B-D roll-up boosts LPL's earnings

Income at LPL Investment Holdings Inc. was up last year, but it fell far short of reaching the highs of the 2007 bull market. With 11,950 reps and advisers, LPL reported $47.5 million in net income last year, a hike of 4.4% compared with 2008. LPL recorded its strongest year in 2007, when the company's earnings topped $61 million. The increase in earnings in 2009 came as the firm saw its net revenue drop 11.8% to $2.75 billion. In a statement, the company said it had a “particularly strong fourth quarter” in 2009, with net income of $18.6 million, versus $2.4 million for the comparable period in 2008. LPL's fourth-quarter income was “also propelled by cost savings already being realized from the successful integration of the operations of our affiliated broker-dealers.” Over the summer, LPL moved the reps and operations of three broker-dealers, Mutual Service Corp., Waterstone Financial Group Inc. and Associated Securities Corp. With the roll-up, LPL said last summer it was cutting 215 jobs. But the move also triggered a $59 million restructuring charge in '09. This year, the company will take an additional $14 million charge related to the roll-up. LPL said it anticipates annual cost savings of $21 million from the roll-up, with at least $6.3 million coming in 2009. [To see LPL's full results for Q4 and 2009, click here].