|
|
|
|
|
Ohio
|
|
65-0190407
|
(State of
incorporation)
|
|
(I.R.S. Employer
Identification No.)
|
325 John H. McConnell Blvd., Suite 200,
Columbus, Ohio 43215
|
|
43215
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common shares, no par value
|
|
The NASDAQ Stock Market LLC
|
|
Large accelerated filer
|
|
¨
|
|
Accelerated filer
|
|
x
|
|
|
|
|
|
|
|
Non-accelerated filer
|
|
¨
|
|
Smaller reporting company
|
|
¨
|
|
Required Information
|
Page
|
|
|
|
|
|
|
|
|
Item 1.
|
Business
|
•
|
Treat every investment as a partial ownership interest in that company.
|
•
|
Always invest with a margin of safety.
|
•
|
Possess a long-term investment temperament.
|
•
|
Recognize that market price and intrinsic value tend to converge over a reasonable period of time.
|
1.
|
Small Cap
– Pursues long-term capital appreciation by investment in a portfolio of 50-80 small-capitalization U.S. equity securities.
|
2.
|
Small-Mid Cap
– Pursues long-term capital appreciation by investing in a portfolio of 50-70 small- and mid-capitalization U.S. equity securities.
|
3.
|
Large Cap
– Pursues long-term capital appreciation by investing in a portfolio of 40-60 large-capitalization U.S. equity securities.
|
4.
|
Select
– Pursues long-term capital appreciation by investing in a portfolio of 30-40 U.S. companies across a broad range of market capitalizations.
|
5.
|
Long-Short
– Pursues long-term capital appreciation by investing both long and selling short U.S. companies across a broad range of market capitalizations.
|
6.
|
Strategic Income
– Pursues high current income, preservation of capital, and total return by investing in corporate bonds across the credit spectrum.
|
|
|
|
As of December 31, 2013
|
|||||||||||||
|
Inception
|
|
1 Year
|
|
3 Year
|
|
5 Year
|
|
10 Year
|
|
Since Inception
|
|||||
Diamond Hill Small Cap Fund
|
12/29/2000
|
|
40.08
|
%
|
|
13.85
|
%
|
|
18.71
|
%
|
|
10.28
|
%
|
|
12.45
|
%
|
Russell 2000
|
|
|
38.82
|
%
|
|
15.67
|
%
|
|
20.08
|
%
|
|
9.07
|
%
|
|
8.42
|
%
|
Diamond Hill Small-Mid Cap Fund
|
12/30/2005
|
|
41.64
|
%
|
|
16.38
|
%
|
|
22.42
|
%
|
|
N/A
|
|
|
9.84
|
%
|
Russell 2500
|
|
|
36.80
|
%
|
|
16.28
|
%
|
|
21.77
|
%
|
|
N/A
|
|
|
9.00
|
%
|
Diamond Hill Large Cap Fund
|
6/29/2001
|
|
36.60
|
%
|
|
16.43
|
%
|
|
17.75
|
%
|
|
9.97
|
%
|
|
8.34
|
%
|
Russell 1000
|
|
|
33.11
|
%
|
|
16.30
|
%
|
|
18.59
|
%
|
|
7.78
|
%
|
|
5.82
|
%
|
Diamond Hill Select Fund
|
12/1/2005
|
|
44.35
|
%
|
|
16.32
|
%
|
|
18.52
|
%
|
|
N/A
|
|
|
8.35
|
%
|
Russell 3000
|
|
|
33.55
|
%
|
|
16.24
|
%
|
|
18.71
|
%
|
|
N/A
|
|
|
7.61
|
%
|
Diamond Hill Long-Short Fund
|
6/30/2000
|
|
23.19
|
%
|
|
11.44
|
%
|
|
10.39
|
%
|
|
8.09
|
%
|
|
7.33
|
%
|
60% Russell 1000 / 40% BofA ML US 0-3 Month T-Bill
|
|
|
18.93
|
%
|
|
9.73
|
%
|
|
11.18
|
%
|
|
5.56
|
%
|
|
3.56
|
%
|
Diamond Hill Strategic Income Fund
|
9/30/2002
|
|
5.30
|
%
|
|
6.87
|
%
|
|
13.00
|
%
|
|
6.30
|
%
|
|
7.78
|
%
|
BofA ML US Corporate & High Yield
|
|
|
0.34
|
%
|
|
6.07
|
%
|
|
10.74
|
%
|
|
5.99
|
%
|
|
6.76
|
%
|
-
|
Fund returns are Class I shares net of fees
|
-
|
Index returns do not reflect any fees
|
|
Assets Under Management by Product
As of December 31, |
||||||||||||||||||
(in millions)
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
Proprietary funds
|
$
|
7,600
|
|
|
$
|
5,251
|
|
|
$
|
4,405
|
|
|
$
|
4,409
|
|
|
$
|
3,714
|
|
Sub-advised funds
|
444
|
|
|
947
|
|
|
972
|
|
|
930
|
|
|
146
|
|
|||||
Institutional accounts
|
4,142
|
|
|
3,231
|
|
|
3,294
|
|
|
3,284
|
|
|
2,423
|
|
|||||
Total AUM
|
$
|
12,186
|
|
|
$
|
9,429
|
|
|
$
|
8,671
|
|
|
$
|
8,623
|
|
|
$
|
6,283
|
|
|
Assets Under Management
by Investment Objective As of December 31, |
||||||||||||||||||
(in millions)
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
Small Cap
|
$
|
1,402
|
|
|
$
|
939
|
|
|
$
|
932
|
|
|
$
|
948
|
|
|
$
|
625
|
|
Small-Mid Cap
|
780
|
|
|
364
|
|
|
277
|
|
|
196
|
|
|
146
|
|
|||||
Large Cap
|
6,254
|
|
|
5,211
|
|
|
4,885
|
|
|
4,631
|
|
|
2,654
|
|
|||||
Select (All Cap)
|
327
|
|
|
258
|
|
|
321
|
|
|
422
|
|
|
400
|
|
|||||
Long-Short
|
3,213
|
|
|
2,455
|
|
|
2,082
|
|
|
2,251
|
|
|
2,300
|
|
|||||
Strategic Income
|
210
|
|
|
202
|
|
|
174
|
|
|
175
|
|
|
158
|
|
|||||
Total AUM
|
$
|
12,186
|
|
|
$
|
9,429
|
|
|
$
|
8,671
|
|
|
$
|
8,623
|
|
|
$
|
6,283
|
|
|
Change in Assets Under Management
For the Year Ended December 31, |
||||||||||||||||||
(in millions)
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
AUM at beginning of the year
|
$
|
9,429
|
|
|
$
|
8,671
|
|
|
$
|
8,623
|
|
|
$
|
6,283
|
|
|
$
|
4,510
|
|
Net cash inflows (outflows)
|
|
|
|
|
|
|
|
|
|
||||||||||
proprietary funds
|
713
|
|
|
429
|
|
|
56
|
|
|
452
|
|
|
(161
|
)
|
|||||
sub-advised funds
|
(758
|
)
|
|
(149
|
)
|
|
21
|
|
|
714
|
|
|
6
|
|
|||||
institutional accounts
|
(263
|
)
|
|
(499
|
)
|
|
(74
|
)
|
|
532
|
|
|
734
|
|
|||||
|
(308
|
)
|
|
(219
|
)
|
|
3
|
|
|
1,698
|
|
|
579
|
|
|||||
Net market appreciation and income
|
3,065
|
|
|
977
|
|
|
45
|
|
|
642
|
|
|
1,194
|
|
|||||
Increase during the year
|
2,757
|
|
|
758
|
|
|
48
|
|
|
2,340
|
|
|
1,773
|
|
|||||
AUM at end of the year
|
$
|
12,186
|
|
|
$
|
9,429
|
|
|
$
|
8,671
|
|
|
$
|
8,623
|
|
|
$
|
6,283
|
|
|
Assets by Distribution Channel
As of December 31, |
||||||||||||||||||
(in millions)
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
Proprietary funds:
|
|
|
|
|
|
|
|
|
|
||||||||||
Registered investment advisers
|
$
|
1,678
|
|
|
$
|
1,258
|
|
|
$
|
1,049
|
|
|
$
|
1,080
|
|
|
$
|
1,272
|
|
Independent broker/dealers
|
1,400
|
|
|
917
|
|
|
665
|
|
|
815
|
|
|
757
|
|
|||||
Wirehouse broker/dealers
|
1,261
|
|
|
758
|
|
|
674
|
|
|
775
|
|
|
824
|
|
|||||
Banks
|
1,668
|
|
|
1,407
|
|
|
927
|
|
|
797
|
|
|
43
|
|
|||||
Defined contribution
|
1,226
|
|
|
739
|
|
|
737
|
|
|
493
|
|
|
211
|
|
|||||
Other
|
367
|
|
|
172
|
|
|
353
|
|
|
449
|
|
|
607
|
|
|||||
Total proprietary funds
|
7,600
|
|
|
5,251
|
|
|
4,405
|
|
|
4,409
|
|
|
3,714
|
|
|||||
Sub-advised funds
|
444
|
|
|
947
|
|
|
972
|
|
|
930
|
|
|
146
|
|
|||||
Institutional accounts:
|
|
|
|
|
|
|
|
|
|
||||||||||
Institutional consultant
|
1,965
|
|
|
1,857
|
|
|
1,836
|
|
|
1,602
|
|
|
1,044
|
|
|||||
Financial intermediary
|
1,488
|
|
|
1,164
|
|
|
1,237
|
|
|
1,246
|
|
|
908
|
|
|||||
Direct
|
689
|
|
|
210
|
|
|
221
|
|
|
436
|
|
|
471
|
|
|||||
Total institutional accounts
|
4,142
|
|
|
3,231
|
|
|
3,294
|
|
|
3,284
|
|
|
2,423
|
|
|||||
Total AUM
|
$
|
12,186
|
|
|
$
|
9,429
|
|
|
$
|
8,671
|
|
|
$
|
8,623
|
|
|
$
|
6,283
|
|
ITEM 1A.
|
Risk Factors
|
•
|
asset management firms;
|
•
|
mutual fund companies;
|
•
|
commercial banks and thrift institutions;
|
•
|
insurance companies;
|
•
|
exchange traded funds;
|
•
|
hedge funds; and
|
•
|
brokerage and investment banking firms.
|
ITEM 1B.
|
Unresolved Staff Comments
|
ITEM 2.
|
Properties
|
ITEM 3.
|
Legal Proceedings
|
ITEM 4.
|
Mine Safety Disclosures
|
ITEM 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
12/31/2008
|
|
12/31/2009
|
|
12/31/2010
|
|
12/31/2011
|
|
12/31/2012
|
|
12/31/2013
|
Cumulative 5 Year Total Return
|
|||||||
Diamond Hill Investment Group, Inc.
|
100
|
|
|
114
|
|
|
152
|
|
|
166
|
|
|
185
|
|
|
327
|
|
227
|
%
|
Russell Microcap® Index
|
100
|
|
|
127
|
|
|
164
|
|
|
149
|
|
|
178
|
|
|
259
|
|
159
|
%
|
Peer Group*
|
100
|
|
|
150
|
|
|
169
|
|
|
126
|
|
|
120
|
|
|
235
|
|
135
|
%
|
|
2013
|
|
2012
|
||||||||||||||||||||
|
High
Price
|
|
Low
Price
|
|
Dividend
Per Share
|
|
High
Price
|
|
Low
Price
|
|
Dividend
Per Share
|
||||||||||||
Quarter ended:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
March 31
|
$
|
79.30
|
|
|
$
|
67.34
|
|
|
$
|
—
|
|
|
$
|
79.37
|
|
|
$
|
72.95
|
|
|
$
|
—
|
|
June 30
|
$
|
85.59
|
|
|
$
|
72.50
|
|
|
$
|
—
|
|
|
$
|
78.29
|
|
|
$
|
64.75
|
|
|
$
|
—
|
|
September 30
|
$
|
113.16
|
|
|
$
|
86.21
|
|
|
$
|
—
|
|
|
$
|
79.30
|
|
|
$
|
70.27
|
|
|
$
|
—
|
|
December 31
|
$
|
124.25
|
|
|
$
|
104.86
|
|
|
$
|
3.00
|
|
|
$
|
80.79
|
|
|
$
|
67.73
|
|
|
$
|
8.00
|
|
Period
|
Total Number
of Shares Purchased |
|
Average Price
Paid Per Share |
|
Total Number
of Shares Purchased as part of Publicly Announced Plans or Programs |
|
Maximum Number
of Shares That May Yet Be Purchased Under the Plans or Programs(a) |
||||
October 1, 2013 through October 31, 2013
|
—
|
|
|
—
|
|
|
—
|
|
|
318,433
|
|
November 1, 2013 through November 30, 2013
|
—
|
|
|
—
|
|
|
—
|
|
|
318,433
|
|
December 1, 2013 through December 31, 2013
|
—
|
|
|
—
|
|
|
—
|
|
|
318,433
|
|
(a)
|
The Company’s current share repurchase program was announced on August 9, 2007. The board of directors authorized management to repurchase up to 350,000 of our common shares in the open market and in private transactions in accordance with applicable securities laws. Our repurchase program is not subject to an expiration date.
|
ITEM 6.
|
Selected Financial Data
|
|
For the Years Ended December 31,
|
||||||||||||||||||
(in thousands, except per share data)
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
81,432
|
|
|
$
|
66,657
|
|
|
$
|
63,895
|
|
|
$
|
56,795
|
|
|
$
|
43,606
|
|
Compensation and related costs
|
40,852
|
|
|
33,868
|
|
|
32,875
|
|
|
30,991
|
|
|
24,114
|
|
|||||
Other expenses
|
9,898
|
|
|
8,361
|
|
|
7,959
|
|
|
7,331
|
|
|
7,380
|
|
|||||
Total expenses
|
50,750
|
|
|
42,229
|
|
|
40,834
|
|
|
38,322
|
|
|
31,494
|
|
|||||
Net operating income
|
30,682
|
|
|
24,428
|
|
|
23,061
|
|
|
18,473
|
|
|
12,112
|
|
|||||
Operating profit margin
|
37.7
|
%
|
|
36.6
|
%
|
|
36.1
|
%
|
|
32.5
|
%
|
|
27.8
|
%
|
|||||
Net income
|
22,155
|
|
|
16,931
|
|
|
14,353
|
|
|
12,402
|
|
|
11,374
|
|
|||||
Per Share Information:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings
|
$
|
7.05
|
|
|
$
|
5.44
|
|
|
$
|
4.86
|
|
|
$
|
4.48
|
|
|
$
|
4.40
|
|
Diluted earnings
|
6.94
|
|
|
5.44
|
|
|
4.86
|
|
|
4.48
|
|
|
4.40
|
|
|||||
Cash dividend declared
|
3.00
|
|
|
8.00
|
|
|
5.00
|
|
|
13.00
|
|
|
10.00
|
|
|||||
Weighted Average Shares Outstanding
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
3,142
|
|
|
3,111
|
|
|
2,952
|
|
|
2,767
|
|
|
2,583
|
|
|||||
Diluted
|
3,194
|
|
|
3,111
|
|
|
2,952
|
|
|
2,768
|
|
|
2,588
|
|
|||||
|
At December 31,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
Balance Sheet Data (in thousands):
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
75,353
|
|
|
$
|
41,236
|
|
|
$
|
37,720
|
|
|
$
|
28,566
|
|
|
$
|
40,505
|
|
Long-term debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Shareholders equity
|
44,943
|
|
|
21,736
|
|
|
18,050
|
|
|
7,498
|
|
|
22,981
|
|
|||||
Assets Under Management (in millions)
|
$
|
12,186
|
|
|
$
|
9,429
|
|
|
$
|
8,671
|
|
|
$
|
8,623
|
|
|
$
|
6,283
|
|
Net Client Flows (in millions)
|
(308
|
)
|
|
(219
|
)
|
|
3
|
|
|
1,698
|
|
|
579
|
|
ITEM 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
For the Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Ending AUM (in millions)
|
$
|
12,186
|
|
|
$
|
9,429
|
|
|
$
|
8,671
|
|
Average AUM (in millions)
|
10,817
|
|
|
9,249
|
|
|
8,825
|
|
|||
Total Revenue (in thousands)
|
81,432
|
|
|
66,657
|
|
|
63,895
|
|
|||
Total Expenses (in thousands)
|
50,750
|
|
|
42,229
|
|
|
40,834
|
|
|||
Average Advisory Fee Rate
|
0.65
|
%
|
|
0.62
|
%
|
|
0.63
|
%
|
|||
Operating Profit Margin
|
37.7
|
%
|
|
36.6
|
%
|
|
36.1
|
%
|
|
Assets Under Management by Product
As of December 31, |
||||||||||
(in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Proprietary funds
|
$
|
7,600
|
|
|
$
|
5,251
|
|
|
$
|
4,405
|
|
Sub-advised funds
|
444
|
|
|
947
|
|
|
972
|
|
|||
Institutional accounts
|
4,142
|
|
|
3,231
|
|
|
3,294
|
|
|||
Total AUM
|
$
|
12,186
|
|
|
$
|
9,429
|
|
|
$
|
8,671
|
|
|
Change in Assets Under Management
For the Year Ended December 31, |
||||||||||
(in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
AUM at beginning of the year
|
$
|
9,429
|
|
|
$
|
8,671
|
|
|
$
|
8,623
|
|
Net cash inflows (outflows)
|
|
|
|
|
|
||||||
proprietary funds
|
713
|
|
|
429
|
|
|
56
|
|
|||
sub-advised funds
|
(758
|
)
|
|
(149
|
)
|
|
21
|
|
|||
institutional accounts
|
(263
|
)
|
|
(499
|
)
|
|
(74
|
)
|
|||
|
(308
|
)
|
|
(219
|
)
|
|
3
|
|
|||
Net market appreciation and income
|
3,065
|
|
|
977
|
|
|
45
|
|
|||
Increase during the year
|
2,757
|
|
|
758
|
|
|
48
|
|
|||
AUM at end of the year
|
$
|
12,186
|
|
|
$
|
9,429
|
|
|
$
|
8,671
|
|
(in thousands, except per share data)
|
2013
|
|
2012
|
|
% Change
|
|
2012
|
|
2011
|
|
% Change
|
||||||||||
Net operating income
|
$
|
30,682
|
|
|
$
|
24,428
|
|
|
26
|
%
|
|
$
|
24,428
|
|
|
$
|
23,061
|
|
|
6
|
%
|
Net operating income after tax
(a)
|
$
|
19,077
|
|
|
$
|
15,857
|
|
|
20
|
%
|
|
$
|
15,857
|
|
|
$
|
14,394
|
|
|
10
|
%
|
Net income
|
$
|
22,155
|
|
|
$
|
16,931
|
|
|
31
|
%
|
|
$
|
16,931
|
|
|
$
|
14,353
|
|
|
18
|
%
|
Net operating income after tax per share
(a)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
6.07
|
|
|
$
|
5.10
|
|
|
19
|
%
|
|
$
|
5.10
|
|
|
$
|
4.88
|
|
|
5
|
%
|
Diluted
|
$
|
5.97
|
|
|
$
|
5.10
|
|
|
17
|
%
|
|
$
|
5.10
|
|
|
$
|
4.88
|
|
|
5
|
%
|
Net income per share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
7.05
|
|
|
$
|
5.44
|
|
|
30
|
%
|
|
$
|
5.44
|
|
|
$
|
4.86
|
|
|
12
|
%
|
Diluted
|
$
|
6.94
|
|
|
$
|
5.44
|
|
|
28
|
%
|
|
$
|
5.44
|
|
|
$
|
4.86
|
|
|
12
|
%
|
Operating profit margin
|
37.7
|
%
|
|
36.6
|
%
|
|
NM
|
|
|
36.6
|
%
|
|
36.1
|
%
|
|
NM
|
|
(a)
|
Net operating income after tax is a non-GAAP performance measure. See Use of Supplemental Data as Non-GAAP Performance Measure on page 22 of this report.
|
(in thousands)
|
2013
|
|
2012
|
|
% Change
|
|
2012
|
|
2011
|
|
% Change
|
||||||||||
Investment advisory
|
$
|
69,967
|
|
|
$
|
57,783
|
|
|
21
|
%
|
|
$
|
57,783
|
|
|
$
|
56,017
|
|
|
3
|
%
|
Mutual fund administration, net
|
11,465
|
|
|
8,874
|
|
|
29
|
%
|
|
8,874
|
|
|
7,878
|
|
|
13
|
%
|
||||
Total
|
81,432
|
|
|
66,657
|
|
|
22
|
%
|
|
66,657
|
|
|
63,895
|
|
|
4
|
%
|
(in thousands)
|
2013
|
|
2012
|
|
% Change
|
|
2012
|
|
2011
|
|
% Change
|
||||||||||
Compensation and related costs
|
$
|
40,852
|
|
|
$
|
33,868
|
|
|
21
|
%
|
|
$
|
33,868
|
|
|
$
|
32,875
|
|
|
3
|
%
|
General and administrative
|
6,043
|
|
|
4,987
|
|
|
21
|
%
|
|
4,987
|
|
|
4,738
|
|
|
5
|
%
|
||||
Sales and marketing
|
1,389
|
|
|
1,065
|
|
|
30
|
%
|
|
1,065
|
|
|
832
|
|
|
28
|
%
|
||||
Third party distribution
|
710
|
|
|
752
|
|
|
(6
|
)%
|
|
752
|
|
|
885
|
|
|
(15
|
)%
|
||||
Mutual fund administration
|
1,756
|
|
|
1,557
|
|
|
13
|
%
|
|
1,557
|
|
|
1,504
|
|
|
4
|
%
|
||||
Total
|
50,750
|
|
|
42,229
|
|
|
20
|
%
|
|
42,229
|
|
|
40,834
|
|
|
3
|
%
|
|
At or For the Quarter Ended
|
||||||||||||||||||||||||||||||
|
2013
|
|
2012
|
||||||||||||||||||||||||||||
(in thousands, except per share data)
|
12/31
|
|
09/30
|
|
06/30
|
|
03/31
|
|
12/31
|
|
09/30
|
|
06/30
|
|
03/31
|
||||||||||||||||
Assets under management (in millions)
|
$
|
12,186
|
|
|
$
|
11,040
|
|
|
$
|
10,427
|
|
|
$
|
10,574
|
|
|
$
|
9,429
|
|
|
$
|
9,681
|
|
|
$
|
9,164
|
|
|
$
|
9,360
|
|
Total revenue
|
22,324
|
|
|
20,819
|
|
|
19,914
|
|
|
18,375
|
|
|
16,982
|
|
|
16,869
|
|
|
16,175
|
|
|
16,632
|
|
||||||||
Total operating expenses
|
12,890
|
|
|
13,350
|
|
|
12,762
|
|
|
11,748
|
|
|
10,435
|
|
|
10,839
|
|
|
10,344
|
|
|
10,611
|
|
||||||||
Operating income
|
9,434
|
|
|
7,469
|
|
|
7,152
|
|
|
6,627
|
|
|
6,547
|
|
|
6,030
|
|
|
5,831
|
|
|
6,021
|
|
||||||||
Investment income (loss)
|
1,482
|
|
|
914
|
|
|
729
|
|
|
1,825
|
|
|
229
|
|
|
621
|
|
|
(468
|
)
|
|
1,272
|
|
||||||||
Net income
|
$
|
6,750
|
|
|
$
|
5,362
|
|
|
$
|
4,712
|
|
|
$
|
5,331
|
|
|
$
|
4,825
|
|
|
$
|
4,167
|
|
|
$
|
3,328
|
|
|
$
|
4,611
|
|
Diluted EPS
|
$
|
2.10
|
|
|
$
|
1.67
|
|
|
$
|
1.45
|
|
|
$
|
1.67
|
|
|
$
|
1.53
|
|
|
$
|
1.32
|
|
|
$
|
1.07
|
|
|
$
|
1.52
|
|
Diluted weighted shares outstanding
|
3,222
|
|
|
3,212
|
|
|
3,248
|
|
|
3,197
|
|
|
3,159
|
|
|
3,154
|
|
|
3,101
|
|
|
3,031
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||
(in thousands)
|
Total
|
|
2014
|
|
2015-2016
|
|
2017-2018
|
|
Later
|
||||||||||
Operating lease obligations
|
$
|
6,935
|
|
|
$
|
683
|
|
|
$
|
1,386
|
|
|
$
|
1,322
|
|
|
$
|
3,544
|
|
Purchase obligations
|
6,809
|
|
|
3,231
|
|
|
3,578
|
|
|
—
|
|
|
—
|
|
|||||
Deferred compensation obligations
|
1,288
|
|
|
—
|
|
|
1,288
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
15,032
|
|
|
$
|
3,914
|
|
|
$
|
6,252
|
|
|
$
|
1,322
|
|
|
$
|
3,544
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands, except per share data)
|
2013
|
|
2012
|
|
2011
|
||||||
Net operating income, GAAP basis
|
$
|
30,682
|
|
|
$
|
24,428
|
|
|
$
|
23,061
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
||||||
Tax provision excluding impact of investment income
|
11,605
|
|
|
8,571
|
|
|
8,667
|
|
|||
Net operating income after tax, non-GAAP basis
|
$
|
19,077
|
|
|
$
|
15,857
|
|
|
$
|
14,394
|
|
Net operating income after tax per basic share, non-GAAP basis
|
$
|
6.07
|
|
|
$
|
5.10
|
|
|
$
|
4.88
|
|
Net operating income after tax per diluted share, non-GAAP basis
|
$
|
5.97
|
|
|
$
|
5.10
|
|
|
$
|
4.88
|
|
Basic weighted average shares outstanding, GAAP basis
|
3,142
|
|
|
3,111
|
|
|
2,952
|
|
|||
Diluted weighted average shares outstanding, GAAP basis
|
3,194
|
|
|
3,111
|
|
|
2,952
|
|
ITEM 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
Fair Value as of
December 31, 2013 |
|
Fair Value
Assuming a Hypothetical 10% Increase |
|
Fair Value
Assuming a Hypothetical 10% Decrease |
||||||
Equity investments
|
$
|
18,726,070
|
|
|
$
|
20,598,677
|
|
|
$
|
16,853,463
|
|
ITEM 8.
|
Financial Statements and Supplementary Data
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
33,106,972
|
|
|
$
|
7,870,908
|
|
Investment portfolio
|
18,726,070
|
|
|
16,503,731
|
|
||
Accounts receivable
|
13,002,295
|
|
|
10,438,598
|
|
||
Prepaid expenses
|
1,489,713
|
|
|
953,526
|
|
||
Furniture and equipment, net of depreciation
|
964,943
|
|
|
745,476
|
|
||
Income tax receivable
|
—
|
|
|
2,271,704
|
|
||
Deferred taxes
|
8,063,425
|
|
|
2,451,974
|
|
||
Total assets
|
$
|
75,353,418
|
|
|
$
|
41,235,917
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
4,049,240
|
|
|
$
|
2,797,483
|
|
Accrued incentive compensation
|
19,606,881
|
|
|
15,908,083
|
|
||
Deferred compensation liability
|
1,287,745
|
|
|
794,644
|
|
||
Income taxes payable
|
5,466,562
|
|
|
—
|
|
||
Total liabilities
|
30,410,428
|
|
|
19,500,210
|
|
||
Commitments and contingencies
|
—
|
|
|
—
|
|
||
Shareholders’ Equity
|
|
|
|
||||
Common stock, no par value
7,000,000 shares authorized; 3,257,247 issued and outstanding at December 31, 2013 (inclusive of 312,099 unvested shares); 3,169,987 issued and outstanding at December 31, 2012 (inclusive of 319,988 unvested shares) |
72,642,933
|
|
|
65,255,813
|
|
||
Preferred stock, undesignated, 1,000,000 shares authorized and unissued
|
—
|
|
|
—
|
|
||
Deferred equity compensation
|
(11,397,560
|
)
|
|
(14,829,470
|
)
|
||
Accumulated deficit
|
(16,302,383
|
)
|
|
(28,690,636
|
)
|
||
Total shareholders’ equity
|
44,942,990
|
|
|
21,735,707
|
|
||
Total liabilities and shareholders’ equity
|
$
|
75,353,418
|
|
|
$
|
41,235,917
|
|
|
|
|
|
||||
Book value per share
|
$
|
13.80
|
|
|
$
|
6.86
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
REVENUES:
|
|
|
|
|
|
||||||
Investment advisory
|
$
|
69,966,377
|
|
|
$
|
57,783,131
|
|
|
$
|
56,016,708
|
|
Mutual fund administration, net
|
11,465,327
|
|
|
8,874,177
|
|
|
7,878,556
|
|
|||
Total revenue
|
81,431,704
|
|
|
66,657,308
|
|
|
63,895,264
|
|
|||
OPERATING EXPENSES:
|
|
|
|
|
|
||||||
Compensation and related costs
|
40,851,722
|
|
|
33,868,225
|
|
|
32,874,606
|
|
|||
General and administrative
|
6,042,781
|
|
|
4,986,559
|
|
|
4,737,831
|
|
|||
Sales and marketing
|
1,388,792
|
|
|
1,064,643
|
|
|
832,429
|
|
|||
Third party distribution
|
710,123
|
|
|
752,481
|
|
|
885,280
|
|
|||
Mutual fund administration
|
1,756,366
|
|
|
1,556,909
|
|
|
1,504,005
|
|
|||
Total operating expenses
|
50,749,784
|
|
|
42,228,817
|
|
|
40,834,151
|
|
|||
NET OPERATING INCOME
|
30,681,920
|
|
|
24,428,491
|
|
|
23,061,113
|
|
|||
Investment income (loss)
|
4,950,245
|
|
|
1,654,124
|
|
|
(66,664
|
)
|
|||
INCOME BEFORE TAXES
|
35,632,165
|
|
|
26,082,615
|
|
|
22,994,449
|
|
|||
Income tax provision
|
(13,477,337
|
)
|
|
(9,151,723
|
)
|
|
(8,641,481
|
)
|
|||
NET INCOME
|
$
|
22,154,828
|
|
|
$
|
16,930,892
|
|
|
$
|
14,352,968
|
|
Earnings per share
|
|
|
|
|
|
||||||
Basic
|
$
|
7.05
|
|
|
$
|
5.44
|
|
|
$
|
4.86
|
|
Diluted
|
$
|
6.94
|
|
|
$
|
5.44
|
|
|
$
|
4.86
|
|
Weighted average shares outstanding
|
|
|
|
|
|
||||||
Basic
|
3,142,083
|
|
|
3,111,328
|
|
|
2,951,751
|
|
|||
Diluted
|
3,194,263
|
|
|
3,111,328
|
|
|
2,951,751
|
|
|
Shares
Outstanding
|
|
Common
Stock
|
|
Deferred
Compensation
|
|
Retained Earnings
(Accumulated Deficit)
|
|
Total
|
|||||||||
Balance at January 1, 2011
|
2,795,683
|
|
|
$
|
34,423,011
|
|
|
$
|
(7,137,729
|
)
|
|
$
|
(19,787,030
|
)
|
|
$
|
7,498,252
|
|
Issuance of restricted stock grants
|
109,333
|
|
|
8,686,586
|
|
|
(8,686,586
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of restricted stock grants
|
—
|
|
|
—
|
|
|
3,742,909
|
|
|
—
|
|
|
3,742,909
|
|
||||
Issuance of stock grants
|
103,899
|
|
|
7,691,800
|
|
|
—
|
|
|
—
|
|
|
7,691,800
|
|
||||
Issuance of common stock related to 401k plan match
|
12,754
|
|
|
960,888
|
|
|
—
|
|
|
—
|
|
|
960,888
|
|
||||
Net excess tax benefit from vested restricted stock grants
|
—
|
|
|
7,007
|
|
|
—
|
|
|
—
|
|
|
7,007
|
|
||||
Shares withheld related to employee tax withholding
|
(2,025
|
)
|
|
(158,988
|
)
|
|
—
|
|
|
—
|
|
|
(158,988
|
)
|
||||
Forfeiture of restricted stock grants
|
(8,368
|
)
|
|
(541,774
|
)
|
|
541,774
|
|
|
—
|
|
|
—
|
|
||||
Repurchase of common stock
|
(15,462
|
)
|
|
(1,072,908
|
)
|
|
—
|
|
|
—
|
|
|
(1,072,908
|
)
|
||||
Cash Dividend Paid of $5.00 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,971,570
|
)
|
|
(14,971,570
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
14,352,968
|
|
|
14,352,968
|
|
||||
Balance at December 31, 2011
|
2,995,814
|
|
|
$
|
49,995,622
|
|
|
$
|
(11,539,632
|
)
|
|
$
|
(20,405,632
|
)
|
|
$
|
18,050,358
|
|
Issuance of restricted stock grants
|
107,600
|
|
|
8,139,135
|
|
|
(8,139,135
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of restricted stock grants
|
—
|
|
|
—
|
|
|
4,693,926
|
|
|
—
|
|
|
4,693,926
|
|
||||
Issuance of stock grants
|
71,949
|
|
|
5,540,792
|
|
|
—
|
|
|
—
|
|
|
5,540,792
|
|
||||
Issuance of common stock related to 401k plan match
|
14,239
|
|
|
1,057,056
|
|
|
—
|
|
|
—
|
|
|
1,057,056
|
|
||||
Tax benefit from dividend payments related to restricted stock grants
|
—
|
|
|
1,992,298
|
|
|
—
|
|
|
—
|
|
|
1,992,298
|
|
||||
Net excess tax benefit from vested restricted stock grants
|
—
|
|
|
34,543
|
|
|
—
|
|
|
—
|
|
|
34,543
|
|
||||
Shares withheld related to employee tax withholding
|
(17,438
|
)
|
|
(1,348,262
|
)
|
|
—
|
|
|
—
|
|
|
(1,348,262
|
)
|
||||
Forfeiture of restricted stock grants
|
(2,177
|
)
|
|
(155,371
|
)
|
|
155,371
|
|
|
—
|
|
|
—
|
|
||||
Cash Dividend Paid of $8.00 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,215,896
|
)
|
|
(25,215,896
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
16,930,892
|
|
|
16,930,892
|
|
||||
Balance at December 31, 2012
|
3,169,987
|
|
|
$
|
65,255,813
|
|
|
$
|
(14,829,470
|
)
|
|
$
|
(28,690,636
|
)
|
|
$
|
21,735,707
|
|
Issuance of restricted stock grants
|
32,000
|
|
|
2,740,030
|
|
|
(2,740,030
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of restricted stock grants
|
—
|
|
|
—
|
|
|
6,161,047
|
|
|
—
|
|
|
6,161,047
|
|
||||
Issuance of stock grants
|
59,006
|
|
|
4,606,008
|
|
|
—
|
|
|
—
|
|
|
4,606,008
|
|
||||
Issuance of common stock related to 401k plan match
|
12,894
|
|
|
1,158,354
|
|
|
—
|
|
|
—
|
|
|
1,158,354
|
|
||||
Tax benefit from dividend payments related to restricted stock grants
|
—
|
|
|
357,188
|
|
|
—
|
|
|
—
|
|
|
357,188
|
|
||||
Net excess tax benefit from vested restricted stock grants
|
—
|
|
|
420,620
|
|
|
—
|
|
|
—
|
|
|
420,620
|
|
||||
Shares withheld related to employee tax withholding
|
(16,500
|
)
|
|
(1,884,187
|
)
|
|
—
|
|
|
—
|
|
|
(1,884,187
|
)
|
||||
Forfeiture of restricted stock grants
|
(140
|
)
|
|
(10,893
|
)
|
|
10,893
|
|
|
—
|
|
|
—
|
|
||||
Cash Dividend Paid of $3.00 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,766,575
|
)
|
|
(9,766,575
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
22,154,828
|
|
|
22,154,828
|
|
||||
Balance at December 31, 2013
|
3,257,247
|
|
|
$
|
72,642,933
|
|
|
$
|
(11,397,560
|
)
|
|
$
|
(16,302,383
|
)
|
|
$
|
44,942,990
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net Income
|
$
|
22,154,828
|
|
|
$
|
16,930,892
|
|
|
$
|
14,352,968
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation on furniture and equipment
|
306,005
|
|
|
305,897
|
|
|
330,971
|
|
|||
Stock-based compensation
|
7,319,401
|
|
|
5,750,981
|
|
|
4,933,613
|
|
|||
Increase in accounts receivable
|
(2,563,697
|
)
|
|
(142,875
|
)
|
|
(1,600,620
|
)
|
|||
Change in current income taxes
|
8,520,834
|
|
|
(105,166
|
)
|
|
(976,574
|
)
|
|||
Change in deferred income taxes
|
(5,616,211
|
)
|
|
(368,572
|
)
|
|
(1,221,328
|
)
|
|||
Net investment (gain) loss
|
(4,270,928
|
)
|
|
(1,135,598
|
)
|
|
111,078
|
|
|||
Increase in accrued compensation
|
8,797,907
|
|
|
5,469,062
|
|
|
8,125,191
|
|
|||
Excess income tax benefit from stock-based compensation
|
(425,380
|
)
|
|
(34,543
|
)
|
|
(7,007
|
)
|
|||
Income tax benefit from dividends paid on unvested shares
|
(357,188
|
)
|
|
(1,992,298
|
)
|
|
—
|
|
|||
Other changes in assets and liabilities
|
715,570
|
|
|
(131,087
|
)
|
|
(1,339,002
|
)
|
|||
Net cash provided by operating activities
|
34,581,141
|
|
|
24,546,693
|
|
|
22,709,290
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Purchase of furniture and equipment
|
(525,472
|
)
|
|
(221,592
|
)
|
|
(253,082
|
)
|
|||
Cost of investments purchased and other portfolio activity
|
(2,306,947
|
)
|
|
(7,463,796
|
)
|
|
(925,507
|
)
|
|||
Proceeds from sale of investments
|
4,355,536
|
|
|
304,152
|
|
|
4,133,000
|
|
|||
Net cash provided by (used in) investing activities
|
1,523,117
|
|
|
(7,381,236
|
)
|
|
2,954,411
|
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Payment for repurchase of common shares
|
—
|
|
|
—
|
|
|
(1,072,908
|
)
|
|||
Shares withheld related to employee tax withholding
|
(1,884,187
|
)
|
|
(1,348,262
|
)
|
|
(158,988
|
)
|
|||
Excess income tax benefit from stock-based compensation
|
425,380
|
|
|
34,543
|
|
|
7,007
|
|
|||
Income tax benefit from dividends paid on unvested shares
|
357,188
|
|
|
1,992,298
|
|
|
—
|
|
|||
Payment of dividends
|
(9,766,575
|
)
|
|
(25,215,896
|
)
|
|
(14,971,570
|
)
|
|||
Net cash used in financing activities
|
(10,868,194
|
)
|
|
(24,537,317
|
)
|
|
(16,196,459
|
)
|
|||
CASH AND CASH EQUIVALENTS
|
|
|
|
|
|
||||||
Net change during the year
|
25,236,064
|
|
|
(7,371,860
|
)
|
|
9,467,242
|
|
|||
At beginning of year
|
7,870,908
|
|
|
15,242,768
|
|
|
5,775,526
|
|
|||
At end of year
|
$
|
33,106,972
|
|
|
$
|
7,870,908
|
|
|
$
|
15,242,768
|
|
Supplemental cash flow information:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Income taxes paid
|
10,575,000
|
|
|
9,636,000
|
|
|
10,849,000
|
|
|||
Supplemental disclosure of non-cash transactions:
|
|
|
|
|
|
||||||
Common stock issued as incentive compensation
|
4,606,008
|
|
|
5,540,792
|
|
|
7,461,984
|
|
|
As of December 31,
|
||||||
|
2013
|
|
2012
|
||||
Level 1 Inputs
|
$
|
32,528,367
|
|
|
$
|
16,922,720
|
|
Level 2 Inputs
|
3,001,461
|
|
|
3,650,561
|
|
|
As of December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
AUM Contractual Period Ends:
|
|
|
|
|
|
||||||
Calendar Quarter-End
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
89,070,421
|
|
Calendar Year-End
|
—
|
|
|
—
|
|
|
81,362,029
|
|
|||
Quarter Ended June 30, 2017
|
380,073,000
|
|
|
274,302,549
|
|
|
—
|
|
|||
Quarter Ended December 31, 2018
|
90,653,000
|
|
|
—
|
|
|
—
|
|
|||
Total AUM Subject to Incentive Fees
|
$
|
470,726,000
|
|
|
$
|
274,302,549
|
|
|
$
|
170,432,450
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Incentive Fees Under Method 1:
|
|
|
|
|
|
||||||
Contractual Period Ends:
|
|
|
|
|
|
||||||
Calendar Quarter-End
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
507
|
|
Calendar Year-End
|
—
|
|
|
—
|
|
|
2,090
|
|
|||
Quarter Ended June 30, 2017
|
—
|
|
|
3,301
|
|
|
—
|
|
|||
Quarter Ended December 31, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total Incentive Fees Under Method 1
|
$
|
—
|
|
|
$
|
3,301
|
|
|
$
|
2,597
|
|
Incentive Fees Under Method 2:
|
|
|
|
|
|
||||||
Contractual Period Ends:
|
|
|
|
|
|
||||||
Calendar Quarter-End
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
507
|
|
Calendar Year-End
|
—
|
|
|
—
|
|
|
2,090
|
|
|||
Quarter Ended June 30, 2017
|
3,900,649
|
|
|
361,700
|
|
|
—
|
|
|||
Quarter Ended December 31, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total Incentive Fees Under Method 2
|
$
|
3,900,649
|
|
|
$
|
361,700
|
|
|
$
|
2,597
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Mutual fund administration:
|
|
|
|
|
|
||||||
Administration revenue, gross
|
$
|
16,692,093
|
|
|
$
|
13,074,707
|
|
|
$
|
11,617,140
|
|
12b-1/service fees and commission revenue received from fund clients
|
8,481,442
|
|
|
6,868,974
|
|
|
7,058,471
|
|
|||
12b-1/service fees and commission expense payments to third parties
|
(7,404,361
|
)
|
|
(5,597,757
|
)
|
|
(5,577,925
|
)
|
|||
Fund related expense
|
(6,321,374
|
)
|
|
(5,469,023
|
)
|
|
(5,254,733
|
)
|
|||
Revenue, net of fund related expenses
|
11,447,800
|
|
|
8,876,901
|
|
|
7,842,953
|
|
|||
DHCM C-Share financing:
|
|
|
|
|
|
||||||
Broker commission advance repayments
|
365,380
|
|
|
217,227
|
|
|
352,740
|
|
|||
Broker commission amortization
|
(347,853
|
)
|
|
(219,951
|
)
|
|
(317,137
|
)
|
|||
Financing activity, net
|
17,527
|
|
|
(2,724
|
)
|
|
35,603
|
|
|||
Mutual fund administration revenue, net
|
$
|
11,465,327
|
|
|
$
|
8,874,177
|
|
|
$
|
7,878,556
|
|
|
As of December 31,
|
||||||
|
2013
|
|
2012
|
||||
Diamond Hill Small Cap Fund
|
$
|
—
|
|
|
$
|
215,550
|
|
Diamond Hill Small-Mid Cap Fund
|
—
|
|
|
239,316
|
|
||
Diamond Hill Large Cap Fund
|
—
|
|
|
246,744
|
|
||
Diamond Hill Select Fund
|
—
|
|
|
242,252
|
|
||
Diamond Hill Long-Short Fund
|
1,287,745
|
|
|
1,036,045
|
|
||
Diamond Hill Financial Long-Short Fund
|
1,131,034
|
|
|
—
|
|
||
Diamond Hill Research Opportunities Fund
|
13,305,830
|
|
|
10,658,665
|
|
||
Diamond Hill Strategic Income Fund
|
—
|
|
|
214,598
|
|
||
Diamond Hill Investment Partners, L.P.
|
1,133
|
|
|
7,336
|
|
||
Diamond Hill Global Fund, L.P.
(a)
|
—
|
|
|
1,384,976
|
|
||
Diamond Hill Valuation-Weighted 500, L.P.
|
3,000,328
|
|
|
2,258,249
|
|
||
Total Investment Portfolio
|
$
|
18,726,070
|
|
|
$
|
16,503,731
|
|
|
As of December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Total partnership assets
|
$
|
122,106,403
|
|
|
$
|
105,472,952
|
|
|
$
|
130,880,368
|
|
Total partnership liabilities
|
25,217,600
|
|
|
17,786,579
|
|
|
21,570,822
|
|
|||
Net partnership assets
|
$
|
96,888,803
|
|
|
$
|
87,686,373
|
|
|
$
|
109,309,546
|
|
DHCM’s portion of net assets
|
$
|
3,001,461
|
|
|
$
|
3,650,561
|
|
|
$
|
6,977,929
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net partnership income (loss)
|
$
|
24,294,495
|
|
|
$
|
15,054,951
|
|
|
$
|
(11,007,617
|
)
|
DHCM’s portion of net income (loss)
|
$
|
899,958
|
|
|
$
|
472,659
|
|
|
$
|
(75,082
|
)
|
|
Shares
|
|
Weighted-Average
Grant Date Price per Share |
|||
Outstanding restricted stock grants as of December 31, 2011
|
260,621
|
|
|
$
|
73.78
|
|
Grants issued
|
107,600
|
|
|
75.64
|
|
|
Grants vested
|
(46,056
|
)
|
|
75.22
|
|
|
Grants forfeited
|
(2,177
|
)
|
|
71.37
|
|
|
Outstanding restricted stock grants as of December 31, 2012
|
319,988
|
|
|
$
|
74.22
|
|
Grants issued
|
32,000
|
|
|
85.63
|
|
|
Grants vested
|
(39,749
|
)
|
|
80.77
|
|
|
Grants forfeited
|
(140
|
)
|
|
77.81
|
|
|
Total outstanding restricted stock grants as of December 31, 2013
|
312,099
|
|
|
$
|
74.17
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Total
|
||||||||||||
$
|
4,647,324
|
|
|
$
|
3,588,155
|
|
|
$
|
1,641,218
|
|
|
$
|
1,024,797
|
|
|
$
|
261,197
|
|
|
$
|
11,162,691
|
|
|
Shares Issued
|
|
Grant Date Value
|
|||
December 31, 2013
|
59,006
|
|
|
$
|
4,606,008
|
|
December 31, 2012
|
71,949
|
|
|
5,540,792
|
|
|
December 31, 2011
|
103,899
|
|
|
7,691,800
|
|
2013
|
|
2012
|
|
2011
|
||||||
$
|
1,171,154
|
|
|
$
|
1,044,255
|
|
|
$
|
960,888
|
|
For the year ended December 31,
|
||||||||||
2013
|
|
2012
|
|
2011
|
||||||
$
|
730,845
|
|
|
$
|
686,747
|
|
|
$
|
620,360
|
|
|
|
Future Minimum Lease Payments by Year
|
||||||||||||||||||||||||
Total
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
||||||||||||||
$
|
6,935,000
|
|
|
$
|
683,000
|
|
|
$
|
693,000
|
|
|
$
|
693,000
|
|
|
$
|
693,000
|
|
|
$
|
629,000
|
|
|
$
|
3,544,000
|
|
|
As of December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Current city income tax provision
|
$
|
952,957
|
|
|
$
|
406,814
|
|
|
$
|
658,106
|
|
Current state income tax provision
|
268,920
|
|
|
122,704
|
|
|
271,776
|
|
|||
Current federal income tax provision
|
17,866,911
|
|
|
8,990,777
|
|
|
8,921,527
|
|
|||
Deferred federal income tax benefit
|
(5,611,451
|
)
|
|
(368,572
|
)
|
|
(1,209,928
|
)
|
|||
Provision for income taxes
|
$
|
13,477,337
|
|
|
$
|
9,151,723
|
|
|
$
|
8,641,481
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Income tax computed at statutory rate
|
$
|
12,471,258
|
|
|
$
|
9,128,915
|
|
|
$
|
8,048,057
|
|
City and state income taxes, net of federal benefit
|
794,220
|
|
|
344,187
|
|
|
604,423
|
|
|||
Other
|
211,859
|
|
|
(321,379
|
)
|
|
(10,999
|
)
|
|||
Income tax expense
|
$
|
13,477,337
|
|
|
$
|
9,151,723
|
|
|
$
|
8,641,481
|
|
|
2013
|
|
2012
|
||||
Stock-based compensation
|
$
|
4,433,293
|
|
|
$
|
3,289,885
|
|
Accrued incentive compensation
|
4,075,735
|
|
|
—
|
|
||
Unrealized (gains) losses
|
(316,926
|
)
|
|
(763,235
|
)
|
||
Other assets and liabilities
|
(128,677
|
)
|
|
(74,676
|
)
|
||
Net deferred tax assets
|
$
|
8,063,425
|
|
|
$
|
2,451,974
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net income
|
$
|
22,154,828
|
|
|
$
|
16,930,892
|
|
|
$
|
14,352,968
|
|
Weighted average number of outstanding shares
|
|
|
|
|
|
||||||
Basic
|
3,142,083
|
|
|
3,111,328
|
|
|
2,951,751
|
|
|||
Diluted
|
3,194,263
|
|
|
3,111,328
|
|
|
2,951,751
|
|
|||
Earnings per share
|
|
|
|
|
|
||||||
Basic
|
$
|
7.05
|
|
|
5.44
|
|
|
4.86
|
|
||
Diluted
|
$
|
6.94
|
|
|
5.44
|
|
|
4.86
|
|
|
As of December 31,
|
||||||
|
2013
|
|
2012
|
||||
Net Capital
|
$
|
338,568
|
|
|
$
|
354,029
|
|
Minimum Net Capital Requirement
|
90,931
|
|
|
46,597
|
|
||
Ratio of Aggregate Indebtedness to Net Capital
|
4.03 to 1
|
|
|
1.97 to 1
|
|
ITEM 9.
|
Changes In and Disagreements With Accountants on Accounting and Financial Disclosures
|
ITEM 9A.
|
Controls and Procedures
|
ITEM 9B.
|
Other Information
|
ITEM 10.
|
Directors, Executive Officers and Corporate Governance
|
ITEM 11.
|
Executive Compensation
|
ITEM 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
|
(a)
|
|
(b)
|
|
(c)
|
|
||||
Plan category
|
Number of securities to
be issued upon the
exercise of outstanding
options, warrants and
rights
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
|
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a)
|
|
||||
Equity compensation plans approved by security holders
|
—
|
|
|
$
|
—
|
|
|
232,300
|
|
1
|
1
|
This amount relates to common shares that may be issued under our 2011 Equity and Cash Incentive Plan.
|
ITEM 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
ITEM 14.
|
Principal Accounting Fees and Services
|
ITEM 15.
|
Exhibits, Financial Statement Schedules
|
(a) (1)
|
Financial Statements
: See “Part II. Item 8, Financial Statements and Supplementary Data”.
|
(2)
|
Financial Statement Schedules:
All financial statement schedules for which provision is made in the applicable accounting regulations of the SEC are omitted because they are not required or the required information is included in the accompanying financial statements or notes thereto.
|
(3)
|
Exhibits:
|
3.1
|
Amended and Restated Articles of Incorporation of the Company. (Incorporated by reference from Exhibit 3(i) to the Current Report on Form 8-K filed with the SEC on May 7, 2002; File No. 000-24498.)
|
|
|
3.2
|
Regulations of the Company. (Incorporated by reference from Exhibit 3(ii) to the Current Report on Form 8-K filed with the SEC on May 7, 2002; File No. 000-24498.)
|
|
|
10.1
|
Amended and Restated Investment Management Agreement between Diamond Hill Capital Management, Inc. and the Diamond Hill Funds dated as of May 23, 2013. (Incorporated by reference from Exhibit 29(h)(iii) to Post-Effective Amendment Nos. 41 and 42 to Registration Statement on Form N1-A (File Nos. 333-22075 and 811-08061) filed by Diamond Hill Funds on December 19, 2013)
|
|
|
10.2
|
Amended and Restated Administrative and Transfer Agency Services Agreement dated as of May 31, 2002, as amended November 17, 2011, between Diamond Hill Capital Management, Inc. and the Diamond Hill Funds. (Incorporated by reference from Exhibit 28h(ix) to Post-Effective Amendment Nos. 28 and 29 to Registration Statement on Form N1-A (File Nos. 333-22075 and 811-08061) filed by Diamond Hill Funds on February 29, 2012)
|
|
|
10.3*
|
2011 Equity and Cash Incentive Plan and Form of Restricted Stock Award Agreement referenced therein. (Incorporated by reference from Exhibit 10.2 and 10.3 to the Current Report on Form 8-K filed with the SEC on April 29, 2011; File No. 000-24498.)
|
|
|
10.4*
|
Amended and Restated Employment Agreement between the Company and Roderick H. Dillon, Jr. dated March 22, 2011. (Incorporated by reference from Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on March 24, 2011; File No. 000-24498.)
|
|
|
10.5*
|
Amended and Restated 2005 Employee and Director Equity Incentive Plan. (Incorporated by reference from Exhibit 10.6 to the Annual Report on Form 10-K filed with the SEC on March 14, 2008; File No. 000-24498.)
|
|
|
10.6*
|
2005 Employee and Director Equity Incentive Plan First Amendment dated November 2, 2010 and Form of Restricted Stock Agreement reference therein. (Incorporated by reference from Exhibit 10.4 to the Annual Report on Form 10-K filed with the SEC on February 25, 2011; File No. 000-24498.)
|
|
|
10.7*
|
Diamond Hill Investment Group, Inc. Compensation Recoupment and Restitution Policy. (Incorporated by reference from Exhibit 99 to the Current Report on Form 8-K filed with the SEC on February 20, 2013; File No. 000-24498.)
|
|
|
10.8*
|
Diamond Hill Investment Group, Inc. Compensation Recoupment and Restitution Policy Acknowledgement and Agreement. (Incorporated by reference from Exhibit 99.1 to the Current Report on Form 8-K filed with the SEC on February 20, 2013; File No. 000-24498.)
|
|
|
10.9*
|
Diamond Hill Fixed Term Deferred Compensation Plan. (Incorporated by reference from Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on April 30, 2013; File No. 000-24498.)
|
|
|
10.10*
|
Diamond Hill Variable Term Deferred Compensation Plan. (Incorporated by reference from Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on April 30, 2013; File No. 000-24498.)
|
|
|
10.11*
|
First Amendment to the Diamond Hill Fixed Term Deferred Compensation Plan. (Incorporated by reference from Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on May 28, 2013; File No. 000-24498.)
|
|
|
10.12*
|
First Amendment to the Diamond Hill Variable Term Deferred Compensation Plan. (Incorporated by reference from Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on May 28, 2013; File No. 000-24498.)
|
|
|
10.13*
|
Loan Agreement by and between Diamond Hill Capital Management, Inc., Diamond Hill Investment Group, Inc. and The Huntington National Bank dated November 8, 2013. (Incorporated by reference from Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on November 14, 2013; File No. 000-24498.)
|
|
|
10.14*
|
Line of Credit Demand Note with Diamond Hill Capital Management, Inc., Diamond Hill Investment Group, Inc. and The Huntington National Bank dated November 8, 2013. (Incorporated by reference from Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on November 14, 2013; File No. 000-24498.)
|
|
|
14.1
|
Amended Code of Business Conduct and Ethics. (File herewith)
|
|
|
21.1
|
Subsidiaries of the Company. (Filed herewith)
|
|
|
23.1
|
Consent of Independent Registered Public Accounting Firm, KPMG LLP. (Filed herewith)
|
|
|
23.2
|
Consent of Independent Registered Public Accounting Firm, Plante & Moran, PLLC. (Filed herewith)
|
|
|
31.1
|
Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a). (Filed herewith)
|
|
|
31.2
|
Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a). (Filed herewith)
|
|
|
32.1
|
Section 1350 Certifications. (Furnished herewith)
|
|
|
101.ins
|
XBRL Instance Document.
|
|
|
101.sch
|
XBRL Taxonomy Extension Schema Document.
|
|
|
101.cal
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
101.def
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
101.lab
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
101.pre
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
*
|
Denotes management contract or compensatory plan or arrangement.
|
(b
)
|
Exhibits:
Reference is made to Item 15(a)(3) above.
|
(c)
|
Financial Statement Schedules:
None required.
|
DIAMOND HILL INVESTMENT GROUP, INC.
|
|
||
|
|
|
|
By:
|
|
/s/ R. H. Dillon
|
|
|
|
R. H. Dillon, President, Chief Executive Officer and a Director
|
March 7, 2014
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ R. H. Dillon
|
|
President, Chief Executive Officer,
|
|
March 7, 2014
|
R. H. Dillon
|
|
and a Director
|
|
|
|
|
|
|
|
/s/ James F. Laird
|
|
Chief Financial Officer, Treasurer,
|
|
March 7, 2014
|
James F. Laird
|
|
Secretary, and a Director
|
|
|
|
|
|
|
|
/s/ Gary R. Young
|
|
Controller
|
|
March 7, 2014
|
Gary R. Young
|
|
|
|
|
|
|
|
|
|
Randolph J. Fortener*
|
|
Director
|
|
March 7, 2014
|
Randolph J. Fortener
|
|
|
|
|
|
|
|
|
|
Peter J. Moran III*
|
|
Director
|
|
March 7, 2014
|
Peter J. Moran III
|
|
|
|
|
|
|
|
|
|
Donald B. Shackelford*
|
|
Director
|
|
March 7, 2014
|
Donald B. Shackelford
|
|
|
|
|
|
|
|
|
|
Bradley C. Shoup*
|
|
Director
|
|
March 7, 2014
|
Bradley C. Shoup
|
|
|
|
|
|
|
|
|
|
Frances A. Skinner*
|
|
Director
|
|
March 7, 2014
|
Frances A. Skinner
|
|
|
|
|
* By
|
/s/ Gary R. Young
|
|
Gary R. Young
|
|
Executed by Gary R. Young
|
|
on behalf of those indicated pursuant to Powers of Attorney
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
|
(2)
|
full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to the SEC, and other public communication made by the Company;
|
(3)
|
compliance with applicable governmental laws, rules and regulations;
|
(4)
|
prompt internal reporting of violations of the Code to the appropriate persons identified in this Code; and
|
(5)
|
accountability for adherence to this Code.
|
1.
|
Each shall promptly bring to the attention of the Audit Committee any information he or she may have concerning (a) significant deficiencies or material weaknesses in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize and report financial data or (b) any fraud, whether or not
|
2.
|
Each shall promptly bring to the attention of the CEO or Chief Compliance Officer, and to the Audit Committee, any information he or she may have concerning any violation of this Code involving any management or other employees who have a significant role in the Company's financial reporting, disclosures or internal controls.
|
3.
|
Each shall promptly bring to the attention of the CEO or the Chief Compliance Officer and to the Audit Committee, any information he or she may have concerning evidence of a material violation by the Company or any agent thereof of the securities or other laws, rules or regulations applicable to the Company and the operation of its business.
|
Subsidiary company and place of incorporation
|
Ownership
|
Diamond Hill Capital Management, Inc. (Ohio)
|
100%
|
Beacon Hill Fund Services, Inc. (Ohio)
|
100%
|
BHIL Distributors, Inc. (Ohio)
|
100%
|
Date:
|
March 7, 2014
|
/s/ R. H. Dillon
|
|
|
R.H. Dillon
|
|
|
Chief Executive Officer
|
Date:
|
March 7, 2014
|
/s/ James F. Laird
|
|
|
James F. Laird
|
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/S/ R.H. Dillon
|
|
Print Name: R.H. Dillon
|
|
Title: Chief Executive Officer
|
|
Date:
|
March 7, 2014
|
|
|
/S/ James F. Laird
|
|
Print Name: James F. Laird
|
|
Title: Chief Financial Officer
|
|
Date:
|
March 7, 2014
|