NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 wholly-owned subsidiaries, Westwood Management Corp. and Westwood Advisors, L.L.C. (referred to hereinafter together as “Westwood Management”) and Westwood Trust.
Westwood Management provides investment advisory services to institutional clients, a family of mutual funds called the Westwood Funds®, other mutual funds, individual investors and clients of Westwood Trust. Westwood Trust provides trust and custodial services and participation in self-sponsored common trust funds (“CTFs”) to institutions and high net worth individuals. Revenue is largely dependent on the total value and composition of assets under management ("AUM"). Accordingly, fluctuations in financial markets and in the composition of AUM impact our revenues and results of operations.
Westwood Management is registered with the Securities and Exchange Commission ("SEC") as an investment advisor ("RIA") under the Investment Advisers Act of 1940. Westwood Trust is chartered and regulated by the Texas Department of Banking.
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 in the opinion of management to present fairly our interim financial position and results of operations and cash flows for the periods presented. The accompanying Condensed Consolidated Financial Statements are presented in accordance with GAAP and the rules and regulations of the SEC.
The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with our Consolidated Financial Statements, and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2021. 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.
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. Advisory and trust fees are calculated based on a percentage of AUM and the performance obligation is realized over the current calendar quarter. Once clients receive our investment advisory services we have an enforceable right to payment.
Advisory Fee Revenues
Our advisory fees are generated by Westwood Management which manages client accounts under investment advisory and sub-advisory agreements. Advisory fees are typically calculated based on a percentage of AUM and are paid in accordance with the terms of the agreements. Advisory fees are paid quarterly in advance based on AUM on the last day of the preceding quarter, quarterly in arrears based on AUM on the last day of the quarter just ended or are based on a daily or monthly analysis of AUM for the stated period. We recognize advisory fee revenues as services are rendered. Since our advance paying clients' billing periods coincide with the calendar quarter to which such payments relate, revenue is recognized within the quarter and our Condensed Consolidated Financial Statements contain no deferred advisory fee revenues. Advisory clients typically consist of institutional and mutual fund accounts.
WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
Institutional investors include separate accounts of (i) corporate pension and profit sharing plans, public employee retirement funds, Taft-Hartley plans, endowments, foundations and individuals; (ii) subadvisory relationships where Westwood provides investment management services for funds offered by other financial institutions; (iii) pooled investment vehicles including 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 wealth management accounts.
Arrangements with Performance-Based Obligations
A limited number of our advisory clients have a contractual performance-based fee component in their contracts, which generates additional revenues if we outperform a specified index over a specific period of time, and a limited number of our mutual fund offerings have fees that generate additional revenues if we outperform specified indices over specific periods of time.
The revenue is based on future market performance and is subject to factors outside our control. We cannot conclude that a significant reversal in the cumulative amount of revenue recognized will not occur during the measurement period, and therefore the revenue is recorded at the end of the measurement period when the performance obligation has been satisfied.
Trust Fee Revenues
Our trust fees are generated by Westwood Trust pursuant to trust or custodial agreements. Trust fees are separately negotiated with each client and are generally based on a percentage of AUM. Westwood Trust also provides trust services to a small number of clients on a fixed fee basis. The fees for most of our trust clients are calculated quarterly in arrears, based on a daily average of AUM for the quarter, or monthly, based on the month-end value of AUM. Since billing periods for most of Westwood Trust’s clients coincide with the calendar quarter, revenue is fully recognized within the quarter and our Condensed Consolidated Financial Statements contain no deferred advisory fee revenues.
Revenue Disaggregated
Sales taxes are excluded from revenues. The following table presents our revenue disaggregated by account type (in thousands). In 2021, we recast certain prior year revenues related to performance-based fees. | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
| 2022 | | 2021 | | | | |
Advisory Fees: | | | | | | | |
Institutional | $ | 7,048 | | | $ | 8,858 | | | | | |
Mutual Funds | 4,549 | | | 3,414 | | | | | |
Wealth Management | 193 | | | 137 | | | | | |
| | | | | | | |
Trust Fees | 5,715 | | | 6,065 | | | | | |
| | | | | | | |
Other, net | (289) | | | (155) | | | | | |
Total revenues | $ | 17,216 | | | $ | 18,319 | | | | | |
We serve clients primarily in the United States, as well as in certain international locations. The following table presents our revenue disaggregated by our clients' geographical locations (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | |
Three Months Ended March 31, 2022 | Advisory | | Trust | | | | Other | | Total |
| | | | | | | | | |
| | | | | | | | | |
Canada | $ | 291 | | | $ | — | | | | | $ | — | | | $ | 291 | |
| | | | | | | | | |
United States | 11,499 | | | 5,715 | | | | | (289) | | | 16,925 | |
Total | $ | 11,790 | | | $ | 5,715 | | | | | $ | (289) | | | $ | 17,216 | |
WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Three Months Ended March 31, 2021 | Advisory | | Trust | | Performance-based | | Other | | Total |
| | | | | | | | | |
| | | | | | | | | |
Canada | $ | 276 | | | $ | — | | | $ | — | | | $ | — | | | $ | 276 | |
Europe | 638 | | | — | | | 262 | | | — | | | 900 | |
United States | 9,546 | | | 6,065 | | | 1,687 | | | (155) | | | 17,143 | |
Total | $ | 10,460 | | | $ | 6,065 | | | $ | 1,949 | | | $ | (155) | | | $ | 18,319 | |
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 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 (i) corporate pension and profit sharing plans, public employee retirement funds, Taft-Hartley plans, endowments, foundations and individuals, (ii) subadvisory relationships where Westwood provides investment management services to the Westwood Funds®, funds offered by other financial institutions and funds offered by our Trust segment and (iii) pooled investment vehicles, including collective investment trusts. Westwood Management provides investment advisory services to similar clients, and is included in our Advisory segment.
Trust
Trust provides trust and custodial services and participation in common trust funds that it sponsors to institutions and high net worth individuals. Westwood Trust is included in our Trust segment. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(in thousands) | | Advisory | | Trust | | Westwood Holdings | | Eliminations | | Consolidated |
Three Months Ended March 31, 2022 | | | | | | | | | | |
Net fee revenues from external sources | | $ | 11,790 | | | $ | 5,715 | | | $ | — | | | $ | — | | | $ | 17,505 | |
Net intersegment revenues | | 577 | | | 90 | | | — | | | (667) | | | — | |
| | | | | | | | | | |
Other, net | | (289) | | | — | | | — | | | — | | | (289) | |
Total revenues | | $ | 12,078 | | | $ | 5,805 | | | $ | — | | | $ | (667) | | | $ | 17,216 | |
| | | | | | | | | | |
Segment assets | | $ | 222,545 | | | $ | 57,913 | | | $ | 12,876 | | | $ | (162,318) | | | $ | 131,016 | |
Segment goodwill | | $ | — | | | $ | 16,401 | | | $ | — | | | $ | — | | | $ | 16,401 | |
| | | | | | | | | | |
Three Months Ended March 31, 2021 | | | | | | | | | | |
Net fee revenues from external sources | | $ | 12,409 | | | $ | 6,065 | | | $ | — | | | $ | — | | | $ | 18,474 | |
Net intersegment revenues | | 676 | | | 81 | | | — | | | (757) | | | — | |
| | | | | | | | | | |
Other, net | | (155) | | | — | | | — | | | — | | | (155) | |
Total revenues | | $ | 12,930 | | | $ | 6,146 | | | $ | — | | | $ | (757) | | | $ | 18,319 | |
| | | | | | | | | | |
Segment assets | | $ | 207,193 | | | $ | 54,143 | | | $ | 12,603 | | | $ | (124,275) | | | $ | 149,664 | |
Segment goodwill | | $ | — | | | $ | 16,401 | | | $ | — | | | $ | — | | | $ | 16,401 | |
WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
5. INVESTMENTS
During 2018, we made a $5.4 million strategic investment in InvestCloud, a digital financial services provider ("InvestCloud"), which is included in “Investments” on our Condensed Consolidated Balance Sheets. This investment represents an equity interest in 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.
Following observable price changes for this investment in the year ended December 31, 2019, we recorded an unrealized gain of $2.8 million. Following InvestCloud's recapitalization in the first quarter of 2021, we recorded a realized gain of approximately $8.3 million when our originally purchased shares were redeemed. Following this redemption we re-invested $4.4 million of our proceeds into newly issued shares of InvestCloud.
Our investment in Charis, the parent company of Westwood Private Bank ("Charis"), is included in “Noncurrent investments at fair value” on our Condensed Consolidated Balance Sheets and is measured at fair value on a recurring basis. In the three months ended March 31, 2021, we recorded unrealized gains of approximately $0.4 million following fair value increases from market transactions.
In 2019 we made a $0.3 million investment in Westwood Hospitality Fund I, LLC, a private investment fund. Our investment is included in “Noncurrent investments at fair value” on our Condensed Consolidated Balance Sheets and is measured at fair value on a recurring basis using net asset value (“NAV”) as a practical expedient.
All other investments are carried at fair value on a recurring basis and are accounted for as trading securities.
Investments carried at fair value are presented in the table below (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Estimated Fair Value |
March 31, 2022: | | | | | | | | |
U.S. Government and Government agency obligations | | $ | 18,267 | | | $ | — | | | $ | (529) | | | $ | 17,738 | |
Money market funds | | 28,272 | | | — | | | — | | | 28,272 | |
Equity funds | | 4,760 | | | 88 | | | (90) | | | 4,758 | |
Equities | | 1,309 | | | 127 | | | — | | | 1,436 | |
Exchange-traded bond funds | | 144 | | | — | | | (5) | | | 139 | |
Total trading securities | | 52,752 | | | 215 | | | (624) | | | 52,343 | |
Private investment fund | | 265 | | | — | | | (42) | | | 223 | |
Private equity | | 3,420 | | | 906 | | | — | | | 4,326 | |
Total investments carried at fair value | | $ | 56,437 | | | $ | 1,121 | | | $ | (666) | | | $ | 56,892 | |
| | | | | | | | |
December 31, 2021: | | | | | | | | |
U.S. Government and Government agency obligations | | $ | 39,926 | | | $ | — | | | $ | (491) | | | $ | 39,435 | |
Money market funds | | 19,661 | | | — | | | — | | | 19,661 | |
Equity funds | | 4,135 | | | 158 | | | (7) | | | 4,286 | |
Equities | | 1,296 | | | 206 | | | — | | | 1,502 | |
Exchange-traded bond funds | | 140 | | | — | | | — | | | 140 | |
Total trading securities | | 65,158 | | | 364 | | | (498) | | | 65,024 | |
Private investment fund | | 265 | | | — | | | (121) | | | 144 | |
Private equity | | 3,420 | | | 949 | | | — | | | 4,369 | |
Total investments carried at fair value | | $ | 68,843 | | | $ | 1,313 | | | $ | (619) | | | $ | 69,537 | |
6. FAIR VALUE MEASUREMENTS
WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
ASC 820, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value and requires disclosures regarding certain fair value measurements. ASC 820 establishes a three-tier hierarchy for measuring fair value, as follows:
•Level 1 – quoted market prices in active markets for identical assets
•Level 2 – inputs other than quoted prices that are directly or indirectly observable
•Level 3 – significant unobservable inputs where there is little or no market activity
Our strategic investment in InvestCloud, discussed in Note 5 “Investments,” is excluded from the recurring fair value table shown below because we have elected to apply the measurement alternative for this investment.
The following table summarizes the values of our investments measured at fair value on a recurring basis within the fair value hierarchy as of the dates indicated (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Level 1 | | Level 2 | | Level 3 | | Investments Measured at NAV (1) | | Total |
As of March 31, 2022: | | | | | | | | | |
Investments in trading securities | $ | 52,343 | | | $ | — | | | $ | — | | | $ | — | | | $ | 52,343 | |
Private investment fund | — | | | — | | | — | | | 223 | | | 223 | |
Private equity | — | | | — | | | 4,326 | | | — | | | 4,326 | |
Total assets measured at fair value | $ | 52,343 | | | $ | — | | | $ | 4,326 | | | $ | 223 | | | $ | 56,892 | |
| | | | | | | | | |
As of December 31, 2021: | | | | | | | | | |
Investments in trading securities | $ | 65,024 | | | $ | — | | | $ | — | | | $ | — | | | $ | 65,024 | |
Private investment fund | — | | | — | | | — | | | 144 | | | 144 | |
Private equity | — | | | — | | | 4,369 | | | — | | | 4,369 | |
Total assets measured at fair value | $ | 65,024 | | | $ | — | | | $ | 4,369 | | | $ | 144 | | | $ | 69,537 | |
| | | | | | | | | |
(1) Comprised of certain investments measured at fair value using net asset value ("NAV") as a practical expedient. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on our Condensed Consolidated Balance Sheets. |
Our investment in Charis is included within Level 3 of the fair value hierarchy as we value that investment utilizing inputs not observable in the market. Our investment is measured at fair value on a recurring basis using a market approach based on a price to tangible book value multiple range that is determined to be reasonable in the current environment, or on market transactions. Management believes this valuation methodology is consistent with the banking industry and we will reevaluate our methodology and inputs on a quarterly basis.
The following table summarizes the changes in Level 3 investments measured at fair value on a recurring basis for the periods presented (in thousands): | | | | | | | | | | | | | | | |
| Fair Value using Significant Unobservable Inputs (Level 3) |
| Three Months Ended March 31, | | |
| 2022 | | 2021 | | | | |
Beginning balance | $ | 4,369 | | | $ | 3,431 | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Unrealized gains (losses) on private investments | (43) | | | 441 | | | | | |
Ending balance | $ | 4,326 | | | $ | 3,872 | | | | | |
The March 31, 2022 private investment fair value of $4.3 million was valued using a market approach based on a price to tangible book value multiple, with unobservable book value multiples ranging from $1.43 to $2.13 per share, with a weighted average of $1.57 per share. Significant increases (decreases) in book value multiples in isolation would have resulted in a significantly higher (lower) fair value measurement.
WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
7. INCOME TAXES
Our effective income tax rate differed from the 21% statutory rate for the three months ended March 31, 2022 and 2021 due to permanent differences between book and tax restricted stock expense based on a decrease in our stock price between the restricted stock grant and vesting dates.
8. EARNINGS PER SHARE
Basic earnings per common share is computed by dividing net income available to common stockholders by the weighted average number of shares outstanding for the applicable period. Diluted earnings per share is computed based on the weighted average number of shares outstanding plus the effect of any dilutive shares of restricted stock granted to employees and non-employee directors. There were approximately 85,000 and 234,000 anti-dilutive restricted shares outstanding for the three months ended March 31, 2022 and March 31, 2021, respectively.
The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share and share amounts): | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
| 2022 | | 2021 | | | | |
Net income | $ | 50 | | | $ | 4,101 | | | | | |
| | | | | | | |
Weighted average shares outstanding - basic | 7,865,174 | | | 7,887,044 | | | | | |
Dilutive potential shares from unvested restricted shares | 66,279 | | | 30,346 | | | | | |
| | | | | | | |
Weighted average shares outstanding - diluted | 7,931,453 | | | 7,917,390 | | | | | |
| | | | | | | |
Earnings per share: | | | | | | | |
Basic | $ | 0.01 | | | $ | 0.52 | | | | | |
Diluted | $ | 0.01 | | | $ | 0.52 | | | | | |
9. GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
Goodwill represents the excess of the cost of acquired assets over the fair value of the underlying identifiable assets at the date of acquisition. Goodwill is not amortized but is tested for impairment at least annually. We completed our most recent annual goodwill impairment assessment during the third quarter of 2021, and determined that no goodwill impairment related to the Trust segment was required. There was no goodwill impairment in the Trust segment during the three months ended March 31, 2022 or March 31, 2021.
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, 2022 or March 31, 2021.
10. LEASES
As of March 31, 2022 there have been no material changes outside the ordinary course of business to our leases since December 31, 2021. For information regarding our leases, refer to Note 11 “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, 2021.
11. STOCKHOLDERS' EQUITY
Share Repurchase Program
WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
In February 2020, our Board of Directors authorized management to repurchase up to an additional $10.0 million of our outstanding common stock on the open market or in privately negotiated transactions. In April 2020, our Board of Directors authorized management to repurchase up to an additional $10.0 million of share repurchases under our share repurchase program.
During the three months ended March 31, 2022, the Company repurchased 12,202 shares of our common stock at an average price of $16.39 per share, including commissions, for an aggregate purchase price of $0.2 million under our share repurchase plan. During the three months ended March 31, 2021, the Company repurchased 92,491 shares of our common stock at an average price of $15.19 per share, including commissions, for an aggregate purchase price of $1.4 million under our share repurchase plan.
12. VARIABLE INTEREST ENTITIES
We evaluated (i) our relationship as sponsor of the Common Trust Funds (“CTFs”) and managing member of the private equity funds Westwood Hospitality Fund I, LLC and Westwood Technology Opportunities Fund I, LP (collectively the “Private Funds”), (ii) our advisory relationships with the Westwood Funds®, and (iii) our investments in InvestCloud and Charis discussed in Note 5 “Investments” (“Private Equity”) 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 and Private Funds 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 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.
Based on our analyses, we determined the Westwood Funds® and Private Equity (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.
Based on our analyses of our investments in these entities for the periods ended March 31, 2022 and December 31, 2021, we have not consolidated the CTFs or Private Funds under the VIE method or the Westwood Funds® or Private Equity under the VOE method.
We recognized fee revenue from the Westwood VIEs and Westwood VOEs as follows (in millions): | | | | | | | | | | | | | | | |
| Three Months Ended | | |
| March 31, 2022 | | March 31, 2021 | | | | |
Fee Revenues | $ | 5.7 | | | $ | 4.9 | | | | | |
The following table displays the AUM and the risk of loss in each vehicle (in millions): | | | | | | | | | | | | | | | | | |
| As of March 31, 2022 |
| Assets Under Management | | Corporate Investment | | Amount at Risk |
VIEs/VOEs: | | | | | |
Westwood Funds® | $ | 2,957 | | | $ | — | | | $ | — | |
Common Trust Funds | 876 | | | — | | | — | |
| | | | | |
Private Funds | 7 | | | 0.2 | | | 0.2 | |
Private Equity | — | | | 8.8 | | | 8.8 | |
All other assets: | | | | | |
Wealth Management | 3,298 | | | | | |
Institutional | 6,716 | | | | | |
Total Assets Under Management | $ | 13,854 | | | | | |
WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
13. 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, 2022 and March 31, 2021, the Company earned insignificant fees from the affiliated funds.
One of our directors serves as a consultant to the Company under a consulting agreement. We recorded insignificant expenses related to this agreement for both the three months ended March 31, 2022 and March 31, 2021.
14. SUBSEQUENT EVENTS
Dividends Declared
On April 27, 2022, the Board of Directors declared a quarterly cash dividend of $0.15 per share of common stock payable on July 1, 2022 to stockholders of record on June 3, 2022.