Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 31, 2019 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2019 | |
Entity File Number | 001-35000 | |
Entity Registrant Name | Walker & Dunlop, Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 80-0629925 | |
Entity Address, Address Line One | 7501 Wisconsin Avenue, Suite 1200E | |
Entity Address, City or Town | Bethesda | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 20814 | |
City Area Code | 301 | |
Local Phone Number | 215-5500 | |
Title of 12(b) Security | Common Stock, $0.01 Par Value Per Share | |
Trading Symbol | WD | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 30,734,570 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001497770 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 74,184 | $ 90,058 |
Restricted cash | 15,454 | 20,821 |
Pledged securities, at fair value | 119,289 | 116,331 |
Loans held for sale, at fair value | 1,302,938 | 1,074,348 |
Loans held for investment, net | 432,593 | 497,291 |
Servicing fees and other receivables, net | 51,982 | 50,419 |
Derivative assets | 22,420 | 35,536 |
Mortgage servicing rights | 688,027 | 670,146 |
Goodwill and other intangible assets | 183,286 | 177,093 |
Other assets | 104,044 | 50,014 |
Total assets | 2,994,217 | 2,782,057 |
Liabilities | ||
Accounts payable and other liabilities | 311,950 | 312,949 |
Performance deposits from borrowers | 14,737 | 20,335 |
Derivative liabilities | 35,122 | 32,697 |
Guaranty obligation, net of accumulated amortization | 51,414 | 46,870 |
Allowance for risk-sharing obligations | 7,964 | 4,622 |
Warehouse notes payable | 1,313,955 | 1,161,382 |
Note payable | 294,840 | 296,010 |
Total liabilities | 2,029,982 | 1,874,865 |
Equity | ||
Preferred shares, authorized 50,000; none issued. | ||
Common stock, $0.01 par value. Authorized 200,000; issued and outstanding 29,964 shares at June 30, 2019 and 29,497 shares at December 31, 2018. | 300 | 295 |
Additional paid-in capital ("APIC") | 227,621 | 235,152 |
Accumulated other comprehensive income (loss) ("AOCI") | 892 | (75) |
Retained earnings | 730,562 | 666,752 |
Total stockholders' equity | 959,375 | 902,124 |
Noncontrolling interests | 4,860 | 5,068 |
Total equity | 964,235 | 907,192 |
Commitments and contingencies (NOTES 2 and 10) | ||
Total liabilities and equity | $ 2,994,217 | $ 2,782,057 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Condensed Consolidated Balance Sheets | ||
Preferred shares, authorized | 50,000 | 50,000 |
Preferred shares, issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 200,000 | 200,000 |
Common stock, issued | 29,964 | 29,497 |
Common stock, outstanding | 29,964 | 29,497 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | ||||
Gains from mortgage banking activities | $ 106,881 | $ 102,237 | $ 205,616 | $ 183,746 |
Servicing fees | 53,006 | 49,317 | 105,205 | 97,357 |
Net warehouse interest income | 6,411 | 2,392 | 13,432 | 4,249 |
Escrow earnings and other interest income | 14,616 | 9,276 | 28,684 | 16,624 |
Other | 19,411 | 14,982 | 34,825 | 23,680 |
Total revenues | 200,325 | 178,204 | 387,762 | 325,656 |
Expenses | ||||
Personnel | 84,398 | 71,426 | 156,029 | 126,699 |
Amortization and depreciation | 37,381 | 35,489 | 75,284 | 69,124 |
Provision for credit losses | 961 | 800 | 3,636 | 323 |
Interest expense on corporate debt | 3,777 | 2,343 | 7,429 | 4,522 |
Other operating expenses | 16,830 | 15,176 | 32,322 | 28,127 |
Total expenses | 143,347 | 125,234 | 274,700 | 228,795 |
Income from operations | 56,978 | 52,970 | 113,062 | 96,861 |
Income tax expense | 14,832 | 11,937 | 26,856 | 19,121 |
Net income before noncontrolling interests | 42,146 | 41,033 | 86,206 | 77,740 |
Less: net income (loss) from noncontrolling interests | (50) | (79) | (208) | (233) |
Walker and Dunlop net income | 42,196 | 41,112 | 86,414 | 77,973 |
Other comprehensive income (loss), net of tax: | ||||
Net change in unrealized gains and losses on pledged available-for-sale securities | 666 | (53) | 967 | (180) |
Walker and Dunlop comprehensive income | $ 42,862 | $ 41,059 | $ 87,381 | $ 77,793 |
Basic earnings per share (NOTE 11) | $ 1.36 | $ 1.31 | $ 2.80 | $ 2.49 |
Diluted earnings per share (NOTE 11) | $ 1.33 | $ 1.26 | $ 2.72 | $ 2.40 |
Basic weighted average shares outstanding | 29,985 | 30,256 | 29,834 | 30,139 |
Diluted weighted average shares outstanding | 30,744 | 31,495 | 30,720 | 31,286 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities | ||
Net income before noncontrolling interests | $ 86,206 | $ 77,740 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Gains attributable to the fair value of future servicing rights, net of guaranty obligation | (82,209) | (79,737) |
Change in the fair value of premiums and origination fees | 938 | (3,527) |
Amortization and depreciation | 75,284 | 69,124 |
Provision for credit losses | 3,636 | 323 |
Originations of loans held for sale | (7,913,982) | (5,946,251) |
Sales of loans to third parties | 7,696,034 | 5,645,888 |
Other operating activities, net | (25,111) | (17,710) |
Net cash provided by (used in) operating activities | (159,204) | (254,150) |
Cash flows from investing activities | ||
Capital expenditures | (3,392) | (1,151) |
Purchase of pledged available-for-sale securities | (7,562) | (38,566) |
Funding of preferred equity investments | (1,100) | |
Distributions from (investments in) Interim Program JV | (18,518) | 1,209 |
Acquisitions, net of cash acquired | (7,180) | (33,102) |
Purchase of mortgage servicing rights | (1,814) | |
Originations of loans held for investment | (83,402) | (151,754) |
Principal collected on loans held for investment upon payoff | 150,761 | 87,688 |
Net cash provided by (used in) investing activities | 30,707 | (138,590) |
Cash flows from financing activities | ||
Borrowings (repayments) of warehouse notes payable, net | 129,412 | 323,153 |
Borrowings of interim warehouse notes payable | 54,757 | 50,455 |
Repayments of interim warehouse notes payable | (32,264) | (61,049) |
Repayments of note payable | (1,500) | (552) |
Proceeds from issuance of common stock | 4,188 | 8,067 |
Repurchase of common stock | (25,915) | (21,457) |
Cash dividends paid | (18,630) | (15,699) |
Payment of contingent consideration | (6,450) | (5,150) |
Debt issuance costs | (1,729) | (1,881) |
Net cash provided by (used in) financing activities | 101,869 | 275,887 |
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents (NOTE 2) | (26,628) | (116,853) |
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period | 120,348 | 286,680 |
Total of cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period | 93,720 | 169,827 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid to third parties for interest | 36,003 | 21,338 |
Cash paid for income taxes | $ 24,865 | $ 31,299 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2019 | |
ORGANIZATION AND BASIS OF PRESENTATION | |
Organization and Basis of Presentation | NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION These financial statements represent the condensed consolidated financial position and results of operations of Walker & Dunlop, Inc. and its subsidiaries. Unless the context otherwise requires, references to “we,” “us,” “our,” “Walker & Dunlop” and the “Company” mean the Walker & Dunlop consolidated companies. The statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they may not include certain financial statement disclosures and other information required for annual financial statements. The accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (“2018 Form 10-K”). In the opinion of management, all adjustments (consisting only of normal recurring accruals except as otherwise noted herein) considered necessary for a fair presentation of the results for the Company in the interim periods presented have been included. Results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 or thereafter. Walker & Dunlop, Inc. is a holding company and conducts the majority of its operations through Walker & Dunlop, LLC, the operating company. Walker & Dunlop is one of the leading commercial real estate services and finance companies in the United States. The Company originates, sells, and services a range of commercial real estate debt and equity financing products, provides property sales brokerage services with a specific focus on multifamily, and engages in commercial real estate investment management activities. Through its mortgage bankers and property sales brokers, the Company offers its customers Agency Lending, Debt Brokerage, and Principal Lending and Investing products and Multifamily Property Sales services. Through its Agency Lending products, the Company originates and sells loans pursuant to the programs of the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac,” and together with Fannie Mae, the “GSEs”), the Government National Mortgage Association (“Ginnie Mae”), and the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (together with Ginnie Mae, “HUD”). Through its Debt Brokerage products, the Company brokers, and in some cases services, loans for various life insurance companies, commercial banks, commercial mortgage backed securities issuers, and other institutional investors, in which cases the Company does not fund the loan. The Company also provides a variety of commercial real estate debt and equity solutions through its Principal Lending and Investing products, including interim loans, preferred equity, and joint venture (“JV”) equity on commercial real estate properties. Interim loans on multifamily properties are offered (i) through the Company and recorded on the Company’s balance sheet (the “Interim Program”) and (ii) through a joint venture with an affiliate of Blackstone Mortgage Trust, Inc., in which the Company holds a 15% ownership interest (the “Interim Program JV”). Interim loans on all commercial real estate property types are also offered through separate accounts managed by the Company’s subsidiary, JCR Capital Investment Corporation (“JCR”). Preferred equity and JV equity on commercial real estate properties are offered through funds managed by JCR. The Company brokers the sale of multifamily properties through its 75% owned subsidiary, Walker & Dunlop Investment Sales (“WDIS”). In some cases, the Company also provides the debt financing for the property sale. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Summary of Significant Accounting Policies | NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation Noncontrolling interests Net income from noncontrolling interests Subsequent Events Use of Estimates Loans Held for Investment, net Loans held for investment, net Loans held for investment, net Loans held for investment, net In the third quarter of 2018, the Company transferred a portfolio of participating interests in loans held for investment to a third party. The Company accounted for the transfer as a secured borrowing. The aggregate unpaid principal balance of the loans of $77.8 million is presented as a component of Loans held for investment, net Accounts payable and other liabilities One loan held for investment with an unpaid principal balance of $14.7 million was delinquent, impaired, and on non-accrual status as of June 30, 2019. None of the loans held for investment was delinquent, impaired, or on non-accrual status as of December 31, 2018. Prior to 2019, the Company had not experienced any delinquencies related to these loans. The Company has never charged off any loan held for investment. The allowances for loan losses recorded as of June 30, 2019 consisted primarily of the specific reserve on the impaired loan, while the allowance for loan losses as of December 31, 2018 was based entirely on the Company’s collective assessment of the portfolio. During July of 2019, a plan was agreed upon to recapitalize the project, bring in new property management, and extend the delinquent loan to allow the sponsor to correct weaknesses in the property. The Company expects to complete the restructuring of the loan later in the third quarter of 2019. Provision for Credit Losses— Provision for credit losses Provision for credit losses For the three months ended For the six months ended June 30, June 30, Components of Provision for Credit Losses (in thousands) 2019 2018 2019 2018 Provision for loan losses $ 25 $ 79 $ 648 $ 66 Provision for risk-sharing obligations 936 721 2,988 257 Provision for credit losses $ 961 $ 800 $ 3,636 $ 323 Net Warehouse Interest Income— Net warehouse interest income For the three months ended For the six months ended June 30, June 30, Components of Net Warehouse Interest Income (in thousands) 2019 2018 2019 2018 Warehouse interest income - loans held for sale $ 12,992 $ 11,382 $ 26,976 $ 20,146 Warehouse interest expense - loans held for sale (12,782) (9,900) (26,737) (17,555) Net warehouse interest income - loans held for sale $ 210 $ 1,482 $ 239 $ 2,591 Warehouse interest income - loans held for investment $ 8,268 $ 1,647 $ 17,047 $ 3,068 Warehouse interest expense - loans held for investment (2,067) (737) (3,854) (1,410) Warehouse interest income - secured borrowings 920 — 1,808 — Warehouse interest expense - secured borrowings (920) — (1,808) — Net warehouse interest income - loans held for investment $ 6,201 $ 910 $ 13,193 $ 1,658 Total net warehouse interest income $ 6,411 $ 2,392 $ 13,432 $ 4,249 Income Taxes —The Company records the realizable excess tax benefits from stock compensation as a reduction to income tax expense. The Company recorded realizable excess tax benefits of zero and $1.7 million during the three months ended June 30, 2019 and 2018, respectively, and $3.4 million and $5.8 million during the six months ended June 30, 2019 and 2018, respectively. Statement of Cash Flows —For presentation in the Condensed Consolidated Statements of Cash Flows, the Company considers pledged cash and cash equivalents (as detailed in NOTE 10) to be restricted cash and restricted cash equivalents. The following table, in conjunction with the detail of Pledged securities, at fair value presented in NOTE 10, presents a reconciliation of the total of cash, cash equivalents, restricted cash, and restricted cash equivalents as presented in the Condensed Consolidated Statements of Cash Flows to the related captions in the Condensed Consolidated Balance Sheets as of June 30, 2019 and 2018 and December 31, 2018 and 2017. June 30, December 31, (in thousands) 2019 2018 2018 2017 Cash and cash equivalents $ 74,184 $ 81,531 $ 90,058 $ 191,218 Restricted cash 15,454 29,986 20,821 6,677 Pledged cash and cash equivalents 4,082 58,310 9,469 88,785 Total cash, cash equivalents, restricted cash, and restricted cash equivalents $ 93,720 $ 169,827 $ 120,348 $ 286,680 Contracts with Customers For the three months ended For the six months ended June 30, June 30, Description in thousands 2019 2018 2019 2018 Statement of income line item Certain loan origination fees $ 15,381 $ 12,371 $ 26,912 $ 23,656 Gains from mortgage banking activities Property sales broker fees, investment management fees, assumption fees, application fees, and other 11,445 8,092 20,407 12,417 Other revenues Total revenues derived from contracts with customers $ 26,826 $ 20,463 $ 47,319 $ 36,073 Litigation Recently Adopted and Recently Announced Accounting Pronouncement s —In the second quarter of 2016, Accounting Standards Update 2016-13 (“ASU 2016-13”), Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments was issued. ASU 2016-13 ("the Standard") represents a significant change to the incurred loss model currently used to account for credit losses. The Standard requires an entity to estimate the credit losses expected over the life of the credit exposure upon initial recognition of that exposure. The expected credit losses consider historical information, current information, and reasonable and supportable forecasts, including estimates of prepayments. Exposures with similar risk characteristics are required to be grouped together when estimating expected credit losses. The initial estimate and subsequent changes to the estimated credit losses are required to be reported in current earnings in the income statement and through an allowance in the balance sheet. ASU 2016-13 is applicable to financial assets subject to credit losses and measured at amortized cost and certain off-balance-sheet credit exposures. The Standard will modify the way the Company estimates its allowance for risk-sharing obligations and its allowance for loan losses and the way it assesses impairment on its pledged available-for-sale (“AFS”) securities. ASU 2016-13 requires modified retrospective application to all outstanding, in-scope instruments, with a cumulative-effect adjustment recorded to opening retained earnings as of the beginning of the period of adoption. The Company plans on adopting ASU 2016-13 when the standard is required to be adopted, January 1, 2020. The Company is in the process of determining the significance of the impact the Standard will have on its financial statements. The Company expects its allowance for risk-sharing obligations to increase when ASU 2016-13 is adopted. The Company is in the process of (i) completing the accounting policies, (ii) gathering data, (iii) updating its processes, and (iv) developing forecasts and expects to run parallel processing sometime during the second half of 2019. There are no other accounting pronouncements previously issued by the FASB but not yet effective or not yet adopted by the Company that have the potential to materially impact the Company’s condensed consolidated financial statements. There have been no material changes to the accounting policies discussed in NOTE 2 of the Company’s 2018 Form 10-K. Immaterial Correction of an Error —In the fourth quarter of 2018, the Company identified and corrected an immaterial error in the calculation of earnings per share for quarterly and annual financial results presented in its previous filings. The Company’s 2018 Form 10-K contains additional detail related to the correction of the immaterial error. This Quarterly Report on Form 10-Q presents the corrected basic and diluted earnings per share for the three and six months ended June 30, 2018. Reclassifications — The Company has made certain immaterial reclassifications to prior-year balances to conform to current-year presentation. |
GAINS FROM MORTGAGE BANKING ACT
GAINS FROM MORTGAGE BANKING ACTIVITIES | 6 Months Ended |
Jun. 30, 2019 | |
GAINS FROM MORTGAGE BANKING ACTIVITIES | |
Gains from mortgage banking activities | NOTE 3—GAINS FROM MORTGAGE BANKING ACTIVITIES Gains from mortgage banking activities consisted of the following activity for the three and six months ended June 30, 2019 and 2018: For the three months ended For the six months ended June 30, June 30, Components of Gains from Mortgage Banking Activities (in thousands) 2019 2018 2019 2018 Contractual loan origination related fees, gross $ 70,970 $ 62,074 $ 131,622 $ 116,457 Co-broker fees (5,360) (6,881) (8,215) (12,448) Fair value of expected net cash flows from servicing recognized at commitment 45,639 51,725 90,674 86,953 Fair value of expected guaranty obligation recognized at commitment (4,368) (4,681) (8,465) (7,216) Total gains from mortgage banking activities $ 106,881 $ 102,237 $ 205,616 $ 183,746 |
MORTGAGE SERVICING RIGHTS
MORTGAGE SERVICING RIGHTS | 6 Months Ended |
Jun. 30, 2019 | |
MSRs | |
Mortgage Servicing Rights | |
Mortgage Servicing Rights | NOTE 4—MORTGAGE SERVICING RIGHTS Mortgage servicing rights (“MSRs”) represent the carrying value of the commercial servicing rights retained by the Company for mortgage loans originated and sold and MSRs acquired from third parties. The initial capitalized amount is equal to the estimated fair value of the expected net cash flows associated with the servicing rights. MSRs are amortized using the interest method over the period that servicing income is expected to be received. The Company has one class of MSRs. The fair values of the MSRs at June 30, 2019 and December 31, 2018 were $874.0 million and $858.7 million, respectively. The Company uses a discounted static cash flow valuation approach, and the key economic assumption is the discount rate. For example, see the following sensitivities: The impact of a 100 - basis point increase in the discount rate at June 30, 2019 is a decrease in the fair value of $27.1 million. The impact of a 200 - basis point increase in the discount rate at June 30, 2019 is a decrease in the fair value of $52.4 million. These sensitivities are hypothetical and should be used with caution. These hypothetical scenarios do not include interplay among assumptions and are estimated as a portfolio rather than individual assets. Activity related to capitalized MSRs for the three and six months ended June 30, 2019 and 2018 is shown in the table below: For the three months ended For the six months ended June 30, June 30, Roll Forward of MSRs (in thousands) 2019 2018 2019 2018 Beginning balance $ 677,946 $ 631,031 $ 670,146 $ 634,756 Additions, following the sale of loan 48,695 42,559 95,797 73,481 Purchases — 1,814 — 1,814 Amortization (34,267) (32,801) (68,470) (64,962) Pre-payments and write-offs (4,347) (3,689) (9,446) (6,175) Ending balance $ 688,027 $ 638,914 $ 688,027 $ 638,914 The following tables summarize the gross value, accumulated amortization, and net carrying value of the Company’s MSRs as of June 30, 2019 and December 31, 2018: Components of MSRs (in thousands) June 30, 2019 December 31, 2018 Gross Value $ 1,144,555 $ 1,100,439 Accumulated amortization (456,528) (430,293) Net carrying value $ 688,027 $ 670,146 The expected amortization of MSRs recorded as of June 30, 2019 is shown in the table below. Actual amortization may vary from these estimates. Expected (in thousands) Amortization Six Months Ending December 31, 2019 $ 66,514 Year Ending December 31, 2020 $ 122,989 2021 109,080 2022 93,909 2023 81,837 2024 68,540 Thereafter 145,158 Total $ 688,027 |
GUARANTY OBLIGATION AND ALLOWAN
GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS | 6 Months Ended |
Jun. 30, 2019 | |
GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS | |
Guaranty Obligation and Allowance for Risk-Sharing Obligations | NOTE 5—GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS When a loan is sold under the Fannie Mae Delegated Underwriting and Servicing TM (“DUS”) program, the Company typically agrees to guarantee a portion of the ultimate loss incurred on the loan should the borrower fail to perform. The compensation for this risk is a component of the servicing fee on the loan. The guaranty is in force while the loan is outstanding. The Company does not provide a guaranty for any other loan product it sells or brokers. Activity related to the guaranty obligation for the three and six months ended June 30, 2019 and 2018 is presented in the following table: For the three months ended For the six months ended June 30, June 30, Roll Forward of Guaranty Obligation (in thousands) 2019 2018 2019 2018 Beginning balance $ 49,376 $ 41,424 $ 46,870 $ 41,187 Additions, following the sale of loan 4,731 3,287 9,594 5,070 Amortization (2,347) (1,950) (4,696) (3,757) Other (346) (291) (354) (30) Ending balance $ 51,414 $ 42,470 $ 51,414 $ 42,470 Activity related to the allowance for risk-sharing obligations for the three and six months ended June 30, 2019 and 2018 is shown in the following table: For the three months ended For the six months ended June 30, June 30, Roll Forward of Allowance for Risk-sharing Obligations (in thousands) 2019 2018 2019 2018 Beginning balance $ 6,682 $ 3,058 $ 4,622 $ 3,783 Provision for risk-sharing obligations 936 721 2,988 257 Write-offs — — — — Other 346 291 354 30 Ending balance $ 7,964 $ 4,070 $ 7,964 $ 4,070 When the Company places a loan for which it has a risk-sharing obligation on its watch list, the Company transfers the remaining unamortized balance of the guaranty obligation to the allowance for risk-sharing obligations. When a loan for which the Company has a risk-sharing obligation is removed from the watch list, the loan’s reserve is transferred from the allowance for risk-sharing obligations back to the guaranty obligation, and the amortization of the remaining balance over the remaining estimated life is resumed. This net transfer of the unamortized balance of the guaranty obligation from a noncontingent classification to a contingent classification (and vice versa) is presented in the guaranty obligation and allowance for risk-sharing obligations tables above as “Other.” The Allowance for risk-sharing obligations as of June 30, 2019 is based largely on the Company’s collective assessment of the probability of loss related to the loans on the watch list as of June 30, 2019. As of June 30, 2019, the maximum quantifiable contingent liability associated with the Company’s guarantees under the Fannie Mae DUS agreement was $7.1 billion. The maximum quantifiable contingent liability is not representative of the actual loss the Company would incur. The Company would be liable for this amount only if all of the loans it services for Fannie Mae, for which the Company retains some risk of loss, were to default and all of the collateral underlying these loans were determined to be without value at the time of settlement. |
SERVICING
SERVICING | 6 Months Ended |
Jun. 30, 2019 | |
Loans and Other Servicing Accounts | |
Servicing | |
Servicing | NOTE 6—SERVICING The total unpaid principal balance of the Company’s servicing portfolio was $89.9 billion as of June 30, 2019 compared to $85.7 billion as of December 31, 2018. As of June 30, 2019 and December 31, 2018, custodial escrow accounts relating to loans serviced by the Company totaled $2.0 billion and $2.3 billion, respectively. These amounts are not included in the accompanying consolidated balance sheets as such amounts are not Company assets. Certain cash deposits at other financial institutions exceed the Federal Deposit Insurance Corporation insured limits. The Company places these deposits with financial institutions that meet the requirements of the Agencies and where it believes the risk of loss to be minimal. |
WAREHOUSE NOTES PAYABLE
WAREHOUSE NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2019 | |
WAREHOUSE NOTES PAYABLE | |
Warehouse Notes Payable | NOTE 7—WAREHOUSE NOTES PAYABLE At June 30, 2019, to provide financing to borrowers, the Company has arranged for warehouse lines of credit. In support of the Agencies’ programs, the Company has committed and uncommitted warehouse lines of credit in the amount of $2.9 billion with certain national banks and a $1.5 billion uncommitted facility with Fannie Mae (collectively, the “Agency Warehouse Facilities”). The Company has pledged substantially all of its loans held for sale against the Agency Warehouse Facilities. The Company has arranged for warehouse lines of credit in the amount of $0.5 billion with certain national banks to assist in funding loans held for investment under the Interim Program (“Interim Warehouse Facilities”). The Company has pledged all of its loans held for investment for which funding is obtained against these Interim Warehouse Facilities. The following table provides additional detail about the warehouse lines of credit at June 30, 2019. June 30, 2019 (dollars in thousands) Committed Uncommitted Total Facility Outstanding Facility 1 Amount Amount Capacity Balance Interest rate Agency Warehouse Facility #1 $ 425,000 $ 200,000 $ 625,000 $ 223,559 30-day LIBOR plus 1.20% Agency Warehouse Facility #2 500,000 300,000 800,000 215,114 30-day LIBOR plus 1.15% Agency Warehouse Facility #3 500,000 265,000 765,000 208,322 30-day LIBOR plus 1.15% Agency Warehouse Facility #4 350,000 — 350,000 256,328 30-day LIBOR plus 1.15% Agency Warehouse Facility #5 30,000 — 30,000 5,777 30-day LIBOR plus 1.80% Agency Warehouse Facility #6 250,000 100,000 350,000 130,961 30-day LIBOR plus 1.20% Total National Bank Agency Warehouse Facilities $ 2,055,000 $ 865,000 $ 2,920,000 $ 1,040,061 Fannie Mae repurchase agreement, uncommitted line and open maturity — 1,500,000 1,500,000 122,603 Total Agency Warehouse Facilities $ 2,055,000 $ 2,365,000 $ 4,420,000 $ 1,162,664 Interim Warehouse Facility #1 $ 135,000 $ — $ 135,000 $ 87,700 30-day LIBOR plus 1.90% Interim Warehouse Facility #2 100,000 — 100,000 41,082 30-day LIBOR plus 2.00% Interim Warehouse Facility #3 75,000 75,000 150,000 23,250 30-day LIBOR plus 1.90% to 2.50% Interim Warehouse Facility #4 100,000 — 100,000 — 30-day LIBOR plus 1.75% Total National Bank Interim Warehouse Facilities $ 410,000 $ 75,000 $ 485,000 $ 152,032 Debt issuance costs — — — (741) Total warehouse facilities $ 2,465,000 $ 2,440,000 $ 4,905,000 $ 1,313,955 1 Agency Warehouse Facilities, including the Fannie Mae repurchase agreement are used to fund loans held for sale, while Interim Warehouse Facilities are used to fund loans held for investment. During the third quarter of 2019, the Company executed the third amendment to the warehouse agreement related to Agency Warehouse Facility #1. The amendment decreased the borrowing rate to 30-day London Interbank Offered Rate (“LIBOR”) plus 115 basis points. No other material modifications have been made to the agreement during 2019. During the second quarter of 2019, the Company executed the third amendment to the warehouse agreement related to Agency Warehouse Facility #2. The amendment decreased the borrowing rate to 30-day LIBOR plus 115 basis points. No other material modifications have been made to the agreement during 2019. During the second quarter of 2019, the Company executed the tenth amendment to the warehouse agreement related to Agency Warehouse Facility #3. The amendment extended the maturity date to April 30, 2020 and decreased the borrowing rate to 30-day LIBOR plus 115 basis points. Additionally, the amendment provides for an uncommitted amount of $265.0 million until January 31, 2020. No other material modifications have been made to the agreement during 2019. During the second quarter of 2019, the Company executed the sixth amendment to the warehouse agreement related to Agency Warehouse Facility #4. The amendment decreased the borrowing rate to 30-day LIBOR plus 115 basis points. No other material modifications have been made to the agreement during 2019. During the third quarter of 2019, Agency Warehouse Facility #5 expired according to its terms. The Company believes that the five remaining committed and uncommitted credit facilities from national banks, the uncommitted credit facility from Fannie Mae, and the Company’s corporate cash provide the Company with sufficient borrowing capacity to conduct its Agency lending operations without this facility. During the first quarter of 2019, the Company executed the second amendment to the warehouse agreement related to Agency Warehouse Facility #6. The amendment extended the maturity date to January 31, 2020 . No other material modifications have been made to the agreement during 2019. During the first quarter of 2019, the Company executed the ninth amendment to the credit and security agreement related to Interim Warehouse Facility #1 that increased the maximum borrowing capacity to $135.0 million. During the second quarter of 2019, the Company executed the tenth amendment to the credit and security agreement that extended the maturity date to April 30, 2020 . No other material modifications have been made to the agreement during 2019. During the second quarter of 2019, the Company executed the fourth amendment to the credit and security agreement related to Interim Warehouse Facility #3 that extended the maturity date to May 18, 2020 and provides for an uncommitted amount of $75.0 million. No other material modifications have been made to the agreement during 2019. During the first quarter of 2019, the Company executed a warehousing credit and security agreement to establish Interim Warehouse Facility #4. The warehouse facility has a committed $100.0 million maximum borrowing amount. The Company can fund certain interim loans to certain specified large institutional borrowers, and the borrowings under the warehouse agreement bear interest at a rate of 30-day LIBOR plus 175 basis points. During the second quarter of 2019, the Company executed the first amendment to the warehousing credit and security agreement that extended the maturity date to April 30, 2020 . No other material modifications have been made to the agreement during 2019. The warehouse notes payable are subject to various financial covenants, all of which the Company was in compliance with as of the current period end. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Goodwill and Other Intangible Assets | NOTE 8—GOODWILL AND OTHER INTANGIBLE ASSETS Activity related to goodwill for the six months ended June 30, 2019 and 2018 follows: For the six months ended June 30, Roll Forward of Goodwill (in thousands) 2019 2018 Beginning balance $ 173,904 $ 123,767 Additions from acquisitions 6,520 29,957 Impairment — — Ending balance $ 180,424 $ 153,724 The additions from acquisitions during the six months ended June 30, 2019 shown in the table above relates to an immaterial acquisition of a technology company, which was completed in the first quarter of 2019. As of June 30, 2019 and December 31, 2018, the balance of intangible assets acquired from acquisitions totaled $2.9 million and $3.2 million, respectively. As of June 30, 2019, the weighted-average period over which the Company expects the intangible assets to be amortized is 5.1 years. A summary of the Company’s contingent consideration, which is included in Accounts payable and other liabilities , as of and for the six months ended June 30, 2019 and 2018 follows: For the six months ended June 30, Roll Forward of Contingent Consideration (in thousands) 2019 2018 Beginning balance $ 11,630 $ 14,091 Accretion 286 463 Payments (6,450) (5,150) Ending balance $ 5,466 $ 9,404 The contingent consideration above relates to an acquisition completed in 2017. The last of the three earn-out periods related to this contingent consideration ends in the first quarter of 2020. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2019 | |
FAIR VALUE MEASUREMENTS | |
Fair Value Measurements | NOTE 9—FAIR VALUE MEASUREMENTS The Company uses valuation techniques that are consistent with the market approach, the income approach, and/or the cost approach to measure assets and liabilities that are measured at fair value. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, accounting standards establish a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: ● Level 1 —Financial assets and liabilities whose values are based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. ● Level 2 —Financial assets and liabilities whose values are based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. ● Level 3 —Financial assets and liabilities whose values are based on inputs that are both unobservable and significant to the overall valuation. The Company's MSRs are measured at fair value on a nonrecurring basis. That is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The Company's MSRs do not trade in an active, open market with readily observable prices. While sales of multifamily MSRs do occur on occasion, precise terms and conditions vary with each transaction and are not readily available. Accordingly, the estimated fair value of the Company’s MSRs was developed using discounted cash flow models that calculate the present value of estimated future net servicing income. The model considers contractually specified servicing fees, prepayment assumptions, delinquency status, late charges, other ancillary revenue, costs to service, and other economic factors. The Company periodically reassesses and adjusts, when necessary, the underlying inputs and assumptions used in the model to reflect observable market conditions and assumptions that a market participant would consider in valuing an MSR asset. MSRs are carried at the lower of amortized cost or fair value. A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Company's assets and liabilities carried at fair value: ● Derivative Instruments —The derivative positions consist of interest rate lock commitments with borrowers and forward sale agreements to the Agencies. These instruments are valued using a discounted cash flow model developed based on changes in the applicable U.S. Treasury rate and other observable market data. The value was determined after considering the potential impact of collateralization, adjusted to reflect nonperformance risk of both the counterparty and the Company, and are classified within Level 3 of the valuation hierarchy . ● Loans Held for Sale — Loans held for sale are reported at fair value. The Company determines the fair value of the loans held for sale using discounted cash flow models that incorporate quoted observable inputs from market participants. Therefore, the Company classifies these loans held for sale as Level 2 . ● Pledged Securities —Investments in cash and money market funds are valued using quoted market prices from recent trades. Therefore, the Company classifies this portion of pledged securities as Level 1. The Company determines the fair value of its AFS investments in Agency debt securities using discounted cash flows that incorporate observable inputs from market participants and then compares the fair value to broker estimates of fair value . Consequently, the Company classifies this portion of pledged securities as Level 2. The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of June 30, 2019, and December 31, 2018, segregated by the level of the valuation inputs within the fair value hierarchy used to measure fair value: Quoted Prices in Significant Significant Active Markets Other Other For Identical Observable Unobservable Assets Inputs Inputs Balance as of (in thousands) (Level 1) (Level 2) (Level 3) Period End June 30, 2019 Assets Loans held for sale $ — $ 1,302,938 $ — $ 1,302,938 Pledged securities 4,082 115,207 — 119,289 Derivative assets — — 22,420 22,420 Total $ 4,082 $ 1,418,145 $ 22,420 $ 1,444,647 Liabilities Derivative liabilities $ — $ — $ 35,122 $ 35,122 Total $ — $ — $ 35,122 $ 35,122 December 31, 2018 Assets Loans held for sale $ — $ 1,074,348 $ — $ 1,074,348 Pledged securities 9,469 106,862 — 116,331 Derivative assets — — 35,536 35,536 Total $ 9,469 $ 1,181,210 $ 35,536 $ 1,226,215 Liabilities Derivative liabilities $ — $ — $ 32,697 $ 32,697 Total $ — $ — $ 32,697 $ 32,697 There were no transfers between any of the levels within the fair value hierarchy during the six months ended June 30, 2019. Derivative instruments (Level 3) are outstanding for short periods of time (generally less than 60 days ). A roll forward of derivative instruments is presented below for the three and six months ended June 30, 2019 and 2018: Fair Value Measurements Using Significant Unobservable Inputs: Derivative Instruments For the three months ended For the six months ended June 30, June 30, (in thousands) 2019 2018 2019 2018 Derivative assets and liabilities, net Beginning balance $ (2,286) $ 12,962 $ 2,839 $ 8,507 Settlements (117,297) (97,236) (221,157) (174,290) Realized gains recorded in earnings (1) 119,583 84,274 218,318 165,783 Unrealized gains recorded in earnings (1) (12,702) 17,963 (12,702) 17,963 Ending balance $ (12,702) $ 17,963 $ (12,702) $ 17,963 (1) Realized and unrealized gains from derivatives are recognized in Gains from mortgage banking activities in the Condensed Consolidated Statements of Income. The following table presents information about significant unobservable inputs used in the recurring measurement of the fair value of the Company’s Level 3 assets and liabilities as of June 30, 2019: Quantitative Information about Level 3 Measurements (in thousands) Fair Value Valuation Technique Unobservable Input (1) Input Value (1) Derivative assets $ 22,420 Discounted cash flow Counterparty credit risk — Derivative liabilities $ 35,122 Discounted cash flow Counterparty credit risk — (1) Significant increases in this input may lead to significantly lower fair value measurements. The carrying amounts and the fair values of the Company's financial instruments as of June 30, 2019 and December 31, 2018 are presented below: June 30, 2019 December 31, 2018 Carrying Fair Carrying Fair (in thousands) Amount Value Amount Value Financial assets: Cash and cash equivalents $ 74,184 $ 74,184 $ 90,058 $ 90,058 Restricted cash 15,454 15,454 20,821 20,821 Pledged securities 119,289 119,289 116,331 116,331 Loans held for sale 1,302,938 1,302,938 1,074,348 1,074,348 Loans held for investment, net 432,593 435,582 497,291 503,549 Derivative assets 22,420 22,420 35,536 35,536 Total financial assets $ 1,966,878 $ 1,969,867 $ 1,834,385 $ 1,840,643 Financial liabilities: Derivative liabilities $ 35,122 $ 35,122 $ 32,697 $ 32,697 Secured borrowings 70,052 70,052 70,052 70,052 Warehouse notes payable 1,313,955 1,314,696 1,161,382 1,162,791 Note payable 294,840 298,500 296,010 300,000 Total financial liabilities $ 1,713,969 $ 1,718,370 $ 1,560,141 $ 1,565,540 The following methods and assumptions were used for recurring fair value measurements as of June 30, 2019: Cash and Cash Equivalents and Restricted Cash —The carrying amounts approximate fair value because of the short maturity of these instruments (Level 1). Pledged Securities —Consist of cash, highly liquid investments in money market accounts invested in government securities, and investments in Agency debt securities. The investments of the money market funds typically have maturities of 90 days or less and are valued using quoted market prices from recent trades. The fair value of the Agency debt securities incorporates the contractual cash flows of the security discounted at market-rate, risk-adjusted yields. Loans Held for Sale —Consist of originated loans that are generally transferred or sold within 60 days from the date that the mortgage loan is funded and are valued using discounted cash flow models that incorporate observable inputs from market participants. Derivative Instruments — Consist of interest rate lock commitments and forward sale agreements. These instruments are valued using discounted cash flow models developed based on changes in the U.S. Treasury rate and other observable market data. The value is determined after considering the potential impact of collateralization, adjusted to reflect nonperformance risk of both the counterparty and the Company . Fair Value of Derivative Instruments and Loans Held for Sale — In the normal course of business, the Company enters into contractual commitments to originate and sell multifamily mortgage loans at fixed prices with fixed expiration dates. The commitments become effective when the borrowers "lock-in" a specified interest rate within time frames established by the Company. All mortgagors are evaluated for creditworthiness prior to the extension of the commitment. Market risk arises if interest rates move between the time of the "lock-in" of rates by the borrower and the sale date of the loan to an investor . To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers, the Company's policy is to enter into a sale commitment with the investor simultaneous with the rate lock commitment with the borrower. The sale contract with the investor locks in an interest rate and price for the sale of the loan. The terms of the contract with the investor and the rate lock with the borrower are matched in substantially all respects, with the objective of eliminating interest rate risk to the extent practical. Sale commitments with the investors have an expiration date that is longer than our related commitments to the borrower to allow, among other things, for the closing of the loan and processing of paperwork to deliver the loan into the sale commitment . Both the rate lock commitments to borrowers and the forward sale contracts to buyers are undesignated derivatives and, accordingly, are marked to fair value through Gains on mortgage banking activities in the Condensed Consolidated Statements of Income. The fair value of the Company's rate lock commitments to borrowers and loans held for sale and the related input levels includes, as applicable : ● the estimated gain from the expected loan sale to the investor (Level 2); ● the expected net cash flows associated with servicing the loan, net of any guaranty obligations retained (Level 2); ● the effects of interest rate movements between the date of the rate lock and the balance sheet date (Level 2); and ● the nonperformance risk of both the counterparty and the Company (Level 3; derivative instruments only). The estimated gain considers the origination fees the Company expects to collect upon loan closing (derivative instruments only) and premiums the Company expects to receive upon loan sale (Level 2). The fair value of the expected net cash flows associated with servicing the loan is calculated pursuant to the valuation techniques applicable to MSRs (Level 2). The fair value of the Company's derivative instruments and loans held for sale considers the effects of the market price movement of the same type of security due to interest rate movements between the trade date and the balance sheet date. To calculate the effects of interest rate movements, the Company uses applicable published U.S. Treasury prices, and multiplies the price movement between the rate lock date or loan origination date and the balance sheet date by the notional amount of the derivative instruments or loans held for sale (Level 2). The fair value of the Company’s interest rate lock commitments and forward sales contracts is adjusted to reflect the risk that the agreement will not be fulfilled. The Company’s exposure to nonperformance in interest rate lock commitments and forward sale contracts is represented by the contractual amount of those instruments. Given the credit quality of our counterparties and the short duration of interest rate lock commitments and forward sale contracts, the risk of nonperformance by the Company’s counterparties has historically been minimal (Level 3) . The following table presents the components of fair value and other relevant information associated with the Company’s derivative instruments and loans held for sale as of June 30, 2019 and December 31, 2018. Fair Value Adjustment Components Balance Sheet Location Fair Value Notional or Estimated Total Adjustment Principal Gain Interest Rate Fair Value Derivative Derivative To Loans (in thousands) Amount on Sale Movement Adjustment Assets Liabilities Held for Sale June 30, 2019 Rate lock commitments $ 859,558 $ 18,149 $ 4,226 $ 22,375 $ 22,411 $ (36) $ — Forward sale contracts 2,113,009 — (35,077) (35,077) 9 (35,086) — Loans held for sale 1,253,451 18,636 30,851 49,487 — — 49,487 Total $ 36,785 $ — $ 36,785 $ 22,420 $ (35,122) $ 49,487 December 31, 2018 Rate lock commitments $ 891,514 $ 20,285 $ 10,627 $ 30,912 $ 30,976 $ (64) $ — Forward sale contracts 1,927,017 — (28,073) (28,073) 4,560 (32,633) — Loans held for sale 1,035,503 21,399 17,446 38,845 — — 38,845 Total $ 41,684 $ — $ 41,684 $ 35,536 $ (32,697) $ 38,845 |
FANNIE MAE COMMITMENTS AND PLED
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES | 6 Months Ended |
Jun. 30, 2019 | |
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES | |
Fannie Mae Commitments and Pledged Securities | NOTE 10—FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES Fannie Mae DUS Related Commitments —Commitments for the origination and subsequent sale and delivery of loans to Fannie Mae represent those mortgage loan transactions where the borrower has locked an interest rate and scheduled closing and the Company has entered into a mandatory delivery commitment to sell the loan to Fannie Mae. As discussed in NOTE 9, the Company accounts for these commitments as derivatives recorded at fair value. The Company is generally required to share the risk of any losses associated with loans sold under the Fannie Mae DUS program. The Company is required to secure these obligations by assigning restricted cash balances and securities to Fannie Mae, which are classified as Pledged securities, at fair value on the Condensed Consolidated Balance Sheets. The amount of collateral required by Fannie Mae is a formulaic calculation at the loan level and considers the balance of the loan, the risk level of the loan, the age of the loan, and the level of risk-sharing. Fannie Mae requires restricted liquidity for Tier 2 loans of 75 basis points, which is funded over a 48 -month period that begins upon delivery of the loan to Fannie Mae. Pledged securities held in the form of money market funds holding U.S. Treasuries are discounted 5% , and multifamily Agency mortgage-backed securities (“Agency Multifamily MBS”) are discounted 4% for purposes of calculating compliance with the restricted liquidity requirements. As seen below, the Company held substantially all of its pledged securities in Agency Multifamily MBS as of June 30, 2019. The majority of the loans for which the Company has risk sharing are Tier 2 loans. The Company is in compliance with the June 30, 2019 collateral requirements as outlined above. As of June 30, 2019, reserve requirements for the DUS loan portfolio will require the Company to fund $65.5 million in additional pledged securities over the next 48 months , assuming no further principal paydowns, prepayments, or defaults within the at risk portfolio. Fannie Mae periodically reassesses the DUS Capital Standards and may make changes to these standards in the future. The Company generates sufficient cash flow from its operations to meet these capital standards and does not expect any future changes to have a material impact on its future operations; however, any future changes to collateral requirements may adversely impact the Company’s available cash. Fannie Mae has established standards for capital adequacy and reserves the right to terminate the Company's servicing authority for all or some of the portfolio if at any time it determines that the Company's financial condition is not adequate to support its obligations under the DUS agreement. The Company is required to maintain acceptable net worth as defined in the agreement, and the Company satisfied the requirements as of June 30, 2019. The net worth requirement is derived primarily from unpaid balances on Fannie Mae loans and the level of risk sharing. At June 30, 2019, the net worth requirement was $186.0 million, and the Company's net worth, as defined in the requirements, was $651.5 million, as measured at our wholly owned operating subsidiary, Walker & Dunlop, LLC. As of June 30, 2019, the Company was required to maintain at least $36.7 million of liquid assets to meet operational liquidity requirements for Fannie Mae, Freddie Mac, HUD, and Ginnie Mae. As of June 30, 2019, the Company had operational liquidity, as defined in the requirements, of $209.8 million, as measured at our wholly owned operating subsidiary, Walker & Dunlop, LLC. Pledged Securities, at Fair Value — Pledged securities, at fair value consisted of the following balances as of June 30, 2019 and 2018 and December 31, 2018 and 2017: June 30, December 31, (in thousands) 2019 2018 2018 2017 Pledged cash and cash equivalents: Restricted cash $ 3,242 $ 3,238 $ 3,029 $ 2,201 Money market funds 840 55,072 6,440 86,584 Total pledged cash and cash equivalents $ 4,082 $ 58,310 $ 9,469 $ 88,785 Agency debt securities 115,207 47,493 106,862 9,074 Total pledged securities, at fair value $ 119,289 $ 105,803 $ 116,331 $ 97,859 The information in the preceding table is presented to reconcile beginning and ending cash, cash equivalents, restricted cash, and restricted cash equivalents in the Condensed Consolidated Statements of Cash Flows as more fully discussed in NOTE 2. The investments in Agency debt securities consist of Agency Multifamily MBS and are all accounted for as AFS securities. The following table provides additional information related to the AFS Agency Multifamily MBS as of June 30, 2019 and December 31, 2018: Fair Value and Amortized Cost of Agency Multifamily MBS (in thousands) June 30, 2019 December 31, 2018 Fair value $ 115,207 $ 106,862 Amortized cost 114,016 106,963 Total gains for securities with net gains in AOCI 1,302 77 Total losses for securities with net losses in AOCI (111) (178) As of June 30, 2019, the Company does not intend to sell any of the Agency debt securities, nor does the Company believe that it is more likely than not that it would be required to sell these investments before recovery of their amortized cost basis, which may be at maturity. The following table provides contractual maturity information related to the Agency Multifamily MBS. The money market funds invest in short-term Federal Government and Agency debt securities and have no stated maturity date. June 30, 2019 Detail of Agency Multifamily MBS Maturities (in thousands) Fair Value Amortized Cost Within one year $ — $ — After one year through five years 1,431 1,408 After five years through ten years 93,177 93,255 After ten years 20,599 19,353 Total $ 115,207 $ 114,016 |
EARNINGS PER SHARE AND STOCKHOL
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2019 | |
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY | |
Earnings Per Share | NOTE 11—EARNINGS PER SHARE EPS is calculated under the two-class method. The two-class method allocates all earnings (distributed and undistributed) to each class of common stock and participating securities based on their respective rights to receive dividends. The Company grants share-based awards to various employees and nonemployee directors under the 2015 Equity Incentive Plan that entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. These unvested awards meet the definition of participating securities. The following table presents the calculation of basic and diluted EPS for the three and six months ended June 30, 2019 and 2018 under the two-class method. Participating securities were included in the calculation of diluted EPS using the two-class method, as this computation was more dilutive than the treasury-stock method. For the three months ended June 30, For the six months ended June 30, EPS Calculations (in thousands, except per share amounts) 2019 2018 2019 2018 Calculation of basic EPS Walker & Dunlop net income $ 42,196 $ 41,112 $ 86,414 $ 77,973 Less: dividends and undistributed earnings allocated to participating securities 1,328 1,471 2,835 2,861 Net income applicable to common stockholders $ 40,868 $ 39,641 $ 83,579 $ 75,112 Weighted-average basic shares outstanding 29,985 30,256 29,834 30,139 Basic EPS $ 1.36 $ 1.31 $ 2.80 $ 2.49 Calculation of diluted EPS Net income applicable to common stockholders $ 40,868 $ 39,641 $ 83,579 $ 75,112 Add: reallocation of dividends and undistributed earnings based on assumed conversion 25 45 62 81 Net income allocated to common stockholders $ 40,893 $ 39,686 $ 83,641 $ 75,193 Weighted-average basic shares outstanding 29,985 30,256 29,834 30,139 Add: weighted-average diluted non-participating securities 759 1,239 886 1,147 Weighted-average diluted shares outstanding 30,744 31,495 30,720 31,286 Diluted EPS $ 1.33 $ 1.26 $ 2.72 $ 2.40 The assumed proceeds used for calculating the dilutive impact of restricted stock awards under the treasury method includes the unrecognized compensation costs associated with the awards. The following table presents any average outstanding options to purchase shares of common stock and average restricted shares that were For the three months ended For the six months ended June 30, June 30, Schedule of Anti-dilutive Securities (in thousands) 2019 2018 2019 2018 Average options — — — — Average restricted shares 32 — 35 5 |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2019 | |
LEASES | |
Leases | NOTE 12—LEASES In the normal course of business, the Company enters into lease arrangements for all of its office space. All such lease arrangements are accounted for as operating leases. The associated right-of-use (“ROU”) assets and liabilities are recorded under Other assets and Accounts payable and other liabilities , respectively, in the Condensed Consolidated Balance Sheet as of June 30, 2019. These operating leases do not provide an implicit discount rate; therefore, the Company uses the incremental borrowing rate of its note payable at lease commencement to calculate lease liabilities. The Company’s lease agreements often include options to extend or terminate the lease. Single lease cost related to these lease agreements is recognized on the straight-line basis over the term of the lease, which includes options to extend when it is reasonably certain that such options will be exercised and the Company knows what the lease payments will be during the optional periods. Single lease cost for the three and six months ended June 30, 2019 was $1.7 million and $3.6 million, respectively, while rent expense for the three and six months ended June 30, 2018 was $1.6 million and $3.2 million, respectively. As of June 30, 2019, ROU assets and lease liabilities were $23.8 million and $30.2 million, respectively. As of June 30, 2019, the weighted-average remaining lease term and the weighted-average discount rate of the Company’s leases were 4.1 years and 4.75% , respectively. Maturities of lease liabilities as of June 30, 2019 follow (in thousands): Six Months Ending December 31, 2019 $ 4,102 Year Ending December 31, 2020 8,183 2021 7,937 2022 7,232 2023 5,594 Thereafter 147 Total lease payments $ 33,195 Less imputed interest (3,030) Total $ 30,165 Minimum cash basis operating lease commitments as of December 31, 2018 follow (in thousands): Year Ending December 31, 2019 $ 7,700 2020 7,789 2021 7,450 2022 6,738 2023 5,200 Thereafter 90 Total $ 34,967 |
TOTAL EQUITY
TOTAL EQUITY | 6 Months Ended |
Jun. 30, 2019 | |
TOTAL EQUITY. | |
Total Equity | NOTE 13—TOTAL EQUITY A summary of changes in total equity for the three and six months ended June 30, 2019 and 2018 is presented below: For the three and six months ended June 30, 2019 Stockholders' Equity Common Stock Retained Noncontrolling Total (in thousands) Shares Amount APIC AOCI Earnings Interests Equity Balance at December 31, 2018 29,497 $ 295 $ 235,152 $ (75) $ 666,752 $ 5,068 $ 907,192 Cumulative-effect adjustment for adoption of ASU 2016-02 — — — — (1,002) — (1,002) Walker & Dunlop net income — — — — 44,218 — 44,218 Net income (loss) from noncontrolling interests — — — — — (158) (158) Other comprehensive income (loss), net of tax — — — 301 — — 301 Stock-based compensation - equity classified — — 6,812 — — — 6,812 Issuance of common stock in connection with equity compensation plans 935 9 4,178 — — — 4,187 Repurchase and retirement of common stock (459) (4) (22,400) — (1,755) — (24,159) Cash dividends paid ($0.30 per common share) — — — — (9,319) — (9,319) Balance at March 31, 2019 29,973 $ 300 $ 223,742 $ 226 $ 698,894 $ 4,910 $ 928,072 Walker & Dunlop net income — — — — 42,196 — 42,196 Net income (loss) from noncontrolling interests — — — — — (50) (50) Other comprehensive income (loss), net of tax — — — 666 — — 666 Stock-based compensation - equity classified — — 4,417 — — — 4,417 Issuance of common stock in connection with equity compensation plans 24 1 — — — — 1 Repurchase and retirement of common stock (33) (1) (538) — (1,217) — (1,756) Cash dividends paid ($0.30 per common share) — — — — (9,311) — (9,311) Balance at June 30, 2019 29,964 $ 300 $ 227,621 $ 892 $ 730,562 $ 4,860 $ 964,235 For the three and six months ended June 30, 2018 Stockholders' Equity Common Stock Retained Noncontrolling Total (in thousands) Shares Amount APIC AOCI Earnings Interests Equity Balance at December 31, 2017 30,016 $ 300 $ 229,080 $ 93 $ 579,943 $ 5,565 $ 814,981 Walker & Dunlop net income — — — — 36,861 — 36,861 Net income (loss) from noncontrolling interests — — — — — (154) (154) Other comprehensive income (loss), net of tax — — — (127) — — (127) Stock-based compensation - equity classified — — 5,093 — — — 5,093 Issuance of common stock in connection with equity compensation plans 567 5 4,846 — — — 4,851 Repurchase and retirement of common stock (435) (4) (12,687) — (8,709) — (21,400) Cash dividends paid ($0.25 per common share) — — — — (7,838) — (7,838) Balance at March 31, 2018 30,148 $ 301 $ 226,332 $ (34) $ 600,257 $ 5,411 $ 832,267 Walker & Dunlop net income — — — — 41,112 — 41,112 Net income (loss) from noncontrolling interests — — — — — (79) (79) Other comprehensive income (loss), net of tax — — — (53) — — (53) Stock-based compensation - equity classified — — 5,076 — — — 5,076 Issuance of common stock in connection with equity compensation plans 242 3 3,213 — — — 3,216 Repurchase and retirement of common stock — — (57) — — — (57) Cash dividends paid ($0.25 per common share) — — — — (7,861) — (7,861) Balance at June 30, 2018 30,390 $ 304 $ 234,564 $ (87) $ 633,508 $ 5,332 $ 873,621 During the first quarter of 2019, the Company repurchased under a 2018 share repurchase program 55 thousand shares of its common stock at a weighted average price of $42.79 per share and immediately retired the shares, reducing stockholders’ equity by $2.4 million. During the first quarter of 2019, the Company’s Board of Directors authorized the Company to repurchase up to $50.0 million of its common stock over a 12 -month period. During the second quarter of 2019, the Company repurchased 30 thousand shares of its common stock under the 2019 share repurchase program at a weighted average price of $51.88 per share and immediately retired the shares, reducing stockholders’ equity by $1.5 million. The Company had $48.5 million of authorized share repurchase capacity remaining as of June 30, 2019. In February 2019, the Company’s Board of Directors declared a cash dividend of $0.30 per share for the first quarter of 2019. The dividend was paid during the first quarter of 2019 to all holders of record of our restricted and unrestricted common stock and restricted stock units. In April 2019, the Company’s Board of Directors declared a dividend of $0.30 per share for the second quarter of 2019. The dividend was paid during the second quarter of 2019 to all holders of record of our restricted and unrestricted common stock and restricted stock units. The dividend will be paid September 9, 2019 to all holders of record of our restricted and unrestricted common stock and restricted stock units as of August 23, 2019. The Company expects the dividends paid during 2019 to be an insignificant portion of the Company’s net income, retained earnings, and cash and cash equivalents. The Company’s note payable contains direct restrictions to the amount of dividends the Company may pay, and the warehouse credit facilities and agreements with the Agencies contain minimum equity, liquidity, and other capital requirements that indirectly restrict the amount of dividends the Company may pay . The Company does not believe that these restrictions currently limit the amount of dividends the Company intends to pay for the foreseeable future. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation Noncontrolling interests Net income from noncontrolling interests Subsequent Events |
Subsequent Events | |
Use of Estimates | Use of Estimates |
Loans Held for Investment, net | Loans Held for Investment, net Loans held for investment, net Loans held for investment, net Loans held for investment, net In the third quarter of 2018, the Company transferred a portfolio of participating interests in loans held for investment to a third party. The Company accounted for the transfer as a secured borrowing. The aggregate unpaid principal balance of the loans of $77.8 million is presented as a component of Loans held for investment, net Accounts payable and other liabilities One loan held for investment with an unpaid principal balance of $14.7 million was delinquent, impaired, and on non-accrual status as of June 30, 2019. None of the loans held for investment was delinquent, impaired, or on non-accrual status as of December 31, 2018. Prior to 2019, the Company had not experienced any delinquencies related to these loans. The Company has never charged off any loan held for investment. The allowances for loan losses recorded as of June 30, 2019 consisted primarily of the specific reserve on the impaired loan, while the allowance for loan losses as of December 31, 2018 was based entirely on the Company’s collective assessment of the portfolio. During July of 2019, a plan was agreed upon to recapitalize the project, bring in new property management, and extend the delinquent loan to allow the sponsor to correct weaknesses in the property. The Company expects to complete the restructuring of the loan later in the third quarter of 2019. |
Provision for Credit Losses | Provision for Credit Losses— Provision for credit losses Provision for credit losses For the three months ended For the six months ended June 30, June 30, Components of Provision for Credit Losses (in thousands) 2019 2018 2019 2018 Provision for loan losses $ 25 $ 79 $ 648 $ 66 Provision for risk-sharing obligations 936 721 2,988 257 Provision for credit losses $ 961 $ 800 $ 3,636 $ 323 |
Net Warehouse Interest Income | Net Warehouse Interest Income— Net warehouse interest income For the three months ended For the six months ended June 30, June 30, Components of Net Warehouse Interest Income (in thousands) 2019 2018 2019 2018 Warehouse interest income - loans held for sale $ 12,992 $ 11,382 $ 26,976 $ 20,146 Warehouse interest expense - loans held for sale (12,782) (9,900) (26,737) (17,555) Net warehouse interest income - loans held for sale $ 210 $ 1,482 $ 239 $ 2,591 Warehouse interest income - loans held for investment $ 8,268 $ 1,647 $ 17,047 $ 3,068 Warehouse interest expense - loans held for investment (2,067) (737) (3,854) (1,410) Warehouse interest income - secured borrowings 920 — 1,808 — Warehouse interest expense - secured borrowings (920) — (1,808) — Net warehouse interest income - loans held for investment $ 6,201 $ 910 $ 13,193 $ 1,658 Total net warehouse interest income $ 6,411 $ 2,392 $ 13,432 $ 4,249 |
Income Taxes | Income Taxes —The Company records the realizable excess tax benefits from stock compensation as a reduction to income tax expense. The Company recorded realizable excess tax benefits of zero and $1.7 million during the three months ended June 30, 2019 and 2018, respectively, and $3.4 million and $5.8 million during the six months ended June 30, 2019 and 2018, respectively. |
Statement of Cash Flows | Statement of Cash Flows —For presentation in the Condensed Consolidated Statements of Cash Flows, the Company considers pledged cash and cash equivalents (as detailed in NOTE 10) to be restricted cash and restricted cash equivalents. The following table, in conjunction with the detail of Pledged securities, at fair value presented in NOTE 10, presents a reconciliation of the total of cash, cash equivalents, restricted cash, and restricted cash equivalents as presented in the Condensed Consolidated Statements of Cash Flows to the related captions in the Condensed Consolidated Balance Sheets as of June 30, 2019 and 2018 and December 31, 2018 and 2017. June 30, December 31, (in thousands) 2019 2018 2018 2017 Cash and cash equivalents $ 74,184 $ 81,531 $ 90,058 $ 191,218 Restricted cash 15,454 29,986 20,821 6,677 Pledged cash and cash equivalents 4,082 58,310 9,469 88,785 Total cash, cash equivalents, restricted cash, and restricted cash equivalents $ 93,720 $ 169,827 $ 120,348 $ 286,680 |
Contracts with Customers | Contracts with Customers For the three months ended For the six months ended June 30, June 30, Description in thousands 2019 2018 2019 2018 Statement of income line item Certain loan origination fees $ 15,381 $ 12,371 $ 26,912 $ 23,656 Gains from mortgage banking activities Property sales broker fees, investment management fees, assumption fees, application fees, and other 11,445 8,092 20,407 12,417 Other revenues Total revenues derived from contracts with customers $ 26,826 $ 20,463 $ 47,319 $ 36,073 |
Litigation | Litigation |
Recently Adopted and Recently Announced Accounting Pronouncements | Recently Adopted and Recently Announced Accounting Pronouncement s —In the second quarter of 2016, Accounting Standards Update 2016-13 (“ASU 2016-13”), Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments was issued. ASU 2016-13 ("the Standard") represents a significant change to the incurred loss model currently used to account for credit losses. The Standard requires an entity to estimate the credit losses expected over the life of the credit exposure upon initial recognition of that exposure. The expected credit losses consider historical information, current information, and reasonable and supportable forecasts, including estimates of prepayments. Exposures with similar risk characteristics are required to be grouped together when estimating expected credit losses. The initial estimate and subsequent changes to the estimated credit losses are required to be reported in current earnings in the income statement and through an allowance in the balance sheet. ASU 2016-13 is applicable to financial assets subject to credit losses and measured at amortized cost and certain off-balance-sheet credit exposures. The Standard will modify the way the Company estimates its allowance for risk-sharing obligations and its allowance for loan losses and the way it assesses impairment on its pledged available-for-sale (“AFS”) securities. ASU 2016-13 requires modified retrospective application to all outstanding, in-scope instruments, with a cumulative-effect adjustment recorded to opening retained earnings as of the beginning of the period of adoption. The Company plans on adopting ASU 2016-13 when the standard is required to be adopted, January 1, 2020. The Company is in the process of determining the significance of the impact the Standard will have on its financial statements. The Company expects its allowance for risk-sharing obligations to increase when ASU 2016-13 is adopted. The Company is in the process of (i) completing the accounting policies, (ii) gathering data, (iii) updating its processes, and (iv) developing forecasts and expects to run parallel processing sometime during the second half of 2019. There are no other accounting pronouncements previously issued by the FASB but not yet effective or not yet adopted by the Company that have the potential to materially impact the Company’s condensed consolidated financial statements. There have been no material changes to the accounting policies discussed in NOTE 2 of the Company’s 2018 Form 10-K. |
Immaterial Correction of an Error | Immaterial Correction of an Error —In the fourth quarter of 2018, the Company identified and corrected an immaterial error in the calculation of earnings per share for quarterly and annual financial results presented in its previous filings. The Company’s 2018 Form 10-K contains additional detail related to the correction of the immaterial error. This Quarterly Report on Form 10-Q presents the corrected basic and diluted earnings per share for the three and six months ended June 30, 2018. |
Reclassifications | Reclassifications — The Company has made certain immaterial reclassifications to prior-year balances to conform to current-year presentation. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of Components of Provision (Benefit) for Credit Losses | For the three months ended For the six months ended June 30, June 30, Components of Provision for Credit Losses (in thousands) 2019 2018 2019 2018 Provision for loan losses $ 25 $ 79 $ 648 $ 66 Provision for risk-sharing obligations 936 721 2,988 257 Provision for credit losses $ 961 $ 800 $ 3,636 $ 323 |
Schedule of Net Warehouse Interest Income | For the three months ended For the six months ended June 30, June 30, Components of Net Warehouse Interest Income (in thousands) 2019 2018 2019 2018 Warehouse interest income - loans held for sale $ 12,992 $ 11,382 $ 26,976 $ 20,146 Warehouse interest expense - loans held for sale (12,782) (9,900) (26,737) (17,555) Net warehouse interest income - loans held for sale $ 210 $ 1,482 $ 239 $ 2,591 Warehouse interest income - loans held for investment $ 8,268 $ 1,647 $ 17,047 $ 3,068 Warehouse interest expense - loans held for investment (2,067) (737) (3,854) (1,410) Warehouse interest income - secured borrowings 920 — 1,808 — Warehouse interest expense - secured borrowings (920) — (1,808) — Net warehouse interest income - loans held for investment $ 6,201 $ 910 $ 13,193 $ 1,658 Total net warehouse interest income $ 6,411 $ 2,392 $ 13,432 $ 4,249 |
Schedule of Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | June 30, December 31, (in thousands) 2019 2018 2018 2017 Cash and cash equivalents $ 74,184 $ 81,531 $ 90,058 $ 191,218 Restricted cash 15,454 29,986 20,821 6,677 Pledged cash and cash equivalents 4,082 58,310 9,469 88,785 Total cash, cash equivalents, restricted cash, and restricted cash equivalents $ 93,720 $ 169,827 $ 120,348 $ 286,680 |
Schedule of Contracts with Customers | For the three months ended For the six months ended June 30, June 30, Description in thousands 2019 2018 2019 2018 Statement of income line item Certain loan origination fees $ 15,381 $ 12,371 $ 26,912 $ 23,656 Gains from mortgage banking activities Property sales broker fees, investment management fees, assumption fees, application fees, and other 11,445 8,092 20,407 12,417 Other revenues Total revenues derived from contracts with customers $ 26,826 $ 20,463 $ 47,319 $ 36,073 |
GAINS FROM MORTGAGE BANKING A_2
GAINS FROM MORTGAGE BANKING ACTIVITIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
GAINS FROM MORTGAGE BANKING ACTIVITIES | |
Schedule of Gains from Mortgage Banking Activities | For the three months ended For the six months ended June 30, June 30, Components of Gains from Mortgage Banking Activities (in thousands) 2019 2018 2019 2018 Contractual loan origination related fees, gross $ 70,970 $ 62,074 $ 131,622 $ 116,457 Co-broker fees (5,360) (6,881) (8,215) (12,448) Fair value of expected net cash flows from servicing recognized at commitment 45,639 51,725 90,674 86,953 Fair value of expected guaranty obligation recognized at commitment (4,368) (4,681) (8,465) (7,216) Total gains from mortgage banking activities $ 106,881 $ 102,237 $ 205,616 $ 183,746 |
MORTGAGE SERVICING RIGHTS (Tabl
MORTGAGE SERVICING RIGHTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
MORTGAGE SERVICING RIGHTS | |
Schedule of Activity Related to Capitalized MSRs, Net of Accumulated Amortization | For the three months ended For the six months ended June 30, June 30, Roll Forward of MSRs (in thousands) 2019 2018 2019 2018 Beginning balance $ 677,946 $ 631,031 $ 670,146 $ 634,756 Additions, following the sale of loan 48,695 42,559 95,797 73,481 Purchases — 1,814 — 1,814 Amortization (34,267) (32,801) (68,470) (64,962) Pre-payments and write-offs (4,347) (3,689) (9,446) (6,175) Ending balance $ 688,027 $ 638,914 $ 688,027 $ 638,914 |
Summary of Components of Net Carrying Value of Acquired and Originated MSRs | Components of MSRs (in thousands) June 30, 2019 December 31, 2018 Gross Value $ 1,144,555 $ 1,100,439 Accumulated amortization (456,528) (430,293) Net carrying value $ 688,027 $ 670,146 |
Schedule of Expected Amortization of MSRs | Expected (in thousands) Amortization Six Months Ending December 31, 2019 $ 66,514 Year Ending December 31, 2020 $ 122,989 2021 109,080 2022 93,909 2023 81,837 2024 68,540 Thereafter 145,158 Total $ 688,027 |
GUARANTY OBLIGATION AND ALLOW_2
GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS | |
Schedule of Activity Related to Guaranty Obligation | For the three months ended For the six months ended June 30, June 30, Roll Forward of Guaranty Obligation (in thousands) 2019 2018 2019 2018 Beginning balance $ 49,376 $ 41,424 $ 46,870 $ 41,187 Additions, following the sale of loan 4,731 3,287 9,594 5,070 Amortization (2,347) (1,950) (4,696) (3,757) Other (346) (291) (354) (30) Ending balance $ 51,414 $ 42,470 $ 51,414 $ 42,470 |
Summary of Allowance for Risk-Sharing Obligations | For the three months ended For the six months ended June 30, June 30, Roll Forward of Allowance for Risk-sharing Obligations (in thousands) 2019 2018 2019 2018 Beginning balance $ 6,682 $ 3,058 $ 4,622 $ 3,783 Provision for risk-sharing obligations 936 721 2,988 257 Write-offs — — — — Other 346 291 354 30 Ending balance $ 7,964 $ 4,070 $ 7,964 $ 4,070 |
WAREHOUSE NOTES PAYABLE (Tables
WAREHOUSE NOTES PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
WAREHOUSE NOTES PAYABLE | |
Schedule of Debt Obligations | June 30, 2019 (dollars in thousands) Committed Uncommitted Total Facility Outstanding Facility 1 Amount Amount Capacity Balance Interest rate Agency Warehouse Facility #1 $ 425,000 $ 200,000 $ 625,000 $ 223,559 30-day LIBOR plus 1.20% Agency Warehouse Facility #2 500,000 300,000 800,000 215,114 30-day LIBOR plus 1.15% Agency Warehouse Facility #3 500,000 265,000 765,000 208,322 30-day LIBOR plus 1.15% Agency Warehouse Facility #4 350,000 — 350,000 256,328 30-day LIBOR plus 1.15% Agency Warehouse Facility #5 30,000 — 30,000 5,777 30-day LIBOR plus 1.80% Agency Warehouse Facility #6 250,000 100,000 350,000 130,961 30-day LIBOR plus 1.20% Total National Bank Agency Warehouse Facilities $ 2,055,000 $ 865,000 $ 2,920,000 $ 1,040,061 Fannie Mae repurchase agreement, uncommitted line and open maturity — 1,500,000 1,500,000 122,603 Total Agency Warehouse Facilities $ 2,055,000 $ 2,365,000 $ 4,420,000 $ 1,162,664 Interim Warehouse Facility #1 $ 135,000 $ — $ 135,000 $ 87,700 30-day LIBOR plus 1.90% Interim Warehouse Facility #2 100,000 — 100,000 41,082 30-day LIBOR plus 2.00% Interim Warehouse Facility #3 75,000 75,000 150,000 23,250 30-day LIBOR plus 1.90% to 2.50% Interim Warehouse Facility #4 100,000 — 100,000 — 30-day LIBOR plus 1.75% Total National Bank Interim Warehouse Facilities $ 410,000 $ 75,000 $ 485,000 $ 152,032 Debt issuance costs — — — (741) Total warehouse facilities $ 2,465,000 $ 2,440,000 $ 4,905,000 $ 1,313,955 1 Agency Warehouse Facilities, including the Fannie Mae repurchase agreement are used to fund loans held for sale, while Interim Warehouse Facilities are used to fund loans held for investment. |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of Goodwill | For the six months ended June 30, Roll Forward of Goodwill (in thousands) 2019 2018 Beginning balance $ 173,904 $ 123,767 Additions from acquisitions 6,520 29,957 Impairment — — Ending balance $ 180,424 $ 153,724 |
Schedule of Contingent Liability | For the six months ended June 30, Roll Forward of Contingent Consideration (in thousands) 2019 2018 Beginning balance $ 11,630 $ 14,091 Accretion 286 463 Payments (6,450) (5,150) Ending balance $ 5,466 $ 9,404 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
FAIR VALUE MEASUREMENTS | |
Summary of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis | Quoted Prices in Significant Significant Active Markets Other Other For Identical Observable Unobservable Assets Inputs Inputs Balance as of (in thousands) (Level 1) (Level 2) (Level 3) Period End June 30, 2019 Assets Loans held for sale $ — $ 1,302,938 $ — $ 1,302,938 Pledged securities 4,082 115,207 — 119,289 Derivative assets — — 22,420 22,420 Total $ 4,082 $ 1,418,145 $ 22,420 $ 1,444,647 Liabilities Derivative liabilities $ — $ — $ 35,122 $ 35,122 Total $ — $ — $ 35,122 $ 35,122 December 31, 2018 Assets Loans held for sale $ — $ 1,074,348 $ — $ 1,074,348 Pledged securities 9,469 106,862 — 116,331 Derivative assets — — 35,536 35,536 Total $ 9,469 $ 1,181,210 $ 35,536 $ 1,226,215 Liabilities Derivative liabilities $ — $ — $ 32,697 $ 32,697 Total $ — $ — $ 32,697 $ 32,697 |
Schedule of Roll Forward of Derivative Instruments | Fair Value Measurements Using Significant Unobservable Inputs: Derivative Instruments For the three months ended For the six months ended June 30, June 30, (in thousands) 2019 2018 2019 2018 Derivative assets and liabilities, net Beginning balance $ (2,286) $ 12,962 $ 2,839 $ 8,507 Settlements (117,297) (97,236) (221,157) (174,290) Realized gains recorded in earnings (1) 119,583 84,274 218,318 165,783 Unrealized gains recorded in earnings (1) (12,702) 17,963 (12,702) 17,963 Ending balance $ (12,702) $ 17,963 $ (12,702) $ 17,963 (1) Realized and unrealized gains from derivatives are recognized in Gains from mortgage banking activities in the Condensed Consolidated Statements of Income. |
Schedule of Significant Unobservable Inputs Used in the Measurement of the Fair Value of Level 3 Assets and Liabilities | Quantitative Information about Level 3 Measurements (in thousands) Fair Value Valuation Technique Unobservable Input (1) Input Value (1) Derivative assets $ 22,420 Discounted cash flow Counterparty credit risk — Derivative liabilities $ 35,122 Discounted cash flow Counterparty credit risk — (1) Significant increases in this input may lead to significantly lower fair value measurements. |
Schedule of Carrying Amounts and the Fair Values of the Company's Financial Instruments | June 30, 2019 December 31, 2018 Carrying Fair Carrying Fair (in thousands) Amount Value Amount Value Financial assets: Cash and cash equivalents $ 74,184 $ 74,184 $ 90,058 $ 90,058 Restricted cash 15,454 15,454 20,821 20,821 Pledged securities 119,289 119,289 116,331 116,331 Loans held for sale 1,302,938 1,302,938 1,074,348 1,074,348 Loans held for investment, net 432,593 435,582 497,291 503,549 Derivative assets 22,420 22,420 35,536 35,536 Total financial assets $ 1,966,878 $ 1,969,867 $ 1,834,385 $ 1,840,643 Financial liabilities: Derivative liabilities $ 35,122 $ 35,122 $ 32,697 $ 32,697 Secured borrowings 70,052 70,052 70,052 70,052 Warehouse notes payable 1,313,955 1,314,696 1,161,382 1,162,791 Note payable 294,840 298,500 296,010 300,000 Total financial liabilities $ 1,713,969 $ 1,718,370 $ 1,560,141 $ 1,565,540 |
Schedule of Fair Value of Derivative Instruments and Loans Held for Sale | Fair Value Adjustment Components Balance Sheet Location Fair Value Notional or Estimated Total Adjustment Principal Gain Interest Rate Fair Value Derivative Derivative To Loans (in thousands) Amount on Sale Movement Adjustment Assets Liabilities Held for Sale June 30, 2019 Rate lock commitments $ 859,558 $ 18,149 $ 4,226 $ 22,375 $ 22,411 $ (36) $ — Forward sale contracts 2,113,009 — (35,077) (35,077) 9 (35,086) — Loans held for sale 1,253,451 18,636 30,851 49,487 — — 49,487 Total $ 36,785 $ — $ 36,785 $ 22,420 $ (35,122) $ 49,487 December 31, 2018 Rate lock commitments $ 891,514 $ 20,285 $ 10,627 $ 30,912 $ 30,976 $ (64) $ — Forward sale contracts 1,927,017 — (28,073) (28,073) 4,560 (32,633) — Loans held for sale 1,035,503 21,399 17,446 38,845 — — 38,845 Total $ 41,684 $ — $ 41,684 $ 35,536 $ (32,697) $ 38,845 |
FANNIE MAE COMMITMENTS AND PL_2
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES | |
Schedule of Pledged Securities at Fair Value | June 30, December 31, (in thousands) 2019 2018 2018 2017 Pledged cash and cash equivalents: Restricted cash $ 3,242 $ 3,238 $ 3,029 $ 2,201 Money market funds 840 55,072 6,440 86,584 Total pledged cash and cash equivalents $ 4,082 $ 58,310 $ 9,469 $ 88,785 Agency debt securities 115,207 47,493 106,862 9,074 Total pledged securities, at fair value $ 119,289 $ 105,803 $ 116,331 $ 97,859 |
Schedule of Investment Information Related to AFS Agency Multifamily MBS | Fair Value and Amortized Cost of Agency Multifamily MBS (in thousands) June 30, 2019 December 31, 2018 Fair value $ 115,207 $ 106,862 Amortized cost 114,016 106,963 Total gains for securities with net gains in AOCI 1,302 77 Total losses for securities with net losses in AOCI (111) (178) |
Schedule of Contractual Maturity Information Related to Multifamily Agency MBS | June 30, 2019 Detail of Agency Multifamily MBS Maturities (in thousands) Fair Value Amortized Cost Within one year $ — $ — After one year through five years 1,431 1,408 After five years through ten years 93,177 93,255 After ten years 20,599 19,353 Total $ 115,207 $ 114,016 |
EARNINGS PER SHARE AND STOCKH_2
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY | |
Schedule of Basic and Diluted EPS Under Two-Class Method | For the three months ended June 30, For the six months ended June 30, EPS Calculations (in thousands, except per share amounts) 2019 2018 2019 2018 Calculation of basic EPS Walker & Dunlop net income $ 42,196 $ 41,112 $ 86,414 $ 77,973 Less: dividends and undistributed earnings allocated to participating securities 1,328 1,471 2,835 2,861 Net income applicable to common stockholders $ 40,868 $ 39,641 $ 83,579 $ 75,112 Weighted-average basic shares outstanding 29,985 30,256 29,834 30,139 Basic EPS $ 1.36 $ 1.31 $ 2.80 $ 2.49 Calculation of diluted EPS Net income applicable to common stockholders $ 40,868 $ 39,641 $ 83,579 $ 75,112 Add: reallocation of dividends and undistributed earnings based on assumed conversion 25 45 62 81 Net income allocated to common stockholders $ 40,893 $ 39,686 $ 83,641 $ 75,193 Weighted-average basic shares outstanding 29,985 30,256 29,834 30,139 Add: weighted-average diluted non-participating securities 759 1,239 886 1,147 Weighted-average diluted shares outstanding 30,744 31,495 30,720 31,286 Diluted EPS $ 1.33 $ 1.26 $ 2.72 $ 2.40 |
Schedule of Outstanding Options to Purchase Shares of Common Stock and Average Restricted Shares that were not Included in Computation of Diluted Earnings per Share | For the three months ended For the six months ended June 30, June 30, Schedule of Anti-dilutive Securities (in thousands) 2019 2018 2019 2018 Average options — — — — Average restricted shares 32 — 35 5 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
LEASES | |
Schedule of maturities of lease liabilities | Maturities of lease liabilities as of June 30, 2019 follow (in thousands): Six Months Ending December 31, 2019 $ 4,102 Year Ending December 31, 2020 8,183 2021 7,937 2022 7,232 2023 5,594 Thereafter 147 Total lease payments $ 33,195 Less imputed interest (3,030) Total $ 30,165 Minimum cash basis operating lease commitments as of December 31, 2018 follow (in thousands): Year Ending December 31, 2019 $ 7,700 2020 7,789 2021 7,450 2022 6,738 2023 5,200 Thereafter 90 Total $ 34,967 |
TOTAL EQUITY (Tables)
TOTAL EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
TOTAL EQUITY. | |
Summary of Changes in Total Equity | For the three and six months ended June 30, 2019 Stockholders' Equity Common Stock Retained Noncontrolling Total (in thousands) Shares Amount APIC AOCI Earnings Interests Equity Balance at December 31, 2018 29,497 $ 295 $ 235,152 $ (75) $ 666,752 $ 5,068 $ 907,192 Cumulative-effect adjustment for adoption of ASU 2016-02 — — — — (1,002) — (1,002) Walker & Dunlop net income — — — — 44,218 — 44,218 Net income (loss) from noncontrolling interests — — — — — (158) (158) Other comprehensive income (loss), net of tax — — — 301 — — 301 Stock-based compensation - equity classified — — 6,812 — — — 6,812 Issuance of common stock in connection with equity compensation plans 935 9 4,178 — — — 4,187 Repurchase and retirement of common stock (459) (4) (22,400) — (1,755) — (24,159) Cash dividends paid ($0.30 per common share) — — — — (9,319) — (9,319) Balance at March 31, 2019 29,973 $ 300 $ 223,742 $ 226 $ 698,894 $ 4,910 $ 928,072 Walker & Dunlop net income — — — — 42,196 — 42,196 Net income (loss) from noncontrolling interests — — — — — (50) (50) Other comprehensive income (loss), net of tax — — — 666 — — 666 Stock-based compensation - equity classified — — 4,417 — — — 4,417 Issuance of common stock in connection with equity compensation plans 24 1 — — — — 1 Repurchase and retirement of common stock (33) (1) (538) — (1,217) — (1,756) Cash dividends paid ($0.30 per common share) — — — — (9,311) — (9,311) Balance at June 30, 2019 29,964 $ 300 $ 227,621 $ 892 $ 730,562 $ 4,860 $ 964,235 For the three and six months ended June 30, 2018 Stockholders' Equity Common Stock Retained Noncontrolling Total (in thousands) Shares Amount APIC AOCI Earnings Interests Equity Balance at December 31, 2017 30,016 $ 300 $ 229,080 $ 93 $ 579,943 $ 5,565 $ 814,981 Walker & Dunlop net income — — — — 36,861 — 36,861 Net income (loss) from noncontrolling interests — — — — — (154) (154) Other comprehensive income (loss), net of tax — — — (127) — — (127) Stock-based compensation - equity classified — — 5,093 — — — 5,093 Issuance of common stock in connection with equity compensation plans 567 5 4,846 — — — 4,851 Repurchase and retirement of common stock (435) (4) (12,687) — (8,709) — (21,400) Cash dividends paid ($0.25 per common share) — — — — (7,838) — (7,838) Balance at March 31, 2018 30,148 $ 301 $ 226,332 $ (34) $ 600,257 $ 5,411 $ 832,267 Walker & Dunlop net income — — — — 41,112 — 41,112 Net income (loss) from noncontrolling interests — — — — — (79) (79) Other comprehensive income (loss), net of tax — — — (53) — — (53) Stock-based compensation - equity classified — — 5,076 — — — 5,076 Issuance of common stock in connection with equity compensation plans 242 3 3,213 — — — 3,216 Repurchase and retirement of common stock — — (57) — — — (57) Cash dividends paid ($0.25 per common share) — — — — (7,861) — (7,861) Balance at June 30, 2018 30,390 $ 304 $ 234,564 $ (87) $ 633,508 $ 5,332 $ 873,621 |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION (Details) | Jun. 30, 2019 |
WDIS | |
Subsidiary | |
Ownership interest | 75.00% |
Interim Program JV | |
Joint Venture | |
Ownership interest | 15.00% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Loans Held-for-Investment, Net (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)loan | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($)loan | |
Transfers of financial assets accounted for as secured borrowings | ||||
Loan portfolio transferred to third party | $ 70,100,000 | |||
Loans Held for Investment | ||||
Transfers of financial assets accounted for as secured borrowings | ||||
Loan portfolio transferred to third party | 77,800,000 | |||
Accounts Payable and Other Liabilities | ||||
Transfers of financial assets accounted for as secured borrowings | ||||
Secured borrowing | $ 70,100,000 | |||
Loans Held for Investment | ||||
Loans Held-for-Investment, Net | ||||
Number of loans held for investment | loan | 14 | 14 | ||
Unpaid principal balance of loans held for investment | $ 436,200,000 | $ 503,500,000 | ||
Net unamortized deferred fees and costs | 2,800,000 | 6,000,000 | ||
Allowance for loan losses | $ 800,000 | 200,000 | ||
Number of delinquent loans | 1 | |||
Loans held for investment, delinquent | $ 14,700,000 | 0 | ||
Number of impaired loans | loan | 1 | |||
Loans held for investment, impaired | $ 14,700,000 | 0 | ||
Number of loans on nonaccrual status | loan | 1 | |||
Loans, non-accrual status | $ 14,700,000 | 0 | ||
Loans Held for Investment | Maximum | ||||
Loans Held-for-Investment, Net | ||||
Loan term (in years) | 3 years | |||
Subordinated Note Participation | ||||
Loans Held-for-Investment, Net | ||||
Unpaid principal balance of loans held for investment | $ 119,400,000 | $ 150,000,000 | ||
MSRs | ||||
Loans Held-for-Investment, Net | ||||
Additions | $ 1,814,000 | $ 1,814,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Provision (Benefit) for Credit Losses (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Components of Provision for Credit Losses | ||||
Provision for loan losses | $ 25 | $ 79 | $ 648 | $ 66 |
Provision for risk-sharing obligations | 936 | 721 | 2,988 | 257 |
Provision for credit losses | $ 961 | $ 800 | $ 3,636 | $ 323 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Net Warehouse Interest Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Net Warehouse Interest Income | ||||
Net warehouse interest income | $ 6,411 | $ 2,392 | $ 13,432 | $ 4,249 |
Loans Held for Sale | ||||
Net Warehouse Interest Income | ||||
Warehouse interest income | 12,992 | 11,382 | 26,976 | 20,146 |
Warehouse interest expense | (12,782) | (9,900) | (26,737) | (17,555) |
Net warehouse interest income | 210 | 1,482 | 239 | 2,591 |
Loans Held for Investment | ||||
Net Warehouse Interest Income | ||||
Warehouse interest income | 8,268 | 1,647 | 17,047 | 3,068 |
Warehouse interest expense | (2,067) | (737) | (3,854) | (1,410) |
Net warehouse interest income | 6,201 | $ 910 | 13,193 | $ 1,658 |
Secured Borrowings | ||||
Net Warehouse Interest Income | ||||
Warehouse interest income | 920 | 1,808 | ||
Warehouse interest expense | $ (920) | $ (1,808) |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Income Taxes (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Excess tax benefits recognized | $ 0 | $ 1.7 | $ 3.4 | $ 5.8 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash Flows (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | ||||
Cash and cash equivalents | $ 74,184 | $ 90,058 | $ 81,531 | $ 191,218 |
Restricted cash | 15,454 | 20,821 | 29,986 | 6,677 |
Pledged cash and cash equivalents | 4,082 | 9,469 | 58,310 | 88,785 |
Total cash, cash equivalents, restricted cash, and restricted cash equivalents | $ 93,720 | $ 120,348 | $ 169,827 | $ 286,680 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contracts with Customers (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Contracts with Customers | |||||
Revenue from contracts with customer | $ 26,826 | $ 20,463 | $ 47,319 | $ 36,073 | |
Contract assets with customers | 0 | 0 | $ 0 | ||
Contract liabilities with customers | 0 | 0 | $ 0 | ||
Loan Origination Fees | Gains from Mortgage Banking Activities | |||||
Contracts with Customers | |||||
Revenue from contracts with customer | 15,381 | 12,371 | 26,912 | 23,656 | |
Investment Sales Broker Fees, Investment Management Fees, Assumption Fees, Application Fees and Other | Other Revenues | |||||
Contracts with Customers | |||||
Revenue from contracts with customer | $ 11,445 | $ 8,092 | $ 20,407 | $ 12,417 |
GAINS FROM MORTGAGE BANKING A_3
GAINS FROM MORTGAGE BANKING ACTIVITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
GAINS FROM MORTGAGE BANKING ACTIVITIES | ||||
Contractual loan origination related fees, gross | $ 70,970 | $ 62,074 | $ 131,622 | $ 116,457 |
Co-broker fees | (5,360) | (6,881) | (8,215) | (12,448) |
Fair value of expected net future cash flows from servicing recognized at commitment | 45,639 | 51,725 | 90,674 | 86,953 |
Fair value of expected guaranty obligation recognized at commitment | (4,368) | (4,681) | (8,465) | (7,216) |
Total gains from mortgage banking activities | $ 106,881 | $ 102,237 | $ 205,616 | $ 183,746 |
MORTGAGE SERVICING RIGHTS - Fai
MORTGAGE SERVICING RIGHTS - Fair Value Disclosures (Detail) - MSRs $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019USD ($)class | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
Servicing | |||
Number of classes of MSRs | class | 1 | ||
Fair value of the MSRs | $ 874 | $ 874 | $ 858.7 |
Sensitivity Analysis of Fair Value, example 1, impact of percent adverse change in discount rate, percent | 1.00% | ||
Decrease in fair value as a result of 100 basis point increase in discount rate | 27.1 | $ 27.1 | |
Sensitivity Analysis of Fair Value, example 2, impact of percent adverse change in discount rate, percent | 2.00% | ||
Decrease in fair value as a result of 200 basis point increase in discount rate | $ 52.4 | $ 52.4 |
MORTGAGE SERVICING RIGHTS - Sch
MORTGAGE SERVICING RIGHTS - Schedule of Activity Related to Capitalized MSRs (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Mortgage Servicing Rights | ||||
Beginning balance | $ 670,146 | |||
Ending balance | $ 688,027 | 688,027 | ||
MSRs | ||||
Mortgage Servicing Rights | ||||
Beginning balance | 677,946 | $ 631,031 | 670,146 | $ 634,756 |
Additions, following sale of loan | 48,695 | 42,559 | 95,797 | 73,481 |
Purchases | 1,814 | 1,814 | ||
Amortization | (34,267) | (32,801) | (68,470) | (64,962) |
Pre-payments and write-offs | (4,347) | (3,689) | (9,446) | (6,175) |
Ending balance | $ 688,027 | $ 638,914 | $ 688,027 | $ 638,914 |
MORTGAGE SERVICING RIGHTS - Sum
MORTGAGE SERVICING RIGHTS - Summary of Components of Net Carrying Value of Acquired and Originated MSRs (Detail) - MSRs - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Mortgage Servicing Rights Acquired and Originated | ||
Gross value | $ 1,144,555 | $ 1,100,439 |
Accumulated amortization | (456,528) | (430,293) |
Net carrying value | $ 688,027 | $ 670,146 |
MORTGAGE SERVICING RIGHTS - S_2
MORTGAGE SERVICING RIGHTS - Schedule of Expected Amortization of MSRs (Detail) - MSRs - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Future amortization | ||
Six Months Ending December 31, 2019 | $ 66,514 | |
2020 | 122,989 | |
2021 | 109,080 | |
2022 | 93,909 | |
2023 | 81,837 | |
2024 | 68,540 | |
Thereafter | 145,158 | |
Net carrying value | $ 688,027 | $ 670,146 |
GUARANTY OBLIGATION AND ALLOW_3
GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS - Schedule of Activity Related to Guaranty Obligation (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS | ||||
Guaranty obligation, net of accumulated amortization - beginning balance | $ 49,376 | $ 41,424 | $ 46,870 | $ 41,187 |
Additions, following the sale of loan | 4,731 | 3,287 | 9,594 | 5,070 |
Amortization | (2,347) | (1,950) | (4,696) | (3,757) |
Other | (346) | (291) | (354) | (30) |
Guaranty obligation, net of accumulated amortization - ending balance | $ 51,414 | $ 42,470 | $ 51,414 | $ 42,470 |
GUARANTY OBLIGATION AND ALLOW_4
GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS - Summary of Allowance for Risk-Sharing Obligations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Allowance for Risk-Sharing Contracts | ||||
Beginning balance | $ 6,682 | $ 3,058 | $ 4,622 | $ 3,783 |
Provision for risk-sharing obligations | 936 | 721 | 2,988 | 257 |
Other | 346 | 291 | 354 | 30 |
Ending balance | 7,964 | $ 4,070 | 7,964 | $ 4,070 |
Fannie Mae DUS program | ||||
Allowance for Risk-Sharing Contracts | ||||
Maximum quantifiable contingent liability associated with guarantees | $ 7,100,000 | $ 7,100,000 |
SERVICING - (Detail)
SERVICING - (Detail) - Loans serviced - USD ($) $ in Billions | Jun. 30, 2019 | Dec. 31, 2018 |
Servicing | ||
Servicing portfolio loans unpaid principal balance | $ 89.9 | $ 85.7 |
Custodial escrow accounts | $ 2 | $ 2.3 |
WAREHOUSE NOTES PAYABLE - Summa
WAREHOUSE NOTES PAYABLE - Summary Information (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2019loan | Jun. 30, 2019USD ($) | Mar. 31, 2019 | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
Warehouse notes payable | |||||
Committed Amount | $ 2,465,000 | $ 2,465,000 | |||
Uncommitted Amount | 2,440,000 | 2,440,000 | |||
Total Facility Capacity | 4,905,000 | 4,905,000 | |||
Outstanding Balance | 1,313,955 | 1,313,955 | $ 1,161,382 | ||
Debt issuance costs | $ (741) | (741) | |||
Agency Warehouse Facility #6 | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Maturity date | Jan. 31, 2020 | ||||
Interim Warehouse Facility #1 | Interim Warehouse Facility | |||||
Warehouse notes payable | |||||
Maturity date | Apr. 30, 2020 | ||||
Interim Warehouse Facility #3 | Interim Warehouse Facility | |||||
Warehouse notes payable | |||||
Maturity date | May 18, 2020 | ||||
Interim Warehouse Facility #4 | Interim Warehouse Facility | |||||
Warehouse notes payable | |||||
Maturity date | Apr. 30, 2020 | ||||
Loans Held for Sale | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | $ 2,055,000 | 2,055,000 | |||
Uncommitted Amount | 2,365,000 | 2,365,000 | |||
Total Facility Capacity | 4,420,000 | 4,420,000 | |||
Outstanding Balance | 1,162,664 | 1,162,664 | |||
Loans Held for Sale | Agency Warehouse Facility #1 | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 425,000 | 425,000 | |||
Uncommitted Amount | 200,000 | 200,000 | |||
Total Facility Capacity | 625,000 | 625,000 | |||
Outstanding Balance | 223,559 | $ 223,559 | |||
Loans Held for Sale | Agency Warehouse Facility #1 | Agency Warehouse Facility | LIBOR | |||||
Warehouse notes payable | |||||
Reference rate for variable interest on the line of credit | 30-day LIBOR | ||||
Basis points added to reference rate | 1.15% | 1.20% | |||
Loans Held for Sale | Agency Warehouse Facility #2 | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 500,000 | $ 500,000 | |||
Uncommitted Amount | 300,000 | 300,000 | |||
Total Facility Capacity | 800,000 | 800,000 | |||
Outstanding Balance | $ 215,114 | $ 215,114 | |||
Loans Held for Sale | Agency Warehouse Facility #2 | Agency Warehouse Facility | LIBOR | |||||
Warehouse notes payable | |||||
Reference rate for variable interest on the line of credit | 30-day LIBOR | ||||
Basis points added to reference rate | 1.15% | 1.15% | |||
Loans Held for Sale | Agency Warehouse Facility #3 | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | $ 500,000 | $ 500,000 | |||
Uncommitted Amount | 265,000 | 265,000 | |||
Total Facility Capacity | 765,000 | 765,000 | |||
Outstanding Balance | $ 208,322 | $ 208,322 | |||
Maturity date | Apr. 30, 2020 | ||||
Loans Held for Sale | Agency Warehouse Facility #3 | Agency Warehouse Facility | LIBOR | |||||
Warehouse notes payable | |||||
Reference rate for variable interest on the line of credit | 30-day LIBOR | ||||
Basis points added to reference rate | 1.15% | 1.15% | |||
Loans Held for Sale | Agency Warehouse Facility #4 | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | $ 350,000 | $ 350,000 | |||
Total Facility Capacity | 350,000 | 350,000 | |||
Outstanding Balance | $ 256,328 | $ 256,328 | |||
Loans Held for Sale | Agency Warehouse Facility #4 | Agency Warehouse Facility | LIBOR | |||||
Warehouse notes payable | |||||
Reference rate for variable interest on the line of credit | 30-day LIBOR | ||||
Basis points added to reference rate | 1.15% | 1.15% | |||
Loans Held for Sale | Agency Warehouse Facility #5 | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | $ 30,000 | $ 30,000 | |||
Total Facility Capacity | 30,000 | 30,000 | |||
Outstanding Balance | 5,777 | $ 5,777 | |||
Loans Held for Sale | Agency Warehouse Facility #5 | Agency Warehouse Facility | LIBOR | |||||
Warehouse notes payable | |||||
Reference rate for variable interest on the line of credit | 30-day LIBOR | ||||
Basis points added to reference rate | 1.80% | ||||
Loans Held for Sale | Agency Warehouse Facility #6 | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 250,000 | $ 250,000 | |||
Uncommitted Amount | 100,000 | 100,000 | |||
Total Facility Capacity | 350,000 | 350,000 | |||
Outstanding Balance | 130,961 | $ 130,961 | |||
Loans Held for Sale | Agency Warehouse Facility #6 | Agency Warehouse Facility | LIBOR | |||||
Warehouse notes payable | |||||
Reference rate for variable interest on the line of credit | 30-day LIBOR | ||||
Basis points added to reference rate | 1.20% | ||||
Loans Held for Investment | Interim Warehouse Facility #1 | Interim Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 135,000 | $ 135,000 | |||
Total Facility Capacity | 135,000 | 135,000 | |||
Outstanding Balance | 87,700 | $ 87,700 | |||
Loans Held for Investment | Interim Warehouse Facility #1 | Interim Warehouse Facility | LIBOR | |||||
Warehouse notes payable | |||||
Reference rate for variable interest on the line of credit | 30-day LIBOR | ||||
Basis points added to reference rate | 1.90% | ||||
Loans Held for Investment | Interim Warehouse Facility #2 | Interim Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 100,000 | $ 100,000 | |||
Total Facility Capacity | 100,000 | 100,000 | |||
Outstanding Balance | 41,082 | $ 41,082 | |||
Loans Held for Investment | Interim Warehouse Facility #2 | Interim Warehouse Facility | LIBOR | |||||
Warehouse notes payable | |||||
Reference rate for variable interest on the line of credit | 30-day LIBOR | ||||
Basis points added to reference rate | 2.00% | ||||
Loans Held for Investment | Interim Warehouse Facility #3 | Interim Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 75,000 | $ 75,000 | |||
Uncommitted Amount | 75,000 | 75,000 | |||
Total Facility Capacity | 150,000 | 150,000 | |||
Outstanding Balance | 23,250 | $ 23,250 | |||
Loans Held for Investment | Interim Warehouse Facility #3 | Interim Warehouse Facility | LIBOR | |||||
Warehouse notes payable | |||||
Reference rate for variable interest on the line of credit | 30-day LIBOR | ||||
Loans Held for Investment | Interim Warehouse Facility #3 | Interim Warehouse Facility | LIBOR | Minimum | |||||
Warehouse notes payable | |||||
Basis points added to reference rate | 1.90% | ||||
Loans Held for Investment | Interim Warehouse Facility #3 | Interim Warehouse Facility | LIBOR | Maximum | |||||
Warehouse notes payable | |||||
Basis points added to reference rate | 2.50% | ||||
Loans Held for Investment | Interim Warehouse Facility #4 | Interim Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 100,000 | $ 100,000 | |||
Total Facility Capacity | 100,000 | $ 100,000 | |||
Loans Held for Investment | Interim Warehouse Facility #4 | Interim Warehouse Facility | LIBOR | |||||
Warehouse notes payable | |||||
Reference rate for variable interest on the line of credit | 30-day LIBOR | ||||
Basis points added to reference rate | 1.75% | ||||
National Banks | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Number of warehouse credit facilities | loan | 5 | ||||
Total Facility Capacity | 2,900,000 | $ 2,900,000 | |||
National Banks | Interim Warehouse Facility | |||||
Warehouse notes payable | |||||
Total Facility Capacity | 500,000 | 500,000 | |||
National Banks | Loans Held for Sale | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 2,055,000 | 2,055,000 | |||
Uncommitted Amount | 865,000 | 865,000 | |||
Total Facility Capacity | 2,920,000 | 2,920,000 | |||
Outstanding Balance | 1,040,061 | 1,040,061 | |||
National Banks | Loans Held for Investment | Interim Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 410,000 | 410,000 | |||
Uncommitted Amount | 75,000 | 75,000 | |||
Total Facility Capacity | 485,000 | 485,000 | |||
Outstanding Balance | 152,032 | 152,032 | |||
Fannie Mae | Loans Held for Sale | Uncommitted Agency Warehouse Facility | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Uncommitted Amount | 1,500,000 | 1,500,000 | |||
Total Facility Capacity | 1,500,000 | 1,500,000 | |||
Outstanding Balance | $ 122,603 | $ 122,603 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Goodwill (Detail) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Goodwill activity | |||
Beginning balance | $ 173,904 | $ 123,767 | |
Additions from acquisitions | 6,520 | 29,957 | |
Ending balance | 180,424 | $ 153,724 | |
Assets acquired | |||
Intangible assets acquired | $ 2,900 | $ 3,200 | |
Weighted average amortization period | 5 years 1 month 6 days |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Contingent Consideration (Detail) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019USD ($)period | Jun. 30, 2018USD ($) | |
Contingent liability | ||
Beginning balance | $ 11,630 | $ 14,091 |
Accretion | 286 | 463 |
Payments | (6,450) | (5,150) |
Ending balance | $ 5,466 | $ 9,404 |
Number of initial annual contingent consideration earn-out periods | period | 3 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Assets | ||||
Loans held for sale | $ 1,302,938 | $ 1,074,348 | ||
Pledged securities | 119,289 | 116,331 | $ 105,803 | $ 97,859 |
Derivative assets | 22,420 | 35,536 | ||
Liabilities | ||||
Derivative liabilities | 35,122 | 32,697 | ||
Recurring | ||||
Assets | ||||
Loans held for sale | 1,302,938 | 1,074,348 | ||
Pledged securities | 119,289 | 116,331 | ||
Derivative assets | 22,420 | 35,536 | ||
Total financial assets | 1,444,647 | 1,226,215 | ||
Liabilities | ||||
Derivative liabilities | 35,122 | 32,697 | ||
Total financial liabilities | 35,122 | 32,697 | ||
Level 1 | Recurring | ||||
Assets | ||||
Pledged securities | 4,082 | 9,469 | ||
Total financial assets | 4,082 | 9,469 | ||
Level 2 | Recurring | ||||
Assets | ||||
Loans held for sale | 1,302,938 | 1,074,348 | ||
Pledged securities | 115,207 | 106,862 | ||
Total financial assets | 1,418,145 | 1,181,210 | ||
Level 3 | Recurring | ||||
Assets | ||||
Derivative assets | 22,420 | 35,536 | ||
Total financial assets | 22,420 | 35,536 | ||
Liabilities | ||||
Derivative liabilities | 35,122 | 32,697 | ||
Total financial liabilities | $ 35,122 | $ 32,697 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Detail) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Fair Value Measurements | |
Amount of transfers between any of the levels within the fair value hierarchy | $ 0 |
Maximum | |
Fair Value Measurements | |
Contract term | 60 days |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Roll Forward of Derivative Instruments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Derivative assets and liabilities, net | ||||
Beginning balance | $ (2,286) | $ 12,962 | $ 2,839 | $ 8,507 |
Settlements | (117,297) | (97,236) | (221,157) | (174,290) |
Realized gains recorded in earnings | 119,583 | 84,274 | 218,318 | 165,783 |
Unrealized gains recorded in earnings | (12,702) | 17,963 | (12,702) | 17,963 |
Ending balance | $ (12,702) | $ 17,963 | $ (12,702) | $ 17,963 |
FAIR VALUE MEASUREMENTS - Sch_2
FAIR VALUE MEASUREMENTS - Schedule of Significant Unobservable Inputs Used in the Measurement of the Fair Value of Level 3 Assets and Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value Measurements | ||
Derivative assets | $ 22,420 | $ 35,536 |
Derivative liabilities | 35,122 | 32,697 |
Level 3 | Discounted Cash Flow | Derivative Assets | ||
Fair Value Measurements | ||
Derivative assets | 22,420 | |
Level 3 | Derivative Liabilities | Discounted Cash Flow | ||
Fair Value Measurements | ||
Derivative liabilities | 35,122 | |
Recurring | ||
Fair Value Measurements | ||
Derivative assets | 22,420 | 35,536 |
Derivative liabilities | 35,122 | 32,697 |
Recurring | Level 3 | ||
Fair Value Measurements | ||
Derivative assets | 22,420 | 35,536 |
Derivative liabilities | $ 35,122 | $ 32,697 |
FAIR VALUE MEASUREMENTS - Sch_3
FAIR VALUE MEASUREMENTS - Schedule of Carrying Amounts and the Fair Values of the Company's Financial Instruments (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Financial assets: | ||||
Cash and cash equivalents | $ 74,184 | $ 90,058 | $ 81,531 | $ 191,218 |
Restricted cash | 15,454 | 20,821 | 29,986 | 6,677 |
Pledged securities | 119,289 | 116,331 | $ 105,803 | $ 97,859 |
Loans held for sale | 1,302,938 | 1,074,348 | ||
Loans held for investment, net | 432,593 | 497,291 | ||
Derivative assets | 22,420 | 35,536 | ||
Financial liabilities: | ||||
Derivative liabilities | 35,122 | 32,697 | ||
Warehouse notes payable | 1,313,955 | 1,161,382 | ||
Note payable | 294,840 | 296,010 | ||
Carrying Amount | ||||
Financial assets: | ||||
Cash and cash equivalents | 74,184 | 90,058 | ||
Restricted cash | 15,454 | 20,821 | ||
Pledged securities | 119,289 | 116,331 | ||
Loans held for sale | 1,302,938 | 1,074,348 | ||
Loans held for investment, net | 432,593 | 497,291 | ||
Derivative assets | 22,420 | 35,536 | ||
Total financial assets | 1,966,878 | 1,834,385 | ||
Financial liabilities: | ||||
Derivative liabilities | 35,122 | 32,697 | ||
Secured borrowings | 70,052 | 70,052 | ||
Warehouse notes payable | 1,313,955 | 1,161,382 | ||
Note payable | 294,840 | 296,010 | ||
Total financial liabilities | 1,713,969 | 1,560,141 | ||
Fair Value | ||||
Financial assets: | ||||
Cash and cash equivalents | 74,184 | 90,058 | ||
Restricted cash | 15,454 | 20,821 | ||
Pledged securities | 119,289 | 116,331 | ||
Loans held for sale | 1,302,938 | 1,074,348 | ||
Loans held for investment, net | 435,582 | 503,549 | ||
Derivative assets | 22,420 | 35,536 | ||
Total financial assets | 1,969,867 | 1,840,643 | ||
Financial liabilities: | ||||
Derivative liabilities | 35,122 | 32,697 | ||
Secured borrowings | 70,052 | 70,052 | ||
Warehouse notes payable | 1,314,696 | 1,162,791 | ||
Note payable | 298,500 | 300,000 | ||
Total financial liabilities | $ 1,718,370 | $ 1,565,540 |
FAIR VALUE MEASUREMENTS - Gener
FAIR VALUE MEASUREMENTS - General information (Detail) | 6 Months Ended |
Jun. 30, 2019 | |
Loans Held for Sale | |
Other information | |
Period of originated loans within which they are transferred or sold | 60 days |
Money Market Funds | Maximum | |
Other information | |
Maximum term of maturity of pledged securities | 90 days |
FAIR VALUE MEASUREMENTS - Sch_4
FAIR VALUE MEASUREMENTS - Schedule of Fair Value of Derivative Instruments and Loans Held for Sale (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Derivative notional amount and balance sheet location | ||
Estimated Gain on Sale | $ 36,785 | $ 41,684 |
Total Fair Value Adjustment | 36,785 | 41,684 |
Derivative assets | 22,420 | 35,536 |
Derivative Liabilities | (35,122) | (32,697) |
Fair Value Adjustment To Loans Held for Sale | 49,487 | 38,845 |
Loans Held for Sale | ||
Derivative notional amount and balance sheet location | ||
Notional or Principal Amount | 1,253,451 | 1,035,503 |
Estimated Gain on Sale | 18,636 | 21,399 |
Interest Rate Movement | 30,851 | 17,446 |
Total Fair Value Adjustment | 49,487 | 38,845 |
Fair Value Adjustment To Loans Held for Sale | 49,487 | 38,845 |
Rate Lock Commitments | ||
Derivative notional amount and balance sheet location | ||
Notional or Principal Amount | 859,558 | 891,514 |
Estimated Gain on Sale | 18,149 | 20,285 |
Interest Rate Movement | 4,226 | 10,627 |
Total Fair Value Adjustment | 22,375 | 30,912 |
Derivative assets | 22,411 | 30,976 |
Derivative Liabilities | (36) | (64) |
Forward Sale Contracts | ||
Derivative notional amount and balance sheet location | ||
Notional or Principal Amount | 2,113,009 | 1,927,017 |
Interest Rate Movement | (35,077) | (28,073) |
Total Fair Value Adjustment | (35,077) | (28,073) |
Derivative assets | 9 | 4,560 |
Derivative Liabilities | $ (35,086) | $ (32,633) |
FANNIE MAE COMMITMENTS AND PL_3
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES - Commitments (Detail) - DUS Risk-Sharing Obligations - Fannie Mae $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Period of funding for collateral requirement | 48 months |
Amount of additional capital required to be funded over the next 48 months | $ 65.5 |
Net worth | 651.5 |
Minimum liquid assets to be maintained to meet operational liquidity requirements | 36.7 |
Operational liquidity | 209.8 |
Minimum | |
LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Net worth requirement | $ 186 |
New Tier 2 loans | |
LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Collateral requirements percentage (as a percent) | 0.75% |
Period of funding for collateral requirement | 48 months |
New Tier 2 loans | Money Market Funds | |
LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Restricted liquidity collateral reduction percentage | 5.00% |
New Tier 2 loans | Agency Mortgage Backed Securities | |
LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Restricted liquidity collateral reduction percentage | 4.00% |
FANNIE MAE COMMITMENTS AND PL_4
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES - Pledged Securities at Fair Value (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Pledged cash and cash equivalents | ||||
Restricted cash | $ 3,242 | $ 3,029 | $ 3,238 | $ 2,201 |
Money market funds | 840 | 6,440 | 55,072 | 86,584 |
Total pledged cash and cash equivalents | 4,082 | 9,469 | 58,310 | 88,785 |
Agency debt securities | 115,207 | 106,862 | 47,493 | 9,074 |
Pledged securities, at fair value | $ 119,289 | $ 116,331 | $ 105,803 | $ 97,859 |
FANNIE MAE COMMITMENTS AND PL_5
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES - Agency Multifamily Mortgage Based Securities Pledged Securities (Detail) - Agency Mortgage Backed Securities - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Investments in Agency debt securities | ||
Fair Value | $ 115,207 | $ 106,862 |
Amortized cost | 114,016 | 106,963 |
Total gains for securities with net gains in AOCI | 1,302 | 77 |
Total losses for securities with net losses in AOCI | (111) | (178) |
Maturities - Fair Value | ||
After one year through five years | 1,431 | |
After five years through ten years | 93,177 | |
After ten years | 20,599 | |
Total | 115,207 | 106,862 |
Maturities - Amortized Cost | ||
After one year through five years | 1,408 | |
After five years through ten years | 93,255 | |
After ten years | 19,353 | |
Total | $ 114,016 | $ 106,963 |
EARNINGS PER SHARE AND STOCKH_3
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY - Basic and Diluted EPS (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Calculation of basic EPS | ||||||
Walker and Dunlop net income | $ 42,196 | $ 44,218 | $ 41,112 | $ 36,861 | $ 86,414 | $ 77,973 |
Less: dividends and undistributed earnings allocated to participating securities | 1,328 | 1,471 | 2,835 | 2,861 | ||
Net income applicable to common stockholders | $ 40,868 | $ 39,641 | $ 83,579 | $ 75,112 | ||
Basic weighted average shares outstanding | 29,985 | 30,256 | 29,834 | 30,139 | ||
Basic EPS | $ 1.36 | $ 1.31 | $ 2.80 | $ 2.49 | ||
Calculation of diluted EPS | ||||||
Add: reallocation of dividends and undistributed earnings based on assumed conversion | $ 25 | $ 45 | $ 62 | $ 81 | ||
Net income allocated to common stockholders | $ 40,893 | $ 39,686 | $ 83,641 | $ 75,193 | ||
Add: weighted-average diluted non-participating securities | 759 | 1,239 | 886 | 1,147 | ||
Weighted average diluted shares outstanding | 30,744 | 31,495 | 30,720 | 31,286 | ||
Diluted EPS | $ 1.33 | $ 1.26 | $ 2.72 | $ 2.40 |
EARNINGS PER SHARE AND STOCKH_4
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY - Antidilutive securities (Detail) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | |
Restricted shares | |||
Antidilutive Securities | |||
Shares outstanding excluded from computation of earnings per share | 32 | 35 | 5 |
LEASES - Operating Leases (Deta
LEASES - Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2019 | |
Leases | |||||
Cumulative effect adjustment for adoption of ASU 2016-02 | $ (1,002) | ||||
Operating lease cost | $ 1,700 | $ 3,600 | |||
Rent expense | $ 1,600 | $ 3,200 | |||
Operating lease right-of-use assets | $ 23,800 | $ 23,800 | |||
Operating lease, right-of-use asset, Statement of Financial Position | us-gaap:OtherAssets | us-gaap:OtherAssets | |||
Operating lease liabilities | $ 30,165 | $ 30,165 | |||
Operating lease liability, Statement of Financial Position | us-gaap:AccountsPayableAndOtherAccruedLiabilities | us-gaap:AccountsPayableAndOtherAccruedLiabilities | |||
Operating leases, weighted average remaining lease term | 4 years 1 month 6 days | 4 years 1 month 6 days | |||
Operating lease, weighted average discount rate (as a percent) | 4.75% | 4.75% | |||
Retained Earnings | |||||
Leases | |||||
Cumulative effect adjustment for adoption of ASU 2016-02 | $ (1,002) |
LEASES - Future Operating Lease
LEASES - Future Operating Lease Commitments (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Maturities of lease liabilities | ||
Six Months Ended December 31, 2019 | $ 4,102 | |
2020 | 8,183 | |
2021 | 7,937 | |
2022 | 7,232 | |
2023 | 5,594 | |
Thereafter | 147 | |
Total | 33,195 | |
Less imputed interest | (3,030) | |
Total | $ 30,165 | |
Minimum cash basis operating lease commitments | ||
2019 | $ 7,700 | |
2020 | 7,789 | |
2021 | 7,450 | |
2022 | 6,738 | |
2023 | 5,200 | |
Thereafter | 90 | |
Total | $ 34,967 |
TOTAL EQUITY - Summary of Chang
TOTAL EQUITY - Summary of Changes in Total Equity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Change in Stockholders' Equity | ||||||
Balances at the beginning of the period | $ 928,072 | $ 907,192 | $ 832,267 | $ 814,981 | $ 907,192 | $ 814,981 |
Balance at the beginning of the period (in shares) | 29,497 | 29,497 | ||||
Cumulative effect adjustment for adoption of ASU 2016-02 | $ (1,002) | |||||
Walker and Dunlop net income | 42,196 | 44,218 | 41,112 | 36,861 | $ 86,414 | 77,973 |
Net income (loss) from noncontrolling interests | (50) | (158) | (79) | (154) | (208) | (233) |
Other comprehensive income (loss), net of tax | 666 | 301 | (53) | (127) | ||
Stock-based compensation - equity classified | 4,417 | 6,812 | 5,076 | 5,093 | ||
Issuance of common stock in connection with equity compensation plans | 1 | 4,187 | 3,216 | 4,851 | ||
Repurchase and retirement of common stock | (1,756) | (24,159) | (57) | (21,400) | ||
Cash dividends paid | (9,311) | (9,319) | (7,861) | (7,838) | ||
Balances at the end of the period | $ 964,235 | $ 928,072 | $ 873,621 | $ 832,267 | $ 964,235 | 873,621 |
Balance at the end of the period (in shares) | 29,964 | 29,964 | ||||
Cash dividends paid per common share | $ 0.30 | $ 0.30 | $ 0.25 | $ 0.25 | ||
Common Stock | ||||||
Change in Stockholders' Equity | ||||||
Balances at the beginning of the period | $ 300 | $ 295 | $ 301 | $ 300 | $ 295 | $ 300 |
Balance at the beginning of the period (in shares) | 29,973 | 29,497 | 30,148 | 30,016 | 29,497 | 30,016 |
Issuance of common stock in connection with equity compensation plans | $ 1 | $ 9 | $ 3 | $ 5 | ||
Issuance of common stock in connection with equity compensation plans (in shares) | 24 | 935 | 242 | 567 | ||
Repurchase and retirement of common stock | $ (1) | $ (4) | $ (4) | |||
Repurchase and retirement of common stock (in shares) | (33) | (459) | (435) | |||
Balances at the end of the period | $ 300 | $ 300 | $ 304 | $ 301 | $ 300 | $ 304 |
Balance at the end of the period (in shares) | 29,964 | 29,973 | 30,390 | 30,148 | 29,964 | 30,390 |
APIC | ||||||
Change in Stockholders' Equity | ||||||
Balances at the beginning of the period | $ 223,742 | $ 235,152 | $ 226,332 | $ 229,080 | $ 235,152 | $ 229,080 |
Stock-based compensation - equity classified | 4,417 | 6,812 | 5,076 | 5,093 | ||
Issuance of common stock in connection with equity compensation plans | 4,178 | 3,213 | 4,846 | |||
Repurchase and retirement of common stock | (538) | (22,400) | (57) | (12,687) | ||
Balances at the end of the period | 227,621 | 223,742 | 234,564 | 226,332 | 227,621 | 234,564 |
AOCI | ||||||
Change in Stockholders' Equity | ||||||
Balances at the beginning of the period | 226 | (75) | (34) | 93 | (75) | 93 |
Other comprehensive income (loss), net of tax | 666 | 301 | (53) | (127) | ||
Balances at the end of the period | 892 | 226 | (87) | (34) | 892 | (87) |
Retained Earnings | ||||||
Change in Stockholders' Equity | ||||||
Balances at the beginning of the period | 698,894 | 666,752 | 600,257 | 579,943 | 666,752 | 579,943 |
Cumulative effect adjustment for adoption of ASU 2016-02 | (1,002) | |||||
Walker and Dunlop net income | 42,196 | 44,218 | 41,112 | 36,861 | ||
Repurchase and retirement of common stock | (1,217) | (1,755) | (8,709) | |||
Cash dividends paid | (9,311) | (9,319) | (7,861) | (7,838) | ||
Balances at the end of the period | 730,562 | 698,894 | 633,508 | 600,257 | 730,562 | 633,508 |
Noncontrolling Interests | ||||||
Change in Stockholders' Equity | ||||||
Balances at the beginning of the period | 4,910 | 5,068 | 5,411 | 5,565 | 5,068 | 5,565 |
Net income (loss) from noncontrolling interests | (50) | (158) | (79) | (154) | ||
Balances at the end of the period | $ 4,860 | $ 4,910 | $ 5,332 | $ 5,411 | $ 4,860 | $ 5,332 |
TOTAL EQUITY - Share Repurchase
TOTAL EQUITY - Share Repurchase (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | |
Repurchases of common stock | ||||
Reduction of equity for retirement of repurchased shares | $ 1,756 | $ 24,159 | $ 57 | $ 21,400 |
Share repurchase program 2018 | ||||
Repurchases of common stock | ||||
Reduction of equity for retirement of repurchased shares | $ 2,400 | |||
Share repurchase program 2018 | Common shares | ||||
Repurchases of common stock | ||||
Repurchased and retired shares | 55 | |||
Weighted average market price of shares repurchased and retired (in dollars per share) | $ 42.79 | |||
Share repurchase program 2019 | ||||
Repurchases of common stock | ||||
Reduction of equity for retirement of repurchased shares | $ 1,500 | |||
Share repurchase program 2019 | Common shares | ||||
Repurchases of common stock | ||||
Repurchased and retired shares | 30 | |||
Weighted average market price of shares repurchased and retired (in dollars per share) | $ 51.88 | |||
Share repurchase program, period for repurchases | 12 months | |||
Authorized share repurchase capacity remaining | $ 48,500 | |||
Share repurchase program 2019 | Common shares | Maximum | ||||
Repurchases of common stock | ||||
Repurchase authorization | $ 50,000 |
TOTAL EQUITY - Dividends (Detai
TOTAL EQUITY - Dividends (Details) - $ / shares | Aug. 06, 2019 | Apr. 30, 2019 | Feb. 28, 2019 |
Dividends | |||
Cash dividends declared per common share | $ 0.30 | $ 0.30 | $ 0.30 |
Dividend payment date | Sep. 9, 2019 |