Thank you, Lynn [ph] thank you, everyone for joining us for our third quarter 2018 results. Silvercrest experienced an increase of approximately $430 million in its discretionary assets under management during the third quarter of 2018.

A quarterly increase of 3% over the prior quarter, primarily driven by capital markets. Silvercrest's discretionary AUM drives the firm's revenue, and it has increased $1.3 billion year-over-year, driven by good capital markets and new client organic growth.

The firm achieved a new high of $16.6 billion in discretionary assets under management to end the third quarter of 2018. As a result of increased discretionary assets, Silvercrest's quarterly revenue increased by 9.1% year-over-year.

We announced during our second quarter that Silvercrest would complete its investment in its outsourced CIO business with the addition of professionals to complement the firm's superb investment team. We plan to aggressively grow this business, and the firm has developed a good pipeline of opportunities.

Silvercrest also has laid the groundwork for future growth in the high net worth business, and we have launched a value-added family business advisory capability. We are determined to grow our wealth management, institutional asset management, now outsourced CIO and family office businesses.

We remain prepared to use our capital for new strategic initiatives, the hiring of intellectual capital and potential acquisitions, including new asset management capabilities. In addition, on October 30, 2018, the company's Board of Directors declared our quarterly dividend of $0.14 per share of Class A common stock and that dividend will be paid on or about December 21, to shareholders of record as of the close of business on December 14.

With that, I'll turn it over to Scott Gerard, our CFO, and then we will take questions. Thank you.

Thanks, Rick. So as disclosed in our earnings release for the third quarter discretionary AUM as of September 30, 2018, was $16.6 billion, and total AUM as of the same period was $21.7 billion.

Revenue for the quarter was $24.9 million. And reported consolidated net income for the quarter was $3.9 million.

Looking in more detail of the quarter, revenue of $24.9 million represented approximately a 9% increase of revenue of approximately $22.8 million for the same period a year ago. This increase was driven primarily by growth in management and advisory fees as a result of increased AUM.

Expenses for the third quarter were $19.8 million, representing approximately a 13% increase from expenses of $17.5 million for the same period last year. This increase was primarily attributable to increases in compensation and benefits expense of $1.4 million, and general and administrative expenses of approximately $0.8 million.

Comp and benefits went up, primarily, because of an increase in the accrual for bonuses, increased salary expense as a result of both merit-based increases and newly hired staff. The increase in G&A during the third quarter was primarily due to increases in occupancy cost as a result of our new lease in New York City that took effect on October 1 of last year.

And we also had an increase in recruiting cost related to the newly hired staff. Reported consolidated net income was $3.9 million for the quarter, and this compared to $3.7 million in the same period last year.

Reported net income attributable to Silvercrest or to Class A shareholders for the third quarter of 2018 was approximately $2.2 million or $0.26 per basic and diluted Class A share. Adjusted EBITDA, which we define as EBITDA without giving effect to equity-based compensation expense and noncore, nonrecurring items, was approximately $7 million or 28.3% of revenue for the third quarter of this year, and that compared to $7 million or 30.7% of revenue for the same period in 2017.

Adjusted net income, which we define as net income without giving effect to noncore and nonrecurring items, and income tax expense, assuming a corporate rate of 26% for the periods beginning on January 1, 2018, as a result of the Tax Cuts & Jobs Act, was approximately $4.2 million for the quarter, or $0.31 per adjusted basic and diluted share. Adjusted earnings per share is equal to adjusted net income divided by the actual Class A and Class B shares outstanding as of the end of the reporting period for basic adjusted EPS.

And to the extent dilutive, we had unvested restricted stock units to the total shares outstanding to compute diluted adjusted EPS. Looking at nine months, ended September 30, revenue was $73.8 million.

This represented approximately a 10% increase of revenue of $66.9 million for the same period last year. And again, this was -- this increase was driven by growth in management and advisory fees as a result of increased AUM.

Expenses for the nine months ended this year were $57.9 million, and that represented approximately a 12% increase from expenses of $51.7 million for the same period last year. This increase was attributable, again, to increased comp and benefits expense of $4.1 million, and increased G&A of approximately $2.1 million.

Again, similar for the quarter comp and benefits went up because of the increased accrual for bonuses, and increased salary expense as a result of both merit-based increases and newly hired staff. The increase in G&A was primarily driven by, again, the increase in our rent expense.

In addition to increased sub advisory and referral fees as a result of increased sub-advisory revenue. And then recruiting cost related to the newly hired staff in addition to some other miscellaneous G&A expenses.

These increases were partially offset by a decrease in depreciation and amortization expense. Reported consolidated net income was $12.1 million for the nine months ended this year, and that compared to $10.6 million for the same period last year.

Reported net income attributable to Silvercrest for the nine months ended this year was $6.7 million or $0.81 per basic and diluted Class A share. Adjusted EBITDA was $21.1 million or 28.5% of revenue for the nine months ended September this year, and that compared to $20.3 million or 30.3% of revenue from the same period last year.

Looking at adjusted net income, it was $12.6 million for the nine months ended this year or $0.93 per adjusted basic share and $0.92 per adjusted diluted share. Quickly looking at the balance sheet, total assets were approximately $120.7 million as of September 30 this year and that compares to $117.4 million as of the end of last year.

Cash and cash equivalents were approximately $57.7 million at September 30 and that compared to $53.8 million at the end of last year. We had no notes payable outstanding at September 30, and we have a small amount of about $0.7 million outstanding at the end of last year.

Lastly, total Class A stockholders’ equity was approximately $53.4 million at September 30 of this year. That concludes my remarks.

I'll turn it over to Rick, and we'll go to Q&A.

Thanks very much, Scott. This time we'll take questions, talk about the business.

Thanks.

Good morning. Thanks for taking my question.

Sure, Brian. Good morning.

Just a couple of quick questions here; two initiatives, the outsourced CIO and family office advisory; there are -- can you highlight any revenue -- pinpoint any revenues yet, or are these initiatives still too early in your lives?

Yes. For the most part, Brian, they’re still too early.

The business -- family business advisory is very new. And let me explain the rationale behind that as well.

Number one, I think it will be important in the long term new business development efforts for helping wealthy families after they have done things with their family business. That effort seeks to serve in the role of an advisory capacity, acting as a fiduciary on the same side of the table as families, as they look to restructure their businesses, recapitalize, perhaps, undertake a strategic sale.

We will not be operating as bankers or investment bankers. We will strictly be working to provide the advice in order to find those professionals and lead families through initiatives that they may have never faced before.

Obviously, our long-term hope is that in helping families through those situations, they will have new liquidity, good relationship with Silvercrest and a desire to have those assets managed for the benefit of the family over the long term. We felt a need to open a more proactive initiative to help grow the high net worth client base, so that's really what that's about.

So, in the future as that business develops, at its current size, I don’t expect it to be a big needle mover with regards to the new business revenue in and of itself. It'll add something.

It's really the long-term opportunity with regards to new AUM on behalf of the families. But it’s way too early.

We’ve just announced it. We're very excited about the professional we've hired.

Yes?

Will that generate advisory fees, something other than fees from AUM?

Yes. Correct.

It's advisory fees for each of the projects that we undertake on behalf of providing advice to these family businesses. And then, we would hope that we can convert those trusting relationships, because it is a matter where we are on their side of the table into assets for discretionary management.

Okay. And the CIO business, you’re a little farther along with that but kind of like it.

Correct. That's right.

We're a little further along, it’s a much larger team to build. As an update on that, we hired business development professional.

I announced that we were just hiring him in our last call. We hired him during the third quarter.

So we’re just getting that going. I can report a couple of interesting things.

First of all, we have a very nice RFP pipeline for that business. It’s quite significant.

So we do expect it to bear fruit. It will take some time, just as it took us some time to build a meaningful institutional business here, but we’re excited about the opportunity.

Secondly, we have seen the revenue for advice that we are providing on a white label basis to other financial institutions and family offices from that group, increased 40% and the -- over the nine months of last year versus the nine months of this year. So that is giving us a lot more experience and some revenue in that group to support the new hires.

Third, we track our asset allocation performance and our results of asset allocation that we've done for others, track very well against the NACUBO index, which of course, is one of the main indices used by endowments and foundations. We look favorable against our peers, so we feel good about that.

We are, as you know, an asset management and an investing firm first. So we have to get that right and that bodes well for that effort.

But otherwise, I don't have anything to report at this time, Brian.

Okay. That’s good answer.

Two other questions. The outflows number, just seems like a big number?

It was pretty moderate. We had net cash flows out from existing accounts of $20 million.

I mean it’s just tiny. And we had closed accounts -- yes, we have closed accounts, no lost relationships on the high net worth side.

But we did have closed accounts, if you would look at it, that the account level is 95. Now that's about $115 million.

It's pretty small. We have had, as I mentioned before, unusually strong flows over the past few years into the business.

The big outflow we had this year was $300 million, as you know, primarily for paying taxes. Second quarter is always a very tough one.

So that was tough to overcome, but it's definitely moderated in the third quarter. And I see nothing unusual about it at all.

Those are going to be lumpy numbers.

Last question. Uses of cash, you don’t have any debt, you’re generating cash.

I forgot the EBITDA number for the quarter, but it was a very good number. Cash on the balance sheet built in the third quarter versus at the beginning of the year, depending on how you measure it, you’ve got five -- sort of $4 to $7 a share in cash.

And what are your plans or thoughts?

Thanks for asking. Yes.

So number one, I agree with your observations. Our capital structure is definitely weighted in one direction.

We have zero debt and significant amount of cash built up.

I will describe your financial position as enviable, so good point to be.

It is that. And having been through the financial crisis in a financial services firm 10 years ago, let me just say it, it felt really good about our position if we hit volatility.

But that doesn’t mean that our capital is most efficiently distributed across the table, right? So when I look at it, I have a couple of thoughts, number one, we have announced before and I’ll reiterate now, we have a policy of supporting a very strong dividend and a nice dividend for our shareholders and our intention is to continue increasing that dividend as we see prudent.

I will also point out that this strong cash flow, I think, it was this quarter the adjusted EBITDA, you were wondering what the number was, it was just over $7 million for the quarter. As we pay distributions, there is cash that goes to the C Corp, that cash is used to pay the dividend.

And there is sufficient cash there to support our new hire dividend that we announced in the spring for some time, even if we were to hit significant bumps on the road in the markets, which would of course, affect revenue. So our intention is to maintain our dividend policy.

I just want to reiterate that. Other options, of course, is a stock buyback.

Historically, our thinking there has been, this is a very small cap company. We have limited amount of liquidity and we have to be very careful to the extent with which we could affect the liquidity available in the market for shareholders.

We don’t want to push out potential institutional to shareholders who have buy and sell requirements for the stock. That said, we have diluted the stock somewhat over time and there is a bit more out there, and it's something that we are definitely thinking about, and do talk about both with shareholders, and as a board, there are obvious other potential effects.

We also have to take into account, Brian, the fact that we may have a strategic purpose for that cash. But with no debt on the balance sheet, let me just say that, there is a statement implied in your question and I understand it.

Okay. Fair enough.

All right. Thank you very much for your answers.

Good quarter.

Thank you very much Ryan. Appreciate it.

Great, thank you very much, and thanks each of you for joining us on the call this morning to review our third quarter. It was a good quarter.

It wasn’t great in terms of organic flows as we discussed, but it was solid. One thing I should mention on the institutional business as we didn't discuss it; is that we have introduced the large-cap equity income and focused value to the marketplace after making great progress in our small-cap capability and we are seeing flows into SMid-cap and we're involved in searches for large-cap and equity income.

So we expect that, that is another contributor to the institutional business and overall revenue and profitability of the business as we look out into the future. We feel very good about the quality of the team and what we've been able to achieve, both in the past in terms of building that business, but how those strategies have positioned to do well in the marketplace.

So you combine that with some of our new initiatives on the high net worth side along with the outsourced CIO capability, and I would say that we are aggressively attempting to grow some new revenue based on those businesses. And we are determined to implement our long-term strategy by hiring additional personnel who can contribute to the bottom line of this company.

And so I appreciate the support that we've received from all of our shareholders as we make those investments to build a more profitable and larger company. Thank you very much.

I appreciate you joining us this morning.