 | - | - | 152 | ||||||||||||||||
Economic Earnings | $ | 44,588 | $ | 2,386 | $ | (5,529 | ) | $ | - | $ | 41,445 | ||||||||||
Segment assets | $ | 144,385 | $ | 18,133 | $ | 10,435 | $ | (33,079 | ) | $ | 139,874 | ||||||||||
Segment goodwill | $ | 5,219 | $ | 6,036 | $ | - | $ | - | $ | 11,255 | |||||||||||
Expenditures for long-lived assets | $ | 226 | $ | 29 | $ | 223 | $ | - | $ | 478 | |||||||||||
2013 | |||||||||||||||||||||
Net fee revenues from external sources | $ | 72,588 | $ | 18,367 | $ | - | $ | - | $ | 90,955 | |||||||||||
Net intersegment revenues | 10,402 | 14 | - | (10,416 | ) | - | |||||||||||||||
Net interest and dividend revenue | 568 | 1 | - | - | 569 | ||||||||||||||||
Other revenue | 301 | - | - | - | 301 | ||||||||||||||||
Total revenues | 83,859 | 18,382 | - | (10,416 | ) | 91,825 | |||||||||||||||
Expenses: | |||||||||||||||||||||
Depreciation and amortization | 468 | 301 | - | - | 769 | ||||||||||||||||
Other operating expenses | 46,545 | 16,943 | 9,799 | (10,416 | ) | 62,871 | |||||||||||||||
Total expenses | 47,013 | 17,244 | 9,799 | (10,416 | ) | 63,640 | |||||||||||||||
Income (loss) before income taxes | 36,846 | 1,138 | (9,799 | ) | - | 28,185 | |||||||||||||||
Income tax expense (benefit) | 13,738 | 408 | (3,798 | ) | — | 10,348 | |||||||||||||||
Net income | $ | 23,108 | $ | 730 | $ | (6,001 | ) | $ | - | $ | 17,837 | ||||||||||
Add: | |||||||||||||||||||||
Restricted stock expense | $ | 7,586 | $ | 1,803 | $ | 2,290 | $ | - | $ | 11,679 | |||||||||||
Intangible amortization | 161 | 198 | - | - | 359 | ||||||||||||||||
Deferred taxes on goodwill | 38 | 114 | - | - | 152 | ||||||||||||||||
Economic Earnings | $ | 30,893 | $ | 2,845 | $ | (3,711 | ) | $ | - | $ | 30,027 | ||||||||||
Segment assets | $ | 114,871 | $ | 14,190 | $ | 6,354 | $ | (19,365 | ) | $ | 116,050 | ||||||||||
Segment goodwill | $ | 5,219 | $ | 6,036 | $ | - | $ | - | $ | 11,255 | |||||||||||
Expenditures for long-lived assets | $ | 962 | $ | 239 | $ | - | $ | - | $ | 1,201 | |||||||||||
2012 | |||||||||||||||||||||
Net fee revenues from external sources | $ | 59,187 | $ | 14,969 | $ | - | $ | - | $ | 74,156 | |||||||||||
Net intersegment revenues | 5,858 | 16 | - | (5,874 | ) | - | |||||||||||||||
Net interest and dividend revenue | 539 | 2 | - | - | 541 | ||||||||||||||||
Other revenue | 2,798 | - | - | - | 2,798 | ||||||||||||||||
Total revenues | 68,382 | 14,987 | - | (5,874 | ) | 77,495 | |||||||||||||||
Expenses: | |||||||||||||||||||||
Depreciation and amortization | 450 | 371 | - | - | 821 | ||||||||||||||||
Other operating expenses | 38,954 | 13,720 | 9,854 | (5,874 | ) | 56,654 | |||||||||||||||
Total expenses | 39,404 | 14,091 | 9,854 | (5,874 | ) | 57,475 | |||||||||||||||
Income (loss) before income taxes | 28,978 | 896 | (9,854 | ) | - | 20,020 | |||||||||||||||
Income tax expense (benefit) | 11,132 | 316 | (3,514 | ) | - | 7,934 | |||||||||||||||
Net income | $ | 17,846 | $ | 580 | $ | (6,340 | ) | $ | - | $ | 12,086 | ||||||||||
Add: | |||||||||||||||||||||
Restricted stock expense | $ | 6,366 | $ | 1,735 | $ | 2,420 | $ | - | $ | 10,521 | |||||||||||
Intangible amortization | 189 | 283 | - | - | 472 | ||||||||||||||||
Deferred taxes on goodwill | 39 | 115 | - | - | 154 | ||||||||||||||||
Economic Earnings | $ | 24,440 | $ | 2,713 | $ | (3,920 | ) | $ | - | $ | 23,233 | ||||||||||
Segment assets | $ | 91,619 | $ | 13,657 | $ | 3,906 | $ | (12,565 | ) | $ | 96,617 | ||||||||||
Segment goodwill | $ | 5,219 | $ | 6,036 | $ | - | $ | - | $ | 11,255 | |||||||||||
Expenditures for long-lived assets | $ | 228 | $ | 36 | $ | - | $ | - | $ | 264 | |||||||||||
Revenues by Geographic Location | |||||||||||||||||||||
Years ended December 31, | |||||||||||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||
Analysis of revenues by geographic location of client: | |||||||||||||||||||||
U.S. | $ | 94,955 | $ | 83,622 | $ | 73,255 | |||||||||||||||
Canada | 8,635 | 5,567 | 2,542 | ||||||||||||||||||
Europe | 8,146 | 1,843 | 1,698 | ||||||||||||||||||
Japan | 21 | - | - | ||||||||||||||||||
Australia | 1,484 | 793 | - | ||||||||||||||||||
Total | $ | 113,241 | $ | 91,825 | $ | 77,495 | |||||||||||||||
Property and Equipment, Net by Geographic Area | |||||||||||||||||||||
As of | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||||||||||
Analysis of property and equipment, net by geographic area: | |||||||||||||||||||||
U.S. | $ | 2,057 | $ | 2,102 | |||||||||||||||||
Canada | 576 | 644 | |||||||||||||||||||
Total | $ | 2,633 | $ | 2,746 | |||||||||||||||||
Concentration_Tables
Concentration (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Risks And Uncertainties [Abstract] | |||||||||||||
Concentration | No single customer accounted for 10% or more of our fee revenues in any of these years. | ||||||||||||
Years ended December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Advisory fees from Westwood Management’s largest client: | |||||||||||||
Asset-based fees | $ | 2,183 | $ | 1,729 | $ | 1,452 | |||||||
Performance-based fees | 3,806 | 2,561 | 1,251 | ||||||||||
Percent of fee revenue | 5.3 | % | 4.7 | % | 3.7 | % | |||||||
Quarterly_Financial_Data_Table
Quarterly Financial Data (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Summary of Quarterly Results of Operations | The following is a summary of unaudited quarterly results of operations for the years ended December 31, 2014 and 2013 (in thousands, except per share amounts): | ||||||||||||||||
Quarter | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
2014(1) | |||||||||||||||||
Revenues | $ | 25,949 | $ | 30,905 | $ | 28,122 | $ | 28,265 | |||||||||
Income before income taxes | 8,613 | 13,356 | 10,592 | 9,475 | |||||||||||||
Net income | 5,562 | 8,591 | 7,118 | 5,978 | |||||||||||||
Basic earnings per common share | 0.74 | 1.14 | 0.95 | 0.79 | |||||||||||||
Diluted earnings per common share | 0.72 | 1.12 | 0.92 | 0.77 | |||||||||||||
2013(2) | |||||||||||||||||
Revenues | $ | 20,100 | $ | 23,475 | $ | 22,998 | $ | 25,252 | |||||||||
Income before income taxes | 4,696 | 7,851 | 6,738 | 8,900 | |||||||||||||
Net income | 2,818 | 4,955 | 4,301 | 5,763 | |||||||||||||
Basic earnings per common share | 0.39 | 0.67 | 0.58 | 0.78 | |||||||||||||
Diluted earnings per common share | 0.38 | 0.66 | 0.57 | 0.75 | |||||||||||||
________________ | |||||||||||||||||
· | Results for the first and second quarter of 2014 have been adjusted for the immaterial error discussed in Note 3. The non-cash net income impact for each of the first and second quarters of 2014 was an overstatement of approximately $0.2 million for an overstatement of approximately $0.4 million for the first half of 2014. | ||||||||||||||||
· | Results for each of the quarters of 2013 have been adjusted for the immaterial error discussed in Note 3. The non-cash net income impact for each of the quarters of 2013 was an overstatement of less than $0.1 million, representing less than $0.1 million for the year ended December 31, 2013. |
Description_of_the_Business_De
Description of the Business (Details Textual) | 12 Months Ended |
Dec. 31, 2014 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Date of incorporation | 12-Dec-01 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details Textual) (USD $) | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule Of Significant Accounting Policies [Line Items] | ||||
Goodwill impairment loss | $0 | $0 | $0 | |
Compensation expense recorded for awards | 359,000 | 344,000 | 124,000 | |
Restricted shares granted to employees vesting period | 5 years | 4 years | 4 years | |
Valuation allowance | $0 | |||
Furniture and Fixtures | Minimum | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of the assets | 3 years | |||
Furniture and Fixtures | Maximum | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of the assets | 11 years | |||
Leasehold Improvements | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of the assets | lesser of the estimated useful life or lease term |
Correction_of_Immaterial_Error2
Correction of Immaterial Error (Details Textual) (Additional Stock Based Compensation Expense, USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | |||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
Quantifying Misstatement In Current Year Financial Statements [Line Items] | ||||||||||
Non-cash adjustment | $0.20 | $0.20 | $0.40 | $3.30 | ||||||
Maximum | ||||||||||
Quantifying Misstatement In Current Year Financial Statements [Line Items] | ||||||||||
Non-cash adjustment | $0.10 | $0.10 | $0.10 | $0.10 | $0.10 | $0.10 |
Correction_of_Immaterial_Error3
Correction of Immaterial Error (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Quantifying Misstatement In Current Year Financial Statements [Line Items] | ||||
Additional paid-in capital | $119,859 | $103,853 | $91,300 | |
Retained earnings | 20,317 | 8,148 | 3,600 | |
Total stockholder’s equity | 110,007 | 88,663 | 76,553 | 71,062 |
As Previously Reported | ||||
Quantifying Misstatement In Current Year Financial Statements [Line Items] | ||||
Additional paid-in capital | 101,000 | 88,400 | ||
Retained earnings | 11,000 | 6,500 | ||
Total stockholder’s equity | 88,700 | 76,600 | ||
Adjustment | ||||
Quantifying Misstatement In Current Year Financial Statements [Line Items] | ||||
Additional paid-in capital | 2,900 | 2,900 | ||
Retained earnings | ($2,900) | ($2,900) |
Investments_Details
Investments (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Investment balances | ||
Cost | $79,488 | $64,293 |
Gross Unrealized Gains | 243 | 315 |
Gross Unrealized Losses | -111 | -54 |
Estimated Fair Value | 79,620 | 64,554 |
U.S. Government and Government Agency Obligations | ||
Investment balances | ||
Cost | 66,761 | 42,595 |
Gross Unrealized Gains | 20 | 16 |
Gross Unrealized Losses | -8 | |
Estimated Fair Value | 66,773 | 42,611 |
Fixed Income Funds | ||
Investment balances | ||
Cost | 10,984 | |
Gross Unrealized Gains | 99 | |
Estimated Fair Value | 11,083 | |
Money Market Funds | ||
Investment balances | ||
Cost | 8,250 | 8,584 |
Estimated Fair Value | 8,250 | 8,584 |
Equity Funds | ||
Investment balances | ||
Cost | 4,477 | 2,130 |
Gross Unrealized Gains | 223 | 200 |
Gross Unrealized Losses | -103 | -54 |
Estimated Fair Value | $4,597 | $2,276 |
Investments_Details_1
Investments (Details 1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other revenue | |||
Realized gains | $156 | $629 | $2,467 |
Realized losses | -50 | -4 | -13 |
Net realized gains | 106 | 625 | 2,454 |
Income tax expense from gains | 37 | 225 | 891 |
Interest income – trading | 51 | 28 | 27 |
Dividend income | 212 | 541 | 514 |
Unrealized gains/(losses) | $75 | ($325) | $344 |
Investments_Details_Textual
Investments (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule Of Investments [Line Items] | |||
Gain on sales of Investment | $1,900,000 | ||
Estimated Fair Value | 79,620,000 | 64,554,000 | |
UCITS Fund | |||
Schedule Of Investments [Line Items] | |||
Estimated Fair Value | 2,000,000 | ||
Corporate funds investment, fair value | 1,900,000 | ||
Private Equity Funds | |||
Schedule Of Investments [Line Items] | |||
Estimated Fair Value | $2,700,000 |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investments in securities: | ||
Trading | $79,620 | $64,554 |
Total Financial instruments | 79,620 | 64,554 |
Level 1 | ||
Investments in securities: | ||
Trading | 77,327 | 64,554 |
Total Financial instruments | 77,327 | 64,554 |
Level 2 | ||
Investments in securities: | ||
Trading | 2,293 | |
Total Financial instruments | $2,293 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Changes in goodwill | |||
Beginning balance | $11,255 | $11,255 | $11,255 |
Ending balance | $11,255 | $11,255 | $11,255 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets (Details 1) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Summary of intangible assets | ||
Gross Carrying Amount | $5,287 | $5,287 |
Accumulated Amortization | -1,857 | -1,498 |
Net Carrying Amount | 3,430 | 3,789 |
Client relationships | ||
Summary of intangible assets | ||
Weighted Average Amortization Period (years) | 14 years 2 months 12 days | 14 years 2 months 12 days |
Gross Carrying Amount | 5,005 | 5,005 |
Accumulated Amortization | -1,575 | -1,216 |
Net Carrying Amount | 3,430 | 3,789 |
Trade names | ||
Summary of intangible assets | ||
Weighted Average Amortization Period (years) | 2 years | 2 years |
Gross Carrying Amount | 256 | 256 |
Accumulated Amortization | -256 | -256 |
Non-compete agreements | ||
Summary of intangible assets | ||
Weighted Average Amortization Period (years) | 2 years 3 months 18 days | 2 years 3 months 18 days |
Gross Carrying Amount | 26 | 26 |
Accumulated Amortization | ($26) | ($26) |
Goodwill_and_Intangible_Assets4
Goodwill and Intangible Assets (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule Of Business Acquisitions Purchase Price Allocation [Line Items] | |||
Amortization expense | $359,000 | $359,000 | $472,000 |
General and administrative expense | |||
Schedule Of Business Acquisitions Purchase Price Allocation [Line Items] | |||
Amortization expense | $359,000 | $359,000 | $472,000 |
Goodwill_and_Intangible_Assets5
Goodwill and Intangible Assets (Details 2) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Estimated amortization expense for intangible assets for the next five years | |
2015 | $359 |
2016 | 359 |
2017 | 359 |
2018 | 359 |
2019 | $359 |
Balance_Sheet_Components_Detai
Balance Sheet Components (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property and equipment | ||
Accumulated depreciation | ($2,720) | ($2,155) |
Net property and equipment | 2,633 | 2,746 |
Leasehold Improvements | ||
Property and equipment | ||
Property and equipment cost | 2,274 | 2,068 |
Furniture and Fixtures | ||
Property and equipment | ||
Property and equipment cost | 1,516 | 1,453 |
Computer Hardware And Office Equipment | ||
Property and equipment | ||
Property and equipment cost | $1,563 | $1,380 |
Balance_Sheet_Components_Detai1
Balance Sheet Components (Details 1) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Components of accumulated other comprehensive loss | ||
Foreign currency translation adjustment | ($1,231) | ($257) |
Accumulated other comprehensive loss | ($1,231) | ($257) |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income (loss) before income taxes by jurisdiction | |||||||||||
United States | $36,104 | $30,799 | $26,844 | ||||||||
Canada | 5,932 | -2,614 | -6,824 | ||||||||
Income before income taxes | $9,475 | $10,592 | $13,356 | $8,613 | $8,900 | $6,738 | $7,851 | $4,696 | $42,036 | $28,185 | $20,020 |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | |||
U.S. Federal corporate tax rate | 35.00% | 35.00% | 35.00% |
Penalties and interest | $16,000 | $0 | $0 |
Canadian net operating loss carryforwards | 627,000 | ||
Deferred tax assets | $166,000 | ||
Expiration period of net operating loss carryforwards | 2033 |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Difference between the Federal corporate tax rate and the effective tax rate | |||
Income tax provision computed at US federal statutory rate | $14,712 | $9,864 | $7,007 |
Canadian rate differential | -520 | 222 | 580 |
State and local income taxes, net of federal income taxes | 442 | 386 | 305 |
Other, net | 153 | -124 | 42 |
Total income tax expense | $14,787 | $10,348 | $7,934 |
Income tax provision computed at US federal statutory rate, effective tax rate | 35.00% | 35.00% | 35.00% |
Canadian rate differential, effective tax rate | -1.20% | 0.70% | 2.90% |
State and local income taxes, net of federal income taxes, effective tax rate | 1.10% | 1.40% | 1.50% |
Other, net, effective tax rate | 0.30% | -0.40% | 0.20% |
Effective income tax rate | 35.20% | 36.70% | 39.60% |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current taxes: | |||
US Federal | $16,230 | $10,683 | $9,280 |
State and local | 690 | 602 | 473 |
Total | 16,920 | 11,285 | 9,753 |
Deferred taxes: | |||
State and local | -40 | -5 | -2 |
US Federal | -3,590 | -240 | -6 |
Non-US | 1,497 | -692 | -1,811 |
Total | -2,133 | -937 | -1,819 |
Total income tax expense | $14,787 | $10,348 | $7,934 |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ||
Share-based compensation expense | $5,210 | $4,226 |
Net operating loss | 166 | 2,244 |
Deferred rent | 186 | 204 |
Compensation and benefits payable | 3,280 | 58 |
Other | 112 | 39 |
Total deferred tax assets | 8,954 | 6,771 |
Deferred tax liabilities: | ||
Property and equipment | -334 | -390 |
Intangibles | -645 | -449 |
Unrealized gains on investments | -123 | -79 |
Total deferred tax liabilities | -1,102 | -918 |
Net deferred tax assets | $7,852 | $5,853 |
Income_Taxes_Details_4
Income Taxes (Details 4) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Net deferred tax assets and liabilities are reflected on our balance sheet | ||
Net current deferred tax asset | $6,268 | $3,812 |
Net current deferred tax liabilities | -2,208 | |
Net current deferred tax assets reflected on the balance sheets | 4,060 | 3,812 |
Net non-current deferred tax assets | 4,782 | 2,275 |
Net non-current deferred tax liabilities | -990 | -234 |
Net non-current deferred tax assets reflected on the balance sheets | 3,792 | 2,041 |
Net deferred tax assets | $7,852 | $5,853 |
Regulatory_Capital_Requirement1
Regulatory Capital Requirements (Details) | Dec. 31, 2014 | Dec. 31, 2014 |
USD ($) | CAD | |
Banking And Thrift [Abstract] | ||
Minimum capital requirement | $1,250,000 | |
Excess from Minimum capital requirement | 12,000,000 | |
Required combined cash and receivables | 200,000 | |
Combined cash and receivables | $12,900,000 | 14,900,000 |
Employee_Benefits_Details_Text
Employee Benefits (Details Textual) | 1 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||||||||||
Feb. 28, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 28, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | |
USD ($) | USD ($) | USD ($) | USD ($) | Mutual Fund | Mutual Fund | Mutual Fund | Benefit Plans | Deferred Compensation Share Based Payments | Deferred Compensation Share Based Payments | Deferred Compensation Share Based Payments | Deferred Compensation Share Based Payments | Westwood Holdings | Restricted Stock | Restricted Stock | Restricted Stock | Restricted Stock | Canadian Plan | Canadian Plan | Canadian Plan | Stock Options | Stock Options | Performance Shares | Performance​ Based​ Restricted​ Shares​ For Future Performance Years | Performance Based Restricted Share Grants | |
USD ($) | USD ($) | USD ($) | Share-based Compensation Award, Tranche One | Share-based Compensation Award, Tranche Two | Share-based Compensation Award, Tranche Three | Share Based Compensation Award Tranche Four | USD ($) | USD ($) | USD ($) | Director | Westwood International Advisors Inc | Westwood International Advisors Inc | Westwood International Advisors Inc | USD ($) | |||||||||||
USD ($) | USD ($) | CAD | |||||||||||||||||||||||
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) | 3,898,100 | ||||||||||||||||||||||||
Shares remain available for issuance | 485,000 | ||||||||||||||||||||||||
Purchase of treasury stock, shares | 31,727 | ||||||||||||||||||||||||
Fund purchases of common stock | $8,600,000 | 10,000,000 | |||||||||||||||||||||||
Purchases of common stock with respect to awards granted | 7,200,000 | ||||||||||||||||||||||||
Share price | $61.82 | $61.82 | |||||||||||||||||||||||
Number of shares purchased in the open market | 11,476 | ||||||||||||||||||||||||
Amount of shares purchased in the open market | 669,000 | 878,000 | 670,000 | ||||||||||||||||||||||
Remaining unrecognized compensation cost | 16,300,000 | 635,000 | |||||||||||||||||||||||
Remaining unrecognized compensation cost recognized over a remaining weighted average period | 2 years 4 months 24 days | 1 year 7 months 6 days | |||||||||||||||||||||||
Number of vested shares from employees on the date vesting | 88,123 | ||||||||||||||||||||||||
Restricted shares granted to employees vesting period | 5 years | 4 years | 4 years | 1 year | 4 years | 6 years | |||||||||||||||||||
Adjusted pre-tax income | 34,000,000 | ||||||||||||||||||||||||
Compound annual growth | 10.00% | ||||||||||||||||||||||||
Nonvested restricted shares | 496,457 | 511,060 | 185,252 | ||||||||||||||||||||||
Period of option granted | 10 years | ||||||||||||||||||||||||
Options outstanding | 16,250 | 0 | |||||||||||||||||||||||
Options exercised | 0 | ||||||||||||||||||||||||
Options exercised | $12.90 | ||||||||||||||||||||||||
Total intrinsic value of options exercised | 364,000 | ||||||||||||||||||||||||
Cash received from the exercise of stock options | 210,000 | ||||||||||||||||||||||||
Percentage of deferred share units vesting | 20.00% | 40.00% | 60.00% | 80.00% | |||||||||||||||||||||
Deferred share units, issued and outstanding | 3,756 | ||||||||||||||||||||||||
Accrued liability | 98,000 | ||||||||||||||||||||||||
Mutual fund vesting period | 1 year | ||||||||||||||||||||||||
Service period of mutual fund share incentive award | 2 years | ||||||||||||||||||||||||
Expense related to mutual fund share incentive awards | 863,000 | 0 | 0 | 13,685,000 | 11,679,000 | 10,521,000 | |||||||||||||||||||
Accrued liability | $844,000 | $1,900,000 | |||||||||||||||||||||||
Vesting period | 6 years | ||||||||||||||||||||||||
Percentage of compensation | 6.00% |
Employee_Benefits_Details
Employee Benefits (Details) (Restricted Stock, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Total stock based compensation expense | $13,685 | $11,679 | $10,521 |
Total income tax benefit recognized related to stock-based compensation | 5,764 | 4,384 | 4,535 |
Restricted Stock Service Condition Stock Based Compensation Expense | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Total stock based compensation expense | 7,580 | 7,602 | 7,546 |
Restricted Stock Performance Condition Stock Based Compensation Expense | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Total stock based compensation expense | 5,718 | 3,842 | 2,975 |
Restricted Stock Stock Based Compensation Expense | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Total stock based compensation expense | 13,298 | 11,444 | 10,521 |
Canadian Plan Restricted Stock Expense | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Total stock based compensation expense | $387 | $235 |
Employee_Benefits_Details_1
Employee Benefits (Details 1) (Restricted Shares Subject Only to a Service Condition, USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Restricted Shares Subject Only to a Service Condition | |
Restricted shares subject only to a service condition: | |
Non-vested, January 1, 2014 | 511,060 |
Granted | 205,768 |
Vested | -186,680 |
Forfeited | -33,691 |
Non-vested, December 31, 2014 | 496,457 |
Non-vested, January 1, 2014 | $40.49 |
Granted | $58.70 |
Vested | $38.76 |
Forfeited | $48.65 |
Non-vested, December 31, 2014 | $48.14 |
Employee_Benefits_Details_2
Employee Benefits (Details 2) (Service condition restricted stock expense, USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Service condition restricted stock expense | |||
Weighted-average grant date fair value for shares granted and the total fair value of shares vested | |||
Weighted-average grant date fair value | $58.70 | $43.68 | $39.26 |
Fair value of shares vested (in thousands) | $7,236 | $7,568 | $8,115 |
Employee_Benefits_Details_3
Employee Benefits (Details 3) (Restricted Shares Subject to Service and Performance Conditions, USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Restricted Shares Subject to Service and Performance Conditions | |||
Restricted shares subject only to a service condition: | |||
Non-vested, January 1, 2014 | 93,000 | ||
Granted | 101,313 | ||
Vested | -93,000 | ||
Non-vested, December 31, 2014 | 101,313 | 93,000 | |
Non-vested, January 1, 2014 | $44.55 | ||
Granted | $58.59 | $44.55 | $39.31 |
Vested | $44.55 | ||
Non-vested, December 31, 2014 | $58.59 | $44.55 |
Employee_Benefits_Details_4
Employee Benefits (Details 4) (Restricted Shares Subject to Service and Performance Conditions, USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Restricted Shares Subject to Service and Performance Conditions | |||
Weighted-average grant date fair value for shares granted and the total fair value of shares vested | |||
Weighted-average grant date fair value | $58.59 | $44.55 | $39.31 |
Fair value of shares vested (in thousands) | $4,143 | $2,948 | $3,111 |
Employee_Benefits_Details_5
Employee Benefits (Details 5) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Profit sharing and 401(k) contributions for the periods | |||
Profit-sharing contributions | $816 | $674 | $648 |
401(k) matching contributions | $928 | $871 | $744 |
Earnings_Per_Share_Details_Tex
Earnings Per Share (Details Textual) (Restricted Stock) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Restricted Stock | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Anti-dilutive restricted shares or options | 5,993 | 0 | 0 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Computation of Basic and Diluted Shares | |||||||||||
Net income | $5,978 | $7,118 | $8,591 | $5,562 | $5,763 | $4,301 | $4,955 | $2,818 | $27,249 | $17,837 | $12,086 |
Weighted average shares outstanding – basic | 7,512,348 | 7,331,874 | 7,145,701 | ||||||||
Dilutive potential shares from unvested restricted shares | 394,197 | 360,882 | 158,200 | ||||||||
Dilutive potential shares from stock options | 3,134 | ||||||||||
Weighted average shares outstanding – diluted | 7,906,545 | 7,692,756 | 7,307,035 | ||||||||
Earnings per share: | |||||||||||
Basic | $0.79 | $0.95 | $1.14 | $0.74 | $0.78 | $0.58 | $0.67 | $0.39 | $3.63 | $2.43 | $1.69 |
Diluted | $0.77 | $0.92 | $1.12 | $0.72 | $0.75 | $0.57 | $0.66 | $0.38 | $3.45 | $2.32 | $1.65 |
Variable_Interest_Entities_Det
Variable Interest Entities (Details Textual) | 12 Months Ended | 1 Months Ended | ||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 31, 2014 | Oct. 31, 2014 | Jun. 30, 2013 | Jun. 30, 2013 | Jan. 31, 2014 | |
USD ($) | USD ($) | USD ($) | UCITS Fund | UCITS Fund | UCITS Fund | UCITS Fund | Common Trust Funds | |
Number_of_Limited_Partnership | USD ($) | EUR (€) | USD ($) | EUR (€) | USD ($) | |||
Number_of_Limited_Liability_Companies | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Number of limited liability companies in which some clients hold their investments | 10 | |||||||
Number of clients in which investment advisory services are provided | 2 | |||||||
Amount provided to fund for the sole purpose of meeting the minimum capital requirements | $2,000,000 | € 1,600,000 | $406,000 | € 300,000 | $1,000,000 | |||
Fee revenues from Westwood VIEs | $48,200,000 | $36,200,000 | $30,200,000 |
Variable_Interest_Entities_Det1
Variable Interest Entities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Variable Interest Entities | ||
Trading | $79,620,000 | $64,554,000 |
Westwood Funds | ||
Variable Interest Entities | ||
Assets Under Management | 3,722,000,000 | |
Trading | 1,000,000 | |
Risk of Loss | 1,000,000 | |
Common Trust Funds | ||
Variable Interest Entities | ||
Assets Under Management | 2,659,000,000 | |
Trading | 2,000,000 | |
Risk of Loss | 2,000,000 | |
Collective Investment Trusts | ||
Variable Interest Entities | ||
Assets Under Management | 289,000,000 | |
UCITS Fund | ||
Variable Interest Entities | ||
Assets Under Management | 811,000,000 | |
Trading | 2,000,000 | |
Risk of Loss | 2,000,000 | |
LLCs | ||
Variable Interest Entities | ||
Assets Under Management | $142,000,000 |
Related_Party_Transactions_Det
Related Party Transactions (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
UCITS Fund | |||
Related Party Transaction [Line Items] | |||
Fees earned from related party | $1,100,000 | $0 | |
Fees unpaid from related party | 256,000 | ||
Trust | |||
Related Party Transaction [Line Items] | |||
Fees earned from related party | 264,000 | 278,000 | 314,000 |
Due from related party | $0 | $0 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details Textual) | 12 Months Ended | |||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | |
USD ($) | USD ($) | USD ($) | General Damage | Punitive Damage | Special Damage | First Lawsuit By A G F | Second Lawsuit by AGF | Second Lawsuit by AGF | Second Lawsuit by AGF | |
CAD | CAD | CAD | CAD | General Damage | Punitive Damage | |||||
CAD | CAD | |||||||||
Loss Contingencies [Line Items] | ||||||||||
Lease agreements expiration dates, description | expiration dates that run through 2021 | |||||||||
Rental expense for facilities and equipment leases | $1,500,000 | $1,600,000 | $1,300,000 | |||||||
Lawsuit Filing Date | On August 3, 2012, AGF Management Limited and AGF Investments Inc. (“AGFâ€) filed a lawsuit in the Ontario Superior Court of Justice against Westwood, certain Westwood employees and executive recruiting firm Warren International, LLC. | On November 6, 2012, AGF filed a second lawsuit against Westwood, Westwood Management and an employee of a Westwood subsidiary | ||||||||
Litigation claim for damages | 1,000,000 | 1,000,000 | 10,000,000 | 10,000,000 | 5,000,000 | 1,000,000 | ||||
Percentage of defense costs which will be covered by insurance | 50.00% | |||||||||
Loss contingency, Receivables | 210,000 | |||||||||
Insurance proceeds | $379,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Future contractual rental payments for non-cancelable operating leases | |
2015 | $1,534 |
2016 | 1,558 |
2017 | 1,378 |
2018 | 1,186 |
2019 | 1,109 |
Thereafter | 1,992 |
Total payments due | $8,757 |
Segment_Reporting_Details_Text
Segment Reporting (Details Textual) | 12 Months Ended |
Dec. 31, 2014 | |
Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Segment Reporting Information [Line Items] | |||||||||||
Net fee revenues from external sources | $112,804,000 | $90,955,000 | $74,156,000 | ||||||||
Net interest and dividend revenue | 263,000 | 569,000 | 541,000 | ||||||||
Other revenue | 174,000 | 301,000 | 2,798,000 | ||||||||
Total revenues | 28,265,000 | 28,122,000 | 30,905,000 | 25,949,000 | 25,252,000 | 22,998,000 | 23,475,000 | 20,100,000 | 113,241,000 | 91,825,000 | 77,495,000 |
Expenses: | |||||||||||
Depreciation and amortization | 938,000 | 769,000 | 821,000 | ||||||||
Other operating expenses | 70,267,000 | 62,871,000 | 56,654,000 | ||||||||
Total expenses | 71,205,000 | 63,640,000 | 57,475,000 | ||||||||
Income (loss) before income taxes | 9,475,000 | 10,592,000 | 13,356,000 | 8,613,000 | 8,900,000 | 6,738,000 | 7,851,000 | 4,696,000 | 42,036,000 | 28,185,000 | 20,020,000 |
Income tax expense (benefit) | 14,787,000 | 10,348,000 | 7,934,000 | ||||||||
Net income | 5,978,000 | 7,118,000 | 8,591,000 | 5,562,000 | 5,763,000 | 4,301,000 | 4,955,000 | 2,818,000 | 27,249,000 | 17,837,000 | 12,086,000 |
Restricted stock expense | 13,685,000 | 11,679,000 | 10,521,000 | ||||||||
Amortization expense | 359,000 | 359,000 | 472,000 | ||||||||
Economic Earnings | 41,445,000 | 30,027,000 | 23,233,000 | ||||||||
Segment assets | 139,874,000 | 116,050,000 | 139,874,000 | 116,050,000 | 96,617,000 | ||||||
Segment goodwill | 11,255,000 | 11,255,000 | 11,255,000 | 11,255,000 | 11,255,000 | ||||||
Expenditures for long-lived assets | 478,000 | 1,201,000 | 264,000 | ||||||||
Operating Segments | Advisory | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net fee revenues from external sources | 92,279,000 | 72,588,000 | 59,187,000 | ||||||||
Net intersegment revenues | 13,527,000 | 10,402,000 | 5,858,000 | ||||||||
Net interest and dividend revenue | 261,000 | 568,000 | 539,000 | ||||||||
Other revenue | 173,000 | 301,000 | 2,798,000 | ||||||||
Total revenues | 106,240,000 | 83,859,000 | 68,382,000 | ||||||||
Expenses: | |||||||||||
Depreciation and amortization | 603,000 | 468,000 | 450,000 | ||||||||
Other operating expenses | 51,265,000 | 46,545,000 | 38,954,000 | ||||||||
Total expenses | 51,868,000 | 47,013,000 | 39,404,000 | ||||||||
Income (loss) before income taxes | 54,372,000 | 36,846,000 | 28,978,000 | ||||||||
Income tax expense (benefit) | 19,057,000 | 13,738,000 | 11,132,000 | ||||||||
Net income | 35,315,000 | 23,108,000 | 17,846,000 | ||||||||
Restricted stock expense | 9,074,000 | 7,586,000 | 6,366,000 | ||||||||
Amortization expense | 161,000 | 161,000 | 189,000 | ||||||||
Deferred taxes on goodwill | 38,000 | 38,000 | 39,000 | ||||||||
Economic Earnings | 44,588,000 | 30,893,000 | 24,440,000 | ||||||||
Segment assets | 144,385,000 | 114,871,000 | 144,385,000 | 114,871,000 | 91,619,000 | ||||||
Segment goodwill | 5,219,000 | 5,219,000 | 5,219,000 | 5,219,000 | 5,219,000 | ||||||
Expenditures for long-lived assets | 226,000 | 962,000 | 228,000 | ||||||||
Operating Segments | Trust | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net fee revenues from external sources | 20,525,000 | 18,367,000 | 14,969,000 | ||||||||
Net intersegment revenues | 14,000 | 16,000 | |||||||||
Net interest and dividend revenue | 2,000 | 1,000 | 2,000 | ||||||||
Other revenue | 1,000 | ||||||||||
Total revenues | 20,528,000 | 18,382,000 | 14,987,000 | ||||||||
Expenses: | |||||||||||
Depreciation and amortization | 302,000 | 301,000 | 371,000 | ||||||||
Other operating expenses | 19,867,000 | 16,943,000 | 13,720,000 | ||||||||
Total expenses | 20,169,000 | 17,244,000 | 14,091,000 | ||||||||
Income (loss) before income taxes | 359,000 | 1,138,000 | 896,000 | ||||||||
Income tax expense (benefit) | 132,000 | 408,000 | 316,000 | ||||||||
Net income | 227,000 | 730,000 | 580,000 | ||||||||
Restricted stock expense | 1,847,000 | 1,803,000 | 1,735,000 | ||||||||
Amortization expense | 198,000 | 198,000 | 283,000 | ||||||||
Deferred taxes on goodwill | 114,000 | 114,000 | 115,000 | ||||||||
Economic Earnings | 2,386,000 | 2,845,000 | 2,713,000 | ||||||||
Segment assets | 18,133,000 | 14,190,000 | 18,133,000 | 14,190,000 | 13,657,000 | ||||||
Segment goodwill | 6,036,000 | 6,036,000 | 6,036,000 | 6,036,000 | 6,036,000 | ||||||
Expenditures for long-lived assets | 29,000 | 239,000 | 36,000 | ||||||||
Westwood Holdings | |||||||||||
Expenses: | |||||||||||
Depreciation and amortization | 33,000 | ||||||||||
Other operating expenses | 12,662,000 | 9,799,000 | 9,854,000 | ||||||||
Total expenses | 12,695,000 | 9,799,000 | 9,854,000 | ||||||||
Income (loss) before income taxes | -12,695,000 | -9,799,000 | -9,854,000 | ||||||||
Income tax expense (benefit) | -4,402,000 | -3,798,000 | -3,514,000 | ||||||||
Net income | -8,293,000 | -6,001,000 | -6,340,000 | ||||||||
Restricted stock expense | 2,764,000 | 2,290,000 | 2,420,000 | ||||||||
Economic Earnings | -5,529,000 | -3,711,000 | -3,920,000 | ||||||||
Segment assets | 10,435,000 | 6,354,000 | 10,435,000 | 6,354,000 | 3,906,000 | ||||||
Expenditures for long-lived assets | 223,000 | ||||||||||
Intersegment Eliminations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net intersegment revenues | -13,527,000 | -10,416,000 | -5,874,000 | ||||||||
Total revenues | -13,527,000 | -10,416,000 | -5,874,000 | ||||||||
Expenses: | |||||||||||
Other operating expenses | -13,527,000 | -10,416,000 | -5,874,000 | ||||||||
Total expenses | -13,527,000 | -10,416,000 | -5,874,000 | ||||||||
Segment assets | -33,079,000 | -19,365,000 | -33,079,000 | -19,365,000 | -12,565,000 | ||||||
Segment Reconciling Items | |||||||||||
Expenses: | |||||||||||
Restricted stock expense | 13,685,000 | 11,679,000 | 10,521,000 | ||||||||
Amortization expense | 359,000 | 359,000 | 472,000 | ||||||||
Deferred taxes on goodwill | $152,000 | $152,000 | $154,000 |
Revenues_by_Geographic_Locatio
Revenues by Geographic Location (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | $28,265 | $28,122 | $30,905 | $25,949 | $25,252 | $22,998 | $23,475 | $20,100 | $113,241 | $91,825 | $77,495 |
U.S | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 94,955 | 83,622 | 73,255 | ||||||||
Canada | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 8,635 | 5,567 | 2,542 | ||||||||
Europe | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 8,146 | 1,843 | 1,698 | ||||||||
Japan | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 21 | ||||||||||
Australia | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | $1,484 | $793 |
Property_and_Equipment_Net_by_
Property and Equipment, Net by Geographic Area (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Segment Reporting Information [Line Items] | ||
Net property and equipment | $2,633 | $2,746 |
U.S | ||
Segment Reporting Information [Line Items] | ||
Net property and equipment | 2,057 | 2,102 |
Canada | ||
Segment Reporting Information [Line Items] | ||
Net property and equipment | $576 | $644 |
Concentration_Details_Textual
Concentration (Details Textual) (Sales Revenue, Net, Customer Concentration Risk) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Customers | Customers | Customers | |
Sales Revenue, Net | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Number of Major Customers | 10 | 10 | 10 |
Revenue accounted by major clients | 20.00% | 20.00% | 20.00% |
Concentration_Details
Concentration (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Concentration Risk [Line Items] | |||
Advisory fees from major client | $88,473 | $70,027 | $57,936 |
Advisory fees from major client | 3,806 | 2,561 | 1,251 |
Sales Revenue, Net | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Advisory fees from major client | 2,183 | 1,729 | 1,452 |
Advisory fees from major client | $3,806 | $2,561 | $1,251 |
Revenue accounted by major clients | 20.00% | 20.00% | 20.00% |
Westwood Management | Sales Revenue, Net | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Revenue accounted by major clients | 5.30% | 4.70% | 3.70% |
Subsequent_Event_Details_Textu
Subsequent Event (Details Textual) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | |
Feb. 04, 2015 | Feb. 23, 2015 | Dec. 31, 2014 | Jan. 15, 2015 | |
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Dividends declared per share | $0.50 | |||
Dividends payable, date to be paid | 1-Apr-15 | |||
Dividends payable, date of record | 13-Mar-15 | |||
Subsequent Event | Restricted Stock | ||||
Subsequent Event [Line Items] | ||||
Restricted stock issued | 186,522 | |||
Share price | $61.82 | |||
Woodway Financial Advisors | ||||
Subsequent Event [Line Items] | ||||
Business combination contingent consideration arrangements description | Approximately 73% of the total merger consideration will be paid in cash. The remaining 27% will be paid through the issuance of shares of Westwood common stock. The number of shares of Westwood common stock comprising the stock portion of the initial merger consideration payable at closing will be determined by dividing the dollar amount of the portion of such payment consisting of Westwood common stock by the average closing price of Westwood common stock over the 15 business days prior to the Signing Date. | |||
Woodway Financial Advisors | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Date of acquisition agreement | 15-Jan-15 | |||
Assets under management | $1,600,000,000 | |||
Total merger consideration | 32,000,000 | |||
Earn-out payment | $15,000,000 | |||
Earn-out period | 12 months | |||
Business combination consideration paid in cash | 73.00% | |||
Business consideration paid through the issuance of shares | 27.00% |
Quarterly_Financial_Data_Detai
Quarterly Financial Data (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $28,265 | $28,122 | $30,905 | $25,949 | $25,252 | $22,998 | $23,475 | $20,100 | $113,241 | $91,825 | $77,495 |
Income before income taxes | 9,475 | 10,592 | 13,356 | 8,613 | 8,900 | 6,738 | 7,851 | 4,696 | 42,036 | 28,185 | 20,020 |
Net income | $5,978 | $7,118 | $8,591 | $5,562 | $5,763 | $4,301 | $4,955 | $2,818 | $27,249 | $17,837 | $12,086 |
Basic earnings per common share | $0.79 | $0.95 | $1.14 | $0.74 | $0.78 | $0.58 | $0.67 | $0.39 | $3.63 | $2.43 | $1.69 |
Diluted earnings per common share | $0.77 | $0.92 | $1.12 | $0.72 | $0.75 | $0.57 | $0.66 | $0.38 | $3.45 | $2.32 | $1.65 |
Quarterly_Financial_Data_Paren
Quarterly Financial Data (Parenthetical) (Details) (Additional Stock Based Compensation Expense, USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | |||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Information Disclosure [Line Items] | ||||||||||
Non-cash adjustment | $0.20 | $0.20 | $0.40 | $3.30 | ||||||
Maximum | ||||||||||
Quarterly Financial Information Disclosure [Line Items] | ||||||||||
Non-cash adjustment | $0.10 | $0.10 | $0.10 | $0.10 | $0.10 | $0.10 |