Exhibit 99.1

Picture 2

Walker & Dunlop First Quarter Total Revenues Grow 27%

And Net Income Increases 20% Year Over Year

Adjusted EBITDA Grows 28%

 

FIRST QUARTER 2019 HIGHLIGHTS

·

Total transaction volume of $5.9 billion, up 23% from Q1 '18

·

Total revenues of $187.4 million, an increase of 27% from Q1 '18

·

Strong net income of $44.2 million, or $1.39 per diluted share, up 20% from Q1 '18

·

Record adjusted EBITDA1 of $66.7 million, growth of 28% over Q1 '18

·

Servicing portfolio of $87.7 billion at March 31, 2019, up 16% from March 31, 2018

·

Declared dividend of $0.30 per share for the second quarter of 2019

 

Bethesda, MD – May 1, 2019Walker & Dunlop, Inc. (NYSE: WD) (the “Company”),  one of the fastest growing commercial real estate finance companies in the United States, reported first quarter 2019 total revenues of $187.4 million, an increase of 27% over the first quarter of 2018. Net income for the first quarter of 2019 was $44.2 million, or $1.39 per diluted share, up 20% from the first quarter of last year. Adjusted EBITDA for the first quarter 2019 was $66.7 million, an increase of 28% over the first quarter of 2018. Total transaction volume grew 23% from the prior-year quarter to $5.9 billion. The Company’s Board declared a $0.30 per share dividend for the second quarter of 2019.

 

“The strong revenue and earnings growth that Walker & Dunlop has shown over the past five years continued into the first quarter of 2019,” said Willy Walker, Chairman and Chief Executive Officer of Walker & Dunlop. “Our bankers and brokers executed on $5.9 billion of total transaction volume, a 23% increase over Q1 of last year. Notably, our multifamily-focused property sales team grew their quarterly volume by 106% to nearly $700 million. Continued growth in new loan originations pushed our loan servicing portfolio to $88 billion, which was a  large contributor to generating net income of $44 million and a record $67 million in adjusted EBITDA, up 28% over Q1 of 2018.”

 

Mr. Walker continued, “W&D was recently ranked the sixth Best Workplace in the Financial Services Industry by Fortune Magazine, an incredible honor that is reflective of our strong corporate culture and incredible team. Our unique ability to effectively compete with global firms while providing our clients with the touch and feel of a small, family company continues to differentiate us from the competition and power our financial results. Given our distinct brand in the industry, the fundamentals supporting the commercial real estate market, and our extremely profitable business model, we feel well positioned to deliver continued strong results in 2019.”

 

1

 


 

Picture 8

First Quarter 2019 Earnings Release

 

FIRST QUARTER 2019 OPERATING RESULTS

 

 

 

 

 

 

 

 

 

 

 

 

 

TRANSACTION VOLUMES

(dollars in thousands)

 

Q1 2019

 

 

Q1 2018

 

$ Variance

 

% Variance

Fannie Mae

$

1,982,810

 

$

1,240,502

 

$

742,308

 

60

%

Freddie Mac

 

1,573,634

 

 

1,319,977

 

 

253,657

 

19

 

Ginnie Mae - HUD

 

178,258

 

 

352,416

 

 

(174,158)

 

(49)

 

Brokered

 

1,434,129

 

 

1,573,909

 

 

(139,780)

 

(9)

 

Principal Lending and Investing2

 

75,862

 

 

24,713

 

 

51,149

 

207

 

Mortgage banking volume

$

5,244,693

 

$

4,511,517

 

$

733,176

 

16

%

Property sales volume

 

696,611

 

 

337,745

 

 

358,866

 

106

 

Total transaction volume

$

5,941,304

 

$

4,849,262

 

$

1,092,042

 

23

%

 

Discussion of Results:

 

·

We continue to see high demand for debt financing due to the strength of the commercial real estate market, strong macroeconomic conditions, a positive interest rate environment, and robust demand for rental properties.

·

Overall mortgage banking volumes increased due to continued strength in the multifamily financing market and a 12% growth in the average number of mortgage bankers on our platform.

·

Our volumes with Fannie Mae and Freddie Mac benefitted from a combination of our increased market share of their lending and from their overall increased lending activity during the first quarter of 2019, especially at Fannie Mae. 

·

During the first quarter of 2019, no loan commitments were processed by HUD for one month due to the U.S. government shutdown, which caused a decline in our HUD volumes.

·

Although brokered volume was down in the first quarter of 2019, we are confident that the investments we have made in our debt brokerage team over the past several years will produce growth in our brokered volumes for the full year.

·

The substantial increase in property sales volume was the result of a small increase in the overall multifamily property sales market, an increase in the number of property sales brokers on our platform, and fantastic execution by our property sales brokers.

 

 

 

 

 

 

 

 

 

 

 

 

MANAGED PORTFOLIO

(dollars in thousands)

 

Q1 2019

 

 

Q1 2018

 

$ Variance

 

% Variance

Fannie Mae

$

36,835,756

 

$

32,566,330

 

$

4,269,426

 

13

%

Freddie Mac

 

31,367,939

 

 

27,709,640

 

 

3,658,299

 

13

 

Ginnie Mae - HUD

 

9,986,488

 

 

9,634,192

 

 

352,296

 

 4

 

Brokered

 

9,227,409

 

 

5,865,961

 

 

3,361,448

 

57

 

Principal Lending and Investing

 

274,090

 

 

60,157

 

 

213,933

 

356

 

Total servicing portfolio

$

87,691,682

 

$

75,836,280

 

$

11,855,402

 

16

%

Assets under management

 

1,427,334

 

 

155,324

 

 

1,272,010

 

819

 

Total Managed Portfolio

$

89,119,016

 

$

75,991,604

 

$

13,127,412

 

17

%

Weighted-average servicing fee rate (basis points)

 

24.0

 

 

25.6

 

 

 

 

 

 

Weighted-average remaining servicing portfolio term (years)

 

9.8

 

 

9.8

 

 

 

 

 

 

 

Discussion of Results:

 

·

During the first quarter of 2019, we added $2.0 billion of net loans to our servicing portfolio, nearly all of which were Fannie Mae and Freddie Mac loans. Over the past 12 months, we added $11.9 billion of net loans to our servicing portfolio, 67% of which are Fannie Mae and Freddie Mac loans.

2


 

Picture 8

First Quarter 2019 Earnings Release

 

·

Our servicing portfolio has experienced strong growth over the past year due to our significant mortgage banking volumes, relatively few maturities and early payoffs, and an acquisition of a small debt brokerage company in the fourth quarter of 2018.

·

The decrease in the weighted-average servicing fee was the result of the net addition of $7.4 billion of Freddie Mac, HUD, and brokered loans serviced compared to a net increase of only $4.3 billion of Fannie Mae loans serviced during the past 12 months. Additionally, the weighted average servicing fee on our Fannie Mae originations has declined over the past 12 months generally due to intense competition for new loans and tighter credit spreads. Fannie Mae loans have the highest servicing fees of all the loan types we service because we share in the risk of loss.

·

Only $4.2 billion of Agency loans in our servicing portfolio with a weighted-average servicing fee of 21.6 basis points are scheduled to mature over the next two years.

·

We added net mortgage servicing rights (“MSRs”) during the quarter of  $7.8 million and $46.9 million over the past 12 months.

·

The MSRs associated with our servicing portfolio had a fair value of $867.7 million as of March 31, 2019.

·

Assets under management as of March 31, 2019 consisted of $1.0 billion of loans and funds managed by our registered investment adviser, JCR Capital Investment Corporation, and $413.4 million of loans we manage for our interim lending joint venture and for an affiliate of Blackstone Mortgage Trust. The year-over-year increase is primarily related to our acquisition of JCR Capital in the second quarter of 2018.

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

(dollars in thousands)

 

Q1 2019

 

 

Q1 2018

 

$ Variance

 

% Variance

Loan origination fees

$

57,797

 

$

48,816

 

$

8,981

 

18

%

Gains attributable to MSRs

 

40,938

 

 

32,693

 

 

8,245

 

25

 

Gains from mortgage banking activities

 

98,735

 

 

81,509

 

 

17,226

 

21

 

Servicing fees

 

52,199

 

 

48,040

 

 

4,159

 

 9

 

Net warehouse interest income, LHFS

 

29

 

 

1,108

 

 

(1,079)

 

(97)

 

Net warehouse interest income, LHFI

 

6,992

 

 

749

 

 

6,243

 

834

 

Escrow earnings and other interest income

 

14,068

 

 

7,348

 

 

6,720

 

91

 

Property sales broker fees

 

4,541

 

 

2,130

 

 

2,411

 

113

 

Other revenues

 

10,873

 

 

6,568

 

 

4,305

 

66

 

Total revenues

$

187,437

 

$

147,452

 

$

39,985

 

27

%

Key revenue metrics (as a percentage of mortgage banking volume):

 

 

 

 

 

 

 

 

 

 

 

Origination related fees3

 

1.11

%

 

1.08

%

 

 

 

 

 

Gains attributable to MSRs3

 

0.79

 

 

0.73

 

 

 

 

 

 

Gains attributable to MSRs - Agency loans4

 

1.10

 

 

1.12

 

 

 

 

 

 

 

Discussion of Results:

 

·

The increase in gains from mortgage banking activities was primarily the result of the overall increase in mortgage banking volumes and the change in the mix of our mortgage banking volumes. During the first quarter of 2019, 38% of our overall mortgage banking volume came from Fannie Mae loans compared to 27% during the first quarter of 2018. Fannie Mae loans produce one of the highest levels of gains from mortgage banking activities. 

·

The $11.9 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, partially offset by the decline in the servicing portfolio’s weighted-average servicing fee.

·

The decrease in net warehouse interest income from loans held for sale (“LHFS”) was due to a significantly lower net interest margin year over year. The decrease in the net interest margin is related to a substantial year-over-year increase in the short-term rates at which we borrow with a much smaller increase in the long-term interest rates on the loans we fund with those borrowings, resulting from the flattening of the yield curve and the tightening of credit spreads year over year.

3


 

Picture 8

First Quarter 2019 Earnings Release

 

·

The increase in net warehouse interest income from loans held for investment (“LHFI”) was due to a larger average balance of loans outstanding as the Company’s principal lending and investing volume was a record in 2018 with few payoffs in the first quarter of 2019.

·

Escrow earnings benefitted from an increase in the average balance of escrow accounts outstanding from the first quarter of 2018 to the first quarter of 2019 due to the net increase in the servicing portfolio. Additionally, the average placement fee on our escrow accounts has increased significantly over the past year as short-term interest rates have increased.

·

The increase in property sales broker fees was the result of the increase in property sales volume year over year.

·

The increase in other revenues was principally due to increases in investment management fees due to our acquisition of JCR Capital in the second quarter of 2018 and in prepayment fees.

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

(dollars in thousands)

 

Q1 2019

 

 

Q1 2018

 

$ Variance

 

% Variance

Personnel

$

71,631

 

$

55,273

 

$

16,358

 

30

%

Amortization and depreciation

 

37,903

 

 

33,635

 

 

4,268

 

13

 

Provision (benefit) for credit losses

 

2,675

 

 

(477)

 

 

3,152

 

(661)

 

Interest expense on corporate debt

 

3,652

 

 

2,179

 

 

1,473

 

68

 

Other operating expenses

 

15,492

 

 

12,951

 

 

2,541

 

20

 

Total expenses

$

131,353

 

$

103,561

 

$

27,792

 

27

%

Key expense metrics (as a percentage of total revenues):

 

 

 

 

 

 

 

 

 

 

 

Personnel expenses

 

38

%

 

37

%

 

 

 

 

 

Other operating expenses

 

 8

 

 

 9

 

 

 

 

 

 

 

Discussion of Results:

 

·

The growth in personnel expenses was largely the result of a 17% increase in average headcount and the Company’s improved financial performance year over year. The increase in average headcount led to a rise in salaries and benefits costs, while the improved financial performance led to year-over-year increases in commissions and bonus expenses.

·

Amortization and depreciation increased due to the growth in the average balance of MSRs outstanding year over year. Over the past 12 months, we have added $46.9 million of MSRs, net of amortization and write offs due to loan prepayments.

·

During the first quarter of 2019, we experienced two defaults on loans for which we have credit risk: a $21.0 million loan in our at risk servicing portfolio and a $14.7 million loan in our interim lending portfolio. These two defaults resulted in the net provision expense of $2.7 million compared to a net benefit of $0.5 million last year. The credit quality in the remainder of our at risk servicing and interim loan portfolios remain strong, as seen in the credit quality statistics shown in the Key Credit Metrics section below.

·

The increase in other operating expenses stemmed primarily from increased office costs due to an increase in our average headcount year over year and recruiting fees as we have increased our hiring efforts related to mortgage bankers and property sales brokers.

 

 

 

 

 

 

 

 

 

 

 

 

KEY PERFORMANCE METRICS

(dollars in thousands, except per share amounts)

 

Q1 2019

 

 

Q1 2018

 

$ Variance

 

% Variance

Walker & Dunlop net income

$

44,218

 

$

36,861

 

$

7,357

 

20

%

Adjusted EBITDA

 

66,684

 

 

52,149

 

 

14,535

 

28

 

Diluted EPS

$

1.39

 

$

1.14

 

$

0.25

 

22

%

Operating margin

 

30

%

 

30

%

 

 

 

 

 

Return on equity

 

20

 

 

18

 

 

 

 

 

 

 

4


 

Picture 8

First Quarter 2019 Earnings Release

 

Discussion of Results:

 

·

The increase in net income was the result of a 28% increase in income from operations, partially offset by an increase in the effective tax rate from 16% during the first quarter of 2018 to 21% for the first quarter of 2019. The increase in the effective tax rate was due to lower realizable excess tax benefits year over year due primarily to a substantial reduction in the number of options exercised in the first quarter of 2019 compared to the same period in 2018.

·

The increase in adjusted EBITDA was primarily driven by the increases in loan origination fees, servicing fees, net warehouse interest income, escrow earnings and other interest income, property sales broker fees, and other revenues, partially offset by the increases in personnel expenses and other operating expenses.

·

The increase in return on equity is largely related to the year-over-year increase in quarterly net income combined with share repurchases and dividend payments over the past 12 months, partially offset by an increase in stockholders’ equity year over year due primarily to the net income recorded over the past 12 months.

 

 

 

 

 

 

 

 

 

 

 

 

KEY CREDIT METRICS

(dollars in thousands)

 

Q1 2019

 

 

Q1 2018

 

$ Variance

 

% Variance

At risk servicing portfolio5

$

33,438,052

 

$

28,883,122

 

$

4,554,930

 

16

%

Maximum exposure to at risk portfolio6

 

6,985,874

 

 

5,912,327

 

 

1,073,547

 

18

 

Defaulted loans

$

20,981

 

$

5,962

 

$

15,019

 

252

%

Key credit metrics (as a percentage of the at risk portfolio):

 

 

 

 

 

 

 

 

 

 

 

Defaulted loans

 

0.06

%

 

0.02

%

 

 

 

 

 

Allowance for risk-sharing

 

0.02

 

 

0.01

 

 

 

 

 

 

Key credit metrics (as a percentage of maximum exposure):

 

 

 

 

 

 

 

 

 

 

 

Allowance for risk-sharing

 

0.10

%

 

0.05

%

 

 

 

 

 

Allowance for risk-sharing and guaranty obligation

 

0.80

 

 

0.75

 

 

 

 

 

 

 

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 mortgage banking volume during the past 12 months. There was one defaulted loan in our at risk servicing portfolio at March 31, 2019,  which defaulted during the first quarter of 2019. All other loans in the at risk portfolio are current and performing as of March 31, 2019.

·

The on-balance sheet interim loan portfolio, which is comprised of loans for which the Company has full risk of loss, was $274.1 million at March 31, 2019 compared to $60.2 million at March 31, 2018.  There was one defaulted loan in our interim loan portfolio at March 31, 2019, which defaulted during the first quarter of 2019. All other loans in the interim loan portfolio are current and performing as of March 31, 2019. The interim loan joint venture holds $343.4 million of loans as of March 31, 2019, for which the Company indirectly shares in a small portion of the risk of loss. All loans in the interim loan joint venture are current and performing as of March 31, 2019.

DIVIDENDS AND SHARE REPURCHASES

 

On April 30, 2019, our Board of Directors declared a dividend of $0.30 per share for the second quarter 2019. The dividend will be paid June 4, 2019 to all holders of record of our restricted and unrestricted common stock and restricted stock units as of May 17, 2019.

 

On February 5, 2019, the Company’s Board of Directors authorized the repurchase of up to $50.0 million of the Company’s outstanding common stock over a one-year period beginning February 11, 2019.  As of March 31, 2019, we had the full capacity remaining as we have not made any stock repurchases under the program since it was adopted.

   

5


 

Picture 8

First Quarter 2019 Earnings Release

 

Purchases made pursuant to the 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. 

 


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” and “Adjusted Financial Metric Reconciliation to GAAP.” 

2 Includes mortgage banking volumes from our interim loan platform, our interim loan joint venture, and JCR separate accounts.

3 Excludes the income and mortgage banking volume from principal lending and investing.

4 The fair value of the expected net cash flows associated with the servicing of the loan, net of any guaranty obligations retained, as a percentage of Agency volume.

5 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. 

6 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 Wednesday, May 1, 2019 at 8:30 a.m. Eastern time. Analysts and investors interested in participating are invited to call (866)  342-8591 from within the United States or (203) 518-9713 from outside the United States and are asked to reference the Conference ID: WDQ119. A simultaneous webcast of the call will be available on the Investor Relations section of the Walker & Dunlop website at http://www.walkerdunlop.com. 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), headquartered in Bethesda, Maryland, is one of the largest commercial real estate services and finance companies in the United States providing financing and property sales to owners of multifamily and commercial properties. Walker & Dunlop, which is included in the S&P SmallCap 600 Index, was ranked as one of FORTUNE Magazine's Fastest Growing Companies in 2014, 2017, and 2018,  and has over 700 professionals in 29 offices across the nation with an unyielding commitment to client satisfaction.

 

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 amortization and depreciation, adjusted for provision (benefit) for credit losses net of write-offs, stock-based incentive compensation charges, and non-cash revenues such as gains attributable to MSRs. Additionally, adjusted EBITDA further excludes other significant activities that are not part of our ongoing operations. 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

6


 

Picture 8

First Quarter 2019 Earnings Release

 

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. For more information on adjusted EBITDA, refer to the section of this press release below titled “Adjusted Financial Metric Reconciliation to GAAP.”

 

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, and (4) 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 our most-recent Quarterly Report 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.

 

Contacts:

 

 

Investors:

Media:

Kelsey Duffey

Susan Weber

Vice President, Investor Relations

Chief Marketing Officer

Phone 301.202.3207

Phone 301.215.5515

investorrelations@walkeranddunlop.com

info@walkeranddunlop.com

 

Phone  301.215.5500

7501 Wisconsin Avenue, Suite 1200E

Bethesda, Maryland 20814

 

 

7


 

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Walker & Dunlop, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 

    

December 31,

    

September 30,

    

June 30,

    

March 31, 

 

2019

 

2018

 

2018

 

2018

 

2018

(in thousands)

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

109,862

 

$

90,058

 

$

165,062

 

$

81,531

 

$

193,695

Restricted cash

 

17,561

 

 

20,821

 

 

16,226

 

 

29,986

 

 

16,991

Pledged securities, at fair value

 

117,566

 

 

116,331

 

 

109,062

 

 

105,803

 

 

102,059

Loans held for sale, at fair value

 

1,226,380

 

 

1,074,348

 

 

2,134,190

 

 

1,257,256

 

 

787,552

Loans held for investment, net

 

471,561

 

 

497,291

 

 

203,824

 

 

130,397

 

 

59,886

Servicing fees and other receivables, net

 

52,643

 

 

50,419

 

 

49,457

 

 

44,804

 

 

30,829

Derivative assets

 

27,605

 

 

35,536

 

 

28,182

 

 

26,632

 

 

20,417

Mortgage servicing rights

 

677,946

 

 

670,146

 

 

647,188

 

 

638,914

 

 

631,031

Goodwill and other intangible assets

 

183,449

 

 

177,093

 

 

157,077

 

 

157,240

 

 

124,526

Other assets

 

84,320

 

 

48,071

 

 

57,968

 

 

88,017

 

 

84,291

Total assets

$

2,968,893

 

$

2,780,114

 

$

3,568,236

 

$

2,560,580

 

$

2,051,277

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and other liabilities

$

306,515

 

$

311,006

 

$

275,460

 

$

188,321

 

$

184,079

Performance deposits from borrowers

 

17,471

 

 

20,335

 

 

16,122

 

 

29,083

 

 

16,717

Derivative liabilities

 

29,891

 

 

32,697

 

 

524

 

 

8,669

 

 

7,455

Guaranty obligation, net

 

49,376

 

 

46,870

 

 

44,413

 

 

42,470

 

 

41,424

Allowance for risk-sharing obligations

 

6,682

 

 

4,622

 

 

4,663

 

 

4,070

 

 

3,058

Warehouse notes payable

 

1,335,461

 

 

1,161,382

 

 

2,156,999

 

 

1,250,642

 

 

802,496

Note payable

 

295,425

 

 

296,010

 

 

163,626

 

 

163,704

 

 

163,781

Total liabilities

$

2,040,821

 

$

1,872,922

 

$

2,661,807

 

$

1,686,959

 

$

1,219,010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred shares

$

 —

 

$

 —

 

$

 —

 

$

 —

 

$

 —

Common stock

 

300

 

 

295

 

 

304

 

 

304

 

 

301

Additional paid-in capital

 

223,742

 

 

235,152

 

 

240,721

 

 

234,564

 

 

226,332

Accumulated other comprehensive income (loss)

 

226

 

 

(75)

 

 

(71)

 

 

(87)

 

 

(34)

Retained earnings

 

698,894

 

 

666,752

 

 

660,102

 

 

633,508

 

 

600,257

Total stockholders’ equity

$

923,162

 

$

902,124

 

$

901,056

 

$

868,289

 

$

826,856

Noncontrolling interests

 

4,910

 

 

5,068

 

 

5,373

 

 

5,332

 

 

5,411

Total equity

$

928,072

 

$

907,192

 

$

906,429

 

$

873,621

 

$

832,267

Commitments and contingencies

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Total liabilities and equity

$

2,968,893

 

$

2,780,114

 

$

3,568,236

 

$

2,560,580

 

$

2,051,277

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 


 

 

\\walkerdunlop.com\DFS\Shares\Marketing\!2017 Letterhead\Logos and PMS Colors\WalkerDunlop_horizontal_CMYK.jpg

Walker & Dunlop, Inc. and Subsidiaries

Condensed Consolidated Statements of Income and Comprehensive Income

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Trends

 

(in thousands, except per share amounts)

Q1 2019

 

Q4 2018

 

Q3 2018

 

Q2 2018

 

Q1 2018

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gains from mortgage banking activities

$

98,735

 

$

124,166

 

$

99,170

 

$

102,237

 

$

81,509

 

Servicing fees

 

52,199

 

 

52,092

 

 

50,781

 

 

49,317

 

 

48,040

 

Net warehouse interest income

 

7,021

 

 

5,902

 

 

3,880

 

 

2,392

 

 

1,857

 

Escrow earnings and other interest income

 

14,068

 

 

14,423

 

 

11,938

 

 

9,276

 

 

7,348

 

Other

 

15,414

 

 

18,350

 

 

18,888

 

 

14,982

 

 

8,698

 

Total revenues

$

187,437

 

$

214,933

 

$

184,657

 

$

178,204

 

$

147,452

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel

$

71,631

 

$

90,828

 

$

79,776

 

$

71,426

 

$

55,273

 

Amortization and depreciation

 

37,903

 

 

36,271

 

 

36,739

 

 

35,489

 

 

33,635

 

Provision (benefit) for credit losses

 

2,675

 

 

(34)

 

 

519

 

 

800

 

 

(477)

 

Interest expense on corporate debt

 

3,652

 

 

3,179

 

 

2,429

 

 

2,343

 

 

2,179

 

Other operating expenses

 

15,492

 

 

19,359

 

 

14,535

 

 

15,176

 

 

12,951

 

Total expenses

$

131,353

 

$

149,603

 

$

133,998

 

$

125,234

 

$

103,561

 

Income from operations

$

56,084

 

$

65,330

 

$

50,659

 

$

52,970

 

$

43,891

 

Income tax expense

 

12,024

 

 

19,885

 

 

12,902

 

 

11,937

 

 

7,184

 

Net income before noncontrolling interests

$

44,060

 

$

45,445

 

$

37,757

 

$

41,033

 

$

36,707

 

Less: net income (loss) from noncontrolling interests

 

(158)

 

 

(305)

 

 

41

 

 

(79)

 

 

(154)

 

Walker & Dunlop net income

$

44,218

 

$

45,750

 

$

37,716

 

$

41,112

 

$

36,861

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in unrealized gains and losses on pledged available-for-sale securities

 

301

 

 

(4)

 

 

16

 

 

(53)

 

 

(127)

 

Walker & Dunlop comprehensive income

$

44,519

 

$

45,746

 

$

37,732

 

$

41,059

 

$

36,734

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

1.44

 

$

1.47

 

$

1.20

 

$

1.31

 

$

1.18

 

Diluted earnings per share

$

1.39

 

$

1.41

 

$

1.15

 

$

1.26

 

$

1.14

 

Cash dividends declared per common share

$

0.30

 

$

0.25

 

$

0.25

 

$

0.25

 

$

0.25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

29,680

 

 

30,109

 

 

30,423

 

 

30,256

 

 

30,020

 

Diluted weighted average shares outstanding

 

30,684

 

 

31,265

 

 

31,606

 

 

31,495