DALLAS, Oct. 28 /PRNewswire-FirstCall/ -- Westwood Holdings Group, Inc. (NYSE: WHG) today reported 2004 third quarter revenues of $4.9 million, net income of $685,000, and earnings per diluted share of $0.13. This compares to revenues of $5.3 million, net income of $1.3 million and earnings per diluted share of $0.24 in the third quarter of 2003. For the nine months ended September 30, 2004, Westwood reported revenues of $14.9 million and net income of $2.8 million, or $0.51 per diluted share, compared to revenues of $15.4 million and net income of $3.8 million, or $0.70 per diluted share, for the same 2003 period. The Company realized non-recurring interest income in the third quarter of 2003 of approximately $377,000 related to the final repayment of officer loans.

Total expenses for the 2004 third quarter were $3.8 million compared to $3.1 million for the 2003 third quarter, an increase of approximately $622,000. Employee compensation and benefits costs increased by approximately $481,000 compared to the 2003 third quarter, primarily as a result of higher restricted stock expense due to additional grants made in July 2004, a non- recurring expense in the 2004 third quarter related to the termination of the Company's deferred compensation plan as well as an expense related to the Company's initial contribution to its broad-based profit sharing plan. The Company expects to recognize a similar profit sharing expense in the fourth quarter of this year. Professional services expenses increased by approximately $119,000 due primarily to higher audit costs related to Sarbanes-Oxley compliance.

Assets under management were $3.8 billion as of September 30, 2004, an increase of 3.8% compared to $3.6 billion on September 30, 2003. Average assets under management for the third quarter of 2004 were $3.8 billion, a decrease of 4.5% compared with the third quarter of 2003. The increase in period ending assets under management was principally attributable to market appreciation of assets under management, partially offset by the withdrawal of assets by certain clients.

Susan M. Byrne, Westwood's founder and Chief Executive Officer commented, "In the third quarter we continued to see the results of the solid investment team we have built as we again generated superior investment performance for our clients across our equity product lines. We also earned continued acceptance of the Westwood Trust Enhanced Balanced product as asset inflows from new and existing clients contributed to an approximate 25% year-over-year increase in fee income at Westwood Trust for the first nine months of 2004."

Westwood also announced today that its Board of Directors has approved the payment of a quarterly cash dividend of $0.08 per common share, payable on January 1, 2005 to stockholders of record on December 15, 2004.

About Westwood

Westwood Holdings Group, Inc. manages investment assets and provides services for its clients through two subsidiaries, Westwood Management Corp. and Westwood Trust. Westwood Management Corp. is a registered investment advisor and provides investment advisory services to corporate pension funds, public retirement plans, endowments and foundations, mutual funds and clients of Westwood Trust. Westwood Trust provides, to institutions and high net worth individuals, trust and custodial services and participation in common trust funds that it sponsors. Westwood Holdings Group, Inc. trades on the New York Stock Exchange under the symbol "WHG". For more information, please visit the Company's website at http://www.westwoodgroup.com .

Note on Forward-looking Statements

Statements that are not purely historical facts, including statements about anticipated or expected future revenue and earnings growth and profitability, as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "should," "could," "goal," "target," "designed," "on track," "continue," "comfortable with," "optimistic," "look forward to" and other similar expressions, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors, which may cause actual results to be materially different from those contemplated by the forward-looking statements. Such factors include the risks and uncertainties referenced in our documents filed with, or furnished to, the Securities and Exchange Commission, including without limitation those identified under the caption "Forward-Looking Statements and Risk Factors" in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on forward- looking statements.

                WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF INCOME
                   (in thousands, except per share amounts)
                                 (unaudited)


                                Three months ended        Nine months ended
                                    September 30,             September 30,
                                 2004         2003         2004         2003
    REVENUES:
     Advisory fees             $3,171       $3,491       $9,840      $10,804
     Trust fees                 1,430        1,260        4,324        3,470
     Other revenues               333          539          753        1,098
      Total revenues            4,934        5,290       14,917       15,372

    EXPENSES:
     Employee compensation
      and benefits              2,657        2,176        7,341        6,497
     Sales and marketing          113          130          361          451
     Information technology       172          214          504          597
     Professional services        376          258          847          676
     General and administrative   450          368        1,270        1,080
      Total expenses            3,768        3,146       10,323        9,301

    Income before income
     taxes                      1,166        2,144        4,594        6,071

    Provision for income
     tax expense                  481          825        1,804        2,303
    Net income                 $  685       $1,319       $2,790      $ 3,768


    Earnings per share:
     Basic                      $0.13        $0.24        $0.52        $0.70

     Diluted                    $0.13        $0.24        $0.51        $0.70


                WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIES

                         CONSOLIDATED BALANCE SHEETS
                As of September 30, 2004 and December 31, 2003
             (in thousands, except par values and share amounts)
                                 (unaudited)

                                                  September 30,  December 31,
                                                      2004          2003
                                ASSETS
    Current Assets:
      Cash and cash equivalents                    $  5,301      $  3,643
      Accounts receivable                             1,999         1,931
      Investments, at market value                   17,784        17,413
        Total current assets                         25,084        22,987
      Goodwill                                        2,302         2,302
      Other assets, net                               2,891           948
        Total assets                               $ 30,277      $ 26,237

              LIABILITIES AND STOCKHOLDERS' EQUITY
    Current Liabilities:
      Accounts payable and accrued liabilities     $  1,422      $    935
      Dividends payable                               4,778           167
      Compensation and benefits payable               2,312         2,776
      Income taxes payable                              193           472
        Total current liabilities                     8,705         4,350
      Other liabilities                                 840            34
        Total liabilities                             9,545         4,384

    Stockholders' Equity:
      Common stock, $0.01 par value,
       authorized 10,000,000 shares, issued
       5,756,147 and outstanding 5,755,845
       shares at September 30, 2004; issued
       5,550,472 and outstanding 5,550,119 shares
       at December 31, 2003                              58            56
      Additional paid-in capital                     16,928        12,952
      Treasury stock, at cost - 302 shares at
       September 30, 2004 and 353 shares
       at December 31, 2003                              (5)           (6)
      Unamortized stock compensation                 (5,277)       (2,609)
      Retained earnings                               9,028        11,460
        Total stockholders' equity                   20,732        21,853
    Total liabilities and stockholders' equity     $ 30,277      $ 26,237

     CONTACT:  Investor Relations
               214-756-6900