WESTWOOD HOLDINGS GROUP INC

1. DESCRIPTION OF THE BUSINESS

Westwood Holdings Group, Inc. (“Westwood”, “the Company”, “we”, “us” or “our”) was incorporated under the laws of the State of Delaware on December 12, 2001. Westwood manages investment assets and provides services for its clients through its subsidiaries, Westwood Management Corp., Westwood Advisors, L.L.C., Salient Advisors, L.P. ("Salient Advisors"), Broadmark Asset Management LLC ("Broadmark") and Salient Capital L.P. ("SCLP"), (referred to hereinafter together as “Westwood Management”), and Westwood Trust.

SCLP is an SEC-registered broker-dealer and Financial Industry Regulatory Authority ("FINRA") member and serves as a sub-placement agent for private placements. Salient Advisors is an SEC-registered investment adviser, a Commodity Futures Trading Commission ("CFTC") registered Commodity Pool Operator ("CPO") and a National Futures Association ("NFA") member. Salient Advisors is an advisor to the Westwood Salient Tactical Plus Fund, which is sub-advised by Broadmark.

Westwood Management provides investment advisory services to institutional clients, a family of mutual funds called the Westwood Funds®, Westwood ETFs, other mutual funds, individual investors, private capital funds and clients of Westwood Trust. Westwood Trust provides trust and custodial services and participation in self-sponsored common trust funds ("CTFs") to institutions and high net worth individuals. Revenue is largely dependent on the total value and composition of assets under management ("AUM") and assets under advisement ("AUA"), and fluctuations in financial markets and in the composition of AUM impact our revenues and results of operations.

Each entity comprising Westwood Management is registered with the Securities and Exchange Commission ("SEC") as an investment adviser under the Investment Advisers Act of 1940, as amended. Westwood Trust is chartered and regulated by the Texas Department of Banking.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements are unaudited and are presented in accordance with the requirements for quarterly reports on Form 10-Q and consequently do not include all of the information and footnote disclosures required by accounting principles generally accepted in the United States of America ("GAAP"). The Company’s Condensed Consolidated Financial Statements reflect all adjustments (consisting only of normal recurring adjustments) necessary to a fair statement of our interim financial position and results of operations and cash flows for the periods presented. The accompanying Condensed Consolidated Financial Statements are presented in accordance with GAAP and the rules and regulations of the SEC.

The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with our Consolidated Financial Statements, and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2025. 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.

Recently Issued Accounting Pronouncements

Income Statement Reporting

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses("ASU 2024-03"). ASU 2024-03 requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period. The FASB further clarified the effective date in January 2025 with the issuance of ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date ("ASU 2025-01"). ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The requirements should be applied on a prospective basis while retrospective application is permitted. We are in the process of analyzing the impact of this ASU on our condensed consolidated financial statements.

Internal-Use Software

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software("ASU 2025-06"). ASU 2025-06 is intended to simplify the capitalization guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The amendments in this update permit an entity to apply the new guidance using a prospective, retrospective or modified transition approach. We are in the process of analyzing the impact of this ASU on our condensed consolidated financial statements.

Interim Reporting

In December 2025, the FASB issued ASU 2025-11, Interim Reporting ("ASU 2025-11"). ASU 2025-11 is intended to clarify the application of interim reporting guidance and to reorganize existing disclosure requirements. The amendments in this ASU are effective for interim periods within annual periods beginning after December 15, 2027, with early adoption permitted. We are in the process of analyzing the impact of this ASU on our condensed consolidated financial statements.

3. REVENUE

Revenue Recognition

Revenues are recognized when the performance obligation (the investment management and advisory or trust services provided to the client) defined by the investment advisory or sub-advisory agreement is satisfied. For each performance obligation, we determine at contract inception whether the revenue satisfies over time or at a point in time. We derive our revenues from investment advisory fees, trust fees and other sources of revenues such as gains and losses from our seed money investments into new investment strategies. The "Other, net” revenues on our Condensed Consolidated Statements of Operations are the unrealized gains and losses on our seed money investments, and our seed money investments are included in "Investments, at fair value" on our Condensed Consolidated Balance Sheets. Advisory and trust fees are calculated based on a percentage of AUM or AUA, as applicable, 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 for managing client accounts under investment advisory and sub-advisory agreements. Advisory fees are typically calculated based on a percentage of AUM and AUA and are paid in accordance with the terms of the agreements. Advisory fees are paid quarterly in advance based on AUM on the last day of the preceding quarter, quarterly in arrears based on AUM on the last day of the quarter just ended, based on a daily or monthly analysis of AUM for the stated period, or based on committed or invested capital with respect to private capital funds. 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 Consolidated Financial Statements contain no deferred advisory fee revenues. Advisory clients typically consist of institutional investors, mutual funds, ETFs, intermediary separately managed accounts ("SMA"), model-delivery SMA and private capital funds.

Institutional investors include separate accounts of (i) corporate pension and profit sharing plans, public employee retirement funds, Taft-Hartley plans, endowments, foundations and individuals; (ii) sub-advisory relationships where Westwood provides investment management services for funds offered by other financial institutions; (iii) pooled investment vehicles, including 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 suite of investment strategies for institutional investors and wealth management accounts.

Arrangements with Performance-Based Obligations

A limited number of our advisory clients have a contractual performance-based fee component in their contracts, which generates additional revenues if we outperform a specified index over a specific period of time, and a limited number of our mutual fund offerings have fees that generate additional revenues if we outperform specified indices over specific periods of time. Performance-based fees are paid after the performance obligation has been satisfied.

The revenue is based on future market performance and is subject to many factors outside our control. We cannot conclude that a significant reversal in the cumulative amount of revenue recognized will not occur during the measurement period, and therefore the revenue is recorded at the end of the measurement period when the performance obligation has been satisfied.

Trust Fee Revenues

Our trust fees are generated by Westwood Trust pursuant to trust or custodial agreements. Trust fees are separately negotiated with each client and are generally based on a percentage of AUM. Westwood Trust also provides trust services to a small number of clients on a fixed fee basis. The fees for most of our trust clients are calculated quarterly in arrears, based on a daily average of AUM for the quarter, or monthly, based on the month-end value of AUM, and are paid monthly and quarterly in arrears. We recognize trust fee revenues as services are rendered. Since billing periods for most of Westwood Trust’s clients coincide with the calendar quarter, revenue is fully recognized within the quarter and our Condensed Consolidated Financial Statements contain no deferred fee revenues.

Revenue Disaggregated

The following table presents our revenue disaggregated by account type (in thousands).

The following table presents our revenue disaggregated by our clients' geographical locations (in thousands):

4. 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 uses to review the financial information for operational decision-making purposes.

The Company's Chief Operating Decision Maker ("CODM"), our Chief Executive Officer, evaluates the performance of our segments based primarily on revenues. The CODM does not evaluate the performance of our segments on segment expenses so those have not been disclosed.

Advisory

Our Advisory segment provides investment advisory services to (i) corporate pension and profit sharing plans, public employee retirement funds, Taft-Hartley plans, endowments, foundations and individuals, (ii) sub-advisory relationships where Westwood provides investment management services to the Westwood Funds®, funds offered by other financial institutions and funds offered by our Trust segment and (iii) pooled investment vehicles, including collective investment trusts.

Trust

Westwood 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.

Other

The Other column below contains 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, along with intersegment eliminations.

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.

5. INVESTMENTS

Our investments consist of the following (in thousands):

Investments at Fair Value

Investments carried at fair value are presented in the table below (in thousands):

Investments Under Measurement Alternative

Our investments below represent equity interests in private companies without readily determinable fair values. The Company has elected to apply the measurement alternative of cost minus impairment, if any, adjusted for any observable price changes in orderly transactions for these investments. The acquisition cost of WEBs Investments Inc. ("WEBs") is allocated using the relative fair value method between preferred stock and a call option.

During the three months ended March 31, 2026 , Vista Bancshares, Inc. was acquired by a third party, National Bank Holdings Corporation ("NBHC"). Following this acquisition we recognized a gain of approximately $2.0 million in the first quarter of 2026 upon liquidation of NBHC stock.

No impairments of these investments were recorded during the three months ended March 31, 2026 or March 31, 2025. Balances are shown below (in thousands):

Equity Method Investments

These investments represent ownership interests in non-controlled partnerships and are measured based on our share of the net earnings or losses of the investee. Investment balances are included in “Equity method investments” on our Condensed Consolidated Balance Sheets and income and expenses are included in our Condensed Consolidated Statements of Operations under "Other income." Balances are shown below (in thousands):

6. FAIR VALUE MEASUREMENTS

ASC 820 defines fair value, establishes a framework for measuring fair value and requires disclosures regarding certain fair value measurements. ASC 820 establishes a three-tier hierarchy for measuring fair value, as follows:

•Level 1 – quoted market prices in active markets for identical assets

•Level 2 – inputs other than quoted prices that are directly or indirectly observable

•Level 3 – significant unobservable inputs where there is little or no market activity

Our equity interests in private companies without readily determinable fair values are excluded from the recurring fair value table shown below because we have elected to apply the measurement alternative for those investments.

The following table summarizes our assets and liabilities measured at fair value on a recurring basis, as of the dates indicated, with the fair value hierarchy(in thousands):

The following table summarizes the changes in Level 3 liabilities measured at fair value on a recurring basis for the periods presented (in thousands):

The final measurement date of the growth earn-out was in 2025 and the final payment for the revenue retention earn-out was made in the first quarter of 2025.

7. INCOME TAXES

Our effective income tax rate differed from the 21% statutory rate for the three months ended March 31, 2026 and March 31, 2025 due to permanent differences related to executive compensation and the impact of state and local taxes.

8. EARNINGS PER SHARE

Basic earnings per common share is computed by dividing income attributable to Westwood Holdings Group, Inc. by the weighted average number of shares outstanding for the applicable period. Diluted earnings per share is computed based on the weighted average number of shares outstanding plus the effect of any dilutive shares of restricted stock granted to employees and non-employee directors.

There were approximately 11,000 and 20,000 anti-dilutive restricted shares outstanding for the three months ended March 31, 2026 and March 31, 2025, respectively.

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share and share amounts):

9. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

Goodwill represents the excess of the cost of acquired assets over the fair value of the underlying liabilities assumed at the date of acquisition. Changes in goodwill were as follows (in thousands):

Goodwill is not amortized but is reviewed for impairment annually, or between annual assessments if a triggering event occurs or circumstances change that would more likely than not result in the fair value of a reporting unit below its carrying amount. We completed our annual goodwill impairment assessment during the third quarter of 2025 and determined that no impairment loss was required. No goodwill impairments were recorded during the three months ended March 31, 2026 or March 31, 2025.

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 intangible asset impairments were recorded during the three months ended March 31, 2026 or March 31, 2025.

Amortization expense, which is included in “General and administrative” expense on our Condensed Consolidated Statements of Operations, was $0.8 million and $1.0 million for the three months ended March 31, 2026 and March 31, 2025, respectively.

10. LEASES

As of March 31, 2026 there have been no material changes outside the ordinary course of business to our leases since December 31, 2025. For information regarding our leases, refer to Note 12 “Leases” in Part IV, Item 15. “Exhibits, Financial Statement Schedules” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

11. STOCKHOLDERS' EQUITY

Share Repurchase Program

As of March 31, 2026, shares up to a value of $5.5 million may yet be repurchased under our plan.

During the three months ended March 31, 2026 and 2025, the Company did not repurchase any shares of our common stock.

12. VARIABLE INTEREST ENTITIES

We evaluated (i) our relationship as sponsor of the CTFs and managing member of the private equity funds Westwood Hospitality, Westwood Technology Opportunities Fund I, LP, Westwood Energy Secondaries Fund I, Westwood Energy Secondaries Fund II, Westwood Energy Secondaries Co-Invest Fund II, Westwood Energy Secondaries Co-Invest Fund III and Westwood Energy Secondaries Co-Invest IV Fund (collectively the “Private Funds”), (ii) our advisory relationships with the Westwood Funds® and (iii) our investments in InvestCloud Inc. ("InvestCloud"), Vista Bancshares, Inc. ("Vista"), Zarvona Energy Fund GP, Zarvona Energy Fund II-A, WEBs Investments Inc. ("WEBs") and the TXSE Group Inc. ("TXSE") as discussed in Note 5 “Investments” to determine whether each of these entities is a variable interest entity ("VIE") or voting ownership entity (“VOE”).

Based on our analyses, we determined that the CTFs, Private Funds, Zarvona Energy Fund II-A and WEBs were VIEs, as the at-risk equity holders do not have the ability to direct the activities that most significantly impact the entities' economic performance, and, while 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, the Company is not exposed to a majority of the economics of those entities and does not qualify as primary beneficiaries for those entities.

Based on our analyses, we determined the Westwood Funds®, InvestCloud, Vista, Zarvona Energy Fund GP and TXSE (i) have sufficient equity at risk to finance the entities' activities independently, (ii) have the obligation to absorb losses, the right to receive residual returns and the right to direct the activities of the entities that most significantly impact the entities' economic performance and (iii) are not structured with disproportionate voting rights and are VOEs. For the Westwood VOEs, we evaluated whether or not we own a controlling financial interest in the entities, and we concluded that we do not. Based on our analyses, we have not consolidated the Westwood VIEs or Westwood VOEs for the periods ending March 31, 2026 and December 31, 2025.

We have not otherwise provided any financial support that we were not previously contractually obligated to provide and there are no arrangements that would require us to provide additional financial support to any of these entities. Our seed investments in the Westwood Funds® are accounted for as investments in accordance with our other investments described in Note 5 “Investments.”

We recognized fee revenue from the Westwood VIEs and Westwood VOEs as follows (in millions):

The following tables display the AUM, the amount of our seed investments that are included in “Investments, at fair value” on the Condensed Consolidated Balance Sheets, and the financial risk of loss in each vehicle(in millions):

13. COMMITMENTS AND CONTINGENCIES

Legal matter

In February 2025, Westwood Trust, a subsidiary of the Company, was named as a defendant in a lawsuit filed in Dallas County Court relating to a trust for which Westwood Trust served as trustee. While the company believes it fulfilled its fiduciary responsibilities as trustee, the parties entered into a settlement agreement in March 2026, providing for a full release of both parties and a settlement payment in the amount of $1.6 million (the “Settlement Amount”), included in "Accounts payable and accrued liabilities" on our Condensed Consolidated Balance Sheets. The Settlement Amount was offset by approximately $0.6 million of related loss recoveries from the Company’s directors and officers liability insurance policy with third parties, which was included as "Other assets" on our March 31, 2026 Condensed Consolidated Balance Sheets.

14. RELATED PARTY TRANSACTIONS

The Company engages in transactions with its affiliates in the ordinary course of business. Westwood Management provides investment advisory services to the Westwood Funds®. Under the terms of the investment advisory agreements, the Company earns quarterly fees paid by clients of the fund or by the funds directly. The fees are based on negotiated fee schedules applied to AUM. For the three months ended March 31, 2026 and March 31, 2025, the Company earned immaterial fees from the affiliated funds.

15. SUBSEQUENT EVENTS

Dividend Declared

On April 30, 2026, the Board of Directors declared a quarterly cash dividend of $0.15 per share of common stock payable on July 1, 2026 to stockholders of record on June 1, 2026.

Cash advanced

On April 27, 2026, the Company advanced $5.0 million to a related party borrower, Westwood Energy Secondaries Fund III, LP.