Diamond Hill Investment Group, Inc. Reports Results for Second Quarter 2006

Company Release - 8/7/2006 4:17 PM ET

COLUMBUS, Ohio, Aug. 7 /PRNewswire-FirstCall/ -- Diamond Hill Investment Group, Inc. (Nasdaq: DHIL) today reported unaudited results for the quarter ended June 30, 2006. Assets under management increased by 237% to $2.733 billion compared to $811 million at the end of the second quarter of 2005 while investment management revenue of $5.3 million for the quarter increased by 286% compared to 2005. Revenue included $900 thousand in performance incentive fees compared to $93 thousand in the second quarter of 2005. Both assets under management and investment management revenue continue to be driven higher by strong investment returns in client portfolios. Net income for the quarter was $1.37 million or $0.62 per diluted share compared to net income of $515 thousand or $0.26 per diluted share in 2005. The company's 2005 second quarter results do not reflect any provision for incentive compensation or income taxes because neither was considered probable at that point in time; however, provisions for both are included in 2006.

Ric Dillon, president and chief investment officer stated, "Our primary business objective is to produce excellent investment returns for our clients. I am pleased that we have continued to deliver strong results. Our efforts to market our funds and managed portfolios resulted in over $1.1 billion in new client investments in the first half of 2006 compared to $235 million in 2005, an increase of 368%."



    Three months ended June 30     Q2 2006         Q2 2005          Change

    Investment management
     revenue
                    $5,334,109      $1,382,712          286%
        Net operating income     $1,450,240        $497,638          191%
        Net operating income
         margin                         27%             36%
    Mutual fund administration,
     net
                          $355,547        ($43,570)          n.m
    Investment return              $364,982         $61,134          497%
        Pre-tax income           $2,170,769        $515,202          321%
        Pre-tax income margin           41%             37%
    Net income                   $1,368,168        $515,202          166%
    Earnings per share -
     diluted                          $0.62           $0.26          138%
        Assets under
         management          $2.733 billion    $811 million          237%


    Six months ended June 30       YTD 2006        YTD 2005        Change

    Investment management
     revenue                    $10,237,963      $2,596,377          294%
        Net operating income     $2,676,204        $862,787          210%
        Net operating income
         margin                         26%             33%
    Mutual fund administration,
     net
                          $623,838      ($117,702)           n.m
    Investment return              $790,100        $166,751          374%
        Pre-tax income           $4,090,142        $911,836          349%
        Pre-tax income margin           40%             35%
    Net income                   $2,620,780        $911,836          187%
    Earnings per share - diluted      $1.20           $0.47          155%


    About Diamond Hill:

Diamond Hill provides investment management services to institutions and financial intermediaries seeking to preserve and build capital. The firm currently manages mutual funds, separate accounts and private investment funds. For more information on Diamond Hill, visit http://www.diamond-hill.com.

SOURCE Diamond Hill Investment Group, Inc.

Contact: James F. Laird, Chief Financial Officer of Diamond Hill Investment Group, Inc., +1-614-255-3353, or jlaird@diamond-hill.com
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