UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549









FORM
10-Q




(Mark
One)


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




For
the quarterly period ended March 31, 2009




OR




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




For
the transition period
from_________________ to_________________




Commission
file number: 1-9728













EPOCH
HOLDING CORPORATION


(Exact
name of registrant as specified in its charter)




Delaware
            
            20-1938886(State
      or other jurisdiction
            
            (I.R.S.
      employerof
      incorporation or organization)
            
            identification
      no.)




640
Fifth Avenue, New York, NY 10019


(Address
of principal executive offices)




212-303-7200


(Registrant's
telephone number, including area code)




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 þ No o





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





Large
      Accelerated Filero
            Accelerated
      Filerþ
            Non-Accelerated
      Filero
              (Do
      not check if Smaller Reporting Company)
            Smaller Reporting Companyo




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted 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 and post such files).  Yes o No o





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





As
of May 5, 2009, there were 22,217,576 shares of the Company's common stock, $.01
par value per share, outstanding.

















EPOCH
HOLDING CORPORATION


FORM 10-Q FOR THE FISCAL QUARTER
ENDED MARCH 31, 2009





TABLE OF
CONTENTS




Page
      No.PART
      I. FINANCIAL  INFORMATIONItem
      1.
                                                                                                                        Financial
      Statements.
                                                                                                                        3Condensed
      Consolidated Balance Sheets – March 31, 2009 (Unaudited) and June
      30, 2008
                                                                                                                        3Condensed
      Consolidated Statements of Operations (Unaudited) – Three and Nine Months
      Ended March 31, 2009 and 2008
                                                                                                                        4Condensed
      Consolidated Statements of Changes in Stockholders' Equity – For theYear
      Ended June 30, 2008 and Nine Months Ended March 31, 2009
      (Unaudited)
                                                                                                                        5Condensed
      Consolidated Statements of Cash Flows (Unaudited) – Nine Months
      Ended March
      31, 2009 and 2008
                                                                                                                        6Notes
      to Condensed Consolidated Financial Statements (Unaudited)
                                                                                                                        7-16Item
      2.
                                                                                                                        Management's
      Discussion and Analysis of Financial Condition and Results of Operations.
                                                                                                                        17-35Item
      3.
                                                                                                                        Quantitative
      and Qualitative Disclosures About Market Risk.
                                                                                                                        36Item
      4.
                                                                                                                        Controls
      and Procedures.
                                                                                                                        37PART
      II. OTHER INORMATIONItem
      1.
                                                                                                                        Legal
      Proceedings.
                                                                                                                        38Item
      1a.
                                                                                                                        Risk
      Factors.
                                                                                                                        38Item
      2.
                                                                                                                        Unregistered
      Sales of Equity Securities and Use of Proceeds.
                                                                                                                        38Item
      6.
                                                                                                                        Exhibits.
                                                                                                                        39Signature
                                                                                                                        
                                                                                                                        40




Items
other than those listed above have been omitted because they are not
applicable.


2





PART I.
FINANCIAL INFORMATION


Item 1. Financial
Statements.




EPOCH
HOLDING CORPORATION AND SUBSIDIARIES


CONDENSED
CONSOLIDATED BALANCE SHEETS


(in
thousands)





March
      31,2009
                  
                  
                  June
      30,(Unaudited)
                  
                  
                  2008ASSETSCurrent
      assets:Cash
      and cash equivalents
                  
                  $
                  36,128
                  
                  
                  $
                  37,436Accounts
      receivable
                  
                  
                  5,399
                  
                  
                  
                  6,391Prepaid
      and other current assets
                  
                  
                  998
                  
                  
                  
                  926Total
      current assets
                  
                  
                  42,525
                  
                  
                  
                  44,753Property
      and equipment, net of accumulated depreciation of $1,691 and $1,369,
      respectively
                  
                  
                  1,386
                  
                  
                  
                  1,689Security
      deposits
                  
                  
                  1,118
                  
                  
                  
                  1,104Deferred
      income taxes
                  
                  
                  2,528
                  
                  
                  
                  2,844Other
      investments (cost of $3,576 and $4,187, respectively) - (Note 5)
                  
                  
                  2,824
                  
                  
                  
                  3,959Total
      assets
                  
                  $
                  50,381
                  
                  
                  $
                  54,349LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilities:Accounts
      payable and accrued liabilities
                  
                  $
                  687
                  
                  
                  $
                  884Accrued
      compensation and benefits
                  
                  
                  1,849
                  
                  
                  
                  5,630Income
      taxes payable
                  
                  
                  —
                  
                  
                  
                  1,447Total
      current liabilities
                  
                  
                  2,536
                  
                  
                  
                  7,961Deferred
      rent
                  
                  
                  749
                  
                  
                  
                  813Subtenant
      security deposit
                  
                  
                  233
                  
                  
                  
                  230Total
      liabilities
                  
                  
                  3,518
                  
                  
                  
                  9,004Commitments
      and contingencies - (Note 6)Stockholders'
      equity:Preferred
      stock - (Note
      7)
                  
                  
                  —
                  
                  
                  
                  10Common
      stock
                  
                  
                  225
                  
                  
                  
                  203Additional
      paid-in capital
                  
                  
                  57,014
                  
                  
                  
                  50,047(Accumulated
      deficit)/ retained earnings
                  
                  
                  (108
                  )
                  
                  
                  698Unearned
      share-based compensation
                  
                  
                  (7,320
                  )
                  
                  
                  (5,302
                  )Accumulated
      other comprehensive loss
                  
                  
                  (752
                  )
                  
                  
                  (228
                  )Treasury
      stock, at cost - (Note
      6)
                  
                  
                  (2,196
                  )
                  
                  
                  (83
                  )Total
      stockholders' equity
                  
                  
                  46,863
                  
                  
                  
                  45,345Total
      liabilities and stockholders' equity
                  
                  $
                  50,381
                  
                  
                  $
                  54,349





The
accompanying notes are an integral part of these condensed consolidated
financial statements.


3




EPOCH
HOLDING CORPORATION AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


(in
thousands, except per share data)





Three
      Months Ended
                                        
                                        
                                        Nine
      Months EndedMarch
      31,
                                        
                                        
                                        March
      31,2009
                                        
                                        
                                        2008
                                        
                                        
                                        2009
                                        
                                        
                                        2008Revenues:Investment
      advisory and management fees
                                        
                                        $
                                        6,843
                                        
                                        
                                        $
                                        8,482
                                        
                                        
                                        $
                                        22,089
                                        
                                        
                                        $
                                        24,910Performance
      fees
                                        
                                        
                                        —
                                        
                                        
                                        
                                        —
                                        
                                        
                                        
                                        —
                                        
                                        
                                        
                                        172Total
      revenue
                                        
                                        
                                        6,843
                                        
                                        
                                        
                                        8,482
                                        
                                        
                                        
                                        22,089
                                        
                                        
                                        
                                        25,082Operating
      expenses:Employee
      related costs (excluding share-based compensation)
                                        
                                        
                                        3,853
                                        
                                        
                                        
                                        4,605
                                        
                                        
                                        
                                        11,857
                                        
                                        
                                        
                                        13,418Share-based
      compensation
                                        
                                        
                                        1,270
                                        
                                        
                                        
                                        1,045
                                        
                                        
                                        
                                        3,391
                                        
                                        
                                        
                                        3,148General,
      administrative and occupancy
                                        
                                        
                                        821
                                        
                                        
                                        
                                        1,266
                                        
                                        
                                        
                                        3,368
                                        
                                        
                                        
                                        3,992Professional
      fees and services
                                        
                                        
                                        493
                                        
                                        
                                        
                                        725
                                        
                                        
                                        
                                        1,670
                                        
                                        
                                        
                                        2,064Depreciation
      and amortization
                                        
                                        
                                        111
                                        
                                        
                                        
                                        104
                                        
                                        
                                        
                                        322
                                        
                                        
                                        
                                        315Total
      operating expenses
                                        
                                        
                                        6,548
                                        
                                        
                                        
                                        7,745
                                        
                                        
                                        
                                        20,608
                                        
                                        
                                        
                                        22,937Operating
      income
                                        
                                        
                                        295
                                        
                                        
                                        
                                        737
                                        
                                        
                                        
                                        1,481
                                        
                                        
                                        
                                        2,145Other
      income (loss): - (Note 9)Realized
      (losses) gains on investments
                                        
                                        
                                        (197
                                        )
                                        
                                        
                                        295
                                        
                                        
                                        
                                        3,971
                                        
                                        
                                        
                                        3,712Interest
      and other income
                                        
                                        
                                        415
                                        
                                        
                                        
                                        436
                                        
                                        
                                        
                                        957
                                        
                                        
                                        
                                        1,498Total
      other income
                                        
                                        
                                        218
                                        
                                        
                                        
                                        731
                                        
                                        
                                        
                                        4,928
                                        
                                        
                                        
                                        5,210Income
      before income taxes
                                        
                                        
                                        513
                                        
                                        
                                        
                                        1,468
                                        
                                        
                                        
                                        6,409
                                        
                                        
                                        
                                        7,355Provision
      for income taxes - (Note
      10)
                                        
                                        
                                        239
                                        
                                        
                                        
                                        793
                                        
                                        
                                        
                                        2,579
                                        
                                        
                                        
                                        2,036Net
      income
                                        
                                        
                                        274
                                        
                                        
                                        
                                        675
                                        
                                        
                                        
                                        3,830
                                        
                                        
                                        
                                        5,319Preferred
      stock dividends - (Note
      11)
                                        
                                        
                                        —
                                        
                                        
                                        
                                        (115
                                        )
                                        
                                        
                                        —
                                        
                                        
                                        
                                        (345
                                        )Net
      income available to commonstockholders
      for basic earnings per share
                                        
                                        $
                                        274
                                        
                                        
                                        $
                                        560
                                        
                                        
                                        $
                                        3,830
                                        
                                        
                                        $
                                        4,974Earnings per share: - (Note 11)Basic
                                        
                                        $
                                        0.01
                                        
                                        
                                        $
                                        0.03
                                        
                                        
                                        $
                                        0.17
                                        
                                        
                                        $
                                        0.25Diluted
                                        
                                        $
                                        0.01
                                        
                                        
                                        $
                                        0.03
                                        
                                        
                                        $
                                        0.17
                                        
                                        
                                        $
                                        0.24Weighted
      Average Shares Outstanding:Basic
                                        
                                        
                                        22,171
                                        
                                        
                                        
                                        20,247
                                        
                                        
                                        
                                        22,101
                                        
                                        
                                        
                                        20,146Diluted
                                        
                                        
                                        22,171
                                        
                                        
                                        
                                        20,291
                                        
                                        
                                        
                                        22,101
                                        
                                        
                                        
                                        21,885Cash
      dividends declared per common share
                                        
                                        $
                                        0.03
                                        
                                        
                                        $
                                        0.025
                                        
                                        
                                        $
                                        0.21
                                        
                                        
                                        $
                                        0.05





The
accompanying notes are an integral part of these condensed consolidated
financial statements.


4





EPOCH
HOLDING CORPORATION AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY


FOR
THE YEAR ENDED JUNE 30, 2008 AND NINE MONTHS ENDED MARCH 31, 2009


(Dollars
and shares in thousands, except per share data)




(Accumulated
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            AccumulatedPreferred
      Stock
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Additional
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Deficit)/
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Unearned
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Other
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            TotalSeries
      A Convertible
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Common
      Stock
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Paid-in
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Retained
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Share-Based
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Comprehensive
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Treasury
      Stock
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Stockholders'Shares
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Amount
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Shares
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Amount
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Capital
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Earnings
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Compensation
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Income
      (Loss)
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Shares
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            Amount
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            EquityBalances
      at June 30, 2007
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            10
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            $
                                                                                                                                                                                                                            10
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            19,935
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            $
                                                                                                                                                                                                                            199
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            $
                                                                                                                                                                                                                            43,852
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            $
                                                                                                                                                                                                                            (6,357
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            $
                                                                                                                                                                                                                            (4,763
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            $
                                                                                                                                                                                                                            2,502
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            $
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            $
                                                                                                                                                                                                                            35,443Net
      income
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            9,036
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            9,036Net
      unrealized gains on marketable securities
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            864
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            864Reclassification of
      realized gains included in net income
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (3,594
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (3,594
                                                                                                                                                                                                                            )Comprehensive
      income
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            6,306Issuance
      and forfeitures of restricted common stock
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            364
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            4
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            4,711
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (4,380
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            335Amortization
      of unearned share-basedcompensation
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            3,841
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            3,841Preferred
      stock dividends
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (460
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (460
                                                                                                                                                                                                                            )Common
      stock dividends ($0.075 per share)
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (1,521
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (1,521
                                                                                                                                                                                                                            )Income
      tax benefit from dividends paid onunvested
      shares
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            43
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            43Net
      loss on sales of shares for employee
                                                                                                                                                                                                                              withholding
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (133
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (133
                                                                                                                                                                                                                            )Common
      shares repurchased
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (9
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            9
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (83
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (83
                                                                                                                                                                                                                            )Excess
      income tax benefit from vesting ofrestricted
      shares
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            1,574
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            1,574Balances
      at June 30, 2008
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            10
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            10
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            20,290
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            203
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            50,047
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            698
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (5,302
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (228
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            9
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (83
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            45,345Net
      income
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            3,830
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            3,830Net
      unrealized losses on other investments
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (1,278
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (1,278
                                                                                                                                                                                                                            )Reclassification
      of realized losses included in net income
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            754
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            754Comprehensive
      income - (Note
      12)
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            3,306Issuance
      and forfeitures of restricted common stock
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            536
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            5
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            4,346
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (4,051
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            300Issuance
      and forfeitures of stock options
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            1,058
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (1,058
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —Amortization
      of unearned share-basedcompensation
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            3,091
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            3,091Conversion
      of preferred stock - (Note
      7)
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (10
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (10
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            1,667
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            17
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (7
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —Common
      stock dividends ($0.21 per share)
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (4,636
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (4,636
                                                                                                                                                                                                                            )Income
      tax benefit from dividends paid onunvested
      shares
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            97
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            97Net
      loss on sales of shares for employee
                                                                                                                                                                                                                              withholding
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (223
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (223
                                                                                                                                                                                                                            )Common
      shares repurchased
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (292
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            292
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (2,113
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            (2,113
                                                                                                                                                                                                                            )Excess
      income tax benefit from vesting ofrestricted
      shares
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            1,696
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            1,696Balances
      at March 31, 2009 (unaudited)
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            $
                                                                                                                                                                                                                            —
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            22,201
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            $
                                                                                                                                                                                                                            225
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            $
                                                                                                                                                                                                                            57,014
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            $
                                                                                                                                                                                                                            (108
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            $
                                                                                                                                                                                                                            (7,320
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            $
                                                                                                                                                                                                                            (752
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            301
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            $
                                                                                                                                                                                                                            (2,196
                                                                                                                                                                                                                            )
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            $
                                                                                                                                                                                                                            46,863
   The
accompanying notes are an integral part of these condensed consolidated
financial
statements.


5




EPOCH
HOLDING CORPORATION AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


(in
thousands)





Nine
      Months EndedMarch
      31,2009
                                      
                                      
                                      2008Cash
      flows from operating activities:Net
      income
                                      
                                      $
                                      3,830
                                      
                                      
                                      $
                                      5,319Adjustments
      to reconcile net income to net cash(used
      in) provided by operating activities:Deferred
      income taxes
                                      
                                      
                                      316
                                      
                                      
                                      
                                      (112
                                      )Share-based
      compensation
                                      
                                      
                                      3,391
                                      
                                      
                                      
                                      3,148Depreciation
      and amortization
                                      
                                      
                                      322
                                      
                                      
                                      
                                      315Realized
      gains on investments
                                      
                                      
                                      (3,971
                                      )
                                      
                                      
                                      (3,712
                                      )Loss
      from equity method investment
                                      
                                      
                                      135
                                      
                                      
                                      
                                      27Excess
      income tax benefit from vesting ofrestricted
      shares
                                      
                                      
                                      (1,696
                                      )
                                      
                                      
                                      (353
                                      )Income
      tax benefit from payment of dividends onunvested
      shares
                                      
                                      
                                      (97
                                      )
                                      
                                      
                                      (27
                                      )Decrease/
      (increase) in operating assets:Accounts
      receivable
                                      
                                      
                                      992
                                      
                                      
                                      
                                      (10
                                      )Prepaid
      and other current assets
                                      
                                      
                                      (272
                                      )
                                      
                                      
                                      227(Decrease)/
      increase in operating liabilities:Accounts
      payable and accrued liabilities
                                      
                                      
                                      (197
                                      )
                                      
                                      
                                      (4
                                      )Accrued
      compensation and benefits
                                      
                                      
                                      (3,781
                                      )
                                      
                                      
                                      2,241Income
      taxes payable
                                      
                                      
                                      346
                                      
                                      
                                      
                                      1,282Deferred
      rent
                                      
                                      
                                      (64
                                      )
                                      
                                      
                                      (64
                                      )Net
      cash (used in) provided by operating activities
                                      
                                      
                                      (746
                                      )
                                      
                                      
                                      8,277Cash
      flows from investing activities:Proceeds
      from other transactions - (Note 9b)
                                      
                                      
                                      4,938
                                      
                                      
                                      
                                      375Investments
      in Epoch managed funds andother
      investments, net
                                      
                                      
                                      (291
                                      )
                                      
                                      
                                      (3,520
                                      )Capital
      expenditures
                                      
                                      
                                      (19
                                      )
                                      
                                      
                                      (86
                                      )Security
      deposits, net
                                      
                                      
                                      (11
                                      )
                                      
                                      
                                      (21
                                      )Purchases
      and sales of short-term investments, net
                                      
                                      
                                      —
                                      
                                      
                                      
                                      21,850Proceeds
      from sale of marketable securities
                                      
                                      
                                      —
                                      
                                      
                                      
                                      4,499Net
      cash provided by investing activities
                                      
                                      
                                      4,617
                                      
                                      
                                      
                                      23,097Cash
      flows from financing activities:Common
      stock dividends paid
                                      
                                      
                                      (4,636
                                      )
                                      
                                      
                                      (1,014
                                      )Repurchase
      of common stock
                                      
                                      
                                      (2,113
                                      )
                                      
                                      
                                      —Income
      tax benefit from the vesting ofrestricted
      shares
                                      
                                      
                                      1,696
                                      
                                      
                                      
                                      353Income
      tax benefit from payment of dividends onunvested
      shares
                                      
                                      
                                      97
                                      
                                      
                                      
                                      27Net
      loss on sale of shares for employee withholding
                                      
                                      
                                      (223
                                      )
                                      
                                      
                                      —Preferred
      stock dividends
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (230
                                      )Net
      cash used in financing activities
                                      
                                      
                                      (5,179
                                      )
                                      
                                      
                                      (864
                                      )Net
      (decrease) increase in cash and cashequivalents
      during period
                                      
                                      
                                      (1,308
                                      )
                                      
                                      
                                      30,510Cash
      and cash equivalents at beginning of period
                                      
                                      
                                      37,436
                                      
                                      
                                      
                                      3,097Cash
      and cash equivalents at end of period
                                      
                                      $
                                      36,128
                                      
                                      
                                      $
                                      33,607Supplemental
      cash flow information:Cash
      paid for income taxes
                                      
                                      $
                                      2,230
                                      
                                      
                                      $
                                      973





The
accompanying notes are an integral part of these condensed consolidated
financial statements.


6




EPOCH
HOLDING CORPORATION AND SUBSIDIARIES





NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE THREE AND NINE MONTHS ENDED MARCH 31, 2009 AND 2008





(Unaudited)




Note
1 - Organization





Business


Epoch
Holding Corporation ("Epoch" or the "Company"), a Delaware corporation, is a
holding company whose sole line of business is investment advisory and
investment management services. The operations of the Company are conducted
through its wholly-owned subsidiary, Epoch Investment Partners, Inc. ("EIP").
EIP is a registered investment adviser under the Investment Advisers Act of
1940, as amended (the "Investment Advisers Act"). EIP provides investment
advisory and investment management services to retirement plans, mutual funds,
endowments, foundations and high net worth individuals. Headquartered in New
York, NY, the Company’s current product offerings include U.S. All Cap Value,
U.S. Value, U.S. Smid (small/mid) Cap Value, U.S. Small Cap Value, U.S. Choice,
Global Small Cap Value, Global Absolute Return, Global Choice, Global All Cap,
International Small Cap, Balanced, and Global Equity Shareholder
Yield.





Business
segments


The
Company's sole line of business is the investment advisory and investment
management business. There are no other operating or reportable
segments.




Note
2 – Summary of Significant Accounting Policies





Basis
of presentation


The
unaudited condensed consolidated financial statements of the Company included
herein have been prepared in accordance with accounting principles generally
accepted in the United States of America (“GAAP”), and in accordance with the
instructions to Form 10-Q pursuant to the rules and regulations of the
Securities and Exchange Commission (the “SEC”). In the opinion of management,
all adjustments, consisting of normal recurring adjustments, necessary for a
fair presentation of the financial condition and interim results of operations
have been made. The results for the interim periods are not necessarily
indicative of the results to be obtained for a full fiscal year.




The
Company's unaudited condensed consolidated financial statements and the related
notes should be read together with the consolidated financial statements and the
related notes included in the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 2008.





Certain
reclassifications have been made to prior period condensed consolidated
financial statements to conform to the current period presentation.





Principles
of consolidation


The
accompanying condensed consolidated financial statements include the accounts of
the Company and its subsidiaries. All material intercompany accounts and
transactions have been eliminated in consolidation.





Use
of estimates


The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
certain estimates and assumptions. These estimates and assumptions impact the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities as of the dates of these condensed consolidated financial
statements and the reported amounts of revenue and expenses during the reporting
periods. Actual results could differ from these estimates.




Financial
instruments with concentration of credit risk


The
financial instruments that potentially subject the Company to concentrations of
credit risk consist principally of cash, cash equivalents and other investments.
Epoch invests its cash and cash equivalents with high-credit quality financial
institutions in amounts which, at times, may be in excess of the FDIC insurance
limits.





Cash
equivalents


Cash
equivalents are highly liquid investments in money market funds consisting of
short-term securities of the U.S. government and its agencies with original
maturities of 90 days or less.




7





Property
and equipment


The costs
of leasehold improvements are capitalized and such costs are amortized on a
straight-line basis over the shorter of their estimated useful lives or lease
term, as applicable. All other capital assets are recorded at cost and such
costs are depreciated on a straight-line basis over their estimated useful
lives. Generally, the useful lives are approximately 3 to 7 years for equipment,
1 to 3 years for purchased software, and 3 to 10 years for leasehold
improvements and exclude option periods, if any. Repairs and maintenance costs
are charged to expense as incurred. Upon sale or disposition of property and
equipment, the cost and related accumulated depreciation amounts are removed
from the accounts and any resulting gain or loss is recognized in
operations.





Other
investments


The
Company holds investments in four Company-sponsored mutual funds—the Epoch
Global Equity Shareholder Yield Fund (“EPSYX”), the Epoch U.S. All Cap Equity
Fund (“EPACX”), the Epoch International Small Cap Fund (“EPIEX”), and the Epoch
U.S. Large Cap Equity Fund (“EPLCX”). The Company also holds investments in the
Epoch Global Absolute Return Fund, LLC and in a separate account of Epoch’s
Global All Cap product. The Company intends to hold these investments for a
period in excess of one year.





The
investments in the Company-sponsored mutual funds and the separate account of
Epoch's Global All Cap product are accounted for as available-for-sale
securities. Any
resulting change in market value is recorded as unrealized gain or loss in
Accumulated other comprehensive income (loss), a separate component of
stockholders’ equity.




EIP is
also the managing member of the Epoch Global Absolute Return Fund, LLC whose
underlying assets consist of marketable securities. The Company's investment in
this entity is accounted for using the equity method, under which EIP's share of
the net earnings or losses from the limited liability company is reflected in
Other income, as earned, and any distributions are reflected as reductions
from the investment.





The
Company periodically reviews the carrying value of these investments for
impairment by evaluating the nature, duration and extent of any decline in fair
value.  If the decline in value is determined to be other-than-temporary,
the carrying value of the investment is written down to fair value through
earnings. No impairment charges have been recognized during the periods
presented.





Treasury
stock


Treasury
stock is accounted for under the cost method.





Revenue
recognition


Investment
advisory and management fees are recognized as services are provided, pursuant
to specific terms contained in advisory or sub-advisory contracts between EIP
and its clients. Such contracts generally call for revenue to be determined as a
percentage of assets under management (“AUM”). Separate account fees are billed
on a quarterly basis, in arrears, generally based on the account's asset value
at the end of the quarter. Fees for services performed for mutual funds under
advisory and sub-advisory contracts are calculated based upon the daily net
asset values of the respective fund, and are generally received in arrears.
Advance payments, if received, are deferred and recognized during the periods
for which services are provided.





The
Company also has certain contracts which contain “incentive clauses” that allow
the Company to earn performance fees in the event that investment returns meet
or exceed targeted amounts specified in the contracts. Revenues for these
incentives are recognized only when such performance targets are met or exceeded
at the end of the contract's year, typically at the end of each calendar year -
the Company’s second fiscal quarter. Due to the inability to forecast financial
markets, no revenues are recognized until the contract year ends, even when
investment returns exceed the contractual targets within the contract
year.





Share-based
compensation


The
Company has issued restricted stock to employees and directors of the Company,
and options to purchase shares of stock to employees of the Company in
accordance with our Amended and Restated 2004 Omnibus Long-Term Incentive
Compensation Plan. Share-based
payments are accounted for in accordance with Statement of Financial Accounting
Standards No. 123 (Revised 2004),Share-Based Compensation
(“SFAS 123R”), using the fair value method.





The fair
value of the Company's restricted stock awards is based on the closing price of
the Company's common stock at the grant date.





The
Company values stock options based upon the Black-Scholes option-pricing model.
Implementation of the Black-Scholes option-pricing model requires the Company to
make certain assumptions, including expected volatility, risk-free interest
rate, expected dividend yield and expected life of the options. The Company
utilized assumptions that it believed to be most appropriate at the time of the
valuation.





Share-based
compensation costs related to share and option awards are charged against income
ratably over the requisite service period for the related equity award, with the
initial charge generally recorded in the first full month following the
grant.





8





Income
taxes


The
Company accounts for income taxes in accordance with Statement of Financial
Accounting Standard No. 109,Accounting for Income Taxes (“SFAS 109”). SFAS 109 requires that deferred
tax assets and liabilities arising from temporary differences between book and
tax basis be recognized using the enacted statutory tax rates and laws that will
be in effect when such differences are expected to reverse. Deferred tax assets
are recognized for temporary differences that will result in deductible amounts
in future years. Deferred tax liabilities are recognized for temporary
differences that will result in taxable income in future years.  SFAS 109
requires a reduction in deferred tax assets if it is more likely than not that
some portion or all of the deferred tax asset will not be realized.





Any
potential interest and penalty associated with a tax contingency, should one
arise, would be included as a component of income tax expense in the period in
which the assessment arises.





Earnings
per common share


Basic
earnings per share (“EPS”) is calculated by dividing net earnings applicable to
common shareholders by the weighted average number of common shares outstanding
during the period. Diluted EPS includes the determinants of basic EPS and, in
addition, reflects the dilutive effect, if any, of the common stock deliverable
pursuant to stock options or, for the prior year’s fiscal periods presented, the
common stock issuable upon the conversion of the convertible preferred
stock.





Comprehensive
income


Total
comprehensive income is reported on the Condensed Consolidated Statement of
Changes in Stockholders’ Equity and includes net income and, for investment
securities available-for-sale, the change in unrealized gains (losses) and the
reclassification of realized gains (losses) to net income.





Recently
issued accounting standards


In
September 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 157,Fair Value Measurements
(“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring
fair value and enhances disclosures about fair value measurements required under
other accounting pronouncements, but does not change existing guidance as to
whether or not an instrument is carried at fair value. SFAS 157 was effective
for the Company beginning July 1, 2008. SFAS 157 establishes a fair value
hierarchy, which requires an entity to maximize the use of observable inputs and
to minimize the use of unobservable inputs when measuring fair value. The
adoption of SFAS 157 did not have a material effect on the Company’s
consolidated financial position, results of operations, or cash
flows.





In
February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial
Assets and Financial Liabilities (“SFAS 159”). SFAS 159 permits certain
financial assets and financial liabilities to be measured at fair value, using
an instrument-by-instrument election. The initial effect of adopting SFAS 159
must be accounted for as a cumulative effect adjustment to opening retained
earnings for the fiscal year of adoption. Retrospective application to fiscal
years preceding the effective date is not permitted. SFAS 159 was effective for
the Company beginning July 1, 2008. The adoption of SFAS 159 did not have a
material effect on the Company’s consolidated financial position, results of
operations, or cash flows.




In June
2008, the FASB issued FASB Staff Position (“FSP”) EITF No. 03-6-1,Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities.
FSP EITF No. 03-6-1 addresses whether instruments granted in share-based payment
transactions are participating securities prior to vesting and therefore need to
be included in the earnings allocation in calculating earnings per share under
the two-class method described in SFAS No. 128,Earnings per Share. FSP EITF
No. 03-6-1 requires companies to treat unvested share-based payment awards that
have non-forfeitable rights to dividends or dividend equivalents as a separate
class of securities in calculating earnings per share. FSP EITF No. 03-6-1 is
effective for the Company beginning July 1, 2009; earlier application is not
permitted. The Company does not expect the adoption of FSP EITF No. 03-6-1 to
have a material effect on its consolidated financial position, results of
operations or earnings per share.





In
October 2008, the FASB issued FSP 157-3,Determining the Fair Value of a
Financial Asset When the Market for That Asset is Not Active. FSP 157-3
does not reinterpret or change SFAS 157’s existing principles but rather is
intended to enhance comparability and consistency in fair value measurements of
financial assets that trade in markets that are inactive. FSP 157-3 primarily
re-asserts that when the market is inactive, management is not required to use
thinly traded quotes or quotes reflecting distressed prices. Rather, management
should look to other means to estimate fair value, such as the “income
approach,” which discounts the estimated cash flows and results in a Level 3
(see Note 3) classification because the inputs are not observable. Revisions
resulting from a change in the valuation technique or its application shall be
accounted for as a change in accounting estimate. FSP 157-3 was effective
immediately upon issuance. The Company does not currently own such investment
instruments and, as such, the adoption of this pronouncement had no effect on
its consolidated financial position, results of operations, or cash flows.




9




In April
2009, the FASB released FSP No. 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly(“FSP FAS No.
157-4”). FSP FAS No. 157-4
provides additional guidance for estimating fair value in accordance with SFAS
157, when the volume and level of activity for the asset or liability have
significantly decreased. It also includes guidance on identifying circumstances
that indicate a transaction is not orderly.FSP FAS No. 157-4 is
effective for interim periods ending after June 15, 2009, but early adoption is
permitted for interim periods ending after March 15, 2009. The Company adopted
FSP FAS No. 157-4 during the quarter ended March 31, 2009. The adoption of this
pronouncement had no effect on its consolidated financial position, results of
operations, or cash flows.





In April
2009, the FASB issued FSP No. 115-2 and No. 124-2, Recognition and Presentation of
Other-Than-Temporary Impairments(“FSP No. 115-2
and No. 124-2”).This
standard provides guidance in determining whether impairments in debt securities
are other than temporary, and modifies the presentation and disclosures
surrounding such instruments. FSP No. 115-2 and No. 124-2 is effective for
interim periods ending after June 15, 2009, but early adoption is permitted for
interim periods ending after March 15, 2009. The Company adopted FSP No. 115-2
and No. 124-2 during the quarter ended March 31, 2009. The adoption of this
pronouncement had no effect on its consolidated financial position, results of
operations, or cash flows.





In April
2009, the FASB issued FSP FAS 107-1 and Accounting Principles Board (APB)
28-1,Interim Disclosures
about Fair Value of Financial
Instruments. The FSP amends SFAS No. 107, Disclosures about Fair Value of
Financial Instruments to require an entity
to provide disclosures about fair value of financial instruments in interim
financial information. This FSP is to be applied prospectively
and is effective for interim and annual periods ending after June 15, 2009 with
early adoption permitted for periods ending
after March 15, 2009.  The Company adopted FSP FAS No. 107-1 during
the quarter ended March 31, 2009. The adoption of this pronouncement had no
effect on its consolidated financial position, results of operations, or cash
flows.





In April
2009, the SEC issued Staff Accounting Bulletin No. 111 (“SAB 111”) on
Other-Than-Temporary Impairments. SAB 111 amends Topic 5.M. in the Staff
Accounting Bulletin Series entitled Other-Than-Temporary Impairment of Certain
Investments in Debt and Equity Securities (“Topic 5. M.”). SAB 111
maintains the SEC staff’s previous views related to equity securities and amends
Topic 5.M. to exclude debt securities from its scope. The Company elected to
adopt SAB 111 during the quarter ended March 31, 2009. The adoption of this
pronouncement had no effect on its consolidated financial position, results of
operations, or cash flows.





Note 3 – Fair Value
Measurements




As
discussed in Note 2, the Company adopted SFAS 157 at the beginning of its fiscal
year commencing July 1, 2008. SFAS 157 establishes a three-level valuation
hierarchy for disclosure of fair value measurements. The valuation hierarchy is
based upon the transparency of inputs to the valuation of an asset or liability
as of the measurement date. The three levels are defined as
follows:





·
            Level
      1 – inputs to the valuation methodology are quoted prices (unadjusted) for
      identical assets or liabilities in active
  markets.





·
            Level
      2 – inputs to the valuation methodology include quoted prices for similar
      assets and liabilities in active markets, and inputs that are observable
      for the asset or liability, either directly or indirectly, for
      substantially the full term of the financial
  instrument.





·
            Level
      3 – inputs to the valuation methodology are unobservable and significant
      to the fair value measurement.





An asset
or liability’s categorization within the valuation hierarchy is based upon the
lowest level of input that is significant to the fair value measurement. The
fair value hierarchy gives the highest priority to quoted prices (unadjusted) in
active markets for identical assets or liabilities (Level 1) and the lowest
priority to unobservable inputs (Level 3).





SFAS 157
allows three types of valuation approaches: a market approach, which uses
observable prices and other relevant information that is generated by market
transactions involving identical or comparable assets or liabilities; an income
approach, which uses valuation techniques to convert future amounts to a single,
discounted present value amount; and a cost approach, which is based on the
amount that currently would be required to replace the service capacity of an
asset.




The
following is a description of the valuation methodologies used for assets and
liabilities measured at fair value, as well as the general classification of
such assets and liabilities pursuant to the valuation hierarchy.




10





Other
investments


Other
investments consist of investments in Company-sponsored investment vehicles,
including mutual funds, an investment product separate account, and a limited
liability company.





The
investments in the mutual funds and in the separate account are accounted for as
available-for-sale investments and valued under the market approach through the
use of unadjusted quoted market prices available in an active market and are
classified within Level 1 of the valuation hierarchy. The fair market value of
these two investments at March 31, 2009 totals $2.5 million.





The
investment in the Epoch Global Absolute Return Fund, LLC is accounted for under
the equity method, whereby the Company records its percentage share of realized
and unrealized earnings or losses and is included in the Condensed Consolidated
Statement of Operations. Accordingly, SFAS 157 does not apply to this
investment.





The
following table presents, for each of the hierarchy levels previously described,
the Company’s assets that are measured at fair value as of March 31, 2009 (in thousands):




As
      of March 31, 2009Quoted
      Prices inActive
      Markets for
                              
                              
                              Significant
      Other
                              
                              
                              SignificantFair
      Value
                              
                              
                              Identical
      Assets
                              
                              
                              Observable
      Inputs
                              
                              
                              Unobservable
      InputsMeasurements
                              
                              
                              (Level
      1)
                              
                              
                              (Level
      2)
                              
                              
                              (Level
      3)Other
      investments:Available-for-sale
                              
                              $
                              2,481
                              
                              
                              $
                              2,481
                              
                              
                              $
                              —
                              
                              
                              $
                              —





At March
31, 2009, the Company did not hold any financial liabilities measured at fair
value.





Financial
Instruments that Approximate Fair Value





Cash
and cash equivalents


Cash and
cash equivalents include cash in checking and money market accounts, as well as
highly liquid investments in money market funds consisting of short-term
securities of the U.S. government and its agencies. Cash and cash equivalents
totaled $36.1 million at March 31, 2009. Cash equivalents are stated at cost
which approximates fair value due to their short maturity. Accordingly, SFAS 157
does not apply to cash and cash equivalents.





Security
deposits


Security
deposits are funds held in certificates of deposit as required by the lessors of
the Company’s leased office premises. These instruments totaled $1.1
million at March 31, 2009. These investments mature, and are renewed, in one
year intervals, and accordingly are valued at cost plus accrued interest, which
approximates fair value.





Other
financial instruments


Accounts
receivable, accounts payable and accrued liabilities are stated at cost which
approximates fair value due to their short maturities.





Note
4 - Accounts Receivable





The
Company's accounts receivable balances do not include an allowance for doubtful
accounts for the periods presented and there have been no bad debt expenses
recognized during the three and nine months ended March 31, 2009 and 2008,
respectively. Management believes these receivables are fully
collectible.




Significant
customers and contracts


For the
three months ended March 31, 2009, CI Investments Inc. (“CI”), a Canadian-owned
investment management company, accounted for approximately 12% of consolidated
revenues, while Genworth Financial Asset Management, Inc. (“Genworth”),
an investment adviser, through its investments in the Epoch
International Small Cap Fund (“EPIEX”) and the Epoch Global Equity Shareholder
Yield Fund (“EPSYX”), as well as separate account mandates, accounted for
approximately 10%.  For the nine months ended March 31, 2009, CI
accounted for approximately 13% of consolidated revenues, while Genworth
accounted for approximately 15% of consolidated revenues.





For the
three months ended March 31, 2008, CI accounted for approximately 15% of
consolidated revenues, while Genworth accounted for approximately 24%. For the
nine months ended March 31, 2008, CI accounted for approximately 16% of
consolidated revenues, while Genworth accounted for approximately 26%. The
Company's services and relationships with these clients are important to the
Company's ongoing growth strategy, and retention of these clients is significant
to the ongoing results of operations of the Company.





11





Note
5 – Other Investments





The
Company’s Other investments at March 31, 2009 and June 30, 2008 are summarized
as follows (in thousands):




March
      31, 2009
                
                
                June
      30, 2008Gross
                
                
                Gross
                
                
                Estimated
                
                
                
                
                
                Gross
                
                
                Gross
                
                
                EstimatedCost
                
                
                Unrealized
                
                
                Unrealized
                
                
                Fair
                
                
                Cost
                
                
                Unrealized
                
                
                Unrealized
                
                
                FairBasis
                
                
                Gains
                
                
                Losses
                
                
                Value
                
                
                Basis
                
                
                Gains
                
                
                Losses
                
                
                ValueAvailable-for-sale
      securities:Other
      Investments:Company-sponsored
      mutual funds
                
                $
                1,096
                
                
                $
                —
                
                
                $
                (410
                )
                
                $
                686
                
                
                $
                830
                
                
                $
                —
                
                
                $
                (97
                )
                
                $
                733Epoch
      Global All Cap separate account
                
                
                2,137
                
                
                
                26
                
                
                
                (368
                )
                
                
                1,795
                
                
                
                2,879
                
                
                
                156
                
                
                
                (287
                )
                
                
                2,748Total
      available-for-sale securities
                
                
                3,233
                
                
                
                26
                
                
                
                (778
                )
                
                
                2,481
                
                
                
                3,709
                
                
                
                156
                
                
                
                (384
                )
                
                
                3,481Equity
      method investment:Epoch
      Global Absolute Return Fund, LLC
                
                
                343
                
                
                
                —
                
                
                
                —
                
                
                
                343
                
                
                
                478
                
                
                
                —
                
                
                
                —
                
                
                
                478$
                3,576
                
                
                $
                26
                
                
                $
                (778
                )
                
                $
                2,824
                
                
                $
                4,187
                
                
                $
                156
                
                
                $
                (384
                )
                
                $
                3,959





Note 6 - Commitments and
Contingencies





Employment
agreements


The
Company entered into a three-year employment agreement with its Chief Executive
Officer in November 2007, effective January 1, 2008. The agreement calls for a
base annual salary of $350 thousand and bonus compensation in accordance with
the Company’s bonus and incentive compensation plans then in effect. The
agreement also calls for certain payments in the event of termination. The
payments could vary depending on the cause of termination and whether or not the
Board of Directors elects to enforce a non-compete agreement. The agreement was
reviewed and approved by the Company's Compensation Committee and the Board of
Directors.





There are
no employment contracts with any other employees or officers of the Company.
There are written agreements with certain employees, which provide for sales
commissions or bonuses, subject to the attainment of certain performance
criteria or continuation of employment. Such commitments under the various
agreements total approximately $0.5 million at March 31, 2009. Of this
amount, approximately $0.2 million is included in accrued compensation and
benefits in the Condensed Consolidated Balance Sheet at March 31, 2009. An
additional $0.1 million will be accrued during the remainder of the fiscal year
ending


June 30,
2009 and shortly thereafter. Approximately $0.2 million represents restricted
stock awards to be issued during the remainder of the fiscal year ending June
30, 2009 and shortly thereafter.





Legal
matters


From time
to time, the Company or its subsidiaries may become parties to claims, legal
actions and complaints arising in the ordinary course of business. Management is
not aware of any matters which would have a material adverse effect on its
consolidated financial statements.





Common
Stock Repurchase Plan


On June
24, 2008, the Company's Board of Directors approved the repurchase of up to a
maximum of 250,000 shares, or just over 1%, of the Company’s then fully diluted
outstanding Common Stock.  The repurchase plan called for the
repurchases to be made in the open market and/or in privately negotiated
transactions from time to time in compliance with applicable laws, rules and
regulations, including Rule 10b-18 under the Securities Exchange Act of 1934, as
amended, subject to prevailing market and business conditions. The plan did not
obligate the Company to purchase any particular number of shares, and could be
suspended or discontinued at any time. The Company completed this repurchase
plan by February 2009.





In March
2009, the Company’s Board of Directors authorized the Company to repurchase up
to an additional 250,000 shares, pursuant to the same conditions.





During
the three months ended March 31, 2009, the Company repurchased 82,599 shares at
a weighted average price of $5.93. For the nine months ended March 31, 2009, the
Company repurchased 263,900 shares at a weighted average price of $7.36. All
shares repurchased are shown as Treasury stock at cost, in the Stockholders’
equity section of the Condensed Consolidated Balance Sheet.





12





Employee
Tax Withholding


To
satisfy statutory employee tax withholding requirements related to the vesting
of common shares, the Company purchases from employees, and then resells in the
open market, shares utilized by employees to cover and pay for employee tax
withholdings. At March 31, 2009, there were 28,065 shares held to be resold by
the Company in the open market. These shares are shown as Treasury stock at cost
in the Stockholders’ equity section of the Condensed Consolidated Balance Sheet.
Any resulting gain or loss on resale is accounted for as an adjustment to
Additional paid-in capital.





Note
7 – Conversion of Preferred Stock





On July
1, 2008, the holder of the 10,000 shares of Series A Convertible Preferred Stock
(“the Preferred Stock”) outstanding, with a face value of $10,000,000, converted
the Preferred Stock to 1,666,667 shares of Common Stock. Accordingly, the Series
A Convertible Preferred Stock has been cancelled and the conversion eliminated
the holder’s rights to receive the semi-annual dividends on the Preferred
Stock.





Note
8 – Share-Based Compensation





The
Company granted $2.1 million and $3.1 million in restricted stock awards to
employees during the three months ended March 31, 2009 and 2008, respectively.
For the three months ended March 31, 2009, a total of 336,753 shares were
granted at a weighted average price of $6.13. For the three months ended March
31, 2008, a total of 278,697 shares were granted at a weighted average
price of $11.15.





The
Company granted $5.1 million and $5.6 million in restricted stock awards to
employees and non-employee directors during the nine months ended March 31, 2009
and 2008, respectively. For the nine months ended March 31, 2009, a total of
613,686 shares were granted at a weighted average price of $8.23. For the nine
months ended March 31, 2008, a total of 485,735 shares were granted at a
weighted average price of $11.55.





Employee
share-based compensation expense for restricted stock is recognized as follows:
12.5% immediately, and the remaining 87.5% ratably over the three-year vesting
period of those awards. Non-employee director awards are recognized over a
one-year period. Neither employee nor director share awards are subject to
performance-based accelerated vesting.





During
the three months ended March 31, 2009 the Company issued options to purchase
630,060 shares of common stock to employees of the Company. These stock options
vest and are recognized ratably over three years from the grant date and
have a term of seven years. The options have an exercise price of $6.17.
However, upon vesting, the options are exercisable only if the volume weighted
average price of the Company’s common stock equals or exceeds $9.25 for a period
of at least 20 trading days. Issuance of these awards will result in total stock
compensation expense of approximately $1.1 million over the requisite service
period.  The fair value of the option grant was estimated on the date of
grant using the Black-Scholes option pricing model with the following
assumptions used: dividend yield of 1.94%; expected volatility of 50%; risk free
interest rate of 1.59%; an average weighted expected life of 4.0 years; and an
estimated discount of 15% of calculated fair value due to the restriction on the
exercise of the options.





Total
unrecognized compensation costs at March 31, 2009, including unrecognized costs
related to the quarter ended March 31, 2009 activity is as follows (in thousands):





Unrecognized
                      
                      
                      Weighted
      AverageCompensation
                      
                      
                      RecognitionAward
                      
                      Cost
                      
                      
                      PeriodUnvested
      Restricted Stock
                      
                      $
                      6,320
                      
                      
                      
                      2.1
      yearsUnvested
      Stock Options
                      
                      $
                      1,000
                      
                      
                      
                      2.8
      years





Note
9 - Other Income





a)eStara
transaction


During
the fiscal year ended June 30, 2000, J Net Enterprises, Inc. (“J Net”), the
predecessor company to Epoch, made an investment in eStara, Inc. ("eStara"), a
technology-related company that provided conversion and tracking solutions to
enhance on-line sales. During the fiscal year ended June 30, 2003, J Net’s
management concluded its ability to recover its investment was remote and wrote
down the remaining carrying value to zero. On October 2, 2006, eStara’s
stockholders approved the acquisition of its stock by Art Technology Group, Inc.
(NASDAQ ticker symbol “ARTG”). Under the terms of the agreement, ARTG acquired
all of the outstanding common stock, preferred stock, and vested and unvested
stock options of eStara.




13




In
exchange for the eStara preferred shares held, the Company received 2,431,577
common shares of ARTG and $267 thousand in cash. The common shares received
from ARTG were subject to a lock-up agreement pursuant to which the shares were
released to the Company in equal monthly installments over a period of
12 months, which commenced January 2007.





During
the three and nine months ended March 31, 2008, the Company sold approximately
0.1 and 1.3  million shares of ARTG, respectively, and recorded
realized gains of approximately $0.3 and $3.5 million, respectively. Upon sale,
these gains were reclassified, in accordance with the provisions of SFAS No.
115,Accounting for Certain
Investments in Debt and Equity Securities, from Accumulated other
comprehensive income (loss), a separate component of stockholders’ equity, to
Realized gains on investments on the Condensed Consolidated Statement of
Operations. All of the remaining shares of ARTG were sold before the end of
fiscal year ended June 30, 2008.





b) Strategic Data
Corporation transaction


During
the fiscal year ended June 30, 2000, J Net, the predecessor company to Epoch,
made an investment in Strategic Data Corp. ("SDC"), a technology-related company
that specialized in advertising optimization technology. During the fiscal year
ended June 30, 2001, the carrying value of this investment was deemed to be
impaired by J Net’s management and written down to zero.




On
February 20, 2007, SDC’s stockholders approved the acquisition of its stock by
Fox Interactive Media, Inc. (“FIM”). Under the terms of the agreement, FIM
acquired all of the outstanding common stock, preferred stock, and vested and
unvested stock options of SDC. As a result of the merger, the Company, as a
holder of preferred stock of SDC, received an initial cash payment of
approximately $2.2 million on March 22, 2007.





The SDC
merger also called for contingent payments, upon the achievement of certain
targets and milestones, payable over a period of approximately 3.5 years from
the closing, as well as the release of an escrow fund. The Company’s share of
additional contingent payments and escrow funds stemming from the acquisition,
based upon the merger agreement, ranged from zero to approximately $15.4
million.





The first
target measurement date was November 2007 and the Company accrued $344 thousand
at that time. The Company received those proceeds during the quarter ended March
31, 2008. The second target measurement date was June 2008 and the Company
accrued an additional $200 thousand at that time, the proceeds of which were
received during the quarter ended September 30, 2008.





The
merger agreement was subsequently amended during the quarter ended December 31,
2008 to provide for a final settlement of all contingent payments by December
31, 2008.  As such, additional payments totaling $4.7 million were
received in December 2008. These payments represent the final contingent
payments and are included in Realized gains on investments on the condensed
consolidated statements of operations for the nine months ended March 31, 2009.
There are no further rights to any payments.





Note
10 - Provision For Income Taxes





In
calculating the provision for income taxes, the Company uses an estimate of the
annual effective income tax rate based upon the facts and circumstances known at
each interim period. On a quarterly basis, the actual effective income tax rate
is adjusted, as appropriate, based upon current facts and circumstances, if any,
as compared to those forecasted at the beginning of the fiscal year and each
interim period thereafter.





Valuation
allowance release


The
Company maintains valuation allowances against certain deferred tax assets, the
benefit of which may not be utilized. The Company reviews its deferred tax asset
valuation allowances on a quarterly basis, or whenever events or changes in
circumstances indicate that a review is required. In determining the requirement
for a valuation allowance, the historical and projected financial results of the
Company is considered, along with any other positive or negative evidence. Since
future financial results may differ from previous estimates, periodic
adjustments to the Company’s valuation allowances may be necessary.




In the
three months ended September 30, 2007, based on the Company’s annual operating
projections and the significant gains realized on sales of marketable
securities, the Company concluded that it was more likely than not that the tax
benefits from its tax basis on a previously impaired investment would be
utilized in the future. As such, in the three months ended September 30, 2007,
the Company released the entire valuation allowance of approximately $1.1
million attributable to this fully valued deferred tax asset, the tax effect of
which was a credit to income tax expense. The effect of this
valuation allowance release, together with the use of a projected annual
effective tax rate, resulted in a net benefit from income taxes of approximately
$0.4 million for the nine months ended March 31, 2008.





14





Note
11 – Earnings Per Share





Basic
earnings per share is computed by dividing net earnings by the weighted average
number of common shares outstanding during the period.





Diluted
earnings per share is computed by dividing net earnings, adjusted for the effect
of dilutive securities, by the weighted average number of common and common
equivalent shares outstanding during the period. The Company had 1,665,060 and
1,035,000 issued and outstanding stock options at


March 31,
2009 and 2008, respectively. The calculation of earnings per share excluded the
issued and outstanding stock options for the three and nine months
ended March 31, 2009, respectively, as the exercise price of the options
was higher than the average market price of the common stock for the respective
period. The conversion of those particular options, whose exercise price was
higher than the average market price of the common stock during the respective
period, would have an anti-dilutive effect.





The
calculation of earnings per share excluded 510,000 and 500,000 issued and
outstanding stock options for the three and nine months ended March 31,
2008, respectively, as the exercise price of these options was higher than the
average market price of the common stock for the respective period.





For the
three and nine months ended March 31, 2008, the 1,666,667 shares of common stock
issuable upon conversion of the preferred stock had no effect on basic earnings
per share, but was included in the calculation of diluted earnings per
share for the nine months ended March 31, 2008. It was not included in the
calculation of diluted earnings for the three months ended March 31, 2008 as its
effect was anti-dilutive.





The
preferred stock was converted into 1,666,667 common shares on July 1, 2008 which
were, accordingly, included in the basic earnings per share calculation for the
three and nine months ended March 31, 2009.




The
following table presents the computation of basic and diluted earnings per share
for the three and nine months ended March 31, 2009 and 2008, respectively (in thousands, except per share
data):





Three
      Months Ended
                                
                                
                                Nine
      Months EndedMarch
      31,
                                
                                
                                March
      31,2009
                                
                                
                                2008
                                
                                
                                2009
                                
                                
                                2008Numerator:Net
      income available to common stockholders:Net
      income
                                
                                $
                                274
                                
                                
                                $
                                675
                                
                                
                                $
                                3,830
                                
                                
                                $
                                5,319Preferred
      stock dividends
                                
                                
                                —
                                
                                
                                
                                (115
                                )
                                
                                
                                —
                                
                                
                                
                                (345
                                )Net
      income available to common stockholdersfor
      basic earnings per share
                                
                                
                                274
                                
                                
                                
                                560
                                
                                
                                
                                3,830
                                
                                
                                
                                4,974Preferred
      stock dividends
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                345Net
      income available to common stockholdersafter
      assumed conversions, for diluted earnings per share
                                
                                $
                                274
                                
                                
                                $
                                560
                                
                                
                                $
                                3,830
                                
                                
                                $
                                5,319Denominator:Average
      common shares outstanding
                                
                                
                                22,171
                                
                                
                                
                                20,247
                                
                                
                                
                                22,101
                                
                                
                                
                                20,146Common
      stock equivalents upon conversion of preferred stock
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                1,667Net
      common stock equivalents assuming the exercise ofin-the-money
      stock options
                                
                                
                                —
                                
                                
                                
                                44
                                
                                
                                
                                —
                                
                                
                                
                                72Average
      common and common equivalent shares outstanding -assuming
      dilution
                                
                                
                                22,171
                                
                                
                                
                                20,291
                                
                                
                                
                                22,101
                                
                                
                                
                                21,885Basic
      earnings per share
                                
                                $
                                0.01
                                
                                
                                $
                                0.03
                                
                                
                                $
                                0.17
                                
                                
                                $
                                0.25Diluted
      earnings per share
                                
                                $
                                0.01
                                
                                
                                $
                                0.03
                                
                                
                                $
                                0.17
                                
                                
                                $
                                0.24




15




Note
12 – Comprehensive Income





A summary
of comprehensive income is as follows (in thousands):





Three
      Months Ended
                
                
                Nine
      Months Ended2009
                
                
                2008
                
                
                2009
                
                
                2008Net
      income
                
                $
                274
                
                
                $
                675
                
                
                $
                3,830
                
                
                $
                5,319Other
      comprehensive income:Change
      in unrealized (losses) gains on available-for-sale
    securities
                
                
                (177
                )
                
                
                (384
                )
                
                
                (1,278
                )
                
                
                962Reclassification
      of realized losses (gains) to net income
                
                
                197
                
                
                
                (263
                )
                
                
                754
                
                
                
                (3,336
                )Comprehensive
      income
                
                $
                294
                
                
                $
                28
                
                
                $
                3,306
                
                
                $
                2,945




Note
13 – Special Cash Dividend





On
December 19, 2008, the Board of Directors declared a special cash dividend of
$0.12 per share on the Company’s common stock. The dividend was paid on January
15, 2009 to all shareholders of record at the close of business on December 31,
2008.  The aggregate dividend payment totaled approximately


$2.6
million.





Note
14 - Subsequent Events





Common
dividends


On April
8, 2009, the Board of Directors declared a quarterly cash dividend on the
Company's Common Stock of $0.03 per share payable on May 15, 2009 to all
shareholders of record at the close of business on April 30, 2009.




The
Company expects regular quarterly cash dividends to be paid in February, May,
August and November of each fiscal year, and anticipates a total annual dividend
of $0.12 per common share. However, the actual declaration of future cash
dividends, and the establishment of record and payment dates, will be subject to
final determination by the Board of Directors each quarter after its review of
the Company's financial performance.





*****




16




Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations.





Set forth
on the following pages is management's discussion and analysis of our financial
condition and results of operations for the three and nine months ended March
31, 2009 and 2008. Such information should be read in conjunction with our
unaudited condensed consolidated financial statements together with the notes to
the unaudited condensed consolidated financial statements. When we use the terms
the “Company,” “management,” “we,” “us,” and “our,” we mean Epoch Holding
Corporation, a Delaware corporation, and its consolidated
subsidiaries.




Forward-Looking
Statements





Certain
information included, or incorporated by reference in this Quarterly Report on
Form 10-Q and other materials filed or to be filed by Epoch
Holding Corporation (“Epoch" or the “Company") with the Securities and
Exchange Commission (“SEC") contain statements that may be considered
forward-looking within the meaning of the Private Securities Litigation Reform
Act of 1995. In some cases, you can identify these statements by forward-looking
words such as “may," “might," “will," “should," “expect," “plan," “anticipate,"
“believe," “estimate," “predict," “potential" or “continue," and the negative of
these terms and other comparable terminology. These forward-looking statements,
which are subject to known and unknown risks, uncertainties and assumptions
about the Company, may include projections of the Company's future financial
performance based on the Company's anticipated growth strategies and trends in
the Company's business. These statements are only predictions based on the
Company's current expectations and projections about future events. There are
important factors that could cause the Company's actual results, level of
activity, performance or achievements to differ materially from the results,
level of activity, performance or achievements expressed or implied by the
forward-looking statements. In particular, you should consider the risks and
uncertainties outlined in “Factors Which May Affect Future
Results.”





These
risks and uncertainties are not exhaustive. Other sections of this Quarterly
Report on Form 10-Q may include additional factors which could adversely impact
the Company's business and financial performance. Moreover, the Company operates
in a very competitive and rapidly changing environment. New risks and
uncertainties emerge from time to time, and it is not possible for the Company's
management to predict all risks and uncertainties, nor can the Company assess
the impact of all factors on the Company's business or the extent to which any
factor, or combination of factors, may cause actual results to differ materially
from those contained in any forward-looking statements.





Although
the Company believes the expectations reflected in the forward-looking
statements are reasonable, the Company cannot guarantee future results, level of
activity, performance or achievements. Moreover, neither the Company nor any
other person assumes responsibility for the accuracy or completeness of any of
these forward-looking statements. You should not rely upon forward-looking
statements as predictions of future events. The Company is under no duty to
update any of these forward-looking statements after the date of this Quarterly
Report on Form 10-Q, nor to conform the Company's prior statements to actual
results or revised expectations, and the Company does not intend to do
so.





Forward-looking
statements include, but are not limited to, statements about the
Company’s:




·
            business
      strategies and investment policies,


·
            possible
      or assumed future results of operations and operating cash
      flows,


·
            competitive
      position,


·
            potential
      growth opportunities,


·
            recruitment
      and retention of the Company's key
employees,


·
            expectations
      with respect to the economy, securities markets, the market for mergers
      and acquisitions activity, the market for asset management activity and
      other industry trends,


·
            potential
      operating performance, achievements, productivity improvements, efficiency
      and cost reduction efforts,


·
              expected
      tax rate, and·
              effect
      from the impact of future legislation and regulation on the
      Company.




17




Available
Information





Reports
the Company files electronically with the SEC via the SEC’s Electronic Data
Gathering, Analysis and Retrieval system (“EDGAR”) may be accessed through the
internet. The SEC maintains an internet site that contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the SEC, atwww.sec.gov.




The
Company maintains a website which contains current information on operations and
other matters. The website address iswww.eipny.com. Through the
Investor Relations section of our website, and “Link to SEC Website” therein, we
make available, free of charge, our Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statement, and any
amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as soon as
reasonably practicable after we electronically file such material with, or
furnish it to, the SEC.





Also
available free of charge on our website within the Investors Relations section
is our Code of Ethics and Business Conduct and charters for the Audit,
Nominating/Corporate Governance, and the Compensation committees of our board of
directors.





Factors
Which May Affect Future Results





There are
numerous risks which may affect the results of operations of the Company.
Factors which could affect the Company's success include, but are not limited
to, the ability to attract and retain clients, performance of the financial
markets and invested assets managed by the Company, retention of key employees,
misappropriation of assets and information by employees, system failures,
significant changes in regulations, the costs of compliance associated with
existing regulations and the penalties associated with non-compliance, and the
risks associated with the loss of key members of the management
team.





In
addition, the Company's ability to expand or alter its product offerings,
whether through acquisitions or internal development is critical to its
long-term success and has inherent risks. This success is dependent on the
ability to identify and fund those products or acquisitions on terms which are
favorable to the Company. There can be no assurance that any of these operating
factors or acquisitions can be achieved or, if undertaken, they will be
successful.




These and
other risks related to our Company are discussed in greater detail under Part I,
Item 1A. “Risk Factors” in the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 2008.





Critical
Accounting Estimates and Policies





Our
significant accounting estimates and policies are described in Note 2 of the
Notes to the Consolidated Financial Statements included in our Annual Report on
Form 10-K for the fiscal year ended June 30, 2008. The Company's Critical
Accounting Estimates and Policies have not changed from those reported in
Management's Discussion and Analysis of Financial Condition and Results of
Operations in the Company's Form 10-K for the fiscal year ended June 30,
2008.





Stock
options





During
the three months ended March 31, 2009, the Company issued options to purchase
shares of common stock to employees of the Company.





The
Company values stock options based upon the Black-Scholes option-pricing model
and recognizes this value as an expense over the requisite service period.
Implementation of the Black-Scholes option-pricing model requires the Company to
make certain assumptions, including expected volatility, risk-free interest
rate, expected dividend yield and expected life of the options. The Company
utilized assumptions that it believed to be most appropriate at the time of the
valuation.





Overview





The
Company, through its operating subsidiary Epoch Investment Partners, Inc.
(“EIP”), provides investment advisory and investment management services to its
clients primarily through separately managed accounts and commingled vehicles,
such as mutual funds and private investment funds. The overall investment
philosophy is focused on achieving a superior risk-adjusted return by investing
in companies that generate free cash flow and are undervalued relative to the
investment team’s fair value determinations. Security selection and portfolio
construction are designed to protect capital in declining markets while
participating in rising markets.





EIP is a
registered investment adviser under the Investment Advisers Act of 1940, as
amended (the “Investment Advisers Act”). It has one line of business, and that
is to manage investment assets for retirement plans, mutual funds, endowments,
foundations, and high net worth individuals. Revenues are generally derived as a
percentage of assets under management (“AUM”). Therefore, among other factors,
revenues are dependent on (i) performance of financial markets, (ii) the ability
to maintain existing clients, and (iii) changes in the composition of AUM. The
management team is led by William W. Priest. Mr. Priest has over 40 years of
experience in the investment advisory business.




18




Financial
and Business Highlights




The three
months ended March 31, 2009 was a period which saw nearly all equity markets
experience double digit negative returns. Despite the persisting difficult
financial market environment, the Company achieved several significant
accomplishments.





ØThe Company experienced
net AUM inflows in excess of $700 million. Management believes this positive
result is reflective of its investment products’ above-benchmark
performance, resulting in several new mandates, particularly in the
U.S. Value and U.S. All Cap services. The global product set, including
International Small Cap and the Global concentrated portfolios, experienced
additional inflows, and the Global Equity Shareholder Yield Fund continued to
outperform its respective benchmark.





Ø In
March, the Company’s Global Equity Shareholder Yield Fund received the Lipper
Fund Award for “best in class” over the past three years in the Global Multi-Cap
Value Funds classification.





ØThe Company achieved
positive operating results for the seventh consecutive quarter. The Company
remains focused on expense management as it continues to monitor and assess its
operating costs and their alignment with its business strategy.





ØCorporate liquidity
remains strong. Cash balances were 72% of total assets as of March 31, 2009.
Working capital increased by $3.2 million  to


$40.0
million. The Company’s current ratio is over 16, which is well above
industry average. The Company is debt-free.





Ø The
Board of Directorsauthorized the
repurchase of up to an additional 250,000 shares, or just over 1%, of its fully
diluted outstanding common stock. This authorization follows the recent
completion of the previous 250,000 share repurchase program. The Company
repurchased approximately 83,000 shares during the three months ended March 31,
2009.  As of March 31, 2009, the Company has repurchased approximately
273,000 shares to date.





Three
      Months EndedMarch
      31,
                                                                                        
                                                                                        
                                                                                        Change(Dollars
      in thousands)
                                                                                        
                                                                                        2009
                                                                                        
                                                                                        
                                                                                        2008
                                                                                        
                                                                                        
                                                                                        $
                                                                                        
                                                                                        
                                                                                        %Operating
      income
                                                                                        
                                                                                        $
                                                                                        295
                                                                                        
                                                                                        
                                                                                        $
                                                                                        737
                                                                                        
                                                                                        
                                                                                        $
                                                                                        (442
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (60)%Operating
      margin
                                                                                        
                                                                                        
                                                                                        4
                                                                                        %
                                                                                        
                                                                                        
                                                                                        9
                                                                                        %





Operating
margins were weaker when compared with the same period a year ago. The main
driver of this was the decrease in revenue, stemming from a lower level of AUM.
The Company finished the quarter ended March 31, 2009 with AUM of $5.7 billion,
a 9% decrease from AUM of $6.2 billion at March 31,
2008.  The average assets under management for the three months ended
March 31, 2009 was approximately $5.2 billion compared to approximately $6.3
billion for the three months ended March 31, 2008, a decrease of approximately
17%. The primary cause for this decrease was a significant decline in global
equity markets from the prior year.  Global equity markets declined
approximately 35-40% during the calendar year ended December 31, 2008, and
approximately 10–15% in the quarter ended March 31, 2009.





Despite
the market decline during the quarter, the Company’s AUM increased by 6% from
the previous quarter. The increased AUM is the result of several new mandates,
particularly in the Company’s U.S. Value and U.S. All Cap services. Net AUM
inflows of $0.7 billion and $1.4 billion for the three and nine months ended
March 31, 2009, respectively, helped to mitigate the impact of market
depreciation.


19


The
Company continued to concentrate on expense management during the quarter ended
March 31, 2009. Operating expenses declined by approximately $1.2
million, or 15%, in the current quarter compared with the same quarter a year
ago. The reduction in employee related costs of $0.8 million was the primary
reason for the decline.




Three
      Months Ended
                                                                              March
      31,
                                                                            
                                                                            
                                                                            Change(Dollars
      in thousands)
                                                                            
                                                                            2009
                                                                            
                                                                            
                                                                            2008
                                                                            
                                                                            
                                                                            $
                                                                            
                                                                            
                                                                            %Net
      income
                                                                            
                                                                            $
                                                                            274
                                                                            
                                                                            
                                                                            $
                                                                            675
                                                                            
                                                                            
                                                                            $
                                                                            (401
                                                                            )
                                                                            
                                                                            
                                                                            (59)%





The
Company’s decline in net income was primarily the result of the reduction in AUM
and revenues due to market depreciation, partially offset by inflows from new
and existing clients. A reduction in other income, including market losses on
other investments and a decline in interest income in conjunction with lower
interest rates, also contributed to the decline.




Business
Environment





As an
investment management and advisory firm, our results of operations can be
directly impacted by global market, political, and economic trends. The business
environment is influenced by several factors, including business profitability,
investor confidence, unemployment, and financial market transparency. These
factors can directly affect capital appreciation or depreciation, which in turn,
impacts our investment advisory and management business.





Overall
economic activity continued to remain weak across the country and throughout the
world during the quarter ended March 31, 2009.U.S. gross domestic
product shrank at a 6.1% annual pace during the quarter ended March 31, 2009
and, having fallen at a 6.3% rate in the previous quarter, marked the worst
two-quarter performance for the GDP in a half century. Retail sales and
lending activity continued to remain weak throughout the
quarter.  Housing continued plummeting and business investment plunged
as firms slashed plans to expand in the backdrop of a deepening recession. Oil
and commodity prices continued their decline as capacity utilization continued
to decrease.Lastly, the rate of
unemployment climbed higher, reaching 8.5% by the end of the quarter, the
highest level in a quarter century. The Federal Reserve and foreign central
banks and governments around the world continued to provide additional liquidity
and stability to the financial markets to mitigate the negative economic impact
related to the credit markets. The U.S. federal government also put in place a
fiscal stimulus plan that supplements the interest rate and other actions taken
by the Federal Reserve over the previous several months.





During
the quarter, stocks around the world continued to endure a period of remarkable
volatility and continue to record large declines.Inall, U.S. and global
markets declined by approximately 10-15% during the quarter ended March 31,
2009.In
particular, the Dow Jones Industrial Average,(1) NASDAQ
Composite Index(2) and
the S&P 500,(3)
assuming dividend reinvestment, decreased during the quarter ended March 31,
2009 by 12%, 3% and 11%, respectively. On a broad basis, developed global
markets, as represented by the MSCI World index,(4)
decreased by 12%.





(1)
            Dow
      Jones Industrial Average is a trademark of Dow Jones & Company, which
      is not affiliated with Epoch.


(2)
            NASDAQ
      Composite Index is a trademark of the NASDAQ Stock Market, Inc., which is
      not affiliated with Epoch.


(3)
            S&P
      500 is a trademark of Standard & Poor’s, a division of the McGraw-Hill
      Companies, Inc., which is not affiliated with
  Epoch.


(4)
            MSCI
      World Index is a trademark of MSCI Inc., which is not affiliated with
      Epoch.




Company
impact and outlook


As the
sharp sell-off in the equity markets continued to impact the value of assets
under management, by nearly $0.4 billion during the quarter, the Company
continued to achieve positive net inflows of approximately $0.7 billion. While
the quarter was difficult to all investors, the Company believes it is well
positioned for the future as a result of its proven investment philosophy and
above average risk-adjusted performance. Its investment strategies, which
emphasize a free cash flow analytical approach to the evaluation of equities,
should continue to produce superior returns at a lower risk for our clients. The
Company believes that free cash flow will be the analytical tool of choice
because share price performance will depend on which companies show operational
efficiencies, have capital expense under control and can properly manage their
cash flow at a time when lending to fund growth or operations has tightened. The
emphasis on cash flow analysis has become increasingly relevant, as the use of
accounting measures alone has proven to inadequately capture issues surrounding
the financial condition of many companies, particularly in the financial
sector.





In the
midst of this challenging environment, the Company continues to place a priority
on its expense management, ensuring that operating costs are monitored,
assessed and aligned with its business strategy.




20





Assets
Under Management and Flows (“AUM”)




The
following table sets forth the changes in our AUM for the periods presented
(dollars in
millions):




Three
      Months Ended
                  
                  
                  Nine
      Months EndedMarch
      31,
                  
                  
                  March
      31,2009
                  
                  
                  2008
                  
                  
                  2009
                  
                  
                  2008Beginning
      of period assets
                  
                  $
                  5,348
                  
                  
                  $
                  6,682
                  
                  
                  $
                  6,634
                  
                  
                  $
                  6,001Net
      inflows/(outflows)
                  
                  
                  712
                  
                  
                  
                  123
                  
                  
                  
                  1,366
                  
                  
                  
                  723Market
      (depreciation)/ appreciation
                  
                  
                  (391
                  )
                  
                  
                  (608
                  )
                  
                  
                  (2,331
                  )
                  
                  
                  (527
                  )End
      of period assets
                  
                  $
                  5,669
                  
                  
                  $
                  6,197
                  
                  
                  $
                  5,669
                  
                  
                  $
                  6,197





A
significant portion of the net inflows during the three months ended March 31,
2009 transpired during the latter half of the period.





For both
the three months and nine months ended March 31, 2009 and 2008, approximately
55% of investment advisory and management fees were earned from services to
mutual funds under advisory and sub-advisory contracts whose fees are calculated
based upon daily net asset values, and approximately 45% of fees were earned
from services provided for separate accounts whose fees are calculated based
upon asset values at the end of the quarter.





No
material impact to revenues or operating results arose during the periods
presented as a result of differences between the average daily AUM for the funds
where our fees are calculated based upon daily net asset values and the
quarter-ending AUM for those funds.




The
charts on the following page show the Company's products as a percentage of AUM
as of March 31, 2009 and 2008, respectively:




21














22





The table
and charts that follow set forth the amount of AUM by distribution
channel:





Assets
Under Management By Distribution Channel


(dollars
in millions)





As
      of March 31,
                        
                        
                        ChangeDistribution
      Channel:
                        
                        2009
                        
                        
                        2008
                        
                        
                        $
                        
                        
                        %Sub-advised
                        
                        $
                        2,788
                        
                        
                        $
                        2,738
                        
                        
                        $
                        50
                        
                        
                        
                        1.8%Institutional
                        
                        
                        2,663
                        
                        
                        
                        3,167
                        
                        
                        
                        (504
                        )
                        
                        
                        (15.9)%High
      net worth
                        
                        
                        218
                        
                        
                        
                        292
                        
                        
                        
                        (74
                        )
                        
                        
                        (25.3)%Total
      AUM
                        
                        $
                        5,669
                        
                        
                        $
                        6,197
                        
                        
                        $
                        (528
                        )
                        
                        
                        (8.5)%


23















24




Results
of operations - three months ended March 31, 2009 and 2008





For the
three months ended March 31, 2009, the Company recorded net income of $0.3
million, a decrease of $0.4 million from the same period a year ago. Basic
earnings per share were $0.01 per share for the three months ended March 31,
2009, compared to $0.03 per share for the same period a year ago.





The
primary drivers for the change in financial results were as
follows:





Ø Management fee revenue
decreased by $1.6 million, or 19%, during the three months ended March 31, 2009
compared with the same period a year ago. This decrease was caused by the
significant decline in the global equity markets, and its related impact on AUM,
partially offset by net inflows from new and existing clients.





Ø Other income decreased
by $0.5 million in the current quarter compared with the same period a year ago.
The prior year comparable period included


$0.3
million in realized gains from the sale of marketable securities. During the
current period, the Company realized $0.2 million in losses on other
investments.





Ø Offsetting these
reductions in net income was a $1.2 million decline in operating expenses. The
decline in employee related costs, particularly incentive compensation, was the
primary reason for this overall change. A 35% decrease in general,
administrative and occupancy costs also contributed to the overall operating
expense decline.




Three
      Months EndedMarch
      31,
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  Change(Dollars
      in thousands)
                                                                                                                                                                  
                                                                                                                                                                  2009
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  2008
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  $
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  %RevenuesInvestment
      advisory and management fees
                                                                                                                                                                  
                                                                                                                                                                  $
                                                                                                                                                                  6,843
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  $
                                                                                                                                                                  8,482
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  $
                                                                                                                                                                  (1,639
                                                                                                                                                                  )
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (19)%




The
decrease in revenues was attributable to the decrease in AUM compared with the
same period a year ago. The Company finished the quarter ended March 31, 2009
with AUM of $5.7 billion, a 9% decrease from AUM of $6.2 billion at March 31,
2008.  The average AUM for the three months ended March 31, 2009 was
approximately $5.2 billion compared to approximately $6.3 billion for the three
months ended March 31, 2008, a decrease of approximately 17%. The
primary cause for this decrease was a significant decline in global equity
markets from the prior year.  Global equity markets declined
approximately 35-40% during the calendar year ended December 31, 2008, and
approximately 10–15% in the quarter ended March 31, 2009.  This was
partly offset by net AUM inflows from new and existing clients of $0.7 billion
during the three months ended March 31, 2009 and over $1.7 billion since March
31, 2008.





For the
three months ended March 31, 2009, CI Investments Inc. (“CI”), a Canadian-owned
investment management company, accounted for approximately 12% of revenues,
while Genworth Financial Asset Management, Inc. (“Genworth”), an investment
adviser, through its investments in the Epoch International Small Cap Fund
(“EPIEX”) and the Epoch Global Equity Shareholder Yield Fund (“EPSYX”), as well
as separate account mandates, accounted for approximately 10% of
revenues.





For the
three months ended March 31, 2008, CI accounted for approximately 15% of
revenues, while Genworth accounted for approximately 24% of
revenues.





Three
      Months EndedMarch
      31,
                                                                                  
                                                                                  
                                                                                  Change(Dollars
      in thousands)
                                                                                  
                                                                                  2009
                                                                                  
                                                                                  
                                                                                  2008
                                                                                  
                                                                                  
                                                                                  $
                                                                                  
                                                                                  
                                                                                  %Employee
      related costs (excluding share-based
      compensation)
                                                                                  
                                                                                  $
                                                                                  3,853
                                                                                  
                                                                                  
                                                                                  $
                                                                                  4,605
                                                                                  
                                                                                  
                                                                                  $
                                                                                  (752
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (16)%As
      a percent of total revenue
                                                                                  
                                                                                  
                                                                                  56
                                                                                  %
                                                                                  
                                                                                  
                                                                                  54
                                                                                  %




Expenses
in this category include salaries, benefits, severance, incentive compensation,
signing bonuses and commission expenses. These expenses declined from the same
period a year ago, primarily as a result of a reduction in incentive
compensation, stemming from the reduction in AUM and revenues. Employee
headcount was nearly unchanged from the comparable period a year
ago.




25




Three
      Months EndedMarch
      31,
                                                                                    
                                                                                    
                                                                                    Change(Dollars
      in thousands)
                                                                                    
                                                                                    2009
                                                                                    
                                                                                    
                                                                                    2008
                                                                                    
                                                                                    
                                                                                    $
                                                                                    
                                                                                    
                                                                                    %Share-based
      compensation
                                                                                    
                                                                                    $
                                                                                    1,270
                                                                                    
                                                                                    
                                                                                    $
                                                                                    1,045
                                                                                    
                                                                                    
                                                                                    $
                                                                                    225
                                                                                    
                                                                                    
                                                                                    
                                                                                    22%As
      a percent of total revenue
                                                                                    
                                                                                    
                                                                                    19
                                                                                    %
                                                                                    
                                                                                    
                                                                                    12
                                                                                    %





The
Company believes that share-based compensation promotes unity in the workplace
and a common objective with shareholders. Employee share-based compensation
expense for restricted stock is recognized as follows: 12.5% immediately, and
the remaining 87.5% ratably over the three-year service period of those
awards. Employee share-based compensation expense for stock options is
recognized ratably over the three-year service period from the grant
date.





The
Company traditionally has issued share awards to certain senior executives
during the first three months following the fiscal year and to other employees
during the first three months following the calendar year. Effective in the
three months ended March 31, 2009, the Company began issuing share awards to all
employees during the first three months following the calendar year. The
increase in share based compensation during the three months ended March 31,
2009 incorporates a six month stub period for those senior
executives.





In the
three months ended March 31, 2009 and 2008, a total of 336,753 and 278,697
shares of restricted stock, respectively, were issued to employees. The value of
these awards was $2.1 million and $3.1 million, respectively. The increase in
the number of shares issued reflects a lower price at which shares were granted
compared to the prior year. A total of 42,097 and 34,836 shares of the
awards issued in the three months ended March 31, 2009 and 2008,
respectively, or approximately 12.5%, were immediately vested. The remaining
87.5% of the shares vest over the subsequent three years. During the three
months ended March 31, 2009 and 2008, a total of 19,778 and 161,426 shares, or
$0.1 million and $0.4 million respectively, were forfeited by terminated
employees.





During
the three months ended March 31, 2009 the Company issued options to purchase
630,060 shares of common stock  to employees of the Company. These
stock options vest and are recognized ratably over three years from the grant
date and have a term of seven years. The options have an exercise price of
$6.17. However, upon vesting, the options are exercisable only if the volume
weighted average price of the Company’s common stock equals or exceeds $9.25 for
a period of at least 20 trading days. Issuance of these awards will result in
total stock compensation expense of $1.1 million over the requisite service
period.




During
the three months ended March 31, 2009 and March 31, 2008,no shares were granted
to directors of the Company. Share grants to directors generally transpire in
the three months ended September 30. All director stock awards vest over one
year. Director share-based compensation expense is recognized ratably over the
one-year vesting period of those awards.




Three
      Months EndedMarch
      31,
                                                                                        
                                                                                        
                                                                                        Change(Dollars
      in thousands)
                                                                                        
                                                                                        2009
                                                                                        
                                                                                        
                                                                                        2008
                                                                                        
                                                                                        
                                                                                        $
                                                                                        
                                                                                        
                                                                                        %General,
      administrative and occupancy
                                                                                        
                                                                                        $
                                                                                        821
                                                                                        
                                                                                        
                                                                                        $
                                                                                        1,266
                                                                                        
                                                                                        
                                                                                        $
                                                                                        (445
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (35)%As
      a percent of total revenue
                                                                                        
                                                                                        
                                                                                        12
                                                                                        %
                                                                                        
                                                                                        
                                                                                        15
                                                                                        %




General,
administrative and occupancy expenses consist primarily of office rents, as well
as expenses for travel and entertainment, advertising and marketing, information
technology, utilities, and other office related expenses. Decreases in
travel-related expenses and market data services as a result of the Company’s
expense management and cost control efforts were the main reasons for the
decrease.





Three
      Months EndedMarch
      31,
                                                                                    
                                                                                    
                                                                                    Change(Dollars
      in thousands)
                                                                                    
                                                                                    2009
                                                                                    
                                                                                    
                                                                                    2008
                                                                                    
                                                                                    
                                                                                    $
                                                                                    
                                                                                    
                                                                                    %Professional
      fees and services
                                                                                    
                                                                                    $
                                                                                    493
                                                                                    
                                                                                    
                                                                                    $
                                                                                    725
                                                                                    
                                                                                    
                                                                                    $
                                                                                    (232
                                                                                    )
                                                                                    
                                                                                    
                                                                                    (32)%As
      a percent of total revenue
                                                                                    
                                                                                    
                                                                                    7
                                                                                    %
                                                                                    
                                                                                    
                                                                                    9
                                                                                    %




These
expenses consist primarily of outside legal fees for general corporate legal
affairs, independent accountants' fees, consulting fees, employee placement fees
and other professional services. A decline in employee placement fees was the
primary cause of the decline in professional fees and services. The prior year
period included placements fees for certain senior level employees.





26








Three
      Months EndedMarch
      31,
                                                                                                                            
                                                                                                                            
                                                                                                                            Change(Dollars
      in thousands)
                                                                                                                            
                                                                                                                            2009
                                                                                                                            
                                                                                                                            
                                                                                                                            2008
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            
                                                                                                                            
                                                                                                                            %Other
      income
                                                                                                                            
                                                                                                                            $
                                                                                                                            218
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            731
                                                                                                                            
                                                                                                                            
                                                                                                                            $
                                                                                                                            (513
                                                                                                                            )
                                                                                                                            
                                                                                                                            
                                                                                                                            (70)%




Other
income includes interest income, dividend income, realized gains and losses on
investments, and rental income from subleased office space. The prior year
period included realized gains of $0.3 million from the sales of marketable
securities, $0.3 million of interest income and $0.1 million of sublease income.
The current period includes $0.1 million of interest income and $0.1 million of
sublease income. Significantly lower interest rates during the three months
ended March 31, 2009 caused interest income to decline when compared to the same
period a year ago.




Three
      Months EndedMarch
      31,
                                                                                  
                                                                                  
                                                                                  Change(Dollars
      in thousands)
                                                                                  
                                                                                  2009
                                                                                  
                                                                                  
                                                                                  2008
                                                                                  
                                                                                  
                                                                                  $
                                                                                  
                                                                                  
                                                                                  %Provision
      for income taxes
                                                                                  
                                                                                  $
                                                                                  239
                                                                                  
                                                                                  
                                                                                  $
                                                                                  793
                                                                                  
                                                                                  
                                                                                  $
                                                                                  (554
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (70)%Effective
      income tax rate
                                                                                  
                                                                                  
                                                                                  46.6
                                                                                  %
                                                                                  
                                                                                  
                                                                                  54.0
                                                                                  %





In
calculating the provision for income taxes, the Company uses an estimate of the
annual effective income tax rate based upon the facts and circumstances known at
each interim period. On a quarterly basis, the effective income tax rate is
adjusted, as appropriate, based upon current facts and circumstances, if any, as
compared to those forecasted at the beginning of the fiscal year and each
interim period thereafter.




Results
of operations - nine months ended March 31, 2009 and 2008





For the
nine months ended March 31, 2009, the Company recorded net income of $3.8
million, a decrease of $1.5 million from the same period a year ago. Basic
earnings per share were $0.17 per share for the nine months ended March 31,
2009, compared with $0.25 per share for the same period a year ago.





The
primary factors for the change in operating results were as
follows:





Ø Operating revenues
declined by $3.0 million. This decrease was driven by the significant 35-40%
decline in the global equity markets and a corresponding decrease in AUM,
partially offset by net inflows of nearly $1.4 billion during the nine months
ended March 31, 2009, $0.7 million of which was received in the three
months ended March 31, 2009.





Ø Provision for income
taxes increased by $0.5 million. The comparable period a year ago included the
release of a $1.1 million tax valuation allowance, the tax benefit of which was
$0.4 million.





Ø Offsetting these
decreases to net income was a decline in total operating expenses of $2.3
million, or 10%, during the nine months ended March 31, 2009. While nearly all
expenses declined during the current period, it was the decline in employee
incentive compensation that was the primary reason for this overall
change.




Nine
      Months EndedMarch
      31,
                                                                    
                                                                    
                                                                    Change(Dollars
      in thousands)
                                                                    
                                                                    2009
                                                                    
                                                                    
                                                                    2008
                                                                    
                                                                    
                                                                    $
                                                                    
                                                                    
                                                                    %Operating
      income
                                                                    
                                                                    $
                                                                    1,481
                                                                    
                                                                    
                                                                    $
                                                                    2,145
                                                                    
                                                                    
                                                                    $
                                                                    (664
                                                                    )
                                                                    
                                                                    
                                                                    (31)%Operating
      margin
                                                                    
                                                                    
                                                                    7
                                                                    %
                                                                    
                                                                    
                                                                    9
                                                                    %




Operating
income decreased by $0.7 million during the nine months ended March 31, 2009
compared with the same period a year ago. Decreases in operating revenue as a
result of the weakness in financial markets were partially offset by a 10%
decrease in operating expenses, most notably in employee incentive compensation
and general, administrative and occupancy costs.





27





Nine Months Ended
                                                                                      March 31,
                                                                                    
                                                                                    
                                                                                    Change(Dollars
      in thousands)
                                                                                    
                                                                                    2009
                                                                                    
                                                                                    
                                                                                    2008
                                                                                    
                                                                                    
                                                                                    $
                                                                                    
                                                                                    
                                                                                    %Net
      income
                                                                                    
                                                                                    $
                                                                                    3,830
                                                                                    
                                                                                    
                                                                                    $
                                                                                    5,319
                                                                                    
                                                                                    
                                                                                    $
                                                                                    (1,489
                                                                                    )
                                                                                    
                                                                                    
                                                                                    (28)%




Net
income also declined for the nine months ended March 31, 2009 when compared with
the same period a year ago. The reason for the decline is a direct result of the
continued financial weakness in the equity markets, causing operating revenues
to decline by 12%.





Nine
      Months EndedMarch
      31,
                                                                                          
                                                                                          
                                                                                          Change(Dollars
      in thousands)
                                                                                          
                                                                                          2009
                                                                                          
                                                                                          
                                                                                          2008
                                                                                          
                                                                                          
                                                                                          $
                                                                                          
                                                                                          
                                                                                          %RevenuesInvestment
      advisory and management fees
                                                                                          
                                                                                          $
                                                                                          22,089
                                                                                          
                                                                                          
                                                                                          $
                                                                                          24,910
                                                                                          
                                                                                          
                                                                                          $
                                                                                          (2,821
                                                                                          )
                                                                                          
                                                                                          
                                                                                          (11)%Performance
      fees
                                                                                          
                                                                                          
                                                                                          -
                                                                                          
                                                                                          
                                                                                          
                                                                                          172
                                                                                          
                                                                                          
                                                                                          
                                                                                          (172
                                                                                          )
                                                                                          
                                                                                          
                                                                                          (100)%Total
      operating revenues
                                                                                          
                                                                                          $
                                                                                          22,089
                                                                                          
                                                                                          
                                                                                          $
                                                                                          25,082
                                                                                          
                                                                                          
                                                                                          $
                                                                                          (2,993
                                                                                          )
                                                                                          
                                                                                          
                                                                                          (12)%





The
decrease in revenues was attributable to lower levels in AUM during the nine
months ended March 31, 2009 compared with the same period a year ago. The
average assets under management for the nine months ended March 31, 2009 was
approximately $5.6 billion compared to approximately $6.3 billion for the nine
months ended March 31, 2008, a decrease of approximately 11%.This was primarily
the result of the significant global equity market decline of approximately
35-40% from a year ago, partially offset by net AUM inflows from new and
existing clients of nearly $1.4 billion during the nine months ended March 31,
2009 and over $1.7 billion since March 31, 2008.





For the
nine months ended March 31, 2009, CI accounted for approximately 13% of
revenues, while Genworth accounted for approximately 15% of revenues. For
the nine months ended March 31, 2008, CI accounted for approximately 16% of
revenues, while Genworth accounted for approximately 26% of
revenues.





Nine
      Months EndedMarch
      31,
                                                                            
                                                                            
                                                                            Change(Dollars
      in thousands)
                                                                            
                                                                            2009
                                                                            
                                                                            
                                                                            2008
                                                                            
                                                                            
                                                                            $
                                                                            
                                                                            
                                                                            %Employee
      related costs (excluding share-based
      compensation)
                                                                            
                                                                            $
                                                                            11,857
                                                                            
                                                                            
                                                                            $
                                                                            13,418
                                                                            
                                                                            
                                                                            $
                                                                            (1,561
                                                                            )
                                                                            
                                                                            
                                                                            (12)%As
      a percent of total revenue
                                                                            
                                                                            
                                                                            54
                                                                            %
                                                                            
                                                                            
                                                                            53
                                                                            %




Employee
related costs declined from the same period a year ago, primarily as a result of
a reduction in incentive compensation. Headcount levels for the nine months
ended March 31, 2009 were virtually unchanged from the similar period a year
ago.





Nine
      Months EndedMarch
      31,
                                                                        
                                                                        
                                                                        Change(Dollars
      in thousands)
                                                                        
                                                                        2009
                                                                        
                                                                        
                                                                        2008
                                                                        
                                                                        
                                                                        $
                                                                        
                                                                        
                                                                        %Share-based
      compensation
                                                                        
                                                                        $
                                                                        3,391
                                                                        
                                                                        
                                                                        $
                                                                        3,148
                                                                        
                                                                        
                                                                        $
                                                                        243
                                                                        
                                                                        
                                                                        
                                                                        8%As
      a percent of total revenue
                                                                        
                                                                        
                                                                        15
                                                                        %
                                                                        
                                                                        
                                                                        13
                                                                        %





In the
nine months ended March 31, 2009 and 2008, a total of 575,066 and 450,131 shares
of restricted stock, respectively, were issued to employees. The value of these
awards was $4.7 million and $5.1 million, respectively. The increase in the
number of shares issued reflects a lower price at which shares were granted
compared to the prior year. A total of 71,886 and 56,266 shares of the awards
issued in the nine months ended March 31, 2009 and 2008, respectively, or
approximately 12.5%, were immediately vested. The remaining 87.5% of the shares
vest over the subsequent three years. During the nine months ended March 31,
2009 and 2008, a total of 76,946 and 162,875 shares, $0.3 million and $0.4
million respectively, were forfeited by terminated employees.





During
the nine months ended March 31, 2009 the Company issued options to purchase
630,060 shares of stock to employees of the Company. These stock options vest
and are recognized ratably over three years and have a term of seven years. The
options have an exercise price of $6.17. However, upon vesting, the options are
exercisable only if the volume weighted average price of the Company’s common
stock equals or exceeds $9.25 for a period of at least 20 trading days. Issuance
of these awards will result in total stock compensation expense of $1.1 million
over the requisite service period.




28




During
the nine months ended March 31, 2009 and March 31, 2008,38,620 and 35,604 shares
of restricted stock, respectively, were granted to directors of the Company. All
director stock awards vest over one year. Director share-based compensation
expense is recognized ratably over the one-year vesting
period.





Nine
      Months EndedMarch
      31,
                                                                          
                                                                          
                                                                          Change(Dollars
      in thousands)
                                                                          
                                                                          2009
                                                                          
                                                                          
                                                                          2008
                                                                          
                                                                          
                                                                          $
                                                                          
                                                                          
                                                                          %General,
      administrative and occupancy
                                                                          
                                                                          $
                                                                          3,368
                                                                          
                                                                          
                                                                          $
                                                                          3,992
                                                                          
                                                                          
                                                                          $
                                                                          (624
                                                                          )
                                                                          
                                                                          
                                                                          (16)%As
      a percent of total revenue
                                                                          
                                                                          
                                                                          15
                                                                          %
                                                                          
                                                                          
                                                                          16
                                                                          %




Decreases
in information technology costs and travel related expenses, two of the primary
focuses of the Company’s cost control efforts, were the main reasons for the
decrease in general, administrative and occupancy costs.




Nine
      Months EndedMarch
      31,
                                                                      
                                                                      
                                                                      Change(Dollars
      in thousands)
                                                                      
                                                                      2009
                                                                      
                                                                      
                                                                      2008
                                                                      
                                                                      
                                                                      $
                                                                      
                                                                      
                                                                      %Professional
      fees and services
                                                                      
                                                                      $
                                                                      1,670
                                                                      
                                                                      
                                                                      $
                                                                      2,064
                                                                      
                                                                      
                                                                      $
                                                                      (394
                                                                      )
                                                                      
                                                                      
                                                                      (19)%As
      a percent of total revenue
                                                                      
                                                                      
                                                                      8
                                                                      %
                                                                      
                                                                      
                                                                      8
                                                                      %




A
decrease in employee placement fees was the primary cause for the decline in
professional fees and services. The prior year period included placements fees
for certain senior level employees. A decrease in legal fees also contributed to
the overall decline from the same period a year ago as the prior period includes
certain legal expenses incurred in the origination of new investment
vehicles.





Nine
      Months EndedMarch
      31,
                                                                      
                                                                      
                                                                      Change(Dollars
      in thousands)
                                                                      
                                                                      2009
                                                                      
                                                                      
                                                                      2008
                                                                      
                                                                      
                                                                      $
                                                                      
                                                                      
                                                                      %Other
      income
                                                                      
                                                                      $
                                                                      4,928
                                                                      
                                                                      
                                                                      $
                                                                      5,210
                                                                      
                                                                      
                                                                      $
                                                                      (282
                                                                      )
                                                                      
                                                                      
                                                                      (5)%




The prior
year period included realized gains of $3.5 million from the sales of marketable
securities, realized gains of $0.3 million from the Strategic Data Corporation
transaction, and approximately $1.0 million of interest income. The current
period includes realized gains of $4.7 million from the Strategic Data
Corporation transaction, losses on investments of $0.6 million, and
approximately $0.5 million of interest income. Significantly lower interest
rates during the nine months ended March 31, 2009 caused interest income to
decline compared to the same period a year ago.




Nine
      Months EndedMarch
      31,
                                                                      
                                                                      
                                                                      Change(Dollars
      in thousands)
                                                                      
                                                                      2009
                                                                      
                                                                      
                                                                      2008
                                                                      
                                                                      
                                                                      $
                                                                      
                                                                      
                                                                      %Provision
      for income taxes
                                                                      
                                                                      $
                                                                      2,579
                                                                      
                                                                      
                                                                      $
                                                                      2,036
                                                                      
                                                                      
                                                                      $
                                                                      543
                                                                      
                                                                      
                                                                      
                                                                      27%Effective
      income tax rate
                                                                      
                                                                      
                                                                      40.2
                                                                      %
                                                                      
                                                                      
                                                                      27.7
                                                                      %




In
calculating the provision for income taxes, the Company uses an estimate of the
annual effective income tax rate based upon the facts and circumstances known at
each interim period. On a quarterly basis, the effective income tax rate is
adjusted, as appropriate, based upon current facts and circumstances, if any, as
compared to those forecasted at the beginning of the fiscal year and each
interim period thereafter.





The
comparable period a year ago included the release of a tax valuation allowance,
the tax benefit of which was $0.4 million.




29





Liquidity
and Capital Resources




The
Company’s operating cash flows are primarily influenced by the timing and
receipt of investment management fees, and the payment of operating expenses,
including incentive compensation to employees. Investment management fees are
generally collected within 90 days of billing. The Company traditionally has
paid cash incentive compensation during the first three months following the
fiscal year to certain senior executives, and to other employees during the
first three months following the calendar year. Beginning with the current
fiscal quarter ending March 31, 2009, the Company has begun to pay incentive
compensation to all employees during the first three months following the
calendar year, incorporating a six month stub period for those senior
executives.




Investing
cash flows are principally influenced by activities to acquire property and
equipment, re-investment of earnings from investments in Company-sponsored
products, and proceeds from other transactions.




Financing
cash flows are predominately influenced by the payment of common stock dividends
and repurchase of the Company’s common stock.  The Company makes
dividend payments on its common stock on a quarterly basis.





The
Company remains committed to growing its business in this challenging market
environment and expects that its main uses of cash will be to invest in new
products, enhance its distribution network, acquire shares of its common stock,
enhance technology infrastructure and pay the operating expenses of the
business, which are predominantly variable in nature and therefore fluctuate
with revenue and assets under management. Accordingly, the Company continues to
look for opportunities to prudently reduce its variable costs and discretionary
spending wherever possible.




Sources
of Liquidity




Sources
of funds for the Company's operations are derived from investment advisory and
investment management fees, interest on the Company's cash and cash equivalents,
and sublease income. As of March 31, 2009, the Company had $36.1 million of cash
and cash equivalents and $5.4 million of accounts receivable to fund its
business growth strategy. Given the availability of these funds, the Company
does not maintain or anticipate a need for an external source of
liquidity.




At March
31, 2009, accounts payable and accrued liabilities, which consist of accrued
professional fees, trade payables and other liabilities, were $0.7 million.
Accrued compensation and benefits, which consist primarily of accrued incentive
compensation, were $1.9 million. The decrease in accrued incentive compensation
results from payments made during the period.





There is
no debt and management does not foresee any reason to incur debt unless a
significant business opportunity warrants such action. The Company's business
does not require it to maintain significant capital balances. Management
believes that the sources of liquidity described above will be sufficient to
meet the Company’s operating needs for the foreseeable future and will enable it
to continue to implement its growth objectives.





A summary
of cash flow data for the nine months ended March 31, 2009 and 2008,
respectively, is as follows(in thousands):




Nine
      Months EndedMarch
      31,2009
                  
                  
                  2008Cash
      flows (used in) provided by:Operating
      activities
                  
                  $
                  (746
                  )
                  
                  $
                  8,277Investing
      activities
                  
                  
                  4,617
                  
                  
                  
                  23,097Financing
      activities
                  
                  
                  (5,179
                  )
                  
                  
                  (864
                  )Net
      (decrease) increase in cash and cash equivalents
                  
                  
                  (1,308
                  )
                  
                  
                  30,510Cash
      and cash equivalents at beginning of year
                  
                  
                  37,436
                  
                  
                  
                  3,097Cash
      and cash equivalents at end of the period
                  
                  $
                  36,128
                  
                  
                  $
                  33,607Percent
      of total assets
                  
                  
                  72
                  %
                  
                  
                  70
                  %





Cash
Flows from Operating Activities





Net cash
used in operating activities of $0.7 million during the nine months ended March
31, 2009 reflects the payment of employee incentive compensation during the
current quarter as well as an increase in excess tax benefits recognized on
share-based compensation. The difference from the prior comparable period
primarily reflects the timing of incentive compensation payments for certain
senior executives.





30





When a
restricted stock award vests, the market price on the date the stock
vests to the employee may be higher than the original grant-date fair
market value of the award. If so, the difference between the cumulative amount
that has been recognized through the Condensed Consolidated Statements of
Operations and the vesting amount results in an excess tax benefit. Excess tax
benefits reduce income taxes payable and increase additional paid-in capital in
the period they are recognized, and are reflected as cash used in operating
activites and as cash provided by financing activities on the Statements of Cash
Flows. Excess tax benefits recognized during the nine months ended March 31,
2009 and 2008 were approximately $1.7 million and $0.4 million,
respectively.





The
remaining fluctuation from the prior year stems from the change in net income as
well as timing differences in the cash settlement of assets and liabilities,
particularly the payment of income taxes.





Cash
Flows from Investing Activities





Cash
flows from investing activities totaled $4.6 million and $23.1 million for the
nine months ended March 31, 2009 and March 31, 2008, respectively. Prior year
investing activities included $21.9 million of proceeds from the sale of
short-term investments as well as $4.5 million of proceeds from the sale of
shares of marketable securities. During August and September 2007, in response
to increasing credit quality concerns present in the fixed income securities
market, the Company liquidated all of its short-term investments. Proceeds from
these liquidations were then invested in cash and cash equivalents. No gains or
losses were realized from these liquidations.





During
the nine months ended March 31, 2009, the Company received $4.9 million
representing the final installment payments from the Strategic Data
transaction.





Cash
Flows from Financing Activities





Cash
flows from financing activities primarily reflect the payment of common stock
dividends, share buy-backs and the recognition of excess tax benefits on
share-based compensation. Cash used for financing activities totaled $5.2
million and $0.9 million for the nine months ended March 31, 2009 and March 31,
2008, respectively. The Company initiated the payment of common stock dividends
in the quarter ended December 31, 2007 and the share buy-back program in June
2008.





Dividends
paid during the nine months ended March 31, 2009 were approximately $4.6
million. During the same period, the Company repurchased 263,900 shares under
our authorized repurchase program for approximately $2.1 million.





Working
Capital





The
Company's working capital and current ratio (current assets divided by current
liabilities) for the nine months ended March 31, 2009 and recent fiscal year
ended June 30, 2008 is set forth in the table below (in thousands):




March
      31,
                  
                  
                  June
      30,
                  
                  
                  Increase/
                  
                  
                  Percent2009
                  
                  
                  2008
                  
                  
                  (Decrease)
                  
                  
                  ChangeCurrent
      Assets
                  
                  $
                  42,525
                  
                  
                  $
                  44,753
                  
                  
                  $
                  (2,228
                  )
                  
                  
                  (5)%Current
      Liabilities
                  
                  
                  2,536
                  
                  
                  
                  7,961
                  
                  
                  
                  (5,425
                  )
                  
                  
                  (68)%Working
      Capital
                  
                  $
                  39,989
                  
                  
                  $
                  36,792
                  
                  
                  $
                  3,197
                  
                  
                  
                  9%Current
      Ratio
                  
                  
                  16.8
                  
                  
                  
                  5.6
                  
                  
                  
                  11.2





Preferred
Stock Dividends





As a
result of the November 7, 2006 preferred stock issuance, the Company began
paying semi-annual dividends on newly issued Series A Convertible Preferred
Stock (“the Preferred Stock”), payable December 31 and June 30 of each year. The
semi-annual dividend payments were approximately


$230
thousand, each June and December.





On July
1, 2008, the holder of the 10,000 shares of the Preferred Stock outstanding,
with a face value of $10,000,000, converted the Preferred Stock to 1,666,667
shares of Common Stock. Accordingly, the Series A Convertible Preferred Stock
has been cancelled and the conversion eliminates the holder’s rights to receive
the semi-annual dividends on the Preferred Stock.





31





Quarterly
Common Stock Dividends





The
Company commenced declaring and paying a quarterly cash dividend on its common
stock in the quarter ended December 31, 2007.





On July
9, 2008, the Board of Directors declared a 20% increase in the quarterly per
share dividend rate on the Company’s common stock, from $0.025 per share to
$0.03 per share.





Quarterly
dividends were paid in August and November 2008 as well as February
2009.





On April
8, 2009, the Board of Directors declared a quarterly cash dividend payable on
May 15, 2009 to all shareholders of record at the close of business on April 30,
2009. The Company expects regular quarterly cash dividends going forward to be
paid in February, May, August and November of each fiscal year, and anticipates
a total annual dividend of $0.12 per common share. However, the actual
declaration of future cash dividends, and the establishment of record and
payment dates, will be subject to final determination by the Board of Directors
each quarter after its review of the Company's financial performance, as well as
general business conditions, capital requirements, and any contractual, legal
and regulatory restrictions.





Special
Common Stock Dividend





As a
result of the Company’s strong cash position and debt free balance sheet, the
Board of Directors declared a special cash dividend on December 19, 2008 of
$0.12 per share. The dividend was paid on January 15, 2009 to all shareholders
of record at the close of business on December 31, 2008. The aggregate dividend
payment totaled approximately $2.6 million.




This
dividend represented a small portion of the Company’s cash balances, the
remainder of which is being utilized to achieve key business objectives in
growing its business, and providing a reserve for any unstable economic
conditions.




Common
Stock Repurchase Plan





On June
24, 2008, the Company's Board of Directors approved the repurchase of up to a
maximum of 250,000 shares, or just over 1%, of the Company’s then fully diluted
outstanding Common Stock.  The repurchase plan called for the
repurchases to be made in the open market and/or in privately negotiated
transactions from time to time in compliance with applicable laws, rules and
regulations, including Rule 10b-18 under the Securities Exchange Act of 1934, as
amended, subject to prevailing market and business conditions. The plan did not
obligate the Company to purchase any particular number of shares, and could be
suspended or discontinued at any time. The Company completed this repurchase by
February 2009.





In March
2009, the Company’s Board of Directors authorized the Company to repurchase up
to an additional 250,000 shares, pursuant to the same conditions.





During
the three months ended March 31, 2009, the Company repurchased 82,599 shares at
a weighted average price of $5.93. For the nine months ended March 31, 2009, the
Company repurchased 263,900 shares at a weighted average price of $7.36. All
shares repurchased are shown as Treasury stock at cost, in the Stockholders’
equity section of the Condensed Consolidated Balance Sheet.




Contractual
Obligations





The
Company's headquarters and operations are located in New York, New York.
Business is conducted at a location with approximately 13,000 square feet under
a long-term lease that expires in September 2015. During
December 2008, in an effort to consolidate marketing efforts and reduce costs,
the Company closed its two-employee marketing office in Sherman Oaks,
California. The office lease at the California location expired in January
2009.




The
Company is also the primary party to another lease in New York, New York with
approximately 8,500 square feet, which expires in November 2010. In January
2002, a sublease agreement was executed with an unrelated third party for this
property. While the Company remains responsible under terms of the original
lease, the subtenant has assumed those responsibilities and is performing its
obligations under the sublease agreement. Proceeds from the sublease, net of
profit sharing with the landlord, more than offset the Company’s obligations
under this lease.





The
subtenant has performed its obligations under the sublease agreement and the
Company is not aware of any credit issues with the subtenant. As of March 31,
2009, the remaining future minimum payments under this lease total $0.8 million.
Future minimum receipts from the subtenant, net of profit sharing with the
landlord, slightly exceed $0.8 million as of March 31, 2009.




The
Company entered into a three-year employment agreement with its Chief Executive
Officer in November 2007, effective January 1, 2008. The agreement calls for a
base annual salary of $350 thousand and bonus compensation in accordance with
the Company’s bonus and incentive compensation plans then in effect. The
agreement also calls for certain payments in the event of termination. The
payments could vary depending on the cause of termination and whether or not the
Board of Directors elects to enforce a non-compete agreement. The agreement was
reviewed and approved by the Company's Compensation Committee and the Board of
Directors.




32




Summary
of Contractual Obligations





The
following table summarizes all contractual obligations, including the
aforementioned office leases (in thousands):




Payments
      Due inFiscal
      Years Ended June 30,RemainingPayments
      in
                          
                          
                          
                          
                          
                          
                          
                          
                          2014
      and2009
                          
                          
                          2010-2011
                          
                          
                          2012-2013
                          
                          
                          thereafter
                          
                          
                          TotalPrimary
      New York operations
                          
                          $
                          244
                          
                          
                          $
                          1,680
                          
                          
                          $
                          1,434
                          
                          
                          $
                          1,613
                          
                          
                          $
                          4,971Subleased
      New York lease
                          
                          
                          120
                          
                          
                          
                          681
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          801Other
      operating leases
                          
                          
                          14
                          
                          
                          
                          54
                          
                          
                          
                          10
                          
                          
                          
                          —
                          
                          
                          
                          78Total
      obligations
                          
                          
                          378
                          
                          
                          
                          2,415
                          
                          
                          
                          1,444
                          
                          
                          
                          1,613
                          
                          
                          
                          5,850Sublease
      income, net
                          
                          
                          (143
                          )
                          
                          
                          (669
                          )
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          (812
                          )Net
      obligations
                          
                          $
                          235
                          
                          
                          $
                          1,746
                          
                          
                          $
                          1,444
                          
                          
                          $
                          1,613
                          
                          
                          $
                          5,038





Off-Balance
Sheet Arrangements





As of
March 31, 2009 the Company had no off-balance sheet
arrangements.





Significant
Transactions





eStara
transaction


During
the fiscal year ended June 30, 2000, J Net Enterprises, Inc. (“J Net”), the
predecessor company to Epoch, made an investment in eStara, Inc. ("eStara"), a
technology-related company that provided conversion and tracking solutions to
enhance on-line sales. During the fiscal year ended June 30, 2003, J Net’s
management concluded its ability to recover its investment was remote and wrote
down the remaining carrying value to zero. On October 2, 2006, eStara’s
stockholders approved the acquisition of its stock by Art Technology Group, Inc.
(NASDAQ ticker symbol “ARTG”). Under the terms of the agreement, ARTG acquired
all of the outstanding common stock, preferred stock, and vested and unvested
stock options of eStara.





In
exchange for the eStara preferred shares held, the Company received 2,431,577
common shares of ARTG and $267 thousand in cash. The common shares received
from ARTG were subject to a lock-up agreement pursuant to which the shares were
released to the Company in equal monthly installments over a period of
12 months, which commenced January 2007.





During
the three and nine months ended March 31, 2008, the Company sold approximately
0.1 and 1.3  million shares of ARTG, respectively, and recorded
realized gains of approximately $0.3 and $3.5 million, respectively. Upon sale,
these gains were reclassified, in accordance with the provisions of SFAS No.
115,Accounting for Certain
Investments in Debt and Equity Securities, from Accumulated other
comprehensive income (loss), a separate component of stockholders’ equity, to
Realized gains on investments on the Condensed Consolidated Statement of
Operations. All of the remaining shares of ARTG were sold before the end of
fiscal year ended June 30, 2008.





Strategic
Data Corporation transaction


During
the fiscal year ended June 30, 2000, J Net, the predecessor company to Epoch,
made an investment in Strategic Data Corp. ("SDC"), a technology-related company
that specialized in advertising optimization technology. During the fiscal year
ended June 30, 2001, the carrying value of this investment was deemed to be
impaired by J Net’s management and written down to zero.




On
February 20, 2007, SDC’s stockholders approved the acquisition of its stock by
Fox Interactive Media, Inc. (“FIM”). Under the terms of the agreement, FIM
acquired all of the outstanding common stock, preferred stock, and vested and
unvested stock options of SDC. As a result of the merger, the Company, as a
holder of preferred stock of SDC, received an initial cash payment of
approximately $2.2 million on March 22, 2007.





The SDC
merger also called for contingent payments, upon the achievement of certain
targets and milestones, payable over a period of approximately 3.5 years from
the closing, as well as the release of an escrow fund. The Company’s share of
additional contingent payments and escrow funds stemming from the acquisition,
based upon the merger agreement, ranged from zero to approximately $15.4
million.




33




The first
target measurement date was November 2007 and the Company accrued $344 thousand
at that time. The Company received those proceeds during the quarter ended March
31, 2008. The second target measurement date was June 2008 and the Company
accrued an additional $200 thousand at that time, the proceeds of which were
received during the quarter ended September 30, 2008.





The
merger agreement was subsequently amended during the quarter ended December 31,
2008 to provide for a final settlement of all contingent payments by December
31, 2008.  As such, additional payments totaling $4.7 million were
received in December 2008. These payments represent the final contingent
payments and are included in Realized gains on investments on the condensed
consolidated statements of operations for the nine months ended March 31, 2009.
There are no further rights to any payments.





New
Accounting Pronouncements





In
September 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 157,Fair Value Measurements
(“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring
fair value and enhances disclosures about fair value measurements required under
other accounting pronouncements, but does not change existing guidance as to
whether or not an instrument is carried at fair value. SFAS 157 was effective
for the Company beginning July 1, 2008. SFAS 157 establishes a fair value
hierarchy, which requires an entity to maximize the use of observable inputs and
to minimize the use of unobservable inputs when measuring fair value. The
adoption of SFAS 157 did not have a material effect on the Company’s
consolidated financial position, results of operations, or cash
flows.





In
February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial
Assets and Financial Liabilities (“SFAS 159”). SFAS 159 permits certain
financial assets and financial liabilities to be measured at fair value, using
an instrument-by-instrument election. The initial effect of adopting SFAS 159
must be accounted for as a cumulative effect adjustment to opening retained
earnings for the fiscal year of adoption. Retrospective application to fiscal
years preceding the effective date is not permitted. SFAS 159 was effective for
the Company beginning July 1, 2008. The adoption of SFAS 159 did not have a
material effect on the Company’s consolidated financial position, results of
operations, or cash flows.





In June
2008, the FASB issued FASB Staff Position (“FSP”) EITF No. 03-6-1,Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities.
FSP EITF No. 03-6-1 addresses whether instruments granted in share-based payment
transactions are participating securities prior to vesting and therefore need to
be included in the earnings allocation in calculating earnings per share under
the two-class method described in SFAS No. 128,Earnings per Share. FSP EITF
No. 03-6-1 requires companies to treat unvested share-based payment awards that
have non-forfeitable rights to dividends or dividend equivalents as a separate
class of securities in calculating earnings per share. FSP EITF No. 03-6-1 is
effective for the Company beginning July 1, 2009; earlier application is not
permitted. The Company does not expect the adoption of FSP EITF No. 03-6-1 to
have a material effect on its consolidated financial position, results of
operations or earnings per share.





In
October 2008, the FASB issued FSP 157-3,Determining the Fair Value of a
Financial Asset When the Market for That Asset is Not Active. FSP 157-3
does not reinterpret or change SFAS 157’s existing principles but rather is
intended to enhance comparability and consistency in fair value measurements of
financial assets that trade in markets that are inactive. FSP 157-3 primarily
re-asserts that when the market is inactive, management is not required to use
thinly traded quotes or quotes reflecting distressed prices. Rather, management
should look to other means to estimate fair value, such as the “income
approach,” which discounts the estimated cash flows and results in a Level 3
classification because the inputs are not observable. Revisions resulting from a
change in the valuation technique or its application shall be accounted for as a
change in accounting estimate. FSP 157-3 was effective immediately upon
issuance. The Company does not currently own such investment instruments and, as
such, the adoption of this pronouncement had no effect on its consolidated
financial position, results of operations, or cash flows.





In April
2009, the FASB released FSP No. 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly(“FSP FAS No.
157-4”). FSP FAS No. 157-4
provides additional guidance for estimating fair value in accordance with SFAS
157, when the volume and level of activity for the asset or liability have
significantly decreased. It also includes guidance on identifying circumstances
that indicate a transaction is not orderly.FSP FAS No. 157-4 is
effective for interim periods ending after June 15, 2009, but early adoption is
permitted for interim periods ending after March 15, 2009. The Company adopted
FSP FAS No. 157-4 during the quarter ended March 31, 2009. The adoption of this
pronouncement had no effect on its consolidated financial position, results of
operations, or cash flows.





In April
2009, the FASB issued FSP No. 115-2 and No. 124-2, Recognition and Presentation of
Other-Than-Temporary Impairments(“FSP No. 115-2
and No. 124-2”).This
standard provides guidance in determining whether impairments in debt securities
are other than temporary, and modifies the presentation and disclosures
surrounding such instruments. FSP No. 115-2 and No. 124-2 is effective for
interim periods ending after June 15, 2009, but early adoption is permitted for
interim periods ending after March 15, 2009. The Company adopted FSP No. 115-2
and No. 124-2 during the quarter ended March 31, 2009. The adoption of this
pronouncement had no effect on its consolidated financial position, results of
operations, or cash flows.





34





In April
2009, the FASB issued FSP FAS 107-1 and Accounting Principles Board (APB)
28-1,Interim Disclosures
about Fair Value of Financial
Instruments. The FSP amends SFAS No. 107, Disclosures about Fair Value of
Financial Instruments to require an entity
to provide disclosures about fair value of financial instruments in interim
financial information. This FSP is to be applied prospectively
and is effective for interim and annual periods ending after June 15, 2009 with
early adoption permitted for periods ending
after March 15, 2009.  The Company adopted FSP FAS No. 107-1 during
the quarter ended March 31, 2009. The adoption of this pronouncement had no
effect on its consolidated financial position, results of operations, or cash
flows.





In April
2009, the SEC issued Staff Accounting Bulletin No. 111 (“SAB 111”) on
Other-Than-Temporary Impairments.  SAB 111 amends Topic 5.M. in the Staff
Accounting Bulletin Series entitled Other-Than-Temporary Impairment of Certain
Investments in Debt and Equity Securities (“Topic 5. M.”). SAB 111
maintains the SEC staff’s previous views related to equity securities and amends
Topic 5.M. to exclude debt securities from its scope. The Company elected to
adopt SAB 111 during the quarter ended March 31, 2009. The adoption of this
pronouncement had no effect on its consolidated financial position, results of
operations, or cash flows.





35





Item
      3. Quantitative and Qualitative
      Disclosures About Market
Risk.




Market
Risk





The
Company’s predominant exposure to market risk is directly related to its role as
an investment adviser for the mutual funds and separate accounts the Company
manages. Changes in value of assets managed will impact the level of management
and performance fee revenues. Approximately 55% of the Company’s revenue is
derived from daily net asset values, while the remaining 45% of revenue is
derived from market values of AUM at the end of the quarter. Declines in equity
security market prices could cause revenues to decline because of lower
investment management fees by causing:





•
            the
      value of AUM to decrease.


•
            the
      returns realized on AUM to decrease (impacting performance
      fees).


•
            clients
      to withdraw funds in favor of investments in markets that they perceive to
      offer greater opportunity.





Underperformance
of client accounts relative to competing products could exacerbate these
factors.





The
management of market risk on behalf of our clients, and the impact on fees to
the Company, is a significant focus for us and we use a variety of risk
measurement techniques to identify and manage market risk.





Other
investments





The
Company is exposed to fluctuations in the market price of Other investments
presented on its Condensed Consolidated Balance Sheets. The total fair value of
Other investments as of March 31, 2009 and June 30, 2008 was $2.8 million and
$4.0 million, respectively. The Company does not hedge its market risk related
to these securities and does not intend to do so in the future.





At March
31, 2009, the Company performed sensitivity analysis to assess the potential
loss in the fair value of these market-risk sensitive securities. The following
table represents the estimated impact on the Company’s financial position
assuming a hypothetical 10% decline in associated market indices (dollars in
thousands):




Estimated
      FairValue
      AfterHypothetical
                            
                            
                            Hypothetical
                            
                            
                            Decrease
      inFair
      Value at
                            
                            
                            Percentage
                            
                            
                            Percentage
                            
                            
                            Stockholders'March
      31, 2009
                            
                            
                            Decline
                            
                            
                            Change
                            
                            
                            Equity
      (1)Other
      investments
                            
                            $
                            2,824
                            
                            
                            
                            10
                            %
                            
                            $
                            2,603
                            
                            
                            $
                            221




1)
            Investments
      in the Epoch mutual funds and the separate account of Epoch's Global
      All-Cap Product are classified as available-for-sale securities.
      Unrealized gains or losses on available-for-sale securities are excluded
      from earnings and recorded in other comprehensive income (loss) as a
      separate component of stockholders’ equity until realized. The investment
      in the Epoch Global Absolute Return Fund, LLC is accounted for using the
      equity method, under which the Company's share of net realized and
      unrealized earnings or losses from the limited liability company is
      reflected in income.


Cash
and cash equivalents





Cash and
cash equivalents are exposed to market risk due to changes in interest rates,
which impacts interest income. The Company consistently monitors the quality of
the institution where its cash is deposited, the balance of which, at times, may
be in excess of the FDIC insurance limits. Presently, the Company neither
participates in hedging activities nor does it have any derivative financial
instruments.


36


Item 4. Controls and Procedures.





Evaluation of
Disclosure Controls and Procedures.





The
Company has established and maintains disclosure controls and other procedures
(as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), that are designed to provide reasonable assurance
that material information relating to Epoch Holding Corporation and its
subsidiaries on a consolidated basis is recorded, processed, accumulated,
summarized and communicated accurately to management, including its principal
executive officer and principal financial and accounting officer, as appropriate
to allow timely decisions regarding required disclosure. There are inherent
limitations to the effectiveness of any system of disclosure controls and
procedures, including the possibility of human error and the circumvention or
overriding of the controls and procedures. In designing and evaluating our
disclosure controls and procedures, management recognized that disclosure
controls and procedures, no matter how well conceived and operated, can only
provide reasonable, not absolute assurance that the objectives of the disclosure
controls and procedures are met.





For the
quarter ended March 31, 2009, management, with the participation of the
Company's principal executive officer and principal financial and
accounting officer, has evaluated the effectiveness of the design and
operation of its disclosure controls and procedures. Based on such evaluation,
the Company's principal executive officer and principal financial and
accounting officer have concluded that the Company's disclosure controls
and procedures were effective during the period covered by this Quarterly Report
on Form
10-Q.




The Company has also established and
maintains internal control over financial reporting as a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of condensed consolidated financial statements for external
purposes in accordance with accounting principles generally accepted in the
United States. In the ordinary course of business, the Company routinely
enhances its internal controls and procedures for financial reporting by either
upgrading its current systems or implementing new systems. During the quarter
ended March 31, 2009, there was no change in the Company’s internal controls
over financial reporting (as defined in Rule 13a-5(f) under the Exchange Act)
that has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting.





37





PART
II. OTHER INFORMATION




Item 1. Legal
Proceedings.





From time
to time, the Company or its subsidiaries may become parties to claims, legal
actions and complaints arising in the ordinary course of business. Management is
not aware of any claims which would have a material adverse effect on its
consolidated financial position, liquidity, or results of
operations.




Item
1a. Risk Factors.





See Part I.
Item 2. “Management’s Discussion and Analysis of Financial Condition and Results
of Operations - Business Environment” in this report for a discussion of the
conditions in the financial markets and economic conditions affecting our
business. This discussion updates, and should be read together with the risk
factor entitled “Negative performance of the securities markets could reduce our
revenues” in our annual report on Form 10-K for the year ended


June 30,
2008.





In
addition, for further discussion of our potential risks and uncertainties, see
information under the heading “Risk Factors” in our annual report on Form 10-K
for the year ended June 30, 2008.





Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.





(c)
Purchases of Equity Securities by the Issuer.





On June
24, 2008, the Company’s Board of Directors approved the repurchase of up to a
maximum of 250,000 shares, or just over 1%, of the Company’s then fully diluted
outstanding Common Stock. The repurchase plan called for the repurchases to be
made in the open market and/or in privately negotiated transactions from time to
time in compliance with applicable laws, rules and regulations, including Rule
10b-18 under the Securities Exchange Act of 1934, as amended, subject to
prevailing market and business conditions. The plan did not obligate the Company
to purchase any particular number of shares, and could be suspended or
discontinued at any time. The Company completed this repurchase plan by February
2009.





In March
2009, the Company’s Board of Directorsauthorized the Company
to repurchase up to an additional 250,000 shares pursuant to the same
conditions. This authorization follows the recent completion of the previously
announced 250,000 share repurchase program.





The table
below displays information with respect to the treasury shares the Company
purchased under the repurchase plans discussed above during the three months
ended March 31, 2009.


Total
      Number of
                  
                  
                  Maximum
      NumberAverage
                  
                  
                  Shares
      Purchased
                  
                  
                  of
      Shares that MayTotal
      Number
                  
                  
                  Price
                  
                  
                  as
      Part of Publicly
                  
                  
                  Yet
      Be Purchasedof
      Shares
                  
                  
                  Paid
      Per
                  
                  
                  Announced
      Plans
                  
                  
                  Under
      OutstandingPeriod
                  
                  Purchased
                  
                  
                  Share
                  
                  
                  or
      Programs
                  
                  
                  Plans
      or ProgramsJanuary
      1, 2009 - January 31, 2009
                  
                  
                  6,600
                  
                  
                  $
                  7.56
                  
                  
                  
                  6,600
                  
                  
                  
                  53,199February
      1, 2009 - February 28, 2009
                  
                  
                  53,199
                  
                  
                  $
                  6.18
                  
                  
                  
                  53,199
                  
                  
                  
                  -March
      1, 2009 - March 31, 2009
                  
                  
                  22,800
                  
                  
                  $
                  4.89
                  
                  
                  
                  22,800
                  
                  
                  
                  227,20082,599
                  
                  
                  
                  
                  
                  
                  
                  82,599





To
satisfy statutory employee tax withholding requirements related to the vesting
of common shares from employee stock awards, the Company purchases, and then
resells in the open market, shares to cover and pay for employee tax
withholdings. At March 31, 2009, there were 28,065 shares held in treasury to be
resold by the Company in the open market.




38




Item 6. Exhibits.





3.1
              
              Certificate
      of Incorporation of the Registrant, as amended. (B)3.2
              
              Amended
      and Restated By-Laws of Epoch Holding Corporation (as adopted April 2,
      2008). (C)10.1
              
              Employment
      Agreement by and between Epoch Holding Corporation and William W. Priest,
      dated as of  November 28, 2007 and effective as of
                January
      1, 2008. (D)10.2
              
              1992
      Incentive and Non-qualified Stock Option Plan. (E)10.40
              
              Indemnification
      Agreement. (F)10.40
              
              Stockholders
      Agreement dated as of June 2, 2004 among J Net Enterprises, Inc. and
      certain of its stockholders. (A)10.41
              
              Registration
      Rights Agreement dated as of June 2, 2004 among J Net Enterprises, Inc.
      and certain of its stockholders. (A)10.44
              
              Amendment
      to 2004 Omnibus Long-Term Incentive Compensation Plan.
  (G)10.45
              
              Office
      lease between Vornado 640 Fifth Avenue LLC (Landlord) and Epoch Investment
      Partners, Inc. (Tenant). (H)10.46
              
              Form
      of Restricted Stock Agreement. (I)10.47
              
              Office
      lease between 680 Fifth Avenue Associates, L.P. (Landlord) and JNet
      Enterprises (Tenant). (I)10.48
              
              Office
      sublease between J Net Enterprises, Inc. (Tenant) and The Game
      Show Network (subtenant). (I)10.49
              
              Form
      of Nonqualified Stock Option Agreement. (J)31.1
              
              Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley
      Act of 2002. (J)31.2
              
              Certification
      of Principal Financial Officer pursuant to Section 302 of the Sarbanes
      Oxley Act of 2002. (J)32.1
              
              Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                Sarbanes-Oxley
      Act of 2002. (J)





(A)
              
              Incorporated
      by reference to Registrant's Form 8-K dated June 3,
  2004.(B)
              
              Incorporated
      by reference to Registrant's Form 8-K dated December 7,
    2004.(C)
              
              Incorporated
      by reference to Registrant's Form 8-K dated April 2,
  2008.(D)
              
              Incorporated
      by reference to Registrant's Form 8-K dated November 28,
    2007.(E)
              
              Incorporated
      by reference to Registrant's 1992 Proxy Statement.(F)
              
              Incorporated
      by reference to Registrant's Quarterly Report on Form 10-Q for the fiscal
      quarter ended March 31, 2003.(G)
              
              Incorporated
      by reference to Registrant's 2008 Proxy Statement.(H)
              
              Incorporated
      by reference to Registrant's Annual Report on Form 10-K for the fiscal
      year ended June 30, 2005.(I)
              
              Incorporated
      by reference to Registrant's Annual Report on Form 10-K/A for the fiscal
      year ended June 30, 2006.(J)
              
              Filed
      herewith.





39




Signature





Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.





EPOCH
      HOLDING CORPORATION(Registrant)By:
                /s/ Adam
      BorakChief
      Financial OfficerDate:
      May 11, 2009
                
                (Principal
      Financial and Accounting
Officer)




40