(State or other jurisdictions of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. | |||||||
(d) | Exhibits | |||||||
99.1 | ||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
LPL FINANCIAL HOLDINGS INC. | |||||
By: | /s/ Matthew J. Audette | ||||
Name: Matthew J. Audette | |||||
Title: Chief Financial Officer |
Investor Relations - Chris Koegel, (617) 897-4574 | ||||||||||||||
For Immediate Release | Media Relations – Lauren Hoyt-Williams, (813) 351-9203 | |||||||||||||
investor.lpl.com/contactus.cfm |
Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||||||||||||||||
2021 | 2021 | Change | 2020 | Change | |||||||||||||||||||||||||
REVENUE | |||||||||||||||||||||||||||||
Advisory | $ | 997,338 | $ | 959,733 | 4 | % | $ | 638,181 | 56 | % | |||||||||||||||||||
Commission | 612,837 | 610,384 | — | % | 503,020 | 22 | % | ||||||||||||||||||||||
Asset-based | 302,040 | 301,701 | — | % | 258,393 | 17 | % | ||||||||||||||||||||||
Service and fee | 110,385 | 105,079 | 5 | % | 94,218 | 17 | % | ||||||||||||||||||||||
Transaction | 39,306 | 35,283 | 11 | % | 35,532 | 11 | % | ||||||||||||||||||||||
Interest income | 7,780 | 7,365 | 6 | % | 6,707 | 16 | % | ||||||||||||||||||||||
Other | 24,506 | 1,218 | n/m | 45,232 | (46 | %) | |||||||||||||||||||||||
Total revenue | 2,094,192 | 2,020,763 | 4 | % | 1,581,283 | 32 | % | ||||||||||||||||||||||
EXPENSE | |||||||||||||||||||||||||||||
Advisory and commission | 1,431,157 | 1,366,832 | 5 | % | 1,029,739 | 39 | % | ||||||||||||||||||||||
Compensation and benefits | 209,630 | 185,980 | 13 | % | 167,864 | 25 | % | ||||||||||||||||||||||
Promotional | 87,743 | 96,012 | (9 | %) | 48,342 | 82 | % | ||||||||||||||||||||||
Occupancy and equipment | 47,800 | 52,695 | (9 | %) | 41,903 | 14 | % | ||||||||||||||||||||||
Depreciation and amortization | 40,816 | 38,409 | 6 | % | 28,650 | 42 | % | ||||||||||||||||||||||
Interest expense on borrowings | 27,121 | 27,063 | — | % | 24,979 | 9 | % | ||||||||||||||||||||||
Amortization of other intangibles | 20,373 | 21,531 | (5 | %) | 17,270 | 18 | % | ||||||||||||||||||||||
Brokerage, clearing and exchange | 20,372 | 22,828 | (11 | %) | 17,762 | 15 | % | ||||||||||||||||||||||
Professional services | 18,384 | 16,722 | 10 | % | 16,541 | 11 | % | ||||||||||||||||||||||
Communications and data processing | 15,549 | 17,824 | (13 | %) | 14,656 | 6 | % | ||||||||||||||||||||||
Other | 38,688 | 36,888 | 5 | % | 27,744 | 39 | % | ||||||||||||||||||||||
Total expense | 1,957,633 | 1,882,784 | 4 | % | 1,435,450 | 36 | % | ||||||||||||||||||||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 136,559 | 137,979 | (1 | %) | 145,833 | (6 | %) | ||||||||||||||||||||||
PROVISION FOR INCOME TAXES | 28,478 | 34,915 | (18 | %) | 34,285 | (17 | %) | ||||||||||||||||||||||
NET INCOME | $ | 108,081 | $ | 103,064 | 5 | % | $ | 111,548 | (3 | %) | |||||||||||||||||||
EARNINGS PER SHARE | |||||||||||||||||||||||||||||
Earnings per share, basic | $ | 1.35 | $ | 1.29 | 5 | % | $ | 1.41 | (4 | %) | |||||||||||||||||||
Earnings per share, diluted | $ | 1.32 | $ | 1.26 | 5 | % | $ | 1.38 | (4 | %) | |||||||||||||||||||
Weighted-average shares outstanding, basic | 80,064 | 80,182 | — | % | 79,353 | 1 | % | ||||||||||||||||||||||
Weighted-average shares outstanding, diluted | 81,744 | 81,849 | — | % | 80,904 | 1 | % |
Years Ended | |||||||||||||||||
December 31, | |||||||||||||||||
2021 | 2020 | Change | |||||||||||||||
REVENUE | |||||||||||||||||
Advisory | $ | 3,525,430 | $ | 2,327,519 | 51 | % | |||||||||||
Commission | 2,378,683 | 1,906,560 | 25 | % | |||||||||||||
Asset-based | 1,148,067 | 1,044,517 | 10 | % | |||||||||||||
Service and fee | 411,761 | 357,722 | 15 | % | |||||||||||||
Transaction | 156,336 | 148,349 | 5 | % | |||||||||||||
Interest income | 28,577 | 29,412 | (3 | %) | |||||||||||||
Other | 71,976 | 57,561 | 25 | % | |||||||||||||
Total revenue | 7,720,830 | 5,871,640 | 31 | % | |||||||||||||
EXPENSE | |||||||||||||||||
Advisory and commission | 5,180,090 | 3,697,147 | 40 | % | |||||||||||||
Compensation and benefits | 741,003 | 609,257 | 22 | % | |||||||||||||
Promotional | 302,285 | 208,250 | 45 | % | |||||||||||||
Occupancy and equipment | 185,531 | 166,389 | 12 | % | |||||||||||||
Depreciation and amortization | 151,428 | 109,732 | 38 | % | |||||||||||||
Interest expense on borrowings | 104,414 | 105,765 | (1 | %) | |||||||||||||
Brokerage, clearing and exchange | 86,023 | 71,185 | 21 | % | |||||||||||||
Amortization of other intangibles | 79,260 | 67,358 | 18 | % | |||||||||||||
Professional services | 73,231 | 57,067 | 28 | % | |||||||||||||
Communications and data processing | 60,296 | 52,399 | 15 | % | |||||||||||||
Loss on extinguishment of debt | 24,400 | — | 100 | % | |||||||||||||
Other | 131,540 | 101,018 | 30 | % | |||||||||||||
Total expense | 7,119,501 | 5,245,567 | 36 | % | |||||||||||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 601,329 | 626,073 | (4 | %) | |||||||||||||
PROVISION FOR INCOME TAXES | 141,463 | 153,433 | (8 | %) | |||||||||||||
NET INCOME | $ | 459,866 | $ | 472,640 | (3 | %) | |||||||||||
EARNINGS PER SHARE | |||||||||||||||||
Earnings per share, basic | $ | 5.75 | $ | 5.96 | (4 | %) | |||||||||||
Earnings per share, diluted | $ | 5.63 | $ | 5.86 | (4 | %) | |||||||||||
Weighted-average shares outstanding, basic | 80,002 | 79,244 | 1 | % | |||||||||||||
Weighted-average shares outstanding, diluted | 81,742 | 80,702 | 1 | % |
December 31, 2021 | September 30, 2021 | December 31, 2020 | ||||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and equivalents | $ | 495,246 | $ | 977,789 | $ | 808,612 | ||||||||||||||
Cash segregated under federal or other regulations | 1,496,463 | 811,716 | 923,158 | |||||||||||||||||
Restricted cash | 80,655 | 85,381 | 67,264 | |||||||||||||||||
Receivables from clients, net of allowance | 578,889 | 592,170 | 405,106 | |||||||||||||||||
Receivables from brokers, dealers and clearing organizations | 102,503 | 96,761 | 97,245 | |||||||||||||||||
Advisor loans, net | 963,869 | 893,592 | 587,553 | |||||||||||||||||
Other receivables, net | 581,483 | 604,201 | 435,012 | |||||||||||||||||
Investment securities ($39,274, $32,085, and $29,252 at fair value at December 31, 2021, September 30, 2021, and December 31, 2020, respectively) | 49,192 | 43,268 | 42,487 | |||||||||||||||||
Property and equipment, net | 658,841 | 624,529 | 582,868 | |||||||||||||||||
Goodwill | 1,642,443 | 1,641,238 | 1,513,866 | |||||||||||||||||
Other intangibles, net | 455,028 | 470,989 | 397,486 | |||||||||||||||||
Other assets | 886,988 | 810,629 | 735,505 | |||||||||||||||||
Total assets | $ | 7,991,600 | $ | 7,652,263 | $ | 6,596,162 | ||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
LIABILITIES: | ||||||||||||||||||||
Client payables | $ | 1,712,224 | $ | 1,610,340 | $ | 1,534,486 | ||||||||||||||
Payables to brokers, dealers and clearing organizations | 170,119 | 148,193 | 89,743 | |||||||||||||||||
Accrued advisory and commission expenses payable | 222,379 | 224,438 | 187,040 | |||||||||||||||||
Corporate debt and other borrowings, net | 2,814,044 | 2,725,691 | 2,345,414 | |||||||||||||||||
Accounts payable and accrued liabilities | 384,025 | 356,792 | 309,159 | |||||||||||||||||
Other liabilities | 1,018,276 | 970,420 | 815,466 | |||||||||||||||||
Total liabilities | 6,321,067 | 6,035,874 | 5,281,308 | |||||||||||||||||
STOCKHOLDERS’ EQUITY: | ||||||||||||||||||||
Common stock, $0.001 par value; 600,000,000 shares authorized; 128,758,086, 128,602,814, and 127,585,764 shares issued at December 31, 2021, September 30, 2021, and December 31, 2020, respectively | 129 | 128 | 127 | |||||||||||||||||
Additional paid-in capital | 1,841,402 | 1,826,247 | 1,762,770 | |||||||||||||||||
Treasury stock, at cost — 48,768,145, 48,475,390, and 48,115,037 shares at December 31, 2021, September 30, 2021, and December 31, 2020, respectively | (2,498,600) | (2,447,933) | (2,391,062) | |||||||||||||||||
Retained earnings | 2,327,602 | 2,237,947 | 1,943,019 | |||||||||||||||||
Total stockholders’ equity | 1,670,533 | 1,616,389 | 1,314,854 | |||||||||||||||||
Total liabilities and stockholders’ equity | $ | 7,991,600 | $ | 7,652,263 | $ | 6,596,162 |
Quarterly Results | |||||||||||||||||||||||||||||
Q4 2021 | Q3 2021 | Change | Q4 2020 | Change | |||||||||||||||||||||||||
Gross Profit(6) | |||||||||||||||||||||||||||||
Advisory | $ | 997,338 | $ | 959,733 | 4 | % | $ | 638,181 | 56 | % | |||||||||||||||||||
Sales-based commissions | 248,382 | 239,804 | 4 | % | 202,504 | 23 | % | ||||||||||||||||||||||
Trailing commissions | 364,455 | 370,580 | (2 | %) | 300,516 | 21 | % | ||||||||||||||||||||||
Advisory fees and commissions | 1,610,175 | 1,570,117 | 3 | % | 1,141,201 | 41 | % | ||||||||||||||||||||||
Production-based payout(7) | (1,410,458) | (1,368,348) | 3 | % | (987,882) | 43 | % | ||||||||||||||||||||||
Advisory fees and commissions, net of payout | 199,717 | 201,769 | (1 | %) | 153,319 | 30 | % | ||||||||||||||||||||||
Client cash | 82,109 | 91,257 | (10 | %) | 105,019 | (22 | %) | ||||||||||||||||||||||
Other asset-based(8) | 219,931 | 210,444 | 5 | % | 153,374 | 43 | % | ||||||||||||||||||||||
Service and fee | 110,385 | 105,078 | 5 | % | 94,218 | 17 | % | ||||||||||||||||||||||
Transaction | 39,306 | 35,284 | 11 | % | 35,532 | 11 | % | ||||||||||||||||||||||
Interest income and other, net(9) | 11,587 | 10,099 | 15 | % | 10,082 | 15 | % | ||||||||||||||||||||||
Total net advisory fees and commissions and attachment revenue | 663,035 | 653,931 | 1 | % | 551,544 | 20 | % | ||||||||||||||||||||||
Brokerage, clearing and exchange expense | (20,372) | (22,828) | (11 | %) | (17,762) | 15 | % | ||||||||||||||||||||||
Gross Profit(6) | 642,663 | 631,103 | 2 | % | 533,782 | 20 | % | ||||||||||||||||||||||
G&A Expense | |||||||||||||||||||||||||||||
Core G&A(10) | 299,401 | 270,865 | 11 | % | 252,391 | 19 | % | ||||||||||||||||||||||
Regulatory charges | 8,442 | 5,976 | 41 | % | 8,775 | (4 | %) | ||||||||||||||||||||||
Promotional (ongoing)(11) | 86,071 | 83,630 | 3 | % | 48,342 | 78 | % | ||||||||||||||||||||||
Acquisition costs(11) | 14,291 | 35,887 | (60 | %) | — | 100 | % | ||||||||||||||||||||||
Employee share-based compensation | 9,589 | 9,763 | (2 | %) | 7,542 | 27 | % | ||||||||||||||||||||||
Total G&A | 417,794 | 406,121 | 3 | % | 317,050 | 32 | % | ||||||||||||||||||||||
EBITDA(12) | 224,869 | 224,982 | — | % | 216,732 | 4 | % | ||||||||||||||||||||||
Depreciation and amortization | 40,816 | 38,409 | 6 | % | 28,650 | 42 | % | ||||||||||||||||||||||
Amortization of other intangibles | 20,373 | 21,531 | (5 | %) | 17,270 | 18 | % | ||||||||||||||||||||||
Interest expense on borrowings | 27,121 | 27,063 | — | % | 24,979 | 9 | % | ||||||||||||||||||||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 136,559 | 137,979 | (1 | %) | 145,833 | (6 | %) | ||||||||||||||||||||||
PROVISION FOR INCOME TAXES | 28,478 | 34,915 | (18 | %) | 34,285 | (17 | %) | ||||||||||||||||||||||
NET INCOME | $ | 108,081 | $ | 103,064 | 5 | % | $ | 111,548 | (3 | %) | |||||||||||||||||||
Earnings per share, diluted | $ | 1.32 | $ | 1.26 | 5 | % | $ | 1.38 | (4 | %) | |||||||||||||||||||
Weighted-average shares outstanding, diluted | 81,744 | 81,849 | — | % | 80,904 | 1 | % | ||||||||||||||||||||||
EPS prior to amortization of intangible assets and acquisition costs(13) | $ | 1.63 | $ | 1.77 | (8 | %) | $ | 1.53 | 7 | % |
Q4 2021 | Q3 2021 | Change | Q4 2020 | Change | |||||||||||||||||||||||||
Market Drivers | |||||||||||||||||||||||||||||
S&P 500 Index (end of period) | 4,766 | 4,308 | 11% | 3,756 | 27% | ||||||||||||||||||||||||
Russell 2000 Index (end of period) | 2,245 | 2,204 | 2% | 1,975 | 14% | ||||||||||||||||||||||||
Fed Funds daily effective rate (average bps) | 8 | 9 | (1bps) | 9 | (1bps) | ||||||||||||||||||||||||
Advisory and Brokerage Assets | |||||||||||||||||||||||||||||
Advisory assets(14) | $ | 643.2 | $ | 594.0 | 8% | $ | 461.2 | 39% | |||||||||||||||||||||
Brokerage assets(15) | 563.2 | 538.6 | 5% | 441.9 | 27% | ||||||||||||||||||||||||
Total Advisory and Brokerage Assets | $ | 1,206.4 | $ | 1,132.6 | 7% | $ | 903.1 | 34% | |||||||||||||||||||||
Advisory as a % of Total Advisory and Brokerage Assets | 53.3 | % | 52.4 | % | 90bps | 51.1 | % | 220bps | |||||||||||||||||||||
Assets by Platform | |||||||||||||||||||||||||||||
Corporate platform advisory assets(16) | $ | 429.6 | $ | 395.6 | 9% | $ | 291.9 | 47% | |||||||||||||||||||||
Hybrid platform advisory assets(17) | 213.6 | 198.4 | 8% | 169.3 | 26% | ||||||||||||||||||||||||
Brokerage assets | 563.2 | 538.6 | 5% | 441.9 | 27% | ||||||||||||||||||||||||
Total Advisory and Brokerage Assets | $ | 1,206.4 | $ | 1,132.6 | 7% | $ | 903.1 | 34% | |||||||||||||||||||||
Centrally Managed Assets | |||||||||||||||||||||||||||||
Centrally managed assets(18) | $ | 96.1 | $ | 88.6 | 8% | $ | 67.1 | 43% | |||||||||||||||||||||
Centrally Managed as a % of Total Advisory Assets | 14.9 | % | 14.9 | % | —bps | 14.6 | % | 30bps | |||||||||||||||||||||
Q4 2021 | Q3 2021 | Change | Q4 2020 | Change | |||||||||||||||||||||||||
Net New Assets (NNA) | |||||||||||||||||||||||||||||
Net new advisory assets(19) | $ | 24.2 | $ | 21.7 | n/m | $ | 18.4 | n/m | |||||||||||||||||||||
Net new brokerage assets(20) | 2.0 | 7.3 | n/m | 3.4 | n/m | ||||||||||||||||||||||||
Total Net New Assets | $ | 26.2 | $ | 29.0 | n/m | $ | 21.8 | n/m | |||||||||||||||||||||
Organic Net New Assets (NNA)(21) | |||||||||||||||||||||||||||||
Organic net new advisory assets | $ | 24.2 | $ | 21.1 | n/m | $ | 15.9 | n/m | |||||||||||||||||||||
Organic net new brokerage assets | 2.0 | 5.6 | n/m | 1.9 | n/m | ||||||||||||||||||||||||
Total Organic Net New Assets | $ | 26.2 | $ | 26.7 | n/m | $ | 17.8 | n/m | |||||||||||||||||||||
Net brokerage to advisory conversions(22) | $ | 3.4 | $ | 3.1 | n/m | $ | 2.6 | n/m | |||||||||||||||||||||
Organic advisory NNA annualized growth(23) | 16.3 | % | 15.6 | % | n/m | 15.6 | % | n/m | |||||||||||||||||||||
Total organic NNA annualized growth(23) | 9.2 | % | 10.2 | % | n/m | 8.8 | % | n/m | |||||||||||||||||||||
Net New Advisory Assets | |||||||||||||||||||||||||||||
Corporate platform net new advisory assets(24) | $ | 17.0 | $ | 15.2 | n/m | $ | 15.0 | n/m | |||||||||||||||||||||
Hybrid platform net new advisory assets(25) | 7.2 | 6.5 | n/m | 3.3 | n/m | ||||||||||||||||||||||||
Total Net New Advisory Assets | $ | 24.2 | $ | 21.7 | n/m | $ | 18.4 | n/m | |||||||||||||||||||||
Centrally managed net new advisory assets(26) | $ | 4.4 | $ | 3.9 | n/m | $ | 2.5 | n/m | |||||||||||||||||||||
Client Cash Balances | |||||||||||||||||||||||||||||
Insured cash account balances | $ | 30.0 | $ | 30.5 | (2%) | $ | 37.3 | (20%) | |||||||||||||||||||||
Deposit cash account balances | 9.3 | 8.6 | 8% | 8.2 | 13% | ||||||||||||||||||||||||
Total Bank Sweep Balances | 39.3 | 39.0 | 1% | 45.5 | (14%) | ||||||||||||||||||||||||
Money market account cash balances | 16.1 | 9.9 | 63% | 1.5 | n/m | ||||||||||||||||||||||||
Purchased money market funds | 1.9 | 1.8 | 6% | 1.9 | —% | ||||||||||||||||||||||||
Total Money Market Balances | 18.0 | 11.7 | 54% | 3.3 | n/m | ||||||||||||||||||||||||
Total Client Cash Balances | $ | 57.3 | $ | 50.7 | 13% | $ | 48.9 | 17% | |||||||||||||||||||||
Client Cash Balances as a % of Total Assets | 4.7 | % | 4.5 | % | 20bps | 5.4 | % | (70bps) | |||||||||||||||||||||
Client Cash Balance Average Fees(27) | |||||||||||||||||||||||||||||
Insured cash account average fee - bps | 101 | 101 | — | 108 | (7) | ||||||||||||||||||||||||
Deposit cash account average fee - bps | 19 | 24 | (5) | 30 | (11) | ||||||||||||||||||||||||
Money market account average fee - bps | 3 | 3 | — | 5 | (2) | ||||||||||||||||||||||||
Purchased money market fund average fee - bps | 6 | 7 | (1) | 13 | (7) | ||||||||||||||||||||||||
Total Client Cash Balance Average Fee - bps | 62 | 74 | (12) | 87 | (25) | ||||||||||||||||||||||||
Net buy (sell) activity(28) | $ | 16.0 | $ | 17.6 | n/m | $ | 12.2 | n/m | |||||||||||||||||||||
December 2021 | November 2021 | Nov to December Change | October 2021 | September 2021 | ||||||||||||||||||||||||||||
Advisory and Brokerage Assets | ||||||||||||||||||||||||||||||||
Advisory assets(14) | $ | 643.2 | $ | 620.1 | 4% | $ | 623.3 | $ | 594.0 | |||||||||||||||||||||||
Brokerage assets(15) | 563.2 | 550.7 | 2% | 557.2 | 538.6 | |||||||||||||||||||||||||||
Total Advisory and Brokerage Assets | $ | 1,206.4 | $ | 1,170.8 | 3% | $ | 1,180.5 | $ | 1,132.6 | |||||||||||||||||||||||
Net New Assets (NNA) | ||||||||||||||||||||||||||||||||
Net new advisory assets(19) | $ | 10.5 | $ | 7.1 | n/m | $ | 6.6 | $ | 9.6 | |||||||||||||||||||||||
Net new brokerage assets(20) | 1.6 | (0.3) | n/m | 0.7 | 1.8 | |||||||||||||||||||||||||||
Total Net New Assets | $ | 12.1 | $ | 6.9 | n/m | $ | 7.2 | $ | 11.4 | |||||||||||||||||||||||
Net brokerage to advisory conversions(22) | $ | 1.1 | $ | 1.2 | n/m | $ | 1.1 | $ | 1.1 | |||||||||||||||||||||||
Organic Net New Assets (NNA)(21) | ||||||||||||||||||||||||||||||||
Net new advisory assets(19) | $ | 10.5 | $ | 7.1 | n/m | $ | 6.6 | $ | 9.0 | |||||||||||||||||||||||
Net new brokerage assets(20) | 1.6 | (0.3) | n/m | 0.7 | 0.1 | |||||||||||||||||||||||||||
Total Organic Net New Assets | $ | 12.1 | $ | 6.9 | n/m | $ | 7.2 | $ | 9.1 | |||||||||||||||||||||||
Client Cash Balances | ||||||||||||||||||||||||||||||||
Insured cash account balances | $ | 30.0 | $ | 29.9 | —% | $ | 29.3 | $ | 30.5 | |||||||||||||||||||||||
Deposit cash account balances | 9.3 | 8.5 | 9% | 8.5 | 8.6 | |||||||||||||||||||||||||||
Total Bank Sweep Balances | 39.3 | 38.4 | 2% | 37.8 | 39.0 | |||||||||||||||||||||||||||
Money market account cash balances | 16.1 | 11.6 | 39% | 11.3 | 9.9 | |||||||||||||||||||||||||||
Purchased money market funds | 1.9 | 1.9 | —% | 1.8 | 1.8 | |||||||||||||||||||||||||||
Total Money Market Balances | 18.0 | 13.5 | 33% | 13.1 | 11.7 | |||||||||||||||||||||||||||
Total Client Cash Balances | $ | 57.3 | $ | 51.9 | 10% | $ | 50.9 | $ | 50.7 | |||||||||||||||||||||||
Net buy (sell) activity(28) | $ | 4.7 | $ | 5.5 | n/m | $ | 5.8 | $ | 5.5 | |||||||||||||||||||||||
Market Indices | ||||||||||||||||||||||||||||||||
S&P 500 index (end of period) | 4,766 | 4,567 | 4% | 4,605 | 4,308 | |||||||||||||||||||||||||||
Russell 2000 Index (end of period) | 2,245 | 2,199 | 2% | 2,297 | 2,204 | |||||||||||||||||||||||||||
Fed funds effective rate (average bps) | 8 | 8 | —bps | 8 | 8 |
Q4 2021 | Q3 2021 | Change | Q4 2020 | Change | |||||||||||||||||||||||||
Commission Revenue by Product | |||||||||||||||||||||||||||||
Annuities | $ | 310,889 | $ | 314,134 | (1%) | $ | 262,235 | 19% | |||||||||||||||||||||
Mutual funds | 198,210 | 201,120 | (1%) | 153,330 | 29% | ||||||||||||||||||||||||
Fixed income | 29,427 | 30,092 | (2%) | 24,395 | 21% | ||||||||||||||||||||||||
Equities | 33,604 | 28,943 | 16% | 31,231 | 8% | ||||||||||||||||||||||||
Other | 40,707 | 36,095 | 13% | 31,829 | 28% | ||||||||||||||||||||||||
Total commission revenue | $ | 612,837 | $ | 610,384 | —% | $ | 503,020 | 22% | |||||||||||||||||||||
Commission Revenue by Sales-based and Trailing | |||||||||||||||||||||||||||||
Sales-based commissions | |||||||||||||||||||||||||||||
Annuities | $ | 108,023 | $ | 108,983 | (1%) | $ | 89,125 | 21% | |||||||||||||||||||||
Mutual funds | 46,986 | 46,934 | —% | 36,715 | 28% | ||||||||||||||||||||||||
Fixed income | 29,427 | 30,092 | (2%) | 24,395 | 21% | ||||||||||||||||||||||||
Equities | 33,604 | 28,943 | 16% | 31,231 | 8% | ||||||||||||||||||||||||
Other | 30,342 | 24,852 | 22% | 21,038 | 44% | ||||||||||||||||||||||||
Total sales-based commissions | $ | 248,382 | $ | 239,804 | 4% | $ | 202,504 | 23% | |||||||||||||||||||||
Trailing commissions | |||||||||||||||||||||||||||||
Annuities | $ | 202,866 | $ | 205,151 | (1%) | $ | 173,110 | 17% | |||||||||||||||||||||
Mutual funds | 151,224 | 154,186 | (2%) | 116,615 | 30% | ||||||||||||||||||||||||
Other | 10,365 | 11,243 | (8%) | 10,791 | (4%) | ||||||||||||||||||||||||
Total trailing commissions | $ | 364,455 | $ | 370,580 | (2%) | $ | 300,516 | 21% | |||||||||||||||||||||
Total commission revenue | $ | 612,837 | $ | 610,384 | —% | $ | 503,020 | 22% | |||||||||||||||||||||
Payout Rate(7) | 87.60 | % | 87.15 | % | 45bps | 86.57 | % | 103bps |
Q4 2021 | Q3 2021 | Q4 2020 | |||||||||||||||
Corporate Cash(3) | |||||||||||||||||
Cash at Parent | $ | 202,407 | $ | 181,061 | $ | 201,385 | |||||||||||
Excess cash at LPL Financial LLC per Credit Agreement | 15,903 | 62,637 | 67,574 | ||||||||||||||
Other available cash | 18,677 | 21,953 | 10,960 | ||||||||||||||
Total Corporate Cash | $ | 236,987 | $ | 265,651 | $ | 279,919 | |||||||||||
Leverage Ratio | |||||||||||||||||
Total debt | $ | 2,838,600 | $ | 2,751,275 | $ | 2,359,300 | |||||||||||
Total corporate cash | 236,987 | 265,651 | 279,919 | ||||||||||||||
Credit Agreement Net Debt | $ | 2,601,613 | $ | 2,485,624 | $ | 2,079,381 | |||||||||||
Credit Agreement EBITDA (trailing twelve months)(29) | $ | 1,150,691 | $ | 1,141,569 | $ | 961,225 | |||||||||||
Leverage Ratio | 2.26 | x | 2.18 | x | 2.16 | x |
December 31, 2021 | ||||||||||||||||||||||||||||||||
Total Debt | Balance | Current Applicable Margin | Yield At Issuance | Interest Rate | Maturity | |||||||||||||||||||||||||||
Revolving Credit Facility(a)(b) | $ | 55,000 | ABR+25bps | 3.500 | % | 3/15/2026 | ||||||||||||||||||||||||||
Broker-Dealer Revolving Credit Facility(c) | — | FFR+125bps | — | % | 7/31/2024 | |||||||||||||||||||||||||||
Senior Secured Term Loan B | 1,048,600 | LIBOR+175 bps(d) | 1.849 | % | 11/12/2026 | |||||||||||||||||||||||||||
Senior Unsecured Notes(e) | 400,000 | 4.625% Fixed | 4.625 | % | 4.625 | % | 11/15/2027 | |||||||||||||||||||||||||
Senior Unsecured Notes(f) | 900,000 | 4.000% Fixed | 4.000 | % | 4.000 | % | 3/15/2029 | |||||||||||||||||||||||||
Senior Unsecured Notes(g) | 400,000 | 4.375% Fixed | 4.375 | % | 4.375 | % | 5/15/2031 | |||||||||||||||||||||||||
Unsecured, Uncommitted Lines of Credit(h)(b) | 35,000 | Broker Base Rate+75bps | 1.000 | % | 9/30/2022 | |||||||||||||||||||||||||||
Total / Weighted Average | $ | 2,838,600 | 3.300 | % |
Q4 2021 | Q3 2021 | Change | Q4 2020 | Change | |||||||||||||||||||||||||
Advisors | |||||||||||||||||||||||||||||
Advisors | 19,876 | 19,627 | 1 | % | 17,287 | 15 | % | ||||||||||||||||||||||
Net new advisors | 249 | 513 | n/m | 119 | n/m | ||||||||||||||||||||||||
Annualized advisory fees and commissions per advisor(30) | $ | 326 | $ | 324 | 1 | % | $ | 265 | 23 | % | |||||||||||||||||||
Average total assets per advisor ($ in millions)(31) | $ | 60.7 | $ | 57.7 | 5 | % | $ | 52.2 | 16 | % | |||||||||||||||||||
Transition assistance loan amortization ($ in millions)(32) | $ | 39.6 | $ | 38.4 | 3 | % | $ | 29.7 | 33 | % | |||||||||||||||||||
Total client accounts (in millions) | 7.2 | 7.1 | 1 | % | 6.0 | 20 | % | ||||||||||||||||||||||
Employees - period end | 5,919 | 5,457 | 8 | % | 4,756 | 24 | % | ||||||||||||||||||||||
Productivity Metrics | |||||||||||||||||||||||||||||
Business Solutions subscriptions(33) | 3,022 | 2,598 | 16 | % | 1,410 | 114 | % | ||||||||||||||||||||||
Advisory revenues as a % of corporate advisory assets(34) | 1.00 | % | 1.00 | % | — | bps | 1.02 | % | (2 | bps) | |||||||||||||||||||
Gross profit ROA(35) | 22.7 | bps | 23.5 | bps | (0.8 | bps) | 26.8 | bps | (4.1 | bps) | |||||||||||||||||||
OPEX as a % of advisory and brokerage assets(36) | 15.3 | bps | 15.5 | bps | (0.2 | bps) | 17.5 | bps | (2.2 | bps) | |||||||||||||||||||
EBIT ROA(37) | 7.4 | bps | 8.0 | bps | (0.6 | bps) | 9.3 | bps | (1.9 | bps) | |||||||||||||||||||
AUM retention rate (quarterly annualized)(38) | 98.3 | % | 97.8 | % | 50 | bps | 97.7 | % | 60 | bps | |||||||||||||||||||
Recurring gross profit rate(39) | 85.2 | % | 84.4 | % | 80 | bps | 84.8 | % | 40 | bps | |||||||||||||||||||
EBITDA as a % of gross profit | 35.0 | % | 35.6 | % | (60 | bps) | 40.6 | % | (560 | bps) | |||||||||||||||||||
Capital expenditure ($ in millions)(40) | $ | 76.0 | $ | 54.9 | 38 | % | $ | 43.6 | 74 | % | |||||||||||||||||||
Share repurchases ($ in millions) | $ | 50.0 | $ | 40.0 | 25 | % | $ | — | 100 | % | |||||||||||||||||||
Dividends ($ in millions) | 20.0 | 20.1 | — | % | 19.8 | 1 | % | ||||||||||||||||||||||
Total Capital Returned ($ in millions) | $ | 70.0 | $ | 60.1 | 16 | % | $ | 19.8 | 254 | % | |||||||||||||||||||
Weighted-average share count, diluted | 81.7 | 81.8 | — | % | 80.9 | 1 | % | ||||||||||||||||||||||
Total Capital Returned per Share(41) | $ | 0.86 | $ | 0.73 | 18 | % | $ | 0.25 | 244 | % |
Q4 2021 | Q3 2021 | Q4 2020 | |||||||||||||||
Total revenue | $ | 2,094,192 | $ | 2,020,763 | $ | 1,581,283 | |||||||||||
Advisory and commission expense | 1,431,157 | 1,366,832 | 1,029,739 | ||||||||||||||
Brokerage, clearing and exchange expense | 20,372 | 22,828 | 17,762 | ||||||||||||||
Gross profit(+) | $ | 642,663 | $ | 631,103 | $ | 533,782 |
Years Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Total revenue | $ | 7,720,830 | $ | 5,871,640 | |||||||
Advisory and commission expense | 5,180,090 | 3,697,147 | |||||||||
Brokerage, clearing and exchange expense | 86,023 | 71,185 | |||||||||
Gross Profit(+) | $ | 2,454,717 | $ | 2,103,308 |
Q4 2021 | Q3 2021 | Q4 2020 | |||||||||||||||
Production-based payout | $ | 1,410,458 | $ | 1,368,348 | $ | 987,882 | |||||||||||
Advisor deferred compensation expense | 20,699 | (1,516) | 41,857 | ||||||||||||||
Advisory and commission expense | $ | 1,431,157 | $ | 1,366,832 | $ | 1,029,739 | |||||||||||
Advisory and commission revenue | $ | 1,610,175 | $ | 1,570,117 | $ | 1,141,201 | |||||||||||
Payout rate | 87.60 | % | 87.15 | % | 86.57 | % |
Q4 2021 | Q3 2021 | Q4 2020 | |||||||||||||||
Interest income | $ | 7,780 | $ | 7,365 | $ | 6,707 | |||||||||||
Plus: Other revenue | 24,506 | 1,218 | 45,232 | ||||||||||||||
(Less) Plus: Advisor deferred compensation expense | (20,699) | 1,516 | (41,857) | ||||||||||||||
Interest income and other, net | $ | 11,587 | $ | 10,099 | $ | 10,082 |
Q4 2021 | Q3 2021 | Q4 2020 | |||||||||||||||
Core G&A Reconciliation | |||||||||||||||||
Total expense | $ | 1,957,633 | $ | 1,882,784 | $ | 1,435,450 | |||||||||||
Advisory and commission | 1,431,157 | 1,366,832 | 1,029,739 | ||||||||||||||
Depreciation and amortization | 40,816 | 38,409 | 28,650 | ||||||||||||||
Amortization of other intangibles | 20,373 | 21,531 | 17,270 | ||||||||||||||
Brokerage, clearing and exchange | 20,372 | 22,828 | 17,762 | ||||||||||||||
Interest expense on borrowings | 27,121 | 27,063 | 24,979 | ||||||||||||||
Total G&A | 417,794 | 406,121 | 317,050 | ||||||||||||||
Promotional (ongoing)(11) | 86,071 | 83,630 | 48,342 | ||||||||||||||
Acquisition costs(11) | 14,291 | 35,887 | — | ||||||||||||||
Employee share-based compensation | 9,589 | 9,763 | 7,542 | ||||||||||||||
Regulatory charges | 8,442 | 5,976 | 8,775 | ||||||||||||||
Core G&A | $ | 299,401 | $ | 270,865 | $ | 252,391 |
Years Ended December 31, | |||||||||||
Core G&A Reconciliation | 2021 | 2020 | |||||||||
Total expense | $ | 7,119,501 | $ | 5,245,567 | |||||||
Advisory and commission | 5,180,090 | 3,697,147 | |||||||||
Depreciation and amortization | 151,428 | 109,732 | |||||||||
Interest expense on borrowings | 104,414 | 105,765 | |||||||||
Brokerage, clearing and exchange | 86,023 | 71,185 | |||||||||
Amortization of other intangibles | 79,260 | 67,358 | |||||||||
Loss on extinguishment of debt | 24,400 | — | |||||||||
Total G&A | 1,493,886 | 1,194,380 | |||||||||
Promotional (ongoing)(11) | 288,016 | 208,250 | |||||||||
Acquisition costs(11) | 76,388 | — | |||||||||
Employee share-based compensation | 41,844 | 31,650 | |||||||||
Regulatory charges | 29,430 | 29,373 | |||||||||
Core G&A | $ | 1,058,208 | $ | 925,107 |
Q4 2021 | Q3 2021 | Q4 2020 | |||||||||||||||
EBITDA Reconciliation | |||||||||||||||||
Net income | $ | 108,081 | $ | 103,064 | $ | 111,548 | |||||||||||
Interest expense on borrowings | 27,121 | 27,063 | 24,979 | ||||||||||||||
Provision for income taxes | 28,478 | 34,915 | 34,285 | ||||||||||||||
Depreciation and amortization | 40,816 | 38,409 | 28,650 | ||||||||||||||
Amortization of other intangibles | 20,373 | 21,531 | 17,270 | ||||||||||||||
EBITDA | $ | 224,869 | $ | 224,982 | $ | 216,732 |
Q4 2021 | Q3 2021 | Q4 2020 | ||||||||||||||||||||||||
Amount | Per Share | Amount | Per Share | Amount | Per Share | |||||||||||||||||||||
Net income / earnings per diluted share | $ | 108,081 | $ | 1.32 | $ | 103,064 | $ | 1.26 | $ | 111,548 | $ | 1.38 | ||||||||||||||
Amortization of other intangibles | 20,373 | 0.25 | 21,531 | 0.26 | 17,270 | 0.21 | ||||||||||||||||||||
Acquisition costs | 14,291 | 0.17 | 35,887 | 0.44 | — | — | ||||||||||||||||||||
Tax benefit | (9,217) | (0.11) | (15,399) | (0.19) | (4,836) | (0.06) | ||||||||||||||||||||
Adjusted net income / EPS prior to amortization of intangible assets and acquisition costs | $ | 133,528 | $ | 1.63 | $ | 145,083 | 1.77 | $ | 123,982 | $ | 1.53 | |||||||||||||||
Diluted share count | 81,744 | 81,849 | 80,904 |
Years Ended December 31, | |||||||||||||||||
2021 | 2020 | ||||||||||||||||
Amount | Per Share | Amount | Per Share | ||||||||||||||
Net income / earnings per diluted share | $ | 459,866 | $ | 5.63 | $ | 472,640 | $ | 5.86 | |||||||||
Amortization of other intangibles | 79,260 | 0.97 | 67,358 | 0.83 | |||||||||||||
Acquisition costs | 76,388 | 0.93 | — | — | |||||||||||||
Tax benefit | (41,387) | (0.51) | (18,860) | (0.23) | |||||||||||||
Adjusted net income / EPS prior to amortization of intangible assets and acquisition costs | $ | 574,127 | $ | 7.02 | $ | 521,138 | $ | 6.46 | |||||||||
Diluted share count | 81,742 | 80,702 |
Q4 2021 | Q3 2021 | Q4 2020 | |||||||||||||||
EBITDA and Credit Agreement EBITDA Reconciliations | |||||||||||||||||
Net income | $ | 459,866 | $ | 463,333 | $ | 472,640 | |||||||||||
Interest expense on borrowings | 104,414 | 102,272 | 105,765 | ||||||||||||||
Provision for income taxes | 141,463 | 147,270 | 153,433 | ||||||||||||||
Depreciation and amortization | 151,428 | 139,262 | 109,732 | ||||||||||||||
Amortization of other intangibles | 79,260 | 76,157 | 67,358 | ||||||||||||||
EBITDA | $ | 936,431 | $ | 928,294 | $ | 908,928 | |||||||||||
Credit Agreement Adjustments: | |||||||||||||||||
Employee share-based compensation expense | $ | 41,844 | $ | 39,797 | $ | 31,650 | |||||||||||
Advisor share-based compensation expense | 2,324 | 2,316 | 2,321 | ||||||||||||||
M&A accretion | 53,550 | 65,379 | — | ||||||||||||||
Loss on extinguishment of debt | 24,400 | 24,400 | — | ||||||||||||||
Acquisition costs and other | 92,142 | 81,383 | 18,326 | ||||||||||||||
Credit Agreement EBITDA (trailing twelve months) | $ | 1,150,691 | $ | 1,141,569 | $ | 961,225 |
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Document and Entity Information Document |
Feb. 03, 2022 |
---|---|
Cover page. [Abstract] | |
Document Type | 8-K |
Document Period End Date | Feb. 03, 2022 |
Entity Registrant Name | LPL Financial Holdings Inc. |
Entity Incorporation, State or Country Code | DE |
Entity File Number | 001-34963 |
Entity Tax Identification Number | 20-3717839 |
Entity Address, Address Line One | 4707 Executive Drive, |
Entity Address, City or Town | San Diego, |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 92121 |
City Area Code | (800) |
Local Phone Number | 877-7210 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common Stock - par value $0.001 per share |
Trading Symbol | LPLA |
Security Exchange Name | NASDAQ |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0001397911 |
Amendment Flag | false |
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