Walker & Dunlop, Inc · NYSE:WD
Walker & Dunlop — Q1 2021 Earnings Presentation
15 slides from Walker & Dunlop's earnings presentation, May 6, 2021
Slide 1: First Quarter 2021 Earnings
FIRST QUARTER 2021 EARNINGS May 6, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the statements contained in this presentation 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
Slide 3: $31B of 2020 Multifamily Lending Vaulted W&D to #1 Multifamily Lender Ranking
$ 3 1 B O F 2 0 2 0 M U LT I FA M I LY L E N D I N G VA U LT E D W & D TO # 1 M U LT I FA M I LY L E N D E R R A N K I N G 2020 Top Multifamily Capital Providers Company Amount (millions) Number Avg. Size (millions) 1 Walker & Dunlop $ 30,763 1,299 $ 23.7 2 CBRE $ 29,091 1,536 $ 18.9 3 JLL $ 29,030
Slide 4: W&D Climbed Six Spots into Fourth Largest Lender to Commercial Real Estate
W & D C L I M B E D S I X S P O T S I N 2 0 2 0 TO F O U RT H L A R G E S T L E N D E R TO C O M M E R C I A L R E A L E S TAT E 2020 Top CRE Lenders Company Amount (millions) Number Avg. Size (millions) 1 KeyBank $ 38,156 977 $ 39.1 2 Wells Fargo $ 30,223 884 $ 34.2 3 JP Morgan Chase & Company $ 29
Slide 5: Revenue Per Employee
REVENUE PER EMPLOYEE Servicing Income and Efficiency Place W&D Amongst the World's Best $1.9M $1.5M $1.1M $1.4M $1.4M $1.1M Facebook Apple $877,933 Alphabet VeriSign $809,589 Visa $728,619 Microsoft PayPal Mastercard Walker & Dunlop 5 Revenue per employee for the year ended December 31, 2020
Slide 6: People, Technology, Brand
Q1 2021 79% of refinancing volume* PEOPLE was new loans BRAND 27% of total transaction volume was with new clients TECHNOLOGY 6 *Includes refinancings that were added to Walker & Dunlop servicing portfolio in Q1’21
Slide 7: Upcoming Multifamily "Wave of Maturities" Drives Growth in Refinancing Opportunity
U P C O M I N G M U L T I F A M I L Y “ W AV E O F M A T U R I T I E S ” D R I V E S G R O W T H I N R E F I N A N C I N G O P P O RT U N I T Y Total Multifamily Loan Maturities (in billions) $129 $117 $92 $93 $92 $89 $72 $61 $58 $42 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 1 Credit Compani
Slide 8: People, Brand, and Technology Drive Strong Financial Performance
PEOPLE, BRAND, AND TECHNOLOGY DRIVE STRONG FINANCIAL PERFORMANCE Q1 Key Performance Metrics Diluted Earnings Per Share Total Transaction Volume Total Revenues (in millions) (in thousands) $1.79 $234,157 $11,356 $224,288 $1.49 $9,044 Q1'20 Q1'21 Q1'20 Q1'21 Q1'20 Q1'21 8
Slide 9: Key Financial Metrics
KEY FINANCIAL METRICS Personnel Expense as % of Operating Margin Return on Equity Revenues 33% 43% 19% 19% 38% 26% Q1'20 Q1'21 Q1'20 Q1'21 Q1'20 Q1'21 2021 target range: 29% to 32% 2021 target range: 19% to 22% • Elevated compared to a typical Q1 due • Expect to deliver annual operating to recent hi
Slide 10: Strong Debt Brokerage and Property Sales Volumes Are Indicative of an Active CRE Financing Market
S T R O N G D E B T B R O K E R A G E A N D P R O P E RT Y S A L E S V O L U M E S A R E I N D I C AT I V E O F A N A C T I V E C R E FINANCING MARKET Breakout of Total Transaction Volume (in millions) $4,302 $4,171 $3,994 28% Other 94% Multifamily $1,731 $1,533 72% Multifamily $1,396 $998 $1,013 $6
Slide 11: Mortgage Servicing Rights Continue to Generate Stable Servicing Fees
M O RT G A G E S E RV I C I N G R I G H T S C O N T I N U E T O G E N E R AT E S T A B L E S E R V I C I N G F E E S > As of March 31, 2021, the servicing portfolio had a weighted average remaining life of 9.2 years and a weighted average servicing fee of 24.3 bps > Only $6.9 billion of Agency loans
Slide 12: 2021 Financial Outlook
2021 FINANCIAL OUTLOOK 2021 GOALS Diluted Earnings Per Share DOUBLE DIGIT GROWTH Adjusted EBITDA DOUBLE DIGIT GROWTH Operating Margin 29% to 32% Return on Equity 19% to 22% 12
Slide 13: Where We Are Going
WHERE WE ARE GOING GROW DEBT FINANCING VOLUME $60B+ Origination Volume / $5B+ Small Balance Loans / $160B Servicing Portfolio GROW PROPERTY SALES VOLUME $25B+ Sales Volume ESTABLISH INVESTMENT BANKING CAPABILITIES $10B+ Assets Under Management ENVIRONMENTAL, SOCIAL AND GOVERNANCE Increase Diverse Le
Slide 14: A New Alliance to Create Sustainable Change & Make CRE More Inclusive
14 GREYSTAR” Freddie ‘The Global Leader in Rental Housing We make home possible* B BANNEKERVENTURES SYMETRA sso CREUnited D P Kayne Anderson ANEW ALLIANCE TO CREATE Real Estate eS SUSTAINABLE CHANGE & MAKE CRE MORE INCLUSIVE y MOHANNA UNIBAIL-RODAMCO-WESTFIELD DEVELOPMENT CO ——_~S__ WALKER & RULE IN
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