Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 17, 2015 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | WESTWOOD HOLDINGS GROUP INC | |
Entity Central Index Key | 1165002 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 8,622,423 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current Assets: | ||
Cash and cash equivalents | $19,607 | $18,131 |
Accounts receivable | 14,840 | 14,540 |
Investments, at fair value | 64,039 | 79,620 |
Deferred income taxes | 4,826 | 4,060 |
Other current assets | 2,538 | 2,413 |
Total current assets | 105,850 | 118,764 |
Goodwill | 11,255 | 11,255 |
Deferred income taxes | 3,542 | 3,792 |
Intangible assets, net | 3,340 | 3,430 |
Property and equipment, net of accumulated depreciation of $2,847 and $2,720 | 2,871 | 2,633 |
Total assets | 126,858 | 139,874 |
Current Liabilities: | ||
Accounts payable and accrued liabilities | 3,694 | 2,334 |
Dividends payable | 4,792 | 4,868 |
Compensation and benefits payable | 5,284 | 18,504 |
Income taxes payable | 2,031 | 1,498 |
Total current liabilities | 15,801 | 27,204 |
Accrued dividends | 914 | 1,450 |
Deferred rent | 1,216 | 1,213 |
Total liabilities | 17,931 | 29,867 |
Commitments and contingencies (Note 11) | ||
Stockholders' Equity: | ||
Common stock, $0.01 par value, authorized 25,000,000 shares, issued 9,280,996 and outstanding 8,467,815 shares at March 31, 2015; issued 9,010,255 and outstanding 8,308,460 shares at December 31, 2014 | 93 | 90 |
Additional paid-in capital | 125,661 | 119,859 |
Treasury stock, at cost - 813,181 shares at March 31, 2015; 701,795 shares at December 31, 2014 | -35,893 | -29,028 |
Accumulated other comprehensive loss | -2,619 | -1,231 |
Retained earnings | 21,685 | 20,317 |
Total stockholders' equity | 108,927 | 110,007 |
Total liabilities and stockholders' equity | $126,858 | $139,874 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Statement Of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation | $2,847 | $2,720 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 9,280,996 | 9,010,255 |
Common stock, shares outstanding | 8,467,815 | 8,308,460 |
Treasury stock, shares | 813,181 | 701,795 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Advisory fees | ||
Asset based | $23,929 | $20,389 |
Performance based | 288 | 363 |
Trust fees | 5,150 | 5,028 |
Other, net | 241 | 169 |
Total revenues | 29,608 | 25,949 |
EXPENSES: | ||
Employee compensation and benefits | 15,309 | 12,852 |
Sales and marketing | 395 | 287 |
Westwood mutual funds | 827 | 652 |
Information technology | 1,037 | 715 |
Professional services | 2,072 | 1,382 |
General and administrative | 1,590 | 1,448 |
Total expenses | 21,230 | 17,336 |
Income before income taxes | 8,378 | 8,613 |
Provision for income taxes | 2,768 | 3,051 |
Net income | 5,610 | 5,562 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | -1,388 | -354 |
Total comprehensive income | $4,222 | $5,208 |
Earnings per share: | ||
Basic | $0.74 | $0.74 |
Diluted | $0.71 | $0.72 |
Weighted average shares outstanding: | ||
Basic | 7,596,223 | 7,474,415 |
Diluted | 7,861,090 | 7,751,243 |
Cash dividends declared per share | $0.50 | $0.44 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock, Par | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings |
In Thousands, except Share data | ||||||
BALANCE at Dec. 31, 2014 | $110,007 | $90 | $119,859 | ($29,028) | ($1,231) | $20,317 |
BALANCE, shares at Dec. 31, 2014 | 8,308,460 | 8,308,460 | ||||
Net income | 5,610 | 5,610 | ||||
Other comprehensive loss | -1,388 | -1,388 | ||||
Issuance of restricted stock, net of forfeitures | 3 | -3 | ||||
Issuance of restricted stock, net of forfeitures, shares | 270,741 | |||||
Dividends declared | -4,242 | -4,242 | ||||
Stock based compensation expense | 3,678 | 3,678 | ||||
Reclassification of compensation liability to be paid in shares | 338 | 338 | ||||
Tax benefit related to stock based compensation | 1,789 | 1,789 | ||||
Purchases of treasury stock | -1,289 | -1,289 | ||||
Purchases of treasury stock, shares | -21,193 | |||||
Restricted stock returned for payment of taxes | -5,576 | -5,576 | ||||
Restricted stock returned for payment of taxes, shares | -90,913 | |||||
BALANCE at Mar. 31, 2015 | $108,927 | $93 | $125,661 | ($35,893) | ($2,619) | $21,685 |
BALANCE, shares at Mar. 31, 2015 | 8,467,815 | 8,467,815 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $5,610 | $5,562 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 145 | 144 |
Amortization of intangible assets | 90 | 90 |
Unrealized gains on trading investments | -119 | -57 |
Stock based compensation expense | 3,678 | 3,479 |
Deferred income taxes | -570 | 3,924 |
Excess tax benefits from stock based compensation | -1,392 | -1,893 |
Net sales of investments - trading securities | 15,700 | 19,206 |
Change in operating assets and liabilities: | ||
Accounts receivable | -690 | -450 |
Other current assets | 42 | 338 |
Accounts payable and accrued liabilities | 1,285 | -189 |
Compensation and benefits payable | -12,406 | -13,963 |
Income taxes payable and prepaid income taxes | 2,414 | -1,557 |
Other liabilities | -6 | -37 |
Net cash provided by operating activities | 13,781 | 14,597 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | -288 | -121 |
Net cash used in investing activities | -288 | -121 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Purchases of treasury stock | -1,289 | -669 |
Restricted stock returned for payment of taxes | -5,576 | -5,170 |
Excess tax benefits from stock based compensation | 1,392 | 1,893 |
Cash dividends | -4,855 | -3,942 |
Net cash used in financing activities | -10,328 | -7,888 |
Effect of currency rate changes on cash | -1,689 | -78 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 1,476 | 6,510 |
Cash and cash equivalents, beginning of period | 18,131 | 10,864 |
Cash and cash equivalents, end of period | 19,607 | 17,374 |
Supplemental cash flow information: | ||
Cash paid during the period for income taxes | $957 | $761 |
Description_of_the_Business
Description of the Business | 3 Months Ended |
Mar. 31, 2015 | |
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 provides investment management services to institutional investors, private wealth clients and financial intermediaries through its subsidiaries, Westwood Management Corp. (“Westwood Management”), Westwood Trust (“Westwood Trust”), Westwood International Advisors Inc. (“Westwood International”) and Westwood Advisors, LLC. Revenue is largely dependent on the total value and composition of assets under management (“AUM”). Accordingly, fluctuations in financial markets and in the composition of AUM impact revenues and results of operations. | |
Acquisition of Woodway Financial Advisors | |
On January 15, 2015, we entered into an agreement to acquire Woodway Financial Advisors (“Woodway”), a Houston-based private wealth and trust company that managed assets of approximately $1.6 billion at December 31, 2014. We completed the acquisition on April 1, 2015. | |
The acquisition of Woodway will be accounted for as a business combination using the acquisition method of accounting, whereby the purchase price will be allocated to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date, with the remaining unallocated purchase price recorded as goodwill. See further discussion of the acquisition of Woodway in Note 13 “Subsequent Events.” |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation | |
The accompanying condensed consolidated financial statements are unaudited and are presented in accordance with the requirements for quarterly reports on Form 10-Q and consequently do not include all of the information and footnote disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The Company’s consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary in the opinion of management to present fairly our interim financial position and results of operations and cash flows for the periods presented. The accompanying condensed consolidated financial statements are presented in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (“SEC”). Our consolidated financial statements include all necessary reclassification adjustments to conform prior year results to the current period presentation. | |
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with our consolidated financial statements, and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2014. Operating results for the periods in these condensed consolidated financial statements are not necessarily indicative of the results for any future period. The accompanying condensed consolidated financial statements include the accounts of Westwood and its subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation. | |
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 adoption of this ASU did not have an 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, 2017, 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. | |
In January 2015, the FASB issued ASU 2015-01, Income Statement – Extraordinary and Unusual Items. The ASU eliminates the concept of extraordinary items, which are currently required to be separately classified, presented and disclosed in financial statements. ASU 2015-01 is effective for annual reporting periods, including interim periods within those periods, beginning after December 31, 2015. We do not expect the adoption of this ASU to have an impact on our consolidated financial statements. | |
In February 2015, the FASB issued ASU 2015-02, Consolidation – Amendments to the Consolidation Analysis. This amendment modifies the analysis required to evaluate whether certain legal entities should be consolidated, including variable interest entities. This amendment changes the evaluation of fee arrangements and related party transactions when determining whether to consolidate a variable interest entity. The amendment is effective for annual reporting periods beginning after December 15, 2016 and for interim periods within reporting periods beginning after December 15, 2017, although early adoption is permitted. We are currently evaluating the impact that the application of ASU 2015-02 will have on our financial statements and disclosures. | |
In April 2015, the FASB issued ASU 2015-05, Intangibles – Goodwill and Other – Internal-Use Software. This amendment provides guidance about whether a cloud computing arrangement includes a software license. The new guidance clarifies that software licenses included in a cloud computing software should be accounted for in the same manner as other software licenses. If the cloud computing arrangement does not include a software license, the arrangement should be accounted for as a service contract. This amendment is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2015, with early adoption permitted. We are currently evaluating the impact that the application of ASU 2015-05 will have on our financial statements. |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Earnings Per Share | 3. EARNINGS PER SHARE | |||||||
Basic earnings per common share is computed by dividing net income available to common stockholders by the weighted average number of shares outstanding for the applicable period. Diluted earnings per share is computed based on the weighted average number of shares outstanding plus the effect of any dilutive shares of restricted stock granted to employees and non-employee directors. There were approximately 44,000 and 103,000 anti-dilutive restricted shares as of March 31, 2015 and March 31, 2014, respectively. | ||||||||
The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share and share amounts): | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Net income | $ | 5,610 | $ | 5,562 | ||||
Weighted average shares outstanding - basic | 7,596,223 | 7,474,415 | ||||||
Dilutive potential shares from unvested restricted shares | 264,867 | 276,828 | ||||||
Weighted average shares outstanding - diluted | 7,861,090 | 7,751,243 | ||||||
Earnings per share: | ||||||||
Basic | $ | 0.74 | $ | 0.74 | ||||
Diluted | $ | 0.71 | $ | 0.72 | ||||
Investments
Investments | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Investments Debt And Equity Securities [Abstract] | ||||||||||||||||
Investments | 4. INVESTMENTS | |||||||||||||||
Investment balances are presented in the table below (in thousands). All investments are carried at fair value and are accounted for as trading securities. | ||||||||||||||||
Gross | Gross | Estimated | ||||||||||||||
Unrealized | Unrealized | Market | ||||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
March 31, 2015: | ||||||||||||||||
U.S. Government and Government agency obligations | $ | 30,293 | $ | 17 | $ | (1 | ) | $ | 30,309 | |||||||
Money market funds | 26,332 | — | — | 26,332 | ||||||||||||
Equity funds | 7,163 | 279 | (44 | ) | 7,398 | |||||||||||
Marketable securities | $ | 63,788 | $ | 296 | $ | (45 | ) | $ | 64,039 | |||||||
December 31, 2014: | ||||||||||||||||
U.S. Government and Government agency obligations | $ | 66,761 | $ | 20 | $ | (8 | ) | $ | 66,773 | |||||||
Money market funds | 8,250 | — | — | 8,250 | ||||||||||||
Equity funds | 4,477 | 223 | (103 | ) | 4,597 | |||||||||||
Marketable securities | $ | 79,488 | $ | 243 | $ | (111 | ) | $ | 79,620 | |||||||
As of March 31, 2015 and December 31, 2014, $5.8 million and $4.6 million in corporate funds were invested in Westwood Funds, Westwood Common Trust Funds and the UCITS Fund. See Note 8 “Variable Interest Entities.” |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair Value Measurements | 5. FAIR VALUE MEASUREMENTS | |||||||||||||||
We determine estimated fair values for our financial instruments using available information. The fair value amounts discussed in our condensed consolidated financial statements are not necessarily indicative of either amounts realizable upon disposition of these instruments or our intent or ability to dispose of these assets. The estimated fair value of cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued liabilities, dividends payable, compensation and benefits payable and income taxes payable approximates their carrying value due to their short-term maturities. The carrying amount of investments designated as “trading” securities, primarily U.S. Government and Government agency obligations, money market funds, Westwood Funds® mutual funds and Westwood Trust common trust fund shares, equals their fair value based on prices quoted in active markets and, with respect to funds, the net asset value of the shares held as reported by each fund. Market values of our money market holdings generally do not fluctuate. | ||||||||||||||||
ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value and requires additional disclosures regarding certain fair value measurements. ASC 820 establishes a three-tier hierarchy for measuring fair value as follows: | ||||||||||||||||
· | level 1 – quoted market prices in active markets for identical assets | |||||||||||||||
· | 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 March 31, 2015: | ||||||||||||||||
Investments in securities: | ||||||||||||||||
Trading | $ | 60,639 | $ | 3,400 | $ | — | $ | 64,039 | ||||||||
Total financial instruments | $ | 60,639 | $ | 3,400 | $ | — | $ | 64,039 | ||||||||
As of December 31, 2014: | ||||||||||||||||
Investments in securities: | ||||||||||||||||
Trading | $ | 77,327 | $ | 2,293 | $ | — | $ | 79,620 | ||||||||
Total financial instruments | $ | 77,327 | $ | 2,293 | $ | — | $ | 79,620 | ||||||||
Investments categorized as level 2 assets consist of investments in common trust funds sponsored by Westwood Trust. Common trust funds are private investment vehicles comprised of commingled investments held in trusts that are valued using the Net Asset Value (“NAV”) calculated by us as administrator of the funds. The NAV is calculated using indirectly observed inputs, as the unit price is based on the market value of the underlying investments traded on an active market. We can make withdrawals from the common trust funds on a daily basis, as needed for liquidity, and there are no restrictions on redemption as of March 31, 2015. |
Goodwill_and_other_intangible_
Goodwill and other intangible assets | 3 Months Ended |
Mar. 31, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 6. 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 for impairment at least annually. We completed our annual goodwill impairment assessment during the third quarter of 2014 and determined that no impairment loss was required. No impairments were recorded during any of the periods presented. | |
Our intangible assets, which totaled $3.3 million (net of accumulated amortization of $1.9 million) at March 31, 2015, represent the acquisition date fair value of acquired client relationships, trade names and non-compete agreements and are reflected net of amortization. In valuing these assets, we made significant estimates regarding their useful lives, growth rates and potential attrition. We periodically review intangible assets for events or circumstances that would indicate impairment. The estimated annual amortization for these assets is $0.4 million for the next five years. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Equity [Abstract] | ||||||||
Accumulated Other Comprehensive Loss | 7. ACCUMULATED OTHER COMPREHENSIVE LOSS | |||||||
The components of accumulated other comprehensive loss were as follows (in thousands): | ||||||||
As of | As of | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Foreign currency translation adjustment | $ | (2,619 | ) | $ | (1,231 | ) | ||
Accumulated other comprehensive loss | $ | (2,619 | ) | $ | (1,231 | ) | ||
Variable_Interest_Entities
Variable Interest Entities | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Variable Interest Entities [Abstract] | ||||||||||||
Variable Interest Entities | 8. 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 International and Westwood Management provide investment advisory services to 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 (“UCITS”), and which is an Ireland domiciled umbrella-type open-ended self-managed investment company. 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, UCITS, Westwood Funds®, CITs and LLCs (“Westwood VIEs”) are considered variable interest entities (“VIEs”) because our clients, who hold the equity at risk, do not have a direct or indirect ability through voting or similar rights to make decisions about the funds that would have a significant effect on their success. 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 expected losses or a right to receive the majority of expected residual returns. Since all losses and returns are distributed to the shareholders of the Company’s VIEs, we are not the primary beneficiary and consequently the Westwood VIEs are not included in our condensed consolidated financial statements. | ||||||||||||
In January 2015 and January 2014, the Company provided $1.0 million and $2.0 million, respectively, to common trust funds for the sole purpose of showing economic substance needed to establish the funds. In October 2014, the Company provided €1.6 million, or $2.0 million, to the UCITS Fund for the sole purpose of showing economic substance needed to establish a new sub-fund. The corporate capital invested in these funds is included in “Investments, at fair value” on our consolidated balance sheet at March 31, 2015. | ||||||||||||
Otherwise, we have not provided any financial support we were not previously contractually obligated to provide and there are no arrangements that would require us to provide additional financial support to any of these VIEs. Our investments in the Westwood Funds®, the CTFs and the UCITS Fund are accounted for as investments in accordance with our other investments described in Note 5. We recognized fee revenue from the Westwood VIEs of approximately $14.3 million and $11.2 million for the three months ended March 31, 2015 and March 31, 2014, respectively. | ||||||||||||
The following table displays assets under management, corporate capital invested and risk of loss in each vehicle (in millions). | ||||||||||||
As of March 31, 2015 | ||||||||||||
Assets | ||||||||||||
Under | Corporate | Risk of | ||||||||||
Management | Investment | Loss | ||||||||||
VIE's: | ||||||||||||
Westwood Funds® | $ | 4,239 | $ | 1 | $ | 1 | ||||||
Common Trust Funds | 2,108 | 3 | 3 | |||||||||
Collective Investment Trusts | 309 | — | — | |||||||||
LLCs | 142 | — | — | |||||||||
UCITS Fund | 820 | 2 | 2 | |||||||||
VIE totals | 7,618 | |||||||||||
All other assets: | ||||||||||||
Private Wealth | 1,775 | |||||||||||
Institutional | 12,329 | |||||||||||
Total AUM | $ | 21,722 | ||||||||||
LongTerm_Incentive_Compensatio
Long-Term Incentive Compensation | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Employee Benefits And Share Based Compensation [Abstract] | ||||||||
Long-Term Incentive Compensation | 9. LONG-TERM INCENTIVE COMPENSATION | |||||||
Restricted Stock Awards | ||||||||
We have issued restricted shares to our employees and non-employee directors. The Third Amended and Restated Westwood Holdings Group, Inc. Stock Incentive Plan, as amended (the “Plan”) reserves shares of Westwood common stock for issuance to eligible employees, directors and consultants of Westwood or its subsidiaries in the form of restricted stock. The total number of shares issuable under the Plan (including predecessor plans to the Plan) may not exceed 3,898,100 shares. At March 31, 2015, approximately 214,000 shares remain available for issuance under the Plan. | ||||||||
Canadian Plan | ||||||||
The Share Award Plan of Westwood Holdings Group, Inc. for Service Provided in Canada to its Subsidiaries (the “Canadian Plan”) provides compensation in the form of common stock for services performed by employees of Westwood International. Under the Canadian Plan, no more than $10 million CDN (or $7.9 million in U. S. Dollars using the exchange rate on March 31, 2015) may be funded to the Plan Trustee to fund purchases of common stock with respect to awards granted under the Canadian Plan. At March 31, 2015, approximately $5.4 million remains available for issuance under the Canadian Plan, or approximately 89,000 shares based on the closing share price of our stock of $60.30 as of March 31, 2015. During the first quarter of 2015, the trust formed pursuant to the Canadian Plan purchased in the open market 21,193 Westwood common shares for approximately $1.3 million. As of March 31, 2015, the trust holds 52,920 shares of Westwood common stock. As of March 31, 2015, unrecognized compensation cost related to restricted stock grants under the Canadian Plan totaled $1.4 million, which we expect to recognize over a weighted-average period of 2.3 years. | ||||||||
The following table presents the total stock based compensation expense recorded for stock based compensation arrangements for the periods indicated (in thousands): | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Service condition stock based compensation expense | $ | 2,183 | $ | 1,814 | ||||
Performance condition stock based compensation expense | 1,354 | 1,249 | ||||||
Stock based compensation expense under the Plan | 3,537 | 3,063 | ||||||
Canada EB Plan stock based compensation expense | 141 | 416 | ||||||
Total stock based compensation expense | $ | 3,678 | $ | 3,479 | ||||
Restricted Stock | ||||||||
Under the Plan, we have granted to employees and non-employee directors restricted stock subject to service conditions, and to certain key employees restricted stock subject to both service and performance conditions. | ||||||||
As of March 31, 2015, there was approximately $33.5 million of unrecognized compensation cost for restricted stock grants under the Plan, which we expect to recognize over a weighted-average period of 2.9 years. Our two types of restricted stock grants under the Plan are discussed below. | ||||||||
Restricted Stock Subject Only to a Service Condition | ||||||||
We calculate compensation cost for restricted stock grants by using the fair market value of our common stock at the date of grant, the number of shares issued, 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 three months ended March 31, 2015: | ||||||||
Weighted Average | ||||||||
Grant Date Fair | ||||||||
Restricted shares subject only to a service condition: | Shares | Value | ||||||
Non-vested, January 1, 2015 | 496,457 | $ | 48.14 | |||||
Granted | 235,945 | 61.74 | ||||||
Vested | (174,008 | ) | 40.85 | |||||
Forfeited | (204 | ) | 58.79 | |||||
Non-vested, March 31, 2015 | 558,190 | $ | 56.16 | |||||
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 provided that annual performance goals established by the Compensation Committee of Westwood’s board of directors are met. 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 2015, the Compensation Committee established the 2015 goal as adjusted pre-tax income of at least $46.0 million, representing a five-year compound annual growth rate in excess of 10% over annual adjusted pre-tax income recorded in 2010. Adjusted pre-tax income is determined based on our audited financial statements and is equal to income before income taxes increased by expenses incurred for the year for (i) incentive compensation for all officers and employees, (ii) performance-based restricted stock awards, and (iii) mutual fund share incentive awards, excluding start up, non-recurring and similar expense items, at the Committee’s discretion. In the first quarter of 2015, we concluded that it was probable that we would meet the performance goals required to vest the applicable performance based restricted shares this year and began recording expense related to those shares. | ||||||||
Weighted Average | ||||||||
Grant Date Fair | ||||||||
Restricted shares subject to service and performance conditions: | Shares | Value | ||||||
Non-vested, January 1, 2015 | 101,313 | $ | 58.59 | |||||
Granted | 101,313 | 61.29 | ||||||
Vested | (101,313 | ) | 58.59 | |||||
Forfeited | — | — | ||||||
Non-vested, March 31, 2015 | 101,313 | $ | 61.29 | |||||
The above amounts as of March 31, 2015 do not include 118,939 non-vested restricted shares that potentially vest over performance years subsequent to 2015 in-as-much as the annual performance goals for those years have not been set by the Compensation Committee and therefore no grant date has been established. | ||||||||
Mutual Fund Share Incentive Awards | ||||||||
We grant annually to certain employees mutual fund incentive awards, which are bonus awards based on our mutual funds achieving 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 believe it is probable that the award will be earned and record expense for these awards over the service period of the award, which is approximately two 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 three months ended March 31, 2015 and 2014, we recorded expense of $426,000 and $125,000, respectively, related to mutual fund share incentive awards. As of March 31, 2015 and December 31, 2014, we had an accrued liability of $1.4 million and $844,000, respectively, related to mutual fund incentive awards. |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 10. 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 March 31, 2015 or December 31, 2014. For the three months ended March 31, 2015 and 2014, we recorded trust fees from these accounts of $74,000 and $59,000, respectively. | |
The Company engages in transactions with its affiliates in the ordinary course of business. Westwood International and Westwood Management provide investment advisory services to the UCITS Fund. Certain members of our 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 clients of the UCITS Fund and, in certain cases, 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 three months ended March 31, 2015 and 2014, the Company earned approximately $346,000 and $36,000 in fees directly from the UCITS Fund. This does not include fees paid directly to Westwood International by certain clients invested in the UCITS Fund that have entered into an investment management agreement with Westwood International. As of March 31, 2015 and December 31, 2014, $120,000 and $256,000, respectively, of these fees were unpaid and included in “Accounts receivable” on our consolidated balance sheet. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. COMMITMENTS AND CONTINGENCIES |
On August 3, 2012, AGF Management Limited and AGF Investments Inc. (collectively, “AGF”) filed a lawsuit in the Ontario Superior Court of Justice against Westwood, certain Westwood employees and the executive recruiting firm of Warren International, LLC. (“Warren”). The action relates to the hiring of certain members of Westwood’s global and emerging markets investment team previously employed by AGF. AGF is alleging that the former employees breached certain obligations when they resigned from AGF and that Westwood and Warren induced such breaches. AGF is seeking an unspecified amount of damages and punitive damages of $10 million CDN in the lawsuit. On November 5, 2012, Westwood responded to AGF’s lawsuit with a counterclaim against AGF for defamation. Westwood is seeking $1 million CDN in general damages, $10 million CDN in special damages, $1 million CDN in punitive damages, and costs. On November 6, 2012, AGF filed a second lawsuit against Westwood, Westwood Management and an employee of a Westwood subsidiary, alleging that the employee made defamatory statements about AGF. In this second lawsuit, AGF is seeking $5 million CDN in general damages, $1 million CDN per defendant in punitive damages, unspecified special damages, interest and costs. The pleadings phase was completed in 2013, and we 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, are covered by insurance. We expense legal fees and directly related costs as incurred. We have received insurance proceeds of approximately $379,000 to date and have recorded a receivable of $343,000 as of March 31, 2015, 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 condensed consolidated balance sheets. |
Segment_Reporting
Segment Reporting | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||
Segment Reporting | 12. SEGMENT REPORTING | |||||||||||||||||||
We operate two segments: Advisory and Trust. These segments are managed separately based on the types of products and services offered and their related client bases. The Company’s segment information is prepared on the same basis that management reviews the financial information for operational decision-making purposes. The Company’s Chief Operating Decision Maker evaluates the performance of our segments based primarily on fee revenues and economic earnings. Westwood Holdings Group, Inc., the parent company of Advisory and Trust, does not have revenues and is the entity in which we record typical holding company expenses including employee compensation and benefits for holding company employees, directors’ fees and investor relations costs. All segment accounting policies are the same as those described in the summary of significant accounting policies. Intersegment balances that eliminate in consolidation have been applied to the appropriate segment. | ||||||||||||||||||||
Advisory | ||||||||||||||||||||
Our Advisory segment provides investment advisory services to corporate retirement plans, public retirement plans, endowments, foundations, individuals, the Westwood Funds®, and the UCITS Fund, as well as investment subadvisory services to mutual funds and our Trust segment. Westwood Management and Westwood International, which provide investment advisory services to clients of similar type, are included in our Advisory segment along with Westwood Advisors, LLC. | ||||||||||||||||||||
Trust | ||||||||||||||||||||
Trust provides trust and custodial services and participation in common trust funds that it sponsors to institutions and high net worth individuals. Westwood Trust is included in our Trust segment. | ||||||||||||||||||||
Westwood | ||||||||||||||||||||
Advisory | Trust | Holdings | Eliminations | Consolidated | ||||||||||||||||
Three Months Ended March 31, 2015 | ||||||||||||||||||||
Net fee revenues from external sources | $ | 24,217 | $ | 5,150 | $ | — | $ | — | $ | 29,367 | ||||||||||
Net intersegment revenues | 3,627 | — | — | (3,627 | ) | — | ||||||||||||||
Net interest and dividend revenue | 49 | — | — | — | 49 | |||||||||||||||
Other revenue | 191 | 1 | — | — | 192 | |||||||||||||||
Total revenues | $ | 28,084 | $ | 5,151 | $ | — | $ | (3,627 | ) | $ | 29,608 | |||||||||
Economic Earnings | $ | 10,717 | $ | 503 | $ | (1,804 | ) | $ | — | $ | 9,416 | |||||||||
Less: Restricted stock expense | 3,678 | |||||||||||||||||||
Intangible amortization | 90 | |||||||||||||||||||
Deferred taxes on goodwill | 38 | |||||||||||||||||||
Net income | $ | 5,610 | ||||||||||||||||||
Segment assets | $ | 146,948 | $ | 15,327 | $ | 10,914 | $ | (46,331 | ) | $ | 126,858 | |||||||||
Segment goodwill | $ | 5,219 | $ | 6,036 | $ | — | $ | — | $ | 11,255 | ||||||||||
Three Months Ended March 31, 2014 | ||||||||||||||||||||
Net fee revenues from external sources | $ | 20,752 | $ | 5,028 | $ | — | $ | — | $ | 25,780 | ||||||||||
Net intersegment revenues | 3,381 | — | — | (3,381 | ) | — | ||||||||||||||
Net interest and dividend revenue | 122 | 1 | — | — | 123 | |||||||||||||||
Other revenue | 45 | 1 | — | — | 46 | |||||||||||||||
Total revenues | $ | 24,300 | $ | 5,030 | $ | — | $ | (3,381 | ) | $ | 25,949 | |||||||||
Economic Earnings | $ | 10,739 | $ | 222 | $ | (1,792 | ) | $ | — | $ | 9,169 | |||||||||
Less: Restricted stock expense | 3,479 | |||||||||||||||||||
Intangible amortization | 90 | |||||||||||||||||||
Deferred taxes on goodwill | 38 | |||||||||||||||||||
Net income | $ | 5,562 | ||||||||||||||||||
Segment assets | $ | 102,777 | $ | 14,957 | $ | 11,253 | $ | (27,572 | ) | $ | 101,415 | |||||||||
Segment goodwill | $ | 5,219 | $ | 6,036 | $ | — | $ | — | $ | 11,255 | ||||||||||
We are providing a non-U.S. generally accepted accounting principles (“non-GAAP”) performance measure that we refer to as Economic Earnings. We provide this measure in addition to, but not as a substitute for, net income reported on a U.S. generally accepted accounting principles (“GAAP”) basis. Both 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, 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 without considering 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. |
Subsequent_Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. SUBSEQUENT EVENTS |
Acquisition of Woodway Financial Advisors | |
On January 15, 2015, we entered into an agreement to acquire Woodway Financial Advisors (“Woodway”), a Houston-based private wealth and trust company that managed assets of approximately $1.6 billion at December 31, 2014. We completed the acquisition on April 1, 2015. | |
Pursuant to the acquisition agreement on April 1, 2015, Woodway merged with Westwood Trust, with Westwood Trust being the surviving entity (the “Merger”). The total merger consideration consisted of (i) $32 million in cash and stock, as described below, and (ii) an earn-out amount equal to the annualized revenue from the post-closing business of Woodway for the twelve-month period ending March 31, 2016 (the “Earn-Out Period”), adjusted for clients or accounts that have terminated, and capped at $15 million (the “Earn-Out Amount”). | |
The acquisition consideration consisted of $25,331,200 in cash and 109,712 shares of Westwood common stock, valued at $6,668,000 using a stock price of $60.78, the average closing price of Westwood common stock over the 15 business days prior to January 15, 2015. Any post-closing merger consideration adjustment for Woodway’s working capital, outstanding indebtedness and unpaid transaction expenses will be paid in cash. The Earn-Out Amount will be paid 54.84% in cash and 45.16% in shares of Westwood’s common stock, valued using the average closing price during the last 30 calendar days of the Earn-Out Period. The shares of Westwood common stock issued pursuant to the Merger were issued only to “accredited investors” within the meaning of Regulation D promulgated under the Securities Act of 1933 (the “Securities Act”). | |
The acquisition of Woodway will be accounted for as a business combination using the acquisition method of accounting, whereby the purchase price will be allocated to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date, with the remaining unallocated purchase price recorded as goodwill. Fair value measurements will be applied based on assumptions that market participants would use in the pricing of the asset or liability. We have not completed the purchase price allocation associated with the acquisition. To date, we have incurred transaction costs of $1.1 million related to the Woodway acquisition, of which $700,000 are included in “Professional services” on our condensed consolidated statements of comprehensive income for the three months ended March 31, 2015. | |
Dividend Declared | |
In April 2015 Westwood’s Board of Directors declared a quarterly cash dividend of $0.50 per common share, payable on July 1, 2015 to stockholders of record on June 12, 2015. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | |
Mar. 31, 2015 | ||
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation | |
The accompanying condensed consolidated financial statements are unaudited and are presented in accordance with the requirements for quarterly reports on Form 10-Q and consequently do not include all of the information and footnote disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The Company’s consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary in the opinion of management to present fairly our interim financial position and results of operations and cash flows for the periods presented. The accompanying condensed consolidated financial statements are presented in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (“SEC”). Our consolidated financial statements include all necessary reclassification adjustments to conform prior year results to the current period presentation. | ||
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with our consolidated financial statements, and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2014. Operating results for the periods in these condensed consolidated financial statements are not necessarily indicative of the results for any future period. The accompanying condensed consolidated financial statements include the accounts of Westwood and its subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation. | ||
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 adoption of this ASU did not have an 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, 2017, 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. | ||
In January 2015, the FASB issued ASU 2015-01, Income Statement – Extraordinary and Unusual Items. The ASU eliminates the concept of extraordinary items, which are currently required to be separately classified, presented and disclosed in financial statements. ASU 2015-01 is effective for annual reporting periods, including interim periods within those periods, beginning after December 31, 2015. We do not expect the adoption of this ASU to have an impact on our consolidated financial statements. | ||
In February 2015, the FASB issued ASU 2015-02, Consolidation – Amendments to the Consolidation Analysis. This amendment modifies the analysis required to evaluate whether certain legal entities should be consolidated, including variable interest entities. This amendment changes the evaluation of fee arrangements and related party transactions when determining whether to consolidate a variable interest entity. The amendment is effective for annual reporting periods beginning after December 15, 2016 and for interim periods within reporting periods beginning after December 15, 2017, although early adoption is permitted. We are currently evaluating the impact that the application of ASU 2015-02 will have on our financial statements and disclosures. | ||
In April 2015, the FASB issued ASU 2015-05, Intangibles – Goodwill and Other – Internal-Use Software. This amendment provides guidance about whether a cloud computing arrangement includes a software license. The new guidance clarifies that software licenses included in a cloud computing software should be accounted for in the same manner as other software licenses. If the cloud computing arrangement does not include a software license, the arrangement should be accounted for as a service contract. This amendment is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2015, with early adoption permitted. We are currently evaluating the impact that the application of ASU 2015-05 will have on our financial statements. | ||
Earnings Per Share | Basic earnings per common share is computed by dividing net income available to common stockholders by the weighted average number of shares outstanding for the applicable period. Diluted earnings per share is computed based on the weighted average number of shares outstanding plus the effect of any dilutive shares of restricted stock granted to employees and non-employee directors. | |
Fair Value Measurements | We determine estimated fair values for our financial instruments using available information. The fair value amounts discussed in our condensed consolidated financial statements are not necessarily indicative of either amounts realizable upon disposition of these instruments or our intent or ability to dispose of these assets. The estimated fair value of cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued liabilities, dividends payable, compensation and benefits payable and income taxes payable approximates their carrying value due to their short-term maturities. The carrying amount of investments designated as “trading” securities, primarily U.S. Government and Government agency obligations, money market funds, Westwood Funds® mutual funds and Westwood Trust common trust fund shares, equals their fair value based on prices quoted in active markets and, with respect to funds, the net asset value of the shares held as reported by each fund. Market values of our money market holdings generally do not fluctuate. | |
ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value and requires additional disclosures regarding certain fair value measurements. ASC 820 establishes a three-tier hierarchy for measuring fair value as follows: | ||
· | level 1 – quoted market prices in active markets for identical assets | |
· | 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 | |
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 International and Westwood Management provide investment advisory services to 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 (“UCITS”), and which is an Ireland domiciled umbrella-type open-ended self-managed investment company. 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, UCITS, Westwood Funds®, CITs and LLCs (“Westwood VIEs”) are considered variable interest entities (“VIEs”) because our clients, who hold the equity at risk, do not have a direct or indirect ability through voting or similar rights to make decisions about the funds that would have a significant effect on their success. 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 expected losses or a right to receive the majority of expected residual returns. Since all losses and returns are distributed to the shareholders of the Company’s VIEs, we are not the primary beneficiary and consequently the Westwood VIEs are not included in our condensed consolidated financial statements. | ||
Restricted Stock Subject Only to a Service Condition | Restricted Stock Subject Only to a Service Condition | |
We calculate compensation cost for restricted stock grants by using the fair market value of our common stock at the date of grant, the number of shares issued, 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. | ||
Restricted Stock Subject to Service and Performance Conditions | Restricted Stock Subject to Service and Performance Conditions | |
Under the Plan, certain key employees were provided agreements for grants of restricted shares that vest over a five year period provided that annual performance goals established by the Compensation Committee of Westwood’s board of directors are met. 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 2015, the Compensation Committee established the 2015 goal as adjusted pre-tax income of at least $46.0 million, representing a five-year compound annual growth rate in excess of 10% over annual adjusted pre-tax income recorded in 2010. Adjusted pre-tax income is determined based on our audited financial statements and is equal to income before income taxes increased by expenses incurred for the year for (i) incentive compensation for all officers and employees, (ii) performance-based restricted stock awards, and (iii) mutual fund share incentive awards, excluding start up, non-recurring and similar expense items, at the Committee’s discretion. In the first quarter of 2015, we concluded that it was probable that we would meet the performance goals required to vest the applicable performance based restricted shares this year and began recording expense related to those shares. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share and share amounts): | |||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Net income | $ | 5,610 | $ | 5,562 | ||||
Weighted average shares outstanding - basic | 7,596,223 | 7,474,415 | ||||||
Dilutive potential shares from unvested restricted shares | 264,867 | 276,828 | ||||||
Weighted average shares outstanding - diluted | 7,861,090 | 7,751,243 | ||||||
Earnings per share: | ||||||||
Basic | $ | 0.74 | $ | 0.74 | ||||
Diluted | $ | 0.71 | $ | 0.72 | ||||
Investments_Tables
Investments (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Investments Debt And Equity Securities [Abstract] | ||||||||||||||||
Investment Balances | Investment balances are presented in the table below (in thousands). All investments are carried at fair value and are accounted for as trading securities. | |||||||||||||||
Gross | Gross | Estimated | ||||||||||||||
Unrealized | Unrealized | Market | ||||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
March 31, 2015: | ||||||||||||||||
U.S. Government and Government agency obligations | $ | 30,293 | $ | 17 | $ | (1 | ) | $ | 30,309 | |||||||
Money market funds | 26,332 | — | — | 26,332 | ||||||||||||
Equity funds | 7,163 | 279 | (44 | ) | 7,398 | |||||||||||
Marketable securities | $ | 63,788 | $ | 296 | $ | (45 | ) | $ | 64,039 | |||||||
December 31, 2014: | ||||||||||||||||
U.S. Government and Government agency obligations | $ | 66,761 | $ | 20 | $ | (8 | ) | $ | 66,773 | |||||||
Money market funds | 8,250 | — | — | 8,250 | ||||||||||||
Equity funds | 4,477 | 223 | (103 | ) | 4,597 | |||||||||||
Marketable securities | $ | 79,488 | $ | 243 | $ | (111 | ) | $ | 79,620 | |||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Values of Assets Within Fair Value Hierarchy | The following table summarizes the values of our assets as of the dates indicated within the fair value hierarchy (in thousands). | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
As of March 31, 2015: | ||||||||||||||||
Investments in securities: | ||||||||||||||||
Trading | $ | 60,639 | $ | 3,400 | $ | — | $ | 64,039 | ||||||||
Total financial instruments | $ | 60,639 | $ | 3,400 | $ | — | $ | 64,039 | ||||||||
As of December 31, 2014: | ||||||||||||||||
Investments in securities: | ||||||||||||||||
Trading | $ | 77,327 | $ | 2,293 | $ | — | $ | 79,620 | ||||||||
Total financial instruments | $ | 77,327 | $ | 2,293 | $ | — | $ | 79,620 | ||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Equity [Abstract] | ||||||||
Components of Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss were as follows (in thousands): | |||||||
As of | As of | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Foreign currency translation adjustment | $ | (2,619 | ) | $ | (1,231 | ) | ||
Accumulated other comprehensive loss | $ | (2,619 | ) | $ | (1,231 | ) | ||
Variable_Interest_Entities_Tab
Variable Interest Entities (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Variable Interest Entities [Abstract] | ||||||||||||
Variable Interest Entities | The following table displays assets under management, corporate capital invested and risk of loss in each vehicle (in millions). | |||||||||||
As of March 31, 2015 | ||||||||||||
Assets | ||||||||||||
Under | Corporate | Risk of | ||||||||||
Management | Investment | Loss | ||||||||||
VIE's: | ||||||||||||
Westwood Funds® | $ | 4,239 | $ | 1 | $ | 1 | ||||||
Common Trust Funds | 2,108 | 3 | 3 | |||||||||
Collective Investment Trusts | 309 | — | — | |||||||||
LLCs | 142 | — | — | |||||||||
UCITS Fund | 820 | 2 | 2 | |||||||||
VIE totals | 7,618 | |||||||||||
All other assets: | ||||||||||||
Private Wealth | 1,775 | |||||||||||
Institutional | 12,329 | |||||||||||
Total AUM | $ | 21,722 | ||||||||||
LongTerm_Incentive_Compensatio1
Long-Term Incentive Compensation (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Total Expense Recorded for Stock Based Compensation | The following table presents the total stock based compensation expense recorded for stock based compensation arrangements for the periods indicated (in thousands): | |||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Service condition stock based compensation expense | $ | 2,183 | $ | 1,814 | ||||
Performance condition stock based compensation expense | 1,354 | 1,249 | ||||||
Stock based compensation expense under the Plan | 3,537 | 3,063 | ||||||
Canada EB Plan stock based compensation expense | 141 | 416 | ||||||
Total stock based compensation expense | $ | 3,678 | $ | 3,479 | ||||
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 three months ended March 31, 2015: | |||||||
Weighted Average | ||||||||
Grant Date Fair | ||||||||
Restricted shares subject only to a service condition: | Shares | Value | ||||||
Non-vested, January 1, 2015 | 496,457 | $ | 48.14 | |||||
Granted | 235,945 | 61.74 | ||||||
Vested | (174,008 | ) | 40.85 | |||||
Forfeited | (204 | ) | 58.79 | |||||
Non-vested, March 31, 2015 | 558,190 | $ | 56.16 | |||||
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 provided that annual performance goals established by the Compensation Committee of Westwood’s board of directors are met. 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 2015, the Compensation Committee established the 2015 goal as adjusted pre-tax income of at least $46.0 million, representing a five-year compound annual growth rate in excess of 10% over annual adjusted pre-tax income recorded in 2010. Adjusted pre-tax income is determined based on our audited financial statements and is equal to income before income taxes increased by expenses incurred for the year for (i) incentive compensation for all officers and employees, (ii) performance-based restricted stock awards, and (iii) mutual fund share incentive awards, excluding start up, non-recurring and similar expense items, at the Committee’s discretion. In the first quarter of 2015, we concluded that it was probable that we would meet the performance goals required to vest the applicable performance based restricted shares this year and began recording expense related to those shares. | |||||||
Weighted Average | ||||||||
Grant Date Fair | ||||||||
Restricted shares subject to service and performance conditions: | Shares | Value | ||||||
Non-vested, January 1, 2015 | 101,313 | $ | 58.59 | |||||
Granted | 101,313 | 61.29 | ||||||
Vested | (101,313 | ) | 58.59 | |||||
Forfeited | — | — | ||||||
Non-vested, March 31, 2015 | 101,313 | $ | 61.29 | |||||
Segment_Reporting_Tables
Segment Reporting (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||
Intersegment Balances | ||||||||||||||||||||
Westwood | ||||||||||||||||||||
Advisory | Trust | Holdings | Eliminations | Consolidated | ||||||||||||||||
Three Months Ended March 31, 2015 | ||||||||||||||||||||
Net fee revenues from external sources | $ | 24,217 | $ | 5,150 | $ | — | $ | — | $ | 29,367 | ||||||||||
Net intersegment revenues | 3,627 | — | — | (3,627 | ) | — | ||||||||||||||
Net interest and dividend revenue | 49 | — | — | — | 49 | |||||||||||||||
Other revenue | 191 | 1 | — | — | 192 | |||||||||||||||
Total revenues | $ | 28,084 | $ | 5,151 | $ | — | $ | (3,627 | ) | $ | 29,608 | |||||||||
Economic Earnings | $ | 10,717 | $ | 503 | $ | (1,804 | ) | $ | — | $ | 9,416 | |||||||||
Less: Restricted stock expense | 3,678 | |||||||||||||||||||
Intangible amortization | 90 | |||||||||||||||||||
Deferred taxes on goodwill | 38 | |||||||||||||||||||
Net income | $ | 5,610 | ||||||||||||||||||
Segment assets | $ | 146,948 | $ | 15,327 | $ | 10,914 | $ | (46,331 | ) | $ | 126,858 | |||||||||
Segment goodwill | $ | 5,219 | $ | 6,036 | $ | — | $ | — | $ | 11,255 | ||||||||||
Three Months Ended March 31, 2014 | ||||||||||||||||||||
Net fee revenues from external sources | $ | 20,752 | $ | 5,028 | $ | — | $ | — | $ | 25,780 | ||||||||||
Net intersegment revenues | 3,381 | — | — | (3,381 | ) | — | ||||||||||||||
Net interest and dividend revenue | 122 | 1 | — | — | 123 | |||||||||||||||
Other revenue | 45 | 1 | — | — | 46 | |||||||||||||||
Total revenues | $ | 24,300 | $ | 5,030 | $ | — | $ | (3,381 | ) | $ | 25,949 | |||||||||
Economic Earnings | $ | 10,739 | $ | 222 | $ | (1,792 | ) | $ | — | $ | 9,169 | |||||||||
Less: Restricted stock expense | 3,479 | |||||||||||||||||||
Intangible amortization | 90 | |||||||||||||||||||
Deferred taxes on goodwill | 38 | |||||||||||||||||||
Net income | $ | 5,562 | ||||||||||||||||||
Segment assets | $ | 102,777 | $ | 14,957 | $ | 11,253 | $ | (27,572 | ) | $ | 101,415 | |||||||||
Segment goodwill | $ | 5,219 | $ | 6,036 | $ | — | $ | — | $ | 11,255 | ||||||||||
Description_of_the_Business_De
Description of the Business (Details Textual) (USD $) | 3 Months Ended | 0 Months Ended |
In Billions, unless otherwise specified | Mar. 31, 2015 | Jan. 15, 2015 |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||
Date of incorporation | 12-Dec-01 | |
Woodway Financial Advisors | ||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||
Date of acquisition agreement | 15-Jan-15 | |
Assets under management | $1.60 | |
Acquisition date of completion | 1-Apr-15 |
Earnings_Per_Share_Details_Tex
Earnings Per Share (Details Textual) (Restricted Stock) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Restricted Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive restricted shares | 44,000 | 103,000 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Computation of Basic and Diluted Shares | ||
Net income | $5,610 | $5,562 |
Weighted average shares outstanding - basic | 7,596,223 | 7,474,415 |
Dilutive potential shares from unvested restricted shares | 264,867 | 276,828 |
Weighted average shares outstanding - diluted | 7,861,090 | 7,751,243 |
Earnings per share: | ||
Basic | $0.74 | $0.74 |
Diluted | $0.71 | $0.72 |
Investments_Details
Investments (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Investment balances | ||
Cost | $63,788 | $79,488 |
Gross Unrealized Gains | 296 | 243 |
Gross Unrealized Losses | -45 | -111 |
Estimated Market Value | 64,039 | 79,620 |
U.S. Government and Government Agency Obligations | ||
Investment balances | ||
Cost | 30,293 | 66,761 |
Gross Unrealized Gains | 17 | 20 |
Gross Unrealized Losses | -1 | -8 |
Estimated Market Value | 30,309 | 66,773 |
Money Market Funds | ||
Investment balances | ||
Cost | 26,332 | 8,250 |
Estimated Market Value | 26,332 | 8,250 |
Equity Funds | ||
Investment balances | ||
Cost | 7,163 | 4,477 |
Gross Unrealized Gains | 279 | 223 |
Gross Unrealized Losses | -44 | -103 |
Estimated Market Value | $7,398 | $4,597 |
Investments_Details_Textual
Investments (Details Textual) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Schedule Of Investments [Line Items] | ||
Estimated Market Value | $64,039 | $79,620 |
VIE | ||
Schedule Of Investments [Line Items] | ||
Estimated Market Value | $5,800 | $4,600 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Investments in securities: | ||
Trading | $64,039 | $79,620 |
Total financial instruments | 64,039 | 79,620 |
Level 1 | ||
Investments in securities: | ||
Trading | 60,639 | 77,327 |
Total financial instruments | 60,639 | 77,327 |
Level 2 | ||
Investments in securities: | ||
Trading | 3,400 | 2,293 |
Total financial instruments | $3,400 | $2,293 |
Recovered_Sheet1
Goodwill and Other Intangible Assets (Details Textual) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Goodwill impairment loss | $0 | $0 | |
Intangible assets, net | 3,340,000 | 3,430,000 | |
Finite lived intangible assets accumulated amortization | 1,900,000 | ||
Estimated annual amortization intangible assets expense in next five years | $400,000 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Components of accumulated other comprehensive loss | ||
Foreign currency translation adjustment | ($2,619) | ($1,231) |
Accumulated other comprehensive loss | ($2,619) | ($1,231) |
Variable_Interest_Entities_Det
Variable Interest Entities (Details Textual) | 3 Months Ended | 1 Months Ended | ||||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Oct. 31, 2014 | Oct. 31, 2014 | Jan. 31, 2015 | Jan. 31, 2014 |
USD ($) | USD ($) | UCITS Fund | UCITS Fund | Common Trust Funds | Common Trust Funds | |
Number_of_Limited_Partnership | USD ($) | EUR (€) | USD ($) | USD ($) | ||
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 showing economic substance | $2 | € 1.60 | $1 | $2 | ||
Fee revenues from Westwood VIEs | $14.30 | $11.20 |
Variable_Interest_Entities_Det1
Variable Interest Entities (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Variable Interest Entities | ||
Assets Under Management | $21,722,000,000 | |
Trading | 64,039,000 | 79,620,000 |
Westwood Funds | ||
Variable Interest Entities | ||
Assets Under Management | 4,239,000,000 | |
Trading | 1,000,000 | |
Risk of Loss | 1,000,000 | |
Common Trust Funds | ||
Variable Interest Entities | ||
Assets Under Management | 2,108,000,000 | |
Trading | 3,000,000 | |
Risk of Loss | 3,000,000 | |
Collective Investment Trusts | ||
Variable Interest Entities | ||
Assets Under Management | 309,000,000 | |
UCITS Fund | ||
Variable Interest Entities | ||
Assets Under Management | 820,000,000 | |
Trading | 2,000,000 | |
Risk of Loss | 2,000,000 | |
VIE totals | ||
Variable Interest Entities | ||
Assets Under Management | 7,618,000,000 | |
Trading | 5,800,000 | 4,600,000 |
Private Wealth | ||
Variable Interest Entities | ||
Assets Under Management | 1,775,000,000 | |
Institutional | ||
Variable Interest Entities | ||
Assets Under Management | 12,329,000,000 | |
LLCs | ||
Variable Interest Entities | ||
Assets Under Management | $142,000,000 |
LongTerm_Incentive_Compensatio2
Long-Term Incentive Compensation (Details Textual) | 1 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 1 Months Ended | |||||||||
Feb. 28, 2015 | Feb. 28, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Feb. 28, 2014 | Mar. 31, 2015 | |
USD ($) | USD ($) | USD ($) | USD ($) | Mutual Fund | Mutual Fund | Restricted Stock | Restricted Stock | Restricted Stock | Canadian Plan | Canadian Plan | Performance Shares | Performanceb Basedb Restrictedb Sharesb For Future Performance Years | ||
USD ($) | USD ($) | USD ($) | USD ($) | Westwood International Advisors Inc | Westwood International Advisors Inc | |||||||||
USD ($) | 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 | 214,000 | 89,000 | ||||||||||||
Fund purchases of common stock | $7,900,000 | 10,000,000 | ||||||||||||
Purchases of common stock with respect to awards granted | 5,400,000 | |||||||||||||
Share price | $60.30 | |||||||||||||
Number of shares purchased in the open market | 21,193 | |||||||||||||
Amount of shares purchased in the open market | 1,289,000 | 669,000 | 1,300,000 | |||||||||||
Purchase of treasury stock, shares | 52,920 | |||||||||||||
Remaining unrecognized compensation cost | 33,500,000 | 1,400,000 | ||||||||||||
Remaining unrecognized compensation cost recognized over a remaining weighted average period | 2 years 10 months 24 days | 2 years 3 months 18 days | ||||||||||||
Adjusted pre-tax income | 46,000,000 | |||||||||||||
Restricted shares granted to employees vesting period | 5 years | |||||||||||||
Compound annual growth | 10.00% | |||||||||||||
Nonvested restricted shares | 558,190 | 496,457 | 118,939 | |||||||||||
Mutual fund vesting period | 1 year | |||||||||||||
Service period of mutual fund share incentive award | 2 years | |||||||||||||
Expense related to mutual fund share incentive awards | 426,000 | 125,000 | 3,678,000 | 3,479,000 | ||||||||||
Accrued liability | $1,400,000 | $844,000 |
LongTerm_Incentive_Compensatio3
Long-Term Incentive Compensation (Details) (Restricted Stock, USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock based compensation expense | $3,678 | $3,479 |
Service Condition Stock Based Compensation Expense | The Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock based compensation expense | 2,183 | 1,814 |
Performance Condition Stock Based Compensation Expense | The Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock based compensation expense | 1,354 | 1,249 |
Stock Based Compensation Expense | The Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock based compensation expense | 3,537 | 3,063 |
Canadian Plan Stock Based Compensation Expense | Canada EB Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock based compensation expense | $141 | $416 |
LongTerm_Incentive_Compensatio4
Long-Term Incentive Compensation (Details 1) (Restricted Shares Subject Only to a Service Condition, USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Restricted Shares Subject Only to a Service Condition | |
Restricted shares subject only to a service condition: | |
Non-vested, January 1, 2015 | 496,457 |
Granted | 235,945 |
Vested | -174,008 |
Forfeited | -204 |
Non-vested, March 31, 2015 | 558,190 |
Non-vested, January 1, 2015 | $48.14 |
Granted | $61.74 |
Vested | $40.85 |
Forfeited | $58.79 |
Non-vested, March 31, 2015 | $56.16 |
LongTerm_Incentive_Compensatio5
Long-Term Incentive Compensation (Details 2) (Restricted Shares Subject to Service and Performance Conditions, USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Restricted Shares Subject to Service and Performance Conditions | |
Restricted shares subject only to a service condition: | |
Non-vested, January 1, 2015 | 101,313 |
Granted | 101,313 |
Vested | -101,313 |
Non-vested, March 31, 2015 | 101,313 |
Non-vested, January 1, 2015 | $58.59 |
Granted | $61.29 |
Vested | $58.59 |
Non-vested, March 31, 2015 | $61.29 |
Related_Party_Transactions_Det
Related Party Transactions (Details Textual) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
UCITS Fund | |||
Related Party Transaction [Line Items] | |||
Fees earned from related party | $346,000 | $36,000 | |
Fees unpaid from related party | 120,000 | 256,000 | |
Trust | |||
Related Party Transaction [Line Items] | |||
Fees earned from related party | 74,000 | 59,000 | |
Due from related party | $0 | $0 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Textual) | 3 Months Ended | |||||||
Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | |
USD ($) | General Damage | Punitive Damage | Special Damage | First Lawsuit by AGF | 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] | ||||||||
Lawsuit Filing Date | On August 3, 2012, AGF Management Limited and AGF Investments Inc. (collectively, bAGFb) filed a lawsuit in the Ontario Superior Court of Justice against Westwood, certain Westwood employees and the executive recruiting firm of Warren International, LLC. (bWarrenb). | 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% | |||||||
Insurance proceeds | 379,000 | |||||||
Loss contingency, Receivables | $343,000 |
Segment_Reporting_Details_Text
Segment Reporting (Details Textual) | 3 Months Ended |
Mar. 31, 2015 | |
Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Segment Reporting Information [Line Items] | |||
Net fee revenues from external sources | $29,367 | $25,780 | |
Net interest and dividend revenue | 49 | 123 | |
Other revenue | 192 | 46 | |
Total revenues | 29,608 | 25,949 | |
Economic Earnings | 9,416 | 9,169 | |
Restricted stock expense | 3,678 | 3,479 | |
Intangible amortization | 90 | 90 | |
Deferred taxes on goodwill | 38 | 38 | |
Net income | 5,610 | 5,562 | |
Segment assets | 126,858 | 101,415 | 139,874 |
Segment goodwill | 11,255 | 11,255 | 11,255 |
Operating Segments | Advisory | |||
Segment Reporting Information [Line Items] | |||
Net fee revenues from external sources | 24,217 | 20,752 | |
Net intersegment revenues | 3,627 | 3,381 | |
Net interest and dividend revenue | 49 | 122 | |
Other revenue | 191 | 45 | |
Total revenues | 28,084 | 24,300 | |
Economic Earnings | 10,717 | 10,739 | |
Segment assets | 146,948 | 102,777 | |
Segment goodwill | 5,219 | 5,219 | |
Operating Segments | Trust | |||
Segment Reporting Information [Line Items] | |||
Net fee revenues from external sources | 5,150 | 5,028 | |
Net interest and dividend revenue | 1 | ||
Other revenue | 1 | 1 | |
Total revenues | 5,151 | 5,030 | |
Economic Earnings | 503 | 222 | |
Segment assets | 15,327 | 14,957 | |
Segment goodwill | 6,036 | 6,036 | |
Westwood Holdings | |||
Segment Reporting Information [Line Items] | |||
Economic Earnings | -1,804 | -1,792 | |
Segment assets | 10,914 | 11,253 | |
Intersegment Eliminations | |||
Segment Reporting Information [Line Items] | |||
Net intersegment revenues | -3,627 | -3,381 | |
Total revenues | -3,627 | -3,381 | |
Segment assets | ($46,331) | ($27,572) |
Subsequent_Event_Details_Textu
Subsequent Event (Details Textual) (USD $) | 3 Months Ended | 1 Months Ended | 0 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Apr. 30, 2015 | Jan. 15, 2015 | Apr. 02, 2015 | |
Subsequent Event [Line Items] | |||||
Professional services | $2,072,000 | $1,382,000 | |||
Dividends declared per share | $0.50 | $0.44 | |||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividends declared per share | $0.50 | ||||
Dividends payable, date to be paid | 1-Jul-15 | ||||
Dividends payable, date of record | 12-Jun-15 | ||||
Woodway Financial Advisors | |||||
Subsequent Event [Line Items] | |||||
Date of acquisition agreement | 15-Jan-15 | ||||
Assets under management | 1,600,000,000 | ||||
Business combination contingent consideration arrangements description | The acquisition consideration consisted of $25,331,200 in cash and 109,712 shares of Westwood common stock, valued at $6,668,000 using a stock price of $60.78, the average closing price of Westwood common stock over the 15 business days prior to January 15, 2015 | ||||
Professional services | 700,000 | ||||
Woodway Financial Advisors | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Total merger consideration | 32,000,000 | ||||
Earn-out payment | 12 months | ||||
Earn-out period | 31-Mar-16 | ||||
Earn-out payment | 15,000,000 | ||||
Business Acquisition, consideration pad in cash | 25,331,200 | ||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 109,712 | ||||
Business Acquisition, value of common stock | 6,668,000 | ||||
Business Acquisition, Share Price | $60.78 | ||||
Business combination Earn-out amount paid in cash | 54.84% | ||||
Business combination Earn-out amount paid through the issuance of shares | 45.16% | ||||
Business Acquisition, transaction costs | $1,100,000 |