FIRST QUARTER 2025 HIGHLIGHTS
- Total transaction volume of $7.0 billion, up 10% from Q1’24
- Total revenues of $237.4 million, up 4% from Q1’24
- Net income of $2.8 million and diluted earnings per share of $0.08, both down 77% from Q1’24
- Adjusted EBITDA(1) of $65.0 million, down 12% from Q1’24
- Adjusted core EPS(2) of $0.85, down 29% from Q1’24
- Servicing portfolio of $135.6 billion as of March 31, 2025, up 3% from March 31, 2024
- Declared quarterly dividend of $0.67 per share for the second quarter 2025
BETHESDA, Md.–(BUSINESS WIRE)–Walker & Dunlop, Inc. (NYSE: WD) (the “Company”, “Walker & Dunlop” or “W&D”) reported first quarter total transaction volume of $7.0 billion, up 10% year over year. Total revenues were $237.4 million for the first quarter of 2025, a 4% increase year over year, while total expenses were up 8%. Although transaction activity and total revenues grew, total expenses increased largely due to increased personnel expenses, the write-off of unamortized issuance costs from our corporate debt paydown, and an increase in the provision for credit losses. Those increased costs drove net income down for the first quarter of 2025 to $2.8 million, or $0.08 per diluted share, both down 77% year over year. Adjusted EBITDA was also down 12% in the first quarter of 2025, and adjusted core EPS, which primarily removes the impact of non-cash revenues and expenses, was down 29%, against the first quarter of 2024. The Company’s Board of Directors declared a dividend of $0.67 per share for the second quarter of 2025.
“2025 began with continued improvement in transaction volumes and revenues, up 10% and 4%, respectively, from Q1 2024, as the US commercial real estate market began to transition from higher rates and dramatically lower transaction activity to the beginning of the next investment cycle,» commented Walker & Dunlop Chairman and CEO Willy Walker. «W&D’s Q1 GAAP net income was down significantly due to increased severance expense, fees associated with a corporate debt issuance, and credit losses that are normal for this time in the credit cycle. Adjusted core net income and adjusted EBITDA were down materially less, reflecting the strength of W&D’s business model and durable profit streams.»
Walker continued, “There is a growing sense that the pent-up demand for financing and capital deployment in commercial real estate is going to drive transaction volumes higher over the coming months and years. The initial deregulatory changes at HUD and the GSEs are welcome, and it is our assumption that the Trump Administration continues to work on getting short and long-term interest rates down. W&D will continue to invest in our Capital Markets platform to meet our clients’ growing needs and expand as the next cycle takes off. Our outlook for 2025, and our guidance, have not changed.”
| ________________________________________ | |
|
(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 Measure Reconciliation to GAAP” and “Adjusted Financial Measure Reconciliation to GAAP by Segment.” |
|
(2) |
Adjusted core EPS is a non-GAAP financial measure the Company presents to help investors better understand our operating performance. For a reconciliation of Adjusted core EPS to Diluted EPS, refer to the sections of this press release below titled “Non-GAAP Financial Measures” and “Adjusted Core EPS Reconciliation.” |
|
CONSOLIDATED FIRST QUARTER 2025 OPERATING RESULTS |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
TRANSACTION VOLUMES |
|||||||||||||||
|
(in thousands) |
|
Q1 2025 |
|
Q1 2024 |
|
$ Variance |
|
% Variance |
|||||||
|
Fannie Mae |
|
$ |
1,511,794 |
|
$ |
903,368 |
|
$ |
608,426 |
|
|
67 |
% |
||
|
Freddie Mac |
|
|
808,247 |
|
|
|
974,926 |
|
|
|
(166,679 |
) |
|
(17 |
) |
|
Ginnie Mae – HUD |
|
|
148,158 |
|
|
|
14,140 |
|
|
|
134,018 |
|
|
948 |
|
|
Brokered (1) |
|
|
2,552,943 |
|
|
|
3,319,074 |
|
|
|
(766,131 |
) |
|
(23 |
) |
|
Principal Lending and Investing (2) |
|
|
175,500 |
|
|
|
15,800 |
|
|
|
159,700 |
|
|
1,011 |
|
|
Debt financing volume |
|
$ |
5,196,642 |
|
|
$ |
5,227,308 |
|
|
$ |
(30,666 |
) |
|
(1 |
)% |
|
Property sales volume |
|
|
1,839,290 |
|
|
|
1,167,151 |
|
|
|
672,139 |
|
|
58 |
|
|
Total transaction volume |
|
$ |
7,035,932 |
|
|
$ |
6,394,459 |
|
|
$ |
641,473 |
|
|
10 |
% |
|
(1) |
Brokered transactions for life insurance companies, commercial banks, and other capital sources. |
|
(2) |
Includes debt financing volumes from Walker & Dunlop Investment Partners, Inc. (“WDIP”) separate accounts. |
DISCUSSION OF RESULTS:
- Total transaction volume increased 10% in the first quarter of 2025 to $7.0 billion from the first quarter of 2024.
- Transaction volumes with Fannie Mae and Freddie Mac (collectively, the “GSEs”) increased 24% year over year, led by a 67% increase in Fannie Mae volumes. Walker & Dunlop continues to be a top GSE lender.
- Property sales volume increased 58% in the first quarter of 2025, outperforming the 36% year-over-year increase in market-wide multifamily property sales volume, according to Real Capital Analytics. Multifamily property sales activity in the first quarter of 2024 reached its lowest levels since the Great Financial Crisis, and the growth in 2025 reflects increasing demand for multifamily assets based on the strength of the fundamentals underlying the sector.
- Multifamily completions reached an all-time high 585,000 units in 2024, particularly in high demand sunbelt markets, according to RealPage. Yet absorption remained extremely strong, with 663,000 units, outpacing supply for the first time since 2021. The cost of owning a single-family home has increased dramatically since the beginning of the Great Tightening, and new construction starts in multifamily have fallen to just 234,000 units. The strength of those fundamentals, coupled with low unemployment, have improved investment conviction in the multifamily sector and driven the strength in our property sales and GSE lending volumes in the first quarter of 2025.
- HUD debt financing volumes increased in the first quarter of 2025, as our team executed well in the face of a challenging market environment. Walker & Dunlop was ranked as the second largest HUD lender for HUD’s fiscal year ended September 30, 2024.
- The decrease in brokered debt financing volume was driven by volatility in the market during the first quarter of 2025, which caused investors to remain selective on transaction timing. The supply of capital from life insurance companies, banks, commercial mortgage-backed securities, and other private capital providers remains strong, and the demand for commercial real estate assets is expected drive increased acquisition and financing activity throughout the remainder of the year.
|
MANAGED PORTFOLIO |
|||||||||||||||
|
(dollars in thousands, unless otherwise noted) |
|
Q1 2025 |
|
Q1 2024 |
|
$ Variance |
|
% Variance |
|||||||
|
Fannie Mae |
|
$ |
69,176,839 |
|
$ |
64,349,886 |
|
$ |
4,826,953 |
|
|
8 |
% |
||
|
Freddie Mac |
|
|
38,556,682 |
|
|
|
39,665,386 |
|
|
|
(1,108,704 |
) |
|
(3 |
) |
|
Ginnie Mae – HUD |
|
|
10,882,857 |
|
|
|
10,595,841 |
|
|
|
287,016 |
|
|
3 |
|
|
Brokered |
|
|
17,032,338 |
|
|
|
17,312,513 |
|
|
|
(280,175 |
) |
|
(2 |
) |
|
Principal Lending and Investing |
|
|
– |
|
|
|
40,139 |
|
|
|
(40,139 |
) |
|
(100 |
) |
|
Total Servicing Portfolio |
|
$ |
135,648,716 |
|
|
$ |
131,963,765 |
|
|
$ |
3,684,951 |
|
|
3 |
% |
|
Assets under management |
|
|
18,518,413 |
|
|
|
17,465,398 |
|
|
|
1,053,015 |
|
|
6 |
|
|
Total Managed Portfolio |
|
$ |
154,167,129 |
|
|
$ |
149,429,163 |
|
|
$ |
4,737,966 |
|
|
3 |
% |
|
Custodial escrow account balance at period end (in billions) |
|
$ |
2.4 |
|
|
$ |
2.3 |
|
|
|
|
|
|
||
|
Weighted-average servicing fee rate (basis points) |
|
|
24.4 |
|
|
|
24.0 |
|
|
|
|
|
|
||
|
Weighted-average remaining servicing portfolio term (years) |
|
|
7.5 |
|
|
|
8.0 |
|
|
|
|
|
|
||
DISCUSSION OF RESULTS:
- Our servicing portfolio continues to expand as a result of additional Agency debt financing volumes over the past 12 months, partially offset by principal paydowns and loan payoffs.
- During the first quarter of 2025, we added $0.4 billion of net loans to our servicing portfolio, and over the past 12 months, we added $3.7 billion of net loans to our servicing portfolio, almost all of which were Agency loans.
- $10.3 billion of Agency loans in our servicing portfolio are scheduled to mature over the next two years. These loans, with a weighted-average servicing fee of 28.9 basis points, represent only 9% of the total Agency loans in our portfolio.
- The mortgage servicing rights (“MSRs”) associated with our servicing portfolio had a fair value of $1.4 billion as of both March 31, 2025 and 2024.
- Assets under management as of March 31, 2025 consisted of $16.0 billion of low-income housing tax credit (“LIHTC”) funds, $1.5 billion of debt funds and $0.9 billion of equity funds managed by WDIP. The 6% increase in assets under management was driven by increases in all three categories.
|
KEY PERFORMANCE METRICS |
|||||||||||||||
|
(in thousands, except per share amounts) |
|
Q1 2025 |
|
Q1 2024 |
|
$ Variance |
|
% Variance |
|||||||
|
Walker & Dunlop net income |
|
$ |
2,754 |
|
$ |
11,866 |
|
$ |
(9,112 |
) |
|
(77 |
)% |
||
|
Adjusted EBITDA |
|
|
64,966 |
|
|
74,136 |
|
|
(9,170 |
) |
|
(12 |
) |
||
|
Diluted EPS |
|
$ |
0.08 |
|
$ |
0.35 |
|
$ |
(0.27 |
) |
|
(77 |
)% |
||
|
Adjusted core EPS |
|
$ |
0.85 |
|
$ |
1.19 |
|
$ |
(0.34 |
) |
|
(29 |
)% |
||
|
Operating margin |
|
|
2 |
% |
|
6 |
% |
|
|
|
|
||||
|
Return on equity |
|
|
1 |
|
|
3 |
|
|
|
|
|
||||
|
Key Expense Metrics (as a % of total revenues): |
|
|
|
|
|
|
|
|
|
||||||
|
Personnel expenses |
|
|
51 |
% |
|
49 |
% |
|
|
|
|
||||
|
Other operating expenses |
|
|
14 |
|
|
13 |
|
|
|
|
|
||||
DISCUSSION OF KEY PERFORMANCE METRICS:
- Walker & Dunlop net income and diluted EPS both decreased 77% in the first quarter of 2025, as the increase in total expenses outpaced the increase in total revenues. Additionally, our effective tax rate increased year over year, as described below. The decrease in net income also drove the decrease in return on equity to 1% for the first quarter of 2025.
- The increase in personnel expenses as a percentage of total revenues for the first quarter of 2025 was principally the result of increases in severance expense and variable compensation related to the growth in total transaction volume. Other operating expenses as a percentage of total revenues increased during the first quarter of 2025 largely due to the acceleration of unamortized debt issuance costs related to refinancing our corporate debt.
- Adjusted EBITDA decreased 12%, primarily due to decreases in placement fees and other interest income and investment management fees and an increase in personnel expense. These changes were partially offset by increases in loan origination and debt brokerage fees, net (“origination fees”) and servicing fees.
- Adjusted core EPS decreased to $0.85 in the first quarter of 2025 from $1.19 in the first quarter of 2024. The decrease was primarily driven by an increase in personnel expense and a decrease in investment management fees in the first quarter of 2025 compared to the first quarter of 2024, partially offset by increases in origination fees, servicing fees, and property sales broker fees.
|
KEY CREDIT METRICS |
|||||||||||||||
|
(in thousands) |
|
Q1 2025 |
|
Q1 2024 |
|
$ Variance |
|
% Variance |
|||||||
|
At-risk servicing portfolio (1) |
|
$ |
64,450,319 |
|
$ |
59,498,851 |
|
$ |
4,951,468 |
|
|
8 |
% |
||
|
Maximum exposure to at-risk portfolio (2) |
|
|
13,200,846 |
|
|
12,088,698 |
|
|
1,112,148 |
|
|
9 |
|
||
|
Defaulted loans (3) |
|
$ |
108,530 |
|
$ |
63,264 |
|
$ |
45,266 |
|
72 |
% |
|||
|
Key credit metrics (as a % of the at-risk portfolio): |
|
|
|
|
|
|
|
|
|
|
|||||
|
Defaulted loans |
|
|
0.17 |
% |
|
0.11 |
% |
|
|
|
|
|
|||
|
Allowance for risk-sharing |
|
|
0.05 |
|
|
0.05 |
|
|
|
|
|
|
|||
|
Key credit metrics (as a % of maximum exposure): |
|
|
|
|
|
|
|
|
|
|
|||||
|
Allowance for risk-sharing |
|
|
0.24 |
% |
|
0.25 |
% |
|
|
|
|
|
|||
| ________________________________________ | |||
|
(1) |
At-risk servicing portfolio is defined as the balance of Fannie Mae Delegated Underwriting and Servicing (“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. |
||
|
(2) |
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. |
||
|
(3) |
Defaulted loans represent loans in our Fannie Mae at-risk portfolio that are probable of foreclosure or that have foreclosed and for which we have recorded a collateral-based reserve (i.e., loans where we have assessed a probable loss). Other loans that are delinquent but not foreclosed or that are not probable of foreclosure are not included here. Additionally, loans that have foreclosed or are probable of foreclosure but are not expected to result in a loss to us are not included here. |
||
DISCUSSION OF KEY CREDIT METRICS:
- Our at-risk servicing portfolio, which is comprised of loans subject to a defined risk-sharing formula, increased primarily due to the level of Fannie Mae loans added to the portfolio during the past 12 months. We take credit risk exclusively on loans backed by multifamily assets and have no credit exposure to losses in any other sector of the commercial real estate lending market.
- As of March 31, 2025, eight at-risk loans were in default with an aggregate unpaid principal balance (“UPB”) of $108.5 million compared to six at-risk loans in default with an aggregate UPB of $63.3 million as of March 31, 2024. The collateral-based reserves on defaulted loans were $7.5 million and $5.1 million as of March 31, 2025 and 2024, respectively. The approximately 3,200 remaining loans in the at-risk servicing portfolio continue to exhibit strong credit quality, with low levels of delinquencies and strong operating performance of the underlying properties in the portfolio.
- During 2024, the Company received requests to repurchase five GSE loans. As of March 31, 2025, the Company has repurchased three of the loans in full and still has forbearance and indemnification agreements in place for the other two loans. The Company foreclosed on one of the repurchased loans and now holds an immaterial Other Real Estate Owned (“OREO”) asset. The aggregate balance of assets not yet repurchased was $46.1 million as of March 31, 2025, all of which will require a cash outlay over the coming year. All repurchased and indemnified loans are delinquent and in non-accrual status.
- We recorded a provision for credit losses of $3.7 million in the first quarter of 2025, primarily related to the newly defaulted loans this quarter, combined with a slight increase to our risk-sharing obligations resulting from an increase in the at-risk servicing portfolio.
FIRST QUARTER 2025
FINANCIAL RESULTS BY SEGMENT
Interest expense on corporate debt is determined at a consolidated corporate level and allocated to each segment proportionally based on each segment’s use of that corporate debt. Income tax expense is determined at a consolidated corporate level and allocated to each segment proportionally based on each segment’s income from operations, except for significant, one-time tax activities, which are allocated entirely to the segment impacted by the tax activity. The following details explain the changes in these expense items at a consolidated corporate level:
- Interest expense on corporate debt, which pays a variable interest rate, decreased 12% year over year, primarily due to a 100-basis point decrease in short-term interest rates year over year. Our corporate debt carries a floating rate of interest tied to one-month Secured Overnight Financing Rate (“SOFR”) that resets monthly and decreases in that index rate directly impact our cost of borrowing. Additionally, in the first quarter of 2025, we refinanced our corporate debt, writing off $4.2 million of unamortized debt issuance costs, as detailed in the Capital Sources and Uses section below. The impact of this write-off is included in other operating expenses and allocated to each of the segments proportionally in the same manner as corporate debt expense.
- Income tax expense decreased 12% from the first quarter of 2024. The decline was largely attributable to a 62% decline in income from operations, partially offset by a change in excess tax benefits year over year. The Company recognized a $1.3 million shortfall from realizable excess tax benefits recognized during the first quarter of 2025 compared to a benefit of $0.6 million during the first quarter of 2024, resulting from changes between the grant date fair value and vesting date fair value of share-based compensation awards that vested during the first quarter of 2025.
|
FINANCIAL RESULTS – CAPITAL MARKETS |
|||||||||||||||
|
(in thousands) |
|
Q1 2025 |
|
Q1 2024 |
|
$ Variance |
|
% Variance |
|||||||
|
Loan origination and debt brokerage fees, net («Origination fees») |
|
$ |
45,297 |
|
$ |
43,700 |
|
$ |
1,597 |
|
|
4 |
% |
||
|
Fair value of expected net cash flows from servicing, net («MSR income») |
|
|
27,811 |
|
|
20,898 |
|
|
6,913 |
|
|
33 |
|
||
|
Property sales broker fees |
|
|
13,521 |
|
|
8,821 |
|
|
4,700 |
|
|
53 |
|
||
|
Net warehouse interest income (expense), loans held for sale («LHFS») |
|
|
(786 |
) |
|
(1,574 |
) |
|
788 |
|
|
(50 |
) |
||
|
Other revenues |
|
|
16,727 |
|
|
10,052 |
|
|
6,675 |
|
|
66 |
|
||
|
Total revenues |
|
$ |
102,570 |
|
$ |
81,897 |
|
$ |
20,673 |
|
|
25 |
% |
||
|
Personnel |
|
$ |
86,466 |
|
$ |
79,187 |
|
$ |
7,279 |
|
|
9 |
% |
||
|
Amortization and depreciation |
|
|
1,141 |
|
|
1,137 |
|
|
4 |
|
|
0 |
|
||
|
Interest expense on corporate debt |
|
|
4,187 |
|
|
4,851 |
|
|
(664 |
) |
|
(14 |
) |
||
|
Other operating expenses |
|
|
6,235 |
|
|
5,052 |
|
|
1,183 |
|
|
23 |
|
||
|
Total expenses |
|
$ |
98,029 |
|
$ |
90,227 |
|
$ |
7,802 |
|
|
9 |
% |
||
|
Income (loss) from operations |
|
$ |
4,541 |
|
$ |
(8,330 |
) |
$ |
12,871 |
|
|
(155 |
)% |
||
|
Income tax expense (benefit) |
|
|
2,181 |
|
|
(1,744 |
) |
|
3,925 |
|
|
(225 |
) |
||
|
Net income (loss) before noncontrolling interests |
|
$ |
2,360 |
|
$ |
(6,586 |
) |
$ |
8,946 |
|
|
(136 |
)% |
||
|
Less: net income (loss) from noncontrolling interests |
|
|
— |
|
|
114 |
|
|
(114 |
) |
|
(100 |
) |
||
|
Walker & Dunlop net income (loss) |
|
$ |
2,360 |
|
$ |
(6,700 |
) |
$ |
9,060 |
|
|
(135 |
)% |
||
|
Key revenue metrics (as a % of debt financing volume): |
|
|
|
|
|
|
|
|
|
||||||
|
Origination fee rate (1) |
|
|
0.90 |
% |
|
0.84 |
% |
|
|
|
|
||||
|
MSR rate (2) |
|
|
0.55 |
|
|
0.40 |
|
|
|
|
|
||||
|
Agency MSR rate (3) |
|
|
1.13 |
|
|
1.10 |
|
|
|
|
|
||||
|
Key performance metrics: |
|
|
|
|
|
|
|
|
|
||||||
|
Operating margin |
|
|
4 |
% |
|
(10 |
)% |
|
|
|
|
||||
|
Adjusted EBITDA |
|
$ |
(13,327 |
) |
$ |
(19,297 |
) |
$ |
5,970 |
|
|
(31 |
)% |
||
|
Diluted EPS |
|
$ |
0.07 |
|
$ |
(0.20 |
) |
$ |
0.27 |
|
|
(135 |
)% |
||
| ________________________________________ | |
|
(1) |
Origination fees as a percentage of debt financing volume. Excludes the income and debt financing volume from Principal Lending and Investing. |
|
(2) |
MSR income as a percentage of debt financing volume. Excludes the income and debt financing volume from Principal Lending and Investing. |
|
(3) |
MSR income as a percentage of Agency debt financing volume. |
CAPITAL MARKETS – DISCUSSION OF QUARTERLY RESULTS:
The Capital Markets segment includes our Agency lending, debt brokerage, property sales, appraisal and valuation services, investment banking, and housing market research businesses.
- The increase in origination fees was the result of the increase in our Fannie Mae and HUD debt financing volume, partially offset by declines in our Freddie Mac and brokered transactions volume. Our Fannie Mae and HUD debt financing volume as a percentage of our overall debt financing volume increased from 18% for the first quarter of 2024 to 33% of our volume for the first quarter of 2025, which led to an increase in the origination fee rate as our Fannie Mae and HUD executions have higher origination fee rates than Freddie Mac and brokered executions.
- The increase in our MSR income was similarly driven by the increase in Fannie Mae and HUD debt financing volume, partially offset by a decrease in the weighted-average service fee rate on Fannie Mae debt financing volume. Fannie Mae is our most-profitable debt financing product.
- Property sales broker fees increased year over year as a result of the 58% increase in property sales volumes, partially offset by a decrease in the property sale fee rate.
- The increase in other revenues was primarily related to an increase in investment banking revenues year over year, driven by several M&A transactions that closed during the first quarter of 2025.
- Personnel expense increased in the first quarter of 2025 primarily due to an increase in commission expenses related to the growth in transaction volumes and severance expense. Severance expense increased largely as a result of the separation of several underperforming producers. We expect to recognize around $5 million of severance and related expenses from separations during the first half of 2025, with $2.4 million of that expense recognized in the first quarter of 2025.
|
FINANCIAL RESULTS – SERVICING & ASSET MANAGEMENT |
|||||||||||||||
|
(in thousands) |
|
Q1 2025 |
|
Q1 2024 |
|
$ Variance |
|
% Variance |
|||||||
|
Origination fees |
|
$ |
1,084 |
|
$ |
40 |
|
$ |
1,044 |
|
|
2,610 |
% |
||
|
Servicing fees |
|
|
82,221 |
|
|
80,043 |
|
|
2,178 |
|
|
3 |
|
||
|
Investment management fees |
|
|
9,682 |
|
|
13,520 |
|
|
(3,838 |
) |
|
(28 |
) |
||
|
Net warehouse interest income, loans held for investment |
|
|
— |
|
|
458 |
|
|
(458 |
) |
|
(100 |
) |
||
|
Placement fees and other interest income |
|
|
29,622 |
|
|
35,603 |
|
|
(5,981 |
) |
|
(17 |
) |
||
|
Other revenues |
|
|
9,294 |
|
|
11,571 |
|
|
(2,277 |
) |
|
(20 |
) |
||
|
Total revenues |
|
$ |
131,903 |
|
$ |
141,235 |
|
$ |
(9,332 |
) |
|
(7 |
)% |
||
|
Personnel |
|
$ |
19,546 |
|
$ |
18,055 |
|
$ |
1,491 |
|
|
8 |
% |
||
|
Amortization and depreciation |
|
|
54,498 |
|
|
53,071 |
|
|
1,427 |
|
|
3 |
|
||
|
Provision (benefit) for credit losses |
|
|
3,712 |
|
|
524 |
|
|
3,188 |
|
|
608 |
|
||
|
Interest expense on corporate debt |
|
|
9,931 |
|
|
11,191 |
|
|
(1,260 |
) |
|
(11 |
) |
||
|
Other operating expenses |
|
|
7,468 |
|
|
5,123 |
|
|
2,345 |
|
|
46 |
|
||
|
Total expenses |
|
$ |
95,155 |
|
$ |
87,964 |
|
$ |
7,191 |
|
|
8 |
% |
||
|
Income (loss) from operations |
|
$ |
36,748 |
|
$ |
53,271 |
|
$ |
(16,523 |
) |
|
(31 |
)% |
||
|
Income tax expense (benefit) |
|
|
17,651 |
|
|
11,153 |
|
|
6,498 |
|
|
58 |
|
||
|
Net income (loss) before noncontrolling interests |
|
$ |
19,097 |
|
$ |
42,118 |
|
$ |
(23,021 |
) |
|
(55 |
)% |
||
|
Less: net income (loss) from noncontrolling interests |
|
|
(29 |
) |
|
(1,165 |
) |
|
1,136 |
|
|
(98 |
) |
||
|
Walker & Dunlop net income (loss) |
|
$ |
19,126 |
|
$ |
43,283 |
|
$ |
(24,157 |
) |
|
(56 |
)% |
||
|
Key performance metrics: |
|
|
|
|
|
|
|
|
|
||||||
|
Operating margin |
|
|
28 |
% |
|
38 |
% |
|
|
|
|
||||
|
Adjusted EBITDA |
|
$ |
107,902 |
|
$ |
119,658 |
|
$ |
(11,756 |
) |
|
(10 |
)% |
||
|
Diluted EPS |
|
$ |
0.55 |
|
$ |
1.28 |
|
$ |
(0.73 |
) |
|
(57 |
)% |
||
SERVICING & ASSET MANAGEMENT – DISCUSSION OF QUARTERLY RESULTS:
The Servicing & Asset Management segment includes loan servicing, principal lending and investing, management of 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.
- The $3.7 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 a small increase in the average servicing fee rate.
- Investment management fees decreased primarily due to a reduction in the accrual for investment management fees from our LIHTC funds that are driven by asset dispositions within the funds and a decrease in realization revenues from our private credit investment management strategies.
- Placement fees and other interest income decreased largely as a result of a decline in our placement fees on escrow deposits, which declined primarily as a result of lower placement fee rates due to the lower average short-term interest rate environment in the first quarter of 2025 compared to the same period in 2024.
- The decrease in other revenues was primarily related to a decrease in income from equity method investments and a reduction in syndication fees related to the decline in gross equity raised within our LIHTC investment management strategies year over year.
Contacts
Headquarters:
7272 Wisconsin Avenue, Suite 1300
Bethesda, Maryland 20814
Phone 301.215.5500
[email protected]
Investors:
Kelsey Duffey
Senior Vice President, Investor Relations
Phone 301.202.3207
[email protected]
Media:
Carol McNerney
Chief Marketing Officer
Phone 301.215.5515
[email protected]
