Diamond Hill Investment Group Inc. Annual Report 2015

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FY2015 Annual Report · Diamond Hill Investment Group Inc.

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Diamond Hill Investment Group, Inc.

2015 Annual Report

Notice of 201 Annual Meeting

And Proxy Statement

DIAMOND HILL INVESTMENT GROUP, INC.
ANNUAL LETTER TO SHAREHOLDERS

Dear Fellow Shareholders:

March 11, 2016

Last spring we achieved a milestone at Diamond Hill when we celebrated our 15-year anniversary as a firm with an
outstanding team of dedicated professionals and client partnerships. As the new CEO of Diamond Hill, I would like
to take a moment to express my gratitude to all my past and present colleagues who have contributed to creating
what I believe is an excellent investment firm. Also, thank you to our shareholders for your continued trust and
support.

We have communicated much of this in the past, however, I would like to reiterate a few of the key values which
guide our organization. Intrinsic value, long-term orientation, discipline and partnership are at the top of our list
of fundamental principles. As a fiduciary and client-centric firm, our foremost priority is generating strong investment
results over sufficiently long time periods (which we define as at least five years) in each of our investment strategies.
Next, because of our long-term investment style and disciplined approach toward identifying and holding securities
with a margin of safety, we seek to partner with clients that are clearly aligned with both our philosophy and time
horizon. Finally, we strive to maintain alignment with our clients and to consistently and effectively communicate
our judgement, decisions and outlook.

We expect to accomplish the first critically important part of our mission, generating strong investment returns, by
managing relatively concentrated, high conviction portfolios constructed independent of benchmark weights using
a long time horizon and detailed research. Our intrinsic value-based philosophy is shared by all of our investment
professionals, allowing us to apply this investment discipline across all of our strategies. Once again, we are very
pleased with the progression of our firm; however, we are also mindful of the need for continuous improvement in
all areas. There is little doubt that our competitors - both active managers as well as passive alternatives - continue
to evolve and provide a wide range of investment choices in the marketplace.

Investment Strategy Results for Clients

After a multi-year period of strong gains in the U.S. equity markets, 2015 proved to be much more challenging on
an absolute basis while relative performance once again remained elusive for most active managers as the vast
majority trailed passive benchmarks. The year was marked by underperformance down the capitalization spectrum
while much of the outperformance was concentrated in a narrow group of mostly large cap, technology-oriented
companies. This likely explains why passive strategies continue to gather market share as many active managers
struggle to outperform passive benchmarks net of fees. In addition, the competition among active managers helps
to make markets more efficient, and in doing so, helps the efficacy of passive management. Despite this competitive
environment, we believe that we will add value above passive alternatives over the majority of long time periods -
as we have in most of our strategies since their respective inceptions.

Financial Results: Shareholder Value

Diamond Hill Investment Group generated revenue of $124 million in 2015 compared with $105 million in 2014
and $57 million in 2010. Assets under management finished the year at $16.8 billion, up 8% from 2014 and up 95%

from 2010 as a result of the strong U.S. equity market coupled with net inflows into our strategies. Clearly these net
inflows represent an increase in our still relatively small market share of the domestic market for active strategies.

Our 47% operating margin was modestly higher than last year’s margin of 45%. This was primarily a result of a
slight decrease in total compensation expense as a percentage of total revenues. A significant component of
compensation expense is variable incentive compensation, which can fluctuate from year to year. Incentive
compensation is determined by many factors but is primarily guided by the investment results generated for our
clients, individual employee contributions and overall company performance.

Over the past five years, Diamond Hill’s tangible book value per share has increased from $2.68 at the end of 2010
to $30.84 at the end of 2015. Additionally, we have paid $25 per share in dividends over the past five years ($58
per share in total since our initial dividend payment in 2008). The $25 per share in dividends plus the $28.16 increase
in tangible book value per share equals a total of $53.16 per share, which represents one measure of change in
shareholder value during the past five years. While tangible book value is a component of intrinsic value, the
percentage of intrinsic value it represents varies considerably between companies.

This analysis is comparable to another popular measure: total shareholder return (TSR), which takes into account
both cash returned to shareholders and change in stock price. For Diamond Hill, this equates to approximately 27%
annualized over the past five years. While the current stock price represents the market’s estimate of a company’s
intrinsic value, a premise of our investment philosophy is that price and intrinsic value often differ, sometimes
substantially. Thus, we believe the relevant measure of value creation, in addition to cash returned to shareholders,
is the change in Diamond Hill’s intrinsic value.

Executive Leadership

With a very long runway (Ric Dillon announced in early 2011 his desire to step down as CEO) and therefore much
deliberation, we have formed and implemented an executive leadership team (ELT) and business function reporting
structure. In addition to myself, the ELT consists of our Chief Operating Officer, Lisa Wesolek and our Chief Financial
Officer, Tom Line. Lisa heads the distribution, marketing and operations areas, while Tom leads the administration,
compliance and finance functions of the firm. I intend to spend the majority of my time focused on my portfolio
manager duties but will also be involved with all aspects of our company with an emphasis on the investment side
of our business. I look forward to continuing to work with Lisa and Tom as they have brought tremendous experience
and expertise to Diamond Hill. I have no doubt they will be instrumental in our leadership efforts going forward.
With a relatively new team in place, succession planning at the senior level is likely to take a pause. However, we
are always mindful that continuing to develop the next generation of leadership is a perpetual and most critical task.
Toward that end, and to assist with the management duties we are responsible for, each of the three of us has a separate
leadership team in place. We are all encouraged by the commitment and skills increasingly apparent among our
growing organization.

While on the topic of leadership, I would like to take this opportunity to express special thanks to Ric Dillon, Don
Shackelford and our Board of Directors. As many of you know, Ric is essentially the founder of our firm and much
of the success over our first 15-plus years is due to his entrepreneurial vision, energetic drive and important
contributions to Diamond Hill’s foundational values. We are fortunate to have had Ric as a leader and will benefit
from his continued role as chairman and portfolio manager. Also, Don Shackelford retired from our Board of Directors
last year and was most recently Ric’s predecessor as chairman. Don is an enormously successful business leader
from central Ohio, and we are grateful for his steady guidance, wonderful humor and many important contributions
over the past decade. Lastly, our Board of Directors now consists of highly experienced professionals with extensive
knowledge of our industry. They have made important contributions to our company and their collective insights
will be of great help going forward.

Outlook

As always, our top priority is to meet our fiduciary duty to our clients. Retaining and attracting highly skilled
professionals is an essential aspect of our goal to add value to our clients’ portfolios. We have a deep, highly skilled
team in place and twelve unique equity and fixed income strategies available to clients in a variety of channels. We
monitor capacity in each of these strategies and will close them when we believe they are nearing the point at which
we can no longer add value for those clients. We closed two strategies to new investors last year, but continue to
believe we have significant capacity in most of our other strategies. Additionally, we will continue to add new
strategies when we see the combination of client interest and the requisite people and skills necessary to meet our
expectation of adding value for our clients. Most recently, we launched the Diamond Hill High Yield strategy while
our growing and increasingly experienced research effort may one day allow us to offer new investment strategies
which include international holdings.

Although markets have experienced a meaningful correction since last August, they have still outpaced economic
growth over the past five to six years and continue to look somewhat elevated due to the combination of historically
lofty margins and generally full multiples. As a result, we believe equity market returns will be on the low end of
the typical return range over the next five years, which could impact our growth in revenues and profits.

Finally, we are a financially strong, well-positioned firm operating in a very competitive industry. Our commitment
to an intrinsic value-based investment philosophy, long-term perspective, disciplined approach and alignment with
our clients’ interests remains unchanged, as it has since our firm’s inception. Once again, now almost 16 years since
our humble beginnings, I believe we have created an excellent investment firm with clear potential for further
improvement and growth. We remain focused on our clients, mindful of the challenges and intent on building upon
our past successes.

Sincerely,

Chris Bingaman
Chief Executive Officer

Diamond Hill Investment Group, Inc.
325 John H. McConnell Boulevard, Suite 200
Columbus, Ohio 43215

March 11, 2016

Dear Shareholders:

We cordially invite you to attend the 2016 Annual Meeting of Shareholders of Diamond Hill Investment Group, Inc. to be held
at 325 John H. McConnell Blvd., Columbus, Ohio 43215, on Wednesday, April 27, 2016, at 10:00 a.m. Eastern Daylight Saving
Time.

The attached Notice of Annual Meeting and Proxy Statement describe the formal business to be transacted at the meeting. During
the meeting, we will also report on our operations and our directors and officers will be present to respond to any appropriate
questions you may have. On behalf of the Board of Directors, we urge you to sign, date and return the enclosed proxy
card as soon as possible, even if you currently plan to attend the Annual Meeting. This will not prevent you from voting in
person, but will ensure that your vote is counted if you are unable to attend the Annual Meeting. Your vote is important, regardless
of the number of shares you own.

Sincerely,

Christopher M. Bingaman
Chief Executive Officer

Diamond Hill Investment Group, Inc.
325 John H. McConnell Boulevard, Suite 200, Columbus, Ohio 43215

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 27, 2016

Notice is hereby given that the 2016 Annual Meeting of Shareholders (the “Annual Meeting”) of Diamond Hill Investment
Group, Inc. (the “Company”), will be held at 325 John H. McConnell Blvd., Columbus, Ohio 43215, on Wednesday, April 27,
2016, at 10:00 a.m. Eastern Daylight Saving Time to consider and act upon the following matters:

the election of six directors to serve on the Company’s Board of Directors until the Company’s 2017
Annual Meeting of Shareholders and until their successors have been duly elected and qualified;
the ratification of the appointment of KPMG LLP as the Company’s independent registered public
accounting firm for the fiscal year ending December 31, 2016;
a non-binding, advisory resolution to approve the compensation of the Company’s named executive
officers; and
such other business as may properly come before the Annual Meeting or any adjournment thereof.

Action may be taken on the foregoing proposals at the Annual Meeting or at any adjournment of the Annual Meeting. The Board
of Directors has fixed the close of business on March 4, 2016, as the record date for determination of the shareholders entitled
to vote at the Annual Meeting and any adjournments thereof. Please complete, sign and date the enclosed proxy card, which is
solicited by the Company’s Board of Directors, and mail it promptly in the enclosed envelope. Alternatively, you may vote by
phone or electronically over the Internet in accordance with the instructions on the enclosed proxy card. Returning the enclosed
proxy card, or transmitting voting instructions electronically through the Internet or by telephone, does not affect your right to
vote in person at the Annual Meeting. If you attend the Annual Meeting, you may revoke your proxy and vote in person if your
shares are registered in your name.

PROMPTLY RETURNING YOUR PROXY WILL SAVE THE COMPANY THE EXPENSE OF MAKING FURTHER
REQUESTS FOR PROXIES IN ORDER TO OBTAIN A QUORUM. WHETHER OR NOT YOU PLAN TO ATTEND
THE ANNUAL MEETING, PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD
IN THE ENCLOSED POSTAGE-PAID ENVELOPE. ALTERNATIVELY, REFER TO THE INSTRUCTIONS ON THE
PROXY CARD TO TRANSMIT YOUR VOTING INSTRUCTIONS VIA THE INTERNET OR BY TELEPHONE.

By order of the Board of Directors,

James F. Laird
Secretary

Columbus, Ohio
March 11, 2016

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 27, 2016:
The Proxy Statement and the Company’s 2015 Annual Report on Form 10-K are available without charge at the
following location:
http://www.diamond-hill.com/proxy

Diamond Hill Investment Group, Inc.
325 John H. McConnell Boulevard, Suite 200
Columbus, Ohio 43215

PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
DIAMOND HILL INVESTMENT GROUP, INC.
TO BE HELD ON APRIL 27, 2016

This Proxy Statement is being furnished to the shareholders of Diamond Hill Investment Group, Inc., an Ohio corporation (the
“Company”, “we”, “us” or “our”), in connection with the solicitation of proxies by our Board of Directors (the “Board”) for use
at our 2016 Annual Meeting of Shareholders (the “Annual Meeting”) to be held on April 27, 2016, and any adjournment thereof.
A copy of the Notice of Annual Meeting accompanies this Proxy Statement. This Proxy Statement and the enclosed proxy are
first being mailed to shareholders on or about March 11, 2016. Only our shareholders of record at the close of business on
March 4, 2016, the record date for the Annual Meeting, are entitled to notice of, and to vote at, the Annual Meeting.

The purposes of this Annual Meeting are:

To elect six directors to serve on our Board until our 2017 Annual Meeting of Shareholders and until their
successors have been duly elected and qualified;

To consider and vote upon a proposal to ratify the appointment of KPMG LLP (“KPMG”) as our independent
registered public accounting firm for the fiscal year ending December 31, 2016;

To consider and vote upon a non-binding, advisory resolution to approve the compensation of our named
executive officers; and

To transact such other business that may properly come before the Annual Meeting or any adjournment
thereof.

Those common shares represented by (i) properly signed proxy cards received by us prior to the Annual Meeting or (ii) properly
authenticated voting instructions recorded electronically over the Internet or by telephone prior to 11:59 p.m. Eastern Daylight
Saving Time on April 26, 2016 and, in each case, that are not revoked, will be voted at the Annual Meeting as directed by the
shareholders. If a shareholder submits a valid proxy and does not specify how the common shares should be voted, they
will be voted as recommended by the Board. The proxy holders will use their best judgment regarding any other matters that
may properly come before the Annual Meeting.

TABLE OF CONTENTS

Section
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
PROCEDURAL MATTERS
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
PROPOSAL 1 — ELECTION OF DIRECTORS

DIRECTOR INDEPENDENCE
THE NOMINEES
THE BOARD OF DIRECTORS AND COMMITTEES
COMPENSATION OF DIRECTORS
CORPORATE GOVERNANCE
EXECUTIVE OFFICERS AND COMPENSATION INFORMATION

COMPENSATION DISCUSSION AND ANALYSIS
STOCK OWNERSHIP GUIDELINES
SUMMARY COMPENSATION TABLE
GRANTS OF PLAN BASED AWARDS FOR 2014
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2014
OPTION EXERCISES AND STOCK VESTED FOR 2014
PENSION PLANS AND NON-QUALIFIED DEFERRED COMPENSATION
EMPLOYMENT AGREEMENTS
COMPENSATION COMMITTEE REPORT

PROPOSAL 2 — RATIFICATION OF THE APPOINTMENT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

AUDIT COMMITTEE REPORT

PROPOSAL 3 — ADVISORY VOTE ON THE COMPENSATION OF THE COMPANY’S

NAMED EXECUTIVE OFFICERS

ADDITIONAL INFORMATION

SHAREHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
SHAREHOLDER PROPOSALS FOR 2017 ANNUAL MEETING
SHAREHOLDERS SHARING THE SAME ADDRESS
OTHER BUSINESS

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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING

When and where will the Annual Meeting take place?

The Annual Meeting will be held at 325 John H. McConnell Blvd., Columbus, Ohio 43215, on Wednesday, April 27, 2016,
at 10:00 a.m. Eastern Daylight Saving Time. You may also listen live to the Annual Meeting via audio conference by calling
1-800-774-6070, and using passcode 8498630# when prompted.

What may I vote on?

At the Annual Meeting, you will be asked to consider and vote upon: (i) the election of six directors to serve on the Board
until our 2017 Annual Meeting of Shareholders; (ii) the ratification of the appointment of KPMG LLP as our independent
registered public accounting firm for the fiscal year ending December 31, 2016; and (iii) a non-binding, advisory resolution
to approve the compensation of our named executive officers.

What do I need to do now?

After carefully reading this Proxy Statement, indicate on the enclosed proxy card how you want your shares to be voted and
sign and mail the proxy card promptly in the enclosed envelope. Alternatively, you may vote by phone or over the Internet
in accordance with the instructions on your proxy card. The deadline for transmitting voting instructions over the Internet
or telephonically is 11:59 p.m. Eastern Daylight Saving Time on Tuesday, April 26, 2016. If you vote by phone or over the
Internet you do not need to return a proxy card. You should be aware that if you vote over the Internet or by phone, you may
incur costs associated with electronic access, such as usage charges from Internet service providers and telephone companies.

What does it mean if I get more than one proxy card?

If your shares are registered in more than one account, you will receive more than one proxy card. If you intend to vote by
mail, sign, date and return all proxy cards to ensure that all your shares are voted. If you are a record holder and intend to
vote by telephone or over the Internet, you must do so for each individual proxy card you receive.

What is the difference between holding shares as a shareholder of record and as a beneficial owner?

Many shareholders are beneficial owners, meaning they hold their shares in “street name” through a broker, bank or other
nominee. As summarized below, there are some distinctions between shares held of record and those owned beneficially.

Shareholder of Record. For shares registered directly in your name with our transfer agent, you are considered the shareholder
of record and we are sending this Proxy Statement and related materials directly to you. As a shareholder of record, you have
the right to vote in person at the Annual Meeting or you may grant your proxy directly to the Board’s designees by completing,
signing and returning the enclosed proxy card, or transmitting your voting instructions over the Internet or by phone.

Beneficial Owner. For shares held in “street name,” you are considered the beneficial owner and this Proxy Statement and
related materials are being forwarded to you by your broker, bank or other nominee, who is the shareholder of record. As the
beneficial owner, you have the right to direct your broker or other nominee on how to vote your shares. Your broker or nominee
will provide you with information on the procedures you must follow to instruct them how to vote your shares or how to
revoke previously given voting instructions.

If my shares are held in “street name” by my broker, will my broker vote my shares for me?

Your broker will vote your shares in the manner you instruct, and you should follow the voting instructions your broker
provided to you. However, if you do not provide voting instructions to your broker, it may vote your shares in its discretion
on certain “routine” matters. The ratification of the appointment of KPMG as our independent registered public accounting
firm for the 2016 fiscal year is considered routine, and if you do not submit voting instructions, your broker may choose, in
its discretion, to vote or not vote your shares on the ratification. None of the other matters to be voted on at the Annual
Meeting are routine, and your broker may not vote your shares on those matters without your instructions.

May I revoke my proxy or change my vote after I have mailed a proxy card or voted electronically over the Internet
or by telephone?

Yes. You can change your vote at any time before your proxy is voted at the Annual Meeting. If you are the record holder
of the shares, you can do this in three ways:

•

send a written statement to James F. Laird, our Secretary, stating that you would like to revoke your proxy, which must
be received prior to the Annual Meeting;

send a newly signed and later-dated proxy card, which must be received prior to the Annual Meeting, or submit later-
dated electronic voting instructions over the Internet or by telephone no later than 11:59 p.m. Eastern Daylight Saving
Time on April 26, 2016; or

attend the Annual Meeting and revoke your proxy in person prior to the start of voting at the Annual Meeting or vote in
person at the Annual Meeting (attending the Annual Meeting will not, by itself, revoke your proxy or a prior Internet
or telephone vote).

If you are a beneficial owner, you may change your vote by submitting new voting instructions to your broker or nominee.
You should review the instructions provided by your broker or nominee to determine the procedures you must follow.

Can I vote my shares in person at the Annual Meeting?

You may vote shares held of record in person at the Annual Meeting. If you choose to attend, please bring the enclosed proxy
card and a form of identification. If you are a beneficial owner and you wish to attend the Annual Meeting and vote in person,
you will need a signed proxy from your broker or other nominee giving you the right to vote your shares at the Annual Meeting
and a form of identification. To obtain directions to attend the Annual Meeting and vote in person, please call our office at
(614) 255-3333 or visit the Company’s website, http://www.diamond-hill.com/contact/.

How will my shares be voted if I submit a proxy without voting instructions?

If you submit a proxy and do not indicate how you want your shares voted, your proxy will be voted on the proposals as
recommended by the Board. The Board’s recommendations are set forth in this Proxy Statement.

Who can answer my questions about how I can submit or revoke my proxy or vote by phone or via the Internet?

If you are a record shareholder and have more questions about how to submit your proxy, please call Tom Line, the Company’s
Chief Financial Officer, at (614) 255-3333. If you are a beneficial owner, you should contact your broker or other nominee
to determine the procedures you must follow.

Record Date

PROCEDURAL MATTERS

Only our shareholders of record at the close of business on March 4, 2016, the record date, will be entitled to vote at the Annual Meeting.
As of the record date, there were 3,398,695 of our common shares outstanding and entitled to vote at the Annual Meeting.

Proxy

Your shares will be voted at the Annual Meeting as you direct on your signed proxy card or in your telephonic or Internet voting
instructions. If you submit a proxy card without voting instructions, it will be voted as recommended by the Board. The Board's
recommendations are set forth in this Proxy Statement. The duly appointed proxy holders will vote in their discretion on any other
matters that may properly come before the Annual Meeting.

Voting

Each outstanding share may cast one vote on each separate matter of business properly brought before the Annual Meeting. If you
hold shares in street name, we encourage you to instruct your broker or other nominee as to how to vote your shares.

A shareholder voting in the election of directors may cumulate such shareholder’s votes and give one candidate a number of votes
equal to (i) the number of directors to be elected (six), multiplied by (ii) the number of shares held by the shareholder, or may distribute
such shareholder’s total votes among as many candidates as the shareholder may select. However, no shareholder will be entitled to
cumulate votes unless the candidate’s name has been placed in nomination prior to voting and a shareholder has given us notice at least
48 hours prior to the Annual Meeting of the intention to cumulate votes. The proxies the Board is soliciting include the discretionary
authority to cumulate votes. If cumulative voting occurs at the Annual Meeting, the proxies intend to vote the shares represented by
proxy in a manner to elect as many of the six director nominees as possible. Cumulative voting only applies to the election of directors.

Director elections. The affirmative vote of the holders of a plurality of the shares present at the Annual Meeting, in person or by proxy,
and entitled to vote is required for the election of directors. The six nominees receiving the most votes will be elected.

Ratification of selection of KPMG. The affirmative vote of a majority of the shares present at the Annual Meeting, in person or by
proxy, and entitled to vote on the proposal is required to ratify the selection of KPMG as the Company’s independent registered public
accounting firm for fiscal year 2016.

Advisory approval of named executive officer compensation. The affirmative vote of a majority of the shares present at the Annual
Meeting, in person or by proxy, and entitled to vote on the proposal is required for shareholder advisory approval of the compensation
of the Company’s named executive officers.

Effect of broker non-votes and abstentions. Under the applicable regulations of the Securities and Exchange Commission (the “SEC”)
and the rules of the exchanges and other self-regulatory organizations of which the brokers are members, brokers who hold common
shares in street name for beneficial owners may sign and submit proxies and may vote our common shares on certain “routine” matters.
The ratification of KPMG is considered routine. Under applicable stock exchange rules, brokers are not permitted to vote without
instruction in the election of directors. In addition, SEC regulations prohibit brokers from voting without customer instruction on the
approval of named executive officer compensation. Proxies that are signed and submitted by brokers that have not been voted on
certain matters are referred to as “broker non-votes.”

Neither broker non-votes nor abstentions will have any effect on the election of directors. Abstentions will have the same effect as a
vote against the ratification of the appointment of KPMG and the advisory approval of named executive officer compensation; although,
broker non-votes will have no effect on those proposals.

Quorum

Business can be conducted at the Annual Meeting only if a quorum, consisting of at least the holders of a majority of our outstanding
shares entitled to vote, is present, either in person or by proxy. Abstentions and broker non-votes will be counted toward establishing
a quorum. If a quorum is not present at the time the Annual Meeting is convened, a majority of the shares represented in person or by
proxy may adjourn the Annual Meeting to a later date and time, without notice other than announcement at the Annual Meeting. At
any such adjournment of the Annual Meeting at which a quorum is present, any business may be transacted which might have been
transacted at the Annual Meeting as originally called.

Solicitation; Expenses

We will pay all expenses of the Board’s solicitation of the proxies for the Annual Meeting, including the cost of preparing, assembling
and mailing the Notice, form of proxy and Proxy Statement, postage for return envelopes, the handling and expenses for tabulation of
proxies received, and charges of brokerage houses and other institutions, nominees or fiduciaries for forwarding such documents to
beneficial owners. We will not pay any electronic access charges associated with Internet or telephonic voting incurred by a shareholder.
We may solicit proxies in person or by telephone, facsimile or e-mail, and our officers, directors and employees may also assist with
solicitation, but will receive no additional compensation for doing so.

No person is authorized to give any information or to make any representation not contained in this Proxy Statement, and you should
not rely on any such information or representation. This Proxy Statement does not constitute the solicitation of a proxy in any jurisdiction
from any person to whom it is unlawful to make such proxy solicitation in such jurisdiction. The delivery of this Proxy Statement
shall not, under any circumstances, imply that there has not been any change in the information set forth herein since the date of this
Proxy Statement.

Requests for Proxy Statement and Annual Report on Form 10-K; Internet Availability

Our Annual Report on Form 10-K for the year ended December 31, 2015, including audited consolidated financial statements,
accompanies this Proxy Statement but is not a part of the proxy solicitation material. We are delivering a single copy of this Proxy
Statement and the Form 10-K to multiple shareholders sharing an address unless we have received instructions from one or more of
the shareholders to the contrary. We will promptly deliver a separate copy of the Proxy Statement and/or Form 10-K, at no charge,
upon receipt of a written or oral request by a record shareholder at a shared address to which a single copy of the documents was
delivered. Written or oral requests for a separate copy of the documents, or to provide instructions for delivery of documents in the
future, may be directed to James F. Laird, Secretary of the Company, at 325 John H. McConnell Boulevard, Suite 200, Columbus,
Ohio 43215 or by phone at (614) 255-3333. Additionally, this Proxy Statement and our Annual Report on Form 10-K are available
on the internet free of charge at: http://www.diamond-hill.com/proxy.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth beneficial ownership of our common shares as of the record date, March 4, 2016, by (a) all persons
known by us to own beneficially five percent or more of the Company’s outstanding shares, (b) each director of the Company,
(c) our Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer, and (d) all of our executive officers,
directors, and nominees as a group. Although not required, we have voluntarily disclosed all common shares beneficially owned
by all other employees of the Company, excluding the executive officers. Unless otherwise indicated, the named persons exercise
sole voting and dispositive power over the shares listed. None of the named persons hold any outstanding options, and none of
the named persons has pledged any common shares of the Company as security.

Name of Beneficial Owner
Christopher M. Bingaman
R. H. Dillon

Randolph J. Fortener

James F. Laird

Thomas E. Line
Paul A. Reeder III

Bradley C. Shoup

Frances A. Skinner

Lisa M. Wesolek

Directors, nominees, and executive officers as a group (9 persons)

All other employees of the Company (124 persons)

5% Beneficial Owners
FMR LLC(4)
BlackRock, Inc.(5)

Amount and Nature
of Beneficial
Ownership

Percent of
Class(1)

27,395 (2)
189,150 (2)
6,000

69,062
4,063 (2)
8,000

6,000

6,935
28,001 (2)
344,606
580,411 (3)

188,137

208,110

5.6%

2.0%

10.1%

17.1%

5.5%

6.1%

(2)

(1) Beneficial ownership of less than one percent is represented by an asterisk (*). The percent of class is based upon (a) the
number of shares beneficially owned by the named person, divided by (b) the total number of shares that are issued and
outstanding as of March 4, 2016 (3,398,695 shares).
Includes 2,845 shares, 3,315 shares, 300 shares, and 1,017 shares for Mr. Bingaman, Mr. Dillon, Mr. Line, and Ms. Wesolek,
respectively, that are held in the Company’s 401(k) plan, over which the Trustee of the 401(k) Plan possess the voting power
and which are subject to restrictions on the power to dispose of these shares.
Includes all employees of Diamond Hill Investment Group, Inc. and its subsidiaries as of March 4, 2016, excluding executive
officers. Each employee has sole voting power. Certain shares are subject to restrictions on the power to dispose of the
shares. The employees do not constitute a Group as defined by Rule 13d-1 of the Exchange Act. Includes 65,488 shares
held in the Company’s 401(k) plan, over which the Trustees of the 401(k) Plan possess the voting power and which are
subject to restrictions on the power to dispose of these shares.

(3)

(4)

The address for FMR LLC is 245 Summer Street, Boston, MA 02210. Based on information contained in a Schedule 13G
filed with the SEC on February 12, 2016, by FMR LLC. In this Schedule 13G, FMR LLC reported sole voting power over
43,056 shares and sole dispositive power over 188,137 shares on behalf of Fidelity Institutional Asset Management Trust
Company and FMR Co..

(5) The address for BlackRock, Inc. is 40 East 52nd Street, New York, NY 10022. Based on information contained in a Schedule
13G/A filed with the SEC on January 26, 2016, by BlackRock, Inc. In this Schedule 13G/A, BlackRock, Inc. reported sole
voting power over 203,312 shares and sole dispositive power over 208,110 shares on behalf of the following subsidiaries:
BlackRock Advisors, LLC, BlackRock Asset Management Canada Limited, BlackRock Asset Management Ireland Limited,
BlackRock Fund Advisors, BlackRock Institutional Trust Company, N.A., and BlackRock Investment Management, LLC.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires executive officers and directors, and persons who beneficially own more than ten
percent of the Company’s shares (the "Reporting Persons"), to file with the SEC initial reports of ownership on Form 3 and
reports of changes in ownership on Form 4 and Form 5. Reporting Persons are required by SEC regulations to furnish to the
Company copies of all Section 16(a) reports they file with the SEC. Based solely upon a review of the Forms 3, 4 and 5
furnished to the Company and statements made by Reporting Persons that no other Section 16(a) reports were required to be
filed by them, we believe that the Reporting Persons complied with all filing requirements applicable to them with respect to
transactions during the fiscal year ended December 31, 2015, except that Mr. Bingaman filed one Form 4 late.

PROPOSAL 1 — ELECTION OF DIRECTORS

The Board guides the strategic direction of the Company and oversees its management. All of our directors are elected annually.
Pursuant to the recommendation of the Nominating and Governance Committee, the Board has nominated the six nominees
listed below for election, all of whom are incumbents, to hold office until the next annual meeting of shareholders and until their
respective successors are elected and qualified. If any nominee becomes unable or unwilling to serve between the date of this
proxy statement and the Annual Meeting, proxies will be voted FOR the election of a replacement recommended by the
Nominating and Governance Committee and approved by the Board.

Director Independence

The Board has determined that, with the exception of Mr. Dillon and Mr. Laird, all of our nominees are independent under the
rules and independence standards of The NASDAQ Stock Market (“NASDAQ”), as well as applicable SEC requirements. There
are no family relationships among our directors and executive officers.

The Nominees

The Board has determined that all of our director nominees are qualified to serve as directors of the Company. In addition to
the specific business experience listed below, each of our director nominees has the tangible and intangible skills and attributes
that we believe are required to be an effective director of the Company, including experience at senior levels in areas of expertise
helpful to the Company, a willingness and commitment to assume the responsibilities required of a director, and the character
and integrity we expect of our directors. The specific qualifications of each individual nominee are set forth under his or her
name below.

R. H. Dillon, CFA, age 59, has been a director of the Company since 2001 and chairman since 2015. He served as the CEO of
the Company from 2000 to 2015 and continues to serve as a portfolio manager. Mr. Dillon has over 30 years of experience in
the investment management industry.

Mr. Dillon received his BS and MA from The Ohio State University and his MBA from University of Dayton. Mr. Dillon also
holds the Chartered Financial Analyst designation.

The Board believes that Mr. Dillon’s qualifications to serve on the Board include his 15 years of experience as CEO and a
Portfolio Manager of the Company, his in-depth knowledge and involvement in our operations and his more than 30 years of
experience as an investment professional.

Randolph J. Fortener, age 62, has been an independent director of the Company since 2013, is the chair of the Audit Committee,
serves on the Nominating and Governance Committee and Compensation Committee, and is an audit committee financial expert,
as defined by the SEC. Mr. Fortener is currently the CEO of Cozzins Road Capital, a private investment firm, since 2014. As
CEO of Cozzins Road Capital, Mr. Fortener directs all investment and acquisition activity for the company. Prior to that Mr.
Fortener worked at the Crane Group, a private holding and management company, based in Columbus, Ohio, from 1990 to 2014
and served as the president of Crane Investment Company from 2007 to 2014. Prior to joining the Crane Group, Mr. Fortener
was a partner at Deloitte & Touche LLP, a big four accounting firm, providing services to investment banking firms. Mr. Fortener
also specialized in estate and tax planning for privately held businesses while with Deloitte. Mr. Fortener has over 35 years of
business experience, with an emphasis on corporate acquisitions and investments.

Mr. Fortener received a BS in accounting from The University of Findlay and an MBA in finance from the University of Dayton
and is a Certified Public Accountant (inactive).

Mr. Fortener’s qualifications to serve on the Board include his substantial experience in accounting and financial matters,
including his significant experience as a certified public accountant and his experience on other corporate boards.

James F. Laird, CPA, age 59, has been a director of the Company since 2011, Secretary since 2001 and served as the Chief
Financial Officer and Treasurer of the Company and President of Diamond Hill Funds from 2001 to 2014. Mr. Laird has over
25 years of experience in the investment management industry.

Mr. Laird received his BS in Accounting from The Ohio State University, is a Certified Public Accountant, and previously held
the Series 7, 24, 26, 27 and 63 securities licenses with the Financial Industry Regulatory Authority.

Mr. Laird’s qualifications to serve on the Board include his 13 years of experience as CFO of the Company, his in-depth knowledge
and involvement in our operations and his more than 25 years of experience in the financial, operational, administrative, and
distribution aspects of the investment management industry.

Paul A. Reeder, III, age 54, has been an independent director of the Company since 2015 and serves on the Audit Committee,
Nominating and Governance Committee, and the Compensation Committee, and is an audit committee financial expert, as
defined by the SEC. Mr. Reeder has been the President of PAR Capital Management, a private investment management firm,
since 1990.

Mr. Reeder received his BA from Oberlin College and his Master’s degree from the Sloan School of Management at MIT.

Mr. Reeder’s qualifications to serve on the Board include his substantial experience of over 30 years in the investment management
industry as an analyst, portfolio manager, and a principal executive of a private investment partnership.

Bradley C. Shoup, age 57, has been an independent director of the Company since 2012, is the chair of the Nominating and
Governance Committee, serves on the Audit Committee and Compensation Committee, and is an audit committee financial
expert, as defined by the SEC. Mr. Shoup has been Partner at Falcon Fund Management Ltd., since 2013. From 2011 to 2013,
Mr. Shoup was Managing Director of Cox Partners, Inc. From 2007 to 2011, Mr. Shoup was Chief Investment Officer of
Armstrong Equity Partners LP.

Mr. Shoup received his BS in Civil Engineering with Distinction from the University of Kansas and his Master’s degree from
the Sloan School of Management at MIT.

Mr. Shoup’s qualifications to serve on the Board include over 20 years of experience in the investment management industry.

Frances A. Skinner, CFA, CPA, age 51, has been an independent director of the Company since 2010, is the chair of the
Compensation Committee, serves on the Audit Committee and Nominating and Governance Committee, and is an audit committee
financial expert, as defined by the SEC. Ms. Skinner has been a partner with AUM Partners, LLC, a management consulting
firm specializing in the investment management industry, since 2009. Prior to joining AUM Partners, she was a principal with
Focus Consulting Group, Inc., a management consulting firm specializing in the investment management industry from 2003
to 2009. Ms. Skinner also spent 16 years at Allstate Investments, LLC, where she worked on developing compensation and
incentive programs for investment professionals. Ms. Skinner has over 25 years of experience in the areas of investment
management, finance and consulting. She is a co-author of the book High Performing Investment Teams (Wiley, 2006).

Ms. Skinner received her BA from St. Xavier University and her MBA from the University of Illinois – Chicago. Ms. Skinner
also holds the Chartered Financial Analyst designation and is a Certified Public Accountant.

Ms. Skinner’s qualifications to serve on the Board include her significant experience in the global investment management
industry and experience in developing and consulting on matters of leadership, teamwork, performance evaluation, and
compensation practices.

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF R. H. DILLON,
RANDY J. FORTENER, JAMES F. LAIRD, PAUL A. REEDER, III, BRADLEY C. SHOUP, AND FRANCES A.
SKINNER AS DIRECTORS OF THE COMPANY.

THE BOARD OF DIRECTORS AND COMMITTEES

The Board held a total of four meetings during the year ended December 31, 2015. Each director attended all of the meetings
of the Board and its committees of which he or she was a member. Consistent with our Corporate Governance Guidelines, the
independent directors met in executive session at all of the regularly scheduled Board meetings in 2015. Our Corporate
Governance Guidelines provide that all directors are expected to attend each annual meeting of shareholders. All of our then
incumbent directors attended our 2015 Annual Meeting of Shareholders.

Corporate Governance

The Board has three standing committees: the Audit Committee, the Compensation Committee, and the Nominating and
Governance Committee. The Board has adopted a written charter for each Committee. Current copies of each committee charter
and our Corporate Governance Guidelines are available at our website, ir.diamond-hill.com, under the heading “Corporate
Governance” on the right hand side of the site.

Pursuant to rules promulgated under the Sarbanes-Oxley Act of 2002, the Board has adopted a Code of Ethics for Principal
Executive and Senior Financial Officers. This code is intended to deter wrongdoing and promote honest and ethical conduct,
full, timely and accurate reporting, compliance with laws, and accountability for adherence to the code, including internal
reporting of code violations.

We also have a Code of Business Conduct and Ethics that is applicable to all of our employees and directors, a copy of which
was filed as an exhibit to our Annual Report on Form 10-K filed with the SEC on March 7, 2014. It is our policy to require all
employees to participate annually in continuing education and training relating to the Code of Business Conduct and Code of
Ethics.

We also have established a policy prohibiting our officers, directors, and employees from purchasing or selling shares of the
Company while in possession of material, nonpublic information, or otherwise using such information for their personal benefit
or in any manner that would violate applicable laws and regulations. The policy also prohibits all employees and directors from
purchasing or selling any derivative arrangement related to securities of the Company or engaging in any speculative, short
selling, or hedging activities related to securities of the Company that may have a similar economic effect.

Audit Committee

Mr. Fortener, Mr. Reeder, Mr. Shoup, and Ms. Skinner serve on the Audit Committee, which met four times during 2015. Mr.
Fortener serves as the Chair of the Audit Committee. The Board has determined that each of these committee members meets
the independence and financial literacy rules and standards of the SEC and NASDAQ. The Board also has concluded that each
of Mr. Fortener, Mr. Reeder, Mr. Shoup, and Ms. Skinner also meets the criteria for an audit committee financial expert as
established by the SEC.

The primary purpose of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities with respect to the
retention of our independent registered public accounting firm, including appointing and overseeing the terms of its engagement
and its performance, qualifications and independence, and the integrity of our financial statements, other financial information
provided to shareholders, and our internal control structure. The Audit Committee also reviews all related person transactions
for potential conflicts of interest on an ongoing basis and all such transactions must be approved by the Audit Committee.
Additional information on the approval of related person transactions is available under the heading “Certain Relationships and
Related Person Transactions” below. The report of the Audit Committee appears below the heading “AUDIT COMMITTEE
REPORT.”

Compensation Committee

Mr. Fortener, Mr. Reeder, Mr. Shoup, and Ms. Skinner serve on the Compensation Committee, which met twice during 2015.
Ms. Skinner serves as the Chair of the Compensation Committee. The Board has determined that each of these committee
members meets the independence criteria of the SEC and NASDAQ.

The primary purpose of the Compensation Committee is to review and approve the Company’s executive compensation policies,
evaluate the performance of our executive officers in light of corporate goals and objectives approved by the Compensation
Committee, approve the annual salary, bonus, stock grants and other benefits, direct and indirect, of our executive officers, make
recommendations to the full Board with respect to incentive compensation plans and equity-based plans and determine director
and committee member/chair compensation for non-employee directors. The Compensation Committee also administers our
equity and other incentive plans. The Compensation Committee has delegated to management the ability to make stock grants
to our employees within specific parameters to align the interests of our shareholders and the associate, to promote employee
retention, and long-term employee ownership. A description of the Company’s processes and procedures for the consideration
and determination of executive officer compensation are discussed under the heading “Compensation Discussion and Analysis”
below.

Nominating and Governance Committee

Mr. Fortener, Mr. Reeder, Mr. Shoup, and Ms. Skinner serve on the Nominating and Governance Committee, which met twice
during 2015. Mr. Shoup serves as the Chair of the Nominating and Governance Committee. The Board has determined that
each of these committee members meets the independence criteria of NASDAQ.

The primary purpose of the Nominating and Governance Committee is to maintain and cultivate the effectiveness of the Board
and oversee the Company’s governance policies. Among the committee’s responsibilities are Board and committee composition,
director qualifications, director orientation and education, and Board evaluations. Members identify, evaluate, and nominate
Board candidates; review compliance with director stock ownership guidelines; and oversee procedures regarding shareholder
nominations and other shareholder communications to the Board. The Nominating and Governance Committee is also responsible
for monitoring compliance with and recommending any changes to the Company’s Corporate Governance Guidelines. Additional
information regarding the committee’s activities can be found under the heading “Corporate Governance.”

Board Committee Membership

The following table summarizes the membership of the Board and each of its committees, and the number of times each met
during 2015.

Director
R. H. Dillon
Randolph J. Fortener

James F. Laird
Paul A. Reeder, III (1)
Bradley C. Shoup

Frances A. Skinner

Number of Meetings in 2015

_________________________________

(1) Mr. Reeder was appointed to all three Committees in April 2015.

Compensation of Directors

Audit

Compensation

Nominating and
Governance

Chair

Member

Chair

Member

Chair

Member

The Compensation Committee is responsible for periodically reviewing and recommending to the Board the compensation of
non-employee directors. At the discretion of the Board, directors are eligible to receive stock-based awards under the Diamond
Hill Investment Group, Inc. 2014 Equity and Cash Incentive Plan (the “2014 Plan”). The Compensation Committee has
determined that the use of long-term cliff vesting restricted stock awards as the sole form of compensation for our non-employee
8

directors is the most appropriate way to further align the interests of our directors with the long-term interests of our shareholders.
These restricted stock grants are intended to compensate the directors for a long-term period of time and are intended to fully
compensate directors for their services as directors and as members of committees of the Board. After the restricted stock grants
vest, to further align the interests of our directors and shareholders, our Corporate Governance Guidelines prohibit the shares
from being sold while the director remains on the Board, except that shares may be sold within the year the grants vest to pay
taxes due as a result of the vesting.

The following table sets forth information regarding the compensation earned by, or paid to, directors who served on our Board
in 2015. Mr. Dillon, who was an executive officer of the Company during 2015, did not receive separate compensation for the
director service and has been omitted from this table.

2015 Director Compensation(1)

Name

Stock Awards(2)

Cash

Total

$ -

Randolph J. Fortener
James F. Laird(3)
Paul A. Reeder, III(4)
Donald B. Shackelford(5) $ -
$ -
Frances A. Skinner

$ -

1,125,760 $

20,000 $

1,457,600 $ -

1,145,760

1,457,600

$ -
$ -

Bradley C. Shoup

$ -

________________________________________

(1)

(2)

(3)

(4)

(5)

Includes only those columns relating to compensation awarded to, earned by, or paid to non employee directors for
their services in 2015. All other columns have been omitted.

Represents the full grant-date fair value computed by multiplying the total shares granted by the closing price of the
shares on the grant date.

Mr. Laird retired from the Company effective December 31, 2014. His stock grant compensation represents service
after his retirement for the ten year period ending April 30, 2025. The cash compensation represents compensation
for his duties as Secretary of the Company.

Mr. Reeder was elected to the Board at the 2015 Annual Shareholder meeting. His compensation represents service
after his election to the Board and is intended to represent service for the ten year period ending April 30, 2025.

Mr. Shackelford retired effective April 2015.

On January 1, 2016, the Company entered into a new Employment Agreement with Mr. Dillon in consideration of his
continued employment as a portfolio manager. For more information on this agreement, see the discussion under the heading
"Employment Agreements and Change in Control Benefits".

Outstanding Stock Grants to Directors

The below table shows the amount of unvested restricted stock grants outstanding to directors as of December 31, 2015 and the
service period covered by the grant. All of these grants vest in full at the conclusion of the applicable service period.

Name

Randolph J. Fortener

James F. Laird

Paul A. Reeder, III

Frances A. Skinner

Bradley C. Shoup

6,000

8,000

6,000

Shares
Granted

Approximate
Service Period

Service Period
Covered

Grant-Date
Fair Value

Five Years

4/24/13 – 4/30/18

$452,940

Grant
Date
4/30/13

Vesting
Date
4/30/18

Ten Years

4/30/15 – 4/30/25

$1,125,760 2/27/15

4/30/25

Ten Years

4/30/15 – 4/30/25

$1,457,600 4/30/15

4/30/25

Five Years

1/1/12 – 12/31/16

$462,060

2/22/12

1/1/17

Five Years

4/25/12 – 4/30/17

$454,140

4/25/12

4/30/17

_________________________________

Ownership and Retention Guidelines

Our Corporate Governance Guidelines generally prohibit shares granted to our directors as compensation from being sold while
the director remains on the Board, except for sales of shares to pay taxes as discussed above. Therefore, we expect each non-
employee director to hold for his or her entire term of service on the Board all of our shares granted to the director as compensation.

CORPORATE GOVERNANCE

The Nominating and Governance Committee has general oversight responsibility for assessment and recruitment of new director
candidates, as well as evaluation of director and board performance and oversight of our governance matters. The Nominating
and Governance Committee has adopted Corporate Governance Guidelines and reviews them annually. The most current version
of the Guidelines is available on our website, ir.diamond-hill.com, under “Corporate Governance” on the right hand side of the
site.

Board Leadership and Composition

The Chairman approves Board agendas and schedules, chairs all executive sessions of the directors, acts as the liaison
between the directors and management, oversees the information distributed in advance of Board meetings, is available to the
Secretary to discuss and, as necessary, respond to shareholder communications to the Board, and calls meetings of the
directors.

We believe separating the roles of Chairman and CEO provides for a strong governance and oversight structure. These roles
generally have been separate since 2000, except for a portion of 2015. Mr. Dillon, who served as CEO through December 31,
2015, assumed the role of Vice Chairman in 2014 and Chairman of the Board in April 2015. As previously announced, Mr.
Dillon stepped down as CEO at the end of 2015. As a result, the dual role of Chairman and CEO held by Mr. Dillon was
temporary and related specifically to succession transition.

Concurrent with the election of Mr. Dillon as Chairman of the Board in April 2015, the Board also appointed Mr. Laird as Lead
Outside Director. The responsibilities of the Lead Outside Director include all of the duties of Chairman when the Chairman is
not present.

Currently, four of our six directors are independent under NASDAQ standards. In addition, the Nominating and Governance
Committee, the Audit Committee, and the Compensation Committee are all comprised entirely of independent directors. Overall,
we believe that our Board structure is designed to foster critical oversight, good governance practices, and the interests of the
Company and its shareholders.

Among other things, the Corporate Governance Guidelines address term limits of each director. Although we have a 10 year
service limit for non-employee directors, the Guidelines authorize the Board to make exceptions to this limitation and permit
directors to serve for an additional year, and the Board has made such exceptions in the past.

Board’s Role in Risk Oversight

The Board’s role in our risk oversight process includes receiving regular reports from members of senior management on areas
of material risk to the Company, including client investment results, and operational, financial, legal, regulatory and strategic

risks. The Audit Committee is responsible for overseeing risks relating to our accounting matters, financial reporting and legal
and regulatory compliance. To satisfy these oversight responsibilities, the Audit Committee meets regularly with management
and the Company’s independent registered public accounting firm. The Compensation Committee is responsible for overseeing
risks relating to employment policies and our compensation and benefits programs. To satisfy these oversight responsibilities,
the Compensation Committee meets regularly with management to understand the implications of compensation decisions,
particularly the risks that our compensation policies pose to our finances and our relationship with employees.

Executive Leadership Team

Effective January 1, 2016, Christopher M. Bingaman was named Chief Executive Officer, succeeding Mr. Dillon. Effective
January 1, 2015, Thomas E. Line was named Chief Financial Officer, succeeding Mr. Laird.

The Company has established an Executive Leadership Team and three divisional leadership teams. The members of the
Executive Leadership Team include Mr. Bingaman, Mr. Line, and Lisa M. Wesolek, and Mr. Dillon (during 2015). Members
of the Executive Leadership Team lead the three divisional leadership teams as indicated below:

Mr. Bingaman – Investment Leadership Team
Mr. Line – Administration Leadership Team
Ms. Wesolek – Distribution Leadership Team

The Company believes that the Executive Leadership Team and three divisional leadership teams is an appropriate and effective
organizational structure for the Company.

Director Orientation and Continuing Education and Development

When a new independent director joins the Board, the Company provides a formal orientation program to provide the new
director with an understanding of our operations and financial condition. In addition, each director is expected to maintain the
necessary level of expertise to perform his or her responsibilities as a director. To assist the directors in maintaining such level
of expertise, we may, from time to time, offer continuing education programs in addition to briefings during Board meetings
relating to the competitive and industry environment and the Company’s goals and strategies.

Director Qualifications and the Nominations Process

The Nominating and Governance Committee believes that the nominees presented in this proxy statement would constitute a
Board with an appropriate level and diversity of experience, education, skills, and independence. The Nominating and
Governance Committee routinely considers the current composition of the Board, and whether changes should be made or
additional directors should be added to the Board.

The Nominating and Governance Committee supervises the nomination process for directors. It considers the performance,
independence, diversity of background, experience, gender and other forms of diversity, as well as other characteristics of our
incumbent directors, including their willingness to serve, and any change in their employment or other circumstances in
considering their nomination each year. We do not have any formal policy regarding diversity in identifying nominees for a
directorship, but rather we consider it among the various factors relevant to any particular nominee and the overall needs of the
Board. In the event that a vacancy exists or the Company decides to increase the size of the Board, the Nominating and Corporate
Governance Committee will identify, interview, examine, and make recommendations to the Board regarding appropriate
candidates.

The Nominating and Governance Committee identifies potential candidates principally through suggestions from our directors
and senior management. The committee may also seek candidates through informal discussions with third parties. We have not
historically retained search firms to help identify director candidates and did not do so in identifying this year’s nominees.

In evaluating potential candidates, the Nominating and Governance Committee considers, among other factors, independence
from management, experience, expertise, commitment, diversity, number of other public company board and related committee
seats held, potential conflicts of interest, and the composition of the Board at the time of the assessment. Additionally, all
potential nominees must:

•

demonstrate strong character and integrity;

•
•

•

have sufficient time to carry out their duties;
have experience at senior levels in areas of expertise helpful to the Company and consistent with the objective
of having a diverse and well-rounded Board; and
have the willingness and commitment to assume the responsibilities required of a director of the Company.

In addition, candidates expected to serve on the various Board committees must meet all applicable independence and financial
literacy qualifications required by NASDAQ, the SEC, and other applicable laws and regulations. The evaluation process of
potential candidates also includes personal interviews and discussions with appropriate references. Once the Nominating and
Governance Committee has selected a candidate, it recommends the candidate to the full Board for election if a vacancy occurs
or is created by an increase in the size of the Board during the course of the year, or for nomination if the director is to be first
elected by our shareholders. All directors serve for one-year terms and must stand for reelection annually.

The Nominating and Governance Committee does not currently have any specific policies regarding the consideration of director
candidates recommended by shareholders due to a historical absence of shareholder recommendations. The Nominating and
Governance Committee will consider shareholder recommendations for directors using the process and criteria set forth above.
In the future, the Nominating and Governance Committee may in its discretion adopt policies regarding the consideration of
director candidates recommended by shareholders. Shareholder recommendations for Board candidates must be directed in
writing to the Company at 325 John H. McConnell Boulevard, Suite 200, Columbus, Ohio 43215, Attention: Secretary, and
must include the candidate’s name, home and business contact information, detailed biographical data and qualifications,
information regarding any relationships between the candidate and the Company within the last three years, and evidence of the
recommending person’s ownership of our common shares.

Certain Relationships and Related Person Transactions

The Board recognizes that related person transactions present a heightened risk of conflicts of interest. We currently have no
related person transactions reportable pursuant to Item 404(a) of SEC Regulation S-K and have not had any such transactions
in the recent past. As such, we do not believe it is necessary to have a written policy specifically dealing with related person
transactions. The Audit Committee will review any potential related person transactions as they arise and are reported to the
Board or the Audit Committee, regardless of whether the transactions are reportable pursuant to Item 404. No such transactions
arose or were reviewed by the Audit Committee in 2015. For any related person transaction to be consummated or to continue,
the Audit Committee must approve or ratify the transaction.

Compensation Committee Interlocks and Insider Participation

The members of the Compensation Committee during 2015 were Mr. Fortener, Mr. Reeder, Mr. Shoup and Ms. Skinner. No
director who served on the Compensation Committee during 2015 currently is, or during 2015 was, an officer, employee or
former officer of the Company or had any relationship during 2015 requiring disclosure by us under Item 404 of SEC Regulation
S-K. During 2015, none of our executive officers served as a member of the board of directors or compensation committee of
any other company that has an executive officer serving as a member of our Board or Compensation Committee.

Executive Officers and Compensation Information

During 2015, R. H. Dillon, Thomas E. Line, Christopher M. Bingaman and Lisa M. Wesolek were the Company’s only named
executive officers. Mr. Dillon's experience is described above under the heading “PROPOSAL 1 – ELECTION OF
DIRECTORS.” Mr. Bingaman, Mr. Line and Ms. Wesolek’s experience is described below. Each named executive officer
devotes his or her full time and effort to the affairs of the Company.

Christopher M. Bingaman, age 50, was named Chief Executive Officer of the Company effective January 1, 2016, has been
the President of the Company since 2014 and also serves as a Portfolio Manager. Mr. Bingaman joined Diamond Hill in 2001.
From 1997 to March 2001, Mr. Bingaman was a Senior Equity Analyst for Nationwide Insurance. In 1997, Mr. Bingaman was
an Equity Analyst for Dillon Capital Management. From 1990 to 1997, Mr. Bingaman held various positions at Fifth Third
Bank, First Chicago NBD and NBD Bank. Mr. Bingaman has over 25 years of experience in the investment management
industry.

Mr. Bingaman received his Bachelor of Arts in Finance from Hillsdale College (cum laude), and his Master of Business
Administration from the University of Notre Dame. Mr. Bingaman holds the Chartered Financial Analyst designation.

Thomas E. Line, age 48, is the Chief Financial Officer and Treasurer of the Company since 2015 and also serves as Chief
Executive Officer of the Diamond Hill Funds. Mr. Line joined Diamond Hill in 2014. Mr. Line served as a Trustee and Chairman
for Diamond Hill Funds from 2005 to 2014. From 2012 to 2014, Mr. Line was Chief Operating Officer for Lancaster Pollard
& Company. Mr. Line was Managing Director and Chief Financial Officer for Red Capital Group from 2005 to 2012 and was
Vice President and Treasurer from 2004 to 2005. From 2002 to 2004, Mr. Line was President of Focused Financial Consulting,
Inc. From 1998 to 2002, Mr. Line was Chief Operating Officer for Meeder Financial, Inc. From 1996 to 1998, Mr. Line was
Vice President and Treasurer for BISYS Fund Services, Inc. Prior to 1996, Mr. Line spent seven years at KPMG in various
roles. Mr. Line has over 25 years of experience in the investment management industry.

Mr. Line has a Bachelor of Science in Accounting from Wake Forest University, holds the Series 27 securities license with the
Financial Industry Regulatory Authority, and is a CPA (inactive).

Lisa M. Wesolek, age 52, has been the Chief Operating Officer of the Company since 2014. Ms. Wesolek joined Diamond Hill
in 2012. From 2008 to 2010, Ms. Wesolek was Senior Vice President, National Sales Manager for the Asset Management Group
at Wells Fargo Funds Management. From 2005 to 2008, Ms. Wesolek was Managing Director and Head- Institutional Asset
Management at Evergreen Investments Management. From 2004 to 2005, Ms. Wesolek was Managing Director, West Region
Head for JP Morgan Asset Management. From 1994 to 2004, Ms. Wesolek was Managing Director for Banc One Investment
Advisors Corporation. Ms. Wesolek has over 30 years of experience in the investment management industry.

Ms. Wesolek received her Bachelor of Science in Finance from Franklin University and holds the Series 7, 24 and 63 securities
licenses with the Financial Industry Regulatory Authority.

Compensation Discussion and Analysis

In our Compensation Discussion and Analysis, we:

•

describe our compensation program objectives and how compensation for our named executive officers is
determined; and
explain the tables and disclosures that follow.

This Compensation Discussion and Analysis presents compensation information for the following individuals:

• R. H. Dillon, who served as Chief Executive Officer in 2015;
• Christopher M. Bingaman, who served as President in 2015;
• Thomas E. Line, who served as Chief Financial Officer and Treasurer in 2015; and
• Lisa M. Wesolek, who served as Chief Operating Officer in 2015.

Background

We are in the investment management industry. Human capital is the most important resource of companies in our industry.
Attracting and retaining employees can be more difficult in our industry than in others because of how heavily our industry
depends on the contributions of talented individuals. We have been able to attract and retain high-quality employees due to:

•
•
•
•

our investment-centric culture;
employee ownership in our business;
our central Ohio location; and
the nationally-competitive compensation we offer to our employees.

Compensation, which is a critical element in a business dependent on talented employees, has a particularly significant impact
on profitability in industries like ours that are not capital intensive. This requires a balancing of the economics between our
operating profit margin and rewarding the employees who generate our profits and produce investment results for our clients.
As of March 4, 2016, our employees and directors owned approximately 27% of the Company. In contrast, many competitor
firms are owned entirely by their employees and many publicly-traded asset managers are far less employee owned. Despite
our unique ownership structure given our industry, we believe that industry norms are helpful benchmarks for evaluating the
balancing effort.

At our 2015 Annual Meeting of Shareholders, we asked our shareholders to vote upon an advisory resolution to approve the
compensation of our executive officers. The compensation of our named executive officers was approved by 98% of the votes
cast on the matter. The Compensation Committee of the Board (the “Committee”) believes that the results of the advisory vote
on executive compensation are supportive of our previous compensation practices and of its overall judgment related to the
compensation practices of the Company and considered that endorsement in establishing the compensation awarded to our
executive officers for 2015.

Compensation Program Objectives

We seek to attract and retain people with integrity, intelligence and energy. All employees are paid a competitive base salary,
provided with competitive benefits and participate in an annual cash and equity incentive compensation program. The amount
of individual incentive awards is based on an assessment of individual performance, while the amount of the overall available
incentive pool is based on (i) investment results in client portfolios, (ii), overall firm operating results, (iii) market compensation
data, and (iv) the profitability of the firm compared to other investment management firms.

In addition to annual incentive compensation, upon commencing employment with the Company, most employees are awarded
equity grants as an incentive to their continued employment. Generally, these awards cliff vest after five years of employment
to promote employee retention and long-term employee ownership. We also seek to increase employee ownership because we
believes such ownership encourages employees to act and think like owners. While compensation amounts differ depending
upon position, responsibilities, performance and competitive data, we seek to reward all employees with similar compensation
components based on these objectives.

Rewards Based on Performance

Our primary business objective is to meet our fiduciary duty to clients. Specifically, our focus is on long-term, five-year
investment returns, with goals defined as rolling five-year periods in which client returns are sufficiently above relevant passive
benchmarks, rank in the top quartile of similar investment strategies, and exceed a sufficient absolute return for the risk associated
with the asset class. As it relates to our investment professionals, their compensation program is designed to reward performance
that supports these objectives. For those employees who are not a part of our investment team the compensation program varies,
but is based on rewarding individual performance that helps us meet our fiduciary duty to clients and shareholders. We seek to
fulfill our fiduciary duty to shareholders by managing the firm and its assets to increase shareholder value over time. Over the
past five years, our annualized total shareholder return was 27.6% compared to a 9.2% return for the Russell 2000 Index.

Compensation Setting Process

Role of the Compensation Committee. The Committee has the overall responsibility for evaluating and approving the structure,
operation and effectiveness of our compensation plans, policies and programs for all employees. The Committee consists of
Mr. Fortener, Mr. Reeder, Mr. Shoup and Ms. Skinner. Ms. Skinner serves as the Chair. Each member of the Committee is an
“outside director” for purposes of Section 162(m) of the Internal Revenue Code (the “Code”), is a “non-employee director” for
purposes of Section 16(b) of the Securities Exchange Act of 1934, and meets NASDAQ independence requirements. The
Committee is specifically charged to:

•

•
•

•

review and approve the corporate goals and objectives relevant to the compensation of the CEO, to evaluate the
CEO’s performance in light of these goals and objectives, and, based on this evaluation, make recommendations
to the Board for the independent directors to approve the CEO’s compensation level (including any long-term
incentive or other compensation under any incentive-based or equity-based compensation plan);
review management’s recommendations and make recommendations to the Board with respect to director and
other non-CEO executive officer compensation; provided, however, that the Committee has full decision-making
authority with respect to compensation intended to be performance-based compensation within the meaning of
Section 162(m) of the Internal Revenue Code;
retain compensation consultants as it deems necessary to assist in its evaluation of director, CEO or other senior
executive compensation programs or arrangements;
obtain advice and assistance as it deems necessary from internal or external legal, accounting or other advisors;
review management’s recommendations and make recommendations to the Board with respect to incentive-based
compensation and equity-based compensation plans and programs that are subject to Board approval, and that may
be applicable to all or any portion of the employees of the Company and/or its subsidiaries; and
exercise all power and authority of the Board in the administration of equity-based incentive compensation plans.

The Committee considers the sum of all pay elements when reviewing annual compensation recommendations for the named
executive officers. Although the framework for compensation decision-making is tied to the Company’s overall financial
performance and the creation of long-term shareholder value, the Committee retains the discretion to make recommendations
to the Board for the independent directors to approve individual compensation based on other performance factors, such as
demonstrated management and leadership capabilities and the achievement of certain investment results for client accounts and
other strategic operating results.

Role of Management. The Company’s CEO evaluates the CFO and COO as part of our annual review process and makes
recommendations to the Committee regarding all elements of executive compensation paid to them. Changes in executive
compensation proposed by the CEO are based on the individual’s performance, the compensation of individuals with comparable
responsibilities in competing or similar organizations, and the profitability of the Company. At the Committee’s request,
management attends Committee meetings to provide general employee compensation and other information to the Committee,
including information regarding the design, implementation and administration of our compensation plans. The Committee also
meets in executive sessions without the presence of any executive officer whose compensation the Committee is scheduled to
discuss.

Use of Compensation Consultants and Surveys in Determining Executive Compensation. The Committee’s charter gives it the
authority to retain an independent outside executive compensation consulting firm to assist in evaluating policies and practices
regarding executive compensation and provide objective advice regarding the competitive landscape. Historically, however,
the Committee has not engaged compensation consultants, and did not do so in 2015.

Each year the Committee obtains and summarizes an asset management industry pay analysis prepared by McLagan Partners,
a compensation specialist focusing on the asset management industry. The companies in the McLagan Partners’ analysis include
approximately 150 public and private asset management companies with which we compete. This analysis provides the
Committee with a general overview of compensation trends in the asset management industry. The Committee does not define
a specific peer group, but rather takes a broad view of the analysis, including the types and amounts of compensation paid
generally by the companies surveyed. The Committee does not set any compensation elements or levels based on targeting a
certain percentile from the survey, but rather sets compensation that it believes to be both competitive and based on the executive’s
value to the Company. The survey is just one of many factors that the Committee considers when determining executive
compensation. Management and the Committee believe this broad view of the analysis is appropriate because we compete with
both public and private asset management firms regardless of their size and scope of operations.

Elements of Compensation

Base Salary. Base salaries for the named executive officers are intended to provide a fixed level of cash compensation that is
appropriate given the executive’s role in the organization. Generally, base salaries are determined by (i) scope of responsibility
and complexity of position, (ii) performance history, (iii) tenure of service, (iv) internal equity within the Company’s salary
structure, and (v) relative salaries of persons holding similar positions at other companies within the investment management
industry. Base salaries are designed to compensate knowledge and experience. In February 2015, the Committee made the
determination not to increase the base salaries of the named executive officers for fiscal year 2015. Consistent with our desire
to have the majority of total compensation paid to named executive officers at risk in the form of incentive compensation, a
significant majority of total compensation of our executive officers was paid in the form of either cash bonuses and/or long-
term equity grants.

Annual Cash Bonuses. Our prior employment agreement with Mr. Dillon entitled him to an annual cash bonus equal to at least
5% of the Company’s operating income, subject to an annual cap of $640,000. Mr. Dillon earned a $640,000 cash bonus for
2015 because 5% of the Company’s operating income for fiscal year 2015 exceeded $640,000. The Committee believed this
formula to determine a cash bonus was appropriate for our CEO, whose effectiveness and responsibility is most closely tied to
the amount of our operating income, capping the award at an amount that Mr. Dillon and the Committee believed was appropriate
given broad market compensation data and the additional value of the separate restricted stock award to Mr. Dillon in 2011
(which is described in the following section).

The Committee awarded a discretionary cash bonus to Mr. Line to reward him for his strong performance and overall contributions
to the Company in fiscal year 2015. The Committee believes that a discretionary cash bonus provided the Committee with the
flexibility to consider all aspects of Mr. Line's performance and contributions to the Company which, for a CFO and Treasurer,
may not be as directly tied to our operating income. In determining the amount of Mr. Line's cash bonus, the Committee
considered the Company’s overall operating results for 2015, contributions by Mr. Line that were not reflected in our operating
results, and broad market compensation data.

The Committee awarded a discretionary cash bonus to Mr. Bingaman, to reward him for his strong performance and overall
contributions to the Company in fiscal year 2015. The Committee believes a discretionary cash bonus provided the Committee
with the flexibility to consider all aspects of Mr. Bingaman’s performance and contributions to the Company as President and
Portfolio Manager. In determining the amount of Mr. Bingaman’s cash bonus, the Committee considered the Company’s overall
operating results for 2015, the investment results in client portfolios, client service, overall contributions to the investment team,
and broad market compensation data.

Restricted Stock Award to Mr. Dillon. In May 2011, the Committee awarded 100,000 shares of performance-based restricted
stock to Mr. Dillon pursuant to the Company’s 2011 Plan. All of the shares vested on January 1, 2016, as the Company’s
cumulative operating profit (defined as the Company’s total revenue during the period beginning on January 1, 2011 and ending
on December 31, 2015, excluding any investment income and gains and the revenue of the Company’s subsidiaries Beacon Hill
Fund Services, Inc. and BHIL Distributors, Inc. (collectively, “Beacon Hill”), less the Company’s total operating expenses during
such period, excluding Beacon Hill expenses, any investment losses and all taxes) exceeded $75,000,000. The results of Beacon
Hill are excluded from the cumulative operating profit because it is a separate subsidiary of the Company and is not yet material
to the overall financial results of the Company. All shares of restricted stock that vested on January 1, 2016 will remain subject
to restrictions on sale or transfer following the vesting date. The restrictions on sale or transfer will lapse with respect to 20%
of the vested shares of restricted stock on each anniversary of the vesting date.

This restricted stock award was intended to comprise all of Mr. Dillon’s equity-based compensation for the 2011 fiscal year
through the 2015 fiscal year, and no additional equity awards were made to Mr. Dillon during that period. The Committee
believes this compensation structure strongly aligns the long-term interests of Mr. Dillon with those of the Company and its
shareholders and better advances the objectives of our compensation program than the annual compensation structure used in
prior years.

In December 2012, we amended Mr. Dillon’s award agreement made under the 2011 Plan to clarify restrictions on dividends
paid on the 100,000 share performance-based restricted stock grant described above. The amendment caused dividends paid in
2012, 2013, and 2014 on the 100,000 share performance-based restricted stock grant to be placed in escrow and to be subject
to the same vesting requirements as the stock grant. These dividend payments also vested on January 1, 2016.

Restricted Stock Unit Award to Mr. Bingaman. In February 2014, the Committee awarded 14,000 shares of performance-based
restricted stock units (“PRSUs”) to Mr. Bingaman pursuant to the Company’s 2011 Plan covering the performance period of
January 1, 2014 through December 31, 2015. 7,000 PRSUs vested on each of January 1, 2015 and January 1, 2016, respectively,
as the Company’s annual operating profit for each calendar year period (defined as the Company’s total revenue during each
calendar year period excluding any investment income and gains, less the Company’s total operating expenses during such
period and any investment losses and all taxes) exceeded $25,000,000. All PRSUs that vested converted to shares of the
Company’s common stock and will be subject to restrictions on sale or transfer for five years following the vesting date. This
PRSU award was intended to comprise all of Mr. Bingaman’s equity-based compensation for the 2014 and 2015 compensation
years.

Restricted Stock Unit Award to Mr. Line. In December 2014, management granted 15,000 shares of restricted stock units ("RSU's)
to Mr. Line pursuant to the Company's 2014 Plan as long-term incentive compensation. Vesting of this award is time based and
3,000 of these RSU's vest on each April 1st from 2015 through 2019. Upon vesting, the shares will be subject to further restrictions
on sale or transfer for an additional five years from each respective vesting date. Mr. Line was named Chief Financial Officer
and Treasurer effective January 1, 2015. Management believes this compensation structure strongly aligns the long-term interests
of Mr. Line with those of the Company and its shareholders. This RSU award is intended to comprise all of Mr. Line's equity-
based compensation for the 2014 through 2018 compensation years.

Restricted Stock Award to Ms. Wesolek. At the time of her hiring in July 2012, management granted Ms. Wesolek 40,000 shares
of restricted stock as both an incentive to employment and as long-term incentive compensation. Vesting of this award is time
based at various times over the five-year period from grant date through July 2017. Upon vesting, the shares will be subject to
further restrictions on sale or transfer for an additional five years from each respective vesting date. Ms. Wesolek was hired to
lead the sales, marketing, client service and distribution efforts of the Company and was named Chief Operating Officer in 2014.
Management believes this compensation structure strongly aligns the long-term interests of Ms. Wesolek with those of the
Company and its shareholders. This restricted stock award is intended to comprise all of Ms. Wesolek’s incentive compensation
for the five-year period of July 2012 through June 2017, and no additional cash or equity awards to Ms. Wesolek during that
period are contemplated.

Retirement Plan Benefits. We provide retirement benefits through the Diamond Hill Investment Group 401(k) Plan and Trust.
Each named executive officer is entitled to participate in this plan on the same terms and conditions as all other employees. The
401(k) Plan does not involve any guaranteed minimum or above-market returns, as plan returns depend on actual investment
results.

Deferred Compensation Plans. We have two Deferred Compensation Plans: the Diamond Hill Fixed Term Deferred
Compensation Plan (the “Fixed Term Plan”) and the Diamond Hill Variable Term Deferred Compensation Plan (the “Variable
Term Plan”), (individually, the "Plan", and collectively the “Deferred Compensation Plans”). Each named executive officer is
eligible to participate in one of the Plans, along with certain other persons employed by the Company or any of its affiliates.
The terms and conditions of the Plans are described in more detail under the heading “Pension Plans and Non-Qualified Deferred
Compensation” below.

Other Benefits and Perquisites. We do not provide supplemental retirement plan benefits to our named executive officers. As
a general rule, we do not provide any perquisites or other personal benefits to our named executive officers that are not offered
on an equal basis to all other employees. Our named executive officers are entitled to participate in benefit programs that entitle
them to medical, dental, and short-term and long-term disability insurance coverage that are available to all employees.

Post-Employment Payments. During 2015, only Mr. Dillon, had an employment contract that provided for payments upon
termination of employment. This agreement has since expired and was replaced with a new agreement after Mr. Dillon stepped
down as CEO. More information on Mr. Dillon’s employment agreement and termination payments under the agreement is set
forth under the headings "Compensation of Directors" and “Employment Agreements and Change in Control Benefits.”

Stock Ownership Guidelines

In February 2010, the Board adopted stock ownership guidelines for our named executive officers to further align their interests
with those of our shareholders. The below table provides the target ownership level reflected in the guidelines and actual shares
owned as of December 31, 2015. Each named executive officer currently holds shares well in excess of the amounts required
under the guidelines.

Name
R. H. Dillon

Title

CEO

Christopher M. Bingaman

President

Thomas E. Line

Chief Financial Officer

Lisa M. Wesolek
________________________________________________

Chief Operating Officer

Target
Ownership
Level
5x Salary

5x Salary

3x Salary

2x Salary

Target
Number of
Shares(a)

Number of
Shares
Owned (b)

Ownership
Guideline Met

9,524

6,614

3,175

2,116

232,452

29,979

16,041

27,979

Yes

(a) Based on a per share price of $189.00 which was the closing price of our common shares on December 31, 2015, and the

respective base salaries of our named executive officers as of that date.
Includes any unvested restricted stock, restricted stock units, and shares held in the Diamond Hill 401k Plan.

(b)

Risks Related to Compensation Policies and Practices

As part of its oversight of our executive and non-executive compensation programs, the Compensation Committee considers
how our current compensation programs, including the incentives created by compensation awards, affect the Company’s risk
profile. In addition, the Committee reviews our compensation policies, particularly the incentives that they create, to determine
whether they encourage an appropriate level of risk-taking and do not present a significant risk to the Company. The Compensation
Committee also considered the following risk mitigating factors:

•

•
•

•

current compensation programs reward portfolio managers and research analysts on trailing five-year investment
performance in client accounts;
a majority of incentive compensation is in the form of long-term equity-based awards;
sale restriction periods for equity-based compensation awards encourage executives and other employees to focus
on the long-term performance of the Company;
the Committee has discretionary authority to adjust annual incentive awards;
the Company has internal controls over financial reporting and other financial, operational and compliance policies
and practices; and
base salaries are consistent with executives’ responsibilities so that they are not motivated to take excessive risks
to achieve a reasonable level of financial security.

Based on this review, the Committee has concluded that our compensation policies and procedures are not reasonably likely to
have a material adverse effect on the Company.

Compensation Recoupment and Restitution Policy

Upon the recommendation of the Compensation Committee, our Board of Directors has adopted a compensation recoupment
and restitution policy that applies to all incentive compensation received by all employees, including our named executive
officers. Under the policy, we may recover all or a portion of incentive compensation (or pay out additional incentive
compensation) related to awards made after the adoption of the policy, in three general situations:

•

if, due to error or malfeasance the previously determined incentive pool, or an individual award, is either too large
(or too small), then any overpayment made to an employee may be returned to Company or an additional payment
may be made to an associate;
if an employee engages in fraud or misconduct that contributes to the need for a financial restatement, or violates
any law or regulation or any policy or procedure of the Company then we may, in the sole discretion of the
Compensation Committee and the Board of Directors, recoup all or a portion of the employee’s incentive
compensation; and

•

if the Compensation Committee determines that the Company's previously issued financial statements are restated
as a result of error, omission, fraud or non-compliance with financial reporting requirements, then we may recoup,
in the sole discretion of the Compensation Committee and the Board of Directors, all or a portion of the employee’s
incentive compensation.

The policy is intended to provide enhanced safeguards against certain types of employee misconduct and provide enhanced
protection to and alignment with shareholders. These provisions are in addition to any policies or recovery rights that are
provided under applicable laws, including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer
Protection Act. Beginning in 2013, all awards are subject to this policy.

Summary Compensation Table

The following table sets forth the total compensation paid to or earned by our named executive officers for services rendered in
the years indicated. Additional information on the elements of compensation included in the table below is available under the
“Compensation Discussion and Analysis” section.

Name
and Principal
Position

R. H. Dillon

Chief Executive Officer

Christopher M. Bingaman

President

Thomas E. Line

Chief Financial Officer

and Treasurer

Lisa M. Wesolek

Chief Operating Officer

Year

2015

2014

2013

2012

2015

2014

2015

2014

Salary

Bonus(1)

Stock Awards

All Other
Compensation(3)

Total

360,000

250,000

200,000

640,000

400,000

225,000

— $

—

1,521,669 (2)

—

36,000

$ 1,036,000

35,400

$ 1,035,400

34,800

$ 1,034,800

35,064

$ 1,035,064

36,300

686,300

36,300

$ 2,207,969

29,600

454,600

29,600

229,600

___________________________________

(1) Mr. Dillon was granted a bonus award in accordance with the terms of his employment contract. Mr. Bingaman and Mr.
Line were each granted a discretionary bonus award from the Company’s bonus pool, which was not based upon any pre-
established performance goals.

(2) This award represents 14,000 restricted stock units (“RSUs”) awarded to Mr. Bingaman on February 24, 2014 as part of a
long-term performance-based incentive program under the 2011 Plan and constitutes the stock portion of Mr. Bingaman’s
incentive compensation for the years 2014 and 2015. 7,000 RSUs vested on January 1, 2015 and the other 7,000 RSUs
vested on January 1, 2016, both subject to the achievement of performance goals established by the Compensation Committee
and described above in the “Compensation Discussion and Analysis” section. The value shown represents the full grant
date fair value which was determined by reducing the grant-date price of the shares by the present value of the dividends
expected to be paid on the underlying shares during the requisite service period, discounted at the appropriate risk-free
interest rate. Any RSUs that vest will convert into an equivalent number of shares of the Company and will be subject to
further restrictions from transfer or sale for a five-year period following the respective vesting date.

(3) The following types of compensation are included in the “all other compensation” column:

Name
R. H. Dillon

Year
2015

2014

2013
Christopher M. Bingaman 2015
2014

Thomas E. Line

Lisa M. Wesolek

2015

2014

Contributions to
Company 401k Plan(a)
31,800
$

31,200

30,600

30,000

24,000

Contributions to Health
Savings Account(a)

Total

4,200

6,300

5,600

36,000

35,400

34,800

36,300

29,600

___________________________________
(a) The Company contributions to the Company 401k Plan and employee Health Savings Accounts are offered to all

employees of the Company and its affiliates.

Grants of Plan Based Awards for 2015

The following table sets forth information regarding annual incentive plan awards to each of the named executive officers for
the year ended December 31, 2015. There were no Plan Based Awards granted during 2015.

Name
R.H. Dillon

Christopher M. Bingaman

Thomas E. Line

Lisa M. Wesolek

____________________

Grant
Date

—

Compensation
Committee
Action Date(1)
—

— 10/28/2015

—

Estimated Possible Payouts
Under Equity Incentive
Plan Awards

Threshold #

—

Target # Maximum #
—

—

Grant
Date Fair
Value of
Stock and
Options

Awards $

—

(1) The Compensation Committee Action Date represents the date on which the Committee authorized the equity-based award.
On October 28, 2015, the Compensation Committee granted an award of 13,000 Performance Restricted Stock Units
("PRSU") to Mr. Bingaman with a grant date of January 1, 2016. This grant is intended to represent the long-term equity
component of Mr. Bingaman's 2016 and 2017 incentive compensation. Subject to meeting performance conditions, 6,500
PRSU's will vest on January 1, 2017 and the other 6,500 PRSU's will vest on January 1, 2018.

Outstanding Equity Awards at December 31, 2015

The following table summarizes all outstanding equity awards held by our named executive officers as of December 31,
2015.

Name
R. H. Dillon
Christopher M. Bingaman

Thomas E. Line

Lisa M. Wesolek

____________________

Stock Awards

Equity Incentive Plan
Awards:
Number of Unearned Shares
That have Not Vested(1)

Equity Incentive Plan Awards:
Market or Payout Value of
Unearned Shares That Have
Not Vested(5)

100,000 (2) $
7,000 (2) $
12,000 (3) $
10,000 (4) $

18,900,000

1,323,000

2,268,000

1,890,000

(1) The amount in this column represents shares of restricted stock or restricted stock units awarded pursuant to the 2011 Plan
and the 2014 Plan, which are described in detail above under the heading “Compensation Discussion and Analysis.”

(2) These shares vested on January 1, 2016, based on the achievement of performance goals established by the Compensation

Committee.

(3) These shares are scheduled to vest in the amount of 3,000 shares on each April 1 for the years 2016 through 2019, subject

to Mr. Line's continued employment with the Company on those respective dates.

(4) These shares are scheduled to vest in the amount of 5,000 shares each on December 1, 2016 and July 1, 2017, respectively,

subject to Ms. Wesolek’s continued employment with the Company on those respective dates.

(5) The amount in this column represents the value of the shares shown multiplied by $189.00, the closing market price of our

common shares as of December 31, 2015.

Option Exercises and Stock Vested for 2015

None of the named executive officers exercised any options during 2015. The following table sets forth information with
respect to the only stock awards vested in 2015.

Name
R. H. Dillon

Christopher M. Bingaman

Thomas E. Line

Lisa M. Wesolek

Stock Awards

Number of Shares
Acquired on Vesting

Value Realized
on Vesting

— $

7,000

3,000

—

966,280

485,760

5,000

$ 1,143,950

Pension Plans and Non-Qualified Deferred Compensation

We do not maintain any pension plans for named executive officers or other employees. We offer to our named executive
officers and certain other employees the opportunity to participate in two Non-Qualified Deferred Compensation Plans: the
Fixed Term Plan and the Variable Term Plan (the “Deferred Compensation Plans”).

Deferrals of Incentive Compensation.

Pursuant to the Deferred Compensation Plans, participants may elect to defer up to 50% of the stock portion of their annual
bonus and up to 100% of the cash portion of their annual bonus for a plan year (the calendar year). Generally, the participant
must submit a deferral election by December 31 of the year before the services are to be performed. After the applicable deadline,
a deferral election is irrevocable for that plan year except under circumstances set forth in the Deferred Compensation Plan.

Earnings

The deferred incentive compensation, if any, is credited to an account for that plan year. The participant is 100% vested in the
account, although the account is subject to the terms and conditions of the Company's Compensation Recoupment and Restitution
21

Policy, described above. The account will be credited with earnings and losses based on the performance of the investment
selections in the participant's account, which only include Diamond Hill Funds.

Plan Funding

The Deferred Compensation Plans are unfunded, unsecured promises by the Company to pay the account balances under the
Deferred Compensation Plans at a later date. Participants have only the rights of general unsecured creditors of the Company
and do not have any interest in or right to any specific asset of the Company.

Distributions

Under the Fixed Term Plan, the account for each Plan Year will be distributed in (i) a single lump sum payment within 90 days
following the fifth anniversary of the date the Incentive Compensation was deferred or (ii) in up to five substantially equal annual
installments beginning on the January 1 following the fifth anniversary of the date such Incentive Compensation was deferred
and on each January 1 thereafter, except in the event of death, Disability or a Change in Control.

Under the Variable Term Plan, the participant must elect when they wish to receive distributions. Generally, the participant may
elect to receive the account (i) in a single lump sum payment within 90 days following either the termination of employment,
or a specified date which is at least five years after the annual bonus was deferred; or (ii) in substantially equal annual installments
for up to fifteen years beginning on the January 1 following either (A) the termination of employment and on each January 1
thereafter, or (B) on a specified date which is at least five years after the annual bonus was deferred and on each January 1
thereafter.

In the event of death or disability, the participant’s account will be distributed to the participant or the participant’s beneficiary,
as applicable, in a lump sum within 90 days after the event. In the event that the Company undergoes a change in control, the
account will be distributed in a lump sum within 30 days after the change in control.

None of the named executive officers contributed to the Deferred Compensation Plans, and none had a balance under such plans
as of December 31, 2015.

Employment Agreements and Change in Control Benefits

In March 2011, we entered into an amended and restated employment agreement with Mr. Dillon. The agreement expired
December 31, 2015. The agreement provided for an annual salary of $360,000, plus an annual cash bonus of at least 5% of the
Company’s operating income, with a maximum annual cash bonus of $640,000. Mr. Dillon also received a restricted stock
award of 100,000 shares that vested on January 1, 2016 upon the satisfaction of specified performance criteria established by
the Compensation Committee. The performance criteria and vesting provisions of Mr. Dillon’s restricted stock award are
discussed more thoroughly in the “Compensation Discussion and Analysis” section above. Mr. Dillon’s employment agreement
also entitled him to receive health insurance and six weeks paid vacation annually and to participate in other benefit programs
offered to employees.

On January 1, 2016, Mr. Dillon and Diamond Hill Capital Management, Inc., a wholly-owned subsidiary of the Company,
entered into an employment agreement setting forth the terms of his continued employment as a portfolio manager. This
employment agreement has a term of five years, subject to early termination. Mr. Dillon will receive an annual salary of $200,000
and will be eligible to receive an annual bonus using the same criteria as applicable to the other portfolio managers of the
Company. Mr. Dillon will also be entitled to an additional bonus based upon the net revenue of the operating division to which
he provides his services. If Mr. Dillon’s employment is terminated without cause, he will be entitled to one year’s base salary
and a pro-rata portion of any incentive compensation. Mr. Dillon's employment agreement has no provision for change in control
benefits. We are not a party to an employment agreement with any other employee.

Compensation Committee Report

The Board’s Compensation Committee has submitted the following report for inclusion in this Proxy Statement:

We have reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement with
management. Based on that review and discussion, we recommended to the Board that the Compensation Discussion and
Analysis be included in this Proxy Statement and the Company’s Annual Report on Form 10-K for the year ended December
31, 2015.

Submitted by the Compensation Committee of the Board of Directors:

Frances A. Skinner, Chair
Paul A. Reeder, III
Randolph J. Fortener
Bradley C. Shoup

PROPOSAL 2 — RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

The Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of the independent
registered public accounting firm retained to audit the Company’s consolidated financial statements. To execute this responsibility,
the Committee engages in an evaluation of the independent auditor's qualifications, performance, and independence and
periodically considers whether the independent registered public accounting firm should be rotated and the advisability and
potential impact of selecting a different independent registered public accounting firm.

The Audit Committee has reappointed KPMG LLP to serve as our independent registered public accounting firm for 2016.
KPMG was first appointed to serve as our independent registered public accounting firm on October 24, 2012.

The Audit Committee and the Board of Directors believe that the continued retention of KPMG as our independent registered
public accounting firm is in the best interests of the Company and our shareholders, and we are asking our shareholders to ratify
the selection of KPMG as our independent registered public accounting firm for 2016.

Representatives of KPMG are expected to be present at the Annual Meeting and will have the opportunity to make a statement,
if they so desire, and respond to appropriate questions from shareholders.

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE
APPOINTMENT OF KPMG AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2016.

If Proposal 2 is not approved, the Audit Committee will reconsider the appointment of KPMG as our independent registered
public accounting firm for 2016.

Disclosure of Fees Charged by the Independent Registered Public Accounting Firm

The following table summarizes the fees billed by KPMG for services rendered to the Company and its subsidiaries during 2014
and 2015.

Audit Fees(1)
Audit-Related Fees

Tax Fees
All Other Fees(2)
Total Fees

Year Ended

12/31/2015

12/31/2014

146,200

—

51,625

—

197,825

122,700

—

74,700

3,000

200,400

____________________

(1) Audit Fees include professional services rendered for the audit of annual financial statements, reviews of quarterly financial
statements, issuance of consents, and assistance with review of other documents filed with the SEC. The 2015 amount
includes $11,200 in overages paid in 2015 related to the 2014 audit.

(2) All Other Fees included services related to a consent related to a registration statement on Form S-8 filed by the Company

with the SEC in 2014.

Preapproval by Audit Committee

The Audit Committee has adopted policies and procedures which set forth the manner in which the committee will review
and approve all audit and non-audit services to be provided by the independent registered public accounting firm (the
“Services”) to ensure that the provision of the Services does not impair the firm’s independence. The pre-approval policies
and procedures are as follows:

• The Audit Committee has established a pre-approval fee cap of $25,000, under which any Services in excess of the
$25,000 fee cap must be submitted to the Audit Committee for review and pre-approval, and any Services less than
the $25,000 fee cap must be approved by the Chief Financial Officer and then reported to the Audit Committee at
their next regularly scheduled meeting.
Pre-approval actions taken during Audit Committee meetings are recorded in the minutes of the meetings.

•

Audit Committee Report

The Audit Committee is comprised of three independent directors operating under a written charter adopted by the Board.
Annually, the Audit Committee engages the Company’s independent registered public accounting firm. KPMG served as the
Company’s independent registered public accounting firm for the fiscal year ended December 31, 2015.

Management is responsible for preparation of the Company’s financial statements and for designing and maintaining the
Company’s systems of internal controls and financial reporting processes. The Company’s independent registered public
accounting firm is responsible for performing an audit of the Company’s consolidated financial statements in accordance with
standards of the Public Company Accounting Oversight Board (“PCAOB”) and issuing reports on the Company’s financial
statements and the effectiveness of the Company’s internal controls over financial reporting. The Audit Committee’s
responsibility is to provide independent, objective oversight of these processes.

Pursuant to this responsibility, the Audit Committee met and held discussions with management and KPMG regarding the audited
consolidated financial statements of the Company for the fiscal year ended December 31, 2015. The Audit Committee reviewed
the audit plan and scope with KPMG and discussed with KPMG the matters required by the Public Company Accounting
Oversight Board (“PCAOB”) Auditing Standard 16, as amended, – Communications with the Audit Committee. The Audit
Committee also met with KPMG without management present to discuss the results of their audit work, their evaluation of the
Company’s system of internal controls and the quality of the Company’s financial reporting.

The Committee also discussed with KPMG its independence from management and the Company, and received its written
disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding the independent accountant’s
communications with the audit committee concerning independence.

Management has represented to the Audit Committee that the Company’s consolidated financial statements for the year ended
December 31, 2015, were prepared in accordance with United States generally accepted accounting principles. Based on the
Audit Committee’s discussions with management and KPMG and its review of KPMG’s report to the Audit Committee, the
Audit Committee recommended to the Board of Directors (and the Board has approved) that the audited consolidated financial
statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the
SEC.

Submitted by the Audit Committee of the Board of Directors:

Randolph J. Fortener, Chairman
Paul A. Reeder, III
Bradley C. Shoup
Frances A. Skinner

PROPOSAL 3 — ADVISORY VOTE ON THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE
OFFICERS

The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in July 2010, requires that we provide our shareholders
with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our executive officers identified
in the Summary Compensation Table of this Proxy Statement (the “named executive officers”).

As described in detail in the section entitled, “EXECUTIVE OFFICERS AND COMPENSATION INFORMATION,” we believe
that executive compensation should be linked with the Company’s performance and significantly aligned with the interests of
the Company’s shareholders. In addition, our executive compensation program is designed to allow us to retain, and recognize
the contributions of, employees who play a significant role in our current and future success. We urge you to read the Compensation
Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosure for a detailed description
of the fiscal year 2015 compensation of our named executive officers.

The vote on this resolution is not intended to address any specific element of compensation; rather, the advisory vote relates to
the overall compensation of our named executive officers. This vote is advisory and therefore not binding on the Company.
However, the Board and the Compensation Committee will review the voting results and will take into account the outcome of
the vote when determining future compensation for the Company’s named executive officers.

Accordingly, we ask our shareholders to vote on the following resolution:

“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the named
executive officers, as disclosed in the Company’s Proxy Statement for the 2016 Annual Meeting of Shareholders
pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the
Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and
disclosure.”

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE
COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT
PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SEC.

ADDITIONAL INFORMATION

SHAREHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS

Given the Company’s relatively small size, our limited number of record shareholders, and the Board’s consistent practice of
being open to receiving direct communications from shareholders, the Board believes that it is not necessary to implement, and
we do not have, a formal process for shareholders to send communications to the Board. Our practice is to forward any
communication addressed to the full Board to the Chairman; to a group of directors, to a member of the group; or to an individual
director, to that person.

SHAREHOLDER PROPOSALS FOR 2017 ANNUAL MEETING

Shareholders are entitled to submit proposals on matters appropriate for shareholder action consistent with SEC rules and our
Code of Regulations. Should a shareholder wish to have a proposal appear in the Proxy Statement for next year’s annual meeting,
under applicable SEC rules, the proposal must be received by the Company’s Secretary on or before November 11, 2016, and
must otherwise comply with the requirements of Rule 14a-8 of the Exchange Act.

Our Amended and Restated Code of Regulations (our “Regulations”) govern the submission of director nominations and other
business proposals that a shareholder wishes to have considered at the annual meeting of shareholders, but which are not included
in our Proxy Statement for that meeting. Under our Regulations, director nominations or other business proposals to be addressed
at our next annual meeting may be made by a shareholder entitled to vote who has delivered a notice to the Secretary of the
Company not later than the close of business on December 11, 2016 and not earlier than November 11, 2016. The notice must
comply with the procedures and requirements of our Regulations.

These advance notice provisions in our Regulations are in addition to, and separate from, the requirements that a shareholder
must meet in order to have a proposal included in the Proxy Statement under the rules of the SEC. A proxy granted by a shareholder

will give discretionary authority to the proxies to vote on any matters introduced pursuant to the above advance notice provisions
in our Regulations, subject to applicable SEC rules. A copy of our Regulations may be obtained from the Secretary of the
Company, James F. Laird, at 325 John H. McConnell Boulevard, Suite 200, Columbus, Ohio 43215 or by phone at (614) 255-3333.

SHAREHOLDERS SHARING THE SAME ADDRESS

The SEC has implemented rules regarding the delivery of proxy materials (i.e., annual reports, proxy statements, proxy statements
combined with a prospectus or any information statements provided to shareholders) to households. This method of delivery,
often referred to as “householding,” generally permits the Company to send a single annual report and a single proxy statement
to any household at which two or more different shareholders reside if the Company believes such shareholders are members
of the same family, unless the shareholder(s) have opted out of the householding process. Each shareholder would continue to
receive a separate notice of any meeting of shareholders and proxy card. The householding procedure reduces the volume of
duplicate information you receive and reduces expenses. The Company has instituted householding. If (i) you wish to receive
separate annual reports or proxy statements, either this year or in the future, or (ii) members of your household receive multiple
copies of the annual report and proxy statement and you wish to request householding, you may contact the Company’s transfer
agent, Continental Stock Transfer & Trust Company at 17 Battery Place, New York, New York 10004, or by phone at (212)
509-4000, or write to Mr. James Laird at 325 John H. McConnell Boulevard, Suite 200, Columbus, Ohio 43215, or by phone
at (614) 255-3333.

In addition, many brokerage firms and other holders of record have instituted householding. If your family has one or more
“street name” accounts under which our shares are beneficially owned, you may have received householding information from
your broker, financial institution or other nominee in the past. Please contact the holder of record directly if you have questions,
require additional copies of this Proxy Statement or Annual Report on Form 10-K or wish to revoke your decision to household
and thereby receive multiple copies. You should also contact the holder of record if you wish to institute householding. These
options are available to you at any time.

OTHER BUSINESS

The Board knows of no other business to be acted upon at the Annual Meeting. However, if any other business properly comes
before the Annual Meeting, it is the intention of the persons named in the enclosed Proxy to vote on such matters in accordance
with their best judgment.

The prompt completion, execution, and delivery of your proxy card or your submission of voting instructions electronically
over the Internet or by telephone will be appreciated. Whether or not you expect to attend the Annual Meeting, please complete
and sign the proxy card and return it in the enclosed envelope, or vote your proxy electronically via the Internet or telephonically.

By Order of the Board of Directors

James F. Laird
Secretary

United States
Securities and Exchange Commission
Washington, D.C. 20549

Form 10-K

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

For the fiscal year ended December 31, 2015

Commission file number 000-24498

DIAMOND HILL INVESTMENT GROUP, INC.

(Exact name of registrant as specified in its charter)

Ohio

(State of
incorporation)

325 John H. McConnell Blvd., Suite 200,
Columbus, Ohio 43215
(Address of principal executive offices)

65-0190407

(I.R.S. Employer
Identification No.)

43215

(Zip Code)

Registrant's telephone number, including area code: (614) 255-3333
Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common shares, no par value

Name of each exchange on which registered
The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes

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

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K

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” and “smaller reporting company”
in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Non-accelerated filer

Accelerated filer

Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes

Aggregate market value of the registrant’s common shares (the only common equity of the registrant) held by non-affiliates of
the registrant, based on the closing price of $199.66 on June 30, 2015 on the NASDAQ Global Select Market was
$593,336,011. Calculation of holdings by non-affiliates is based upon the assumption, for these purposes only, that the
registrant’s executive officers and directors are affiliates.

The number of issuer's common shares outstanding, as of February 25, 2016, was 3,398,695 shares.

Documents Incorporated by Reference

Portions of the registrant’s definitive proxy statement for the 2016 Annual Meeting of Shareholders to be filed pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended, are incorporated by reference into Part III of this
report.

Diamond Hill Investment Group, Inc.
Form 10-K
For the Fiscal Year Ended December 31, 2015
Index

Required Information
Part I

Item 1. Business

Item 1A. Risk Factors

Item 1B. Unresolved Staff Comments

Item 2. Properties

Item 3. Legal Proceedings

Item 4. Mine Safety Disclosures

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Item 6. Selected Financial Data
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data

Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosures

Item 9A. Controls and Procedures

Item 9B. Other Information

Part III

Item 10. Directors, Executive Officers and Corporate Governance

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13. Certain Relationships and Related Transactions, and Director Independence

Item 14. Principal Accounting Fees and Services

Part IV

Item 15. Exhibits, Financial Statement Schedules

Signatures

Page
3

Item 1.

Business

Forward-Looking Statements

PART I

Throughout this Annual Report on Form 10-K, Diamond Hill Investment Group, Inc. (the "Company," "we," "us" and "our")
may make forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, relating to such matters as anticipated operating results,
prospects and levels of assets under management, technological developments, economic trends (including interest rates and
market volatility), expected transactions and similar matters. The words “believe,” “expect,” “anticipate,” “estimate,” “should,”
“hope,” “seek,” “plan,” “intend” and similar expressions identify forward-looking statements that speak only as of the date
thereof. While we believe that the assumptions underlying our forward-looking statements are reasonable, investors are
cautioned that any of the assumptions could prove to be inaccurate and, accordingly, our actual results and experiences could
differ materially from the anticipated results or other expectations expressed in our forward-looking statements. Factors that
could cause such actual results or experiences to differ from results discussed in the forward-looking statements include, but are
not limited to: the adverse effect from a decline in the securities markets; a decline in the performance of our products; changes
in interest rates; changes in national and local economic and political conditions, the continuing economic uncertainty in
various parts of the world; changes in government policy and regulation, including monetary policy; changes in our ability to
attract or retain key employees; unforeseen costs and other effects related to legal proceedings or investigations of
governmental and self-regulatory organizations; and other risks identified from time-to-time in other public documents on file
with the U. S. Securities and Exchange Commission (“SEC”), including those discussed below in Item 1A. Throughout this
Annual Report on Form 10-K, when we use the terms the “Company,” “management,” “we,” “us,” and “our,” we mean
Diamond Hill Investment Group, Inc. and its subsidiaries.

Overview

The Company, an Ohio corporation organized in April 1990, derives its consolidated revenue and net income from investment
advisory and fund administration services provided by its subsidiaries Diamond Hill Capital Management, Inc. (“DHCM”),
Beacon Hill Fund Services, Inc. (“BHFS”), and BHIL Distributors, Inc. (“BHIL”). BHFS and BHIL collectively operate as
"Beacon Hill". DHCM is a registered investment adviser under the Investment Advisers Act of 1940. DHCM sponsors,
distributes, and provides investment advisory and related services to U.S. and foreign clients through Diamond Hill Funds (the
"Funds"), institutional accounts, an exchange traded fund, and private investment funds (generally known as “hedge funds”).
Beacon Hill provides fund administration and statutory underwriting services to U.S. and foreign clients, including the Funds.

The Company’s primary objective is to fulfill our fiduciary duty to our clients. Our secondary objective is to grow the intrinsic
value of the Company in order to achieve an adequate long-term return for our shareholders.

Investment Advisory Activities

Clients

The Company provides investment advisory services to a broad range of clients, including corporations, mutual funds,
retirement plans, public pension funds, endowments, foundations, financial institutions and high net worth individuals. We
strive to expand our client base by attracting new clients and earning additional business from existing clients.

Investment Philosophy

We believe that a company’s intrinsic value is independent of its stock price. We also believe competitive long-term returns
can be achieved by buying (shorting) companies when the current market price is at a discount (premium) to our estimate of
intrinsic value, based upon a discounted cash flow methodology.

The following are the guiding principles for our philosophy:

• Treat every investment as a partial ownership interest in that company.

Investing is most intelligent when it is viewed through the lens of an owner.

• Always invest with a margin of safety.

Our discipline is to purchase (short) securities at a sufficient discount (premium) to our estimate of intrinsic value. We
estimate the intrinsic value of the company independent of the current stock market price then compare our estimate to
the price to determine if an opportunity exists. When we successfully identify securities trading below (above) our
estimate of intrinsic value, it increases the potential reward and serves as the most effective risk control.

• Possess a long-term investment temperament.

In the short term, emotion as much as economic fundamentals drives market prices. Over time, the economic
performance of the company and the price paid, versus the market, will determine investment return.

• Recognize that market price and intrinsic value tend to converge over a reasonable period of time.

Investment opportunity lies in the ability to buy (or short), when the current market price does not reflect a company’s
intrinsic value, and to sell (or cover) when price and value converge.

Investment Process

DHCM’s investment process begins with fundamental research focusing on estimating a company’s intrinsic value independent
of its current stock price. Bottom-up analysis, which takes into consideration earnings, revenue growth, operating margins and
other economic factors, is of primary importance in estimating the intrinsic value of an individual company. A five-year
discounted cash flow analysis is the primary methodology to determine whether there is a discrepancy between the current
market price and DHCM’s estimate of intrinsic value. In order to forecast the amount and timing of cash flows, the research
analysts concentrate on the fundamental economic drivers of the business, including competitive positioning, quality of
management, and balance sheet strength. Research analysts also evaluate each company within the context of sector and
industry secular trends. Key factors in analyzing sectors and industries include relative pricing power, ability to earn excess
returns, long-term capital flow, and other fundamental factors. DHCM also applies an intrinsic value philosophy to the analysis
of fixed income securities.

Only securities selling at a discount (premium) to intrinsic value will be purchased (sold short). A portfolio manager assigns the
highest weights to the highest conviction names. Within certain diversification constraints, a portfolio manager is willing to
take outsized positions in the highest conviction ideas and we will often have no exposure to industries without attractive
intrinsic value opportunities. A stock will be sold (or covered) if its price reaches DHCM’s estimate of intrinsic value, if
fundamentals deteriorate, if a more attractive opportunity is identified, or if the holding reaches a specified limit as a percent of
the portfolio.

DHCM believes that many investors’ short-term focus hinders their long-term results, which creates market inefficiencies and,
therefore, opportunities. In addition, not all investors are valuation sensitive. We believe that we can exploit these market
anomalies/inefficiencies by possessing a long-term investment temperament and practicing a consistent and repeatable business
appraisal approach to investing. Furthermore, DHCM believes that investing in securities whose market prices are significantly
below its estimate of intrinsic value (or selling short securities whose market prices are above its estimate of intrinsic value) is a
reliable method to achieve above average relative returns, as well as mitigate risk.

Investment Advisory Fees

The Company’s principal source of revenue is investment advisory fee income earned from managing client accounts under
investment advisory and sub-advisory agreements. The fees earned depend on the type of investment strategy, account size and
servicing requirements. Revenues depend on the total value and composition of assets under management (“AUM”).
Accordingly, net cash flows from clients, market fluctuations in client portfolios, and the composition of AUM impact our
revenues and results of operations. We also have certain agreements which allow us to earn variable fees in the event that
investment returns exceed targeted amounts during a measurement period.

Investment Strategies

The Company offers several traditional and alternative investment strategies, which are all based on the same intrinsic value
philosophy. As of December 31, 2015, we offered the following representative investment strategies to our clients:

Small Cap - Pursues long-term capital appreciation by investment in a portfolio of small-capitalization U.S. equity
securities.

Small-Mid Cap - Pursues long-term capital appreciation by investing in a portfolio of small- and mid-capitalization
U.S. equity securities.

Mid Cap - Pursues long-term capital appreciation by investing in a portfolio of mid-capitalization U.S. equity
securities

Large Cap - Pursues long-term capital appreciation by investing in a portfolio of large-capitalization U.S. equity
securities.

Select - Pursues long-term capital appreciation by investing in a concentrated portfolio of U.S. companies across a
broad range of market capitalizations.

Long-Short - Pursues long-term capital appreciation by both investing long and selling short U.S. companies across
a broad range of market capitalizations.

Research Opportunities - Pursues long-term capital appreciation by both investing long and selling short U.S.
companies across a broad range of market capitalizations, as well as by investing up to 20% in international equities
and up to 20% in fixed income investments.

Financial Long-Short - Pursues long-term capital appreciation by both investing long and selling short U.S.
financial services companies across a broad range of market capitalizations.

Valuation-Weighted 500 - Pursues long-term capital appreciation by investing in large-capitalization U.S. equity
securities that seek to track the price and total return of the Diamond Hill Valuation-Weighted 500 Index.

10.

Strategic Income - Pursues high current income, preservation of capital, and total return by investing in corporate
bonds across the credit spectrum.

11. High Yield - Pursues high current income with the opportunity for capital appreciation by investing in corporate

bonds with a credit characteristics that are below investment grade.

Investment Results

The Company believes that one of the most important characteristics exhibited by the best investment firms is excellent
investment returns for their clients over a long period of time. We are pleased that, during our history as an investment advisory
firm, we have delivered what we believe are strong long-term investment returns for our clients. Investment returns have been a
key driver in the long-term success we have achieved in growing assets under management ("AUM").

In 2015, the Russell 1000 Index posted a total return, including dividends, of 0.92%, while the broader Russell 3000 Index
posted a 0.48% total return. Small cap stocks fared worse than large cap stocks, with the Russell 2000 Index posting a total
return of -4.41%. Absolute returns for our equity strategies were primarily negative in 2015, while returns relative to
benchmarks were mixed. Across most of our equity strategies, holdings in the energy and industrials sectors were the primary
detractors from return in 2015, reflecting concerns about the slowdown in China’s economic growth as well as exposure to
commodity price declines. Nonetheless, as of December 31, 2015, the since-inception returns for all but one of our strategies
with at least a five-year track record exceeded their respective benchmark returns. The only exception was our Research
Opportunities Fund. As always, we remain focused on five-year periods to evaluate our results, as we believe five years is the
shortest time period for statistical significance.

The performance of active strategies relative to a passive benchmark tends to be cyclical. These cycles are created because
price momentum can persist in the short-term but reverts in the long-term. Market returns are often driven by investor
emotions and unpredictable market psychology in the short-term, which has been extended in recent years by unprecedented
monetary stimulus; an extended bull market characterized by lower volatility, lower dispersion, and higher correlations; less
focus on individual, bottom-up company fundamentals; and self-reinforcing passive flows. While market conditions over the
past five years have made it difficult for many active managers to outperform passive alternatives, we expect the cycle will turn
in favor of active management, and we are beginning to see signs of a turning point. Dispersion between individual stock
returns is increasing, and in December 2015 the Federal Reserve increased its Fed Funds target rate for the first time since
2006. We continue to believe that our intrinsic value-focused approach will outperform over a full market cycle, supported by
our intrinsic value-based investment philosophy, long-term perspective, disciplined approach, and alignment with our clients’
interests. The following is a summary of the investment returns for each of our representative strategies as of December 31,
2015, relative to its respective passive benchmark.

As of December 31, 2015

3 Year

5 Year

8.36%

1 Year
(3.47)% 12.34%
(4.41 )%
9.19 %
11.65 %
1.32 % 15.50% 11.38%
(2.90 )%
12.46 % 10.32 %
N/A
0.74 %
(2.44 )%
N/A
(0.85)% 14.47% 11.62%
0.92 %
15.01 % 12.44 %
(1.14)% 16.77% 11.66%
14.74 % 12.18 %
0.48 %
(1.40)%
7.98%

N/A
N/A

9.32%

0.75 %
8.93 %
(5.00)% 10.58%
0.48 %
(4.40)% 12.49%
0.68 %
1.49 %
(1.37 )%

3.05%

1.75 %

7.50 %
9.06%
14.74 % 12.18 %
9.42%

15.58 % 11.48 %
4.87%

4.61 %

10 Year

6.29%

6.80 %
8.71%

7.56 %
N/A
N/A
7.24%

7.40 %
7.68%

7.35 %
4.94%

5.17 %
N/A
N/A
2.13%

1.53 %
5.66%

5.58 %

Since
Inception

10.80%

7.27 %
8.71%

7.56 %
4.27%
5.10 %
7.85%

5.97 %
7.68%

7.35 %
6.76%

3.64 %
14.05%
17.61 %
6.98%

4.81 %
6.88%

6.10 %

Inception
12/29/2000

12/30/2005

12/31/2013

6/29/2001

12/30/2005

6/30/2000

3/31/2009

8/1/1997

9/30/2002

Diamond Hill Small Cap Fund

Russell 2000
Diamond Hill Small-Mid Cap Fund

Russell 2500
Diamond Hill Mid Cap Fund
Russell Midcap
Diamond Hill Large Cap Fund

Russell 1000
Diamond Hill Select Fund

Russell 3000
Diamond Hill Long-Short Fund

60% Russell 1000 / 40% BofA ML US 0-3
Month T-Bill
Diamond Hill Research Opportunities Fund
Russell 3000
Diamond Hill Financial Long-Short Fund

Russell 3000 Financials
Diamond Hill Strategic Income Fund

BofA ML US Corporate & High Yield

________________________

Fund returns are Class I shares net of fees

Index returns do not reflect any fees

Assets Under Management

The following tables show AUM by product and investment objective as well as net client cash flows for the past five years
ended December 31, 2015:

(in millions)

Proprietary funds

Sub-advised funds

Institutional accounts

Total AUM

(in millions)

Small Cap

Small-Mid Cap

Large Cap

Select (All Cap)

Long-Short

Strategic Income

Total AUM

Assets Under Management by Product
As of December 31,

2015

2014

2013

2012

2011

11,505

9,863

7,600

5,251

665

4,671

665

5,128

444

4,142

947

3,231

16,841

15,656

12,186

9,429

4,405

972

3,294

8,671

Assets Under Management
by Investment Objective
As of December 31,

2015

2014

2013

2012

2011

1,703

1,575

1,402

2,088

7,547

545

4,597

361

1,295

7,926

432

4,179

249

780

6,254

327

3,213

210

939

364

5,211

258

2,455

202

16,841

15,656

12,186

9,429

932

277

4,885

321

2,082

174

8,671

(in millions)

AUM at beginning of the year

Net cash inflows (outflows)

proprietary funds

sub-advised funds

institutional accounts

Net market appreciation (depreciation) and income

Increase during the year

AUM at end of the year

Capacity

Change in Assets Under Management
For the Year Ended December 31,

2015
15,656

2014
12,186

2013

2012

2011

9,429

8,671

8,623

1,916
(6)
(443)
1,467
(282)
1,185

1,618

166

478

2,262

1,208

3,470

713
(758)
(263)
(308)
3,065

2,757

429
(149)
(499)
(219)
977

758

21
(74)
3

16,841

15,656

12,186

9,429

8,671

The Company’s primary goal is to fulfill our fiduciary duty to clients. We understand that our ability to retain and grow assets
as a firm has been, and will be, driven primarily by delivering attractive long-term investment results to our clients. When we
have determined that the size of any of our strategies hinders our ability to add value over a passive alternative, we have closed
those strategies to new clients and we will continue to do so, which will impact our ability to grow AUM. We have prioritized,
and will continue to prioritize, investment results over asset accumulation. The Small Cap strategy was closed to new investors
as of December 31, 2015 and the Long-Short strategy was closed to new investors as of June 12, 2015. We estimate our AUM
capacity to be approximately $30-$40 billion, with AUM of $16.8 billion as of December 31, 2015.

Distribution Channels

The Company’s investment advisory services are distributed through multiple channels. Our institutional sales efforts include
building relationships with institutional consultants and also establishing direct relationships with institutional clients. Our sales
efforts for the Funds include wholesaling to third-party financial intermediaries, including independent registered investment
advisers, brokers, financial planners, and wealth advisers, who utilize the Funds in investment programs they construct for their
clients.

AUM by Channel

Below is a summary of our AUM by distribution channel for the past five years ended December 31, 2015:

(in millions)

Proprietary funds:

AUM by Distribution Channel
As of December 31,

2015

2014

2013

2012

2011

Registered investment advisers

2,723

2,363

1,678

1,258

1,049

Independent broker/dealers

Wirehouse broker/dealers

Banks

Defined contribution

Other

Total proprietary funds

Sub-advised funds

Institutional accounts:

Institutional consultant

Financial intermediary

Direct

Total institutional accounts

Total AUM

Growth Strategy

2,329

1,963

2,735

1,218

537

11,505

665

2,370

1,474

827

4,671

1,862

1,760

2,176

1,232

470

9,863

665

2,681

1,573

874

5,128

1,400

1,261

1,668

1,226

367

7,600

444

1,965

1,488

689

4,142

917

758

1,407

739

172

5,251

947

1,857

1,164

210

3,231

16,841

15,656

12,186

9,429

665

674

927

737

353

4,405

972

1,836

1,237

221

3,294

8,671

The Company’s growth strategy will remain focused on achieving excellent investment results in all our strategies and
providing the highest level of client service. We will continue to focus on the development of distribution channels to enable us
to offer our various investment strategies to a broad array of clients. We seek to continue to grow our AUM through our
proprietary funds and institutional accounts. We have a targeted strategic business plan to further penetrate our existing
distribution channels. Our business development efforts are focused on expanding the institutional consultant channel and plan
sponsor network on the separate account side, as well as our intermediary network on the fund side.

Fund Administration Activities

Fund Administration Services

The Company provides fund administration services to the Funds and other third party mutual fund companies and investment
advisers. Fund administration services are broadly defined as portfolio and regulatory compliance, treasury and financial
oversight, statutory underwriting, oversight of back-office service providers such as the custodian, fund accountant, and
transfer agent, and general business management and governance of the mutual fund complex. These services are offered on a
stand-alone basis, as well as through a series or "umbrella" trust whereby individual investment advisers can establish a mutual
fund under a fund complex sponsored by the Company.

Fund Administration Fees

The Company earns revenue from performing the various fund administration activities described above under individual client
agreements. The fees earned depend on the type of service, fund size, and/or servicing requirements. Certain client agreements
have a fixed fee arrangement while others have a fee derived as a percentage of assets under administration.

Competition

Competition in the area of investment management and fund administration is intense, and our competitors include investment
management firms, broker-dealers, banks and insurance companies, some of whom offer various investment alternatives,
including passive index strategies. Many competitors are better known than the Company, offer a broader range of investment
products and have more offices, employees and business development representatives. We compete primarily on the basis of
philosophy, performance and client service.

Regulation

The Company and our business are subject to various federal, state and foreign laws and regulations. As a matter of public
policy, regulatory bodies are charged with safeguarding the integrity of the securities and other financial markets and with
protecting the interests of participants in those markets, including investment advisory clients and shareholders of investment
funds. Under these laws and regulations, agencies that regulate investment advisers have broad administrative powers,
including the power to limit, restrict or prohibit an investment adviser from carrying on its business in the event the adviser
fails to comply with such laws and regulations. Possible sanctions that may be imposed include civil and criminal liability, the
suspension of individual employees, limitations on engaging in certain lines of business for specified periods of time,
revocation of investment adviser, broker/dealer, and other registrations, censures and fines.

DHCM is registered with the SEC under the Investment Advisers Act of 1940 (the “Advisers Act”) and operates in a highly
regulated environment. The Advisers Act imposes numerous obligations on registered investment advisers, including fiduciary
duties, recordkeeping requirements, operational requirements and disclosure obligations. All Diamond Hill Funds are registered
with the SEC under the Investment Company Act of 1940 and are required to make notice filings with all states where the
Funds are offered for sale. BHIL is registered with the SEC as a broker/dealer and is a member of the Financial Industry
Regulatory Authority, Inc. (“FINRA”). Virtually all aspects of our investment advisory and fund administration business are
subject to various federal and state laws and regulations.

To the extent that DHCM is a “fiduciary” under the Employee Retirement Income Security Act of 1974 (“ERISA”) with respect
to benefit plan clients, it is subject to ERISA regulations. ERISA and applicable provisions of the Internal Revenue Code
impose certain duties on persons who are fiduciaries, prohibit certain transactions involving ERISA plan clients, and provide
monetary penalties for violations of these prohibitions. The U.S. Department of Labor, which administers ERISA, has been
increasingly active in proposing and adopting regulations affecting the asset management industry.

The Company’s trading activities for client accounts are regulated under the Securities Exchange Act of 1934 (the “Exchange
Act”), as well as as various FINRA rules, including laws governing trading on inside information, market manipulation and a
broad number of trading requirements (e.g., volume limitations, reporting obligations) and market regulation policies in the
United States.

The preceding descriptions of the regulatory and statutory provisions applicable to us are not complete and are qualified in their
entirety by reference to their respective statutory or regulatory provisions. Failure to comply with these requirements could
have a material adverse effect on our business.

Contractual Relationships with the Diamond Hill Funds

The Company is very dependent on our contractual relationships with the Funds. In the event our advisory or administration
agreements with the Funds are terminated, not renewed, or amended to reduce fees, we would be materially and adversely
affected. We generated approximately 75%, 73% and 71% of our 2015, 2014 and 2013 revenues, respectively, from our
advisory and administrative contracts with the Funds. We consider our relationship with the Funds and their board of trustees to
be good, and have no reason to believe that these advisory or administration contracts will not be renewed in the future;
however, there is no assurance that the Funds will choose to continue their relationships with the Company. Please see Item 1A
for risk factors regarding this relationship.

Employees

As of December 31, 2015, the Company and its subsidiaries employed 126 full-time equivalent employees. As of December 31,
2014, the comparable number was 107. We believe that our relationship with our employees is good. Our employee count has
been growing over the past several years and we expect that general trend to continue.

SEC Filings

The Company maintains an Internet website at www.diamond-hill.com. Our Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q, XBRL instance documents, Current Reports on Form 8-K and amendments to those reports that we file or
furnish pursuant to Section 13(a) or 15(d) of the Exchange Act, are made available free of charge, on or through our website, as
soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The contents of our
website are not incorporated into, or otherwise made a part of, this Annual Report on Form 10-K. Our filings with the
Commission may be read and copied at the Commission's Public Reference Room at 100F Street, NE, Washington, DC 20549.
These filings are also available on the Commission's web-site at http://www.sec.gov free of charge.

ITEM 1A. Risk Factors

The Company’s future results of operations, financial condition, liquidity, and the market price of our common shares are
subject to various risks, including those mentioned below and those that are discussed from time-to-time in our other periodic
filings with the SEC. Investors should carefully consider these risks, along with the other information contained in this report,
before making an investment decision regarding our common shares. There may be additional risks of which we are currently
unaware, or which we currently consider immaterial. The occurrence of any of these risks could have a material adverse effect
on our financial condition, results of operations, liquidity, and value of our common shares. Please see “Forward Looking
Statements” within Item 1 of Part I of this Form 10-K.

Poor investment results of our products could affect our ability to attract new clients or reduce the amount of assets under
management, potentially negatively impacting revenue and net income.

If we fail to deliver acceptable investment results for our clients, both in the short and long term, we will likely experience
diminished investor interest and potentially a diminished level of AUM. Adverse opinions of the funds we administer or advise
published by third parties, including rating agencies and industry analysts, could also decrease our AUM and our revenues.

Investment funds are assessed and rated by independent third parties, including rating agencies, industry analysts and
publications. Investors can be influenced by such ratings. If any of the funds we administer or advise receives an adverse
report, it could negatively influence the amount of money invested into the fund and increase withdrawals from the fund
reducing our AUM and our revenue.

The Company’s success depends on our key personnel, and our financial performance could be negatively affected by the loss
of their services.

Our success depends on highly skilled personnel, including portfolio managers, research analysts, and management, many of
whom have specialized expertise and extensive experience in the investment management industry. Financial services
professionals are in high demand, and we face significant competition for qualified employees. With the exception of R. H.
Dillon, our Chairman and a portfolio manager, our employees do not have employment contracts and generally can terminate
their employment at any time. The Company cannot assure that we will be able to retain or replace key personnel. In order to
retain or replace our key personnel, we may be required to increase compensation, which would decrease net income. The loss
of key personnel could damage our reputation and make it more difficult to retain and attract new employees and clients. A
loss of client assets resulting from the departure of key personnel may materially decrease our revenues and net income.

The Company's AUM, which impacts revenue, is subject to significant fluctuations.

A large majority of our revenue is calculated as a percentage of AUM or is related to the general performance of the equity
securities market. A decline in securities prices or in the sale of investment products, or an increase in fund redemptions,
generally would reduce fee income. Financial market declines would generally negatively impact the level of our AUM and
consequently our revenue and net income. A recession or other economic or political events, both in the United States as well as
globally, could also adversely impact our revenue, if such events led to a decreased demand for products, a higher redemption
rate, or a decline in securities prices.

The Company's investment results and/or the growth in our AUM may be constrained if appropriate investment opportunities
are not available or if we close certain of our portfolios.

The Company’s ability to deliver strong investment results depends in large part on our ability to identify appropriate
investment opportunities in which to invest client assets. If we are unable to identify sufficient investment opportunities for
existing and new client assets on a timely basis, our investment results could be adversely affected. The risk that appropriate
investment opportunities may be unavailable is influenced by a number of factors, including general market conditions, and is
likely to increase if our AUM increases rapidly. In addition, if we determine that sufficient investment opportunities are not
available for a portfolio strategy, or we believe that in order to continue to produce attractive returns from a portfolio, we will
consider closing the portfolio to new investors. The Small Cap strategy was closed to new investors as of December 31, 2015
and the Long-Short strategy was closed to new investors as of June 12, 2015. If we misjudge the point at which it would be
optimal to close a portfolio, the investment results of the portfolio could be negatively impacted.

The Company is subject to substantial competition in all aspects of our business.

Our investment products compete against a number of investment products and services from:

•

asset management firms;

• mutual fund companies;

•

commercial banks and thrift institutions;

insurance companies;

exchange traded funds;

hedge funds; and

brokerage and investment banking firms.

Many of our competitors have substantially greater resources than the Company and may operate in more markets or offer a
broader range of products, including passively managed or “index” products. Some of these institutions operate in a different
regulatory environment, which may give them certain competitive advantages in the investment products and portfolio
structures that they offer. We compete with other providers of investment services primarily based upon our philosophy,
performance and client service. Some institutions have a broad array of products and distribution channels that make it more
difficult for us to compete with them. If current or potential customers decide to use one of our competitors, we could face a
significant decline in market share, AUM, revenues, and net income. If we are required to lower our fees in order to remain
competitive, our net income could be significantly reduced because some of our expenses are fixed, especially over shorter
periods of time, and our expenses may not decrease in proportion to the decrease in revenues.

The loss of access to or increased fees required by third party distribution sources to market our portfolios and access our client
base could adversely affect our results of operations.

The Company’s ability to attract additional AUM is dependent on our relationship with third-party financial intermediaries. We
compensate some of these intermediaries for access to investors and for various marketing services provided. These distribution
sources and client bases may not continue to be accessible to us for reasonable terms, or at all. If such access is restricted or
eliminated, it could have an adverse effect on our results of operations. Fees paid to financial intermediaries for investor access
and marketing services have generally increased over the past few years. If such fee increases continue, refusal to pay them
could restrict our access to those client bases while paying them could adversely affect our profitability.

A significant portion of the Company’s revenues are based on contracts with the Funds that are subject to termination without
cause and on short notice.

The Company is very dependent on our contractual relationships with the Funds. If our advisory or administration agreements
with the Funds were terminated, not renewed, or amended to reduce fees, we would be materially and adversely affected.
Generally, these agreements are terminable by either party upon 60 days written notice without penalty. The agreements are
subject to annual approval by either (i) the board of trustees of the Funds or (ii) a vote of the majority of the outstanding voting
securities of each Fund. The agreements automatically terminate in the event of their assignment by either the Company or the
Fund. We generated approximately 75%, 73%, and 71% of our 2015, 2014 and 2013 revenues, respectively, from our advisory
and administrative contracts with the Funds, including 30%, 15%, and 10% from the advisory contracts with the Diamond Hill
Long-Short Fund, Large Cap Fund, and Small Cap Fund, respectively, during 2015. The loss of the Long-Short Fund, Large
Cap Fund, or Small Cap Fund contracts would have a material adverse effect on the Company. We consider our relationship
with the Funds and their board of trustees to be good, and we have no reason to believe that these advisory or administration
contracts will not be renewed in the future; however, there can be no assurance that the Funds will choose to continue their
relationships with us.

Operational risks may disrupt our business, result in losses or limit our growth.

The Company is dependent on the capacity and reliability of the communications, information and technology systems
supporting our operations, whether developed, owned and operated by the Company or by third parties. Operational risks such
as trading or operational errors, interruption of our financial, accounting, trading, compliance and other data processing
systems, the loss of data contained in the systems, or compromised systems due to cyber-attack, could result in a disruption of
our business, liability to clients, regulatory intervention or reputational damage, and thus adversely affect our business.

The Company’s business is subject to substantial governmental regulation.

Our business is subject to a variety of federal securities laws, including the Investment Advisers Act of 1940, the Investment
Company Act of 1940, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, and the U.S. PATRIOT Act of
2001. In addition, we are subject to significant regulation and oversight by the SEC and FINRA. Changes in legal, regulatory,
accounting, tax and compliance requirements could have a significant effect on our operations and results, including but not
limited to increased expenses and reduced investor interest in certain funds and other investment products we offer. We
continually monitors legislative, tax, regulatory, accounting, and compliance developments that could impact our business. We
and our directors, officers and employees could be subject to lawsuits or regulatory proceedings for violations of such laws and
regulations, which could result in the payment of fines or penalties and cause reputational harm to the Company. Such harm
could negatively affect our financial condition and results of operations, as well as divert management's attention from
operations.

We continue to seek to understand, evaluate and, when possible, manage and control these and other business risks.

Trading in our common shares is limited, which may adversely affect the time and the price at which you can sell your shares
of the Company.

Although our common shares are listed on the NASDAQ Global Select Market, the shares are held by a relatively small
number of shareholders, and trading in our common shares is not active. The spread between the bid and the asked prices is
often wide. As a result, you may not be able to sell your shares on short notice, and the sale of a large number of shares at one
time could temporarily depress the market price. In addition, certain shareholders, including certain directors and officers of
the Company, own a significant number of shares. The sale of a large number of shares by any such individual could
temporarily depress the market price.

ITEM 1B. Unresolved Staff Comments

None.

ITEM 2.

Properties

The Company leases office space at one location in Columbus, Ohio and one location in Berwyn, Pennsylvania.

The Company does not own any real estate or interests in real estate.

ITEM 3.

Legal Proceedings

From time to time, the Company is party to ordinary routine litigation that is incidental to its business. There are currently no
material legal proceedings.

ITEM 4.

Mine Safety Disclosures

Not applicable.

PART II

ITEM 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities

The following performance graph compares the total shareholder return of an investment in our common shares to that of the
Russell Microcap® Index, and to a peer group index of publicly traded asset management firms for the five-year period ending
on December 31, 2015. The graph assumes that the value of the investment in our common shares and each index was $100 on
December 31, 2010. Total return includes reinvestment of all dividends. The Russell Microcap® Index makes up less than 3%
of the U.S. equity market and is a market-value-weighted index of the smallest 1,000 securities in the small-cap Russell 2000®
Index plus the next 1,000 smallest securities. Peer Group returns are weighted by the market capitalization of each firm at the
beginning of the measurement period. The historical information set forth below is not necessarily indicative of future
performance. We do not make or endorse any predictions as to future stock performance.

12/31/2010

12/31/2011

12/31/2012

12/31/2013

12/31/2014

12/31/2015

Diamond Hill Investment Group, Inc.

Russell Microcap® Index

Peer Group*

$100

$109

$91

$72

$112

$109

$91

$200

$158

$143

$240

$164

$146

$338

$156

$114

Cumulative
5 Year Total
Return

238%

56%

14%

* The Peer Group is based upon all asset managers with market cap of less than $5 billion excluding firms whose primary
business is hedge fund or private equity, and firms with multiple lines of business. The following companies are included in the
Peer Group: Alliance Bernstein Holding L.P.; Calamos Asset Management, Inc.; Cohen & Steers, Inc.; Eaton Vance Corp.;
Federated Investors, Inc.; GAMCO Investors, Inc.; Hennessy Advisors, Inc.; Janus Capital Group, Inc.; Legg Mason, Inc.;
Pzena Investment Management, Inc.; Teton Advisors, Inc.; U.S. Global Investors, Inc.; Virtus Investment Partners, Inc.;
Waddell & Reed Financial, Inc.; Wisdomtree Investments, Inc.; and Westwood Holdings Group, Inc.

The Company’s common shares trade on the NASDAQ Global Select Market under the symbol DHIL. The following table sets
forth the high and low sales prices during each quarter of 2015 and 2014:

Quarter ended:

March 31

June 30

September 30

December 31

High
Price

2015

Low
Price

Dividend
Per Share

High
Price

2014

Low
Price

Dividend
Per Share

164.49

208.96

202.50

228.79

129.76

161.92

184.20

187.75

— $

130.57

133.50

133.62

5.00

143.06

112.83

115.86

122.89

114.57

—

4.00

Due to the relatively low volume of traded shares, bid/ask spreads can be fairly wide at times and therefore, quoted prices may
not be indicative of the price a shareholder may receive in an actual transaction. During the years ended December 31, 2015
and 2014, approximately 2,320,086 and 1,553,212, respectively, of our common shares were traded. The dividends indicated
above were special dividends. We have not paid regular quarterly dividends in the past, and have no present intention of paying
regular dividends in the future. The approximate number of record holders of our common shares at December 31, 2015 was
219, although we believe that the number of beneficial owners of our common shares is substantially greater.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The Company did not purchase any of our common shares through the repurchase program during the year ended
December 31, 2015. The following table sets forth information regarding our repurchase program of our common shares and
shares withheld for tax payments due upon vesting of employee restricted stock units and restricted stock awards which vested
during the fourth quarter of fiscal year 2015:

Period

October 1, 2015 through October 31, 2015

November 1, 2015 through November 30, 2015

December 1, 2015 through December 31, 2015

Total Number
of Shares Purchased(a)

Average Price
Paid Per Share

666

189.29

— $

1,932

2,598

—

227.40

217.63

Total Number
of Shares Purchased
as part of Publicly
Announced Plans
or Programs

Maximum Number
of Shares That May
Yet Be Purchased
Under the Plans or
Programs(b)

—

318,433

All of the 2,598 shares of the Company's common shares purchased during the quarter ended December 31, 2015
represented shares which were withheld for tax payments due upon the vesting of employee restricted stock units and
restricted share awards which vested during the quarter.
The Company’s current share repurchase program was announced on August 9, 2007. The board of directors authorized
management to repurchase up to 350,000 of our common shares in the open market and in private transactions in
accordance with applicable securities laws. Our repurchase program is not subject to an expiration date.

Total

(a)

(b)

We sold no equity securities of the Company during 2015 that were not registered under the Securities Act of 1933.

ITEM 6.

Selected Financial Data

The following selected financial data should be read in conjunction with our Consolidated Financial Statements and related
notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Annual
Report on Form 10-K.

(in thousands, except per share data)

Income Statement Data:

Total revenues

Compensation and related costs

Other expenses

Total expenses

Net operating income

Operating profit margin

Net income

Per Share Information:
Basic earnings

Diluted earnings

Cash dividend declared

Weighted Average Shares Outstanding

Basic

Diluted

Balance Sheet Data (in thousands):

Total assets

Long-term debt

Shareholders equity

2015

2014

2013

2012

2011

For the Years Ended December 31,

124,426

104,559

47,951

17,755

65,706

58,720

43,892

13,206

57,098

47,460

81,432

40,852

9,898

50,750

30,682

66,657

33,868

8,361

42,229

24,428

63,895

32,875

7,959

40,834

23,061

47.2%

45.4%

37.7%

36.6%

36.1%

37,074

31,581

22,155

16,931

14,353

11.31

11.03

5.00

3,278

3,360

9.88

9.67

4.00

3,196

3,266

7.05

6.94

3.00

3,142

3,194

5.44

8.00

3,111

4.86

5.00

2,952

2015

2014

2013

2012

2011

At December 31,

145,187

107,709

75,353

41,236

37,720

—

105,314

—

74,319

15,656

2,262

—

44,943

12,186
(308)

—

21,736

9,429
(219)

—

18,050

8,671

Assets Under Management (in millions)

16,841

Net Client Flows (in millions)

1,467

ITEM 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

In this section, we discuss and analyze the consolidated results of operations for the past three fiscal years and other factors that
may affect future financial performance. This discussion should be read in conjunction with our Consolidated Financial
Statements, Notes to Consolidated Financial Statements, and Selected Financial Data contained in this Form 10-K.

Business Environment

U.S. stocks rose modestly in the first half of 2015 but lost momentum in the third quarter as investor concerns over a slowdown
in China’s economic growth negatively impacted commodity prices. China is the world’s largest importer of raw materials.
This slowdown has also strained many other developing countries and large portions of the global industrial sector as China has
been a meaningful source of incremental demand for key industrial end markets. A strong fourth quarter was not enough to
completely save the year and most major market indexes ended 2015 somewhere close to even.

In 2015, market returns were very narrow with much of the strength in a handful of stocks. Netflix (+134%) and Amazon
(+118%) were the best performers for the year, far outpacing the Russell 1000 Index return. The energy sector posted the
largest decline (-22% within the Russell 1000 Index) as oil prices fell meaningfully for the second consecutive year. The price
of oil at the end of 2015 was approximately $37 per barrel, down from more than $100 per barrel in 2014. Robust production
from U.S. shale-oil fields pushed the global crude market into oversupply in late 2014, and production rose again in 2015 as
producers worldwide chose to maintain high production levels. U.S inventories of crude oil are near an eight-decade high.

Thus far, it appears consumers have largely used the money saved from lower gasoline prices to pay down debt and to increase
savings. However, we would expect increases in household spending associated with lower gasoline prices to occur with a
meaningful lag as consumers gain confidence that the decline is long-term. Any incremental consumer spending in the coming
year could provide a modest boost to the economy, partially offset by job losses in the energy sector.

In December, the Federal Reserve increased its Fed Funds target rate for the first time since 2006, moving to 50 basis points
from 25 basis points. U.S. government bond yields rose only modestly over the past twelve months, indicating investors were
not yet ready to leave the relative safety of government bonds.

The U.S. economy appears to be continuing the healing process with real growth generally staying in the 2% - 3% range.
However, as we have experienced numerous times over the past few years, domestic politics, geo-political events and even
extreme weather are all variables which can exert meaningful near-term pressure on overall growth.

Globally, central banks remain extraordinarily accommodative in an attempt to provide a backdrop for increased economic
growth. Europe, which has been an economic laggard over the past few years, has shown some signs of stabilization.
However, China has seen a significant slowdown in its rate of economic expansion. While the U.S. Federal Funds rate remains
extremely low, the 25 basis point increase in December indicates policymakers’ confidence in the recovery of U.S. labor
markets and an expectation of slowly rising inflation. It is expected that further rate increases will come at a gradual pace,
which may be affected by volatility in global financial markets.

We continue to expect positive but below average equity market returns over the next five years. Our conclusion is primarily
based on the combination of above average price/earnings multiples applied to already very strong levels of corporate profit
margins, which likely tempers prospective returns. This expectation also seems consistent with the current interest rate
environment. We believe that we can achieve better-than-market returns over the next five years through active portfolio
management.

A large majority of our revenue is calculated as a percentage of AUM and is therefore impacted by the overall business and
economic environment described above. Financial market declines or deterioration in the economic environment would
generally negatively impact the level of our AUM, and consequently our revenue and net income.

Key Financial Performance Indicators

There are a variety of key performance indicators the Company monitors in order to evaluate our business results. The
following table presents the results of certain key performance indicators over the past three fiscal years:

Ending AUM (in millions)

Average AUM (in millions)

Total Revenue (in thousands)

Total Expenses (in thousands)

Average Advisory Fee Rate

Operating Profit Margin

Assets Under Management

For the Years Ended December 31,

2015

16,841

16,415

124,426

65,706

2014

15,656

13,847

104,559

57,099

2013

12,186

10,817

81,432

50,750

0.66%

47.2%

0.65%

45.4%

0.65%

37.7%

Our revenue is derived primarily from investment advisory and administration fees. Investment advisory and administration
fees paid to the Company are generally based on the value of the investment portfolios we manage and fluctuate with changes
in the total value of the AUM. Substantially all of our AUM (97.9%) is valued based on readily available market quotations.
AUM in our fixed income strategies (2.1%) is valued using evaluated prices from an independent third-party provider. Fees are
recognized in the period that the Company manages these assets.

Revenues are highly dependent on both the value and composition of AUM. The following is a summary of our AUM by
product, investment objective, and a roll-forward of the change in AUM for the years ended December 31, 2015, 2014, and
2013:

(in millions)

Proprietary funds

Sub-advised funds

Institutional accounts

Total AUM

(in millions)
Small Cap

Small-Mid Cap

Large Cap

Select (All Cap)

Long-Short
Strategic Income

Total AUM

(in millions)
AUM at beginning of the year

Net cash inflows (outflows)

proprietary funds

sub-advised funds

institutional accounts

Net market appreciation (depreciation) and income

Increase during the year

AUM at end of the year

Consolidated Results of Operations

The following is a discussion of our consolidated results of operations.

Assets Under Management by Product
As of December 31,

2015

2014

2013

11,505

9,863

665

4,671

665

5,128

7,600

444

4,142

16,841

15,656

12,186

Assets Under Management
by Investment Objective
As of December 31,

2015

2014

2013

1,703

1,575

2,088

7,547

545

4,597
361

1,295

7,926

432

4,179
249

1,402

780

6,254

327

3,213
210

16,841

15,656

12,186

Change in Assets Under Management
For the Year Ended December 31,

2015

2014

2013

15,656

12,186

9,429

1,916
(6)
(443)
1,467
(282)
1,185

1,618

166

478

2,262

1,208

3,470

713
(758)
(263)
(308)
3,065

2,757

16,841

15,656

12,186

(in thousands, except per share data)

Net operating income
Net operating income after tax(a)
Net income

Net operating income after tax per
diluted share(a)
Net income per diluted share

2015

58,720

37,546

37,074

11.17

11.03

2014

47,460

29,759

31,581

9.11

9.67

Operating profit margin

47.2%

45.4%

% Change

24%

26%

17%

23%

14%

2014

47,460

29,759

31,581

9.11

9.67

2013

30,682

19,077

22,155

5.97

6.94

45.4%

37.7%

% Change

55%

56%

43%

53%

39%

(a)

Net operating income after tax is a non-GAAP performance measure. See Use of Supplemental Data as Non-GAAP
Performance Measure section within this report.

Year Ended December 31, 2015 compared with Year Ended December 31, 2014

The Company generated net income of $37.1 million ($11.03 per diluted share) for the year ended December 31, 2015,
compared with net income of $31.6 million ($9.67 per diluted share) for the year ended December 31, 2014. Revenue increased
$19.9 million period over period due to an increase in AUM, resulting in an $11.3 million increase in operating income. The
revenue increase was offset by an increase in operating expenses of $8.6 million, primarily related to increases in compensation
and related expenses, general and administrative expenses, and sales and marketing expenses. The Company had $0.7 million
in investment losses due to market depreciation in 2015 compared to investment income of $2.9 million in 2014. Income tax
expense increased $2.1 million from 2014 to 2015 due to the overall increase in income before taxes.

Net operating income after tax, which excludes the impact of investment gains or losses, increased $7.8 million, or 26%, from
2014 to 2015 consistent with the increase in net operating income.

Operating profit margin increased to 47.2% for 2015 from 45.4% for 2014. We expect that our operating margin will fluctuate,
sometimes substantially, from year to year based on various factors including revenues; investment results; employee
performance; staffing levels; development of investment strategies, products, or channels; and industry comparisons.

Year Ended December 31, 2014 compared with Year Ended December 31, 2013

The Company earned net income of $31.6 million ($9.67 per diluted share) for the year ended December 31, 2014, compared
with net income of $22.2 million ($6.94 per diluted share) for the year ended December 31, 2013. Operating income increased
by $16.8 million from 2013 to 2014 primarily due to an increase in AUM, resulting in a $23.1 million increase in revenue. The
revenue increase was offset by an increase in operating expenses of $6.3 million, primarily related to higher compensation due
to staffing and merit increases and increases in incentive compensation. A positive return on our corporate investments further
contributed to the overall increase in net income. Investment income of $2.9 million in 2014 was due to net portfolio
appreciation. The income tax provision increased $5.3 million from the year ended December 31, 2013 to December 31, 2014
primarily due to an overall increase in book income.

Net operating income after tax, which excludes the impact of investment gains or losses, increased $10.7 million, or 56.0%,
from 2013 to 2014 consistent with the increase in net operating income.

Operating profit margin increased to 45.4% for 2014 from 37.7% for 2013. We expect that our operating margin will fluctuate,
sometimes substantially, from year to year based on various factors including revenues; investment results; employee
performance; staffing levels; development of investment strategies, products, or channels; and industry comparisons.

Revenue

(in thousands)

Investment advisory

Mutual fund administration, net

Total

2015

2014

% Change

2014

2013

% Change

107,916

16,510

124,426

89,901

14,658

104,559

20%

13%

19%

89,901

14,658

104,559

69,967

11,465

81,432

28%

Revenue for the Year Ended December 31, 2015 compared with Year Ended December 31, 2014

As a percent of total 2015 revenues, investment advisory fees accounted for 87% and mutual fund administration fees made up
the remaining 13%. This compared to 86% and 14%, respectively, for 2014.

Investment Advisory Fees. Investment advisory fees increased by $18.0 million, or 20%, from the year ended December 31,
2014 to the year ended December 31, 2015. Investment advisory fees are calculated as a percentage of average AUM at various
rates depending on the investment product. The increase in investment advisory fees was primarily driven by an increase of
19% in average AUM year over year. The average advisory fee rate in 2015 and 2014 was 0.66% and 0.65%, respectively.
Effective June 12, 2015, the Diamond Hill Long-Short Fund, which has a 0.90% advisory fee, was closed to new investors. In
addition, effective December 31, 2015, the Diamond Hill Small Cap Fund, which has a 0.80% advisory fee, was closed to new
investors. As a result, the Company expects the recent growth in AUM in these funds to decline, which could negatively
impact the average advisory fee rate. Effective January 1, 2016, the Company voluntarily reduced the investment advisory fee
it charges on the Large Cap Fund and certain institutional accounts by 0.05%. Based upon assets held as of December 31, 2015
in large cap strategies, the Company expects this fee reduction could potentially reduce revenue by approximately $2.4 million
during 2016.

Mutual Fund Administration Fees. Mutual fund administration fees increased by $1.9 million, or 13%, from the year ended
December 31, 2014 to the year ended December 31, 2015. Mutual fund administration fees include administration fees received
from the Funds, which are calculated as a percentage of average mutual fund AUM, and all Beacon Hill fee revenue. The
increase in the mutual fund administration fee is due to a 24% increase in average Fund AUM which increased from $8.6
billion for the year ended December 31, 2014 to $10.7 billion for the year ended December 31, 2015. This increase was offset
by a reduction in the net administration fee rate by 0.02% to 0.12% for the year ended 2015 from 0.14% for the year ended
2014. This decrease in the net administration fee rate was due to a reduction in the Funds' administration fee rate by one basis
point, which was effective January 1, 2015 for assets held in Class A, C, and I shares for all Diamond Hill Funds and the further
reduction in the administration fee rate charged on assets held in Class I shares from 0.24% to 0.21% effective July 1, 2015. In
addition, effective January 1, 2016, the Company further reduced the administration fee rate charged on assets held in Class I
shares from 0.21% to 0.20%. As of December 31, 2015, assets held in class I shares for the Diamond Hill Funds totaled $6.9
billion.

Revenue for the Year Ended December 31, 2014 compared with Year Ended December 31, 2013

As a percent of total 2014 revenues, investment advisory fees accounted for 86% and mutual fund administration fees made up
the remaining 14%. This compared to 87% and 13%, respectively, for 2013.

Investment Advisory Fees. Investment advisory fees increased by $19.9 million, or 28%, from the year ended December 31,
2013 to the year ended December 31, 2014. Investment advisory fees are calculated as a percentage of average AUM at various
rates depending on the investment product. The increase in investment advisory fees was driven by an increase of 28% in
average AUM year over year. The average advisory fee rate for both periods was 0.65%.

Mutual Fund Administration Fees. Mutual fund administration fees increased by $3.2 million, or 28%, from the year ended
December 31, 2013 to the year ended December 31, 2014. Mutual fund administration fees include administration fees received
from Diamond Hill Funds, which are calculated as a percentage of average mutual fund AUM, and all Beacon Hill fee revenue.
The increase in the mutual fund administration fee is due to a 36% increase in average Diamond Hill Fund AUM which
increased from $6.3 billion for the year ended December 31, 2013 to $8.6 billion for the year ended December 31, 2014. The
increase was also partially due to an increase in Beacon Hill's administered umbrella trust AUM period over period. The overall
blended net administration fee rate for the Diamond Hill Funds decreased by 1 basis point to 0.14% in 2014.

Expenses

(in thousands)
Compensation and related costs
General and administrative
Sales and marketing
Mutual fund administration
Total

2015
47,951
10,246
4,179
3,330
65,706

2014
43,892
8,099
2,222
2,885
57,098

% Change
9%
27%
88%
15%
15%

2014
43,892
8,099
2,222
2,885
57,098

2013
40,852
6,043
2,099
1,756
50,750

% Change
7%
34%
6%
64%
13%

Expenses for the Year Ended December 31, 2015 compared with Year Ended December 31, 2014

Compensation and Related Costs. Employee compensation and benefits increased by $4.1 million, or 9%, from the year
ended December 31, 2014 to the year ended December 31, 2015, due to an increase of $3.8 million in salaries and related
benefits due to an increase in staffing and merit levels and an increase of $0.5 million in incentive compensation during fiscal
year 2015 due to growth in the business partially offset by a reduction in deferred compensation expense of $0.2 million.
Incentive compensation expense can fluctuate significantly period over period as we evaluate incentive compensation by
reviewing investment performance, individual performance, Company performance and other factors.

General and Administrative. General and administrative expenses increased by $2.1 million, or 27%, from the year ended
December 31, 2014 to the year ended December 31, 2015. This increase was due to additional research expenses of $0.4
million to support our investment team, an increase in information technology expense of $0.3 million, an increase in
depreciation expense of $0.4 million due to the expansion of our office space, an increase in charitable donations of $0.4
million, an increase in consulting expense of $0.5 million, and an increase in general office expenses of $0.1 million.

Sales and Marketing. Sales and marketing expenses increased by $2.0 million, or 88%, from the year ended December 31,
2014 to the year ended December 31, 2015. This increase was primarily due to additional payments made to third party
intermediaries of $1.7 million and increased business development expenses of $0.3 million.

Mutual Fund Administration. Mutual fund administration expenses increased by $0.4 million, or 15%, from the year ended
December 31, 2014 to the year ended December 31, 2015. Mutual fund administration expenses consist of both variable and
fixed expenses. The variable expenses are based on mutual fund AUM and the number of shareholder accounts.

Expenses for the Year Ended December 31, 2014 compared with Year Ended December 31, 2013

Compensation and Related Costs. Employee compensation and benefits increased by $3.0 million, or 7%, due to an increase
of $2.4 million in salaries and related benefits due to an increase in staffing and merit levels and an increase of $0.6 million in
incentive compensation during fiscal year 2014 due to growth in the business. Incentive compensation expense can fluctuate
significantly period over period as we evaluate incentive compensation by reviewing investment performance, individual
performance, company performance and other factors.

General and Administrative. General and administrative expenses increased by $2.1 million, or 34%, from the year ended
December 31, 2013 to the year ended December 31, 2014. This increase was primarily due to an additional $1.1 million of
charitable contributions in 2014. The remaining increase was due to additional research expenses to support our investment
team, additional rent related to the expansion of our office space and non-income related taxes.

Sales and Marketing. Sales and marketing expenses increased by $0.1 million, or 6%, from the year ended December 31,
2013 to the year ended December 31, 2014. This increase was due to an overall increase in travel and other expenses related to
business development efforts. We expect revenue sharing to financial intermediaries who support the distribution of the Funds
to increase between $0.5 million and $1.0 million in 2015.

Mutual Fund Administration. Mutual fund administration expenses increased by $1.1 million, or 64%, from the year ended
December 31, 2013 to the year ended December 31, 2014. Mutual fund administration expenses consist of both variable and
fixed expenses. The variable expenses are based on mutual fund AUM and the number of shareholder accounts. The increase is
primarily due to a restructuring of certain servicing contracts for the Funds to shift the expense obligation from the Funds to the
Company. This effectively lowered the expense ratio of the Funds by approximately one basis point and increased the mutual
fund administration expense of the Company by an equivalent dollar amount. An increase in the average Funds AUM of 36%
from the year ended December 31, 2013 to December 31, 2014 also contributed to the increase.

Liquidity and Capital Resources

Sources of Liquidity

The Company's main source of liquidity is cash flow from operating activities which are generated from investment advisory
and fund administration fees. Our investment portfolio is primarily in readily marketable securities, which provide for cash
liquidity, if needed. Investments in mutual funds are valued at their quoted current net asset value. Investments in private
investment funds are valued independently using net asset value ("NAV") as a practical expedient. Equity securities in private
investment funds are based on readily available market quotations. Debt securities in private investment funds are valued using
pricing techniques which take into account factors such as trading activity, readily available market quotations, yield, quality,
coupon rate, maturity, type of issue, trading characteristics, call features, credit rates and other observable inputs. Inflation is
expected to have no material impact on our performance. Cash and cash equivalents, accounts receivable, and investments
represented approximately 89% and 91% of total assets as of December 31, 2015 and 2014 respectively. We believe these
sources of liquidity, as well as our continuing cash flows from operating activities, will be sufficient to meet our current and
future operating needs for at least the next 12 months.

Uses of Liquidity

In line with the Company’s primary objective to fulfill our fiduciary duty to clients and secondary objective to achieve an
adequate long-term return for shareholders, we anticipate our main uses of cash will be operating expenses and seed capital to
fund new investment strategies.

The Board of Directors and management regularly review various factors to determine whether we have capital in excess of
that required for the business and the appropriate use of any excess capital. The factors considered include our investment
opportunities, capital needed for investment strategies, risks, and future dividend and capital gain tax rates. Evaluating
management’s stewardship of capital for shareholders is a central part of our investment discipline that we practice for our
clients. We hold ourselves to the same standard that we look for when evaluating investments for our clients.

While this is the eighth consecutive year that the Company has paid a special dividend, there can be no assurance that we will
pay a dividend in the future. We have paid out special dividends totaling $58.00 per share from 2008 through 2015. These
special dividends reduced shareholders’ equity by $167.2 million over the past 8 years. The 2015, 2014, and 2013 special
dividend reduced shareholders' equity by $17.0 million, $13.2 million, and $9.8 million, respectively. The 2015, 2014, and
2013 special dividends were each qualified dividends for tax purposes and were recorded as a reduction to retained earnings.

Working Capital

As of December 31, 2015, the Company had working capital of approximately $91.9 million compared to $66.2 million at
December 31, 2014. Working capital includes cash, securities owned, current receivables and other current assets, net of all
liabilities. On October 28, 2015, our Board of Directors declared a $5.00 per share dividend payable on December 14, 2015 to
shareholders of record on December 4, 2015. The payment of the special cash dividend reduced our working capital balance by
approximately $17.0 million. The Company has no debt, and we believe our available working capital is sufficient to cover
current expenses and presently anticipated capital expenditures.

Cash Flow Analysis

Cash Flows from Operating Activities

The Company’s cash flows from operating activities are calculated by adjusting net income to reflect other significant operating
sources and uses of cash, certain significant non-cash items such as share-based compensation, and timing differences in the
cash settlement of operating assets and liabilities.

For the years ended December 31, 2015, 2014, and 2013, net cash provided by operating activities totaled $52.0 million, $42.6
million, and $34.6 million, respectively. The changes in net cash provided by operating activities generally reflects net income
plus the effect of non-cash items and the timing differences in the cash settlement of assets and liabilities.

Cash Flows from Investing Activities

The Company’s cash flows from investing activities consist primarily of capital expenditures and purchases and redemptions in
our investment portfolio.

Cash flows used in investing activities totaled $11.9 million for the year ended December 31, 2015. The Company purchased
$22.1 million of corporate investments (inclusive of $4.3 million of purchases into our deferred compensation plans) during
2015. This cash outflow was partially offset by redemptions of corporate investments of $11.8 million. The Company also
purchased $1.6 million of property and equipment related to our office space expansion.

Cash flows used in investing activities totaled $26.7 million for the year ended December 31, 2014 primarily related to
purchases of $25.4 million into the Company's corporate investments (inclusive of $3.9 million of purchases into our deferred
compensation plans) during 2014, slightly offset by redemptions of corporate investments of $0.2 million. The Company also
purchased $1.5 million of property and equipment related to our office space expansion.

Cash flows provided by investing activities totaled $1.5 million for the year ended December 31, 2013. The Company had
redemptions of corporate investments of $4.4 million offset by purchases of $2.3 million into the Company's corporate
investments and capital expenditures of $0.5 million during 2013.

Cash Flows from Financing Activities

The Company’s cash flows from financing activities consist primarily of the payment of special dividends, shares withheld
related to employee tax withholding, excess income tax benefit from stock-based compensation, and the income tax benefit
from dividends paid on unvested shares.

For the year ended December 31, 2015, net cash used by financing activities totaled $18.5 million consisting of the payment of
special dividends of $17.0 million and the value of shares withheld related to employee tax withholding of $4.3 million,
partially offset by excess income tax benefit from stock-based compensation of $2.5 million and income tax benefit from
dividends paid on unvested shares of $0.3 million.

For the years ended December 31, 2014 and 2013, net cash used by financing activities totaled $13.3 million and $10.9 million,
respectively. The primary cash flows used in financing activities for the periods were special dividends of $13.2 million and
$9.8 million, respectively.

Selected Quarterly Information

Our unaudited quarterly results of operations for the years ended December 31, 2015 and 2014 are summarized below:

(in thousands, except per share data)

12/31

09/30

06/30

03/31

12/31

09/30

06/30

03/31

At or For the Quarter Ended

2015

2014

Investment income (loss)

973

(3,512)

$ 16,841

$ 15,914

$ 16,734

$ 16,098

$ 15,656

$ 14,474

$ 14,204

$ 12,986

32,302

15,039

17,263

31,424

17,283

14,141

$ 11,655

3.43

6,728

1.99

31,382

17,260

14,122

457

9,178

2.73

29,318

16,124

13,194

1,345

28,471

10,240

18,231

2,073

9,513

$ 12,553

2.89

3.81

27,459

16,475

10,984
(1,006)
6,351

1.94

25,440

15,766

9,674

1,322

6,928

2.12

23,189

14,617

8,572

517

5,750

1.78

3,393

3,379

3,367

3,296

3,292

3,281

3,268

3,231

Assets under management
(in millions)

Total revenue

Total operating expenses

Operating income

Net income

Diluted EPS

Diluted weighted shares
outstanding

Contractual Obligations

The following table presents a summary of the Company’s future obligations under the terms of operating leases and lease
commitments, other contractual purchase obligations, and deferred compensation obligations at December 31, 2015. Other
purchase obligations include contractual amounts that will be due for the purchase of services to be used in our operations, such
as mutual fund sub-administration and portfolio accounting software. These obligations may be cancelable at earlier times than
those indicated and, under certain conditions, may involve termination fees. The deferred compensation obligations includes
compensation that will be paid out upon satisfactory completion of time-based criteria (see Note 2: Deferred Compensation
Liability). Because these obligations are of a normal recurring nature, we expect to fund them from future cash flows from
operations. The information presented does not include operating expenses or capital expenditures that will be committed in the
normal course of operations in 2016 and future years:

(in thousands)

Operating lease obligations

Purchase obligations

Deferred compensation obligations

Total

Payments Due by Period

Total

2016

2017-2018

2019-2020

Later

5,585

696

1,328

1,220

3,366

10,237

3,253

2,275

113

—

3,429

19,188

6,224

1,441

4,649

2,341

—

4,533

6,874

Use of Supplemental Data as Non-GAAP Performance Measure

Net Operating Income After Tax

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

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

(in thousands, except per share data)
Net operating income, GAAP basis
Non-GAAP adjustments:

Tax provision excluding impact of investment income (loss)

Net operating income after tax, non-GAAP basis
Net operating income after tax per diluted share, non-GAAP basis
Diluted weighted average shares outstanding, GAAP basis

Year Ended December 31,

2015

2014

2013

58,720

47,460

30,682

(21,174)
37,546
11.17
3,360

$
$

(17,701)
29,759
9.11
3,266

$
$

(11,605)
19,077
5.97
3,194

$
$

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

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements. We do not have any obligation under a guarantee contract, or a retained
or contingent interest in assets or similar arrangement that serves as credit, liquidity or market risk support for such assets, or
any other obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument
or arising out of a variable interest.

Critical Accounting Policies and Estimates

Provisions for Income Taxes. The objectives of accounting for income taxes are to recognize the amount of taxes payable or
refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been
recognized in an entity’s financial statements or tax returns. Judgment is required in assessing the future tax consequences of
events that have been recognized in our financial statements or tax returns.

Revenue Recognition on Incentive-Based Advisory Contracts. We have certain investment advisory contracts in which a portion
of the fees are based on investment performance achieved in the respective client portfolio in excess of a specified hurdle rate.
These fees are calculated based on client investment results over rolling five-year periods. The Company records variable
incentive fees at the end of the contract measurement period.

Revenue Recognition when Acting as an Agent vs. Principal. The Funds have selected and contractually engaged certain
vendors to fulfill various services to benefit the Funds’ shareholders or to satisfy regulatory requirements of the Funds. These
services include, among others, required fund shareholder mailings, registration services, and legal and audit services. DHCM,
in fulfilling a portion of its role under the administration agreement with the Funds, acts as agent to pay these obligations of the
Funds. Each vendor is independently responsible for fulfillment of the services it has been engaged to provide and negotiates
fees and terms with the management and board of trustees of the Funds. The fee that the Funds pay to DHCM is reviewed
annually by the Funds’ board of trustees and specifically takes into account the contractual expenses that DHCM pays on behalf
of the Funds. As a result, DHCM is not involved in the delivery or pricing of these services and bears no risk related to these
services. Revenue has been recorded net of these Fund expenses, as it is the appropriate accounting treatment for this agency
relationship.

Beacon Hill has underwriting agreements with certain clients, including registered mutual funds. Part of Beacon Hill’s role as
underwriter is to act as an agent on behalf of its mutual fund clients to receive 12b-1/service fees and commission revenue and
facilitate the payment of those fees and commissions to third parties who provide services to the funds and their shareholders.
The amount of 12b-1/service fees and commissions are determined by each mutual fund client and Beacon Hill bears no
financial risk related to these services. As a result, 12b-1/service fees and commission revenue has been recorded net of the
expense payments to third parties, as it is the appropriate accounting treatment for this agency relationship.

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

The Company’s revenues and net income are based primarily on the value of AUM. Accordingly, declines in financial market
values directly and negatively impact our investment advisory revenues and net income.

We invest in the Funds and our private investment funds, which are market risk sensitive financial instruments. These
investments have inherent market risk in the form of price risk; that is, the potential future loss of value that would result from
a decline in their fair value. Market prices fluctuate and the amount realized upon subsequent sale may differ significantly from
the reported market value.

The table below summarizes our market risks as of December 31, 2015, and shows the effects of a hypothetical 10% increase
and decrease in investments.

Equity investments

Fixed Income investments

Total

Fair Value as of
December 31, 2015

Fair Value
Assuming a
Hypothetical
10% Increase

Fair Value
Assuming a
Hypothetical
10% Decrease

41,761,959

10,728,861

52,490,820

45,938,155

11,801,747

57,739,902

37,585,763

9,655,975

47,241,738

ITEM 8.

Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
Diamond Hill Investment Group, Inc.:

We have audited the accompanying consolidated balance sheets of Diamond Hill Investment Group, Inc. and subsidiaries (the
Company) as of December 31, 2015 and 2014, and the related consolidated statements of income, shareholders’ equity, and cash
flows for each of the years in the three-year period ended December 31, 2015. These consolidated financial statements are the
responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements
based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position
of Diamond Hill Investment Group, Inc. and subsidiaries as of December 31, 2015 and 2014, and the results of their operations
and their cash flows for each of the years in the
period ended December 31, 2015, in conformity with U.S. generally
accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
Company’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control -
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and
our report dated February 25, 2016 expressed an unqualified opinion on the effectiveness of the Company’s internal control over
financial reporting.

/s/ KPMG LLP

Columbus, Ohio
February 25, 2016

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
Diamond Hill Investment Group, Inc.:

We have audited Diamond Hill Investment Group Inc.’s (the Company) internal control over financial reporting as of December 31,
2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal
control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in
the accompanying Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A of the
Company’s December 31, 2015 annual report on Form 10-K. Our responsibility is to express an opinion on the Company’s internal
control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control
over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
consolidated balance sheets of Diamond Hill Investment Group, Inc. and subsidiaries as of December 31, 2015 and 2014, and the
related consolidated statements of operations, shareholders’ equity, and cash flows for each of the years in the three-year period
ended December 31, 2015, and our report dated February 25, 2016 expressed an unqualified opinion on those consolidated financial
statements.

/s/ KPMG LLP

Columbus, Ohio
February 25, 2016

Diamond Hill Investment Group, Inc.
Consolidated Balance Sheets

ASSETS

Cash and cash equivalents

Investment portfolio

Accounts receivable

Prepaid expenses

Income taxes receivable

Property and equipment, net of depreciation

Deferred taxes

Total assets

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities

Accounts payable and accrued expenses

Accrued incentive compensation

Deferred compensation

Income taxes payable

Total liabilities

Shareholders’ Equity

Common stock, no par value
7,000,000 shares authorized; 3,414,338 issued and outstanding at December 31, 2015
(inclusive of 310,356 unvested shares); 3,317,728 issued and outstanding at December
31, 2014 (inclusive of 306,768 unvested shares)

Preferred stock, undesignated, 1,000,000 shares authorized and unissued

Deferred equity compensation

Retained Earnings

Total shareholders’ equity

Total liabilities and shareholders’ equity

Book value per share

December 31,

2015

2014

$ 57,474,777

$ 35,777,140

52,490,820

18,579,302

1,780,105

1,402,137

4,253,361

9,206,079

45,427,456

16,514,146

1,904,945

—

2,425,949

5,658,992

$ 145,186,581

$ 107,708,628

7,651,324

6,550,770

21,984,500

10,236,743

—

19,981,250

5,678,764

1,178,620

39,872,567

33,389,404

102,536,527

84,855,693

—
(19,294,784)
22,072,271

—
(12,566,133)
2,029,664

105,314,014

74,319,224

$ 145,186,581

$ 107,708,628

30.84

22.40

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

Diamond Hill Investment Group, Inc.
Consolidated Statements of Income

REVENUES:

Investment advisory

Mutual fund administration, net

Total revenue
OPERATING EXPENSES:

Compensation and related costs

General and administrative

Sales and marketing

Mutual fund administration

Total operating expenses

NET OPERATING INCOME

Investment income (loss)
INCOME BEFORE TAXES

Income tax expense

NET INCOME

Earnings per share

Basic

Diluted

Weighted average shares outstanding

Basic

Diluted

Year Ended December 31,

2015

2014

2013

$ 107,915,557

$ 89,900,834

$ 69,966,377

16,510,429

14,657,931

124,425,986

104,558,765

11,465,327

81,431,704

47,951,039

10,245,866

4,179,064

3,330,265

65,706,234

58,719,752
(736,590)
57,983,162
(20,908,665)
$ 37,074,497

43,892,336

40,851,722

8,099,410

2,222,382

2,884,495

57,098,623

47,460,142

2,905,794

6,042,781

2,098,915

1,756,366

50,749,784

30,681,920

4,950,245

50,365,936
(18,785,005)
$ 31,580,931

35,632,165
(13,477,337)
$ 22,154,828

11.31

11.03

9.88

9.67

7.05

6.94

3,277,920

3,359,786

3,196,127

3,266,168

3,142,083

3,194,263

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

Diamond Hill Investment Group, Inc.
Consolidated Statements of Shareholders’ Equity

Balance at January 1, 2013

3,169,987

65,255,813

(14,829,470) $

(28,690,636) $

21,735,707

Shares
Outstanding

Common
Stock

Deferred Equity
Compensation

Retained
Earnings/(Deficit)

Total

Issuance of restricted stock grants

Amortization of restricted stock grants

Issuance of stock grants

Issuance of common stock related to
401k plan match

Tax benefit from dividend payments
related to restricted stock grants

Net excess tax benefit from vested
restricted stock grants

Shares withheld related to employee tax
withholding

Forfeiture of restricted stock grants

Cash Dividend Paid of $3.00 per share

Net income

32,000

—

59,006

2,740,030

—

4,606,008

12,894

1,158,354

—

357,188

420,620

(16,500)

(1,884,187)

(2,740,030)

6,161,047

—

(10,893)

10,893

(140)

—

6,161,047

4,606,008

1,158,354

357,188

420,620

(1,884,187)

—

(9,766,575)

22,154,828

Balance at December 31, 2013

3,257,247

72,642,933

(11,397,560) $

(16,302,383) $

44,942,990

Issuance of restricted stock grants

Amortization of restricted stock grants

Issuance of stock grants

Issuance of common stock related to
401k plan match

Tax benefit from dividend payments
related to restricted stock grants

Net excess tax benefit from vested
restricted stock grants

Shares withheld related to employee tax
withholding

Forfeiture of restricted stock grants

Cash Dividend Paid of $4.00 per share

Net income

31,613

—

33,745

7,518,895

—

3,984,816

10,999

1,356,035

—

(7,663)

(8,213)

—

296,755

666,889

(976,343)

(634,287)

—

(7,518,895)

5,716,035

—

634,287

—

5,716,035

3,984,816

1,356,035

296,755

666,889

(976,343)

—

(13,248,884)

31,580,931

Balance at December 31, 2014

3,317,728

84,855,693

(12,566,133) $

2,029,664

74,319,224

Issuance of restricted stock grants

Amortization of restricted stock grants

Issuance of stock grants

Issuance of common stock related to
401k plan match

Tax benefit from dividend payments
related to restricted stock grants

Net excess tax benefit from vested
restricted stock grants

Shares withheld related to employee tax
withholding

Forfeiture of restricted stock grants

Cash Dividend Paid of $5.00 per share

Net income

92,050

13,907,286

(13,907,286)

—

27,192

3,826,458

—

6,906,300

9,336

1,645,434

—

376,394

2,521,273

(28,468)

(3,500)

(4,323,676)

(272,335)

—

6,906,300

3,826,458

1,645,434

376,394

2,521,273

(4,323,676)

—

(17,031,890)

37,074,497

—

272,335

—

Balance at December 31, 2015

3,414,338

102,536,527

(19,294,784) $

22,072,271

105,314,014

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

Diamond Hill Investment Group, Inc.
Consolidated Statements of Cash Flows

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income

$ 37,074,497

$ 31,580,931

$ 22,154,828

Adjustments to reconcile net income to net cash provided by operating
activities:

Year Ended December 31,

2015

2014

2013

Depreciation

Stock-based compensation

Increase in accounts receivable

Change in current income taxes

Change in deferred income taxes

Net unrealized losses (gains) on investments

Increase in accrued incentive compensation

Increase in deferred compensation
Excess income tax benefit from stock-based compensation

Income tax benefit from dividends paid on unvested shares

Other changes in assets and liabilities

Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

Cost of investments purchased and other portfolio activity

Proceeds from sale of investments

Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Value of shares withheld related to employee tax withholding

Excess income tax benefit from stock-based compensation

Income tax benefit from dividends paid on unvested shares

Payment of dividends

Net cash used in financing activities

CASH AND CASH EQUIVALENTS

Net change during the year

At beginning of year

At end of year

Supplemental cash flow information:

Income taxes paid

Supplemental disclosure of non-cash transactions:

Common stock issued as incentive compensation

Charitable donation of corporate investments

625,788

301,936

306,005

8,551,734
(2,065,156)
316,910
(3,547,087)
1,860,360

5,829,708

4,557,979
(2,521,273)
(376,394)
1,724,253

7,303,799
(3,511,851)
(3,324,298)
2,404,433
(1,517,662)
4,127,457

4,391,019
(666,889)
(296,755)
1,827,723

7,319,401
(2,563,697)
8,520,834
(5,616,211)
(4,270,928)
8,304,806

493,101
(425,380)
(357,188)
715,570

52,031,319

42,619,843

34,581,141

(1,550,857)
(22,095,491)
11,770,565
(11,875,783)

(1,504,368)
(25,433,201)
249,477
(26,688,092)

(525,472)
(2,306,947)
4,355,536

1,523,117

(4,323,676)
2,521,273

376,394
(17,031,890)
(18,457,899)

(976,343)
666,889

296,755
(13,248,884)
(13,261,583)

(1,884,187)
425,380

357,188
(9,766,575)
(10,868,194)

21,697,637

35,777,140

2,670,168

25,236,064

33,106,972

7,870,908

$ 57,474,777

$ 35,777,140

$ 33,106,972

$ 24,138,841

$ 19,704,817

$ 10,575,000

3,826,458

1,401,202

3,984,816

4,606,008

—

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

Diamond Hill Investment Group, Inc.
Notes to Consolidated Financial Statements

Note 1 Business and Organization

Diamond Hill Investment Group, Inc. (the “Company”), an Ohio Corporation, derives its consolidated revenues and net income
from investment advisory and fund administration services. The Company has three operating subsidiaries.

Diamond Hill Capital Management, Inc. (“DHCM”), an Ohio corporation, is a wholly owned subsidiary of the Company and a
registered investment adviser. DHCM is the investment adviser to the Diamond Hill Funds (the “Funds”), a series of open-end
mutual funds, private investment funds (“Private Funds”), an exchange traded fund, and other institutional accounts. In
addition, DHCM is administrator for the Funds.

Beacon Hill Fund Services, Inc. (“BHFS”), an Ohio corporation, is a wholly owned subsidiary of the Company. BHFS provides
compliance, treasury, and other fund administration services to investment advisers and mutual funds. BHIL Distributors, Inc.
(“BHIL”), an Ohio corporation, is a wholly owned subsidiary of BHFS. BHIL provides underwriting services to mutual funds.
BHFS and BHIL collectively operate as "Beacon Hill".

Note 2 Significant Accounting Policies

Basis of Presentation

The accompanying Consolidated Financial Statements of the Company have been prepared pursuant to the rules and regulations
of the U. S. Securities and Exchange Commission ("SEC") and in accordance with the instructions to Form 10-K. The
Company believes that the disclosures contained herein are adequate to make the information presented not misleading.

These Consolidated Financial Statements reflect, in the opinion of the Company, all material adjustments (which include only
normal recurring adjustments) necessary to fairly present the Company’s financial position as of December 31, 2015 and 2014,
and results of operations for the years ended December 31, 2015, 2014 and 2013. The preparation of the Consolidated Financial
Statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities at
the date of the financial statements as well as the reported amounts of revenue and expense during the reporting period.
Estimates have been prepared on the basis of the most current and best available information, but actual results could differ
materially from those estimates.

Book value per share is computed by dividing total shareholders' equity by the number of shares issued and outstanding at the
end of the measurement period.

Reclassification

Certain prior period amounts and disclosures may have been reclassified to conform to the current period's financial
presentation.

Principles of Consolidation

The accompanying consolidated financial statements include the operations of the Company and its subsidiaries. All inter-
company transactions and balances have been eliminated in consolidation.

The Company holds certain investments in the Funds we advise and an exchange traded fund ("the ETF") we advise for general
corporate investment purposes and to provide seed capital for newly formed strategies. The Funds are organized in a Trust
which is an open-end investment company registered under the Investment Company Act of 1940, as amended (the"1940 Act").
The ETF is an individual series of ETF Series Solutions ("the Series Trust") which is an open-end investment company
registered under the 1940 Act. As the Funds and the Series Trust are both regulated under the 1940 Act we have concluded they
both qualify for the Investment Company deferral in ASC 810-10-65-2 (aa) and have evaluated the accounting for the Funds
and the Series Trust under FASB Interpretation No. 46 (revised December 2003) Consolidation of Variable Interest Entities an
interpretation of ARB No. 51 (“FIN46R”) as codified in ASC 810. We have performed our analysis at the trust level and have
concluded the Funds and the Series Trust are voting rights entities ("VREs"). The Company owns less than 1% of the voting
interest of both the Funds and the Series Trust as of December 31, 2015 and 2014, respectively, and therefore do not consolidate
the entities. These investments are classified as trading securities and are measured at fair value.

DHCM is the managing member of Diamond Hill General Partner, LLC (the “General Partner”), the general partner of
Diamond Hill Investment Partners, L.P. (“DHIP”), Diamond Hill Global Fund, L.P. ("DHGF"), Diamond Hill High Yield, L.P.
(“DHHY”) and Diamond Hill Valuation-Weighted 500, L.P. (“DHVW”), each a limited partnership whose underlying assets
consist primarily of marketable securities, or collectively (the “LPs”).

During 2015, the Company converted DHVW to the ETF by liquidating its investment in the partnership and purchasing into
the ETF (refer to Note 3).

DHCM is wholly owned by the Company and is consolidated by us. Further, DHCM through its control of the General Partner,
has the power to direct each LP’s economic activities and the right to receive investment advisory and performance incentive
fees that may be significant to the LPs. We have concluded each of the LPs meet the investment company criteria as outlined in
FASB Accounting Standards Codification Topic 946, Financial Services - Investment Companies. As the LPs are investment
companies, we have further concluded the LPs qualify for the Investment Company deferral in ASC 810-10-65-2 (aa) and have
evaluated the accounting for the LPs under FIN46R.

Under FIN 46R, the Company concluded DHIP was a variable interest entity ("VIE") as the group of equity holders lacked the
ability to make decisions regarding DHIP’s activities that have a significant impact on the success of the LP. The Company
considered our equity interest, equity interests from related parties, and management fees earned as the Company’s total
variable interest in our evaluation of determining the primary beneficiary. The Company had no equity at risk in DHIP as of
December 31, 2015 and 2014. The Company’s total variable interest absorbed or received through its fees is less than 50% of
the VIE expected losses or residual returns and thus we do not consider the Company to be the primary beneficiary of the VIE.

Under FIN46R, the Company concluded DHVW, DHGF and DHHY (the "Remaining LPs") were VIEs as DHCM has
disproportionately less vote than economics because the Company receives over 95% of the variability of the Remaining LPs,
yet the Limited Partners have full power to remove the Company as the General Partner due to the existence of substantive
kick-out rights. In addition, substantially all of the Remaining LPs' activities are conducted on behalf of the General Partner
which has disproportionately few voting rights. The Company is the primary beneficiary of the these VIEs as the variable
interest absorbed or received through our equity investment is greater than 50% for each of the Remaining LPs. We have
evaluated the materiality of consolidating the VIEs for which the Company is the primary beneficiary and deemed the impact
immaterial to the consolidated financial statements. Therefore, these investments are accounted for under the equity method
rather than being consolidated in the accompanying financial statements.

DHCM’s investments in the LPs are reported as a component of the Company’s investment portfolio, valued at DHCM’s
proportionate interest in the net asset value of the marketable securities held by the Partnerships. The Partnerships are not
subject to lock-up periods and can be redeemed on demand. Gains and losses attributable to changes in the value of DHCM’s
interests in the Partnerships are included in the Company’s reported investment income. The Company’s exposure to loss as a
result of its involvement with the Partnerships is limited to the amount of its investments. DHCM is not obligated to provide,
and has not provided, financial or other support to the Partnerships, other than its investments to date and its contractually
provided investment advisory responsibilities. The Company has not provided liquidity arrangements, guarantees or other

commitments to support the Partnerships’ operations, and the Partnerships’ creditors and interest holders have no recourse to the
general credit of the Company.

Certain board members, officers and employees of the Company invest in DHIP and are not subject to a management fee or an
incentive fee. These individuals receive no remuneration as a result of their personal investment in DHIP. The capital of the
General Partner is not subject to a management fee or an incentive fee.

Segment Information

Management has determined that the Company operates in one business segment, providing investment management and
administration services to mutual funds, institutional accounts, and private investment funds. Therefore, no disclosures relating
to operating segments are required in the annual financial statements.

Cash and Cash Equivalents

Cash and cash equivalents include demand deposits and third party money market mutual funds.

Accounts Receivable

Accounts receivable are recorded when they are due and are presented on the balance sheet net of any allowance for doubtful
accounts. Accounts receivable are written off when they are determined to be uncollectible. Any allowance for doubtful
accounts is estimated based on the Company’s historical losses, existing conditions in the industry, and the financial stability of
those individuals or entities that owe the receivable. No allowance for doubtful accounts was deemed necessary at
December 31, 2015 or 2014. Accounts Receivable from the Funds was $9.2 million and $7.9 million as of December 31, 2015
and 2014, respectively.

Valuation of Investment Portfolio

Investments held by the Company are classified as trading securities and are valued based upon Level 1 inputs and Level 2
inputs. Level 1 inputs are defined as fair values which use quoted prices in active markets for identical assets or liabilities.
Level 2 inputs are defined as quoted prices in markets that are not considered to be active for identical assets or liabilities,
quoted prices in active markets for similar assets or liabilities, and inputs other than quoted prices that are directly observable or
that may be corroborated indirectly with observable market data. The following table summarizes the values of the Company’s
investments based upon Level 1 and Level 2 inputs as of December 31, 2015 and 2014:

Level 1 Inputs

Level 2 Inputs

As of December 31,

2015

2014

$ 92,376,955

$ 62,595,546

$ 11,284,109

14,652,589

Level 1 investments are all registered investment companies (mutual funds) and include as of December 31, 2015 and 2014,
$51.2 million and $31.8 million, respectively, of third party money market mutual funds that the Company classifies as cash
equivalents. Level 2 investments are all limited partnerships, which are based on net asset value. Equity securities in limited
partnerships are valued based upon readily available market quotations obtained from an independent pricing service. Debt
securities in limited partnerships are valued by an independent pricing service which uses pricing techniques which take into
account factors such as trading activity, readily available market quotations, yield, quality, coupon rate, maturity, type of issue,
trading characteristics, call features, credit rates and other observable inputs. The Company determines transfers between fair
value hierarchy levels at the end of the reporting period. There were no transfers in or out of the levels during the years ended
December 31, 2015 or 2014.

The changes in fair values on the investments are recorded in the Consolidated Statements of Income as investment income
(loss).

Property and Equipment

Property and equipment, consisting of leasehold improvements, computer equipment, furniture and fixtures, are carried at cost
less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated life of the assets.

Deferred Compensation Liability

Deferred compensation liability represents compensation that will be paid out upon satisfactory completion of time-based
criteria specified in employee award agreements issued pursuant to the 2014 and 2011 Equity and Cash Incentive Plans. See
Note 5.

Revenue Recognition – General

The Company earns substantially all of its revenue from investment advisory and fund administration services. Investment
advisory and administration fees, generally calculated as a percentage of AUM, are recorded as revenue as services are
performed. In addition to fixed fees based on a percentage of AUM, certain client accounts also provide periodic variable
incentive fees. Investment advisory revenue from the Funds was $80.7 million, $65.1 million and $48.5 million for the years
ended December 31, 2015, 2014 and 2013, respectively.

Revenue Recognition – Variable Incentive Fees

The Company manages certain client accounts that provide for variable incentive fees. These fees are calculated based on client
investment results over rolling five-year periods. The Company records variable incentive fees at the end of the contract
measurement period. No variable incentive fees were earned during the twelve months ended December 31, 2015, 2014, or
2013. The table below shows AUM subject to variable incentive fees and the amount of variable incentive fees that would have
been recognized if the contracts were terminated as of December 31, 2015:

AUM subject to variable incentive fees

Contractual Period Ends:

Quarter Ended June 30, 2017
Quarter Ended December 31, 2018
Quarter Ended September 30, 2019

Total variable incentive fees that would have been recognized if contracts were terminated

As Of December 31,

2015

551,090,995

For the Year Ended

2015

618,134
430,041
405,845
1,454,020

The contractual end dates highlight the time remaining until the variable incentive fees are scheduled to be earned. The amount
of variable incentive fees that would be recognized if the contracts were terminated as of December 31, 2015 will increase or
decrease based on future client investment results through the contractual period end, and there is no assurance that the above
amounts will ultimately be earned.

Revenue Recognition – Mutual Fund Administration

DHCM has an administrative and transfer agency services agreement with the Funds, under which DHCM performs certain
services for each Fund. These services include mutual fund administration, fund accounting, transfer agency and other related
functions. Effective January 1, 2015, for performing these services, each Fund pays DHCM a fee, which is calculated using an
annual rate of 0.24% for Class A, C, and I shares and 0.10% for Class Y shares, times the average daily net assets of each
respective series and share class. Effective July 1, 2015, the annual rate for Class I shares was reduced to 0.21%. Prior to
January 1, 2015, the annual rate was 0.25% for Class A, C, and I shares and 0.10% for Class Y shares.

The Funds have selected and contractually engaged certain vendors to fulfill various services to benefit the Funds’ shareholders
or to satisfy regulatory requirements of the Funds. These services include, among others, required shareholder mailings, federal
and state registrations, and legal and audit services. DHCM, in fulfilling a portion of its role under the administration agreement
with the Funds, acts as agent to pay these obligations of the Funds. Each vendor is independently responsible for fulfillment of
the services it has been engaged to provide and negotiates fees and terms with the management and board of trustees of the
Funds. The fee that each Fund pays to DHCM is reviewed annually by the Funds’ board of trustees and specifically takes into
account the contractual expenses that DHCM pays on behalf of the Funds. As a result, DHCM is not involved in the delivery or

pricing of these services and bears no risk related to these services. Revenue has been recorded net of these Fund related
expenses, in accordance with FASB ASC 605-45, Revenue Recognition – Principal Agent Considerations. In addition, DHCM
finances the upfront commissions which are paid to brokers who sell Class C shares of the Funds. As financer, DHCM advances
the commission amount to be paid to the selling broker at the time of sale. These advances are capitalized and amortized over
12 months to correspond with the repayments DHCM receives from the principal underwriter to recoup this commission
advancement.

Beacon Hill has underwriting and administrative service agreements with certain clients, including registered mutual funds. The
fee arrangements vary from client to client based upon services provided and are recorded as revenue under mutual fund
administration on the Consolidated Statements of Income. Part of Beacon Hill’s role as underwriter is to act as an agent on
behalf of its mutual fund clients to receive 12b-1/service fees and commission revenue and facilitate the payment of those fees
and commissions to third parties who provide services to the funds and their shareholders. The majority of 12b-1/service fees
are paid to independent third parties and the remainder are retained by the Company as a reimbursement of expenses the
Company has incurred. The amount of 12b-1/service fees and commissions are determined by each mutual fund client, and
Beacon Hill bears no financial risk related to these services. As a result, 12b-1/service fees and commission revenue has been
recorded net of the expense payments to third parties, in accordance with the appropriate accounting treatment for this agency
relationship.

Mutual fund administration gross and net revenue are summarized below:

Mutual fund administration:

Administration revenue, gross

12b-1/service fees and commission revenue received from fund clients

12b-1/service fees and commission expense payments to third parties

Fund related expense

Revenue, net of related expenses

DHCM C-Share financing:

Broker commission advance repayments

Broker commission amortization

Financing activity, net

Year Ended December 31,

2015

2014

2013

$ 27,042,861

$ 22,968,369

$ 16,692,093

11,087,978
(9,617,568)
(12,031,353)
16,481,918

10,514,242
(9,102,565)
(9,753,359)
14,626,687

8,481,442
(7,404,361)
(6,321,374)
11,447,800

991,430
(962,919)
28,511

878,105
(846,861)
31,244

365,380
(347,853)
17,527

Mutual fund administration revenue, net

$ 16,510,429

$ 14,657,931

$ 11,465,327

Mutual fund administrative net revenue from the Funds was $14.3 million, $13.1 million and $9.7 million for the years ended
December 31, 2015, 2014 and 2013, respectively.

Contractual Expense Reimbursements

BHIL has an agreement with an investment adviser that is part of the umbrella trust sponsored by BHFS to provide staff to
support the wholesaling functions and sales support services to distribute shares of the registered investment companies
managed by the investment adviser and distributed by BHIL. Under the agreement, the investment adviser is obligated to
reimburse BHIL for all expenses incurred in association with these efforts. The amount of expense incurred and reimbursed for
the years ended December 31, 2015, 2014, and 2013 was $2,291,910, $1,849,786, and $375,825, respectively. In addition, the
third party investment adviser is obligated to reimburse BHIL for any contractual obligations entered into by BHIL as a result
of this arrangement. BHIL is not involved in the delivery or pricing of these services and bears no risk related to these services.
Revenue has been recorded net of these expenses in accordance with FASB ASC 605-45, Revenue Recognition - Principal
Agent Considerations. This agreement concluded on December 1, 2015.

Income Taxes

The Company accounts for current and deferred income taxes through an asset and liability approach. Deferred tax assets are
recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences.
Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred

tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on
the date of enactment.

The Company is subject to examination by various federal, and applicable state and local jurisdictions for various tax periods.
The Company’s income tax positions are based on research and interpretations of the income tax laws and rulings in each of the
jurisdictions in which the Company does business. Due to the subjectivity of interpretations of laws and rulings in each
jurisdiction, the differences and interplay in tax laws between those jurisdictions, as well as the inherent uncertainty in
estimating the final resolution of complex tax audit matters, the Company’s estimates of income tax liabilities may differ from
actual payments or assessments. The Company regularly assesses its position with regard to tax exposures and records
liabilities for these uncertain tax positions and related interest and penalties, if any, according to the principles of FASB ASC
740, Income Taxes. As of December 31, 2015, the Company has not recorded any liability for uncertain tax positions. The
Company records interest and penalties, if any, within income tax expense on the income statement.

Earnings Per Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net income by the weighted average number of
Common Shares outstanding for the period, which includes participating securities. Diluted EPS reflects the potential dilution
of EPS due to unvested restricted stock grants with forfeitable rights to dividends and restricted stock units. For the periods
presented, the Company has unvested stock-based payment awards that contain both forfeitable and nonforfeitable rights to
dividends. See Note 9.

Recently Issued Accounting Standards

In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers",
which supersedes existing accounting standards for revenue recognition and creates a single framework. ASU 2014-09 requires
an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to
customers. This standard also specifies the accounting for certain costs to obtain or fulfill a contract with a customer. This
ASU will supersede much of the existing revenue recognition guidance in accounting principles generally accepted in the
United States and is effective for fiscal years beginning after December 15, 2016, including interim periods within that
reporting period and requires either a retrospective or a modified retrospective approach to adoption. The Company is currently
assessing the impact of this standard on its consolidated financial statements and related disclosures, as well as the transition
methods. Early application is permitted for the first interim period within annual reporting periods beginning after December
15, 2016.

In May 2015, the FASB issued ASU No. 2015-07, "Fair Value Measurement (Topic 820): Disclosures for Investments in
Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)". This standard will eliminate the requirement to
categorize investments in the fair value hierarchy if their fair value is measured at net asset value ("NAV") per share (or its
equivalent) using the practical expedient in the FASB’s fair value measurement guidance. The amendment is effective
retrospectively for fiscal years (and interim periods within those years) beginning after December 15, 2015 and is not expected
to have a material impact on our consolidated financial statements and related disclosures.

We will implement Accounting Standards Update No. 2015-02 - Consolidation (Topic 810): Amendments to the Consolidation
Analysis on January 1, 2016, using the modified retrospective transition method. The adoption of this new guidance will require
our analysis to be performed at the individual Fund level which may result in the consolidation of certain funds we advise
because we own the majority of the voting interest of those funds. Thus, if deemed material, the underlying assets and liabilities
of the consolidated funds will be included in our consolidated balance sheet, and we will recognize non-controlling interest for
the portion of the consolidated funds that are owned by third-party investors. Additionally, if deemed material, the Company
would record the amount of net income of the consolidated funds attributable to the Company and to the non-controlling
interest on the face of the consolidated statements of income. We are evaluating the effect ASU 2015-02 will have on our
consolidated financial statements and related disclosures.

Note 3 Investment Portfolio

As of December 31, 2015, the Company held investments (excluding third party money market funds, included with cash and
cash equivalents) worth $52.5 million and an estimated cost basis of $48.7 million. The following table summarizes the fair
value of these investments as of December 31, 2015 and 2014:

Corporate Investments:

Diamond Hill Mid Cap Fund

Diamond Hill Research Opportunities Fund

Diamond Hill Financial Long-Short Fund

Diamond Hill Valuation-Weighted 500 ETF(a)

Diamond Hill Valuation-Weighted 500, L.P.(a)

Diamond Hill High Yield Fund, L.P.

Diamond Hill Global Fund, L.P.

Total Corporate Investments
Deferred Compensation Investments

Total Investment Portfolio

As of December 31,

2015

2014

$ 10,749,860

$ 10,729,930

10,306,395

13,143,281

967,721

1,222,892

11,221,323

—

9,874,099

1,410,010

44,529,408
7,961,412

—

3,398,035

9,764,814

1,489,740

39,748,692
5,678,764

$ 52,490,820

$ 45,427,456

(a) During the second quarter of 2015, the Company converted the Diamond Hill Valuation-Weighted 500, L.P. to the Diamond Hill
Valuation-Weighted 500 ETF by liquidating its investment in the partnership and purchasing into the Diamond Hill Valuation-Weighted 500
ETF.

The deferred compensation investments above consist of Diamond Hill Funds and relate to deferred compensation liabilities
from both deferred compensation plans (refer to Note 6).

The underlying assets of the LPs are cash, marketable equity securities and fixed income securities. Summary financial
information, including the Company’s carrying value and income is as follows for DHIP and the Remaining LPs, respectively:

Summary Financial Information - DHIP

Total assets

Total liabilities

Net assets

DHCM’s portion of net assets

Net income (loss)

DHCM’s portion of net income

2015
$ 104,763,018

As of December 31,
2014
$ 113,050,560

2013
$ 118,989,180

24,622,223

21,779,556

25,217,600

$ 80,140,795

$ 91,271,004

$ 93,771,580

— $

1,133

For the Year Ended December 31,
2014
8,346,265

2013
$ 23,358,257

2015
(9,145,162) $
— $

— $

1,798

Summary Financial Information - Remaining LPs

Total assets

Total liabilities

Net assets

DHCM’s portion of net assets

Net income

DHCM’s portion of net income

Note 4 Line of Credit

2015
$ 11,653,249

As of December 31,
2014
$ 15,131,651

25,996

3,015

2013
3,117,223

—

$ 11,627,253

$ 15,128,636

$ 11,274,109

$ 14,652,589

3,117,223

3,000,328

For the Year Ended December 31,
2014

2013

2015

127,703

124,825

524,153

491,951

936,238

898,160

The Company has an uncommitted Line of Credit Agreement (the "Credit Agreement") with a commercial bank that matures
in November of 2016 and permits the Company to borrow up to $10.0 million. Borrowings under the Credit Agreement bear
interest at a rate equal to LIBOR plus 1.50%. The Company has not borrowed under the Credit Agreement as of and for the
years ended December 31, 2015 and 2014. No interest is payable on the unused portion of the Credit Agreement.

The proceeds of the Credit Agreement may be used by the Company and its subsidiaries for ongoing working capital needs and
other general corporate purposes. The line of credit agreement contains representations, warranties and covenants that are
customary for agreements of this type.

Note 5 Capital Stock

Common Shares

The Company has only one class of securities outstanding, Common Shares, no par value per share.

Authorization of Preferred Shares

The Company’s Amended and Restated Articles of Incorporation authorize the issuance of 1,000,000 “blank check” preferred
shares with such designations, rights and preferences as may be determined from time to time by the Company’s Board of
Directors. The Board of Directors is authorized, without shareholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting, or other rights, which could adversely affect the voting or other rights of the holders of the
Common Shares. There were no shares of preferred stock issued or outstanding at December 31, 2015 or 2014.

Note 6 Compensation Plans

Equity Incentive Plans

2014 Equity and Cash Incentive Plan

At the Company’s annual shareholder meeting on April 30, 2014, shareholders approved the 2014 Equity and Cash Incentive
Plan (“2014 Plan”). The 2014 Plan is intended to facilitate the Company’s ability to attract and retain staff, provide additional
incentive to employees and directors, and promote the success of the Company’s business. The 2014 Plan authorizes the
issuance of 600,000 Common Shares of the Company in various forms of equity awards. The 2014 Plan also authorizes cash
incentive awards. As of December 31, 2015, there were 456,808 Common Shares available for awards under the 2014 Plan. The
2014 Plan provides that the Board of Directors, or a committee appointed by the Board, may grant awards and otherwise
administer the 2014 Plan. Restricted stock units and restricted stock grants issued under the 2014 Plan, which vest over time,
are recorded as deferred compensation in the equity section of the balance sheet on the grant date and then recognized as
compensation expense based on the grant date price over the vesting period of the respective grant. Stock grants issued under
the 2014 Plan are recorded as compensation expense based on the grant date price.

2011 Equity and Cash Incentive Plan and 2005 Employee and Director Equity Incentive Plan

There are no longer any Common Shares available for future issuance under either the 2011 or 2005 equity incentive plans,
although outstanding grants under these plans remain issued and outstanding. Restricted stock grants issued under the 2011 and

2005 equity incentive plans, which vest over time, were recorded as deferred compensation in the equity section of the balance
sheet on the grant date and then recognized as compensation expense based on the grant date price over the vesting period of
the respective grant. Stock grants issued under the 2011 and 2005 equity incentive plans were recorded as compensation
expense based on the grant date price.

Share-Based Payment Transactions

The Company issues restricted stock units and restricted stock awards (collectively, "Restricted Stock") under the 2014 Plan.
Restricted stock units represent shares which may be issued in the future, whereas restricted stock awards represent shares
issued and outstanding upon grant with vesting restrictions. The following table represents a roll-forward of outstanding
Restricted Stock and related activity during the years ended December 31, 2015 and 2014:

Outstanding Restricted Stock as of December 31, 2013

Grants issued

Grants vested

Grants forfeited

Outstanding Restricted Stock as of December 31, 2014

Grants issued

Grants vested

Grants forfeited

Outstanding Restricted Stock as of December 31, 2015

Weighted-
Average
Grant Date Price
per Share

312,099

60,613
(28,731)
(8,213)
335,768

82,050
(84,962)
(3,500)
329,356

74.17

124.05

63.47

77.23

79.79

169.50

73.47

77.81

108.46

Total deferred compensation related to unvested Restricted Stock grants was $19.3 million as of December 31, 2015.
Compensation expense related to the restricted stock grants is calculated based upon the fair market value of the Common
Shares on grant date, adjusted for estimated forfeitures. Compensation expense recognition of deferred compensation over the
remaining vesting periods, adjusted for estimated forfeitures, is as follows:

2016

2017

2018

2019

2020

Thereafter

Total

5,243,958

4,647,054

3,943,960

3,039,242

1,309,111

1,111,459

19,294,784

Stock Grant Transactions

The following table represents stock issued as part of our incentive compensation program during the years ended
December 31, 2015, 2014, and 2013:

December 31, 2015

December 31, 2014

December 31, 2013

401(k) Plan

Shares Issued

Grant Date Value

27,192

33,745

59,006

3,826,458

3,984,816

4,606,008

The Company sponsors a 401(k) plan in which all employees are eligible to participate. Employees may contribute a portion of
their compensation subject to certain limits based on federal tax laws. The Company makes matching contributions of common
shares of the Company with a value equal to 200 percent of the first six percent of an employee’s compensation contributed to
the plan. Employees become fully vested in the matching contributions after six plan years of employment. The following table
summarizes the Company’s expenses attributable to the plan during the years ended December 31, 2015, 2014 and 2013:

For the year ended December 31,

2015

2014

2013

1,645,434

1,356,035

1,158,354

Deferred Compensation Plans

The Company offers two deferred compensation plans, the Diamond Hill Fixed Term Deferred Compensation Plan and the
Diamond Hill Variable Term Deferred Compensation Plan (collectively the “Plans”) to its employees. Under the Plans,
participants may elect to voluntarily defer, for a minimum of five years, certain incentive compensation, that the Company then
contributes into the Plans. Each participant is responsible for designating investment options for assets they contribute, and the
distribution paid to each participant reflects any gains or losses on the assets realized while in the Plans. Assets held in the
Plans are included in the Company’s investment portfolio, and the associated obligation to participants is included in deferred
compensation liability. Assets held in the Plans are recorded at fair value. Deferred compensation liability was $10.2 million
and $5.7 million at December 31, 2015 and 2014, respectively.

Note 7 Operating Leases

The Company currently leases office space of approximately 42,400 square feet at two locations. The following table
summarizes the total lease and operating expenses for the years ended December 31, 2015, 2014 and 2013:

For the year ended December 31,

2015
928,440

2014
905,061

2013
730,845

The approximate future minimum lease payments under the operating leases are as follows:

Total
5,585,502

2016

2017

2018

2019

2020

Thereafter

696,198

632,120

595,807

624,179

2,341,000

Future Minimum Lease Payments by Year

In addition to the above lease payments, the Company is also responsible for normal operating expenses of the properties. Such
operating expenses were approximately $0.4 million, $0.3 million and $0.2 million in 2015, 2014 and 2013, respectively.

Note 8 Income Taxes

The Company files a consolidated federal income tax return. It is the policy of the Company to allocate the consolidated tax
provision to subsidiaries as if each subsidiary’s tax liability or benefit were determined on a separate company basis. As part of
the consolidated group, subsidiaries transfer to the Company their current federal tax liabilities or assets.

As of December 31,

2015

2014

2013

Current city income tax provision

Current state income tax provision

Current federal income tax provision

Deferred federal income tax expense (benefit)

Provision for income taxes

1,245,285

935,612

335,897

22,874,571
(3,547,088)
$ 20,908,665

429,147

15,015,813

2,404,433

$ 18,785,005

952,957

268,920

17,866,911
(5,611,451)
$ 13,477,337

A reconciliation of income tax expense at the statutory federal rate to the Company’s income tax expense is as follows:

Income tax computed at statutory rate

City and state income taxes, net of federal benefit

Other

Income tax expense

2015

2014

2013

$ 20,294,107

$ 17,628,078

$ 12,471,258

1,027,768
(413,210)
$ 20,908,665

887,093

269,834

794,220

211,859

$ 18,785,005

$ 13,477,337

Net deferred tax assets consist of the following at December 31, 2015 and 2014:

Stock-based compensation

Accrued compensation

Unrealized gains

Property and equipment

Other assets and liabilities

Net deferred tax assets

2015

2014

6,077,629

5,433,419

4,724,670
(722,466)
(815,825)
(57,929)
9,206,079

2,964,688
(2,436,006)
(369,248)
66,139

5,658,992

The net temporary differences incurred to date will reverse in future periods as the Company generates taxable earnings. The
Company believes it is more likely than not that the results of future operations will generate sufficient taxable income to
realize the net deferred tax assets recorded. The Company records a valuation allowance when it is more likely than not that
some portion or all of the deferred tax assets will not be realized. As of December 31, 2015, no valuation allowance was
deemed necessary.

The Company's income taxes payable has been reduced by the tax benefits from equity incentive plan awards. These tax
benefits are considered windfall tax benefits under ASC 718 and are recognized as an increase to common stock. For Restricted
Stock, the Company receives an excess income tax benefit calculated as the tax effect of the difference between the fair market
value of the stock at the time of grant and vesting. The Company also records a tax benefit on dividends paid on Restricted
Stock during the vesting period. The Company had net tax benefits from equity awards of $2.9 million, $1.0 million, and $0.8
million, for the years ended December 31, 2015, 2014 and 2013, respectively.

FASB ASC 740, Income Taxes, prescribes a recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a tax return and also provides guidance on
derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company did
not record an accrual for tax related uncertainties or unrecognized tax positions as of December 31, 2015. The Company does
not expect a change to the reserve for uncertain tax positions within the next twelve months that would have a material impact
on the consolidated financial statements.

The Company files income tax returns in the federal and all applicable state and local jurisdictions. The Company is subject to
federal, state and local examinations by tax authorities for tax years ended December 31, 2012 through 2015.

Note 9 Earnings Per Share

The Company’s common shares outstanding consist of all shares issued and outstanding, including unvested restricted shares.
Basic and diluted EPS are calculated under the two-class method. Pursuant to the two-class method, the Company’s unvested
restricted stock grants with nonforfeitable rights to dividends are considered participating securities. Dividends are paid on all
Common Shares outstanding at the same rate. Accordingly, the Company has evaluated the impact of earnings per share of all
participating securities under the two-class method, noting no impact on earnings per share. Restricted stock grants with
forfeitable rights to dividends and restricted stock units are considered dilutive. The following table sets forth the computation
for basic and diluted EPS and reconciliation between basic and diluted shares outstanding:

Net income

Year Ended December 31,

2015

2014

2013

$ 37,074,497

$ 31,580,931

$ 22,154,828

Weighted average number of outstanding shares - Basic

3,277,920

3,196,127

3,142,083

Dilutive impact of restricted stock grants with forfeitable rights to
dividends

Dilutive impact of restricted stock units

74,957

6,909

67,453

2,588

52,180

—

Weighted average number of outstanding shares - Diluted

3,359,786

3,266,168

3,194,263

Earnings per share

Basic

Diluted

Note 10 Regulatory Requirements

11.31

11.03

9.88

9.67

7.05

6.94

BHIL, a wholly owned subsidiary of the Company and principal underwriter for mutual funds, is subject to the SEC’s Uniform
Net Capital
indebtedness to net capital cannot exceed 15 to 1. BHIL’s net capital exceeded its minimum net capital requirement at
December 31, 2015 and 2014. The net capital balances, minimum net capital requirements, and ratio of aggregate indebtedness
to net capital for BHIL are summarized below as of December 31, 2015 and 2014:

which requires the maintenance of minimum net capital and requires that the ratio of aggregate

Net Capital

Minimum Net Capital Requirement

Ratio of Aggregate Indebtedness to Net Capital

Note 11 Commitments and Contingencies

As of December 31,

2015

2014

507,518

370,604

84,514

2.50 to 1

84,055

3.40 to 1

The Company indemnifies its directors and certain of its officers and employees for certain liabilities that might arise from their
performance of their duties to the Company. Additionally, in the normal course of business, the Company enters into
agreements that contain a variety of representations and warranties and which provide general indemnifications. Certain
agreements do not contain any limits on the Company’s liability and would involve future claims that may be made against the
Company that have not yet occurred. Therefore, it is not possible to estimate the Company’s potential liability under these
indemnities. Further, the Company maintains insurance policies that may provide coverage against certain claims under these
indemnities.

ITEM 9.

Changes In and Disagreements With Accountants on Accounting and Financial Disclosures

None.

ITEM 9A. Controls and Procedures

Management, including the Chief Executive Officer and the Chief Financial Officer, has conducted an evaluation of the
effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Exchange
Act of 1934) as of the end of the period covered by this report (the “Evaluation Date”). Based on such evaluation, the Chief
Executive Officer and the Chief Financial Officer have concluded that, as of the Evaluation Date, the Company’s disclosure
controls and procedures are effective to ensure that the information required to be disclosed by the Company in the reports that
it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified
in the SEC’s rules and forms, and to ensure that the information required to be disclosed by the Company in the reports it files
or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Chief
Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions
regarding required disclosure.

There have been no changes in the Company’s internal control over financial reporting during the year ended December 31,
2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial
reporting.

Management’s Annual Report on Internal Control Over Financial Reporting

Management of Diamond Hill Investment Group, Inc. (the “Company”) is responsible for establishing and maintaining
adequate internal control over financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act. The
Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of its consolidated financial statements for external purposes in accordance
with accounting principles generally accepted in the United States of America.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, management
assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2015 based on criteria
established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO). Based on this assessment, management concluded that the Company’s internal control over
financial reporting was effective as of December 31, 2015.

The Company’s independent registered public accounting firm, KPMG LLP, has audited the Company’s 2015 and 2014
consolidated financial statements included in this Annual Report on Form 10-K and the Company’s internal control over
financial reporting as of December 31, 2015, and has issued its Report of Independent Registered Public Accounting Firm on
Consolidated Financial Statements, which is included in this Annual Report on Form 10-K.

ITEM 9B. Other Information

None.

ITEM 10. Directors, Executive Officers and Corporate Governance

PART III

Information required by this Item 10 is incorporated herein by reference from the Company’s definitive proxy statement for its
2016 annual meeting of shareholders to be filed with the SEC pursuant to Regulation 14A of the Exchange Act (the “2016
Proxy Statement”), under the captions: “Section 16(a) Beneficial Ownership Reporting Compliance”, “Proposal 1 – Election of
Directors”, “Proposal 1 – Election of Directors – The Board of Directors and Committees”, “Proposal 1 – Election of Directors
– Corporate Governance”, and “Proposal 1 – Election of Directors – Executive Officers and Compensation Information”.

ITEM 11.

Executive Compensation

Information required by this Item 11 is incorporated herein by reference from the Company’s 2016 Proxy Statement under the
captions: “Proposal 1 – Election of Directors—The Board of Directors and Committees”, “Proposal 1 – Election of Directors –
Corporate Governance”, “Proposal 1 – Election of Directors – Corporate Governance – Compensation Committee Interlocks
and Insider Participation”, “Proposal 1 – Election of Directors – Executive Officers and Compensation Information”, and
“Proposal 1 – Election of Directors – Compensation Committee Report”.

ITEM 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth certain information concerning our equity compensation plans at December 31, 2015:

Equity Compensation Plan Information

Plan category
Equity compensation plans approved by security holders

(a)

(b)

(c)

Number of securities to
be issued upon the
exercise of outstanding
options, warrants and
rights

Weighted-average
exercise price of
outstanding options,
warrants and rights

Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a)

— $

—

456,808 1

This amount relates to common shares that may be issued under our 2014 Equity and Cash Incentive Plan.

The other information required by this Item 12 is incorporated herein by reference from the Company’s 2016 Proxy Statement
under the captions: “Security Ownership of Certain Beneficial Owners and Management” and “Proposal 1 – Election of
Directors – Executive Officers and Compensation Information”.

ITEM 13. Certain Relationships and Related Transactions, and Director Independence

Information required by this Item 13 is incorporated herein by reference from the Company’s 2016 Proxy Statement under the
caption: “Proposal 1 – Election of Directors – Director Independence” and “Proposal 1 – Election of Directors – Corporate
Governance”.

ITEM 14.

Principal Accounting Fees and Services

Information required by this Item 14 is incorporated herein by reference from the Company’s 2016 Proxy Statement under the
caption: “Proposal 2 – Ratification of the Appointment of Independent Registered Public Accounting Firm”.

ITEM 15.

Exhibits, Financial Statement Schedules

PART IV

(a) (1) Financial Statements: See “Part II. Item 8, Financial Statements and Supplementary Data”.

(2) Financial Statement Schedules: All financial statement schedules for which provision is made in the applicable

accounting regulations of the SEC are omitted because they are not required or the required information is included
in the accompanying financial statements or notes thereto.

(3) Exhibits:

3.1

3.2

10.1

10.2

10.3*

10.4*

10.5*

10.6*

10.7*

10.8*

10.9*

10.10*

10.11*

10.12*

10.13*

Amended and Restated Articles of Incorporation of the Company. (Incorporated by reference from Exhibit 3(i)
to the Current Report on Form 8-K filed with the SEC on May 7, 2002; File No. 000-24498.)

Regulations of the Company. (Incorporated by reference from Exhibit 4.2 to the Registration Statement on
Form S-8 filed with the SEC on June 27, 2014; File No. 333-197064.)

Amended and Restated Investment Management Agreement between Diamond Hill Capital Management, Inc.
and the Diamond Hill Funds dated November 17, 2011, as amended November 21, 2013. (Incorporated by
reference from Exhibit 28(d)(iii) to Post-Effective Amendment Nos. 45 and 46 to Registration Statement on
Form N-1A (File Nos. 333-22075 and 811-08061) filed by Diamond Hill Funds on February 27, 2015)

Amended and Restated Administrative and Transfer Agency Services Agreement dated as of May 31, 2002, as
amended January 1, 2016, between Diamond Hill Capital Management, Inc. and the Diamond Hill Funds.
(Incorporated by reference from Exhibit 28(h)(vii) to Post-Effective Amendment Nos. 49 and 50 to
Registration Statement on Form N-1A (File Nos. 333-22075 and 811-08061) filed by Diamond Hill Funds on
December 7, 2015)

2014 Equity and Cash Incentive Plan. (Incorporated by reference from Exhibit 10.1 to the Registration
Statement on Form S-8 filed with the SEC on June 27, 2014; File No 333-197064.)

2011 Equity and Cash Incentive Plan and Form of Restricted Stock Award Agreement referenced therein.
(Incorporated by reference from Exhibit 10.2 and 10.3 to the Current Report on Form 8-K filed with the SEC
on April 29, 2011; File No. 000-24498.)

Employment Agreement between Diamond Hill Capital Management, Inc. and Roderick H. Dillon, Jr. dated
January 1, 2016. (Incorporated by reference from Exhibit 10.1 to the Current Report on Form 8-K filed with
the SEC on January 4, 2016; File No. 000-24498.)

Amended and Restated 2005 Employee and Director Equity Incentive Plan. (Incorporated by reference from
Exhibit 10.6 to the Annual Report on Form 10-K filed with the SEC on March 14, 2008; File No. 000-24498.)

2005 Employee and Director Equity Incentive Plan First Amendment dated November 2, 2010 and Form of
Restricted Stock Agreement reference therein. (Incorporated by reference from Exhibit 10.4 to the Annual
Report on Form 10-K filed with the SEC on February 25, 2011; File No. 000-24498.)

Diamond Hill Investment Group, Inc. Compensation Recoupment and Restitution Policy. (Incorporated by
reference from Exhibit 99 to the Current Report on Form 8-K filed with the SEC on February 20, 2013; File
No. 000-24498.)

Diamond Hill Investment Group, Inc. Compensation Recoupment and Restitution Policy Acknowledgment
and Agreement. (Incorporated by reference from Exhibit 99.1 to the Current Report on Form 8-K filed with the
SEC on February 20, 2013; File No. 000-24498.)

Diamond Hill Fixed Term Deferred Compensation Plan. (Incorporated by reference from Exhibit 10.1 to the
Current Report on Form 8-K filed with the SEC on April 30, 2013; File No. 000-24498.)

Diamond Hill Variable Term Deferred Compensation Plan. (Incorporated by reference from Exhibit 10.2 to the
Current Report on Form 8-K filed with the SEC on April 30, 2013; File No. 000-24498.)

First Amendment to the Diamond Hill Fixed Term Deferred Compensation Plan. (Incorporated by reference
from Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on May 28, 2013; File No.
000-24498.)

First Amendment to the Diamond Hill Variable Term Deferred Compensation Plan. (Incorporated by reference
from Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on May 28, 2013; File No.
000-24498.)

10.14

10.15

14.1

21.1

23.1

31.1

31.2

32.1

Loan Agreement by and between Diamond Hill Capital Management, Inc., Diamond Hill Investment Group,
Inc. and The Huntington National Bank dated November 8, 2013. (Incorporated by reference from Exhibit
10.1 to the Current Report on Form 8-K filed with the SEC on November 14, 2013; File No. 000-24498.)

Line of Credit Demand Note with Diamond Hill Capital Management, Inc., Diamond Hill Investment Group,
Inc. and The Huntington National Bank dated November 8, 2013. (Incorporated by reference from Exhibit
10.2 to the Current Report on Form 8-K filed with the SEC on November 14, 2013; File No. 000-24498.)

Amended Code of Business Conduct and Ethics. (Incorporated by reference from Exhibit 14.1 to the Annual
Report on Form 10-K filed with the SEC on March 7, 2014; File No. 000-24498.)

Subsidiaries of the Company. (Filed herewith)

Consent of Independent Registered Public Accounting Firm, KPMG LLP. (Filed herewith)

Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a). (Filed herewith)

Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a). (Filed herewith)

Section 1350 Certifications. (Furnished herewith)

101.ins

XBRL Instance Document.

101.sch

XBRL Taxonomy Extension Schema Document.

101.cal

XBRL Taxonomy Extension Calculation Linkbase Document.

101.def

XBRL Taxonomy Extension Definition Linkbase Document.

101.lab

XBRL Taxonomy Extension Label Linkbase Document.

101.pre

XBRL Taxonomy Extension Presentation Linkbase Document.

* Denotes management contract or compensatory plan or arrangement.

(b) Exhibits: Reference is made to Item 15(a)(3) above.
(c) Financial Statement Schedules: None required.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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:

DIAMOND HILL INVESTMENT GROUP, INC.

By:

/s/ Christopher M. Bingaman

Christopher M. Bingaman, Chief Executive Officer

February 25, 2016

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Title

Date

/s/ Christopher M. Bingaman

Christopher M. Bingaman

Chief Executive Officer and

February 25, 2016

President

/s/ Thomas E. Line

Thomas E. Line

/s/ Jeffrey J. Cook

Jeffrey J. Cook

/s/ R. H. Dillon

R. H. Dillon

James F. Laird*

James F. Laird

Randolph J. Fortener*

Randolph J. Fortener

Paul A. Reeder, III*

Paul A. Reeder, III

Bradley C. Shoup*

Bradley C. Shoup

Frances A. Skinner*

Frances A. Skinner

Chief Financial Officer and

February 25, 2016

Treasurer

Controller

Director

February 25, 2016

Secretary and a Director

February 25, 2016

Director

February 25, 2016

* By

/s/ Thomas E. Line

Thomas E. Line

Executed by Thomas E. Line

on behalf of those indicated pursuant to Powers of Attorney

INVESTOR
INFORMATION

CORPORATE HEADQUARTERS
Diamond Hill Investment Group, Inc.
325 John H. McConnell Blvd., Suite 200
Columbus, OH 43215
614.255.3333
info@diamond-hill.com
www.diamond-hill.com

INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
KPMG LLP
Columbus, OH

FORM 10-K AND OTHER FINANCIAL REPORTS
The Company’s Annual Report on Form 10-K, as

filed with the U.S. Securities and Exchange Commission,
which includes the complete financial statements of the
company, has been included with the proxy materials mailed
to each shareholder.

Additional copies are available without charge by contact-

ing the Company at:

STOCK LISTING
Diamond Hill Investment Group, Inc. is listed
on the NASDAQ Global Select Market
Ticker Symbol: DHIL

325 John H. McConnell Blvd., Suite 200
Columbus, OH 43215
614.255.3333
info@diamond-hill.com

SHAREHOLDER INFORMATION
The Transfer Agent for Diamond Hill is
Continental Stock Transfer & Trust Company.
Shareholders who wish to transfer their stock or
change the name in which the shares are
registered should contact:

Continental Stock Transfer & Trust Co.
17 Battery Place
New York, NY 10004
212.509.4000

LEGAL COUNSEL
Vorys, Sater, Seymour and Pease LLP
Columbus, OH

www.diamond-hill.com

Diamond Hill Investment Group, Inc.
325 John H. McConnell Blvd., Suite 200
Columbus, OH 43215
614.255.3333