samg-10q_20210930.htm

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of outstanding shares of the registrant’s Class A common stock, par value $0.01 per share, and Class B common stock, par value $0.01 per share, as of November 1, 2021 was 9,653,214 and 4,815,460, respectively.

Except where the context requires otherwise and as otherwise set forth herein, in this report, references to the “Company”, “we”, “us” or “our” refer to Silvercrest Asset Management Group Inc. (“Silvercrest”) and its consolidated subsidiary, Silvercrest L.P., the managing member of our operating subsidiary (“Silvercrest L.P.” or “SLP”). SLP is a limited partnership whose existing limited partners are referred to in this report as “principals”.

This report contains, and from time to time our management may make, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks, uncertainties and assumptions. These statements are only predictions based on our current expectations and projections about future events. Important factors that could cause actual results, level of activity, performance or achievements to differ materially from those indicated by such forward-looking statements include but are not limited to: incurrence of net losses, fluctuations in quarterly and annual results, adverse economic or market conditions, our expectations with respect to future levels of assets under management, inflows and outflows, our ability to retain clients from whom we derive a substantial portion of our assets under management, our ability to maintain our fee structure, our particular choices with regard to investment strategies employed, our ability to hire and retain qualified investment professionals, the cost of complying with current and future regulation coupled with the cost of defending ourselves from related investigations or litigation, failure of our operational safeguards against breaches in data security, privacy, conflicts of interest or employee misconduct, our expected tax rate, and our expectations with respect to deferred tax assets, adverse economic or market conditions, including the continued adverse effects of the coronavirus pandemic, incurrence of net losses, adverse effects of management focusing on implementation of a growth strategy, failure to develop and maintain the Silvercrest brand and other factors disclosed under “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2020 which is accessible on the SEC’s website at www.sec.gov. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

	September 30, 2021			December 31, 2020
Assets
Cash and cash equivalents	$	65,930		$	62,498
Investments		53			914
Receivables, net		9,386			8,341
Due from Silvercrest Funds		2,188			1,018
Furniture, equipment and leasehold improvements, net		5,272			5,523
Goodwill		63,675			63,675
Operating lease assets		26,580			30,068
Finance lease assets		276			254
Intangible assets, net		24,582			26,553
Deferred tax asset—tax receivable agreement		11,100			11,397
Prepaid expenses and other assets		3,870			3,563
Total assets	$	212,912		$	213,804
Liabilities and Equity
Accounts payable and accrued expenses	$	18,763		$	18,040
Accrued compensation		31,567			33,849
Borrowings under credit facility		9,927			12,600
Operating lease liabilities		32,896			36,127
Finance lease liabilities		283			259
Deferred tax and other liabilities		9,651			9,530
Total liabilities		103,087			110,405
Commitments and Contingencies (Note 10)
Equity
Preferred Stock, par value $0.01, 10,000,000 shares authorized; none issued and outstanding, as of September 30, 2021 and December 31, 2020		—			—
Class A common stock, par value $0.01, 50,000,000 shares authorized; 9,680,411 and 9,653,214 shares issued and outstanding as of September 30, 2021, respectively; 9,650,692 shares issued and outstanding as of December 31, 2020		97			96
Class B common stock, par value $0.01, 25,000,000 shares authorized; 4,815,460 and 4,721,646 issued and outstanding, as of September 30, 2021 and December 31, 2020, respectively		47			46
Additional Paid-In Capital		51,408			51,039
Treasury stock, at cost, 27,197 and 0 shares as of September 30, 2021 and December 31, 2020, respectively		(418	)		—
Retained earnings		24,363			19,498
Total Silvercrest Asset Management Group Inc.’s equity		75,497			70,679
Non-controlling interests		34,328			32,720
Total equity		109,825			103,399
Total liabilities and equity	$	212,912		$	213,804

	Three months ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020
Revenue
Management and advisory fees	$	32,248		$	26,148		$	94,435		$	76,554
Performance fees		86			—			86			—
Family office services		1,127			1,034			3,278			3,014
Total revenue		33,461			27,182			97,799			79,568
Expenses
Compensation and benefits		18,758			15,142			54,882			44,217
General and administrative		6,522			7,091			21,706			16,431
Total expenses		25,280			22,233			76,588			60,648
Income before other (expense) income, net		8,181			4,949			21,211			18,920
Other (expense) income, net
Other (expense) income, net		43			8			58			23
Interest income		1			2			5			12
Interest expense		(92	)		(120	)		(294	)		(445	)
Total other (expense) income, net		(48	)		(110	)		(231	)		(410	)
Income before provision for income taxes		8,133			4,839			20,980			18,510
Provision for income taxes		1,779			1,359			4,630			4,558
Net income		6,354			3,480			16,350			13,952
Less: net income attributable to non-controlling interests		(2,631	)		(1,421	)		(6,740	)		(5,871	)
Net income attributable to Silvercrest	$	3,723		$	2,059		$	9,610		$	8,081
Net income per share:
Basic	$	0.38		$	0.22		$	0.99		$	0.85
Diluted	$	0.38		$	0.22		$	0.99		$	0.85
Weighted average shares outstanding:
Basic		9,670,054			9,532,362			9,661,610			9,478,695
Diluted		9,691,103			9,540,604			9,676,639			9,488,259

	Class A Common Stock Shares		Class A Common Stock Amount		Class B Common Stock Shares			Class B Common Stock Amount			Additional Paid-In Capital			Retained Earnings			Total Silvercrest Asset Management Group Inc.’s Equity			Non- controlling Interest			Total Equity

January 1, 2020		9,330	$	93		5,031		$	49		$	49,246		$	15,648		$	65,036		$	32,771		$	97,807
Distributions to partners		—		—		—			—			—			—			—			(2,226	)		(2,226	)
Repayment of notes receivable from partners		—		—		—			—			—			—			—			300			300
Equity-based compensation		—		—		—			—			9			—			9			100			109
Net Income		—		—		—			—			—			5,532			5,532			4,158			9,690
Deferred tax, net of amounts payable under tax receivable agreement		—		—		—			—			(364	)		—			(364	)		—			(364	)
Accrued interest on notes receivable from partners		—		—		—			—			—			—			—			(2	)		(2	)
Share conversion		176		2		(176	)		(2	)		1,149			—			1,149			(1,149	)		—
Dividends paid on Class A common stock - $0.15 per share		—		—		—			—			—			(1,520	)		(1,520	)		—			(1,520	)
March 31, 2020		9,506	$	95		4,855		$	47		$	50,040		$	19,660		$	69,842		$	33,952		$	103,794
Distributions to partners		—		—		—			—			—			—			—			(2,798	)		(2,798	)
Repayment of notes receivable from partners		—		—		—			—			—			—			—			—			—
Equity-based compensation		2		—		9			—			10			—			10			147			157
Net Income		—		—		—			—			—			490			490			292			782
Deferred tax, net of amounts payable under tax receivable agreement		—		—		—			—			8			—			8			—			8
Accrued interest on notes receivable from partners		—		—		—			—			—			—			—			(2	)		(2	)
Share conversion		12		—		(12	)		—			88			—			88			(88	)		—
Dividends paid on Class A common stock - $0.16 per share		—		—		—			—			—			(1,523	)		(1,523	)		—			(1,523	)
June 30, 2020		9,520	$	95		4,852		$	47		$	50,146		$	18,627		$	68,915		$	31,503		$	100,418
Distributions to partners		—		—		—			—			—			—			—			(1,497	)		(1,497	)
Repayment of notes receivable from partners		—		—		—			—			—			—			—			—			—
Equity-based compensation		1		—		—			—			52			—			52			169			221
Net Income		—		—		—			—			—			2,059			2,059			1,421			3,480
Deferred tax, net of amounts payable under tax receivable agreement		—		—		—			—			(176	)		—			(176	)		—			(176	)
Accrued interest on notes receivable from partners		—		—		—			—			—			—			—			(2	)		(2	)
Share conversion		24		—		(24	)		—			163			—			163			(163	)		—
Dividends paid on Class A common stock - $0.16 per share		—		—		—			—			—			(1,531	)		(1,531	)		—			(1,531	)
September 30, 2020		9,545	$	95		4,828		$	47		$	50,185		$	19,155		$	69,482		$	31,431		$	100,913

	Class A Common Stock Shares		Class A Common Stock Amount		Class B Common Stock Shares			Class B Common Stock Amount		Additional Paid-In Capital		Treasury Stock Shares		Treasury Shares Amount		Retained Earnings		Total Silvercrest Asset Management Group Inc.’s Equity		Non- controlling Interest			Total Equity

January 1, 2021		9,651	$	96		4,722		$	46	$	51,039		—	$	—	$	19,498	$	70,679	$	32,720		$	103,399
Distributions to partners		—		—		—			—		—		—		—		—		—		(1,758	)		(1,758	)
Issuance of notes receivable from partners		—		—		—			—		—		—		—		—		—		(475	)		(475	)
Issuance of Class B shares		—		—		56			1		—		—		—		—		1		475			476
Repayment of notes receivable from partners		—		—		—			—		—		—		—		—		—		228			228
Equity-based compensation		—		—		—			—		—		—		—		—		—		469			469
Net Income		—		—		—			—		—		—		—		2,552		2,552		1,783			4,335
Deferred tax, net of amounts payable under tax receivable agreement		—		—		—			—		7		—		—		—		7		—			7
Accrued interest on notes receivable from partners		—		—		—			—		—		—		—		—		—		(2	)		(2	)
Share conversion		8		—		(8	)		—		56		—		—		—		56		(56	)		—
Dividends paid on Class A common stock - $0.16 per share

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A common stock, $0.01 par value per share		SAMG		The Nasdaq Global Market

Part I	Financial Information
Item 1.	Condensed Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Statements of Financial Condition as of September 30, 2021 and December 31, 2020	1
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020	2
	Condensed Consolidated Statements of Changes in Equity for the three and nine months ended September 30, 2021 and 2020	3
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020	5
	Notes to Condensed Consolidated Financial Statements as of September 30, 2021 and December 31, 2020 and for the three and nine months ended September 30, 2021 and 2020	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	49
Item 4.	Controls and Procedures	49
Part II	Other Information
Item 6.	Exhibits	50


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging growth company	☐