LPL Financial Holdings Inc To Acquire Commonwealth Financial Network Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Cyprys - Morgan Stanley - Analyst : Hoping to kick off with a question for Wayne since you've joined the call here. Maybe you could talk -- hoping you could talk about the growth that you've seen at Commonwealth over the years. You've grown that to $285 billion of assets in a highly competitive industry. Can you talk about the steps that you've taken over the years in managing the business and the steps you've taken to be recognized for the industry-leading service that was mentioned on the call here?

Question: Dan Fannon - Jefferies - Analyst : I was hoping you guys could help bridge the EBITDA of the $120 million as of the 12/31 level to the over $400 million you're expecting post integration, how much of that is expense synergies versus revenue synergies, and then give a little bit more specifics around the buckets to where you think you can leverage the most.

Question: Dan Fannon - Jefferies - Analyst : And just to clarify, so a larger percentage of revenue synergies and expense synergies in those numbers. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 31, 2025 / 12:00PM, LPLA.OQ - LPL Financial Holdings Inc To Acquire Commonwealth Financial Network

Question: Dan Fannon - Jefferies - Analyst : Got it. And then just a follow-up on the growth, 11% AUM CAGR for Commonwealth, but that obviously includes some beta. Can you strip out the organic growth over the last several years of the business on a stand-alone basis?

Question: Bill Katz - TD Cowen - Analyst : Congrats on the transaction. For Mr. Bloom, I'm curious. You mentioned a number of things that have powered your franchise over the last several years, but you also mentioned the import of LPL Financials. So in particular, I was wondering if you could highlight where you see the opportunity for incremental services. And then for Rich, I'm curious. From your perspective, what do you see as some of the incremental best practices that might accelerate growth for the legacy part of the business?

Question: Bill Katz - TD Cowen - Analyst : Great. Maybe just a follow-up. Just maybe more of a financials question. I think everything is geared off of 12/31, so maybe a couple of parts to this. One is, how do we think about the mix between equity and fixed income with the assets just given the market

Question: Steven Chubak - Wolfe Research - Analyst : Congrats on the deal. Rich, I mean, you've been clear on your ambitions to increase your capture rate of breakaway wirehouse teams. Just given Commonwealth's reputation for attracting and servicing some of these larger teams, just want to better understand how the deal can strengthen your value prop with attracting more of those breakaway wirehouse advisors.

Question: Steven Chubak - Wolfe Research - Analyst : Great. And Rich, you've touched on this a little bit already, but I was hoping you could maybe just drill down into how you're planning to deploy some of Commonwealth's best-in-class servicing capabilities at scale across the border platform and how that might translate into some better growth or financial outcomes for LPL.

Question: Devin Ryan - Citizens - Analyst : Congratulations to all here. Really nice deal. First question, you hit on it. But if I look at this on an EBIT ROA basis, it implies, on the run rate pro forma number, like a 14-basis-point EBIT ROA, which was roughly in line with what you all announced with the Atria deal. And obviously, Commonwealth is 75% advisory. 25% was advisory to Atria. So I know we don't have anything beyond 2026, but the 14 basis points as a headline, it feels maybe a little bit conservative. So it would just be great to maybe just get a read on that. And then as we look beyond 2026, you hit on a couple, but just love to hear about some of the bigger picture long-term synergies of these two platforms.

Question: Benjamin Budish - Barclays - Analyst : I wanted to check on a few financial details. I guess, first, I apologize if you mentioned this before, but the expected adjusted EBITDA by the end of 2026, is that predicated on current adjusted EBITDA run rate with synergies, but at the current level of AUM and not assuming any incremental growth? And then the other thing I wanted to check on, Matt, you mentioned that there's a plan to deleverage once Commonwealth is onboarded. Curious how the timing of onboarding and integration costs impact the timing of deleveraging. And what does that mean in terms of when do you get back to a point where you could be repurchasing shares?

Question: Mike Brown - Wells Fargo Securities, LLC - Analyst : Most have been asked, but I just wanted to -- maybe a couple of ticky-tacky questions for you. Just wanted to hear a little bit about the cash levels at Commonwealth. How should we think about that cash as a percentage of client assets? Where is that typically at historically and is where it is currently a good level to consider as we think about modeling this out?

Question: Mike Brown - Wells Fargo Securities, LLC - Analyst : Yeah. No dogs are allowed in the office here, so wasn't me. But thanks for clarifying, Rich.