Ladies and gentlemen, thank you for standing by and welcome to the First Quarter 2020 Westwood Holdings Group Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. As a reminder, today's program is being recorded. I'd now like to introduce your host for today's program, Julie Gerron, General Counsel and Chief Compliance Officer. Please go ahead.

Thank you and welcome to our first quarter 2020 earnings conference call. The following discussion will include forward-looking statements which 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. Additional information concerning the factors that could cause such a difference is included in our press release issued earlier today as well as in our Form 10-Q for the quarter ended March 31, 2020 that is 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. You are cautioned not to place undue reliance on forward-looking statements. In addition, in accordance with SEC rules concerning non-GAAP financial measures, the reconciliation of our economic earnings and economic earnings per share to the most comparable GAAP measures is included at the end of our press release issued earlier today. On the call today, we have Brian Casey, our President and Chief Executive Officer; and Terry Forbes, our Chief Financial Officer. I will now turn the call over to Brian Casey.

Good afternoon. Thank you for taking the time to listen to our quarterly earnings call during these unprecedented times. We hope you’re keeping safe in what a difficult circumstances for all of us. As always, I'll discuss our quarterly earnings and we'll cover the impact of the COVID-19 crisis on our company. Looking back, the past quarter was one for the record books. The global COVID-19 pandemic swept across the globe, sending liquidity and returns sharply lower with much of the pain felt in March. The S&P 500 suffered the worst first quarter performance since 1928 while global equity and fixed income markets were equally battered. Investors remain focused on when the number of new cases of the virus may peak for clues about the future, though the path to economic recovery is anything but clear. In our U.S. Value Equity Products, the unprecedented selloff in equities was large in absolute terms, but higher quality companies up and down the market cap spectrum were the best relative performers. Every single one of our U.S. Value strategies outperformed its passive benchmark, as the benefits of active management were clearly evident. Our flagship LargeCap Value strategy showed resilience during the selloff, capturing only about 85% of the downside and posting nearly 400 basis points of outperformance relative to the Russell 1000 value index. LargeCap Value is ahead of the benchmark over multiple time periods, and its ranking among institutional LargeCap Value peers remains strong. Through the first quarter, our LargeCap Value strategy was in the top decile for the trailing three year period and in the top quartile for the trailing one, five and seven year periods. Our LargeCap Select strategy also finished the quarter ahead of the Russell 1000 value benchmark and it now possesses a ranking in the top decile…

Thanks, Brian, and good afternoon, everyone. Today, we reported total revenues of $16.7 million for the first quarter of 2020 compared to $18.6 million in the fourth quarter of 2019 and $23.9 million in the prior year's first quarter. The decrease from the fourth quarter and the prior year's first quarter was primarily due to lower average assets under management. First quarter net income was $1.1 million or $0.13 per share compared to $2.5 million or $0.30 per share in the fourth quarter of 2019. The decrease primarily related to lower total revenues and unrealized losses on private investments, partially offset by lower operating expenses and income taxes. Economic earnings, a non-GAAP metric, was $4.2 million or $0.50 per share in the current quarter versus $5.4 million or $0.64 per share in the fourth quarter of 2019. First quarter net income of $1.1 million or $0.13 per share compared to $0.4 million or $0.05 per share in the prior year's first quarter. The increase primarily related to lower operating expenses, particularly employee compensation and benefits, foreign currency transaction gains and income taxes, partially offset by lower revenues and unrealized losses on private investments. Economic earnings for the quarter was $4.2 million or $0.50 per share compared to $4.1 million or $0.49 per share in the first quarter of 2019. Firm-wide assets under management totaled $11.6 billion at quarter end and consisted of institutional assets of $6.3 billion or 55% of the total, wealth management assets of $3.8 billion or 33% of the total and mutual fund assets of $1.5 billion or 12% of the total. Over the quarter, we experienced market depreciation of $3 billion and net outflows of $0.6 billion. Our financial position continues to be very solid with cash and short-term investments at quarter end totaling $82.4 million and a debt free balance sheet. In the first quarter, we repurchased approximately 272,000 shares of our common stock for an aggregate purchase price of $4.9 million. In April, we repurchased an additional 407,000 shares for an aggregate purchase price of approximately $8.1 million. This completed the amount authorized under our share repurchase program. That brings our prepared comments to a close. We encourage you to review our investor presentation we have posted on our website reflecting first quarter highlights as well as a discussion of our business, product development and longer term trends in revenues and earnings. We thank you for your interest in our company and we'll open the line to questions.

[Operator Instructions]. And our first question comes to the line of from Mac Sykes from Gabelli. Your question please.

I was wondering if you could talk a little bit about the outsourced trading aspect. How has that worked and how is it viewed in terms of institutional, operational due diligence questionnaires?

So we've spent about six months researching this. And as we've described over a series of calls, we've always been very interested in being as efficient as possible. Technology really allows you to be efficient and we’ve spent a lot of time and energy on our technology journey over the last 3.5, 4 years. This is simply a continuation of that journey. Trading is something that has become much more automated in the last few years. I'm always reminded of my first visit to the New York Stock Exchange, which was about 1985 and it was -- you had paper up to your ankles and everyone was yelling and screaming. And I went, took my family there a few years ago to visit and it was like being in church. It was quiet, people are spending their day on their computers and it was a completely different experience. So the world has become connected technologically, trading is done technologically and it's simply the missed rung in the ladder for us in terms of our evolution to becoming a more efficient and cutting edge technological firm.

And just along that line, in terms of the wealth management, you've been making some in-roads in terms of the applications and engagement with clients. I mean given that we've seen some stress in the markets and that would have been a place to improve engagement, what did you see in terms of your technology there and the client conversations and I guess engaging with the newer technologies that you've put forth?

Well, it's been really amazing. You plan, you test, you do everything you can to try to anticipate what might happen if you're not able to come to work. And I guess when you think about that, you think of things like an earthquake or a flood or I don't think worldwide pandemic was really on the forefront of anybody's minds. But nonetheless, we’ve bounced and been able to come to work. And we have not missed a beat at Westwood. I mean we have been communicating every day as a management team. We have communicated a couple of times a week on our crisis management team to deal with any issues or problems. But as far as reaching out to clients, we are able to do it through a number of different ways. And I think more than anything, just pick up the phone and calling our clients the good old fashioned way is a good way to remind them that we're here, remind them that we care and that we're here to help. And we had a number of existing clients add money to their accounts to take advantage of some of the volatility. But certainly in terms of -- just to answer your question about technology, I mean we have the ability to communicate in multiple ways and I think what you learn is what is the preferred way that a customer wants to communicate with you. And with some people that's in person, with some people that's on the phone, some people it's you get on and do a face time or a Zoom meeting or just all the things that all of us have been doing. But I think clients have really warmed up to the idea that we can still get a lot done without having to drive, park their car and come into an office.

Just one last question. In terms of the wealth management engagement on the physical presence, how do you see that evolving, kind of as the states open up, how do you see the office management and getting in touch with clients on a physical basis in the bank as well?

Well, it's interesting. I think we have two different client groups, I would say, not only at Westwood, but in the industry. Historically, the wealth management industry has catered to the baby boom generation because they're the ones that had all the money. And that is shifting now to the Gen X, Gen Y, the millennials. And their preference all along, forget about the pandemic, is to communicate through technology, not to come in and visit an office. So, I really think it will -- it may evolve to where the baby boomers don't feel like they need to come to the office as often as some of them like to come. So it's going to be a profound change, I think for the world. It’s going to be interesting to see. I'm looking out of my window in Dallas at lots of cranes of office buildings going up and 60 days ago we were close to zero percent unemployment and one of the fastest growing cities in America, and it'll be interesting to see how that changes when we do open back up.

[Operator Instructions]. And this does conclude the question-and-answer session of today's program. I'd like to hand the program back to Brian Casey for any further remarks.

Okay, well, thanks again for listening to the call. And in closing, I'd like to add that while we would qualify for government loans, we really want that money to go to those who need it the most. So we have not applied for, nor do we intend to apply for any government loans. I hope everybody stays healthy and safe, and we appreciate your interest in Westwood. Please visit westwoodgroup.com. if you have any questions or give us a call directly. Thanks so much.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You can now disconnect. Good day.