Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 20, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | WESTWOOD HOLDINGS GROUP INC | |
Entity Central Index Key | 1,165,002 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 9,026,806 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 47,301 | $ 54,249 |
Accounts receivable | 22,903 | 21,660 |
Investments, at fair value | 61,513 | 51,324 |
Income Taxes Receivable, Current | 0 | 4,269 |
Other current assets | 1,853 | 6,612 |
Total current assets | 133,570 | 138,114 |
Long-term Investments | 5,000 | 0 |
Goodwill | 19,804 | 27,144 |
Deferred income taxes | 5,007 | 3,407 |
Intangible assets, net | 16,798 | 19,804 |
Property and equipment, net of accumulated depreciation of $6,055 and $5,673 | 4,088 | 4,190 |
Total assets | 184,267 | 192,659 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 2,724 | 3,501 |
Dividends payable | 7,144 | 7,357 |
Compensation and benefits payable | 9,000 | 19,075 |
Income taxes payable | 1,232 | 1,598 |
Total current liabilities | 20,100 | 31,531 |
Accrued dividends | 1,116 | 1,717 |
Accrued Income Taxes, Noncurrent | 0 | 1,017 |
Deferred rent | 1,910 | 1,998 |
Total liabilities | 23,126 | 36,263 |
Commitments and contingencies | ||
Stockholders' Equity: | ||
Common stock, $0.01 par value, authorized 25,000,000 shares, issued 10,204,887 and outstanding 9,026,806 shares at June 30, 2018; issued 9,980,827 and outstanding 8,899,587 shares at December 31, 2017 | 102 | 100 |
Additional paid-in capital | 187,367 | 179,241 |
Treasury stock, at cost - 1,178,081 shares at June 30, 2018; 1,081,240 shares at December 31, 2017 | (55,201) | (49,788) |
Foreign currency translation adjustment | (3,442) | (1,764) |
Retained earnings | 32,315 | 28,607 |
Total stockholders' equity | 161,141 | 156,396 |
Total liabilities and stockholders' equity | $ 184,267 | $ 192,659 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation | $ 6,055 | $ 5,673 |
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 10,204,887 | 9,980,827 |
Common stock, shares outstanding | 9,026,806 | 8,899,587 |
Treasury stock, shares | 1,178,081 | 1,081,240 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Advisory fees: | ||||
Asset-based | $ 23,473,000 | $ 24,496,000 | $ 47,956,000 | $ 48,285,000 |
Performance-based | 1,649,000 | 1,031,000 | 2,984,000 | 1,417,000 |
Trust fees | 7,465,000 | 7,917,000 | 15,074,000 | 15,712,000 |
Other, net | 173,000 | 312,000 | 313,000 | 965,000 |
Total revenues | 32,760,000 | 33,756,000 | 66,327,000 | 66,379,000 |
EXPENSES: | ||||
Employee compensation and benefits | 14,654,000 | 15,557,000 | 32,413,000 | 33,274,000 |
Sales and marketing | 409,000 | 513,000 | 852,000 | 990,000 |
Westwood mutual funds | 1,002,000 | 909,000 | 1,987,000 | 1,772,000 |
Information technology | 2,383,000 | 1,883,000 | 4,421,000 | 3,639,000 |
Professional services | 1,277,000 | 1,318,000 | 2,305,000 | 2,814,000 |
General and administrative | 2,099,000 | 2,993,000 | 3,450,000 | 5,537,000 |
Total expenses | 21,824,000 | 23,173,000 | 45,428,000 | 48,026,000 |
Operating Income (Loss) | 10,936,000 | 10,583,000 | 20,899,000 | 18,353,000 |
Gain on sale of operations | 0 | 0 | 524,000 | 0 |
Income before income taxes | 10,936,000 | 10,583,000 | 21,423,000 | 18,353,000 |
Provision for income taxes | 2,944,000 | 3,687,000 | 5,453,000 | 5,393,000 |
Net income | 7,992,000 | 6,896,000 | 15,970,000 | 12,960,000 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (479,000) | 934,000 | (1,678,000) | 1,141,000 |
Total comprehensive income | $ 7,513,000 | $ 7,830,000 | $ 14,292,000 | $ 14,101,000 |
Earnings per share: | ||||
Basic (dollars per share) | $ 0.95 | $ 0.84 | $ 1.92 | $ 1.60 |
Diluted (dollars per share) | $ 0.94 | $ 0.83 | $ 1.87 | $ 1.56 |
Weighted average shares outstanding: | ||||
Basic (shares) | 8,399,148 | 8,167,277 | 8,336,923 | 8,118,327 |
Diluted (shares) | 8,543,353 | 8,316,508 | 8,543,401 | 8,315,722 |
Cash dividends declared per share (dollars per share) | $ 0.68 | $ 0.62 | $ 1.36 | $ 1.24 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - 6 months ended Jun. 30, 2018 - USD ($) $ in Thousands | Total | Common Stock, Par | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings |
BALANCE at Dec. 31, 2017 | $ 156,396 | $ 100 | $ 179,241 | $ (49,788) | $ (1,764) | $ 28,607 |
BALANCE, shares at Dec. 31, 2017 | 8,899,587 | 8,899,587 | ||||
Net income | $ 15,970 | |||||
Other comprehensive income | (1,678) | (1,678) | ||||
Issuance of restricted stock, net of forfeitures | 0 | $ 2 | (2) | |||
Issuance of restricted stock, net of forfeitures, shares | 224,060 | |||||
Dividends declared | (12,262) | (12,262) | ||||
Stock based compensation expense | 7,963 | 7,963 | ||||
Reclassification of compensation liability to be paid in shares | 165 | 165 | ||||
Purchases of treasury stock | (726) | (726) | ||||
Purchases of treasury stock, shares | (13,031) | |||||
Restricted stock returned for payment of taxes | (4,687) | (4,687) | ||||
Restricted stock returned for payment of taxes, shares | (83,810) | |||||
BALANCE at Jun. 30, 2018 | $ 161,141 | $ 102 | $ 187,367 | $ (55,201) | $ (3,442) | $ 32,315 |
BALANCE, shares at Jun. 30, 2018 | 9,026,806 | 9,026,806 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 15,970 | $ 12,960 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 434 | 479 |
Amortization of intangible assets | 836 | 980 |
Unrealized (gains) losses on trading investments | 256 | (378) |
Stock based compensation expense | 7,963 | 8,065 |
Deferred income taxes | (1,631) | 437 |
Gain on sale of operations | (524) | 0 |
Change in operating assets and liabilities: | ||
Net sales (purchases) of investments - trading securities | (10,445) | 11,198 |
Accounts receivable | (1,616) | 531 |
Other current assets | 4,637 | 455 |
Accounts payable and accrued liabilities | (442) | 266 |
Compensation and benefits payable | (9,844) | (6,940) |
Income taxes payable | 2,881 | (1,178) |
Other liabilities | (74) | (53) |
Net cash provided by operating activities | 8,401 | 26,822 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (426) | (245) |
Proceeds from sale of operations | 10,013 | 0 |
Payments to Acquire Investments | (5,000) | |
Payments to Acquire Businesses, Net of Cash Acquired | 0 | |
Net cash provided by (used in) investing activities | 4,587 | (245) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment for Repurchases of Stock for Benefit Plan | (726) | (1,326) |
Restricted stock returned for payment of taxes | (4,687) | (5,189) |
Cash dividends paid | (13,075) | (11,674) |
Net cash used in financing activities | (18,488) | (18,189) |
Effect of currency rate changes on cash | (1,448) | 1,076 |
Net Change in Cash and Cash Equivalents | (6,948) | 9,464 |
Cash and cash equivalents, beginning of period | 54,249 | 33,679 |
Cash and cash equivalents, end of period | 47,301 | 43,143 |
Supplemental cash flow information: | ||
Cash paid during the period for income taxes | 4,169 | 5,539 |
DividendsAccrued | 8,260 | 7,760 |
Capital Expenditures Incurred but Not yet Paid | $ 0 | $ 52 |
DESCRIPTION OF THE BUSINESS
DESCRIPTION OF THE BUSINESS | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
DESCRIPTION OF THE BUSINESS | DESCRIPTION OF THE BUSINESS Westwood Holdings Group, Inc. (“Westwood”, the “Company”, “we”, “us” or “our”) was incorporated under the laws of the State of Delaware on December 12, 2001 . Westwood provides investment management services to institutional investors, private wealth clients and financial intermediaries through its subsidiaries, Westwood Management Corp. and Westwood Advisors, L.L.C. (together “Westwood Management”), Westwood Trust, and Westwood International Advisors Inc. (“Westwood International”). Revenue is largely dependent on the total value and composition of assets under management (“AUM”). Accordingly, fluctuations in financial markets and in the composition of AUM impact revenues and results of operations. Divestiture of our Omaha Operations On September 6, 2017, we entered into an agreement to sell the Omaha-based component of our Private Wealth business. The sale closed on January 12, 2018. We received proceeds of $10.0 million , net of working capital requirements, and recorded a $524,000 gain on the sale, which is included as “Gain on sale of operations” on our Consolidated Statements of Comprehensive Income. The sale reduced goodwill and intangible assets but did not have a material impact on our Condensed Consolidated Balance Sheet. The following table presents cash proceeds received and net assets sold (in thousands): Cash Proceeds $ 10,013 Net assets sold: Accounts receivable 99 Other current assets 112 Goodwill 7,340 Intangible assets, net 2,170 Property and equipment, net 18 Accounts payable and accrued liabilities (241 ) Other liabilities (9 ) Gain on sale of operations $ 524 The component is reported within both our Advisory and Trust segments. The sale did not represent a major strategic shift in our business and did not qualify for discontinued operations reporting. | |
Date of incorporation | Dec. 12, 2001 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying Condensed Consolidated Financial Statements are unaudited and are presented in accordance with the requirements for quarterly reports on Form 10-Q and consequently do not include all of the information and footnote disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The Company’s Condensed Consolidated Financial Statements reflect all adjustments (consisting only of normal recurring adjustments) necessary in the opinion of management to present fairly our interim financial position and results of operations and cash flows for the periods presented. The accompanying Condensed Consolidated Financial Statements are presented in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (“SEC”). The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with our Consolidated Financial Statements, and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2017 , filed with the SEC. Operating results for the periods in these Condensed Consolidated Financial Statements are not necessarily indicative of results for any future period. The accompanying Condensed Consolidated Financial Statements include the accounts of Westwood and its subsidiaries. All intercompany accounts and transactions have been eliminated upon consolidation. Recent Accounting Pronouncements Recently Adopted In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) , which resulted from a joint project by the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP and International Financial Reporting Standards (“IFRS”). The ASU is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Retrospective application is required, with the entity either applying the change to each prior reporting period presented or applying the cumulative effect of each prior reporting period presented at the date of initial application. We adopted ASU 2014-09 effective January 1, 2018. See further discussion in Note 9 “Revenue.” In March 2018, the FASB issued ASU 2018-05, Income Taxes: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 , to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act (“Tax Reform Act”). See further discussion in Note 11 “Income Taxes.” Not Yet Adopted In June 2018, the FASB issued ASU 218-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The purpose of this amendment is to simplify the accounting for share-based payments granted to nonemployees for goods and services by aligning it with the accounting used for arrangements with employees. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. We do not expect the amendment to have a material impact on our Consolidated Financial Statements, and we plan to adopt the standard within the required time frame. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per common share is computed by dividing net income available to common stockholders by the weighted average number of shares outstanding for the applicable period. Diluted earnings per share is computed based on the weighted average number of shares outstanding plus the effect of any dilutive shares of restricted stock granted to employees and non-employee directors. There were no anti-dilutive restricted shares outstanding for the three months ended June 30, 2018 , and there were approximately 7,000 anti-dilutive restricted shares outstanding for the three months ended June 30, 2017. There were approximately 5,000 and 13,000 anti-dilutive restricted shares outstanding for the six months ended June 30, 2018 and 2017 , 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 June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net income $ 7,992 $ 6,896 $ 15,970 $ 12,960 Weighted average shares outstanding - basic 8,399,148 8,167,277 8,336,923 8,118,327 Dilutive potential shares from unvested restricted shares 144,205 149,231 206,478 197,395 Weighted average shares outstanding - diluted 8,543,353 8,316,508 8,543,401 8,315,722 Earnings per share: Basic $ 0.95 $ 0.84 $ 1.92 $ 1.60 Diluted $ 0.94 $ 0.83 $ 1.87 $ 1.56 |
INVESTMENTS
INVESTMENTS | 6 Months Ended |
Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS In May 2018, we entered into a $5.0 million strategic investment in an equity position of a private company. As this investment represents a private company without a readily determinable fair value, the Company has elected to apply the measurement alternative of cost minus impairment, if any, plus or minus changes resulting from observable price changes. The Company will reassess whether our investment qualifies for the measurement alternative at each reporting period. In evaluating the investment for impairment or observable price changes, we will use inputs including recent financing events, as well as other available information regarding the private company's historical and forecasted performance. As of June 30, 2018, there were no observable price changes or indicators of impairment for this investment. See further discussion regarding our investment in Note 13 “Commitments and Contingencies.” All other investments are carried at fair value on a recurring basis and are accounted for as trading securities. Trading securities are presented in the table below (in thousands): Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Market Value June 30, 2018: U.S. Government and Government agency obligations $ 40,081 $ 72 $ — $ 40,153 Money market funds 9,736 — — 9,736 Equity funds 11,309 524 (209 ) 11,624 Total trading securities $ 61,126 $ 596 $ (209 ) $ 61,513 December 31, 2017: U.S. Government and Government agency obligations $ 29,367 $ 21 $ (15 ) $ 29,373 Money market funds 9,736 — — 9,736 Equity funds 11,578 657 (20 ) 12,215 Total trading securities $ 50,681 $ 678 $ (35 ) $ 51,324 As of June 30, 2018 and December 31, 2017 , approximately $10.7 million in corporate funds were invested in Westwood Funds®, Westwood Common Trust Funds and Westwood Investment Funds PLC (the “UCITS Fund”). See Note 8 “Variable Interest Entities.” |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS We determine estimated fair values for our financial instruments using available information. The fair value amounts discussed in our Condensed Consolidated Financial Statements are not necessarily indicative of either amounts realizable upon disposition of these instruments or our intent or ability to dispose of these assets. The estimated fair value of cash and cash equivalents, accounts receivable, prepaid income taxes, other current assets, accounts payable and accrued liabilities, dividends payable, compensation and benefits payable and income taxes payable approximates their carrying value due to their short-term maturities. The carrying amount of investments designated as “trading” securities, primarily U.S. Government and Government agency obligations, money market funds, Westwood Funds ® mutual funds, the UCITS Fund and Westwood Trust common trust fund shares, equals their fair value based on prices quoted in active markets and, with respect to common trust funds, the net asset value of the shares held as reported by each fund. Market values of our money market holdings generally do not fluctuate. Our strategic investment in a private company discussed in Note 4 “Investments” is excluded from the below recurring fair value table, as we have elected to apply the measurement alternative for this investment. ASC 820, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value and requires disclosures regarding certain fair value measurements. ASC 820 establishes a three-tier hierarchy for measuring fair value, as follows: • level 1 – quoted market prices in active markets for identical assets • level 2 – inputs other than quoted prices that are directly or indirectly observable • level 3 – significant unobservable inputs where there is little or no market activity The following table summarizes the values of our investments measured at fair value on a recurring basis within the fair value hierarchy as of the dates indicated (in thousands): Level 1 Level 2 Level 3 Investments Measured at NAV (1) Total As of June 30, 2018: Investments in trading securities $ 59,214 $ — $ — $ 2,299 $ 61,513 Total assets measured at fair value $ 59,214 $ — $ — $ 2,299 $ 61,513 As of December 31, 2017: Investments in trading securities $ 48,998 $ — $ — $ 2,326 $ 51,324 Total assets measured at fair value $ 48,998 $ — $ — $ 2,326 $ 51,324 (1) Comprised of certain investments measured at fair value using net asset value ( “ NAV ” ) as a practical expedient. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on our Condensed Consolidated Balance Sheets. |
ACQUISITIONS, GOODWILL AND OTHE
ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Goodwill represents the excess of the cost of acquired assets over the fair value of the underlying identifiable assets at the date of acquisition. Goodwill is not amortized but is tested for impairment at least annually. We completed our annual goodwill impairment assessment during the third quarter of 2017 and determined that no impairment loss was required. No impairments on goodwill were recorded during the three or six months ended June 30, 2018 or 2017 . Changes in the balance of Goodwill for the periods presented are as follows (in thousands): Goodwill Balance as of December 31, 2017 $ 27,144 Omaha divestiture (7,340 ) Balance as of June 30, 2018 $ 19,804 Other Intangible Assets Our intangible assets represent the acquisition date fair value of acquired client relationships, trade names, non-compete agreements and internally developed software and are reflected net of amortization. In valuing these assets, we made significant estimates regarding their useful lives, growth rates and potential attrition. We periodically review intangible assets for events or circumstances that would indicate impairment. No impairments on intangible assets were recorded during the three or six months ended June 30, 2018 or 2017 . Changes in the balance of Intangible assets, net for the periods presented are as follows (in thousands): Intangible assets, net Balance as of December 31, 2017 $ 19,804 Amortization (836 ) Omaha divestiture (1) (2,170 ) Balance as of June 30, 2018 $ 16,798 _____________________ (1) Related to client relationships |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BALANCE SHEET COMPONENTS | STOCKHOLDERS' EQUITY Accumulated Other Comprehensive Loss The components of Accumulated other comprehensive loss were as follows (in thousands): As of June 30, 2018 As of December 31, 2017 Foreign currency translation adjustment $ (3,442 ) $ (1,764 ) Accumulated other comprehensive loss $ (3,442 ) $ (1,764 ) |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 6 Months Ended |
Jun. 30, 2018 | |
Variable Interest Entities [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES We have evaluated (i) our advisory relationships with the UCITS Fund and the Westwood Funds®, (ii) our relationship as sponsor of the Common Trust Funds (“CTFs”) and managing member of the private equity fund Westwood Hospitality Fund I, LLC (“WHF”) and (iii) the private company discussed in Note 4 “Investments” (“Private Equity”) to determine whether each of these entities is a variable interest entity (“VIE”) or voting ownership entity (“VOE”). Based on our analysis, we determined that the CTFs and WHF were VIEs, as the at-risk equity holders do not have the ability to direct the activities that most significantly impact the entity’s economic performance, and the Company and its representatives have a majority control of the entities' respective boards of directors and can influence the respective entities' management and affairs. Prior to the sale of our Omaha-based operations, we also considered our advisory relationship with ten limited liability companies (“LLCs”) as VIEs, but as of June 30, 2018 , we no longer serve as the managing member of the funds and do not control the activities that most significantly impact the entities' economic performance. Therefore, the LLCs are no longer considered VIEs. Although we have related parties on the UCITS Fund board of directors, the shareholders have rights to remove the current directors with a simple majority vote and so we determined that the UCITS Fund is not a VIE. As the Company and its representatives do not have representation on the Westwood Funds® or the Private Equity independent boards of directors, which direct the activities that most significantly impact the entities' economic performance, we determined that the Westwood Funds® and the Private Equity were not VIEs. Therefore, the UCITS Fund, Westwood Funds® and Private Equity should be analyzed under the VOE consolidation method. Based on our analysis of our investments in these entities for the periods ending June 30, 2018 and December 31, 2017 , we have not consolidated the CTFs, WHF or LLCs under the VIE method or the UCITS Fund, Westwood Funds® or Private Equity under the VOE method, and therefore the financial results of these entities are not included in the Company’s consolidated financial results. As of June 30, 2018 and December 31, 2017 , our seed investments aggregated approximately $10.7 million in the CTFs, the Westwood Funds, and the UCITS Fund. The seed investments were provided for the sole purpose of showing the economic substance needed to establish the funds or sub-funds. The Company's seed investments in these funds are included in “Investments, at fair value” on our Condensed Consolidated Balance Sheets. We have not otherwise provided any financial support not previously contractually obligated to provide, and there are no arrangements that would require us to provide additional financial support to any of these entities. Our seed investments in the above-mentioned Westwood Funds ® , the UCITS Fund and the CTFs are accounted for as investments in accordance with our other investments described in Note 4 “Investments.” We recognized fee revenue from the Westwood VIEs and Westwood VOEs of approximately $12.0 million and $13.1 million for the three months ended June 30, 2018 and 2017 , respectively. We recognized fee revenue from the Westwood VIEs and Westwood VOEs of approximately $24.6 million and $25.9 million for the six months ended June 30, 2018 and 2017 , respectively. The following table displays the assets under management, the amounts of our seed investments included in “Investments” on our consolidated balance sheets, and the risk of loss in each vehicle (in millions): As of June 30, 2018 Assets Corporate Amount at Risk VIEs/VOEs: Westwood Funds® $ 4,199 $ 6 $ 6 Common Trust Funds 2,311 2 2 UCITS Fund 411 2 2 Westwood Hospitality Fund I, LLC 3 — — Private Equity — 5 5 All other assets: Private Wealth 2,621 Institutional 12,046 Total Assets Under Management $ 21,591 |
REVENUE (Notes)
REVENUE (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer, Excluding Assessed Tax | REVENUE Adoption of ASC 2014-09 Revenue from Contracts with Customers (Topic 606) On January 1, 2018, we adopted ASU 2016-10 using the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606 while prior period amounts continue to be reported in accordance with our historic accounting under Topic 605. We analyzed the revenue from prior periods and determined no material adjustments to opening retained earnings were necessary as the updated guidance is consistent with our historical revenue recognition methodology. Revenue Recognition Revenues are recognized when the performance obligation (the investment management and advisory or trust services provided to the client) defined by the investment advisory or sub-advisory agreement is satisfied. For each performance obligation, we determine at contract inception whether the revenue satisfies over time or at a point in time. We derive our revenues from investment advisory fees, trust fees and other sources of revenues. Advisory and Trust fees are calculated based on a percentage of assets under management and the performance obligation is realized over the current calendar quarter. Once clients receive our investment advisory services we have an enforceable right to payment. Advisory Fee Revenues Our advisory fees are generated by Westwood Management and Westwood International, which manage client accounts under investment advisory and sub-advisory agreements. Advisory fees are typically calculated based on a percentage of assets under management and are paid in accordance with the terms of the agreements. Advisory fees are paid quarterly in advance based on assets under management on the last day of the preceding quarter, quarterly in arrears based on assets under management on the last day of the quarter just ended or are based on a daily or monthly analysis of assets under management for the stated period. We recognize advisory fee revenues as services are rendered. Since our advance paying clients' billing periods coincide with the calendar quarter to which such payments relate, revenue is recognized within the quarter and our condensed consolidated financial statements contain no deferred advisory fee revenues. Advisory clients typically consist of institutional and mutual fund accounts. Institutional investors includes separate accounts of (i) corporate pension and profit sharing plans, public employee retirement funds, Taft Hartley plans, endowments, foundations and individuals; (ii) subadvisory relationships where Westwood provides investment management services for funds offered by other financial institutions; (iii) pooled investment vehicles, including the UCITS Fund and collective investment trusts; and (iv) managed account relationships with brokerage firms and other registered investment advisors that offer Westwood products to their customers. Mutual funds include the Westwood Funds®, a family of mutual funds for which Westwood Management serves as advisor. These funds are available to individual investors, as well as offered as part of our investment strategies for institutional investors and private wealth accounts. Arrangements with Performance Based Obligations A limited number of our advisory clients have a contractual performance-based fee component in their contracts, which generates additional revenues if we outperform a specified index over a specific period of time. The revenue is based on future market performance and is susceptible to factors outside our control. We cannot conclude that a significant reversal in the cumulative amount of revenue recognized will not occur during the measurement period, and therefore the revenue is recorded at the end of the measurement period when the performance obligation has been satisfied. Trust Fee Revenues Our trust fees are generated by Westwood Trust pursuant to trust or custodial agreements. Trust fees are separately negotiated with each client and are generally based on a percentage of assets under management. Westwood Trust also provides trust services to a small number of clients on a fixed fee basis. The fees for most of our trust clients are calculated quarterly in arrears, based on a daily average of assets under management for the quarter. Since billing periods for most of Westwood Trust’s clients coincide with the calendar quarter, revenue is fully recognized within the quarter and our Condensed Consolidated Financial Statements do not contain a significant amount of deferred trust fee revenues. Revenue Disaggregated Sales taxes are excluded from revenues. The following table presents our revenue disaggregated by account type (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Advisory Fees: Institutional $ 15,684 $ 17,043 $ 32,389 $ 33,652 Mutual Funds 7,753 7,452 15,503 14,632 Private Wealth 36 — 64 — Performance-based 1,649 1,031 2,984 1,417 Trust Fees 7,465 7,917 15,074 15,713 Other 173 313 313 965 Total revenues $ 32,760 $ 33,756 $ 66,327 $ 66,379 We have clients in various locations around the world. The following table presents our revenue disaggregated by our clients' geographical locations (in thousands): Three Months Ended June 30, 2018 Advisory Trust Performance-based Other Total Asia $ 1,236 $ — $ — $ — $ 1,236 Australia 974 — — — 974 Canada 1,640 — — 37 1,677 Europe 1,347 — — — 1,347 United States 18,276 7,465 1,649 136 27,526 Total $ 23,473 $ 7,465 $ 1,649 $ 173 $ 32,760 Six Months Ended June 30, 2018 Asia $ 2,667 $ — $ — $ — $ 2,667 Australia 1,996 — — — 1,996 Canada 3,470 — — 86 3,556 Europe 2,590 — — — 2,590 United States 37,233 15,074 2,984 227 55,518 Total $ 47,956 $ 15,074 $ 2,984 $ 313 $ 66,327 Three Months Ended June 30, 2017 Advisory Trust Performance-based Other Total Asia $ 1,508 $ — $ — $ — $ 1,508 Australia 786 — — — 786 Canada 2,118 — — 139 2,257 Europe 1,061 — — — 1,061 United States 19,023 7,917 1,031 173 28,144 Total $ 24,496 $ 7,917 $ 1,031 $ 312 $ 33,756 Six Months Ended June 30, 2017 Asia $ 3,047 $ — $ — $ — $ 3,047 Australia 1,427 — — — 1,427 Canada 4,132 — — 222 4,354 Europe 2,119 — — — 2,119 United States 37,560 15,712 1,417 743 55,432 Total $ 48,285 $ 15,712 $ 1,417 $ 965 $ 66,379 |
LONG-TERM INCENTIVE COMPENSATIO
LONG-TERM INCENTIVE COMPENSATION | 6 Months Ended |
Jun. 30, 2018 | |
Employee Benefits and Share-based Compensation, Noncash [Abstract] | |
LONG-TERM INCENTIVE COMPENSATION | LONG-TERM INCENTIVE COMPENSATION Restricted Stock Awards We have issued restricted shares to our employees and non-employee directors. The Fifth Amended and Restated Westwood Holdings Group, Inc. Stock Incentive Plan (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. In April 2018, stockholders approved an additional 200,000 shares to be authorized under the Plan, increasing the total number of shares issuable under the Plan (including predecessor plans to the Plan) to 4,848,100 shares. At June 30, 2018 , approximately 401,000 shares remain available for issuance under the Plan. The following table presents the total stock-based compensation expense recorded for stock-based compensation arrangements for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Service condition stock-based compensation expense $ 2,535 $ 2,608 $ 5,325 $ 5,237 Performance condition stock-based compensation expense 1,088 1,372 2,364 2,495 Stock-based compensation expense under the Plan 3,623 3,980 7,689 7,732 Canadian Plan stock-based compensation expense 153 188 274 333 Total stock-based compensation expense $ 3,776 $ 4,168 $ 7,963 $ 8,065 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 June 30, 2018 , there was approximately $27.8 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. Our two types of restricted stock grants under the Plan are discussed below. Restricted Stock Subject Only to a Service Condition We calculate compensation cost for restricted stock grants by using the fair market value of our common stock at the date of grant, the number of shares issued and an adjustment for restrictions on dividends. This compensation cost is amortized on a straight-line basis over the applicable vesting period, with adjustments for forfeitures recorded as they occur. The following table details the status and changes in our restricted stock grants subject only to a service condition for the six months ended June 30, 2018 : Shares Weighted Average Non-vested, January 1, 2018 519,375 $ 55.44 Granted 172,366 55.92 Vested (203,020 ) 53.49 Forfeited (20,977 ) 56.42 Non-vested, June 30, 2018 467,744 $ 56.42 Restricted Stock Subject to Service and Performance Conditions Under the Plan, certain key employees were provided agreements for grants of restricted shares that vest over multiple year periods subject to achieving annual performance goals established by the Compensation Committee of Westwood’s Board of Directors. Each year the Compensation Committee establishes specific goals for that year’s vesting of the restricted shares. The date that the Compensation Committee establishes annual goals is considered to be the grant date and the fair value measurement date to determine expense on the shares that are likely to vest. The vesting period ends when the Compensation Committee formally approves the performance-based restricted stock vesting based on the specific performance goals from the Company’s audited consolidated financial statements. If a portion of the performance-based restricted shares does not vest, no compensation expense is recognized for that portion and any previously recognized compensation expense related to shares that do not vest is reversed. In March 2018, the Compensation Committee established the fiscal 2018 goal for our Chief Executive Officer and Chief Investment Officer as Income before income taxes of $20.0 million for 50% of their respective awards and an Income before income taxes target of $36.0 million (ranging from 25% of target for threshold performance of $32.0 million to 185% of target for maximum performance of $44.5 million ) for the remaining 50% of their respective awards. For certain other key employees, the Compensation Committee established fiscal 2018 goals based on various departmental and company-wide performance goals, including Income before income taxes of at least $20.0 million . During the first six months of 2018, we recorded expense related to the applicable percentage of the performance-based restricted shares expected to meet or exceed the performance goals needed to earn the shares. The following table details the status and changes in our restricted stock grants subject to service and performance conditions for the six months ended June 30, 2018 : Shares Weighted Average Non-vested, January 1, 2018 165,918 $ 55.85 Granted 84,829 55.46 Vested (98,281 ) 55.81 Forfeited — — Non-vested, June 30, 2018 152,466 $ 55.66 Canadian Plan The Share Award Plan of Westwood Holdings Group, Inc. for Service Provided in Canada to its Subsidiaries (the “Canadian Plan”) provides compensation in the form of common stock for services performed by employees of Westwood International. Under the Canadian Plan, no more than $10 million CDN ( $7.6 million in U.S. Dollars using the exchange rate on June 30, 2018 ) may be funded to the plan trustee for purchases of common stock with respect to awards granted under the Canadian Plan. At June 30, 2018 , approximately $3.4 million CDN ( $2.6 million in U.S. Dollars using the exchange rate on June 30, 2018 ) remains available for issuance under the Canadian Plan, or approximately 44,099 shares based on the closing share price of our stock of $59.54 as of June 30, 2018 . During the first six months of 2018 , the trust formed pursuant to the Canadian Plan purchased in the open market 13,031 Westwood common shares for approximately $726,000 . As of June 30, 2018 , the trust holds 46,358 shares of Westwood common stock. As of June 30, 2018 , unrecognized compensation cost related to restricted stock grants under the Canadian Plan totaled $1.0 million , which we expect to recognize over a weighted-average period of 1.9 years. Mutual Fund Share Incentive Awards We grant annually to certain employees mutual fund incentive awards, which are bonus awards based on our mutual funds achieving specific performance goals. Awards granted are notionally credited to a participant account maintained by us that contains a number of mutual fund shares equal to the award amount divided by the net closing value of a fund share on the date the amount is credited to the account. We maintain the award in a corporate investment account until vesting. The investment 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. Unvested mutual fund awards are included under “Investments, at fair value” on our Condensed Consolidated Balance Sheets. Awards vest over approximately two years of service following the year in which the participant earned the award. We begin accruing a liability for mutual fund incentive awards when we believe it is probable that the award will be earned and record expense for these awards over the service period of the award, which is 3 years. During the year in which the amount of the award is determined, we record expense based on the expected value of the award. After the award is earned, we record expense based on the value of the shares awarded and the percentage of the vesting period that has elapsed. Our liability under these awards may increase or decrease based on changes in the value of the mutual fund shares awarded, including reinvested income from the mutual funds during the vesting period. Upon vesting, participants receive the value of the mutual fund share awards adjusted for earnings or losses attributable to the underlying mutual funds. For the three months ended June 30, 2018 and 2017 , we recorded expense of approximately $11,000 and $250,000 , respectively, related to mutual fund share incentive awards. For the six months ended June 30, 2018 and 2017 , we recorded expense of approximately $185,000 and $538,000 , respectively, related to mutual fund share incentive awards. As of June 30, 2018 and December 31, 2017 , we had an accrued liability of approximately $517,000 and $1.8 million , respectively, related to mutual fund share incentive awards. |
INCOME TAXES (Notes)
INCOME TAXES (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | INCOME TAXES Our effective income tax rate was 26.9% for the second quarter of 2018 , compared with 34.8% for the second quarter of 2017 . Our effective income tax rate was 25.5% for the six months ended June 30, 2018 , compared with 29.4% for the six months ended June 30, 2017 . The current quarter and year-to-date rates benefited from the decrease in the U.S. corporate income tax rate under the Tax Cuts and Jobs Act signed into law in December 2017, while the first six months of 2017 included a $1.0 million tax benefit related to the adoption of ASU 2016-09 Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting . Excluding this discrete tax benefit, our effective tax rate would have been 34.5% for the six months ended June 30, 2017 . Tax Reform Act On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. During 2017, we provisionally recognized the incremental tax impacts related to deemed repatriated earnings and the revaluation of deferred tax assets and liabilities and included these amounts in our Consolidated Financial Statements for the year ended December 31, 2017. During the first six months of 2018, we did not make any changes to the amounts provisionally recognized. The ultimate impact may differ, possibly materially, from these provisional amounts due to, among other things, additional analysis, changes in interpretations and assumptions we have made, additional regulatory guidance that may be issued and actions we may take as a result of the Tax Reform Act. The accounting is expected to be complete when our 2017 U.S. corporate income tax return is filed in the third quarter of 2018. Tax Audit The Company is subject to taxation in the United States and various state and foreign jurisdictions, and our 2014 tax return is currently under audit in a state jurisdiction in which we operate. It is reasonably possible that the audit may be completed during the next twelve months, and we do not expect the result of this audit to have a material impact on our consolidated financial statements. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Some of our directors, executive officers and their affiliates invest their personal funds directly in trust accounts that we manage. For the three months ended June 30, 2018 and 2017 , we recorded trust fees from these accounts of $92,000 and $90,000 , respectively. For the six months ended June 30, 2018 and 2017 , we recorded trust fees from these accounts of $187,000 and $185,000 , respectively. There was $92,000 and $98,000 due from these accounts as of June 30, 2018 and December 31, 2017 , respectively. The Company engages in transactions with its affiliates in the ordinary course of business. Westwood International and Westwood Management provide investment advisory services to the UCITS Fund and the Westwood Funds®. Certain members of our management serve on the board of directors of the UCITS Fund, and we have capital invested in three of the Westwood Funds®. Under the terms of the investment advisory agreements, the Company earns quarterly fees paid by clients of the fund or by the funds directly. The fees are based on negotiated fee schedules applied to assets under management. These fees are commensurate with market rates. For the three months ended June 30, 2018 and 2017 , the Company earned approximately $1.1 million and $900,000 , respectively, in fees from the affiliated funds. For the six months ended June 30, 2018 and 2017 , the Company earned approximately $2.3 million and $1.7 million , respectively, in fees from the affiliated funds. These fees do not include fees paid directly to Westwood International by certain clients invested in the UCITS Fund that have an investment management agreement with Westwood International. As of June 30, 2018 and December 31, 2017 , $342,000 and $423,000 , respectively, of these fees were outstanding and included in “Accounts receivable” on our Condensed Consolidated Balance Sheets. As discussed in Note 4 “Investments,” the Company made a strategic investment in an equity position of a private company during the second quarter of 2018 . We previously entered into a separate agreement with this private company to implement a portfolio management product. For the three and six months ended June 30, 2018 , we incurred approximately $530,000 and $605,000 , respectively, in expenses to this company, which are included in “Information technology expenses” on our Condensed Consolidated Statements of Comprehensive Income. The Company did not incur any similar expenses during the three or six months ended June 30, 2017 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Strategic Investment As discussed in Note 4 “Investments,” the Company made an initial strategic investment of $5.0 million in a private company during the second quarter of 2018. As part of the agreement, we committed to an additional $5.0 million purchase of equity securities to be invested no later than August 31, 2018. Our intent is to offer this investment opportunity to our current and prospective clients, Board of Directors and employees, but to the extent these parties do not invest the full $5.0 million, we are obligated to make an additional investment to cover any shortfall. Litigation 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 related to the hiring of certain members of Westwood’s global and emerging markets investment team previously employed by AGF. On November 5, 2012, Westwood responded to AGF’s lawsuit with a counterclaim, and on November 6, 2012, AGF filed a second lawsuit against Westwood, Westwood Management and an employee of Westwood International. On October 13, 2017, we reached a settlement with AGF that provides for the dismissal of all claims, with prejudice and without any admission of liability. We agreed to pay AGF a one-time payment of $10.0 million CDN, half of which was covered by our insurance. During 2017, we recorded a net $4.0 million ( $5.0 million CDN) charge related to the settlement and associated insurance coverage, with a $4.0 million ( $5.0 million CDN) receivable from our insurance provider included in “Other current assets” on our Condensed Consolidated Balance Sheets at December 31, 2017. We received the insurance proceeds of $4.0 million during the six months ended June 30, 2018 and had no receivable related to the settlement at June 30, 2018 . 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 received the remaining insurance proceeds related to AGF legal expenses during the six months ended June 30, 2018 and had no receivable at quarter-end. We had a receivable of approximately $212,000 as of December 31, 2017 , which represented our current minimum estimate of expenses that we expected to recover under our insurance policy. This receivable is included in “Other current assets” on our Condensed Consolidated Balance Sheets. |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING We operate two segments: Advisory and Trust. These segments are managed separately based on the types of products and services offered and their related client bases. The Company’s segment information is prepared on the same basis that management reviews the financial information for operational decision-making purposes. The Company’s chief operating decision maker, our Chief Executive Officer, evaluates the performance of our segments based primarily on fee revenues and Economic Earnings. Westwood Holdings Group, Inc., the parent company of Advisory and Trust, does not have revenues and is the entity in which we record typical holding company expenses including employee compensation and benefits for holding company employees, directors’ fees and investor relations costs. All segment accounting policies are the same as those described in the summary of significant accounting policies. Intersegment balances that eliminate in consolidation have been applied to the appropriate segment. Advisory Our Advisory segment provides investment advisory services to corporate retirement plans, public retirement plans, endowments, foundations, individuals, the Westwood Funds ® , and the UCITS Fund, as well as investment subadvisory services to mutual funds and our Trust segment. Westwood Management Corp. and Westwood International, which provide investment advisory services to clients of similar type, are included in our Advisory segment along with Westwood Advisors, L.L.C. Trust Trust provides trust and custodial services and participation in common trust funds that it sponsors to institutions and high net worth individuals. Westwood Trust is included in our Trust segment. (in thousands) Advisory Trust Westwood Eliminations Consolidated Three Months Ended June 30, 2018 Net fee revenues from external sources $ 25,122 $ 7,465 $ — $ — $ 32,587 Net intersegment revenues 1,846 57 — (1,903 ) — Net interest and dividend revenue 135 55 — — 190 Other, net (16 ) (1 ) — — (17 ) Total revenues $ 27,087 $ 7,576 $ — $ (1,903 ) $ 32,760 Economic Earnings $ 13,111 $ 1,457 $ (2,323 ) $ — $ 12,245 Less: Restricted stock expense 3,776 Intangible amortization 418 Deferred taxes on goodwill 59 Net income $ 7,992 Segment assets $ 214,051 $ 59,605 $ 16,056 $ (105,445 ) $ 184,267 Segment goodwill $ 3,403 $ 16,401 $ — $ — $ 19,804 Three Months Ended June 30, 2017 Net fee revenues from external sources $ 25,525 $ 7,919 $ — $ — $ 33,444 Net intersegment revenues 1,998 52 — (2,050 ) — Net interest and dividend revenue 122 15 — — 137 Other, net 172 3 — — 175 Total revenues $ 27,817 $ 7,989 $ — $ (2,050 ) $ 33,756 Economic Earnings $ 11,800 $ 1,519 $ (1,609 ) $ — $ 11,710 Less: Restricted stock expense 4,168 Intangible amortization 490 Deferred taxes on goodwill 156 Net income $ 6,896 Segment assets $ 192,247 $ 71,808 $ 14,798 $ (102,921 ) $ 175,932 Segment goodwill $ 5,219 $ 21,925 $ — $ — $ 27,144 (in thousands) Advisory Trust Westwood Eliminations Consolidated Six Months Ended June 30, 2018 Net fee revenues from external sources $ 50,940 $ 15,074 $ — $ — $ 66,014 Net intersegment revenues 3,883 112 — (3,995 ) — Net interest and dividend revenue 276 100 — — 376 Other (58 ) (5 ) — — (63 ) Total revenues $ 55,041 $ 15,281 $ — $ (3,995 ) $ 66,327 Economic Earnings $ 26,910 $ 2,677 $ (4,700 ) $ — $ 24,887 Less: Restricted stock expense 7,963 Intangible amortization 836 Deferred taxes on goodwill 118 Net income $ 15,970 Six Months Ended June 30, 2017 Net fee revenues from external sources $ 49,701 $ 15,713 $ — $ — $ 65,414 Net intersegment revenues 4,024 103 — (4,127 ) — Net interest and dividend revenue 280 24 — — 304 Other 654 7 — — 661 Total revenues $ 54,659 $ 15,847 $ — $ (4,127 ) $ 66,379 Economic Earnings $ 22,587 $ 2,967 $ (3,236 ) $ — $ 22,318 Less: Restricted stock expense 8,065 Intangible amortization 980 Deferred taxes on goodwill 313 Net income $ 12,960 We are providing a performance measure that we refer to as Economic Earnings. Our management and the Board of Directors review Economic Earnings to evaluate our ongoing performance, allocate resources and determine our dividend policy. We also believe that this performance measure is useful for management and investors when evaluating our underlying operating and financial performance and our available resources. In calculating Economic Earnings, we add to net income the non-cash expense associated with equity-based compensation awards of restricted stock, amortization of intangible assets and the deferred taxes related to the tax-basis amortization of goodwill. Although depreciation on property and equipment is a non-cash expense, we do not add it back when calculating Economic Earnings because depreciation charges represent a decline in the value of the related assets that will ultimately require replacement. The following tables provide a reconciliation of Net income to Economic Earnings (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net income $ 7,992 $ 6,896 $ 15,970 $ 12,960 Add: Stock-based compensation expense 3,776 4,168 7,963 8,065 Add: Intangible amortization 418 490 836 980 Add: Tax benefit from goodwill amortization 59 156 118 313 Economic Earnings $ 12,245 $ 11,710 $ 24,887 $ 22,318 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Event [Line Items] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Dividend Declared In July 2018, Westwood’s Board of Directors declared a quarterly cash dividend of $0.68 per common share, payable on October 1, 2018 , to stockholders of record on September 7, 2018 . |
SUMMARY OF SIGNIFICANT ACCOUN22
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Restricted Stock Subject Only To A Service Condition Policy [Text Block] | Restricted Stock Subject Only to a Service Condition We calculate compensation cost for restricted stock grants by using the fair market value of our common stock at the date of grant, the number of shares issued and an adjustment for restrictions on dividends. This compensation cost is amortized on a straight-line basis over the applicable vesting period, with adjustments for forfeitures recorded as they occur. |
Restricted Stock Subject To Service And Performance Conditions Policy [Text Block] | Restricted Stock Subject to Service and Performance Conditions Under the Plan, certain key employees were provided agreements for grants of restricted shares that vest over multiple year periods subject to achieving annual performance goals established by the Compensation Committee of Westwood’s Board of Directors. Each year the Compensation Committee establishes specific goals for that year’s vesting of the restricted shares. The date that the Compensation Committee establishes annual goals is considered to be the grant date and the fair value measurement date to determine expense on the shares that are likely to vest. The vesting period ends when the Compensation Committee formally approves the performance-based restricted stock vesting based on the specific performance goals from the Company’s audited consolidated financial statements. If a portion of the performance-based restricted shares does not vest, no compensation expense is recognized for that portion and any previously recognized compensation expense related to shares that do not vest is reversed. In March 2018, the Compensation Committee established the fiscal 2018 goal for our Chief Executive Officer and Chief Investment Officer as Income before income taxes of $20.0 million for 50% of their respective awards and an Income before income taxes target of $36.0 million (ranging from 25% of target for threshold performance of $32.0 million to 185% of target for maximum performance of $44.5 million ) for the remaining 50% of their respective awards. For certain other key employees, the Compensation Committee established fiscal 2018 goals based on various departmental and company-wide performance goals, including Income before income taxes of at least $20.0 million . During the first six months of 2018, we recorded expense related to the applicable percentage of the performance-based restricted shares expected to meet or exceed the performance goals needed to earn the shares. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition Revenues are recognized when the performance obligation (the investment management and advisory or trust services provided to the client) defined by the investment advisory or sub-advisory agreement is satisfied. For each performance obligation, we determine at contract inception whether the revenue satisfies over time or at a point in time. We derive our revenues from investment advisory fees, trust fees and other sources of revenues. Advisory and Trust fees are calculated based on a percentage of assets under management and the performance obligation is realized over the current calendar quarter. Once clients receive our investment advisory services we have an enforceable right to payment. Advisory Fee Revenues Our advisory fees are generated by Westwood Management and Westwood International, which manage client accounts under investment advisory and sub-advisory agreements. Advisory fees are typically calculated based on a percentage of assets under management and are paid in accordance with the terms of the agreements. Advisory fees are paid quarterly in advance based on assets under management on the last day of the preceding quarter, quarterly in arrears based on assets under management on the last day of the quarter just ended or are based on a daily or monthly analysis of assets under management for the stated period. We recognize advisory fee revenues as services are rendered. Since our advance paying clients' billing periods coincide with the calendar quarter to which such payments relate, revenue is recognized within the quarter and our condensed consolidated financial statements contain no deferred advisory fee revenues. Advisory clients typically consist of institutional and mutual fund accounts. Institutional investors includes separate accounts of (i) corporate pension and profit sharing plans, public employee retirement funds, Taft Hartley plans, endowments, foundations and individuals; (ii) subadvisory relationships where Westwood provides investment management services for funds offered by other financial institutions; (iii) pooled investment vehicles, including the UCITS Fund and collective investment trusts; and (iv) managed account relationships with brokerage firms and other registered investment advisors that offer Westwood products to their customers. Mutual funds include the Westwood Funds®, a family of mutual funds for which Westwood Management serves as advisor. These funds are available to individual investors, as well as offered as part of our investment strategies for institutional investors and private wealth accounts. Arrangements with Performance Based Obligations A limited number of our advisory clients have a contractual performance-based fee component in their contracts, which generates additional revenues if we outperform a specified index over a specific period of time. The revenue is based on future market performance and is susceptible to factors outside our control. We cannot conclude that a significant reversal in the cumulative amount of revenue recognized will not occur during the measurement period, and therefore the revenue is recorded at the end of the measurement period when the performance obligation has been satisfied. Trust Fee Revenues Our trust fees are generated by Westwood Trust pursuant to trust or custodial agreements. Trust fees are separately negotiated with each client and are generally based on a percentage of assets under management. Westwood Trust also provides trust services to a small number of clients on a fixed fee basis. The fees for most of our trust clients are calculated quarterly in arrears, based on a daily average of assets under management for the quarter. Since billing periods for most of Westwood Trust’s clients coincide with the calendar quarter, revenue is fully recognized within the quarter and our Condensed Consolidated Financial Statements do not contain a significant amount of deferred trust fee revenues. |
Basis of Presentation | Basis of Presentation The accompanying Condensed Consolidated Financial Statements are unaudited and are presented in accordance with the requirements for quarterly reports on Form 10-Q and consequently do not include all of the information and footnote disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The Company’s Condensed Consolidated Financial Statements reflect all adjustments (consisting only of normal recurring adjustments) necessary in the opinion of management to present fairly our interim financial position and results of operations and cash flows for the periods presented. The accompanying Condensed Consolidated Financial Statements are presented in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (“SEC”). The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with our Consolidated Financial Statements, and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2017 , filed with the SEC. Operating results for the periods in these Condensed Consolidated Financial Statements are not necessarily indicative of results for any future period. The accompanying Condensed Consolidated Financial Statements include the accounts of Westwood and its subsidiaries. All intercompany accounts and transactions have been eliminated upon consolidation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) , which resulted from a joint project by the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP and International Financial Reporting Standards (“IFRS”). The ASU is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Retrospective application is required, with the entity either applying the change to each prior reporting period presented or applying the cumulative effect of each prior reporting period presented at the date of initial application. We adopted ASU 2014-09 effective January 1, 2018. See further discussion in Note 9 “Revenue.” In March 2018, the FASB issued ASU 2018-05, Income Taxes: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 , to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act (“Tax Reform Act”). See further discussion in Note 11 “Income Taxes.” Not Yet Adopted In June 2018, the FASB issued ASU 218-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The purpose of this amendment is to simplify the accounting for share-based payments granted to nonemployees for goods and services by aligning it with the accounting used for arrangements with employees. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. We do not expect the amendment to have a material impact on our Consolidated Financial Statements, and we plan to adopt the standard within the required time frame. |
EARNINGS PER SHARE Policies (Po
EARNINGS PER SHARE Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share, Policy [Policy Text Block] | 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. |
VARIABLE INTEREST ENTITIES Poli
VARIABLE INTEREST ENTITIES Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation, Variable Interest Entity, Policy [Policy Text Block] | We have evaluated (i) our advisory relationships with the UCITS Fund and the Westwood Funds®, (ii) our relationship as sponsor of the Common Trust Funds (“CTFs”) and managing member of the private equity fund Westwood Hospitality Fund I, LLC (“WHF”) and (iii) the private company discussed in Note 4 “Investments” (“Private Equity”) to determine whether each of these entities is a variable interest entity (“VIE”) or voting ownership entity (“VOE”). Based on our analysis, we determined that the CTFs and WHF were VIEs, as the at-risk equity holders do not have the ability to direct the activities that most significantly impact the entity’s economic performance, and the Company and its representatives have a majority control of the entities' respective boards of directors and can influence the respective entities' management and affairs. Prior to the sale of our Omaha-based operations, we also considered our advisory relationship with ten limited liability companies (“LLCs”) as VIEs, but as of June 30, 2018 , we no longer serve as the managing member of the funds and do not control the activities that most significantly impact the entities' economic performance. Therefore, the LLCs are no longer considered VIEs. Although we have related parties on the UCITS Fund board of directors, the shareholders have rights to remove the current directors with a simple majority vote and so we determined that the UCITS Fund is not a VIE. As the Company and its representatives do not have representation on the Westwood Funds® or the Private Equity independent boards of directors, which direct the activities that most significantly impact the entities' economic performance, we determined that the Westwood Funds® and the Private Equity were not VIEs. Therefore, the UCITS Fund, Westwood Funds® and Private Equity should be analyzed under the VOE consolidation method. Based on our analysis of our investments in these entities for the periods ending June 30, 2018 and December 31, 2017 , we have not consolidated the CTFs, WHF or LLCs under the VIE method or the UCITS Fund, Westwood Funds® or Private Equity under the VOE method, and therefore the financial results of these entities are not included in the Company’s consolidated financial results. |
DESCRIPTION OF THE BUSINESS Tab
DESCRIPTION OF THE BUSINESS Table (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | The following table presents cash proceeds received and net assets sold (in thousands): Cash Proceeds $ 10,013 Net assets sold: Accounts receivable 99 Other current assets 112 Goodwill 7,340 Intangible assets, net 2,170 Property and equipment, net 18 Accounts payable and accrued liabilities (241 ) Other liabilities (9 ) Gain on sale of operations $ 524 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net income $ 7,992 $ 6,896 $ 15,970 $ 12,960 Weighted average shares outstanding - basic 8,399,148 8,167,277 8,336,923 8,118,327 Dilutive potential shares from unvested restricted shares 144,205 149,231 206,478 197,395 Weighted average shares outstanding - diluted 8,543,353 8,316,508 8,543,401 8,315,722 Earnings per share: Basic $ 0.95 $ 0.84 $ 1.92 $ 1.60 Diluted $ 0.94 $ 0.83 $ 1.87 $ 1.56 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Balances | Trading securities are presented in the table below (in thousands): Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Market Value June 30, 2018: U.S. Government and Government agency obligations $ 40,081 $ 72 $ — $ 40,153 Money market funds 9,736 — — 9,736 Equity funds 11,309 524 (209 ) 11,624 Total trading securities $ 61,126 $ 596 $ (209 ) $ 61,513 December 31, 2017: U.S. Government and Government agency obligations $ 29,367 $ 21 $ (15 ) $ 29,373 Money market funds 9,736 — — 9,736 Equity funds 11,578 657 (20 ) 12,215 Total trading securities $ 50,681 $ 678 $ (35 ) $ 51,324 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Table Text Block] | The following table summarizes the values of our investments measured at fair value on a recurring basis within the fair value hierarchy as of the dates indicated (in thousands): Level 1 Level 2 Level 3 Investments Measured at NAV (1) Total As of June 30, 2018: Investments in trading securities $ 59,214 $ — $ — $ 2,299 $ 61,513 Total assets measured at fair value $ 59,214 $ — $ — $ 2,299 $ 61,513 As of December 31, 2017: Investments in trading securities $ 48,998 $ — $ — $ 2,326 $ 51,324 Total assets measured at fair value $ 48,998 $ — $ — $ 2,326 $ 51,324 (1) Comprised of certain investments measured at fair value using net asset value ( “ NAV ” ) as a practical expedient. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on our Condensed Consolidated Balance Sheets. |
ACQUISITIONS, GOODWILL AND OT29
ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS Table (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Changes in the balance of Intangible assets, net for the periods presented are as follows (in thousands): Intangible assets, net Balance as of December 31, 2017 $ 19,804 Amortization (836 ) Omaha divestiture (1) (2,170 ) Balance as of June 30, 2018 $ 16,798 _____________________ (1) Related to client relationships |
Schedule of Goodwill [Table Text Block] | Changes in the balance of Goodwill for the periods presented are as follows (in thousands): Goodwill Balance as of December 31, 2017 $ 27,144 Omaha divestiture (7,340 ) Balance as of June 30, 2018 $ 19,804 |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Components of Accumulated Other Comprehensive Loss | The components of Accumulated other comprehensive loss were as follows (in thousands): As of June 30, 2018 As of December 31, 2017 Foreign currency translation adjustment $ (3,442 ) $ (1,764 ) Accumulated other comprehensive loss $ (3,442 ) $ (1,764 ) |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | The following table displays the assets under management, the amounts of our seed investments included in “Investments” on our consolidated balance sheets, and the risk of loss in each vehicle (in millions): As of June 30, 2018 Assets Corporate Amount at Risk VIEs/VOEs: Westwood Funds® $ 4,199 $ 6 $ 6 Common Trust Funds 2,311 2 2 UCITS Fund 411 2 2 Westwood Hospitality Fund I, LLC 3 — — Private Equity — 5 5 All other assets: Private Wealth 2,621 Institutional 12,046 Total Assets Under Management $ 21,591 |
REVENUE Table (Tables)
REVENUE Table (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disaggregation of Revenue [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The following table presents our revenue disaggregated by account type (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Advisory Fees: Institutional $ 15,684 $ 17,043 $ 32,389 $ 33,652 Mutual Funds 7,753 7,452 15,503 14,632 Private Wealth 36 — 64 — Performance-based 1,649 1,031 2,984 1,417 Trust Fees 7,465 7,917 15,074 15,713 Other 173 313 313 965 Total revenues $ 32,760 $ 33,756 $ 66,327 $ 66,379 |
Revenue Disaggregation by Geographic Location [Table Text Block] | The following table presents our revenue disaggregated by our clients' geographical locations (in thousands): Three Months Ended June 30, 2018 Advisory Trust Performance-based Other Total Asia $ 1,236 $ — $ — $ — $ 1,236 Australia 974 — — — 974 Canada 1,640 — — 37 1,677 Europe 1,347 — — — 1,347 United States 18,276 7,465 1,649 136 27,526 Total $ 23,473 $ 7,465 $ 1,649 $ 173 $ 32,760 Six Months Ended June 30, 2018 Asia $ 2,667 $ — $ — $ — $ 2,667 Australia 1,996 — — — 1,996 Canada 3,470 — — 86 3,556 Europe 2,590 — — — 2,590 United States 37,233 15,074 2,984 227 55,518 Total $ 47,956 $ 15,074 $ 2,984 $ 313 $ 66,327 Three Months Ended June 30, 2017 Advisory Trust Performance-based Other Total Asia $ 1,508 $ — $ — $ — $ 1,508 Australia 786 — — — 786 Canada 2,118 — — 139 2,257 Europe 1,061 — — — 1,061 United States 19,023 7,917 1,031 173 28,144 Total $ 24,496 $ 7,917 $ 1,031 $ 312 $ 33,756 Six Months Ended June 30, 2017 Asia $ 3,047 $ — $ — $ — $ 3,047 Australia 1,427 — — — 1,427 Canada 4,132 — — 222 4,354 Europe 2,119 — — — 2,119 United States 37,560 15,712 1,417 743 55,432 Total $ 48,285 $ 15,712 $ 1,417 $ 965 $ 66,379 |
LONG-TERM INCENTIVE COMPENSAT33
LONG-TERM INCENTIVE COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, Six Months Ended June 30, 2018 2017 2018 2017 Service condition stock-based compensation expense $ 2,535 $ 2,608 $ 5,325 $ 5,237 Performance condition stock-based compensation expense 1,088 1,372 2,364 2,495 Stock-based compensation expense under the Plan 3,623 3,980 7,689 7,732 Canadian Plan stock-based compensation expense 153 188 274 333 Total stock-based compensation expense $ 3,776 $ 4,168 $ 7,963 $ 8,065 |
Restricted Stock Subject Only to a Service Condition | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Status and Changes in Restricted Stock Grants that Subject to Service Condition | The following table details the status and changes in our restricted stock grants subject only to a service condition for the six months ended June 30, 2018 : Shares Weighted Average Non-vested, January 1, 2018 519,375 $ 55.44 Granted 172,366 55.92 Vested (203,020 ) 53.49 Forfeited (20,977 ) 56.42 Non-vested, June 30, 2018 467,744 $ 56.42 |
Restricted Shares Subject to Service and Performance Conditions | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Status and Changes in Restricted Stock Grants that Subject to Service Condition | The following table details the status and changes in our restricted stock grants subject to service and performance conditions for the six months ended June 30, 2018 : Shares Weighted Average Non-vested, January 1, 2018 165,918 $ 55.85 Granted 84,829 55.46 Vested (98,281 ) 55.81 Forfeited — — Non-vested, June 30, 2018 152,466 $ 55.66 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | ||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | (in thousands) Advisory Trust Westwood Eliminations Consolidated Three Months Ended June 30, 2018 Net fee revenues from external sources $ 25,122 $ 7,465 $ — $ — $ 32,587 Net intersegment revenues 1,846 57 — (1,903 ) — Net interest and dividend revenue 135 55 — — 190 Other, net (16 ) (1 ) — — (17 ) Total revenues $ 27,087 $ 7,576 $ — $ (1,903 ) $ 32,760 Economic Earnings $ 13,111 $ 1,457 $ (2,323 ) $ — $ 12,245 Less: Restricted stock expense 3,776 Intangible amortization 418 Deferred taxes on goodwill 59 Net income $ 7,992 Segment assets $ 214,051 $ 59,605 $ 16,056 $ (105,445 ) $ 184,267 Segment goodwill $ 3,403 $ 16,401 $ — $ — $ 19,804 Three Months Ended June 30, 2017 Net fee revenues from external sources $ 25,525 $ 7,919 $ — $ — $ 33,444 Net intersegment revenues 1,998 52 — (2,050 ) — Net interest and dividend revenue 122 15 — — 137 Other, net 172 3 — — 175 Total revenues $ 27,817 $ 7,989 $ — $ (2,050 ) $ 33,756 Economic Earnings $ 11,800 $ 1,519 $ (1,609 ) $ — $ 11,710 Less: Restricted stock expense 4,168 Intangible amortization 490 Deferred taxes on goodwill 156 Net income $ 6,896 Segment assets $ 192,247 $ 71,808 $ 14,798 $ (102,921 ) $ 175,932 Segment goodwill $ 5,219 $ 21,925 $ — $ — $ 27,144 | (in thousands) Advisory Trust Westwood Eliminations Consolidated Six Months Ended June 30, 2018 Net fee revenues from external sources $ 50,940 $ 15,074 $ — $ — $ 66,014 Net intersegment revenues 3,883 112 — (3,995 ) — Net interest and dividend revenue 276 100 — — 376 Other (58 ) (5 ) — — (63 ) Total revenues $ 55,041 $ 15,281 $ — $ (3,995 ) $ 66,327 Economic Earnings $ 26,910 $ 2,677 $ (4,700 ) $ — $ 24,887 Less: Restricted stock expense 7,963 Intangible amortization 836 Deferred taxes on goodwill 118 Net income $ 15,970 Six Months Ended June 30, 2017 Net fee revenues from external sources $ 49,701 $ 15,713 $ — $ — $ 65,414 Net intersegment revenues 4,024 103 — (4,127 ) — Net interest and dividend revenue 280 24 — — 304 Other 654 7 — — 661 Total revenues $ 54,659 $ 15,847 $ — $ (4,127 ) $ 66,379 Economic Earnings $ 22,587 $ 2,967 $ (3,236 ) $ — $ 22,318 Less: Restricted stock expense 8,065 Intangible amortization 980 Deferred taxes on goodwill 313 Net income $ 12,960 |
ReconciliationFromNetIncomeToNonGaapMeasure [Table Text Block] | The following tables provide a reconciliation of Net income to Economic Earnings (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net income $ 7,992 $ 6,896 $ 15,970 $ 12,960 Add: Stock-based compensation expense 3,776 4,168 7,963 8,065 Add: Intangible amortization 418 490 836 980 Add: Tax benefit from goodwill amortization 59 156 118 313 Economic Earnings $ 12,245 $ 11,710 $ 24,887 $ 22,318 |
DESCRIPTION OF THE BUSINESS Oma
DESCRIPTION OF THE BUSINESS Omaha Operations Divestiture (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Mar. 31, 2017 | |
Cash Proceeds From Divestiture [Line Items] | ||||||
Proceeds from sale of operations | $ 10,013,000 | $ 0 | ||||
Accounts receivable | $ 22,903,000 | 22,903,000 | $ 21,660,000 | |||
Other current assets | 1,853,000 | 1,853,000 | 6,612,000 | |||
Goodwill | 19,804,000 | 19,804,000 | 27,144,000 | $ 27,144,000 | ||
Intangible assets, net | 16,798,000 | 16,798,000 | 19,804,000 | |||
Property and equipment, net of accumulated depreciation of $6,055 and $5,673 | 4,088,000 | 4,088,000 | 4,190,000 | |||
Accounts payable and accrued liabilities | (2,724,000) | (2,724,000) | $ (3,501,000) | |||
Gain on sale of operations | 0 | $ 0 | 524,000 | $ 0 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | ||||||
Cash Proceeds From Divestiture [Line Items] | ||||||
Proceeds from sale of operations | 10,013,000 | |||||
Accounts receivable | 99,000 | 99,000 | ||||
Other current assets | 112,000 | 112,000 | ||||
Goodwill | 7,340,000 | 7,340,000 | ||||
Intangible assets, net | 2,170,000 | 2,170,000 | ||||
Property and equipment, net of accumulated depreciation of $6,055 and $5,673 | 18,000 | 18,000 | ||||
Accounts payable and accrued liabilities | (241,000) | (241,000) | ||||
Other liabilities | $ (9,000) | (9,000) | ||||
Gain on sale of operations | $ 524,000 |
EARNINGS PER SHARE (Details Tex
EARNINGS PER SHARE (Details Textual) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Restricted Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive restricted shares | 0 | 7,000 | 5,000 | 13,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Computation of Basic and Diluted Shares | ||||
Net income | $ 7,992 | $ 6,896 | $ 15,970 | $ 12,960 |
Weighted average shares outstanding - basic (shares) | 8,399,148 | 8,167,277 | 8,336,923 | 8,118,327 |
Dilutive potential shares from unvested restricted shares (shares) | 144,205 | 149,231 | 206,478 | 197,395 |
Weighted average shares outstanding - diluted (shares) | 8,543,353 | 8,316,508 | 8,543,401 | 8,315,722 |
Earnings per share: | ||||
Basic (dollars per share) | $ 0.95 | $ 0.84 | $ 1.92 | $ 1.60 |
Diluted (dollars per share) | $ 0.94 | $ 0.83 | $ 1.87 | $ 1.56 |
INVESTMENTS (Details)
INVESTMENTS (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Investment balances | |||
Cost | $ 50,681 | ||
Gross Unrealized Gains | $ 678 | ||
Gross Unrealized Losses | (35) | ||
Estimated Market Value | $ 61,513 | 51,324 | |
Money market funds | |||
Investment balances | |||
Cost | 9,736 | 9,736 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Losses | 0 | 0 | |
Estimated Market Value | 9,736 | 9,736 | |
Equity funds | |||
Investment balances | |||
Cost | 11,309 | 11,578 | |
Gross Unrealized Gains | 524 | 657 | |
Gross Unrealized Losses | (209) | $ (20) | |
Estimated Market Value | $ 11,624 | $ 12,215 |
INVESTMENTS (Details Textual)
INVESTMENTS (Details Textual) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Schedule Of Investments [Line Items] | |||
Cost | $ 50,681 | ||
Trading Securities, Unrealized Holding Gain | $ 678 | ||
Trading Securities, Unrealized Holding Loss | (35) | ||
Estimated Market Value | $ 61,513 | 51,324 | |
VIE | |||
Schedule Of Investments [Line Items] | |||
Estimated Market Value | 10,700 | 10,700 | |
U.S. Government and Government agency obligations | |||
Schedule Of Investments [Line Items] | |||
Cost | 40,081 | 29,367 | |
Trading Securities, Unrealized Holding Gain | 72 | 21 | |
Trading Securities, Unrealized Holding Loss | 0 | (15) | |
Estimated Market Value | 40,153 | 29,373 | |
Money market funds | |||
Schedule Of Investments [Line Items] | |||
Cost | 9,736 | 9,736 | |
Trading Securities, Unrealized Holding Gain | 0 | 0 | |
Trading Securities, Unrealized Holding Loss | 0 | 0 | |
Estimated Market Value | 9,736 | 9,736 | |
Equity funds | |||
Schedule Of Investments [Line Items] | |||
Cost | 11,309 | 11,578 | |
Trading Securities, Unrealized Holding Gain | 524 | 657 | |
Trading Securities, Unrealized Holding Loss | (209) | $ (20) | |
Estimated Market Value | 11,624 | $ 12,215 | |
Private Equity Funds [Member] | |||
Schedule Of Investments [Line Items] | |||
Cost | 61,126 | ||
Trading Securities, Unrealized Holding Gain | 596 | ||
Trading Securities, Unrealized Holding Loss | (209) | ||
Estimated Market Value | $ 61,513 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Investments in securities: | ||
Investments in trading securities | $ 61,513 | $ 51,324 |
Fair Value, Net Asset (Liability) | 61,513 | 51,324 |
Inputs, Net Asset Value [Member] | ||
Investments in securities: | ||
Investments in trading securities | 2,299 | 2,326 |
Level 1 | ||
Investments in securities: | ||
Investments in trading securities | 59,214 | 48,998 |
Fair Value, Net Asset (Liability) | 59,214 | 48,998 |
Level 2 | ||
Investments in securities: | ||
Investments in trading securities | 0 | 0 |
Fair Value, Net Asset (Liability) | 0 | 0 |
Level 3 | ||
Investments in securities: | ||
Investments in trading securities | 0 | 0 |
Fair Value, Net Asset (Liability) | $ 0 | $ 0 |
ACQUISITIONS, GOODWILL AND OT41
ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Goodwill, Impairment Loss | $ 0 | $ 0 | $ 0 | $ 0 | ||
Impairment of Intangible Assets (Excluding Goodwill) | 0 | 0 | 0 | 0 | ||
Intangible assets, net | 16,798,000 | 16,798,000 | $ 19,804,000 | |||
Amortization of Intangible Assets | (418,000) | $ (490,000) | (836,000) | $ (980,000) | ||
Intangible Assets reduction from divestiture | (2,170,000) | |||||
Goodwill | $ 19,804,000 | 19,804,000 | $ 27,144,000 | $ 27,144,000 | ||
Goodwill reduction from divestiture | $ (7,340,000) |
BALANCE SHEET COMPONENTS (Detai
BALANCE SHEET COMPONENTS (Details 1) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Components of accumulated other comprehensive loss | ||
Foreign currency translation adjustment | $ (3,442) | $ (1,764) |
Accumulated other comprehensive loss | $ (3,442) | $ (1,764) |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Variable Interest Entity [Line Items] | |||||
Trading Securities | $ 61,513 | $ 61,513 | $ 51,324 | ||
Fee revenues from Westwood VIEs | 12,000 | $ 13,100 | 24,600 | $ 25,900 | |
VIE | |||||
Variable Interest Entity [Line Items] | |||||
Trading Securities | 10,700 | 10,700 | $ 10,700 | ||
Common Trust Funds | |||||
Variable Interest Entity [Line Items] | |||||
Trading Securities | 2,000 | 2,000 | |||
UCITS Fund | |||||
Variable Interest Entity [Line Items] | |||||
Trading Securities | $ 2,000 | $ 2,000 |
VARIABLE INTEREST ENTITIES (D44
VARIABLE INTEREST ENTITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Variable Interest Entities | ||
Assets Under Management | $ 21,591,000 | |
Estimated Market Value | 61,513 | $ 51,324 |
Westwood Funds® | ||
Variable Interest Entities | ||
Assets Under Management | 4,199,000 | |
Estimated Market Value | 6,000 | |
Amount at Risk | 6,000 | |
Common Trust Funds | ||
Variable Interest Entities | ||
Assets Under Management | 2,311,000 | |
Estimated Market Value | 2,000 | |
Amount at Risk | 2,000 | |
UCITS Fund | ||
Variable Interest Entities | ||
Assets Under Management | 411,000 | |
Estimated Market Value | 2,000 | |
Amount at Risk | 2,000 | |
Westwood Hospitality Fund I LLC [Member] | ||
Variable Interest Entities | ||
Assets Under Management | 3,000 | |
Estimated Market Value | 0 | |
Amount at Risk | 0 | |
Private Equity Investments [Member] | ||
Variable Interest Entities | ||
Assets Under Management | 0 | |
Estimated Market Value | 5,000 | |
Amount at Risk | 5,000 | |
Private Wealth | ||
Variable Interest Entities | ||
Assets Under Management | 2,621,000 | |
Institutional | ||
Variable Interest Entities | ||
Assets Under Management | $ 12,046,000 |
REVENUE Disaggregation of Reven
REVENUE Disaggregation of Revenue - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue from Contract with Customer [Abstract] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | REVENUE Adoption of ASC 2014-09 Revenue from Contracts with Customers (Topic 606) On January 1, 2018, we adopted ASU 2016-10 using the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606 while prior period amounts continue to be reported in accordance with our historic accounting under Topic 605. We analyzed the revenue from prior periods and determined no material adjustments to opening retained earnings were necessary as the updated guidance is consistent with our historical revenue recognition methodology. Revenue Recognition Revenues are recognized when the performance obligation (the investment management and advisory or trust services provided to the client) defined by the investment advisory or sub-advisory agreement is satisfied. For each performance obligation, we determine at contract inception whether the revenue satisfies over time or at a point in time. We derive our revenues from investment advisory fees, trust fees and other sources of revenues. Advisory and Trust fees are calculated based on a percentage of assets under management and the performance obligation is realized over the current calendar quarter. Once clients receive our investment advisory services we have an enforceable right to payment. Advisory Fee Revenues Our advisory fees are generated by Westwood Management and Westwood International, which manage client accounts under investment advisory and sub-advisory agreements. Advisory fees are typically calculated based on a percentage of assets under management and are paid in accordance with the terms of the agreements. Advisory fees are paid quarterly in advance based on assets under management on the last day of the preceding quarter, quarterly in arrears based on assets under management on the last day of the quarter just ended or are based on a daily or monthly analysis of assets under management for the stated period. We recognize advisory fee revenues as services are rendered. Since our advance paying clients' billing periods coincide with the calendar quarter to which such payments relate, revenue is recognized within the quarter and our condensed consolidated financial statements contain no deferred advisory fee revenues. Advisory clients typically consist of institutional and mutual fund accounts. Institutional investors includes separate accounts of (i) corporate pension and profit sharing plans, public employee retirement funds, Taft Hartley plans, endowments, foundations and individuals; (ii) subadvisory relationships where Westwood provides investment management services for funds offered by other financial institutions; (iii) pooled investment vehicles, including the UCITS Fund and collective investment trusts; and (iv) managed account relationships with brokerage firms and other registered investment advisors that offer Westwood products to their customers. Mutual funds include the Westwood Funds®, a family of mutual funds for which Westwood Management serves as advisor. These funds are available to individual investors, as well as offered as part of our investment strategies for institutional investors and private wealth accounts. Arrangements with Performance Based Obligations A limited number of our advisory clients have a contractual performance-based fee component in their contracts, which generates additional revenues if we outperform a specified index over a specific period of time. The revenue is based on future market performance and is susceptible to factors outside our control. We cannot conclude that a significant reversal in the cumulative amount of revenue recognized will not occur during the measurement period, and therefore the revenue is recorded at the end of the measurement period when the performance obligation has been satisfied. Trust Fee Revenues Our trust fees are generated by Westwood Trust pursuant to trust or custodial agreements. Trust fees are separately negotiated with each client and are generally based on a percentage of assets under management. Westwood Trust also provides trust services to a small number of clients on a fixed fee basis. The fees for most of our trust clients are calculated quarterly in arrears, based on a daily average of assets under management for the quarter. Since billing periods for most of Westwood Trust’s clients coincide with the calendar quarter, revenue is fully recognized within the quarter and our Condensed Consolidated Financial Statements do not contain a significant amount of deferred trust fee revenues. Revenue Disaggregated Sales taxes are excluded from revenues. The following table presents our revenue disaggregated by account type (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Advisory Fees: Institutional $ 15,684 $ 17,043 $ 32,389 $ 33,652 Mutual Funds 7,753 7,452 15,503 14,632 Private Wealth 36 — 64 — Performance-based 1,649 1,031 2,984 1,417 Trust Fees 7,465 7,917 15,074 15,713 Other 173 313 313 965 Total revenues $ 32,760 $ 33,756 $ 66,327 $ 66,379 We have clients in various locations around the world. The following table presents our revenue disaggregated by our clients' geographical locations (in thousands): Three Months Ended June 30, 2018 Advisory Trust Performance-based Other Total Asia $ 1,236 $ — $ — $ — $ 1,236 Australia 974 — — — 974 Canada 1,640 — — 37 1,677 Europe 1,347 — — — 1,347 United States 18,276 7,465 1,649 136 27,526 Total $ 23,473 $ 7,465 $ 1,649 $ 173 $ 32,760 Six Months Ended June 30, 2018 Asia $ 2,667 $ — $ — $ — $ 2,667 Australia 1,996 — — — 1,996 Canada 3,470 — — 86 3,556 Europe 2,590 — — — 2,590 United States 37,233 15,074 2,984 227 55,518 Total $ 47,956 $ 15,074 $ 2,984 $ 313 $ 66,327 Three Months Ended June 30, 2017 Advisory Trust Performance-based Other Total Asia $ 1,508 $ — $ — $ — $ 1,508 Australia 786 — — — 786 Canada 2,118 — — 139 2,257 Europe 1,061 — — — 1,061 United States 19,023 7,917 1,031 173 28,144 Total $ 24,496 $ 7,917 $ 1,031 $ 312 $ 33,756 Six Months Ended June 30, 2017 Asia $ 3,047 $ — $ — $ — $ 3,047 Australia 1,427 — — — 1,427 Canada 4,132 — — 222 4,354 Europe 2,119 — — — 2,119 United States 37,560 15,712 1,417 743 55,432 Total $ 48,285 $ 15,712 $ 1,417 $ 965 $ 66,379 | |||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 32,760 | $ 33,756 | $ 66,327 | $ 66,379 |
Asia [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,236 | 1,508 | 2,667 | 3,047 |
Australia | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 974 | 786 | 1,996 | 1,427 |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,677 | 2,257 | 3,556 | 4,354 |
Europe [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,347 | 1,061 | 2,590 | 2,119 |
United States [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 27,526 | 28,144 | 55,518 | 55,432 |
Investment Advisory Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 23,473 | 24,496 | 47,956 | 48,285 |
Investment Advisory Services [Member] | Asia [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,236 | 1,508 | 2,667 | 3,047 |
Investment Advisory Services [Member] | Australia | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 974 | 786 | 1,996 | 1,427 |
Investment Advisory Services [Member] | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,640 | 2,118 | 3,470 | 4,132 |
Investment Advisory Services [Member] | Europe [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,347 | 1,061 | 2,590 | 2,119 |
Investment Advisory Services [Member] | United States [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 18,276 | 19,023 | 37,233 | 37,560 |
Investment Advisory Services [Member] | Advisory | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 15,684 | 17,043 | 32,389 | 33,652 |
Mutual Fund Advisory [Member] | Advisory | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 7,753 | 7,452 | 15,503 | 14,632 |
Private Wealth Advisory [Member] | Advisory | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 36 | 0 | 64 | 0 |
Performance-based fees [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,649 | 1,031 | 2,984 | 1,417 |
Performance-based fees [Member] | Asia [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 |
Performance-based fees [Member] | Australia | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 |
Performance-based fees [Member] | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 |
Performance-based fees [Member] | Europe [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 |
Performance-based fees [Member] | United States [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,649 | 1,031 | 2,984 | 1,417 |
Performance-based fees [Member] | Advisory | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,649 | 1,031 | 2,984 | 1,417 |
Trust Fees [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 7,465 | 7,917 | 15,074 | 15,712 |
Trust Fees [Member] | Asia [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 |
Trust Fees [Member] | Australia | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 |
Trust Fees [Member] | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 |
Trust Fees [Member] | Europe [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 |
Trust Fees [Member] | United States [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 7,465 | 7,917 | 15,074 | 15,712 |
Trust Fees [Member] | Trust | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 7,465 | 7,917 | 15,074 | 15,713 |
Other Revenue Misc Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 173 | 312 | 313 | 965 |
Other Revenue Misc Services [Member] | Asia [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 |
Other Revenue Misc Services [Member] | Australia | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 |
Other Revenue Misc Services [Member] | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 37 | 139 | 86 | 222 |
Other Revenue Misc Services [Member] | Europe [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 |
Other Revenue Misc Services [Member] | United States [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 136 | 173 | 227 | 743 |
Other Revenue Misc Services [Member] | Advisory | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 173 | $ 313 | $ 313 | $ 965 |
LONG-TERM INCENTIVE COMPENSAT46
LONG-TERM INCENTIVE COMPENSATION (Details Textual) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | Jun. 30, 2018CAD ($)shares | Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($)shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Provision for income taxes | $ 2,944,000 | $ 3,687,000 | $ 5,453,000 | $ 5,393,000 | ||
Remaining unrecognized compensation cost recognized over a remaining weighted average period | 2 years 5 months | 2 years 5 months | ||||
Accrued liability | 517,000 | $ 517,000 | $ 1,800,000 | |||
Mutual Fund [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Service period of mutual fund share incentive award | 3 years | 3 years | ||||
Expense related to mutual fund share incentive awards | $ 11,000 | 250,000 | $ 185,000 | 538,000 | ||
Restricted Stock | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Total number of shares that may be issued under the stock based compensation Plan (including predecessor plans to the Plan) | shares | 4,848,100 | 4,848,100 | ||||
Shares remain available for issuance | shares | 401,000 | 401,000 | ||||
Remaining unrecognized compensation cost | $ 27,800,000 | $ 27,800,000 | ||||
Nonvested restricted shares | shares | 467,744 | 467,744 | 519,375 | |||
Expense related to mutual fund share incentive awards | $ 3,776,000 | $ 4,168,000 | $ 7,963,000 | $ 8,065,000 | ||
Canadian Plan | Westwood International Advisors Inc | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares remain available for issuance | shares | 44,099 | 44,099 | ||||
Share Based Compensation Arrangement By Share Based Payment Award Available For Grant, Original | $ 10 | $ 7,600,000 | ||||
Fund purchases of common stock | $ 46,358 | 46,358 | ||||
Purchases of common stock with respect to awards granted | $ 3.4 | $ 2,600,000 | ||||
Share price | $ / shares | $ 59.54 | $ 59.54 | ||||
Amount of shares purchased in the open market | $ 726,000 | |||||
Purchases of treasury stock, shares | shares | 13,031 | 13,031 | ||||
Remaining unrecognized compensation cost | $ 1,000,000 | $ 1,000,000 | ||||
Remaining unrecognized compensation cost recognized over a remaining weighted average period | 1 year 11 months | 1 year 11 months | ||||
Share-based Compensation Award, First 50% of CEO and CIO Award | Target [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share Pretax Income Goal | $ 20,000,000 | |||||
Share-based Compensation Award, Second 50% of CEO and CIO Award | Minimum [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share Pretax Income Goal | $ 32,000,000 | |||||
Percentage of Pretax income Goal Earned | 25.00% | 25.00% | ||||
Share-based Compensation Award, Second 50% of CEO and CIO Award | Maximum [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share Pretax Income Goal | $ 44,500,000 | |||||
Percentage of Pretax income Goal Earned | 185.00% | 185.00% | ||||
Share-based Compensation Award, Second 50% of CEO and CIO Award | Target [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share Pretax Income Goal | $ 36,000,000 | |||||
Share-based Compensation Award, All Other Performance Grants | Target [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share Pretax Income Goal | $ 20,000,000 |
LONG-TERM INCENTIVE COMPENSAT47
LONG-TERM INCENTIVE COMPENSATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | (in thousands) Advisory Trust Westwood Eliminations Consolidated Three Months Ended June 30, 2018 Net fee revenues from external sources $ 25,122 $ 7,465 $ — $ — $ 32,587 Net intersegment revenues 1,846 57 — (1,903 ) — Net interest and dividend revenue 135 55 — — 190 Other, net (16 ) (1 ) — — (17 ) Total revenues $ 27,087 $ 7,576 $ — $ (1,903 ) $ 32,760 Economic Earnings $ 13,111 $ 1,457 $ (2,323 ) $ — $ 12,245 Less: Restricted stock expense 3,776 Intangible amortization 418 Deferred taxes on goodwill 59 Net income $ 7,992 Segment assets $ 214,051 $ 59,605 $ 16,056 $ (105,445 ) $ 184,267 Segment goodwill $ 3,403 $ 16,401 $ — $ — $ 19,804 Three Months Ended June 30, 2017 Net fee revenues from external sources $ 25,525 $ 7,919 $ — $ — $ 33,444 Net intersegment revenues 1,998 52 — (2,050 ) — Net interest and dividend revenue 122 15 — — 137 Other, net 172 3 — — 175 Total revenues $ 27,817 $ 7,989 $ — $ (2,050 ) $ 33,756 Economic Earnings $ 11,800 $ 1,519 $ (1,609 ) $ — $ 11,710 Less: Restricted stock expense 4,168 Intangible amortization 490 Deferred taxes on goodwill 156 Net income $ 6,896 Segment assets $ 192,247 $ 71,808 $ 14,798 $ (102,921 ) $ 175,932 Segment goodwill $ 5,219 $ 21,925 $ — $ — $ 27,144 | (in thousands) Advisory Trust Westwood Eliminations Consolidated Six Months Ended June 30, 2018 Net fee revenues from external sources $ 50,940 $ 15,074 $ — $ — $ 66,014 Net intersegment revenues 3,883 112 — (3,995 ) — Net interest and dividend revenue 276 100 — — 376 Other (58 ) (5 ) — — (63 ) Total revenues $ 55,041 $ 15,281 $ — $ (3,995 ) $ 66,327 Economic Earnings $ 26,910 $ 2,677 $ (4,700 ) $ — $ 24,887 Less: Restricted stock expense 7,963 Intangible amortization 836 Deferred taxes on goodwill 118 Net income $ 15,970 Six Months Ended June 30, 2017 Net fee revenues from external sources $ 49,701 $ 15,713 $ — $ — $ 65,414 Net intersegment revenues 4,024 103 — (4,127 ) — Net interest and dividend revenue 280 24 — — 304 Other 654 7 — — 661 Total revenues $ 54,659 $ 15,847 $ — $ (4,127 ) $ 66,379 Economic Earnings $ 22,587 $ 2,967 $ (3,236 ) $ — $ 22,318 Less: Restricted stock expense 8,065 Intangible amortization 980 Deferred taxes on goodwill 313 Net income $ 12,960 | ||
DomesticEmployeeServiceAward [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Allocated Share-based Compensation Expense | $ 2,535 | $ 2,608 | $ 5,325 | $ 5,237 |
Performance Shares [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Allocated Share-based Compensation Expense | 1,088 | 1,372 | 2,364 | 2,495 |
DomesticServiceAndPerformanceAward [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Allocated Share-based Compensation Expense | 3,623 | 3,980 | 7,689 | 7,732 |
CanadianEmployeeServiceAward [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Allocated Share-based Compensation Expense | 153 | 188 | 274 | 333 |
Restricted Stock | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Allocated Share-based Compensation Expense | $ 3,776 | $ 4,168 | $ 7,963 | $ 8,065 |
LONG-TERM INCENTIVE COMPENSAT48
LONG-TERM INCENTIVE COMPENSATION (Details 1) - Restricted Shares Subject Only to a Service Condition | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Restricted shares subject only to a service condition: | |
Non-vested, beginning balance, shares | shares | 519,375 |
Granted (shares) | shares | 172,366 |
Vested (shares) | shares | (203,020) |
Forfeited (shares) | shares | (20,977) |
Non-vested, ending balance, shares | shares | 467,744 |
Non-vested, beginning balance, (dollars per share) | $ / shares | $ 55.44 |
Granted (dollars per share) | $ / shares | 55.92 |
Vested (dollars per share) | $ / shares | 53.49 |
Forfeited (dollars per share) | $ / shares | 56.42 |
Non-vested, ending balance, (dollars per share) | $ / shares | $ 56.42 |
LONG-TERM INCENTIVE COMPENSAT49
LONG-TERM INCENTIVE COMPENSATION (Details 2) - Restricted Shares Subject to Service and Performance Conditions | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Restricted shares subject only to a service condition: | |
Non-vested, beginning balance, shares | shares | 165,918 |
Granted (shares) | shares | 84,829 |
Vested (shares) | shares | (98,281) |
Forfeited (shares) | shares | 0 |
Non-vested, ending balance, shares | shares | 152,466 |
Non-vested, beginning balance, (dollars per share) | $ / shares | $ 55.85 |
Granted (dollars per share) | $ / shares | 55.46 |
Vested (dollars per share) | $ / shares | 55.81 |
Forfeited (dollars per share) | $ / shares | 0 |
Non-vested, ending balance, (dollars per share) | $ / shares | $ 55.66 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Effective Income Tax Rate Reconciliation, Percent | 26.90% | 34.80% | 25.50% | 29.40% |
Provision for income taxes | $ 2,944 | $ 3,687 | $ 5,453 | $ 5,393 |
Adoption of ASU 2016-09 [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Provision for income taxes | $ 1,000 | |||
Tax rate excluding ASU 2016-09 adoption | 34.50% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
UCITS Fund | |||||
Related Party Transaction [Line Items] | |||||
Fees earned from related party | $ 1,100,000 | $ 900,000 | $ 2,300,000 | $ 1,700,000 | |
Fees unpaid from related party | 342,000 | 342,000 | $ 423,000 | ||
Private Equity Investments [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Purchases from Related Party | 530,000 | 605,000 | |||
Trust | |||||
Related Party Transaction [Line Items] | |||||
Due from related party | 92,000 | 92,000 | $ 98,000 | ||
Fees earned from related party | $ 92,000 | $ 90,000 | $ 187,000 | $ 185,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Textual) $ in Millions | Nov. 06, 2012 | Aug. 03, 2012 | Jun. 30, 2018USD ($) | Dec. 31, 2017CAD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) |
Loss Contingencies [Line Items] | ||||||
Other Commitment | $ 5,000,000 | |||||
Percentage of defense costs which will be covered by insurance | 50.00% | |||||
Receivable | $ 0 | $ 212,000 | ||||
First Lawsuit by AGF | ||||||
Loss Contingencies [Line Items] | ||||||
Lawsuit filing date | On August 3, 2012, AGF Management Limited and AGF Investments Inc. (collectively, “AGF”) filed a lawsuit in the Ontario Superior Court of Justice against Westwood, certain Westwood employees and the executive recruiting firm of Warren International, LLC (“Warren”). | |||||
One-time litigation payment | $ 10 | |||||
Legal settlement expense | 5 | $ 4,000,000 | ||||
Insurance proceeds | 4,000,000 | |||||
Receivable | $ 0 | $ 5 | $ 4,000,000 | |||
Second Lawsuit by AGF | ||||||
Loss Contingencies [Line Items] | ||||||
Lawsuit filing date | on November 6, 2012, AGF filed a second lawsuit against Westwood, Westwood Management and an employee of Westwood International. |
SEGMENT REPORTING (Details Text
SEGMENT REPORTING (Details Textual) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)Segment | Jun. 30, 2017USD ($) | |
Segment Reporting [Abstract] | ||||
Net income | $ | $ 7,992 | $ 6,896 | $ 15,970 | $ 12,960 |
Number of operating segments | Segment | 2 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||||
ReconciliationFromNetIncomeToNonGaapMeasure [Table Text Block] | The following tables provide a reconciliation of Net income to Economic Earnings (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net income $ 7,992 $ 6,896 $ 15,970 $ 12,960 Add: Stock-based compensation expense 3,776 4,168 7,963 8,065 Add: Intangible amortization 418 490 836 980 Add: Tax benefit from goodwill amortization 59 156 118 313 Economic Earnings $ 12,245 $ 11,710 $ 24,887 $ 22,318 | |||||
Net fee revenues from external sources | $ 32,587 | $ 33,444 | $ 66,014 | $ 65,414 | ||
Net intersegment revenues | 0 | 0 | 0 | 0 | ||
Net interest and dividend revenue | 190 | 137 | 376 | 304 | ||
Other, net | (17) | 175 | (63) | 661 | ||
Total revenues | 32,760 | 33,756 | 66,327 | 66,379 | ||
Net income | 7,992 | 6,896 | 15,970 | 12,960 | ||
Intangible amortization | 418 | 490 | 836 | 980 | ||
Deferred taxes on goodwill | 59 | 156 | 118 | 313 | ||
Economic Earnings | 12,245 | 11,710 | 24,887 | 22,318 | ||
Segment assets | 184,267 | 184,267 | $ 192,659 | $ 175,932 | ||
Segment goodwill | 19,804 | 19,804 | $ 27,144 | 27,144 | ||
Operating Segments | Trust | ||||||
Segment Reporting Information [Line Items] | ||||||
Net fee revenues from external sources | 7,465 | 7,919 | 15,074 | 15,713 | ||
Net intersegment revenues | 57 | 52 | 112 | 103 | ||
Net interest and dividend revenue | 55 | 15 | 100 | 24 | ||
Other, net | (1) | 3 | (5) | 7 | ||
Total revenues | 7,576 | 7,989 | 15,281 | 15,847 | ||
Economic Earnings | 1,457 | 1,519 | 2,677 | 2,967 | ||
Segment assets | 59,605 | 59,605 | 71,808 | |||
Segment goodwill | 16,401 | 16,401 | 21,925 | |||
Operating Segments | Advisory | ||||||
Segment Reporting Information [Line Items] | ||||||
Net fee revenues from external sources | 25,122 | 25,525 | 50,940 | 49,701 | ||
Net intersegment revenues | 1,846 | 1,998 | 3,883 | 4,024 | ||
Net interest and dividend revenue | 135 | 122 | 276 | 280 | ||
Other, net | (16) | 172 | (58) | 654 | ||
Total revenues | 27,087 | 27,817 | 55,041 | 54,659 | ||
Economic Earnings | 13,111 | 11,800 | 26,910 | 22,587 | ||
Segment assets | 214,051 | 214,051 | 192,247 | |||
Segment goodwill | 3,403 | 3,403 | 5,219 | |||
Westwood Holdings | ||||||
Segment Reporting Information [Line Items] | ||||||
Net fee revenues from external sources | 0 | 0 | 0 | 0 | ||
Net intersegment revenues | 0 | 0 | 0 | 0 | ||
Net interest and dividend revenue | 0 | 0 | 0 | 0 | ||
Other, net | 0 | 0 | 0 | 0 | ||
Total revenues | 0 | 0 | 0 | 0 | ||
Economic Earnings | (2,323) | (1,609) | (4,700) | (3,236) | ||
Segment assets | 16,056 | 16,056 | 14,798 | |||
Segment goodwill | 0 | 0 | 0 | |||
Eliminations | ||||||
Segment Reporting Information [Line Items] | ||||||
Net fee revenues from external sources | 0 | 0 | 0 | 0 | ||
Net intersegment revenues | (1,903) | (2,050) | (3,995) | (4,127) | ||
Net interest and dividend revenue | 0 | 0 | 0 | 0 | ||
Other, net | 0 | 0 | 0 | 0 | ||
Total revenues | (1,903) | (2,050) | (3,995) | (4,127) | ||
Economic Earnings | 0 | 0 | 0 | 0 | ||
Segment assets | (105,445) | (105,445) | (102,921) | |||
Segment goodwill | 0 | 0 | $ 0 | |||
Restricted Stock | ||||||
Segment Reporting Information [Line Items] | ||||||
Allocated Share-based Compensation Expense | $ 3,776 | $ 4,168 | $ 7,963 | $ 8,065 |
SUBSEQUENT EVENTS (Details Text
SUBSEQUENT EVENTS (Details Textual) - $ / shares | Jul. 25, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Subsequent Event [Line Items] | |||||
Dividends declared per share (dollars per share) | $ 0.68 | $ 0.62 | $ 1.36 | $ 1.24 | |
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Dividends declared per share (dollars per share) | $ 0.68 | ||||
Dividends payable, date to be paid | Oct. 1, 2018 | ||||
Dividends payable, date of record | Sep. 7, 2018 |