Walker & Dunlop, Inc · NYSE:WD
Walker & Dunlop — Q4 2020 Earnings Presentation
21 slides from Walker & Dunlop's earnings presentation, Feb 4, 2021
Slide 1: Fourth Quarter and Full Year 2020 Earnings
FOURTH QUARTER AND FULL YEAR 2020 EARNINGS February 4, 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: Annual Total Revenues
A N N U A L T O T A L R E V E N U E S (in millions) $1,084 GOAL 18% $1B $817 CAGR $712 $725 $575 $468 in annual total revenues 2015 2016 2017 2018 2019 2020 3
Slide 4: Debt Financing Volume
D E B T F I N A N C I N G V O L U M E (in millions) $34,954 17% $24,875 $25,334 $26,574 GOAL CAGR $16,239 $16,724 $30B+ annual debt financing volume 2015 2016 2017 2018 2019 2020 4
Slide 5: Servicing Portfolio
S E R V I C I N G P O R T F O L I O (in millions) $107,212 16% $85,689 $93,225 GOAL CAGR $100B+ $74,310 $63,081 $50,212 servicing portfolio at December at December at December at December at December at December 31, 2015 31, 2016 31, 2017 31, 2018 31, 2019 31, 2020 5
Slide 6: Property Sales Volume
P R O P E R T Y S A L E S V O L U M E (in millions) $6,130 $5,393 GOAL 32% CAGR $1,520 $2,574 $3,031 $2,713 $8B+ annual property sales volume 2015 2016 2017 2018 2019 2020 6
Slide 7: W&D Has Grown EPS by a 24% CAGR Over Past Five Years
W&D HAS GROWN EPS BY A 24% CAGR OVER PA S T F I V E Y E A R S Historical Diluted EPS and Weighted Average Shares $8.00 $7.69 40,000 $7.00 Weighted Avg. Diluted Shares (in thousands) $6.47 38,000 $6.00 $5.45 36,000 Diluted EPS $4.96 $5.00 34,000 $4.00 $3.57 31,386 31,384 32,000 $3.00 $2.62 31,083 30,
Slide 8: People, Brand, Technology
PEOPLE BRAND WaD TECHNOLOGY
Slide 9: W&D Has Maintained Industry-Leading Revenue per Employee While Growing
W & D H A S M A I N TA I N E D I N D U S T R Y- L E A D I N G REVENUE PER EMPLOYEE WHILE GROWING Annual Revenue per Employee ($ in thousands) $1,188 $1,204 $1,111 $1,081 $1,068 900 765 671 599 518 2016 2017 2018 2019 2020 Average headcount Revenue per employee 9
Slide 10: Brand Expansion Has Contributed to Growth Across Channels
B R A N D E X PA N S I O N H A S C O N T R I B U T E D T O G R O W T H ACROSS CHANNELS WEBCAST WEBSITE PUBLIC RELATIONS 260k 200k 82% 430% Views (Live Registrants YoY YoY increase & Replay) increase in in media hits traffic 10
Slide 11: People, Technology, Brand
FY 2020 66% of refinancing volume* PEOPLE was new loans BRAND 23% of total transaction volume was with new customers TECHNOLOGY 11 *Includes refinancings that were added to Walker & Dunlop servicing portfolio in 2020
Slide 12: People, Brand and Technology Are Driving Strong Financial Performance (Q4)
PEOPLE, BRAND AND TECHNOLOGY ARE DRIVING STRONG FINANCIAL PERFORMANCE Q4 Key Performance Metrics Total Transaction Volume Total Revenues Diluted Earnings Per Share (in millions) (in millions) $14,189 $350 $2.59 $9,812 $217 $1.34 Q4'19 Q4'20 Q4'19 Q4'20 Q4'19 Q4'20 12
Slide 13: People, Brand and Technology Are Driving Strong Financial Performance (2020)
PEOPLE, BRAND AND TECHNOLOGY ARE DRIVING STRONG FINANCIAL PERFORMANCE 2020 Key Performance Metrics Total Transaction Volume Total Revenues Diluted Earnings Per Share (in millions) (in millions) $41,084 $7.69 $1,084 $31,967 $817 $5.45 2019 2020 2019 2020 2019 2020 13
Slide 14: Exceptional Key Financial Metrics
EXCEPTIONAL KEY FINANCIAL METRICS Operating Margin Return on Equity Personnel Expense as % of Revenues 34% 29% 45% 45% 27% Q4 17% 2020 Q4'19 Q4'20 Q4'19 Q4'20 Q4'19 Q4'20 30% 23% 43% 42% 28% 18% FY 2020 2019 2020 2019 2020 2019 2020 14 2020 target range: 27% to 30% 2020 target range: 18% to 20%
Slide 15: Strong Q4 Total Transaction Volume Contributed to Record Year
S T R O N G Q 4 T O TA L T R A N S A C T I O N V O L U M E CONTRIBUTED TO RECORD YEAR Breakout of Total Transaction Volume (in millions) $3,892 $3,884 $3,769 $2,846 $2,685 $1,979 $1,693 $1,526 $844 $532 $197 $153 Fannie Mae Freddie Mac HUD Brokered Principal Lending and Property Sales Investing Q4'1
Slide 16: Strong Portfolio Growth Sets Stage for Accelerated Cash Generation
S T R O N G P O RT F O L I O G R O W T H S E T S S TA G E F O R A C C E L E R AT E D C A S H G E N E R AT I O N I N F U T U R E > As of December 31, 2020, the servicing portfolio had a weighted average remaining life of 9.4 years and a weighted average servicing fee of 24.0 bps > Only $5.1 billion o
Slide 17: 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% 17
Slide 18: 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 19: Multifamily Lending Could Advance Us to #1 Lender Ranking
$ 2 4 B O F 2 0 2 0 M U LT I FA M I LY L E N D I N G C O U L D A D VA N C E U S TO # 1 M U LT I FA M I LY L E N D E R R A N K I N G 2019 Top Multifamily Lenders Company Amount (millions) Number Avg. Size (millions) 1 JP Morgan Chase $ 22,739 6,638 $ 3.4 2 Wells Fargo $ 20,364 921 $ 22.1 3 CBRE $ 19,
Slide 20: Total Revenues and Diluted EPS Outlook
Total Revenues Diluted EPS $1.7 to $2.0B $13.00 to $15.00 20
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