Walker & Dunlop, Inc · NYSE:WD
Walker & Dunlop — Q2 2021 Earnings Presentation
17 slides from Walker & Dunlop's earnings presentation, Aug 5, 2021
Slide 1: Second Quarter 2021 Earnings
Q2 SECOND QUARTER 2021 EARNINGS August 5, 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: Strong Cash Revenues Drove Q2 Financial Results
STRONG CASH REVENUES DROVE Q2 F I N A N C I A L R E S U LT S Total Revenues Diluted EPS Adjusted EBITDA1 Total Transaction Volume (in millions) (in thousands) (in thousands) $66,514 $13,538 $281,411 $252,825 $1.95 $1.73 $48,394 $7,128 Q2'20 Q2'21 Q2'20 Q2'21 Q2'20 Q2'21 Q2'20 Q2'21 1) This is a non-
Slide 4: 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 5: People, Technology, Brand
Q2 2021 22% of total transaction PEOPLE volume was with new clients BRAND 55% of refinancing volume* was new loans TECHNOLOGY *Represents refinancings that were added to Walker & Dunlop 5 servicing portfolio in Q2’21
Slide 6: Q2'21 Debt Brokerage Volume Up From 2019 and 2020 Levels
Q2’21 DEBT BROKERAGE VOLUME UP FROM 2019 AND 2020 LEVELS Brokered Loan Originations1 (in millions) $6,281 $4,302 $3,994 $3,884 $3,768 $3,101 $1,945 $1,712 $1,496 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 6 1) Brokered transactions for life insurance companies, commercia
Slide 7: Increase in Cash Revenues Driving Strong Adjusted EBITDA
INCREASE IN CASH REVENUES DRIVING STRONG ADJUSTED EBITDA Total Revenues Adjusted EBITDA (in thousands) (in thousands) $66,514 $281,411 $252,825 22% $48,394 36% 78% 64% Q2'20 Q2'21 Q2'20 Q2'21 Cash Revenues Non-Cash Revenues 1 7 1) Represents mortgage serving rights (“MSR income”), which represent th
Slide 8: Debt Brokerage Volume Has Scaled Significantly and Is on Pace for a Record Year
DEBT BROKERAGE VOLUME HAS SCALED S I G N I F I C A N T LY A N D I S O N PA C E F O R A R E C O R D YEAR Brokered Loan Originations1 (in millions) $10,969 $10,583 $10,364 $8,398 $7,327 $4,122 $4,189 2015 2016 2017 2018 2019 2020 YTD 2021 8 1) Brokered transactions for life insurance companies, commer
Slide 9: W&D Property Sales Have Expanded Dramatically and Are Poised for Continued Growth
W & D P R O P E R T Y S A L E S H AV E E X P A N D E D D R A M AT I C A L LY A N D A R E P O I S E D F O R C O N T I N U E D GROWTH Walker & Dunlop Property Sales Volume Marcus & Millichap Property Sales Volume (in millions) (in millions) 32% 2% 5-Year 5-Year $6,130 CAGR1 CAGR1 $36,070 $36,858 $5,39
Slide 10: W&D Revenue per Employee Dwarfs That of Large Competitors
W& D R E V E N U E P E R E M P L O Y E E D WA R F S T H AT O F L A R G E C O M P E T I T O R S $1M ~ $1.1M $500,000 J.P. Morgan ~ $468K Wells Fargo CBRE ~ $269K JLL ~ $238K ~ $182K REVENUE / EMPLOYEEE # OF 100,000 200,000 300,000 EMPLOYEEES 10 Revenue per employee for the year ended December 31, 202
Slide 11: People, Brand, and Technology Contributing to Strong YTD Results
PEOPLE, BRAND, AND TECHNOLOGY C O N T R I B U T I N G T O S T R O N G Y T D R E S U LT S YTD 2021 Key Performance Metrics Total Revenues Diluted EPS Total Transaction Volume Adjusted EBITDA (in thousands) (in millions) (in thousands) $3.52 $22,572 $505,699 $127,181 $486,982 $3.44 $18,484 $112,522 YT
Slide 12: Maintaining Leading GSE Market Share
M A I N TA I N I N G L E A D I N G G S E M A R K E T S H A R E Combined GSE Market Share $19,606 $16,939 12.3% 11.2% 11.3% $15,121 12.2% 11.0% 10.6% $13,959 10.2% 9.6% 9.8% $11,891 $10,148 $6,412 $6,550 $5,261 2013 2014 2015 2016 2017 2018 2019 2020 YTD 2021 W&D Deliveries to GSE 1 W&D Market Share
Slide 13: Signed Applications for GSE Loans Began Picking Up at End of Q2 and Into July
S I G N E D A P P L I C AT I O N S F O R G S E L O A N S B E G A N P I C K I N G U P AT T H E E N D O F Q 2 A N D I N T O J U L Y Volume of 2021 Monthly Signed Applications (in millions) $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 January February March April May June July Fanni
Slide 14: 2021 Financial Outlook
2021 FINANCIAL OUTLOOK 2021 TARGETS Diluted Earnings Per Share FLAT to 5% GROWTH Adjusted EBITDA DOUBLE DIGIT GROWTH Operating Margin 29% to 32% Return on Equity 19% to 22% 14
Slide 15: Appendix
APPENDIX
Slide 16: Adjusted EBITDA Reconciliation to Net Income
A D J U S T E D E B I T D A R E C O N C I L I AT I O N TO NET INCOME For the Three months ended Three months ended Six months ended Six months ended June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 (in thousands) Walker & Dunlop Net Income $56,058 $62,059 $114,110 $109,888 Adjustments: Income
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