LPL Financial Acquires Altria Wealth Solutions, Appoints New CEO

LPL Financial Holdings LPLA, along with its subsidiaries LPL Financial LLC, has completed the acquisition of Altria Wealth Solutions, Inc. ("Altria"). Further, the company announced a change in its leadership with the termination of its existing president and chief executive officer and the appointment of a new CEO.

Details of Acquisition Pursued by LPLA

Atria Wealth Solutions, Inc., based in New York, boasts a network of almost 2,400 advisors and serves around 150 banks and credit unions, managing an impressive $100 billion in brokerage and advisory assets. Notably, brokerage accounts comprise nearly 80% of the firm's assets, with the rest in advisory holdings.

Per the acquisition announcement dated Feb. 13, 2024, LPLA expected onboarding and integration costs to be between $300 million and $350 million. Despite these expenses, the long-term financial projections are promising, with LPLA anticipating additional earnings of $140 million annually from the deal.

LPL Financial expects to meet or exceed its retention target of 80%. Altria will function as a wholly owned portfolio company through the onboarding of Altria advisors, which is anticipated to be completed in mid-2025.

The acquisition aligns with LPL Financial's goal to empower independent financial advisors and institutions nationwide by providing them with comprehensive support and resources. The acquisition of Atria Wealth Solutions builds upon LPL Financial's previous successful ventures, including the acquisition of National Planning Holdings and Waddell & Reed in 2017 and 2021, respectively.

Further, LPLA considers acquisitions a core part of its business expansion strategy. In May, the company acquired Crown Capital, while in September, it agreed to acquire The Investment Center, Inc., reinforcing its strategy of expanding its advisor network and enhancing offerings.

LPL Financial Leadership Change

LPLA's board of directors terminated the company's president and chief executive officer, Dan H. Arnold for violation of the company's commitment to a respectful workplace. He has submitted his resignation from the board as well.

The dismissal is based on the cause recommended by a special committee of directors following an investigation by an external law firm, which concluded that Arnold had made statements to employees that breached LPLA's code of conduct.

The board has appointed Rich Steinmeier (presently the company's managing director and chief growth officer) as interim CEO, effective immediately.

James Putnam, chair of the board of directors at LPL Financial, stated, "LPL's Code of Conduct requires every employee, no matter their title, to foster a supportive and professional workplace and show respect to each other, our stakeholders and the broader community, Mr. Arnold failed to meet these obligations."

LPL Financial's Zacks Rank & Price Performance

Year to date, shares of LPL Financial have risen 1% compared with the industry's growth of 17.7%.

Image Source: Zacks Investment Research

Currently, LPLA carries a Zacks Rank #3 (Hold).

Merger & Acquisition Deal Pursued by Other Finance Firms

This week, Byline Bancorp, Inc. BY entered into a cash and stock merger deal worth $41 million with First Security Bancorp, Inc. in an effort to strengthen its position in Chicago.

The merger is expected to solidify Byline's position as Chicago's largest community bank, with assets under $10 billion, loans of $7.3 billion and deposits worth $7.8 billion, along with 45 branches across the greater Chicago metropolitan area.

Last week, TowneBank TOWN agreed to acquire Village Bank and Trust Financial Corp. VBFC. The all-cash transaction is valued at $120 million.

The deal is anticipated to be roughly 6% accretive to TOWN's 2025 earnings per share, assuming the execution of cost savings on a GAAP basis. Further, TOWN projects a roughly 1% improvement in common equity tier 1 capital and an 80-basis points improvement in efficiency ratio next year.

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