DALLAS, Oct. 25 /PRNewswire-FirstCall/ -- Westwood Holdings Group, Inc. (NYSE: WHG) today reported 2005 third quarter revenues of $5.6 million, net income of $814,000 and earnings per diluted share of $0.15. This compares to revenues of $4.9 million, net income of $685,000 and earnings per diluted share of $0.13 in the third quarter of 2004. For the nine months ended September 30, 2005, Westwood reported revenues of $15.9 million and net income of $2.6 million, or $0.48 per diluted share, compared to revenues of $14.9 million and net income of $2.8 million, or $0.51 per diluted share, for the same 2004 period.

Revenues for the third quarter 2005 increased 12.6% compared to the third quarter 2004 and increased by 6.5% for the nine months ended September 30, 2005 compared to the prior year period primarily as a result of increased average assets under management. Assets under management were $4.6 billion as of September 30, 2005, an increase of 20.4% compared to $3.8 billion on September 30, 2004. Average assets under management for the third quarter of 2005 were $4.4 billion, an increase of 15.9% compared with the third quarter of 2004. The increase in period ending assets under management was principally attributable to market appreciation of assets under management and asset inflows from new clients, partially offset by the withdrawal of assets by certain clients.

Total expenses for the third quarter of 2005 were $4.1 million compared to $3.8 million for the third quarter of 2004, an increase of approximately $353,000. The primary driver of the increase was employee compensation and benefits costs, which increased by approximately $392,000 compared to the 2004 third quarter, primarily due to higher restricted stock expense and higher incentive compensation expense. Offsetting this increase to some extent, professional services costs decreased by approximately $61,000 primarily as a result of lower professional fee accruals related to Sarbanes-Oxley compliance, other consulting costs incurred in the prior year quarter and a decrease in legal fees.

Westwood also announced today that its Board of Directors has approved the payment of a quarterly cash dividend of $0.09 per share, payable on January 2, 2006 to stockholders of record on December 15, 2005.

Susan M. Byrne, Westwood's founder and Chief Executive Officer commented, "We are beginning to see the results of three years of hard work and investment by our employees and stockholders. Continuing strong relative and absolute performance by our investment teams has been helpful in the continuing rollout of new products. We are particularly pleased to add a SMidCap mutual fund in the coming months on the heels of the excellent acceptance of our SMidCap institutional product."

Brian O. Casey, Westwood's President and Chief Operating Officer added, "The third quarter marks another period of sequential asset growth for Westwood. We also recently completed the initial SEC filing for two new mutual funds, the WHG SMidCap Fund and the WHG Income Opportunity Fund, which we expect to launch by the end of this year. We view the mutual fund distribution channel to be important to Westwood's future growth prospects and will offer an institutional shareholder class so that the funds may be appropriately positioned for consideration by institutional investors and 401(k) plans."

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,
                                      2005       2004       2005       2004
    REVENUES:
      Advisory fees                 $ 3,466    $ 3,171    $ 9,966    $ 9,840
      Trust fees                      1,773      1,430      5,144      4,324
      Other revenues                    315        333        779        753
        Total revenues                5,554      4,934     15,889     14,917

    EXPENSES:
      Employee compensation
       and benefits                   3,049      2,657      8,328      7,341
      Sales and marketing               110        113        337        361
      Information technology            199        172        576        504
      Professional services             315        376        908        847
      General and administrative        448        450      1,360      1,270
        Total expenses                4,121      3,768     11,509     10,323
    Income before income taxes        1,433      1,166      4,380      4,594
    Provision for income taxes          619        481      1,754      1,804
    Net income                      $   814    $   685    $ 2,626    $ 2,790

    Earnings per share:
      Basic                         $  0.15    $  0.13    $  0.48    $  0.52
      Diluted                       $  0.15    $  0.13    $  0.48    $  0.51



                WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIES

                         CONSOLIDATED BALANCE SHEETS
                As of September 30, 2005 and December 31, 2004
             (in thousands, except par values and share amounts)
                                 (unaudited)

                                            September 30,   December 31,
                                                2005            2004
              ASSETS
    Current Assets:
      Cash and cash equivalents               $ 5,904         $   720
      Accounts receivable                       2,252           1,832
      Investments, at market value             16,089          18,632
      Other current assets                        408             414
          Total current assets                 24,653          21,598
      Goodwill                                  2,302           2,302
      Deferred income taxes                       570             517
      Property and equipment, net of
       accumulated depreciation of
       $454 and $250                            1,635           1,860
          Total assets                        $29,160         $26,277

        LIABILITIES AND STOCKHOLDERS' EQUITY
    Current Liabilities:
      Accounts payable and accrued
       liabilities                            $   721         $   629
      Dividends payable                         5,028             460
      Compensation and benefits payable         1,984           2,703
      Income taxes payable                        185             ---
      Other current liabilities                     7              17
          Total current liabilities             7,925           3,809
    Deferred rent                                 839             805
          Total liabilities                     8,764           4,614
    Stockholders' Equity:
      Common stock, $0.01 par value,
       authorized 10,000,000 shares, issued
       and outstanding 5,985,897 shares at
       September 30, 2005; issued and
       outstanding 5,754,147 shares at
       December 31, 2004                           60              58
      Additional paid-in capital               21,425          16,962
      Unamortized stock compensation           (7,230)         (4,821)
      Retained earnings                         6,141           9,464
          Total stockholders' equity           20,396          21,663
    Total liabilities and stockholders'
     equity                                   $29,160         $26,277