FIRST QUARTER 2022 HIGHLIGHTS
- Total transaction volume of $12.7
billion, up 40% from Q1'21
- Total revenues of $319.4
million, up 42% from Q1'21
- Net income of $71.2 million
and diluted earnings per share of $2.12, up 23% and 18%, respectively, from
Q1'21
- Adjusted EBITDA1 of $62.6
million, up 3% from Q1'21
- Servicing portfolio of $116.3
billion at March 31, 2022 up
6% from March 31, 2021
- Completed the acquisition of GeoPhy
- Declared quarterly dividend of $0.60 per share for the second quarter
- Promoted Steve Theobald to
Chief Operating Officer and Greg
Florkowski to Chief Financial Officer
BETHESDA, Md., May 5, 2022
/PRNewswire/ -- Walker & Dunlop, Inc. (NYSE: WD) (the
"Company" or "W&D") reported total revenues of $319.4 million for the first quarter of 2022, an
increase of 42% year over year. Net income for the first quarter of
2022 was $71.2 million or
$2.12 per diluted share, up 23% and
18%, respectively, from the first quarter of 2021. First quarter
2022 adjusted EBITDA1 was $62.6
million, up 3% over the same period in 2021. First quarter
total transaction volume was $12.7
billion, up 40% year over year. The Company's Board of
Directors declared a dividend of $0.60 per share for the second quarter of 2022.
The Company promoted Steve Theobald
to Executive Vice President and Chief Operating Officer, effective
June 1, 2022, at which time
Greg Florkowski will assume the role
of Executive Vice President and Chief Financial Officer.
Walker & Dunlop Chairman and CEO Willy Walker commented, "The breadth of Walker
& Dunlop's platform, capabilities, and brand resulted in 40%
year-over-year growth in total transaction volume to $12.7 billion in the first quarter of 2022,
driving total revenues to $319
million, up 42% year over year, and diluted earnings
per share of $2.12, up 18% from the
first quarter of last year. We recently made the two largest
acquisitions in W&D's history, Alliant and GeoPhy, which
dramatically expand our presence in the affordable housing industry
and accelerate our growth as a technologically-enabled financial
services company. The growth and market share gains in our
core businesses, along with our investments in new businesses and
technology, position Walker & Dunlop extremely well to achieve
our mission of becoming the premier commercial real estate finance
company in the United
States."
Mr. Walker continued, "Exceptional service delivery is a
hallmark of W&D. We have asked Steve
Theobald to become Chief Operating Officer to drive service
delivery, integration, and technology implementation across Walker
& Dunlop. Greg Florkowski, who
has been an integral member of our finance and accounting team
before running business development for the past three years, will
become Chief Financial Officer. It is a joy to see these two
talented executives moving into new roles that will bring
significant benefits to W&D."
CONSOLIDATED FIRST QUARTER 2022 OPERATING
RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
|
TRANSACTION
VOLUMES
|
(dollars in
thousands)
|
|
|
Q1
2022
|
|
|
Q1
2021
|
|
$
Variance
|
|
%
Variance
|
Fannie Mae
|
|
$
|
1,998,374
|
|
$
|
1,533,024
|
|
$
|
465,350
|
|
30
|
%
|
Freddie Mac
|
|
|
987,849
|
|
|
1,012,720
|
|
|
(24,871)
|
|
(2)
|
|
Ginnie Mae -
HUD
|
|
|
391,693
|
|
|
622,133
|
|
|
(230,440)
|
|
(37)
|
|
Brokered
(2)
|
|
|
5,643,081
|
|
|
4,302,492
|
|
|
1,340,589
|
|
31
|
|
Principal Lending and
Investing (3)
|
|
|
114,020
|
|
|
178,250
|
|
|
(64,230)
|
|
(36)
|
|
Debt financing
volume
|
|
$
|
9,135,017
|
|
$
|
7,648,619
|
|
$
|
1,486,398
|
|
19
|
%
|
Property sales
volume
|
|
|
3,531,690
|
|
|
1,395,760
|
|
|
2,135,930
|
|
153
|
|
Total transaction
volume
|
|
$
|
12,666,707
|
|
$
|
9,044,379
|
|
$
|
3,622,328
|
|
40
|
%
|
Discussion of Results:
- Total debt financing volume increased 19% from the first
quarter of 2021. Driving the overall increase was a 17% increase in
GSE debt financing volumes, driven by strong Fannie Mae lending
activity. Our GSE market share increased in the first quarter of
2022 to 12.3% compared to 11.4% at December
31, 2021. Despite the decreases in Freddie Mac and HUD debt
financing volume, Agency debt financing volume saw a 7% increase
quarter over quarter, indicating continued strength in the
multifamily financing market.
- The 31% increase in brokered volume in the first quarter of
2022 reflects our team's ability to meet our clients' broad range
of capital needs within uncertain market conditions, continued
demand for all commercial real estate property types, and the
impacts of our investments in people, brand and technology. We
continue to see a benefit from our investments in acquiring and
recruiting commercial mortgage bankers, the significant amount of
capital being invested into U.S. commercial real estate, and our
valued relationships with commercial real estate capital
providers.
- Property sales volume increased 153% in the first quarter of
2022 due to the significant growth in our property sales team over
the past year in key markets and strong investor demand for
multifamily assets.
|
|
|
|
|
|
|
|
|
|
|
|
|
MANAGED
PORTFOLIO
|
(dollars in
thousands, unless otherwise noted)
|
|
|
Q1
2022
|
|
|
Q1
2021
|
|
$
Variance
|
|
%
Variance
|
Fannie Mae
|
|
$
|
54,000,550
|
|
$
|
50,113,076
|
|
$
|
3,887,474
|
|
8
|
%
|
Freddie Mac
|
|
|
36,965,185
|
|
|
37,695,462
|
|
|
(730,277)
|
|
(2)
|
|
Ginnie Mae -
HUD
|
|
|
9,954,262
|
|
|
9,754,667
|
|
|
199,595
|
|
2
|
|
Brokered
|
|
|
15,115,619
|
|
|
12,090,825
|
|
|
3,024,794
|
|
25
|
|
Principal Lending and
Investing
|
|
|
221,649
|
|
|
213,240
|
|
|
8,409
|
|
4
|
|
Total Servicing
Portfolio
|
|
$
|
116,257,265
|
|
$
|
109,867,270
|
|
$
|
6,389,995
|
|
6
|
%
|
Assets under
management
|
|
|
16,687,112
|
|
|
1,836,086
|
|
|
14,851,026
|
|
809
|
|
Total Managed
Portfolio
|
|
$
|
132,944,377
|
|
$
|
111,703,356
|
|
$
|
21,241,021
|
|
19
|
%
|
Custodial escrow
account balance (in billions)
|
|
$
|
2.5
|
|
$
|
2.5
|
|
|
|
|
|
|
Weighted-average
servicing fee rate (basis points)
|
|
|
25.0
|
|
|
24.3
|
|
|
|
|
|
|
Weighted-average
remaining servicing portfolio term (years)
|
|
|
9.1
|
|
|
9.2
|
|
|
|
|
|
|
Discussion of Results:
- Our servicing portfolio continues to expand as a result of the
debt financing volume over the past 12 months, partially offset by
payoffs of loans.
- During the first quarter of 2022, we added $0.5 billion of net loans to our servicing
portfolio, and over the past 12 months, we added $6.4 billion of net loans to our servicing
portfolio, 61% of which were Fannie Mae.
- $5.8 billion of Agency loans in
our servicing portfolio are scheduled to mature over the next two
years. These loans represent only 5% of the total portfolio, with a
relatively low weighted-average servicing fee of 19.3 basis points.
Additionally, we expect lower levels of prepayments and higher
levels of loan assumptions due to rising interest rates compared to
the past several quarters, which should benefit the growth of the
servicing portfolio in the coming quarters.
- The increase in the overall weighted-average servicing fee was
primarily due to an increase in Fannie Mae loans as a percentage of
the overall servicing portfolio year over year, coupled with a
higher weighted-average servicing fee on Fannie Mae debt financing
volumes over the past year than loans that have paid off.
- We added net mortgage servicing rights ("MSRs") from
originations of $22.7 million in the
first quarter of 2022 and $66.7
million over the past 12 months.
- The MSRs associated with our servicing portfolio had a fair
value of $1.3 billion as of
March 31, 2022, compared to
$1.2 billion as of March 31, 2021.
- Assets under management ("AUM") as of March 31, 2022 consisted of $14.5 billion of assets managed by Alliant,
$1.3 billion of loans and funds
managed by WDIP and $0.9 billion of
loans in our interim lending joint venture. The year-over-year
increase in AUM is driven by the addition of Alliant's AUM to our
portfolio upon closing the acquisition in the fourth quarter of
2021.
|
|
|
|
|
|
|
|
|
|
|
|
|
KEY PERFORMANCE
METRICS
|
(dollars in
thousands, except per share amounts)
|
|
|
Q1
2022
|
|
|
Q1
2021
|
|
$
Variance
|
|
%
Variance
|
Walker & Dunlop net
income
|
|
$
|
71,209
|
|
$
|
58,052
|
|
$
|
13,157
|
|
23
|
%
|
Adjusted
EBITDA
|
|
|
62,636
|
|
|
60,667
|
|
|
1,969
|
|
3
|
|
Diluted
EPS
|
|
$
|
2.12
|
|
$
|
1.79
|
|
$
|
0.33
|
|
18
|
%
|
Operating
margin
|
|
|
28
|
%
|
|
33
|
%
|
|
|
|
|
|
Return on
equity
|
|
|
19
|
|
|
19
|
|
|
|
|
|
|
Key Expense Metrics
(as a percentage of total revenues):
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel
expenses
|
|
|
45
|
%
|
|
43
|
%
|
|
|
|
|
|
Other operating
expenses
|
|
|
10
|
|
|
8
|
|
|
|
|
|
|
Discussion of Results:
- The increase in net income was a result of a 23% increase in
income from operations, driven by the increase in total revenues
year over year. The first quarter of 2022 includes a $39.6 million gain connected with our acquisition
of GeoPhy, which positively benefited net income. As part of the
GeoPhy acquisition, we acquired the other 50% ownership interest in
Apprise. The revaluation of our existing 50% ownership interest in
Apprise resulted in the $39.6 million
gain.
- The increase in adjusted EBITDA was a result of higher
origination fees, property sales broker fees, servicing fees and
other revenues. These increases were offset by growth in personnel
expense and other operating expenses.
- The decrease in operating margin was primarily due to the
increase in total expenses outpacing the growth in total revenues
year over year.
- The increase in personnel expenses as a percentage of revenue
was a result of commissionable revenues increasing at a faster rate
than non-commissionable revenues.
- The increase in other operating expenses as a percentage of
revenues was due to the significant investments we have made in our
infrastructure over the past year as part of our Drive to '25
growth strategy.
|
|
|
|
|
|
|
|
|
|
|
|
|
KEY CREDIT
METRICS
|
(dollars in
thousands)
|
|
|
Q1
2022
|
|
|
Q1
2021
|
|
$
Variance
|
|
%
Variance
|
At-risk servicing
portfolio (7)
|
|
$
|
50,176,521
|
|
$
|
45,796,952
|
|
$
|
4,379,569
|
|
10
|
%
|
Maximum exposure to
at-risk portfolio (8)
|
|
|
10,178,454
|
|
|
9,304,440
|
|
|
874,014
|
|
9
|
|
Defaulted
loans
|
|
$
|
78,659
|
|
$
|
48,481
|
|
$
|
30,178
|
|
62
|
%
|
Key credit metrics
(as a percentage of the at-risk portfolio):
|
|
|
|
|
|
|
|
|
|
|
|
|
Defaulted
loans
|
|
|
0.16
|
%
|
|
0.11
|
%
|
|
|
|
|
|
Allowance for
risk-sharing
|
|
|
0.11
|
|
|
0.14
|
|
|
|
|
|
|
Key credit metrics
(as a percentage of maximum exposure):
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for
risk-sharing
|
|
|
0.52
|
%
|
|
0.69
|
%
|
|
|
|
|
|
Discussion of Results:
- Our at-risk servicing portfolio, which is comprised of loans
subject to a defined risk-sharing formula, increased due to the
significant level of Fannie Mae loans added to the portfolio during
the past 12 months. As of March 31,
2022, there were two defaulted loans that were provisioned
for in 2019 and one loan that was provisioned for in 2021. The two
properties that defaulted in 2019 have been foreclosed on and final
settlement of any losses will occur in the future upon disposition
of the assets by Fannie Mae.
- The on-balance sheet interim loan portfolio, which is comprised
of loans for which we have full risk of loss, was $221.6 million at March
31, 2022 compared to $213.2
million at March 31, 2021.
There was one defaulted loan in our interim loan portfolio at
March 31, 2022, which was provisioned
for in the third quarter of 2020. All other loans in the on-balance
sheet interim loan portfolio are current and performing as of
March 31, 2022. The interim loan
joint venture holds $0.9 billion of
loans as of March 31, 2022, compared
to $0.6 billion as of March 31, 2021. We share in a small portion of
the risk of loss, and as of March 31,
2022, all loans in the interim loan joint venture are
current and performing.
FIRST QUARTER 2022 FINANCIAL RESULTS BY
SEGMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL RESULTS -
CAPITAL MARKETS
|
(dollars in
thousands)
|
|
|
Q1
2022
|
|
|
Q1
2021
|
|
|
$
Variance
|
|
%
Variance
|
|
Loan origination and debt brokerage fees, net
|
|
$
|
81,823
|
|
$
|
75,295
|
|
$
|
6,528
|
|
9
|
%
|
Fair value of expected net cash flows from servicing, net
("MSR income")
|
|
|
52,730
|
|
|
57,935
|
|
|
(5,205)
|
|
(9)
|
|
Property sales broker fees
|
|
|
23,398
|
|
|
9,042
|
|
|
14,356
|
|
159
|
|
Net
warehouse interest income, LHFS
|
|
|
3,530
|
|
|
2,459
|
|
|
1,071
|
|
44
|
|
Other revenues
|
|
|
2,763
|
|
|
2,560
|
|
|
203
|
|
8
|
|
Total
revenues
|
|
$
|
164,244
|
|
$
|
147,291
|
|
$
|
16,953
|
|
12
|
%
|
Personnel
|
|
$
|
98,726
|
|
$
|
72,635
|
|
$
|
26,091
|
|
36
|
%
|
Amortization and depreciation
|
|
|
—
|
|
|
521
|
|
|
(521)
|
|
(100)
|
|
Other operating expenses
|
|
|
6,111
|
|
|
3,402
|
|
|
2,709
|
|
80
|
|
Total
expenses
|
|
$
|
104,837
|
|
$
|
76,558
|
|
$
|
28,279
|
|
37
|
%
|
Income from
operations
|
|
$
|
59,407
|
|
$
|
70,733
|
|
$
|
(11,326)
|
|
(16)
|
%
|
Income tax expense
|
|
|
12,847
|
|
|
14,615
|
|
|
(1,768)
|
|
(12)
|
|
Walker & Dunlop
net income
|
|
$
|
46,560
|
|
$
|
56,118
|
|
$
|
(9,558)
|
|
(17)
|
%
|
Key revenue metrics
(as a percentage of debt financing
volume):
|
|
|
|
|
|
|
|
|
|
|
|
|
Origination fee margin (4)
|
|
|
0.90
|
%
|
|
1.02
|
%
|
|
|
|
|
|
MSR
margin (5)
|
|
|
0.58
|
|
|
0.78
|
|
|
|
|
|
|
Agency MSR margin (6)
|
|
|
1.56
|
|
|
1.83
|
|
|
|
|
|
|
Key performance
metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
36
|
%
|
|
48
|
%
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
11,256
|
|
$
|
17,131
|
|
|
|
|
|
|
Capital Markets - Discussion of Results:
The Capital Markets segment includes our Agency lending, debt
brokerage, property sales, and appraisal and valuation
services.
- The increase in origination fees was driven by the increase in
overall debt financing volume, partially offset by the decrease in
the origination fee margin. The decrease in origination fee margin
was due to a shift in the mix of debt financing volume from 41%
Agency loans in the first quarter of 2021 to 37% Agency loans in
the first quarter of 2022. Agency loans typically carry higher
origination fees than brokered loans.
- The decrease in MSR income was the result of the decrease in
the Agency MSR margin, partially offset by a 7% increase in Agency
debt financing volume year over year. The decrease in the Agency
MSR margin was the result of the significant decline in HUD debt
financing volume as HUD loans have the highest MSR margins of all
our products. Additionally, the weighted-average servicing fee for
our Fannie Mae debt financing volume decreased 25% year over
year.
- The increase in property sales broker fees was driven by the
153% increase in property sales volume year over year.
- The increase in net warehouse interest income from loans held
for sale ("LHFS") was due to an 89% increase in the net spread,
offset by a 24% decrease in the average balance of LHFS
outstanding.
- Personnel expense increased primarily as a result of (i) an
increase in commissions expense due to the increases in origination
fees and property sales broker fees; (ii) an increase in salaries
and benefits costs due to strategic acquisitions and hiring
initiatives that contributed to a 12% increase in average bankers
and brokers year over year; and (iii) an increase in subjective
bonuses due to the increase in headcount and our financial
performance. Additionally, there was a $1.5
million increase in total compensation costs as a result of
consolidating Apprise after the acquisition of GeoPhy. The
operating results for the month of March
2022 include compensation costs for Apprise, while the
operating results for the three months ended March 31, 2021 do not as we accounted for our
investment in Apprise under the equity method in 2021.
- The increase in other operating expenses was largely
attributable to increases in travel and entertainment and marketing
costs, both of which are attributable to our overall growth over
the past year and low costs in these areas in the first quarter of
2021 due to the pandemic.
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL RESULTS -
SERVICING & ASSET MANAGEMENT
|
(dollars in
thousands)
|
|
|
Q1
2022
|
|
|
Q1
2021
|
|
|
$
Variance
|
|
%
Variance
|
|
Loan origination and debt brokerage fees, net
|
|
$
|
487
|
|
$
|
584
|
|
$
|
(97)
|
|
(17)
|
%
|
Servicing fees
|
|
|
72,681
|
|
|
65,978
|
|
|
6,703
|
|
10
|
%
|
Net
warehouse interest income, LHFI
|
|
|
1,243
|
|
|
2,096
|
|
|
(853)
|
|
(41)
|
|
Escrow earnings and other interest income
|
|
|
1,758
|
|
|
1,999
|
|
|
(241)
|
|
(12)
|
|
Other revenues
|
|
|
34,897
|
|
|
7,508
|
|
|
27,389
|
|
365
|
|
Total
revenues
|
|
$
|
111,066
|
|
$
|
78,165
|
|
$
|
32,901
|
|
42
|
%
|
Personnel
|
|
$
|
18,638
|
|
$
|
7,111
|
|
$
|
11,527
|
|
162
|
%
|
Amortization and depreciation
|
|
|
54,931
|
|
|
45,378
|
|
|
9,553
|
|
21
|
|
Provision (benefit) for credit losses
|
|
|
(9,498)
|
|
|
(11,320)
|
|
|
1,822
|
|
(16)
|
|
Other operating expenses
|
|
|
6,119
|
|
|
2,253
|
|
|
3,866
|
|
172
|
|
Total
expenses
|
|
$
|
70,190
|
|
$
|
43,422
|
|
$
|
26,768
|
|
62
|
%
|
Income from
operations
|
|
$
|
40,876
|
|
$
|
34,743
|
|
$
|
6,133
|
|
18
|
%
|
Income tax expense
|
|
|
8,839
|
|
|
7,178
|
|
|
1,661
|
|
23
|
|
Net income before
noncontrolling interests
|
|
$
|
32,037
|
|
$
|
27,565
|
|
$
|
4,472
|
|
16
|
%
|
Less: net income (loss) from noncontrolling
interests
|
|
|
(679)
|
|
|
—
|
|
|
(679)
|
|
N/A
|
|
Walker & Dunlop
net income
|
|
$
|
32,716
|
|
$
|
27,565
|
|
$
|
5,151
|
|
19
|
%
|
Key performance
metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
37
|
%
|
|
44
|
%
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
87,773
|
|
$
|
69,419
|
|
|
|
|
|
|
Servicing & Asset Management - Discussion of
Results:
The Servicing & Asset Management segment includes loan
servicing, principal lending and investing, managing
third-party capital invested in tax credit equity funds focused on
the affordable housing sector and other commercial real estate, and
real estate-related investment banking and advisory services,
including housing market research.
- The $6.4 billion net increase in
the servicing portfolio over the past 12 months was the principal
driver of the growth in servicing fees year over year, combined
with the increase in the servicing portfolio's weighted-average
servicing fee.
- Other revenues increased principally due to the additions of
fee income from Alliant and Zelman, with no comparable activity in
the prior year as these acquisitions occurred in the second half of
2021. Additionally, prepayment fees increased substantially due to
an increase in prepayment activity year over year.
- Personnel expense increased substantially year over year as a
result of increased salaries and benefits costs due to strategic
acquisitions and hiring initiatives, including both Alliant and
Zelman.
- Amortization and depreciation increased as a result of the
growth in the average balance of MSRs outstanding year over year
and an increase in prepayment activity. Additionally, we had a
$3.3 million increase in amortization
of intangible assets from our strategic investments in 2021.
- The benefit for credit losses for first quarter of 2022 was
primarily attributable to the update in our historical loss rate
factor that is based on a 10-year rolling period. The historical
loss rate decreased to 1.2 basis points as of March 31, 2022 from 1.8 basis points as of
December 31, 2021. In response to
improving unemployment statistics and the expected continued
overall health of the multifamily market, we adjusted the loss rate
for the forecast period downwards to four basis points as of
March 31, 2021 from six basis points
as of December 31, 2020, resulting in
the benefit for risk-sharing obligations for the first quarter of
2021.
- The increase in other operating expenses was largely
attributable to increases in office and other professional fees to
support the continued growth in our operations as a result of
recent acquisitions.
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL RESULTS -
CORPORATE
|
(dollars in
thousands)
|
|
|
Q1
2022
|
|
|
Q1
2021
|
|
|
$
Variance
|
|
%
Variance
|
|
Escrow earnings and other interest income
|
|
$
|
45
|
|
$
|
118
|
|
$
|
(73)
|
|
(62)
|
%
|
Other revenues
|
|
|
44,089
|
|
|
(1,286)
|
|
|
45,375
|
|
(3,528)
|
|
Total
revenues
|
|
$
|
44,134
|
|
$
|
(1,168)
|
|
$
|
45,302
|
|
(3,879)
|
%
|
Personnel
|
|
$
|
26,817
|
|
$
|
16,469
|
|
$
|
10,348
|
|
63
|
%
|
Amortization and depreciation
|
|
|
1,221
|
|
|
972
|
|
|
249
|
|
26
|
|
Interest expense on corporate debt
|
|
|
6,405
|
|
|
1,765
|
|
|
4,640
|
|
263
|
|
Other operating expenses
|
|
|
19,984
|
|
|
11,932
|
|
|
8,052
|
|
67
|
|
Total
expenses
|
|
$
|
54,427
|
|
$
|
31,138
|
|
$
|
23,289
|
|
75
|
%
|
Income from
operations
|
|
$
|
(10,293)
|
|
$
|
(32,306)
|
|
$
|
22,013
|
|
(68)
|
%
|
Income tax expense
|
|
|
(2,226)
|
|
|
(6,675)
|
|
|
4,449
|
|
(67)
|
|
Walker & Dunlop
net income
|
|
$
|
(8,067)
|
|
$
|
(25,631)
|
|
$
|
17,564
|
|
(69)
|
%
|
Key performance
metric:
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
(36,393)
|
|
$
|
(25,883)
|
|
|
|
|
|
|
Corporate - Discussion of Results:
- The increase in other revenues was primarily a result of the
$39.6 million gain connected with the
acquisition of GeoPhy discussed above, coupled with an increase in
income from our other equity method investments.
- Personnel expense increased primarily as a result of (i)
increased salaries and benefits costs due to an increase in the
average headcount year over year; and (ii) an increase in company
bonus and stock-based compensation expense associated with our
performance share plans due to our financial performance and
increased headcount.
- In the fourth quarter of 2021, we refinanced our senior secured
term loan and doubled the aggregate principal amount from
$300 million to $600 million. The term loan carries an interest
rate of SOFR plus a 10 basis point credit spread adjustment (with a
floor of 50 basis points) plus a 225 basis point spread, leading to
additional interest expense in the first quarter of 2022 compared
to the same period last year. In addition to the debt refinancing,
we incurred additional interest expense related to a note payable
at our subsidiary, Alliant, which we assumed in the fourth quarter
of 2021.
- Other operating expenses increased in the first quarter due to:
(i) an increase in legal and other professional fees and office
expenses related to our recent acquisitions and overall growth; and
(ii) an increase in travel and entertainment expenses, which were
still impacted by the effects of the pandemic in the first quarter
of 2021.
CAPITAL SOURCES AND USES
On May 4, 2022, the Company's
Board of Directors declared a dividend of $0.60 per share for the second quarter of 2022.
The dividend will be paid on June 3,
2022 to all holders of record of the Company's restricted
and unrestricted common stock as of May 19,
2022.
On February 2, 2022, our Board of
Directors authorized the repurchase of up to $75.0 million of the Company's outstanding common
stock over the coming one-year period ("2022 Share Repurchase
Program"). During the first quarter of 2022, the Company did not
repurchase any shares of its common stock under the 2022 Share
Repurchase Program. As of March 31,
2022, the Company had $75.0
million of authorized share repurchase capacity remaining
under the 2022 Share Repurchase Program.
Any future purchases made pursuant to the 2022 Share Repurchase
Program will be made in the open market or in privately negotiated
transactions from time to time as permitted by federal securities
laws and other legal requirements. The timing, manner, price and
amount of any repurchases will be determined by the Company in its
discretion and will be subject to economic and market conditions,
stock price, applicable legal requirements and other factors. The
repurchase program may be suspended or discontinued at any
time.
LEADERSHIP APPOINTMENTS
Walker & Dunlop promoted Steve
Theobald to Executive Vice President and Chief Operating
Officer. Mr. Florkowski will succeed Mr. Theobald as Executive Vice
President and Chief Financial Officer. Both leadership changes will
be effective on June 1,
2022.
Mr. Theobald has been with Walker & Dunlop in the CFO role
since 2013 during which time he has overseen the servicing,
marketing, investor relations, treasury, financial reporting, and
accounting departments. Prior to joining the Company, Mr. Theobald
served as the executive vice president and chief financial officer
of Hampton Roads Bankshares, Inc. Previously, he held numerous
senior financial positions at Capital One Financial Corporation
from 1999 to 2010, including serving as chief financial officer,
local banking. Mr. Theobald began his career at KPMG LLP. He holds
a Bachelor of Science in Business Administration in accounting from
the University of Notre Dame.
Mr. Florkowski has been with Walker & Dunlop since 2010 when
he was hired as Senior Vice President & Controller. Most
recently, he has served as Executive Vice President, Business
Development with the responsibility of developing, implementing,
and executing strategic business initiatives, including the
successful acquisitions of AKS Capital, FourPoint, TapCap, Zelman,
Alliant, and GeoPhy. Prior to joining Walker & Dunlop, Mr.
Florkowski served as a senior manager at KPMG LLP, where he began
his career. Mr. Florkowski holds a Bachelor of Science in
accounting from Salisbury
University.
|
|
|
|
|
|
|
(1)
|
Adjusted EBITDA is a
non-GAAP financial measure the Company presents to help investors
better understand our operating performance. For a reconciliation
of adjusted EBITDA to net income, refer to the sections of this
press release below titled "Non-GAAP Financial Measures", "Adjusted
Financial Metric Reconciliation to GAAP" and "Adjusted Financial
Metric Reconciliation to GAAP by Segment."
|
|
|
(2)
|
Brokered transactions
for life insurance companies, commercial banks, and other capital
sources.
|
|
|
(3)
|
Includes debt financing
volumes from our interim loan program, our interim loan joint
venture, and WDIP separate accounts.
|
|
|
(4)
|
Loan origination and
debt brokerage fees, net as a percentage of debt financing volume.
Excludes the income and debt financing volume from Principal
Lending and Investing.
|
|
|
(5)
|
MSR income as a
percentage of debt financing volume. Excludes the income and debt
financing volume from Principal Lending and Investing.
|
|
|
(6)
|
MSR income as a
percentage of Agency debt financing volume.
|
|
|
(7)
|
At-risk servicing
portfolio is defined as the balance of Fannie Mae DUS loans subject
to the risk-sharing formula described below, as well as a small
number of Freddie Mac loans on which we share in the risk of loss.
Use of the at-risk portfolio provides for comparability of the full
risk-sharing and modified risk-sharing loans because the provision
and allowance for risk-sharing obligations are based on the at-risk
balances of the associated loans. Accordingly, we have presented
the key statistics as a percentage of the at-risk
portfolio.
|
|
|
|
For example, a $15
million loan with 50% risk-sharing has the same potential risk
exposure as a $7.5 million loan with full DUS risk sharing.
Accordingly, if the $15 million loan with 50% risk-sharing
were to default, we would view the overall loss as a percentage of
the at-risk balance, or $7.5 million, to ensure comparability
between all risk-sharing obligations. To date, substantially all of
the risk-sharing obligations that we have settled have been from
full risk-sharing loans.
|
|
|
(8)
|
Represents the maximum
loss we would incur under our risk-sharing obligations if all of
the loans we service, for which we retain some risk of loss, were
to default and all of the collateral underlying these loans was
determined to be without value at the time of settlement. The
maximum exposure is not representative of the actual loss we would
incur.
|
CONFERENCE CALL INFORMATION
The Company will host a conference call to discuss its quarterly
results on Thursday, May 5, 2022 at
8:30 a.m. Eastern time. Listeners can
access the webcast via the link:
https://walkerdunlop.zoom.us/webinar/register/WN_Pp8bFPh0RU20ivYHZi03OA or
by dialing +1 408 901 0584, Webinar ID 842 5966
3665, Password 232851. Presentation materials
related to the conference call will be posted to the Investor
Relations section of the Company's website prior to the call. An
audio replay will also be available on the Investor Relations
section of the Company's website, along with the presentation
materials.
ABOUT WALKER & DUNLOP
Walker & Dunlop (NYSE: WD) is one of the largest providers
of capital to the commercial real estate industry, enabling real
estate owners and operators to bring their visions of communities —
where Americans live, work, shop and play — to life. The power of
our people, premier brand, and industry-leading technology enables
us to meet any client need – including financing, research,
property sales, valuation, and advisory services. With over 1,000
employees across every major U.S. market, Walker & Dunlop has
consistently been named one of Fortune's Great Places to Work® and
is committed to making the commercial real estate industry more
inclusive and diverse while creating meaningful social,
environmental, and economic change in our communities.
NON-GAAP FINANCIAL MEASURES
To supplement our financial statements presented in accordance
with United States generally
accepted accounting principles ("GAAP"), the Company uses adjusted
EBITDA, a non-GAAP financial measure. The presentation of adjusted
EBITDA is not intended to be considered in isolation or as a
substitute for, or superior to, the financial information prepared
and presented in accordance with GAAP. When analyzing our operating
performance, readers should use adjusted EBITDA in addition to, and
not as an alternative for, net income. Adjusted EBITDA represents
net income before income taxes, interest expense on our term loan
facility and Alliant's note payable, and amortization and
depreciation, adjusted for provision (benefit) for credit losses
net of write-offs, stock-based incentive compensation charges, the
fair value of expected net cash flows from servicing, net, and
non-cash charges associated with the extinguishment of long-term
debt, and the gain associated with the revaluation of our
previously held equity-method investment in connection with our
acquisition of GeoPhy. Because not all companies use identical
calculations, our presentation of adjusted EBITDA may not be
comparable to similarly titled measures of other companies.
Furthermore, adjusted EBITDA is not intended to be a measure of
free cash flow for our management's discretionary use, as it does
not reflect certain cash requirements such as tax and debt service
payments. The amounts shown for adjusted EBITDA may also differ
from the amounts calculated under similarly titled definitions in
our debt instruments, which are further adjusted to reflect certain
other cash and non-cash charges that are used to determine
compliance with financial covenants.
We use adjusted EBITDA to evaluate the operating performance of
our business, for comparison with forecasts and strategic plans and
for benchmarking performance externally against competitors. We
believe that this non-GAAP measure, when read in conjunction with
the Company's GAAP financials, provides useful information to
investors by offering:
- the ability to make more meaningful period-to-period
comparisons of the Company's on-going operating results;
- the ability to better identify trends in the Company's
underlying business and perform related trend analyses; and
- a better understanding of how management plans and measures the
Company's underlying business.
We believe that adjusted EBITDA has limitations in that it does
not reflect all of the amounts associated with the Company's
results of operations as determined in accordance with GAAP and
that adjusted EBITDA should only be used to evaluate the Company's
results of operations in conjunction with net income on both a
consolidated and segment basis. For more information on adjusted
EBITDA, refer to the section of this press release below titled
"Adjusted Financial Metric Reconciliation to GAAP" and "Adjusted
Financial Metric Reconciliation to GAAP By Segment."
FORWARD-LOOKING STATEMENTS
Some of the statements contained in this press release may
constitute forward-looking statements within the meaning of the
federal securities laws. Forward-looking statements relate to
expectations, projections, plans and strategies, anticipated events
or trends and similar expressions concerning matters that are not
historical facts. In some cases, you can identify forward-looking
statements by the use of forward-looking terminology such as "may,"
"will," "should," "expects," "intends," "plans," "anticipates,"
"believes," "estimates," "predicts," or "potential" or the negative
of these words and phrases or similar words or phrases that are
predictions of or indicate future events or trends and which do not
relate solely to historical matters. You can also identify
forward-looking statements by discussions of strategy, plans, or
intentions.
The forward-looking statements contained in this press release
reflect our current views about future events and are subject to
numerous known and unknown risks, uncertainties, assumptions and
changes in circumstances that may cause actual results to differ
significantly from those expressed or contemplated in any
forward-looking statement.
While forward-looking statements reflect our good faith
projections, assumptions and expectations, they are not guarantees
of future results. Furthermore, we disclaim any obligation to
publicly update or revise any forward-looking statement to reflect
changes in underlying assumptions or factors, new information, data
or methods, future events or other changes, except as required by
applicable law. Factors that could cause our results to differ
materially include, but are not limited to: (1) general
economic conditions and multifamily and commercial real estate
market conditions, (2) regulatory and/or legislative changes
to Freddie Mac, Fannie Mae or HUD, (3) our ability to retain
and attract loan originators and other professionals, (4) risks
related to our recently completed acquisitions, including our
ability to integrate and achieve the expected benefits of such
acquisitions, and (5) changes in federal government fiscal and
monetary policies, including any constraints or cuts in federal
funds allocated to HUD for loan originations.
For a further discussion of these and other factors that could
cause future results to differ materially from those expressed or
contemplated in any forward-looking statements, see the section
titled "Risk Factors" in our most recent Annual Report on Form 10-K
and any updates or supplements in subsequent Quarterly Reports on
Form 10-Q and our other filings with the SEC. Such filings are
available publicly on our Investor Relations web page
at www.walkerdunlop.com.
Walker & Dunlop,
Inc. and Subsidiaries
Condensed Consolidated
Balance Sheets
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
March 31,
|
|
2022
|
|
2021
|
|
2021
|
|
2021
|
|
2021
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
141,375
|
|
$
|
305,635
|
|
$
|
318,188
|
|
$
|
326,518
|
|
$
|
277,277
|
Restricted cash
|
|
41,584
|
|
|
42,812
|
|
|
34,875
|
|
|
15,842
|
|
|
14,805
|
Pledged securities, at fair value
|
|
148,647
|
|
|
148,996
|
|
|
148,774
|
|
|
146,548
|
|
|
139,570
|
Loans held for sale, at fair value
|
|
703,629
|
|
|
1,811,586
|
|
|
2,711,900
|
|
|
1,718,444
|
|
|
1,048,385
|
Loans held for investment, net
|
|
216,620
|
|
|
269,125
|
|
|
233,685
|
|
|
272,033
|
|
|
281,788
|
Mortgage servicing rights
|
|
976,554
|
|
|
953,845
|
|
|
929,825
|
|
|
915,519
|
|
|
909,884
|
Goodwill
|
|
908,744
|
|
|
698,635
|
|
|
333,249
|
|
|
266,465
|
|
|
261,189
|
Other intangible assets
|
|
211,405
|
|
|
183,904
|
|
|
8,454
|
|
|
1,553
|
|
|
1,717
|
Derivative assets
|
|
112,023
|
|
|
37,364
|
|
|
85,486
|
|
|
36,751
|
|
|
58,130
|
Receivables, net
|
|
249,305
|
|
|
212,019
|
|
|
106,228
|
|
|
80,196
|
|
|
59,526
|
Committed investments in tax credit equity
|
|
223,771
|
|
|
177,322
|
|
|
—
|
|
|
—
|
|
|
—
|
Other assets, net
|
|
405,974
|
|
|
364,746
|
|
|
206,198
|
|
|
163,252
|
|
|
151,694
|
Total
assets
|
$
|
4,339,631
|
|
$
|
5,205,989
|
|
$
|
5,116,862
|
|
$
|
3,943,121
|
|
$
|
3,203,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warehouse notes payable
|
$
|
924,280
|
|
$
|
1,941,572
|
|
$
|
2,848,579
|
|
$
|
1,823,982
|
|
$
|
1,112,340
|
Notes payable
|
|
726,555
|
|
|
740,174
|
|
|
289,763
|
|
|
290,498
|
|
|
291,045
|
Allowance for risk-sharing obligations
|
|
53,244
|
|
|
62,636
|
|
|
61,607
|
|
|
60,329
|
|
|
64,580
|
Derivative liabilities
|
|
12,400
|
|
|
6,403
|
|
|
13,263
|
|
|
30,411
|
|
|
9,250
|
Commitments to fund investments in tax credit
equity
|
|
206,605
|
|
|
162,747
|
|
|
—
|
|
|
—
|
|
|
—
|
Other liabilities
|
|
779,376
|
|
|
714,250
|
|
|
519,714
|
|
|
444,406
|
|
|
481,618
|
Total
liabilities
|
$
|
2,702,460
|
|
$
|
3,627,782
|
|
$
|
3,732,926
|
|
$
|
2,649,626
|
|
$
|
1,958,833
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
$
|
324
|
|
$
|
320
|
|
$
|
312
|
|
$
|
310
|
|
$
|
310
|
Additional paid-in capital
|
|
387,009
|
|
|
393,022
|
|
|
271,562
|
|
|
255,676
|
|
|
248,069
|
Accumulated other comprehensive income (loss)
|
|
1,588
|
|
|
2,558
|
|
|
2,737
|
|
|
2,578
|
|
|
1,810
|
Retained earnings
|
|
1,205,384
|
|
|
1,154,252
|
|
|
1,090,506
|
|
|
1,034,931
|
|
|
994,943
|
Total stockholders'
equity
|
$
|
1,594,305
|
|
$
|
1,550,152
|
|
$
|
1,365,117
|
|
$
|
1,293,495
|
|
$
|
1,245,132
|
Noncontrolling interests
|
|
42,866
|
|
|
28,055
|
|
|
18,819
|
|
|
—
|
|
|
—
|
Total
equity
|
$
|
1,637,171
|
|
$
|
1,578,207
|
|
$
|
1,383,936
|
|
$
|
1,293,495
|
|
$
|
1,245,132
|
Commitments and
contingencies
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Total liabilities
and stockholders' equity
|
$
|
4,339,631
|
|
$
|
5,205,989
|
|
$
|
5,116,862
|
|
$
|
3,943,121
|
|
$
|
3,203,965
|
Walker & Dunlop,
Inc. and Subsidiaries
Condensed Consolidated
Statements of Income and Comprehensive Income
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly
Trends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands,
except per share amounts)
|
Q1
2022
|
|
Q4
2021
|
|
Q3
2021
|
|
Q2
2021
|
|
Q1
2021
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan origination and debt brokerage fees, net
|
$
|
82,310
|
|
$
|
139,421
|
|
$
|
123,242
|
|
$
|
107,472
|
|
$
|
75,879
|
|
Fair value of expected net cash flows from servicing, net
("MSR
income")
|
|
52,730
|
|
|
77,879
|
|
|
89,482
|
|
|
61,849
|
|
|
57,935
|
|
Servicing fees
|
|
72,681
|
|
|
72,808
|
|
|
70,628
|
|
|
69,052
|
|
|
65,978
|
|
Property sales broker fees
|
|
23,398
|
|
|
54,808
|
|
|
33,677
|
|
|
22,454
|
|
|
9,042
|
|
Net
warehouse interest income
|
|
4,773
|
|
|
7,340
|
|
|
5,583
|
|
|
4,630
|
|
|
4,555
|
|
Escrow earnings and other interest income
|
|
1,803
|
|
|
2,178
|
|
|
2,032
|
|
|
1,823
|
|
|
2,117
|
|
Other revenues
|
|
81,749
|
|
|
52,755
|
|
|
21,646
|
|
|
14,131
|
|
|
8,782
|
|
Total
revenues
|
$
|
319,444
|
|
$
|
407,189
|
|
$
|
346,290
|
|
$
|
281,411
|
|
$
|
224,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel
|
$
|
144,181
|
|
$
|
195,670
|
|
$
|
170,181
|
|
$
|
141,421
|
|
$
|
96,215
|
|
Amortization and depreciation
|
|
56,152
|
|
|
61,405
|
|
|
53,498
|
|
|
48,510
|
|
|
46,871
|
|
Provision (benefit) for credit losses
|
|
(9,498)
|
|
|
1,093
|
|
|
1,266
|
|
|
(4,326)
|
|
|
(11,320)
|
|
Interest expense on corporate debt
|
|
6,405
|
|
|
2,690
|
|
|
1,766
|
|
|
1,760
|
|
|
1,765
|
|
Other operating expenses
|
|
32,214
|
|
|
36,484
|
|
|
24,836
|
|
|
19,748
|
|
|
17,587
|
|
Total
expenses
|
$
|
229,454
|
|
$
|
297,342
|
|
$
|
251,547
|
|
$
|
207,113
|
|
$
|
151,118
|
|
Income from
operations
|
$
|
89,990
|
|
$
|
109,847
|
|
$
|
94,743
|
|
$
|
74,298
|
|
$
|
73,170
|
|
Income tax expense
|
|
19,460
|
|
|
30,117
|
|
|
22,953
|
|
|
18,240
|
|
|
15,118
|
|
Net income before
noncontrolling interests
|
$
|
70,530
|
|
$
|
79,730
|
|
$
|
71,790
|
|
$
|
56,058
|
|
$
|
58,052
|
|
Less: net income (loss) from noncontrolling
interests
|
|
(679)
|
|
|
(201)
|
|
|
69
|
|
|
—
|
|
|
—
|
|
Walker & Dunlop
net income
|
$
|
71,209
|
|
$
|
79,931
|
|
$
|
71,721
|
|
$
|
56,058
|
|
$
|
58,052
|
|
Net change in unrealized gains
(losses) on pledged available-for-sale
securities, net
of taxes
|
|
(970)
|
|
|
(179)
|
|
|
159
|
|
|
768
|
|
|
(158)
|
|
Walker & Dunlop
comprehensive income
|
$
|
70,239
|
|
$
|
79,752
|
|
$
|
71,880
|
|
$
|
56,826
|
|
$
|
57,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$
|
2.14
|
|
$
|
2.46
|
|
$
|
2.23
|
|
$
|
1.75
|
|
$
|
1.82
|
|
Diluted earnings per
share
|
|
2.12
|
|
|
2.42
|
|
|
2.21
|
|
|
1.73
|
|
|
1.79
|
|
Cash dividends paid per
common share
|
|
0.60
|
|
|
0.50
|
|
|
0.50
|
|
|
0.50
|
|
|
0.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted-average
shares outstanding
|
|
32,219
|
|
|
31,343
|
|
|
31,064
|
|
|
31,019
|
|
|
30,823
|
|
Diluted
weighted-average shares outstanding
|
|
32,617
|
|
|
31,956
|
|
|
31,459
|
|
|
31,370
|
|
|
31,276
|
|
SUPPLEMENTAL
OPERATING DATA
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly
Trends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands,
except per share data)
|
Q1
2022
|
|
Q4
2021
|
|
Q3
2021
|
|
Q2
2021
|
|
Q1
2021
|
|
Transaction
Volume:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Debt
Financing Volume
|
|
|
|
|
|
|
|
|
|
|
Fannie Mae
|
$
|
1,998,374
|
|
$
|
2,585,100
|
|
$
|
3,271,765
|
|
$
|
1,911,976
|
|
$
|
1,533,024
|
|
Freddie Mac
|
|
987,849
|
|
|
1,546,883
|
|
|
2,591,906
|
|
|
1,003,319
|
|
|
1,012,720
|
|
Ginnie Mae - HUD
|
|
391,693
|
|
|
523,899
|
|
|
522,093
|
|
|
672,574
|
|
|
622,133
|
|
Brokered (1)
|
|
5,643,081
|
|
|
12,684,294
|
|
|
6,402,862
|
|
|
6,280,578
|
|
|
4,302,492
|
|
Principal Lending and Investing (2)
|
|
114,020
|
|
|
474,873
|
|
|
472,142
|
|
|
318,237
|
|
|
178,250
|
|
Total Debt Financing
Volume
|
$
|
9,135,017
|
|
$
|
17,815,049
|
|
$
|
13,260,768
|
|
$
|
10,186,684
|
|
$
|
7,648,619
|
|
Property Sales Volume
|
|
3,531,690
|
|
|
9,287,312
|
|
|
5,230,093
|
|
|
3,341,532
|
|
|
1,395,760
|
|
Total Transaction
Volume
|
$
|
12,666,707
|
|
$
|
27,102,361
|
|
$
|
18,490,861
|
|
$
|
13,528,216
|
|
$
|
9,044,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Performance
Metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
28
|
%
|
|
27
|
%
|
|
27
|
%
|
|
26
|
%
|
|
33
|
%
|
Return on
equity
|
|
19
|
|
|
23
|
|
|
22
|
|
|
18
|
|
|
19
|
|
Walker & Dunlop net
income
|
$
|
71,209
|
|
$
|
79,931
|
|
$
|
71,721
|
|
$
|
56,058
|
|
$
|
58,052
|
|
Adjusted EBITDA
(3)
|
|
62,636
|
|
|
109,667
|
|
|
72,430
|
|
|
66,514
|
|
|
60,667
|
|
Diluted EPS
|
|
2.12
|
|
|
2.42
|
|
|
2.21
|
|
|
1.73
|
|
|
1.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Expense Metrics
(as a percentage of total revenues):
|
|
|
|
|
|
|
|
|
|
|
Personnel
expenses
|
|
45
|
%
|
|
48
|
%
|
|
49
|
%
|
|
50
|
%
|
|
43
|
%
|
Other operating
expenses
|
|
10
|
|
|
9
|
|
|
7
|
|
|
7
|
|
|
8
|
|
Key Revenue Metrics
(as a percentage of debt financing volume):
|
|
|
|
|
|
|
|
|
|
|
Origination fee margin
(4)
|
|
0.90
|
%
|
|
0.80
|
%
|
|
0.95
|
%
|
|
1.07
|
%
|
|
1.02
|
%
|
MSR margin
(5)
|
|
0.58
|
|
|
0.45
|
|
|
0.70
|
|
|
0.63
|
|
|
0.78
|
|
Agency MSR margin
(6)
|
|
1.56
|
|
|
1.67
|
|
|
1.40
|
|
|
1.72
|
|
|
1.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market capitalization
at period end
|
$
|
4,192,900
|
|
$
|
4,835,508
|
|
$
|
3,540,501
|
|
$
|
3,239,332
|
|
$
|
3,182,606
|
|
Closing share price at
period end
|
$
|
129.42
|
|
$
|
150.88
|
|
$
|
113.50
|
|
$
|
104.38
|
|
$
|
102.74
|
|
Average
headcount
|
|
1,353
|
|
|
1,128
|
|
|
1,084
|
|
|
1027
|
|
|
974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of
Servicing Portfolio (end of period):
|
|
|
|
|
|
|
|
|
|
|
Fannie Mae
|
$
|
54,000,550
|
|
$
|
53,401,457
|
|
$
|
52,317,953
|
|
$
|
51,077,660
|
|
$
|
50,113,076
|
|
Freddie Mac
|
|
36,965,185
|
|
|
37,138,836
|
|
|
38,039,014
|
|
|
37,887,969
|
|
|
37,695,462
|
|
Ginnie Mae - HUD
|
|
9,954,262
|
|
|
9,889,289
|
|
|
9,894,893
|
|
|
9,904,246
|
|
|
9,754,667
|
|
Brokered (7)
|
|
15,115,619
|
|
|
15,035,439
|
|
|
13,429,801
|
|
|
13,129,969
|
|
|
12,090,825
|
|
Principal Lending and Investing (8)
|
|
221,649
|
|
|
235,543
|
|
|
238,713
|
|
|
276,738
|
|
|
213,240
|
|
Total Servicing
Portfolio
|
$
|
116,257,265
|
|
$
|
115,700,564
|
|
$
|
113,920,374
|
|
$
|
112,276,582
|
|
$
|
109,867,270
|
|
Assets under management (9)
|
|
16,687,112
|
|
|
16,437,865
|
|
|
2,309,332
|
|
|
1,801,577
|
|
|
1,836,086
|
|
Total Managed
Portfolio
|
$
|
132,944,377
|
|
$
|
132,138,429
|
|
$
|
116,229,706
|
|
$
|
114,078,159
|
|
$
|
111,703,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Servicing
Portfolio Metrics:
|
|
|
|
|
|
|
|
|
|
|
Custodial escrow
account balance (in billions)
|
$
|
2.5
|
|
$
|
3.7
|
|
$
|
3.0
|
|
$
|
3.0
|
|
$
|
2.5
|
|
Weighted-average
servicing fee rate (basis points)
|
|
25.0
|
|
|
24.9
|
|
|
24.6
|
|
|
24.5
|
|
|
24.3
|
|
Weighted-average
remaining servicing portfolio
term (years)
|
|
9.1
|
|
|
9.2
|
|
|
9.2
|
|
|
9.2
|
|
|
9.2
|
|
|
|
|
|
|
|
|
(1)
|
Brokered transactions
for life insurance companies, commercial banks, and other capital
sources.
|
(2)
|
Includes debt financing
volumes from our interim lending platform, our interim lending
joint venture, and WDIP separate accounts.
|
(3)
|
This is a non-GAAP
financial measure. For more information on adjusted EBITDA, refer
to the section above titled "Non-GAAP Financial
Measures."
|
(4)
|
Loan origination and
debt brokerage fees, net as a percentage of debt financing volume.
Excludes the income and debt financing volume from Principal
Lending and Investing.
|
(5)
|
MSR income as a
percentage of debt financing volume. Excludes the income and debt
financing volume from Principal Lending and Investing.
|
(6)
|
MSR income as a
percentage of Agency debt financing volume.
|
(7)
|
Brokered loans serviced
primarily for life insurance companies.
|
(8)
|
Consists of interim
loans not managed for our interim loan joint venture.
|
(9)
|
Alliant & WDIP
assets under management and interim loans serviced for our interim
loan joint venture. Alliant assets under management were acquired
in December 2021.
|
KEY CREDIT
METRICS
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
March 31,
|
|
(dollars in
thousands)
|
2022
|
|
2021
|
|
2021
|
|
2021
|
|
2021
|
|
Risk-sharing
servicing portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fannie Mae Full Risk
|
$
|
46,194,756
|
|
$
|
45,581,476
|
|
$
|
44,069,885
|
|
$
|
42,444,569
|
|
$
|
41,152,790
|
|
Fannie Mae Modified Risk
|
|
7,794,710
|
|
|
7,807,853
|
|
|
8,235,475
|
|
|
8,617,020
|
|
|
8,941,234
|
|
Freddie Mac Modified Risk
|
|
23,715
|
|
|
33,195
|
|
|
36,883
|
|
|
36,894
|
|
|
37,006
|
|
Total risk-sharing
servicing portfolio
|
$
|
54,013,181
|
|
$
|
53,422,524
|
|
$
|
52,342,243
|
|
$
|
51,098,483
|
|
$
|
50,131,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-risk-sharing
servicing portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fannie Mae No Risk
|
$
|
11,084
|
|
$
|
12,127
|
|
$
|
12,593
|
|
$
|
16,071
|
|
$
|
19,052
|
|
Freddie Mac No Risk
|
|
36,941,470
|
|
|
37,105,641
|
|
|
38,002,131
|
|
|
37,851,075
|
|
|
37,658,456
|
|
GNMA - HUD No Risk
|
|
9,954,262
|
|
|
9,889,289
|
|
|
9,894,893
|
|
|
9,904,246
|
|
|
9,754,667
|
|
Brokered
|
|
15,115,619
|
|
|
15,035,438
|
|
|
13,429,801
|
|
|
13,129,969
|
|
|
12,090,825
|
|
Total
non-risk-sharing servicing portfolio
|
$
|
62,022,435
|
|
$
|
62,042,495
|
|
$
|
61,339,418
|
|
$
|
60,901,361
|
|
$
|
59,523,000
|
|
Total loans serviced
for others
|
$
|
116,035,616
|
|
$
|
115,465,019
|
|
$
|
113,681,661
|
|
$
|
111,999,844
|
|
$
|
109,654,030
|
|
Interim loans (full
risk) servicing portfolio
|
|
221,649
|
|
|
235,543
|
|
|
238,713
|
|
|
276,738
|
|
|
213,240
|
|
Total servicing
portfolio unpaid principal balance
|
$
|
116,257,265
|
|
$
|
115,700,562
|
|
$
|
113,920,374
|
|
$
|
112,276,582
|
|
$
|
109,867,270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Loan Joint
Venture Managed Loans (1)
|
$
|
930,296
|
|
$
|
848,196
|
|
$
|
918,518
|
|
$
|
629,532
|
|
$
|
660,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At-risk servicing
portfolio (2)
|
$
|
50,176,521
|
|
$
|
49,573,263
|
|
$
|
48,209,532
|
|
$
|
46,866,767
|
|
$
|
45,796,952
|
|
Maximum exposure to
at-risk portfolio (3)
|
|
10,178,454
|
|
|
10,056,584
|
|
|
9,784,054
|
|
|
9,517,609
|
|
|
9,304,440
|
|
Defaulted
loans
|
|
78,659
|
|
|
78,659
|
|
|
48,481
|
|
|
48,481
|
|
|
48,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defaulted loans as a
percentage of the at-risk portfolio
|
|
0.16
|
%
|
|
0.16
|
%
|
|
0.10
|
%
|
|
0.10
|
%
|
|
0.11
|
%
|
Allowance for
risk-sharing as a percentage of the at-risk portfolio
|
|
0.11
|
|
|
0.13
|
|
|
0.13
|
|
|
0.13
|
|
|
0.14
|
|
Allowance for
risk-sharing as a percentage of maximum exposure
|
|
0.52
|
|
|
0.62
|
|
|
0.63
|
|
|
0.63
|
|
|
0.69
|
|
|
|
|
|
|
|
(1)
|
Includes $73.3 million
as of March 31, 2021 of loans managed directly for our interim loan
joint venture partner in addition to $587.7 million of Interim
Program JV managed loans. We indirectly share in a portion of the
risk of loss associated with interim loan joint venture managed
loans through our 15% equity ownership in the joint venture. We had
no exposure to risk of loss for the loans serviced directly for our
interim loan joint venture partner. The balance of this line is
included as a component of assets under management in the
Supplemental Operating Data table.
|
|
|
(2)
|
At-risk servicing
portfolio is defined as the balance of Fannie Mae DUS loans subject
to the risk-sharing formula described below, as well as a small
number of Freddie Mac loans on which we share in the risk of loss.
Use of the at-risk portfolio provides for comparability of the full
risk-sharing and modified risk-sharing loans because the provision
and allowance for risk-sharing obligations are based on the at-risk
balances of the associated loans. Accordingly, we have presented
the key statistics as a percentage of the at-risk portfolio. For
example, a $15 million loan with 50% risk-sharing has the same
potential risk exposure as a $7.5 million loan with full DUS
risk sharing. Accordingly, if the $15 million loan with 50%
risk-sharing were to default, we would view the overall loss as a
percentage of the at-risk balance, or $7.5 million, to ensure
comparability between all risk-sharing obligations. To date,
substantially all of the risk-sharing obligations that we have
settled have been from full risk-sharing loans.
|
|
|
(3)
|
Represents the maximum
loss we would incur under our risk-sharing obligations if all of
the loans we service, for which we retain some risk of loss, were
to default and all of the collateral underlying these loans was
determined to be without value at the time of settlement. The
maximum exposure is not representative of the actual loss we would
incur.
|
ADJUSTED FINANCIAL
METRIC RECONCILIATION TO GAAP
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly
Trends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
Q1
2022
|
|
Q4
2021
|
|
Q3
2021
|
|
Q2
2021
|
|
Q1
2021
|
|
Reconciliation of
Walker & Dunlop Net Income to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
Walker & Dunlop
Net Income
|
$
|
71,209
|
|
$
|
79,931
|
|
$
|
71,721
|
|
$
|
56,058
|
|
$
|
58,052
|
|
Income tax
expense
|
|
19,460
|
|
|
30,117
|
|
|
22,953
|
|
|
18,240
|
|
|
15,118
|
|
Interest expense on
corporate debt
|
|
6,405
|
|
|
2,690
|
|
|
1,766
|
|
|
1,760
|
|
|
1,765
|
|
Amortization and
depreciation
|
|
56,152
|
|
|
61,405
|
|
|
53,498
|
|
|
48,510
|
|
|
46,871
|
|
Provision (benefit) for
credit losses
|
|
(9,498)
|
|
|
1,093
|
|
|
1,266
|
|
|
(4,326)
|
|
|
(11,320)
|
|
Net
write-offs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Stock-based
compensation expense
|
|
11,279
|
|
|
9,637
|
|
|
10,708
|
|
|
8,121
|
|
|
8,116
|
|
Gain from revaluation
of previously held equity-method investment
|
|
(39,641)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Unamortized issuance
costs from corporate debt retirement
|
|
—
|
|
|
2,673
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Fair value of expected
net cash flows from servicing, net
|
|
(52,730)
|
|
|
(77,879)
|
|
|
(89,482)
|
|
|
(61,849)
|
|
|
(57,935)
|
|
Adjusted
EBITDA
|
$
|
62,636
|
|
$
|
109,667
|
|
$
|
72,430
|
|
$
|
66,514
|
|
$
|
60,667
|
|
ADJUSTED FINANCIAL
METRIC RECONCILIATION TO GAAP BY SEGMENT
Unaudited
|
|
|
|
|
|
|
|
Capital
Markets
|
(in
thousands)
|
Q1
2022
|
|
Q1
2021
|
Reconciliation of
Walker & Dunlop Net Income to Adjusted EBITDA
|
Walker & Dunlop
Net Income
|
$
|
46,560
|
|
$
|
56,118
|
Income tax
expense
|
|
12,847
|
|
|
14,615
|
Interest expense on
corporate debt
|
|
—
|
|
|
—
|
Amortization and
depreciation
|
|
—
|
|
|
521
|
Provision (benefit) for
credit losses
|
|
—
|
|
|
—
|
Net
write-offs
|
|
—
|
|
|
—
|
Stock-based
compensation expense
|
|
4,579
|
|
|
3,812
|
Gain from revaluation
of previously held equity-method investment
|
|
—
|
|
|
—
|
Unamortized issuance
costs from corporate debt retirement
|
|
—
|
|
|
—
|
Fair value of expected
net cash flows from servicing, net
|
|
(52,730)
|
|
|
(57,935)
|
Adjusted
EBITDA
|
$
|
11,256
|
|
$
|
17,131
|
|
|
|
|
|
|
|
Servicing &
Asset Management
|
(in
thousands)
|
Q1
2022
|
|
Q1
2021
|
Reconciliation of
Walker & Dunlop Net Income to Adjusted EBITDA
|
Walker & Dunlop
Net Income
|
$
|
32,716
|
|
$
|
27,565
|
Income tax
expense
|
|
8,839
|
|
|
7,178
|
Interest expense on
corporate debt
|
|
—
|
|
|
—
|
Amortization and
depreciation
|
|
54,931
|
|
|
45,378
|
Provision (benefit) for
credit losses
|
|
(9,498)
|
|
|
(11,320)
|
Net
write-offs
|
|
—
|
|
|
—
|
Stock-based
compensation expense
|
|
785
|
|
|
618
|
Gain from revaluation
of previously held equity-method investment
|
|
—
|
|
|
—
|
Unamortized issuance
costs from corporate debt retirement
|
|
—
|
|
|
—
|
Fair value of expected
net cash flows from servicing, net
|
|
—
|
|
|
—
|
Adjusted
EBITDA
|
$
|
87,773
|
|
$
|
69,419
|
|
|
|
|
|
|
|
Corporate
|
(in
thousands)
|
Q1
2022
|
|
Q1
2021
|
Reconciliation of
Walker & Dunlop Net Income to Adjusted EBITDA
|
Walker & Dunlop
Net Income
|
$
|
(8,067)
|
|
$
|
(25,631)
|
Income tax
expense
|
|
(2,226)
|
|
|
(6,675)
|
Interest expense on
corporate debt
|
|
6,405
|
|
|
1,765
|
Amortization and
depreciation
|
|
1,221
|
|
|
972
|
Provision (benefit) for
credit losses
|
|
—
|
|
|
—
|
Net
write-offs
|
|
—
|
|
|
—
|
Stock-based
compensation expense
|
|
5,915
|
|
|
3,686
|
Gain from revaluation
of previously held equity-method investment
|
|
(39,641)
|
|
|
—
|
Unamortized issuance
costs from corporate debt retirement
|
|
—
|
|
|
—
|
Fair value of expected
net cash flows from servicing, net
|
|
—
|
|
|
—
|
Adjusted
EBITDA
|
$
|
(36,393)
|
|
$
|
(25,883)
|
|
|
|
|
|
|
View original
content:https://www.prnewswire.com/news-releases/walker--dunlop-reports-42-growth-in-revenues-as-diluted-eps-grows-18-to-2-12--301540276.html
SOURCE Walker & Dunlop, Inc.