FOR IMMEDIATE RELEASE:


Investor Contact:James F. Laird-Chief Financial Officer614-255-3353 (jlaird@diamond-hill.com)





DIAMOND HILL INVESTMENT GROUP, INC.


REPORTS RESULTS FOR FIRST QUARTER  2014





Columbus, Ohio - April 30, 2014 - Diamond Hill Investment Group, Inc.  (the “Company,” "we," "us") (NASDAQ:DHIL) today reported unaudited results for the quarter ended March 31, 2014 and filed its Form 10-Q.








Three Months Ended March 31,20142013ChangeRevenue$23,189,097$18,375,37526%Net operating income8,571,7846,627,61529%Operating margin37%36%Investment income516,5291,824,659Net income5,749,5985,330,7338%Earnings per share - diluted$1.78$1.677%





As OfMarch 31, 2014December 31, 2013March 31, 2013Assets under management (millions)$12,986$12,186$10,574Book value per share(a)$17.06$13.80$10.23Total outstanding shares3,296,2973,257,2473,242,674





(a) - A $3 per share special dividend was paid in December 2013.





325 John H. McConnell Blvd, Suite 200, Columbus, Ohio 43215  614-255-3333 info@diamond-hill.com


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Change in Assets Under ManagementFor the Three Months Ended March 31,(in millions)20142013AUM at beginning of the period$12,186$9,429Net cash inflows (outflows)proprietary funds367142sub-advised funds33(37)institutional accounts160(33)56072Net market appreciation and income2401,073Increase during the period8001,145AUM at end of the period$12,986$10,574





About Diamond Hill :


We are an independent investment management firm with significant employee ownership and $13.0 billion in assets under management as of March 31, 2014 .  We provide investment management services to institutions and individuals through mutual funds, institutional separate accounts, and private investment funds.  Our entire investment team shares the same intrinsic value investment philosophy focused on absolute returns, and our interests are firmly aligned with our clients through significant investment in its strategies.  For more information visit www.diamond-hill.com .





Use of Supplemental Data as Non-GAAP Performance Measure


Net Operating Income After Tax





As supplemental information, we provide performance measures that are based on methodologies other than generally accepted accounting principles (“non-GAAP”) for “Net Operating Income After Tax” that management uses as benchmarks in evaluating and comparing the period-to-period operating performance of the Company and subsidiaries.





The Company defines “net operating income after tax” as our net operating income less income tax provision, excluding investment income and the tax impact related to the investment income. We believe that “net operating income after tax” provides a good representation of our operating performance, as it excludes the impact of investment income on financial results. The amount of the investment portfolio and market fluctuations on the investments may change significantly from one period to another, which can distort the underlying earnings of a company. We also believe “net operating income after tax” is an important metric in estimating the value of an asset management business. This non-GAAP measure is provided in addition to net income and net operating income and is not a substitute for net income or net operating income and may not be comparable to non-GAAP performance measures of other companies.





Three Months Ended March 31,(in thousands, except per share data)20142013Net operating income, GAAP basis$8,572$6,628Non-GAAP adjustments:Tax provision excluding impact of investment income3,1492,448Net operating income after tax, non-GAAP basis$5,423$4,180Net operating income after tax per diluted share, non-GAAP basis$1.68$1.31





The tax provision excluding impact of investment income is calculated by applying the tax rate calculated from the income statement to net operating income.





Our management does not promote that investors consider the above non-GAAP financial measures alone, or as a substitute for, financial information prepared in accordance with GAAP.





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325 John H. McConnell Blvd, Suite 200, Columbus, Ohio 43215  614-255-3333 info@diamond-hill.com


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Throughout this press release, we may make 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, relating to such matters as anticipated operating results, prospects and levels of assets under management, technological developments, economic trends (including interest rates and market volatility), expected transactions  and similar matters. The words “believe,” “expect,” “anticipate,” “estimate,” “should,” “hope,” “seek,” “plan,” “intend” and similar expressions identify forward-looking statements that speak only as of the date thereof.  While we believe that the assumptions underlying our forward-looking statements are reasonable, investors are cautioned that any of the assumptions could prove to be inaccurate and accordingly, our actual results and experiences could differ materially from the anticipated results or other expectations expressed  in our forward-looking statements. Factors that could cause such actual results or experiences to differ from results discussed in the forward-looking statements include, but are not limited to: the adverse effect from a decline in the securities markets; a decline in the performance of our products; changes in interest rates; changes in national and local economic and political conditions, including the effects of implementation of the Budget Control Act of 2011, the American Taxpayer Relief Act of 2012, the Jumpstart Our Business Startups Act of 2012 and the continuing economic uncertainty in various parts of the world; changes in government policy and regulation, including monetary policy; changes in our ability to attract or retain key employees; unforeseen costs and other effects related to legal proceedings or investigations of governmental and self-regulatory organizations; and other risks identified from time-to-time in  other public documents on file with the U. S. Securities and Exchange Commission.





325 John H. McConnell Blvd, Suite 200, Columbus, Ohio 43215  614-255-3333 info@diamond-hill.com