Walker & Dunlop, Inc · NYSE:WD
Walker & Dunlop — Q1 2023 Earnings Presentation
16 slides from Walker & Dunlop's earnings presentation, May 4, 2023
Slide 1: First Quarter 2023 Earnings
Q1 FIRST QUARTER 2023 EARNINGS May 4, 2023
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: Q1'23 Consolidated Key Performance Metrics
S T R O N G R E S U LT S D E S P I T E C H A L L E N G I N G ENVIRONMENT Q1’23 Consolidated Key Performance Metrics Total Transaction Volume Adjusted EBITDA1 Adjusted Core EPS2 (in millions) (in thousands) $12,667 $67,975 $1.17 $62,636 $6,720 $1.06 Q1'22 Q1'23 Q1'22 Q1'23 Q1'22 Q1'23 3 1) This is a
Slide 4: Pull Back in Bank Lending Presents Significant Need for Alternative Capital Sources
PULL BACK IN BANK LENDING PRESENTS SIGNIFICANT N E E D F O R A LT E R N AT I V E C A P I TA L S O U R C E S $4.5 Trillion of Total Commercial Real Estate Debt Outstanding1 0.8% 0.5% 0.7% 2.0% 0.5% 2.0% 0.6% 3.0% 4.0% Bank and Thrift Agency and GSE Portfolios and MBS Life Insurance Companies 13.3% 38
Slide 5: Multifamily Portfolio Credit Fundamentals Withstand Macroeconomic Concerns
M U LT I FA M I LY P O R T F O L I O C R E D I T F U N D A M E N TA L S W I T H S TA N D M A C R O E C O N O M I C C O N C E R N S Key Credit Metrics (as a percentage of the at-risk portfolio) 1.70% 14% Cumulative losses in the 1.40% 12% at-risk portfolio totaled At-Risk Portfolio Credit Metrics 16
Slide 6: Capital Markets: Q1'23 Key Financial Metrics
C A P I TA L M A R K E T S Q1’23 KEY FINANCIAL METRICS (in thousands) Q1’23 Q1’22 % Change Total Consolidated Transaction Volumes $6,720,480 $12,666,707 (47%) Total Revenues $104,004 $168,817 (38%) Income from Operations $2,443 $55,078 (96%) Net Income $504 $43,102 (99%) Adjusted EBITDA2 ($18,687) $
Slide 7: Servicing & Asset Management (SAM): Q1'23 Key Financial Metrics
S E RV I C I N G & A S S E T M A N A G E M E N T ( “ S A M ” ) Q1’23 KEY FINANCIAL METRICS (in thousands) Q1’23 Q1’22 % Change Total Revenues $133,196 $106,493 25% Income from Operations $63,558 $34,869 82% Net Income $51,084 $28,073 82% Adjusted EBITDA1 $112,975 $86,236 31% • Ended Q1’23 with total
Slide 8: Corporate: Q1'23 Key Financial Metrics
C O R P O R AT E Q1’23 KEY FINANCIAL METRICS (in thousands) Q1’23 Q1’22 % Change Total Revenues $1,546 $44,134 (96%) Income from Operations ($31,396) $43 (73,114%) Net Income ($24,923) $34 (73,403%) Adjusted EBITDA1 ($26,313) ($32,134) (18%) • Decline in total revenues largely impacted by inclusion
Slide 9: Full-Year 2023 Financial Outlook Ranges
FULL-YEAR 2023 FINANCIAL OUTLOOK RANGES1 LOW END HIGH END Diluted Earnings Per Share DOWN 35% FLAT Adjusted Core Earnings Per Share DOWN NO MORE THAN 10% DOUBLE-DIGIT GROWTH Adjusted EBITDA DOWN NO MORE THAN 10% DOUBLE-DIGIT GROWTH Operating Margin MID-TEENS LOW-TWENTIES Return on Equity HIGH SINGLE
Slide 10: Scale with GSEs Is Beneficial to Winning Business
SCALE WITH GSES IS BENEFICIAL TO WINNING BUSINESS 2022 Top Fannie Mae DUS® 2022 Top Freddie Mac Optigo® 2022 Top GSE Lenders Lenders Lenders 2022 2022 2022 Company Amount Company Amount Company Amount (billions) (billions) (billions) 1 Walker & Dunlop $11.4 1 Berkadia $11.1 1 Walker & Dunlop $18.0 2
Slide 11: Appendix
APPENDIX
Slide 12: Consolidated Adjusted EBITDA Reconciliation to Consolidated Net Income
C O N S O L I D AT E D 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 T O C O N S O L I D AT E D N E T I N C O M E Three months ended March 31, Three months ended March 31, (in thousands) 2023 2022 Walker & Dunlop Net Income $26,665 $71,209 Adjustments: Income tax expense 7,135 19,460 Intere
Slide 13: Adjusted Core Net Income and Adjusted Core EPS Reconciliation to Net Income
ADJUSTED CORE NET INCOME AND ADJUSTED C O R E E P S R E C O N C I L I AT I O N T O N E T I N C O M E (in thousands), except per share amounts Three months ended March 31, 2023 Three months ended March 31, 2022 Walker & Dunlop Net Income $26,665 $71,209 Adjustments: Provision (benefit) for credit los
Slide 14: Adjusted EBITDA Reconciliation to Net Income by Segment: Capital Markets
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 T O NET INCOME BY SEGMENT Capital Markets Three moths ended March 31, Three months ended March 31, (in thousands) 2023 2022 Walker & Dunlop Net Income $504 $43,102 Adjustments: Income tax expense 504 11,911 Interest expense on corporate debt 4,2
Slide 15: Adjusted EBITDA Reconciliation to Net Income by Segment: SAM
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 T O NET INCOME BY SEGMENT SAM Three months ended March 31, Three months ended March 31, (in thousands) 2023 2022 Walker & Dunlop Net Income $51,084 $28,073 Adjustments: Income tax expense 13,104 7,540 Interest expense on corporate debt 9,582 4,5
Slide 16: Adjusted EBITDA Reconciliation to Net Income by Segment: Corporate
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 T O NET INCOME BY SEGMENT Corporate Three months ended March 31, Three months ended March 31, (in thousands) 2023 2022 Walker & Dunlop Net Income ($24,923) $34 Adjustments: Income tax expense (6,473) 9 Interest expense on corporate debt 1,423 34