Walker & Dunlop, Inc · NYSE:WD
Walker & Dunlop — Q2 2020 Earnings Presentation
15 slides from Walker & Dunlop's earnings presentation, Aug 5, 2020
Slide 1: Second Quarter 2020 Earnings
SECOND QUARTER 2020 EARNINGS August 5, 2020
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: CRE Market Share Has Increased Dramatically to 13%
CRE MARKET SHARE HAS I N C R E A S E D D R A M AT I C A L LY T O 1 3 % Total Commercial Real Estate Mortgage Originations $700,000,000,000 (dollars in billions) 14.0% $601 $600,000,000,000 $574 13.2% $530 12.0% $504 $490 $500,000,000,000 10.0% $400 $400,000,000,000 $358 8.0% $300,000,000,000 6.0% $2
Slide 4: Previous Investments Came Together in Q2 to Produce Strong Financial Results
PREVIOUS INVESTMENTS CAME TOGETHER IN Q2 TO PRODUCE S T R O N G F I N A N C I A L R E S U LT S Diluted Earnings Per Share Servicing Portfolio(1) Total Revenues(1) $99,988 $252,825 $1.95 $1.33 $94,822 $200,325 Q2'19 Q2'20 at March 31, at June 30, Q2'19 Q2'20 2020 2020 4 1) In millions
Slide 5: Strong Agency Volumes Drive Total GSE Market Share to 14%
STRONG AGENCY VOLUMES DRIVE T O TA L G S E M A R K E T S H A R E T O 1 4 % Fannie Mae Freddie Mac ($ in millions) ($ in millions) 10.8% 10.7% 10.4% 10.0% 19.9% 9.1% 8.2% 7.7% 7.2% 14.0% 12.4% 11.9% 12.4% 11.3% 10.8% 10.5% $9,135 $8,678 $7,804 $7,076 $6,883 $6,716 $6,442 $5,919 $5,971 $5,119 $5,029 $
Slide 6: Strong Agency Transaction Volume
STRONG AGENCY TRANSACTION VOLUME Breakdown of Total Transaction Volume (in millions) $2,762 $2,358 $1,945 $1,769 $1,533 $1,496 $1,102 $640 $447 $192 $178 $14 Fannie Mae Freddie Mac HUD Brokered Principal Lending and Property Sales Investing Q2'19 Q2'20 6
Slide 7: Vision 2020: $1 Billion in Annual Revenues
VISION 2020 $1 BILLION IN ANNUAL REVENUES $30B $8B $100B $8B annual debt annual property servicing portfolio asset management financing volume sales volume platform 7
Slide 8: Vision 2020 CAGRs
VISION 2020 CAGRS Debt Financing Volume Property Sales Volume (in millions) (in millions) 14% $31,432 31% $5,393 $5,772 CAGR CAGR $26,574 $24,875 $25,334 $3,031 $16,724 $2,713 $16,239 $2,574 $1,520 2015 2016 2017 2018 2019 TTM 2015 2016 2017 2018 2019 TTM 2020 2020 8
Slide 9: Vision 2020 CAGRs
VISION 2020 CAGRS Servicing Portfolio Total Revenues (in millions) (in millions) 15% $99,988 14% $916 CAGR $93,225 CAGR $817 $85,689 $725 $712 $74,310 $575 $63,081 $468 $50,212 at at at at at at June 30, December December December December December 2020 2015 2016 2017 2018 2019 TTM 31, 2015 31, 2016
Slide 10: Multifamily Remains Top Performing Asset Class in CRE
M U LT I FA M I LY R E M A I N S T O P PERFORMING ASSET CLASS IN CRE WD Forbearance Requests* by Property Type Loans in Property Type Loans in Portfolio % in Forbearance Forbearance Multifamily 5,404 44 1% Retail 845 197 23% Industrial 343 15 4% Office 252 24 10% Hotel 17 14 82% 10 *Forbearance requ
Slide 11: Higher Margins Drive Strong Growth in Revenues and Earnings
HIGHER MARGINS DRIVE STRONG GROWTH IN REVENUES AND EARNINGS Total Transaction Gain on Sale Margin Total Revenues(2) Diluted EPS Volume(1) 2.52% $1.95 $252,825 $7,306 $1.33 $7,128 1.76% 1.35% $200,325 0.68% 1.08% 1.17% Q2'19 Q2'20 Q2'19 Q2'20 Q2'19 Q2'20 Q2'19 Q2'20 Gains attributable to MSRs Origina
Slide 12: Key Financial Metrics Outperform Target Ranges
KEY FINANCIAL METRICS O U T P E R F O R M TA R G E T R A N G E S Operating Margin Return on Equity 33% 23% 30% 21% 28% 18% Q2'19 Q2'20 YTD 2020 Q2'19 Q2'20 YTD 2020 12
Slide 13: Servicing Portfolio Has Steadily Grown to $100 Billion
S E RV I C I N G P O RT F O L I O H A S S T E A D I LY G R O W N T O $ 1 0 0 B I L L I O N > As of June 30, 2020, the servicing portfolio had a weighted average remaining life of 9.5 years and a weighted average servicing fee of 23.3 bps > Over the next two years, only $4.1 billion of Agency loans a
Slide 14: Strong Liquidity Position Supports Advance Obligations
STRONG LIQUIDITY POSITION S U P P O R T S A D VA N C E O B L I G A T I O N S > Under the terms of our Fannie Mae and Ginnie Mae loan servicing agreements, we are obligated to advance mortgage payments to bondholders for loans that are granted forbearance or are otherwise delinquent. We do not have a
Slide 15: Phone 301.215.5500 7501 Wisconsin Avenue, Suite 1200E Bethesda, Maryland 20814
Phone 301.215.5500 7501 Wisconsin Avenue, Suite 1200E Bethesda, Maryland 20814