Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 27, 2023 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
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 | 7272 Wisconsin Avenue, Suite 1300 | |
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, $0.01 Par Value Per Share | |
Trading Symbol | WD | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 33,450,185 | |
Entity Central Index Key | 0001497770 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and cash equivalents | $ 236,321 | $ 225,949 |
Restricted cash | 17,768 | 17,676 |
Pledged securities, at fair value | 177,509 | 157,282 |
Loans held for sale, at fair value | 758,926 | 396,344 |
Mortgage servicing rights | 921,746 | 975,226 |
Goodwill | 949,710 | 959,712 |
Other intangible assets | 185,927 | 198,643 |
Receivables, net | 265,234 | 202,251 |
Committed investments in tax credit equity | 212,296 | 254,154 |
Other assets | 552,414 | 658,122 |
Total assets | 4,277,851 | 4,045,359 |
Liabilities | ||
Warehouse notes payable | 790,742 | 537,531 |
Notes payable | 774,677 | 704,103 |
Allowance for risk-sharing obligations | 30,957 | 44,057 |
Commitments to fund investments in tax credit equity | 196,250 | 239,281 |
Other liabilities | 754,234 | 803,558 |
Total liabilities | 2,546,860 | 2,328,530 |
Equity | ||
Preferred stock (authorized 50,000 shares; none issued) | ||
Common stock ($0.01 par value; authorized 200,000 shares; issued and outstanding 32,779 shares at September 30, 2023 and 32,396 shares at December 31, 2022) | 328 | 323 |
Additional paid-in capital ("APIC") | 420,062 | 412,636 |
Accumulated other comprehensive income (loss) ("AOCI") | (1,864) | (1,568) |
Retained earnings | 1,287,653 | 1,278,035 |
Total stockholders' equity | 1,706,179 | 1,689,426 |
Noncontrolling interests | 24,812 | 27,403 |
Total equity | 1,730,991 | 1,716,829 |
Commitments and contingencies (NOTES 2 and 9) | ||
Total liabilities and equity | $ 4,277,851 | $ 4,045,359 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
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 | 32,779 | 32,396 |
Common stock, outstanding | 32,779 | 32,396 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues | ||||
Total revenues | $ 268,743 | $ 315,611 | $ 780,104 | $ 975,903 |
Expenses | ||||
Personnel | 136,507 | 157,059 | 388,425 | 469,608 |
Amortization and depreciation | 57,479 | 59,846 | 170,737 | 177,101 |
Provision (benefit) for credit losses | 421 | 1,218 | (11,088) | (13,120) |
Interest expense on corporate debt | 17,594 | 9,306 | 49,878 | 22,123 |
Other operating expenses | 28,529 | 33,991 | 83,322 | 102,400 |
Total expenses | 240,530 | 261,420 | 681,274 | 758,112 |
Income (loss) from operations | 28,213 | 54,191 | 98,830 | 217,791 |
Income tax expense | 7,069 | 7,532 | 24,695 | 46,495 |
Net income (loss) before noncontrolling interests | 21,144 | 46,659 | 74,135 | 171,296 |
Net income (loss) from noncontrolling interests | (314) | (174) | (1,623) | (1,032) |
Walker & Dunlop net income (loss) | 21,458 | 46,833 | 75,758 | 172,328 |
Net change in unrealized gains (losses) on pledged available-for-sale securities, net of taxes | (399) | (1,238) | (296) | (4,018) |
Walker & Dunlop comprehensive income | $ 21,059 | $ 45,595 | $ 75,462 | $ 168,310 |
Basic earnings per share (NOTE 10) | $ 0.64 | $ 1.41 | $ 2.26 | $ 5.18 |
Diluted earnings per share (NOTE 10) | $ 0.64 | $ 1.40 | $ 2.25 | $ 5.13 |
Basic weighted-average shares outstanding | 32,737 | 32,290 | 32,654 | 32,300 |
Diluted weighted-average shares outstanding | 32,895 | 32,620 | 32,853 | 32,645 |
Loan origination and debt brokerage fees, Net | ||||
Revenues | ||||
Total revenues | $ 56,149 | $ 90,858 | $ 168,201 | $ 275,773 |
Fair value of expected net cash flows from servicing, net | ||||
Revenues | ||||
Total revenues | 35,375 | 55,291 | 107,446 | 159,970 |
Servicing fees | ||||
Revenues | ||||
Total revenues | 79,200 | 75,975 | 232,027 | 222,916 |
Property sales broker fees | ||||
Revenues | ||||
Total revenues | 16,862 | 30,308 | 38,831 | 100,092 |
Investment management fees | ||||
Revenues | ||||
Total revenues | 13,362 | 16,301 | 44,844 | 47,345 |
Net warehouse interest income (expense) | ||||
Revenues | ||||
Total revenues | (2,031) | 3,980 | (3,556) | 14,021 |
Placement fees and other interest income | ||||
Revenues | ||||
Total revenues | 43,000 | 18,129 | 109,310 | 26,683 |
Other revenue | ||||
Revenues | ||||
Total revenues | $ 26,826 | $ 24,769 | $ 83,001 | $ 129,103 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | APIC | AOCI | Retained Earnings | Noncontrolling Interests | Total |
Balances at the beginning of the period at Dec. 31, 2021 | $ 320 | $ 393,022 | $ 2,558 | $ 1,154,252 | $ 28,055 | $ 1,578,207 |
Balance at the beginning of the period (in shares) at Dec. 31, 2021 | 32,049 | |||||
Change in Stockholders' Equity | ||||||
Net Income (Loss) | 71,209 | 71,209 | ||||
Net income (loss) from noncontrolling interests | (679) | (679) | ||||
Other comprehensive income (loss), net of tax | (970) | (970) | ||||
Stock-based compensation - equity classified | 10,812 | 10,812 | ||||
Issuance of common stock in connection with equity compensation plans | $ 5 | 15,526 | 15,531 | |||
Issuance of common stock in connection with equity compensation plans (in shares) | 544 | |||||
Repurchase and retirement of common stock | $ (1) | (27,048) | (27,049) | |||
Repurchase and retirement of common stock (in shares) | (195) | |||||
Cash dividends paid | (20,077) | (20,077) | ||||
Other activity | (5,303) | 15,490 | 10,187 | |||
Balances at the end of the period at Mar. 31, 2022 | $ 324 | 387,009 | 1,588 | 1,205,384 | 42,866 | 1,637,171 |
Balance at the end of the period (in shares) at Mar. 31, 2022 | 32,398 | |||||
Balances at the beginning of the period at Dec. 31, 2021 | $ 320 | 393,022 | 2,558 | 1,154,252 | 28,055 | 1,578,207 |
Balance at the beginning of the period (in shares) at Dec. 31, 2021 | 32,049 | |||||
Change in Stockholders' Equity | ||||||
Net Income (Loss) | 172,328 | |||||
Net income (loss) from noncontrolling interests | (1,032) | |||||
Balances at the end of the period at Sep. 30, 2022 | $ 323 | 407,417 | (1,460) | 1,256,663 | 31,760 | 1,694,703 |
Balance at the end of the period (in shares) at Sep. 30, 2022 | 32,344 | |||||
Balances at the beginning of the period at Mar. 31, 2022 | $ 324 | 387,009 | 1,588 | 1,205,384 | 42,866 | 1,637,171 |
Balance at the beginning of the period (in shares) at Mar. 31, 2022 | 32,398 | |||||
Change in Stockholders' Equity | ||||||
Net Income (Loss) | 54,286 | 54,286 | ||||
Net income (loss) from noncontrolling interests | (179) | (179) | ||||
Other comprehensive income (loss), net of tax | (1,810) | (1,810) | ||||
Stock-based compensation - equity classified | 9,980 | 9,980 | ||||
Issuance of common stock in connection with equity compensation plans | 110 | 110 | ||||
Issuance of common stock in connection with equity compensation plans (in shares) | 43 | |||||
Repurchase and retirement of common stock | $ (1) | (2,409) | (9,892) | (12,302) | ||
Repurchase and retirement of common stock (in shares) | (119) | |||||
Distributions to noncontrolling interest holders | (1,675) | (1,675) | ||||
Cash dividends paid | (20,066) | (20,066) | ||||
Other activity | 8,978 | (8,718) | 260 | |||
Balances at the end of the period at Jun. 30, 2022 | $ 323 | 403,668 | (222) | 1,229,712 | 32,294 | 1,665,775 |
Balance at the end of the period (in shares) at Jun. 30, 2022 | 32,322 | |||||
Change in Stockholders' Equity | ||||||
Net Income (Loss) | 46,833 | 46,833 | ||||
Net income (loss) from noncontrolling interests | (174) | (174) | ||||
Other comprehensive income (loss), net of tax | (1,238) | (1,238) | ||||
Stock-based compensation - equity classified | 5,185 | 5,185 | ||||
Issuance of common stock in connection with equity compensation plans (in shares) | 36 | |||||
Repurchase and retirement of common stock | (1,436) | (1,436) | ||||
Repurchase and retirement of common stock (in shares) | (14) | |||||
Distributions to noncontrolling interest holders | (360) | (360) | ||||
Cash dividends paid | (19,882) | (19,882) | ||||
Balances at the end of the period at Sep. 30, 2022 | $ 323 | 407,417 | (1,460) | 1,256,663 | 31,760 | 1,694,703 |
Balance at the end of the period (in shares) at Sep. 30, 2022 | 32,344 | |||||
Balances at the beginning of the period at Dec. 31, 2022 | $ 323 | 412,636 | (1,568) | 1,278,035 | 27,403 | $ 1,716,829 |
Balance at the beginning of the period (in shares) at Dec. 31, 2022 | 32,396 | 32,396 | ||||
Change in Stockholders' Equity | ||||||
Net Income (Loss) | 26,665 | $ 26,665 | ||||
Net income (loss) from noncontrolling interests | 805 | 805 | ||||
Other comprehensive income (loss), net of tax | (53) | (53) | ||||
Stock-based compensation - equity classified | 6,664 | 6,664 | ||||
Issuance of common stock in connection with equity compensation plans | $ 5 | 3,397 | 3,402 | |||
Issuance of common stock in connection with equity compensation plans (in shares) | 468 | |||||
Repurchase and retirement of common stock | $ (1) | (17,394) | (17,395) | |||
Repurchase and retirement of common stock (in shares) | (185) | |||||
Distributions to noncontrolling interest holders | (600) | (600) | ||||
Cash dividends paid | (21,221) | (21,221) | ||||
Other activity | (2,360) | 2,360 | ||||
Balances at the end of the period at Mar. 31, 2023 | $ 327 | 405,303 | (1,621) | 1,281,119 | 29,968 | 1,715,096 |
Balance at the end of the period (in shares) at Mar. 31, 2023 | 32,679 | |||||
Balances at the beginning of the period at Dec. 31, 2022 | $ 323 | 412,636 | (1,568) | 1,278,035 | 27,403 | $ 1,716,829 |
Balance at the beginning of the period (in shares) at Dec. 31, 2022 | 32,396 | 32,396 | ||||
Change in Stockholders' Equity | ||||||
Net Income (Loss) | $ 75,758 | |||||
Net income (loss) from noncontrolling interests | (1,623) | |||||
Balances at the end of the period at Sep. 30, 2023 | $ 328 | 420,062 | (1,864) | 1,287,653 | 24,812 | $ 1,730,991 |
Balance at the end of the period (in shares) at Sep. 30, 2023 | 32,779 | 32,779 | ||||
Balances at the beginning of the period at Mar. 31, 2023 | $ 327 | 405,303 | (1,621) | 1,281,119 | 29,968 | $ 1,715,096 |
Balance at the beginning of the period (in shares) at Mar. 31, 2023 | 32,679 | |||||
Change in Stockholders' Equity | ||||||
Net Income (Loss) | 27,635 | 27,635 | ||||
Net income (loss) from noncontrolling interests | (2,114) | (2,114) | ||||
Other comprehensive income (loss), net of tax | 156 | 156 | ||||
Stock-based compensation - equity classified | 7,541 | 7,541 | ||||
Issuance of common stock in connection with equity compensation plans (in shares) | 33 | |||||
Repurchase and retirement of common stock | (662) | (662) | ||||
Repurchase and retirement of common stock (in shares) | (9) | |||||
Distributions to noncontrolling interest holders | (1,735) | (1,735) | ||||
Cash dividends paid | (21,180) | (21,180) | ||||
Other activity | (240) | (240) | ||||
Balances at the end of the period at Jun. 30, 2023 | $ 327 | 412,182 | (1,465) | 1,287,334 | 26,119 | 1,724,497 |
Balance at the end of the period (in shares) at Jun. 30, 2023 | 32,703 | |||||
Change in Stockholders' Equity | ||||||
Net Income (Loss) | 21,458 | 21,458 | ||||
Net income (loss) from noncontrolling interests | (314) | (314) | ||||
Other comprehensive income (loss), net of tax | (399) | (399) | ||||
Stock-based compensation - equity classified | 7,015 | 7,015 | ||||
Issuance of common stock in connection with equity compensation plans | $ 1 | 1,736 | 1,737 | |||
Issuance of common stock in connection with equity compensation plans (in shares) | 86 | |||||
Repurchase and retirement of common stock | (871) | (871) | ||||
Repurchase and retirement of common stock (in shares) | (10) | |||||
Distributions to noncontrolling interest holders | (993) | (993) | ||||
Cash dividends paid | (21,139) | (21,139) | ||||
Balances at the end of the period at Sep. 30, 2023 | $ 328 | $ 420,062 | $ (1,864) | $ 1,287,653 | $ 24,812 | $ 1,730,991 |
Balance at the end of the period (in shares) at Sep. 30, 2023 | 32,779 | 32,779 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
TOTAL EQUITY. | ||||||
Cash dividends paid. amount per common share | $ 0.63 | $ 0.63 | $ 0.63 | $ 0.60 | $ 0.60 | $ 0.60 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||
Net income before noncontrolling interests | $ 74,135 | $ 171,296 |
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 | (107,446) | (159,970) |
Change in the fair value of premiums and origination fees | 6,634 | 8,586 |
Amortization and depreciation | 170,737 | 177,101 |
Provision (benefit) for credit losses | (11,088) | (13,120) |
Gain from revaluation of previously held equity-method investment | (39,641) | |
Originations of loans held for sale | (8,402,185) | (13,877,961) |
Proceeds from transfers of loans held for sale | 8,023,294 | 13,283,455 |
Other operating activities, net | (86,493) | (16,512) |
Net cash provided by (used in) operating activities | (332,412) | (466,766) |
Cash flows from investing activities | ||
Capital expenditures | (13,880) | (19,302) |
Purchases of equity-method investments | (15,062) | (25,098) |
Purchases of pledged available-for-sale ("AFS") securities | (51,302) | |
Proceeds from prepayment and sale of pledged AFS securities | 9,274 | 9,261 |
Investments in joint ventures | (5,040) | |
Distributions from joint ventures | 5,436 | 11,926 |
Acquisitions, net of cash acquired | (114,163) | |
Originations of loans held for investment | (50,772) | |
Principal collected on loans held for investment | 160,801 | 73,500 |
Net cash provided by (used in) investing activities | 146,569 | (170,990) |
Cash flows from financing activities | ||
Borrowings (repayments) of warehouse notes payable, net | 387,109 | 593,685 |
Borrowings of interim warehouse notes payable | 36,459 | |
Repayments of interim warehouse notes payable | (119,835) | (26,000) |
Repayments of notes payable | (120,046) | (29,487) |
Borrowings of notes payable | 196,000 | |
Proceeds from issuance of common stock | 2,186 | 263 |
Repurchase of common stock | (18,928) | (40,675) |
Cash dividends paid | (63,540) | (60,025) |
Payment of contingent consideration | (26,090) | (19,720) |
Distributions to noncontrolling interest holders | (3,328) | (2,035) |
Debt issuance costs | (5,321) | (2,831) |
Net cash provided by (used in) financing activities | 228,207 | 449,634 |
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents (NOTE 2) | 42,364 | (188,122) |
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period | 258,283 | 393,180 |
Total of cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period | 300,647 | 205,058 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid to third parties for interest | 86,663 | 48,590 |
Cash paid for income taxes | $ 26,656 | $ 56,099 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Supplemental Disclosure of Non-Cash Activity: | ||
Issuance of common stock to settle compensation liabilities | $ 2,953 | $ 6,551 |
Issuance of common stock to settle contingent consideration liabilities (NOTE 7) | 8,750 | |
Net increase in total equity due to consolidations of tax credit entities (NOTE 10) | 10,447 | |
Net increase in total assets due to consolidations of tax credit entities (NOTE 10) | 13,700 | |
Net increase in total liabilities due to consolidations of tax credit entities (NOTE 10) | 3,559 | |
Forgiveness of receivables related to acquisitions (NOTE 7) | 5,460 | |
Allowance charge-off of loan held for investment | $ (6,033) | |
Additions of contingent consideration liabilities from acquisitions (NOTE 7) | $ 119,955 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2023 | |
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, 2022 (“2022 Form 10-K”). In the opinion of management, all adjustments 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 nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 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 multifamily property sales brokerage and valuation services, engages in commercial real estate investment management activities with a particular focus on the affordable housing sector through low-income housing tax credit (“LIHTC”) syndication, provides housing market research, and delivers real estate-related investment banking and advisory 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. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation If the Company determines it does not hold a variable interest in a VIE, it then applies the voting interest model. Under the voting interest model, the Company consolidates an entity when it holds a majority voting interest in an entity. If the Company does not have a majority voting interest but has significant influence, it uses the equity method of accounting. In instances where the Company owns less than 100% of the equity interests of an entity but owns a majority of the voting interests or has control over an entity, the Company accounts for the portion of equity not attributable to Walker & Dunlop, Inc. as Noncontrolling interests Net income (loss) from noncontrolling interests Subsequent Events Use of Estimates other intangible assets, and the initial and recurring fair value assessments of contingent consideration liabilities. Actual results may vary from these estimates. Provision (Benefit) for Credit Losses — Provision (benefit) for credit losses Provision (benefit) for credit losses Loans Held for Investment (“LHFI”), net As of September 30, 2023, LHFI consisted of two loans with an aggregate $40.0 million of unpaid principal balance less an immaterial amount of net unamortized deferred fees and costs and allowance for loan losses. As of December 31, 2022, LHFI consisted of nine loans with an aggregate $206.8 million of unpaid principal balance less $0.4 million of net unamortized deferred fees and costs and $6.2 million of allowance for loan losses. LHFI are included as a component of Other assets The Company did not have any non-accrual loan Statement of Cash Flows September 30, December 31, (in thousands) 2023 2022 2022 2021 Cash and cash equivalents $ 236,321 $ 152,188 $ 225,949 $ 305,635 Restricted cash 17,768 40,246 17,676 42,812 Pledged cash and cash equivalents (NOTE 9) 46,558 12,624 14,658 44,733 Total cash, cash equivalents, restricted cash, and restricted cash equivalents $ 300,647 $ 205,058 $ 258,283 $ 393,180 Income Taxes Net Warehouse Interest Income (Expense)— Net warehouse interest income (expense) For the three months ended For the nine months ended September 30, September 30, Components of Net Warehouse Interest Income (Expense) (in thousands) 2023 2022 2023 2022 Warehouse interest income $ 11,912 $ 18,413 $ 34,015 $ 44,816 Warehouse interest expense (13,943) (14,433) (37,571) (30,795) Net warehouse interest income (expense) $ (2,031) $ 3,980 $ (3,556) $ 14,021 Co-broker Fees— Loan origination and debt brokerage fees, net Contracts with Customers The majority of the Company’s contracts with customers do not require significant judgment or material estimates that affect the determination of the transaction price (including the assessment of variable consideration), the allocation of the transaction price to performance obligations, and the determination of the timing of the satisfaction of performance obligations. Additionally, the earnings process for the majority all of the Company’s contracts with customers is not complicated and is generally completed in a short period of time. The following table presents information about the Company’s contracts with customers for the three and nine months ended September 30, 2023 and 2022: For the three months ended For the nine months ended September 30, September 30, Description in thousands 2023 2022 2023 2022 Statement of income line item Certain loan origination fees $ 16,259 $ 40,076 $ 50,982 $ 130,722 Loan origination and debt brokerage fees, net Property sales broker fees 16,862 30,308 38,831 100,092 Property sales broker fees Investment management fees 13,362 16,301 44,844 47,345 Investment management fees Application fees, appraisal revenues, subscription revenues, syndication fees, and other revenues 15,138 12,643 56,602 55,384 Other revenues Total revenues derived from contracts with customers $ 61,621 $ 99,328 $ 191,259 $ 333,543 Litigation Recently Adopted and Recently Announced Accounting Pronouncement s Reclassifications |
MORTGAGE SERVICING RIGHTS
MORTGAGE SERVICING RIGHTS | 9 Months Ended |
Sep. 30, 2023 | |
MSRs | |
Mortgage Servicing Rights | |
MORTGAGE SERVICING RIGHTS | NOTE 3—MORTGAGE SERVICING RIGHTS The fair value of the mortgage servicing rights (“MSRs”) was $1.4 billion as of both September 30, 2023 and December 31, 2022. 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 related to the discount rate: The impact of a 100 - basis point increase in the discount rate at September 30, 2023 would be a decrease in the fair value of $43.2 million to the MSRs outstanding as of September 30, 2023. The impact of a 200 - basis point increase in the discount rate at September 30, 2023 would be a decrease in the fair value of $83.5 million to the MSRs outstanding as of September 30, 2023. These sensitivities are hypothetical and should be used with caution, and these estimates do not include interplay among assumptions. Activity related to MSRs for the three and nine months ended September 30, 2023 and 2022 follows: For the three months ended For the nine months ended September 30, September 30, Roll Forward of MSRs (in thousands) 2023 2022 2023 2022 Beginning balance $ 932,131 $ 978,745 $ 975,226 $ 953,845 Additions, following the sale of loan 42,495 45,454 104,644 182,753 Amortization (50,276) (47,391) (149,185) (140,846) Pre-payments and write-offs (2,604) (9,038) (8,939) (27,982) Ending balance $ 921,746 $ 967,770 $ 921,746 $ 967,770 The following table summarizes the gross value, accumulated amortization, and net carrying value of the Company’s MSRs as of September 30, 2023 and December 31, 2022: Components of MSRs (in thousands) September 30, 2023 December 31, 2022 Gross value $ 1,710,517 $ 1,659,185 Accumulated amortization (788,771) (683,959) Net carrying value $ 921,746 $ 975,226 The expected amortization of MSRs shown in the Condensed Consolidated Balance Sheet as of September 30, 2023 is shown in the table below. Actual amortization may vary from these estimates. Expected (in thousands) Amortization Three Months Ending December 31, 2023 $ 49,384 Year Ending December 31, 2024 $ 187,062 2025 164,837 2026 139,019 2027 118,031 2028 95,632 Thereafter 167,781 Total $ 921,746 |
ALLOWANCE FOR RISK-SHARING OBLI
ALLOWANCE FOR RISK-SHARING OBLIGATIONS | 9 Months Ended |
Sep. 30, 2023 | |
ALLOWANCE FOR RISK-SHARING OBLIGATIONS | |
ALLOWANCE FOR RISK-SHARING OBLIGATIONS | NOTE 4—ALLOWANCE FOR RISK-SHARING OBLIGATIONS When a loan is sold under the Fannie Mae Delegated Underwriting and Servicing (“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. Substantially all loans sold under the Fannie Mae DUS program contain modified or full-risk sharing guaranties that are based on the credit performance of the loan. The Company records an estimate of the contingent loss reserve for Current Expected Credit Losses (“CECL”) for all loans in its Fannie Mae at-risk servicing portfolio and also records collateral-based reserves as necessary and presents this combined loss reserve as Allowance for risk-sharing obligations Activity related to the allowance for risk-sharing obligations for the three and nine months ended September 30, 2023 and 2022 follows: For the three months ended For the nine months ended September 30, September 30, Roll Forward of Allowance for Risk-Sharing Obligations (in thousands) 2023 2022 2023 2022 Beginning balance $ 32,410 $ 48,475 $ 44,057 $ 62,636 Provision (benefit) for risk-sharing obligations 555 1,183 (11,092) (12,978) Write-offs (2,008) — (2,008) — Ending balance $ 30,957 $ 49,658 $ 30,957 $ 49,658 The Company assesses several factors to calculate the CECL allowance each quarter including the current and expected unemployment rate, macroeconomic conditions, and the multifamily market. The key inputs for the CECL allowance are the historic loss rate, the forecast-period loss rate, the reversion-period loss rate, and the unpaid principal balance (“UPB”) of the at-risk servicing portfolio. A summary of the key inputs of the CECL allowance as of the end of each of the quarters presented and the provision (benefit) impact during each quarter for the nine months ended September 30, 2023 and 2022 follows. 2023 CECL Calculation Details and Provision Impact Q1 Q2 Q3 Total Forecast-period loss rate in basis points 2.3 2.3 2.3 N/A Reversion-period loss rate in basis points 1.5 1.5 1.5 N/A Historical loss rate in basis points 0.6 0.6 0.6 N/A At-risk Fannie Mae servicing portfolio UPB in billions $ 54.5 $ 55.7 $ 57.4 N/A CECL allowance (in millions) $ 28.7 $ 28.9 $ 31.0 N/A Provision (benefit) for risk-sharing obligations in millions $ (11.0) $ (0.7) $ 0.6 $ (11.1) 2022 CECL Calculation Details and Provision Impact Q1 Q2 Q3 Total Forecast-period loss rate in basis points 3.0 2.2 2.2 N/A Reversion-period loss rate in basis points 2.0 1.7 1.7 N/A Historical loss rate in basis points 1.2 1.2 1.2 N/A At-risk Fannie Mae servicing portfolio UPB in billions $ 49.7 $ 51.2 $ 52.1 N/A CECL allowance (in millions) $ 42.5 $ 37.7 $ 38.9 N/A Provision (benefit) for risk-sharing obligations in millions $ (9.4) $ (4.8) $ 1.2 $ (13.0) During the first quarters of 2023 and 2022, the Company updated its 10-year look-back period, resulting in loss data from the earliest year being replaced with the loss data for the most recently completed year. The look-back period updates resulted in the historical loss rate factor decreasing and the benefit for risk-sharing obligations, as noted in the table above. The Company also slightly increased its forecast-period and reversion-period loss rates, during the three months ended March 31, 2023, to incorporate uncertain macroeconomic conditions. For the three months ended March 31, 2022, no adjustment was made to the forecast-period loss rate. During the second quarter of 2023, the benefit for risk-sharing obligations shown above was the result of an updated collateral-based reserve, as the Company settled this risk-sharing obligation with Fannie Mae early in the third quarter of 2023 for $2.0 million. During the second quarter of 2022, the benefit for risk-sharing obligations seen above was a result of the reductions in the forecast-period and reversion-period rates seen above, as the remaining risks and uncertainties related to the COVID-19 pandemic were removed from the forecast-period and reversion period loss rates. During the third quarters of 2023 and 2022, the provision for risk-sharing obligations seen above were the result of increases in the at-risk portfolio. The weighted average remaining life of the at-risk Fannie Mae servicing portfolio as of September 30, 2023 was 6.6 years compared to 7.2 years as of December 31, 2022. As of September 30, 2023, the Company had no loans with collateral-based reserves compared to two loans with an aggregate collateral-based reserve of $4.4 million as of December 31, 2022. As of September 30, 2023 and 2022, the maximum quantifiable contingent liability associated with the Company’s guaranties for the at-risk loans serviced under the Fannie Mae DUS agreement was $11.8 billion and $10.8 billion, respectively. This maximum quantifiable contingent liability relates to the at-risk loans serviced for Fannie Mae at the specific point in time indicated. 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 | 9 Months Ended |
Sep. 30, 2023 | |
Loans and Other Servicing Accounts | |
Servicing | |
SERVICING | NOTE 5—SERVICING The total unpaid principal balance of loans the Company was servicing for various institutional investors was $129.0 billion as of September 30, 2023 compared to $123.1 billion as of December 31, 2022. As of September 30, 2023 and December 31, 2022, custodial deposit accounts (“escrow deposits”) relating to loans serviced by the Company totaled $2.8 billion and $2.7 billion, respectively. These amounts are not included in the Condensed Consolidated Balance Sheets as such amounts are not Company assets; however, the Company is entitled to placement fees on these escrow deposits, presented within Placement fees and other interest income in the Condensed Consolidated Statements of Income. Certain cash deposits exceed Federal Deposit Insurance Corporation insurance limits; however, the Company believes it has mitigated this risk by holding uninsured deposits balances at large national banks. |
WAREHOUSE NOTES PAYABLE AND NOT
WAREHOUSE NOTES PAYABLE AND NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2023 | |
WAREHOUSE NOTES PAYABLE AND NOTES PAYABLE | |
WAREHOUSE NOTES PAYABLE AND NOTES PAYABLE | NOTE 6—WAREHOUSE NOTES PAYABLE AND NOTES PAYABLE As of September 30, 2023, to provide financing to borrowers under the Agencies’ programs, the Company has committed and uncommitted warehouse lines of credit in the amount of $3.9 billion with certain national banks and a $1.5 billion uncommitted facility with Fannie Mae (collectively, the “Agency Warehouse Facilities”). In support of these Agency Warehouse Facilities, the Company has pledged substantially all of its loans held for sale under the Company’s approved programs. The Company’s ability to originate mortgage loans for sale depends upon its ability to secure and maintain these types of financings on acceptable terms. Additionally, the Company has arranged for warehouse lines of credit with certain national banks to assist in funding loans held for investment under the Interim Loan Program (“Interim Warehouse Facilities”). The Company has pledged substantially all of its loans held for investment against these Interim Warehouse Facilities. The Company’s ability to originate and hold loans held for investment depends upon market conditions and its ability to secure and maintain these types of financings on acceptable terms. As of September 30, 2023, the Interim Warehouse Facilities had $454.8 million of total facility capacity with an outstanding balance of $25.6 million. The interest rate on the Interim Warehouse Facilities ranged from SOFR (defined below) plus 135 to 325 basis points. The interest rate for all our warehouse facilities and debt is based on an Adjusted Term Secured Overnight Financing Rate (“SOFR”). The maximum amount and outstanding borrowings under Agency Warehouse Facilities as of September 30, 2023 follows: September 30, 2023 (dollars in thousands) Committed Uncommitted Total Facility Outstanding Facility Amount Amount Capacity Balance Interest rate (1) Agency Warehouse Facility #1 $ 325,000 $ 250,000 $ 575,000 $ 92,872 SOFR plus 1.30% Agency Warehouse Facility #2 700,000 300,000 1,000,000 133,366 SOFR plus 1.30% Agency Warehouse Facility #3 600,000 265,000 865,000 106,856 SOFR plus 1.35% Agency Warehouse Facility #4 200,000 225,000 425,000 124,934 SOFR plus 1.30% to 1.35% Agency Warehouse Facility #5 — 1,000,000 1,000,000 94,755 SOFR plus 1.45% Total National Bank Agency Warehouse Facilities $ 1,825,000 $ 2,040,000 $ 3,865,000 $ 552,783 Fannie Mae repurchase agreement, uncommitted line and open maturity — 1,500,000 1,500,000 212,811 Total Agency Warehouse Facilities $ 1,825,000 $ 3,540,000 $ 5,365,000 $ 765,594 (1) Interest rate presented does not include the effect of any applicable interest rate floors. During 2023, the following amendments to the Company’s Agency Warehouse Facilities and Notes Payable were executed in the normal course of business to support the Company’s business. Additionally, the Company had a note payable through its wholly-owned subsidiary, WDAE (as defined in NOTE 12), formerly known as “Alliant,” which had an outstanding balance of $114.5 million as of December 31, 2022. As noted below, on January 12, 2023, the Company repaid the Alliant note payable in full with proceeds from the Incremental Term Loan (as defined below). Agency Warehouse Facilities During August 2023, the Company executed an amendment to Agency Warehouse Facility #1 that extended the maturity date to August 28, 2024. No other material modifications have been made to the agreement during 2023. During April 2023, the Company executed an amendment to Agency Warehouse Facility #2 that extended the maturity date to April 12, 2024. No other material modifications have been made to the agreement during 2023. During May 2023, the Company executed an amendment to Agency Warehouse Facility #3 that extended the maturity date to May 15, 2024. No other material modifications have been made to the agreement during 2023. During June 2023, the Company executed an amendment to Agency Warehouse Facility #4 that extended the maturity date to June 22, 2024, updated the interest rate as shown in the table above, and updated one of the financial covenants to conform with the Company’s other financial covenants. No other material modifications have been made to the agreement during 2023. During September 2023, the Company executed an amendment to Agency Warehouse Facility #5 that extended the maturity date to September 12, 2024. No other material modifications have been made to the agreement during 2023. No other material modifications have been made to the Agency Warehouse Facilities during the year. Notes payable Incremental Term Loan As of December 31, 2022, the Company had a senior secured credit agreement (the “Credit Agreement”) that provided for a $600 million term loan (the “Term Loan”). On January 12, 2023, the Company entered into a lender joinder agreement and amendment to the Credit Agreement that provided for an increment term loan (“Incremental Term Loan”) with a principal amount of $200.0 million, modified the ratio thresholds related to mandatory prepayments, and included a provision that allows additional types of indebtedness. The Incremental Term Loan was issued at a 2.0% discount and contains similar repayment terms as the Term Loan, bears interest at a rate equal to SOFR plus 300 basis points, and matures on December 16, 2028 . The Company used approximately $115.9 million of the proceeds to pay off the Alliant note payable principal balance, accrued interest, and other fees. The Company is obligated to make principal payments on the Incremental Term Loan in consecutive quarterly installments equal to 0.25% of the aggregate original principal amount of the Incremental Term Loan on the last business day of each March, June, September, and December that commenced on June 30, 2023. The warehouse notes payable and notes payable are subject to various financial covenants. The Company is in compliance with all of these financial covenants. As of September 30, 2023, the Company has transitioned all of its debt agreements to a SOFR-based benchmark. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 7—GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill A summary of the Company’s goodwill for the nine months ended September 30, 2023 and 2022 follows: For the nine months ended September 30, Roll Forward of Goodwill (in thousands) 2023 2022 Beginning balance $ 959,712 $ 698,635 Additions from acquisitions — 222,670 Measurement-period and other adjustments 3,998 26,859 Impairment (14,000) — Ending balance $ 949,710 $ 948,164 The Company recognized goodwill impairment during the three months ended September 30, 2023 in conjunction with the Company’s reassessment of the fair value of its contingent consideration liabilities The Company does not believe the impairment recorded is indicative of a broader goodwill impairment at the reporting unit. The period over which the contingent consideration can be earned (approximately two The fair value adjustment to the contingent consideration liability and the goodwill impairment are both included within Other operating expenses Other operating activities, net Condensed Consolidated Statements of Cash Flows. The following table shows goodwill by reportable segments as of September 30, 2023 and December 31, 2022. As of As of Goodwill by Reportable Segment (in thousands) September 30, 2023 December 31, 2022 Capital Markets $ 510,189 $ 520,191 Servicing & Asset Management 439,521 439,521 Ending balance $ 949,710 $ 959,712 Other Intangible Assets Activity related to other intangible assets for the nine months ended September 30, 2023 and 2022 follows: For the nine months ended September 30, Roll Forward of Other Intangible Assets (in thousands) 2023 2022 Beginning balance $ 198,643 $ 183,904 Additions from acquisitions — 31,000 Amortization (12,716) (12,070) Ending balance $ 185,927 $ 202,834 The following table summarizes the gross value, accumulated amortization, and net carrying value of the Company’s other intangible assets as of September 30, 2023 and December 31, 2022: Components of Other Intangible Assets (in thousands) September 30, 2023 December 31, 2022 Gross value $ 220,682 $ 220,682 Accumulated amortization (34,755) (22,039) Net carrying value $ 185,927 $ 198,643 The expected amortization of other intangible assets shown in the Condensed Consolidated Balance Sheet as of September 30, 2023 is shown in the table below. Actual amortization may vary from these estimates. Expected (in thousands) Amortization Three Months Ending December 31, 2023 $ 4,257 Year Ending December 31, 2024 $ 16,235 2025 16,235 2026 16,235 2027 16,235 2028 16,235 Thereafter 100,495 Total $ 185,927 Contingent Consideration Liabilities A summary of the Company’s contingent consideration liabilities, which are included in Other liabilities For the nine months ended September 30, Roll Forward of Contingent Consideration Liabilities (in thousands) 2023 2022 Beginning balance $ 200,346 $ 125,809 Additions — 119,955 Accretion 927 3,767 Fair value adjustments (14,000) — Payments (26,090) (28,547) Ending balance $ 161,183 $ 220,984 The contingent consideration liabilities presented in the table above relate to (i) acquisitions of debt brokerage and investment sales brokerage companies completed over the past several years, (ii) the purchase of noncontrolling interests in 2020 that was fully earned as of December 31, 2021 and paid in 2022, (iii) the Alliant acquisition, and (iv) the GeoPhy acquisition. The contingent consideration for each of the acquisitions may be earned over various lengths of time after each acquisition, with a maximum earnout period of five years , provided certain revenue targets and other metrics have been met. The last of the earnout periods related to the contingent consideration ends in the third quarter of 2027. In each case, t he Company estimated the initial fair value of the contingent consideration using a Monte Carlo simulation. As noted in the table above, the fair value adjustment recorded during the nine months ended September 30, 2023 was related to the GeoPhy acquisition. The probability of achievement for the contingent consideration declined due to short-term macroeconomic and commercial real estate market conditions and the reduced likelihood that those conditions will recover for the business to achieve the maximum contingent consideration targets. The recognition of the contingent consideration liability for the GeoPhy acquisition in the first quarter of 2022 is non-cash, and thus not reflected in the amount of cash consideration paid on the Condensed Consolidated Statements of Cash Flows. In addition, |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2023 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 8—FAIR VALUE MEASUREMENTS The Company uses valuation techniques that are consistent with the market approach, the income approa ch, 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, discount rates, volatilities, prepayment speeds, earnings rates, credit risk, 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 at inception, and thereafter on a nonrecurring basis. That is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value measurement when there is impairment and for disclosure purposes (NOTE 3). The Company's MSRs do not trade in an active, open market with readily observable prices. 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, estimated placement fee revenue from escrow deposits, 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 market participants consider in valuing MSR assets. 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. ● Derivative Instruments —The derivative positions consist of interest rate lock commitments with borrowers and forward sale agreements to the Agencies. The fair value of these instruments is estimated 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 —All loans held for sale presented in the Condensed Consolidated Balance Sheets 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, such as changes in the U.S. Treasury rate. Therefore, the Company classifies these loans held for sale as Level 2 . ● Pledged Securities —Investments in 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. ● Contingent Consideration Liabilities —Contingent consideration liabilities from acquisitions are recognized at fair value and subsequently remeasured using a Monte Carlo simulation that uses updated management forecasts and current valuation assumptions and discount rates. The Company determines the fair value of each contingent consideration liability based on probability of achievement, which incorporates management estimates. As a result, the Company classifies these liabilities as Level 3. The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022, segregated by the level of the valuation inputs within the fair value hierarchy used to measure fair value: Balance as of (in thousands) Level 1 Level 2 Level 3 Period End September 30, 2023 Assets Loans held for sale $ — $ 758,926 $ — $ 758,926 Pledged securities 46,558 130,951 — 177,509 Derivative assets — — 33,617 33,617 Total $ 46,558 $ 889,877 $ 33,617 $ 970,052 Liabilities Derivative liabilities $ — $ — $ 2,065 $ 2,065 Contingent consideration liabilities — — 161,183 161,183 Total $ — $ — $ 163,248 $ 163,248 December 31, 2022 Assets Loans held for sale $ — $ 396,344 $ — $ 396,344 Pledged securities 14,658 142,624 — 157,282 Derivative assets — — 17,636 17,636 Total $ 14,658 $ 538,968 $ 17,636 $ 571,262 Liabilities Derivative liabilities $ — $ — $ 2,076 $ 2,076 Contingent consideration liabilities — — 200,346 200,346 Total $ — $ — $ 202,422 $ 202,422 There were no transfers between any of the levels within the fair value hierarchy during the nine months ended September 30, 2023. 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 nine months ended September 30, 2023 and 2022: For the three months ended For the nine months ended September 30, September 30, Derivative Assets and Liabilities, net (in thousands) 2023 2022 2023 2022 Beginning balance $ 20,241 $ 42,634 $ 15,560 $ 30,961 Settlements (80,213) 42,458 (259,655) (235,463) Realized gains (losses) recorded in earnings (1) 59,972 (85,092) 244,095 204,502 Unrealized gains (losses) recorded in earnings (1) 31,552 231,241 31,552 231,241 Ending balance $ 31,552 $ 231,241 $ 31,552 $ 231,241 (1) Realized and unrealized gains (losses) from derivatives are recognized in Loan origination and debt brokerage fees, net and Fair value of expected net cash flows from servicing, net 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 September 30, 2023: Quantitative Information about Level 3 Fair Value Measurements (in thousands) Fair Value Valuation Technique Unobservable Input (1) Input Range (1) Weighted Average (2) Derivative assets $ 33,617 Discounted cash flow Counterparty credit risk — — Derivative liabilities $ 2,065 Discounted cash flow Counterparty credit risk — — Contingent consideration liabilities $ 161,183 Monte Carlo Simulation Probability of earnout achievement 48% - 100% 66% (1) Significant changes in this input may lead to significant changes in the fair value measurements. (2) Contingent consideration weighted based on maximum gross earnout amount. The carrying amounts and the fair values of the Company's financial instruments as of September 30, 2023 and December 31, 2022 are presented below: September 30, 2023 December 31, 2022 Carrying Fair Carrying Fair (in thousands) Amount Value Amount Value Financial Assets: Cash and cash equivalents $ 236,321 $ 236,321 $ 225,949 $ 225,949 Restricted cash 17,768 17,768 17,676 17,676 Pledged securities 177,509 177,509 157,282 157,282 Loans held for sale 758,926 758,926 396,344 396,344 Loans held for investment, net (1) 39,891 40,000 200,247 200,900 Derivative assets (1) 33,617 33,617 17,636 17,636 Total financial assets $ 1,264,032 $ 1,264,141 $ 1,015,134 $ 1,015,787 Financial Liabilities: Derivative liabilities (2) $ 2,065 $ 2,065 $ 2,076 $ 2,076 Contingent consideration liabilities (2) 161,183 161,183 200,346 200,346 Warehouse notes payable 790,742 791,178 537,531 538,134 Notes payable 774,677 788,500 704,103 708,546 Total financial liabilities $ 1,728,667 $ 1,742,926 $ 1,444,056 $ 1,449,102 (1) Included as a component of Other Assets in the Condensed Consolidated Balance Sheets. (2) Included as a component of Other Liabilities in the Condensed Consolidated Balance Sheets. The following methods and assumptions were used for recurring fair value measurements as of September 30, 2023 and December 31, 2022. 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 a mortgage loan is funded and are valued using discounted cash flow models that incorporate observable prices from market participants. Contingent Consideration Liabilities— Consists of the estimated fair values of expected future earnout payments related to acquisitions completed over the past few years. The earnout liabilities are valued using a Monte Carlo simulation analysis. The fair value of the contingent consideration liabilities incorporates unobservable inputs, such as the probability of earnout achievement, volatility rates, and discount rate, to determine the expected earnout cash flows. The probability of the earnout achievement is based on management’s estimate of the expected future performance and other financial metrics of each of the acquired entities, which are subject to significant uncertainty . Derivative Instruments — Consists 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 adversely 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 enters into a sale commitment with the investor simultaneously 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 Loan origination and debt brokerage fees, net 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 of 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 sale of the loan (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 the fair value of future servicing, net at loan sale (Level 2). 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 and the balance sheet date by the notional loan commitment amount (Level 2). The fair value of the Company's forward sales contracts to investors considers effects of interest rate movements between the trade date and the balance sheet date (Level 2). The market price changes are multiplied by the notional amount of the forward sales contracts to measure the fair value. 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 September 30, 2023 and December 31, 2022: 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 September 30, 2023 Rate lock commitments $ 349,336 $ 10,990 $ (6,049) $ 4,941 $ 5,142 $ (201) $ — Forward sale contracts 1,120,941 — 26,611 26,611 28,475 (1,864) — Loans held for sale 771,605 7,883 (20,562) (12,679) — — (12,679) Total $ 18,873 $ — $ 18,873 $ 33,617 $ (2,065) $ (12,679) December 31, 2022 Rate lock commitments $ 376,870 $ 12,349 $ (4,495) $ 7,854 $ 7,854 $ — $ — Forward sale contracts 769,585 — 7,706 7,706 9,782 (2,076) — Loans held for sale 392,715 6,840 (3,211) 3,629 — — 3,629 Total $ 19,189 $ — $ 19,189 $ 17,636 $ (2,076) $ 3,629 |
FANNIE MAE COMMITMENTS AND PLED
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES | 9 Months Ended |
Sep. 30, 2023 | |
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES | |
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES | NOTE 9—FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES Fannie Mae DUS Related Commitments 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 The Company is in compliance with the September 30, 2023 collateral requirements as outlined above. As of September 30, 2023, reserve requirements for the DUS loan portfolio will require the Company to fund $79.6 million in additional restricted liquidity over the next 48 months, assuming no further principal paydowns, prepayments, or defaults within the at-risk portfolio. Fannie Mae has reassessed the DUS Capital Standards in the past 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 increases to collateral requirements may adversely impact the Company’s available cash. Fannie Mae has established benchmark 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 September 30, 2023. The net worth requirement is derived primarily from unpaid principal balances on Fannie Mae loans and the level of risk sharing. As of September 30, 2023, the net worth requirement was $301.6 million, and the Company's net worth, as defined in the requirements, was $1.0 billion, as measured at our wholly-owned operating subsidiary, Walker & Dunlop, LLC. As of September 30, 2023, the Company was required to maintain at least $60.0 million of liquid assets to meet operational liquidity requirements for Fannie Mae, Freddie Mac, HUD, and Ginnie Mae, and the Company had operational liquidity, as defined in the requirements, of $186.4 million as of September 30, 2023, as measured at our wholly-owned operating subsidiary, Walker & Dunlop, LLC. Pledged Securities, at Fair Value Pledged securities, at fair value September 30, December 31, Pledged Securities (in thousands) 2023 2022 2022 2021 Restricted cash $ 10,523 $ 8,454 $ 5,788 $ 3,779 Money market funds 36,035 4,170 8,870 40,954 Total pledged cash and cash equivalents $ 46,558 $ 12,624 $ 14,658 $ 44,733 Agency MBS 130,951 138,789 142,624 104,263 Total pledged securities, at fair value $ 177,509 $ 151,413 $ 157,282 $ 148,996 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 Company’s investments included within Pledged securities, at fair value Fair Value and Amortized Cost of Agency MBS (in thousands) September 30, 2023 December 31, 2022 Fair value $ 130,951 $ 142,624 Amortized cost 133,421 144,801 Total gains for securities with net gains in AOCI 381 797 Total losses for securities with net losses in AOCI (2,851) (2,974) Fair value of securities with unrealized losses 115,337 118,565 Pledged securities with a fair value of $99.2 million, an amortized cost of $102.0 million, and a net unrealized loss of $2.8 million have been in a continuous unrealized loss position for more than 12 months, with the unrealized losses driven primarily by widening investor spreads as a result of the rapid increase in interest rates and related market uncertainty over the last 12 months. All securities that have been in a continuous loss position are Agency debt securities that carry a guarantee of the contractual payments. The Company concluded that an allowance for credit losses is not warranted, as the Company does not intend to sell the securities and does not believe it would be required to sell the securities, and as they carry the guarantee of payment from the Agencies. The following table provides contractual maturity information related to Agency MBS. The money market funds invest in short-term Federal Government and Agency debt securities and have no stated maturity date. September 30, 2023 Detail of Agency MBS Maturities (in thousands) Fair Value Amortized Cost Within one year $ — $ — After one year through five years 18,045 18,132 After five years through ten years 92,267 93,322 After ten years 20,639 21,967 Total $ 130,951 $ 133,421 |
EARNINGS PER SHARE AND STOCKHOL
EARNINGS PER SHARE AND STOCKHOLDERS EQUITY | 9 Months Ended |
Sep. 30, 2023 | |
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY | |
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY | NOTE 10—EARNINGS PER SHARE AND STOCKHOLDERS’ EQUITY 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 2020 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 nine months ended September 30, 2023 and 2022 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 September 30, For the nine months ended September 30, EPS Calculations (in thousands, except per share amounts) 2023 2022 2023 2022 Calculation of basic EPS Walker & Dunlop net income $ 21,458 $ 46,833 $ 75,758 $ 172,328 Less: dividends and undistributed earnings allocated to participating securities 534 1,296 1,942 4,984 Net income applicable to common stockholders $ 20,924 $ 45,537 $ 73,816 $ 167,344 Weighted-average basic shares outstanding 32,737 32,290 32,654 32,300 Basic EPS $ 0.64 $ 1.41 $ 2.26 $ 5.18 Calculation of diluted EPS Net income applicable to common stockholders $ 20,924 $ 45,537 $ 73,816 $ 167,344 Add: reallocation of dividends and undistributed earnings based on assumed conversion — 7 2 34 Net income allocated to common stockholders $ 20,924 $ 45,544 $ 73,818 $ 167,378 Weighted-average basic shares outstanding 32,737 32,290 32,654 32,300 Add: weighted-average diluted non-participating securities 158 330 199 345 Weighted-average diluted shares outstanding 32,895 32,620 32,853 32,645 Diluted EPS $ 0.64 $ 1.40 $ 2.25 $ 5.13 The assumed proceeds used for calculating the dilutive impact of restricted stock awards under the treasury-stock method includes the unrecognized compensation costs associated with the awards. For the three and nine months ended September 30, 2023, 169 thousand average restricted shares and 343 thousand average restricted shares, respectively, were excluded from the computation of diluted EPS under the treasury-stock method. For the three and nine months ended September 30, 2022, 218 thousand average restricted shares and 111 thousand average restricted shares, respectively, were excluded from the computation. These average restricted shares were excluded from the computation of diluted EPS under the treasury method because the effect would have been anti-dilutive, as the grant date market price of the restricted shares was greater than the average market price of the Company’s shares of common stock during the periods presented. The following non-cash transactions did not impact the amount of cash paid on the Condensed Consolidated Statements of Cash Flows. During 2022, the operating agreement of three of the Company’s tax credit-related joint ventures changed. The Company reconsidered its consolidation conclusion based on these changes and concluded that the joint ventures should be consolidated, resulting in a $3.7 million increase in APIC and $6.8 million of noncontrolling interests consolidated as shown on the Consolidated Statements of Changes in Equity for the nine months ended September 30, 2022. The consolidation also resulted in a $35.0 million increase in Receivables, net Other assets Other liabilities. In February 2023, the Company’s Board of Directors approved a stock repurchase program that permits the repurchase of up to $75.0 million of the Company’s common stock over a 12-month period beginning on February 23, 2023. During the first nine months of 2023, the Company did no t repurchase any shares of its common stock under the share repurchase program. As of September 30, 2023, the Company had $75.0 million of authorized share repurchase capacity remaining under the 2023 share repurchase program. During each of the first three quarters of 2023, the Company paid a dividend of $0.63 per share. On November 8, 2023, the Company’s Board of Directors declared a dividend of $0.63 per share for the fourth quarter of 2023. The dividend will be paid on December 8, 2023 to all holders of record of the Company’s restricted and unrestricted common stock as of November 24, 2023. The Company’s Note Payable (“Term Loan”) contains direct restrictions on the amount of dividends the Company may pay, and the warehouse debt 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 can pay for the foreseeable future. |
SEGMENTS
SEGMENTS | 9 Months Ended |
Sep. 30, 2023 | |
SEGMENTS | |
SEGMENTS | NOTE 11—SEG MENTS The Company’s executive leadership team, which functions as the Company’s chief operating decision making body, makes decisions and assesses performance based on the following three reportable segments. The reportable segments are determined based on the product or service provided and reflect the manner in which management is currently evaluating the Company’s financial information. (i) Capital Markets (“CM”) —CM provides a comprehensive range of commercial real estate finance products to its customers, including Agency lending, debt brokerage, property sales, and appraisal and valuation services. The Company’s long-established relationships with the Agencies and institutional investors enable CM to offer a broad range of loan products and services to the Company’s customers, including first mortgage, second trust, supplemental, construction, mezzanine, preferred equity, and small-balance loans. CM provides property sales services to owners and developers of multifamily properties and commercial real estate and multifamily property appraisals for various investors. CM also provides real estate-related investment banking and advisory services, including housing market research. As part of Agency lending, CM temporarily funds the loans it originates (loans held for sale) before selling them to the Agencies and earns net interest income on the spread between the interest income on the loans and the warehouse interest expense. For Agency loans, CM recognizes the fair value of expected net cash flows from servicing, which represents the right to receive future servicing fees. CM also earns fees for origination of loans for both Agency lending and debt brokerage, fees for property sales, appraisals, and investment banking and advisory services, and subscription revenue for its housing market research. Direct internal, including compensation, and external costs that are specific to CM are included within the results of this reportable segment. (ii) Servicing & Asset Management (“SAM”) —SAM’s activities include: (i) servicing and asset-managing the portfolio of loans the Company (a) originates and sells to the Agencies, (b) brokers to certain life insurance companies, and (c) originates through its principal lending and investing activities, (ii) managing third-party capital invested in commercial real estate assets through senior secured debt or limited partnership equity instruments; e.g., preferred equity, mezzanine debt, etc. either through funds or direct investments, and (iii) managing third-party capital invested in tax credit equity funds focused on the low-income housing tax credit (“LIHTC”) sector and other commercial real estate. SAM earns revenue through (i) fees for servicing and asset-managing the loans in the Company’s servicing portfolio, (ii) asset management fees for managing third-party capital, and (iii) net interest income on the spread between the interest income on the loans and the warehouse interest expense for loans held for investment. Direct internal, including compensation, and external costs that are specific to SAM are included within the results of this reportable segment. (iii) Corporate —The Corporate segment consists primarily of the Company’s treasury operations and other corporate-level activities. The Company’s treasury activities include monitoring and managing liquidity and funding requirements, including corporate debt. Other corporate-level activities include equity-method investments, accounting, information technology, legal, human resources, marketing, internal audit, and various other corporate groups (“support functions”). The Company does not allocate costs from these support functions to the CM or SAM segments in presenting segment operating results. The Company does allocate interest expense and income tax expense. Corporate debt and the related interest expense are allocated first based on specific acquisitions where debt was directly used to fund the acquisition and then based on the remaining segment assets. Income tax expense is allocated proportionally based on income from operations at each segment, except for significant, one-time tax activities, which are allocated entirely to the segment impacted by the tax activity. The following tables provide a summary and reconciliation of each segment’s results for the three months ended September 30, 2023 and 2022. Segment Results (in thousands) For the three months ended September 30, 2023 Revenues CM SAM Corporate Consolidated Loan origination and debt brokerage fees, net $ 56,149 $ — $ — $ 56,149 Fair value of expected net cash flows from servicing, net 35,375 — — 35,375 Servicing fees — 79,200 — 79,200 Property sales broker fees 16,862 — — 16,862 Investment management fees — 13,362 — 13,362 Net warehouse interest income (expense) (2,565) 534 — (2,031) Placement fees and other interest income — 39,475 3,525 43,000 Other revenues 11,875 15,569 (618) 26,826 Total revenues $ 117,696 $ 148,140 $ 2,907 $ 268,743 Expenses Personnel $ 97,973 $ 17,139 $ 21,395 $ 136,507 Amortization and depreciation 1,137 54,375 1,967 57,479 Provision (benefit) for credit losses — 421 — 421 Interest expense on corporate debt 4,874 11,096 1,624 17,594 Other operating expenses 4,193 5,039 19,297 28,529 Total expenses $ 108,177 $ 88,070 $ 44,283 $ 240,530 Income (loss) from operations $ 9,519 $ 60,070 $ (41,376) $ 28,213 Income tax expense (benefit) 2,386 15,040 (10,357) 7,069 Net income (loss) before noncontrolling interests $ 7,133 $ 45,030 $ (31,019) $ 21,144 Less: net income (loss) from noncontrolling interests 83 (397) — (314) Walker & Dunlop net income (loss) $ 7,050 $ 45,427 $ (31,019) $ 21,458 Segment Results (in thousands) For the three months ended September 30, 2022 Revenues CM SAM Corporate Consolidated Loan origination and debt brokerage fees, net $ 89,752 $ 1,106 $ — $ 90,858 Fair value of expected net cash flows from servicing, net 55,291 — — 55,291 Servicing fees — 75,975 — 75,975 Property sales broker fees 30,308 — — 30,308 Investment management fees — 16,301 — 16,301 Net warehouse interest income (expense) 2,178 1,802 — 3,980 Placement fees and other interest income — 17,760 369 18,129 Other revenues 11,011 16,378 (2,620) 24,769 Total revenues $ 188,540 $ 129,322 $ (2,251) $ 315,611 Expenses Personnel $ 128,981 $ 18,728 $ 9,350 $ 157,059 Amortization and depreciation 1,052 57,139 1,655 59,846 Provision (benefit) for credit losses — 1,218 — 1,218 Interest expense on corporate debt 2,430 6,324 552 9,306 Other operating expenses 6,869 5,237 21,885 33,991 Total expenses $ 139,332 $ 88,646 $ 33,442 $ 261,420 Income (loss) from operations $ 49,208 $ 40,676 $ (35,693) $ 54,191 Income tax expense (benefit) 12,468 10,204 (15,140) 7,532 Net income (loss) before noncontrolling interests $ 36,740 $ 30,472 $ (20,553) $ 46,659 Less: net income (loss) from noncontrolling interests 277 (451) — (174) Walker & Dunlop net income (loss) $ 36,463 $ 30,923 $ (20,553) $ 46,833 The following tables provide a summary and reconciliation of each segment’s results for the nine months ended September 30, 2023 and 2022 and total assets as of September 30, 2023 and 2022. Segment Results and Total Assets (in thousands) As of and for the nine months ended September 30, 2023 Revenues CM SAM Corporate Consolidated Loan origination and debt brokerage fees, net $ 167,679 $ 522 $ — $ 168,201 Fair value of expected net cash flows from servicing, net 107,446 — — 107,446 Servicing fees — 232,027 — 232,027 Property sales broker fees 38,831 — — 38,831 Investment management fees — 44,844 — 44,844 Net warehouse interest income (expense) (7,006) 3,450 — (3,556) Placement fees and other interest income — 100,636 8,674 109,310 Other revenues 40,735 42,697 (431) 83,001 Total revenues $ 347,685 $ 424,176 $ 8,243 $ 780,104 Expenses Personnel $ 281,502 $ 53,669 $ 53,254 $ 388,425 Amortization and depreciation 3,412 161,935 5,390 170,737 Provision (benefit) for credit losses — (11,088) — (11,088) Interest expense on corporate debt 13,870 31,385 4,623 49,878 Other operating expenses 15,037 16,465 51,820 83,322 Total expenses $ 313,821 $ 252,366 $ 115,087 $ 681,274 Income (loss) from operations $ 33,864 $ 171,810 $ (106,844) $ 98,830 Income tax expense (benefit) 8,462 42,931 (26,698) 24,695 Net income (loss) before noncontrolling interests $ 25,402 $ 128,879 $ (80,146) $ 74,135 Less: net income (loss) from noncontrolling interests 1,741 (3,364) — (1,623) Walker & Dunlop net income (loss) $ 23,661 $ 132,243 $ (80,146) $ 75,758 Total assets $ 1,424,270 $ 2,361,245 $ 492,336 $ 4,277,851 Segment Results and Total Assets (in thousands) As of and for the nine months ended September 30, 2022 Revenues CM SAM Corporate Consolidated Loan origination and debt brokerage fees, net $ 273,660 $ 2,113 $ — $ 275,773 Fair value of expected net cash flows from servicing, net 159,970 — — 159,970 Servicing fees — 222,916 — 222,916 Property sales broker fees 100,092 — — 100,092 Investment management fees — 47,345 — 47,345 Net warehouse interest income (expense) 9,415 4,606 — 14,021 Placement fees and other interest income — 26,166 517 26,683 Other revenues 29,838 57,624 41,641 129,103 Total revenues $ 572,975 $ 360,770 $ 42,158 $ 975,903 Expenses Personnel $ 372,656 $ 53,211 $ 43,741 $ 469,608 Amortization and depreciation 2,191 170,501 4,409 177,101 Provision (benefit) for credit losses — (13,120) — (13,120) Interest expense on corporate debt 5,488 15,388 1,247 22,123 Other operating expenses 19,943 15,535 66,922 102,400 Total expenses $ 400,278 $ 241,515 $ 116,319 $ 758,112 Income (loss) from operations $ 172,697 $ 119,255 $ (74,161) $ 217,791 Income tax expense (benefit) 41,878 28,919 (24,302) 46,495 Net income (loss) before noncontrolling interests $ 130,819 $ 90,336 $ (49,859) $ 171,296 Less: net income (loss) from noncontrolling interests 995 (2,027) — (1,032) Walker & Dunlop net income (loss) $ 129,824 $ 92,363 $ (49,859) $ 172,328 Total assets $ 3,093,803 $ 2,543,730 $ 365,480 $ 6,003,013 |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 9 Months Ended |
Sep. 30, 2023 | |
VARIABLE INTEREST ENTITIES | |
VARIABLE INTEREST ENTITIES | NOTE 12—VARIABLE INTEREST ENTITIES The Company, through its subsidiary Walker & Dunlop Affordable Equity (“WDAE”), formerly known as “Alliant,” provides alternative investment management services through the syndication of tax credit funds and the joint development of affordable housing projects. To facilitate the syndication and development of affordable housing projects, the Company is involved with the acquisition and/or formation of limited partnerships and joint ventures with investors, property developers, and property managers that are VIEs. A detailed discussion of the Company’s accounting policies regarding the consolidation of VIEs and significant transactions involving VIEs is included in NOTE 2 and NOTE 17 of the 2022 Form 10-K. As of September 30, 2023 and December 31, 2022, the assets and liabilities of the consolidated tax credit funds were immaterial. The table below presents the assets and liabilities of the Company’s consolidated joint development VIEs included in the Condensed Consolidated Balance Sheets: Consolidated VIEs (in thousands) September 30, 2023 December 31, 2022 Assets: Cash and cash equivalents $ 379 $ 201 Restricted cash 2,828 1,532 Receivables, net 31,948 33,593 Other Assets 50,501 49,768 Total assets of consolidated VIEs $ 85,656 $ 85,094 Liabilities: Other liabilities $ 44,745 $ 39,148 Total liabilities of consolidated VIEs $ 44,745 $ 39,148 The table below presents the carrying value and classification of the Company’s interests in nonconsolidated VIEs included in the Condensed Consolidated Balance Sheets: Nonconsolidated VIEs (in thousands) September 30, 2023 December 31, 2022 Assets Committed investments in tax credit equity $ 212,296 $ 254,154 Other assets: Equity-method investments 60,188 57,981 Total interests in nonconsolidated VIEs $ 272,484 $ 312,135 Liabilities Commitments to fund investments in tax credit equity $ 196,250 $ 239,281 Total commitments to fund nonconsolidated VIEs $ 196,250 $ 239,281 Maximum exposure to losses (1)(2) $ 272,484 $ 312,135 (1) Maximum exposure determined as Total interests in nonconsolidated VIEs . The maximum exposure for the Company’s investments in tax credit equity is limited to the carrying value of its investment, as there are no funding obligations or other commitments related to the nonconsolidated VIEs other than the amounts presented in the table above. (2) Based on historical experience and the underlying expected cash flows from the underlying investment, the maximum exposure of loss is not representative of the actual loss, if any, that the Company may incur. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation If the Company determines it does not hold a variable interest in a VIE, it then applies the voting interest model. Under the voting interest model, the Company consolidates an entity when it holds a majority voting interest in an entity. If the Company does not have a majority voting interest but has significant influence, it uses the equity method of accounting. In instances where the Company owns less than 100% of the equity interests of an entity but owns a majority of the voting interests or has control over an entity, the Company accounts for the portion of equity not attributable to Walker & Dunlop, Inc. as Noncontrolling interests Net income (loss) from noncontrolling interests |
Subsequent Events | Subsequent Events |
Use of Estimates | Use of Estimates other intangible assets, and the initial and recurring fair value assessments of contingent consideration liabilities. Actual results may vary from these estimates. |
Provision (Benefit) for Credit Losses | Provision (Benefit) for Credit Losses — Provision (benefit) for credit losses Provision (benefit) for credit losses |
Loans Held for Investment ("LHFI"), net | Loans Held for Investment (“LHFI”), net As of September 30, 2023, LHFI consisted of two loans with an aggregate $40.0 million of unpaid principal balance less an immaterial amount of net unamortized deferred fees and costs and allowance for loan losses. As of December 31, 2022, LHFI consisted of nine loans with an aggregate $206.8 million of unpaid principal balance less $0.4 million of net unamortized deferred fees and costs and $6.2 million of allowance for loan losses. LHFI are included as a component of Other assets The Company did not have any non-accrual loan |
Statement of Cash Flows | Statement of Cash Flows September 30, December 31, (in thousands) 2023 2022 2022 2021 Cash and cash equivalents $ 236,321 $ 152,188 $ 225,949 $ 305,635 Restricted cash 17,768 40,246 17,676 42,812 Pledged cash and cash equivalents (NOTE 9) 46,558 12,624 14,658 44,733 Total cash, cash equivalents, restricted cash, and restricted cash equivalents $ 300,647 $ 205,058 $ 258,283 $ 393,180 |
Income Taxes | Income Taxes |
Net Warehouse Interest Income (Expense) | Net Warehouse Interest Income (Expense)— Net warehouse interest income (expense) For the three months ended For the nine months ended September 30, September 30, Components of Net Warehouse Interest Income (Expense) (in thousands) 2023 2022 2023 2022 Warehouse interest income $ 11,912 $ 18,413 $ 34,015 $ 44,816 Warehouse interest expense (13,943) (14,433) (37,571) (30,795) Net warehouse interest income (expense) $ (2,031) $ 3,980 $ (3,556) $ 14,021 |
Co-broker Fees | Co-broker Fees— Loan origination and debt brokerage fees, net |
Contracts with Customers | Contracts with Customers The majority of the Company’s contracts with customers do not require significant judgment or material estimates that affect the determination of the transaction price (including the assessment of variable consideration), the allocation of the transaction price to performance obligations, and the determination of the timing of the satisfaction of performance obligations. Additionally, the earnings process for the majority all of the Company’s contracts with customers is not complicated and is generally completed in a short period of time. The following table presents information about the Company’s contracts with customers for the three and nine months ended September 30, 2023 and 2022: For the three months ended For the nine months ended September 30, September 30, Description in thousands 2023 2022 2023 2022 Statement of income line item Certain loan origination fees $ 16,259 $ 40,076 $ 50,982 $ 130,722 Loan origination and debt brokerage fees, net Property sales broker fees 16,862 30,308 38,831 100,092 Property sales broker fees Investment management fees 13,362 16,301 44,844 47,345 Investment management fees Application fees, appraisal revenues, subscription revenues, syndication fees, and other revenues 15,138 12,643 56,602 55,384 Other revenues Total revenues derived from contracts with customers $ 61,621 $ 99,328 $ 191,259 $ 333,543 |
Litigation | Litigation |
Recently Adopted and Recently Announced Accounting Pronouncements | Recently Adopted and Recently Announced Accounting Pronouncement s |
Reclassifications | Reclassifications |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | September 30, December 31, (in thousands) 2023 2022 2022 2021 Cash and cash equivalents $ 236,321 $ 152,188 $ 225,949 $ 305,635 Restricted cash 17,768 40,246 17,676 42,812 Pledged cash and cash equivalents (NOTE 9) 46,558 12,624 14,658 44,733 Total cash, cash equivalents, restricted cash, and restricted cash equivalents $ 300,647 $ 205,058 $ 258,283 $ 393,180 |
Schedule of Net Warehouse Interest Income (Expense) | For the three months ended For the nine months ended September 30, September 30, Components of Net Warehouse Interest Income (Expense) (in thousands) 2023 2022 2023 2022 Warehouse interest income $ 11,912 $ 18,413 $ 34,015 $ 44,816 Warehouse interest expense (13,943) (14,433) (37,571) (30,795) Net warehouse interest income (expense) $ (2,031) $ 3,980 $ (3,556) $ 14,021 |
Schedule of Contracts with Customers | For the three months ended For the nine months ended September 30, September 30, Description in thousands 2023 2022 2023 2022 Statement of income line item Certain loan origination fees $ 16,259 $ 40,076 $ 50,982 $ 130,722 Loan origination and debt brokerage fees, net Property sales broker fees 16,862 30,308 38,831 100,092 Property sales broker fees Investment management fees 13,362 16,301 44,844 47,345 Investment management fees Application fees, appraisal revenues, subscription revenues, syndication fees, and other revenues 15,138 12,643 56,602 55,384 Other revenues Total revenues derived from contracts with customers $ 61,621 $ 99,328 $ 191,259 $ 333,543 |
MORTGAGE SERVICING RIGHTS (Tabl
MORTGAGE SERVICING RIGHTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
MORTGAGE SERVICING RIGHTS | |
Schedule of Activity Related to MSRs | For the three months ended For the nine months ended September 30, September 30, Roll Forward of MSRs (in thousands) 2023 2022 2023 2022 Beginning balance $ 932,131 $ 978,745 $ 975,226 $ 953,845 Additions, following the sale of loan 42,495 45,454 104,644 182,753 Amortization (50,276) (47,391) (149,185) (140,846) Pre-payments and write-offs (2,604) (9,038) (8,939) (27,982) Ending balance $ 921,746 $ 967,770 $ 921,746 $ 967,770 |
Summary of Components of Net Carrying Value of MSRs | Components of MSRs (in thousands) September 30, 2023 December 31, 2022 Gross value $ 1,710,517 $ 1,659,185 Accumulated amortization (788,771) (683,959) Net carrying value $ 921,746 $ 975,226 |
Schedule of Expected Amortization of MSRs | Expected (in thousands) Amortization Three Months Ending December 31, 2023 $ 49,384 Year Ending December 31, 2024 $ 187,062 2025 164,837 2026 139,019 2027 118,031 2028 95,632 Thereafter 167,781 Total $ 921,746 |
ALLOWANCE FOR RISK-SHARING OB_2
ALLOWANCE FOR RISK-SHARING OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
ALLOWANCE FOR RISK-SHARING OBLIGATIONS | |
Summary of Allowance for Risk-Sharing Obligations | For the three months ended For the nine months ended September 30, September 30, Roll Forward of Allowance for Risk-Sharing Obligations (in thousands) 2023 2022 2023 2022 Beginning balance $ 32,410 $ 48,475 $ 44,057 $ 62,636 Provision (benefit) for risk-sharing obligations 555 1,183 (11,092) (12,978) Write-offs (2,008) — (2,008) — Ending balance $ 30,957 $ 49,658 $ 30,957 $ 49,658 |
Schedule of CECL Calculation Details and Provision Impact | 2023 CECL Calculation Details and Provision Impact Q1 Q2 Q3 Total Forecast-period loss rate in basis points 2.3 2.3 2.3 N/A Reversion-period loss rate in basis points 1.5 1.5 1.5 N/A Historical loss rate in basis points 0.6 0.6 0.6 N/A At-risk Fannie Mae servicing portfolio UPB in billions $ 54.5 $ 55.7 $ 57.4 N/A CECL allowance (in millions) $ 28.7 $ 28.9 $ 31.0 N/A Provision (benefit) for risk-sharing obligations in millions $ (11.0) $ (0.7) $ 0.6 $ (11.1) 2022 CECL Calculation Details and Provision Impact Q1 Q2 Q3 Total Forecast-period loss rate in basis points 3.0 2.2 2.2 N/A Reversion-period loss rate in basis points 2.0 1.7 1.7 N/A Historical loss rate in basis points 1.2 1.2 1.2 N/A At-risk Fannie Mae servicing portfolio UPB in billions $ 49.7 $ 51.2 $ 52.1 N/A CECL allowance (in millions) $ 42.5 $ 37.7 $ 38.9 N/A Provision (benefit) for risk-sharing obligations in millions $ (9.4) $ (4.8) $ 1.2 $ (13.0) |
WAREHOUSE NOTES PAYABLE AND N_2
WAREHOUSE NOTES PAYABLE AND NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
WAREHOUSE NOTES PAYABLE AND NOTES PAYABLE | |
Schedule of notes payable | September 30, 2023 (dollars in thousands) Committed Uncommitted Total Facility Outstanding Facility Amount Amount Capacity Balance Interest rate (1) Agency Warehouse Facility #1 $ 325,000 $ 250,000 $ 575,000 $ 92,872 SOFR plus 1.30% Agency Warehouse Facility #2 700,000 300,000 1,000,000 133,366 SOFR plus 1.30% Agency Warehouse Facility #3 600,000 265,000 865,000 106,856 SOFR plus 1.35% Agency Warehouse Facility #4 200,000 225,000 425,000 124,934 SOFR plus 1.30% to 1.35% Agency Warehouse Facility #5 — 1,000,000 1,000,000 94,755 SOFR plus 1.45% Total National Bank Agency Warehouse Facilities $ 1,825,000 $ 2,040,000 $ 3,865,000 $ 552,783 Fannie Mae repurchase agreement, uncommitted line and open maturity — 1,500,000 1,500,000 212,811 Total Agency Warehouse Facilities $ 1,825,000 $ 3,540,000 $ 5,365,000 $ 765,594 (1) Interest rate presented does not include the effect of any applicable interest rate floors. |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of Goodwill | For the nine months ended September 30, Roll Forward of Goodwill (in thousands) 2023 2022 Beginning balance $ 959,712 $ 698,635 Additions from acquisitions — 222,670 Measurement-period and other adjustments 3,998 26,859 Impairment (14,000) — Ending balance $ 949,710 $ 948,164 As of As of Goodwill by Reportable Segment (in thousands) September 30, 2023 December 31, 2022 Capital Markets $ 510,189 $ 520,191 Servicing & Asset Management 439,521 439,521 Ending balance $ 949,710 $ 959,712 |
Schedule of Other Intangible Assets | For the nine months ended September 30, Roll Forward of Other Intangible Assets (in thousands) 2023 2022 Beginning balance $ 198,643 $ 183,904 Additions from acquisitions — 31,000 Amortization (12,716) (12,070) Ending balance $ 185,927 $ 202,834 |
Summary of Components of Net Carrying Value of Other Intangible Assets | Components of Other Intangible Assets (in thousands) September 30, 2023 December 31, 2022 Gross value $ 220,682 $ 220,682 Accumulated amortization (34,755) (22,039) Net carrying value $ 185,927 $ 198,643 |
Schedule of Expected Amortization of Other Intangible Assets | Expected (in thousands) Amortization Three Months Ending December 31, 2023 $ 4,257 Year Ending December 31, 2024 $ 16,235 2025 16,235 2026 16,235 2027 16,235 2028 16,235 Thereafter 100,495 Total $ 185,927 |
Schedule of Contingent Liability | For the nine months ended September 30, Roll Forward of Contingent Consideration Liabilities (in thousands) 2023 2022 Beginning balance $ 200,346 $ 125,809 Additions — 119,955 Accretion 927 3,767 Fair value adjustments (14,000) — Payments (26,090) (28,547) Ending balance $ 161,183 $ 220,984 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
FAIR VALUE MEASUREMENTS | |
Summary of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis | Balance as of (in thousands) Level 1 Level 2 Level 3 Period End September 30, 2023 Assets Loans held for sale $ — $ 758,926 $ — $ 758,926 Pledged securities 46,558 130,951 — 177,509 Derivative assets — — 33,617 33,617 Total $ 46,558 $ 889,877 $ 33,617 $ 970,052 Liabilities Derivative liabilities $ — $ — $ 2,065 $ 2,065 Contingent consideration liabilities — — 161,183 161,183 Total $ — $ — $ 163,248 $ 163,248 December 31, 2022 Assets Loans held for sale $ — $ 396,344 $ — $ 396,344 Pledged securities 14,658 142,624 — 157,282 Derivative assets — — 17,636 17,636 Total $ 14,658 $ 538,968 $ 17,636 $ 571,262 Liabilities Derivative liabilities $ — $ — $ 2,076 $ 2,076 Contingent consideration liabilities — — 200,346 200,346 Total $ — $ — $ 202,422 $ 202,422 |
Schedule of Roll Forward of Derivative Instruments | For the three months ended For the nine months ended September 30, September 30, Derivative Assets and Liabilities, net (in thousands) 2023 2022 2023 2022 Beginning balance $ 20,241 $ 42,634 $ 15,560 $ 30,961 Settlements (80,213) 42,458 (259,655) (235,463) Realized gains (losses) recorded in earnings (1) 59,972 (85,092) 244,095 204,502 Unrealized gains (losses) recorded in earnings (1) 31,552 231,241 31,552 231,241 Ending balance $ 31,552 $ 231,241 $ 31,552 $ 231,241 (1) Realized and unrealized gains (losses) from derivatives are recognized in Loan origination and debt brokerage fees, net and Fair value of expected net cash flows from servicing, net 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 Fair Value Measurements (in thousands) Fair Value Valuation Technique Unobservable Input (1) Input Range (1) Weighted Average (2) Derivative assets $ 33,617 Discounted cash flow Counterparty credit risk — — Derivative liabilities $ 2,065 Discounted cash flow Counterparty credit risk — — Contingent consideration liabilities $ 161,183 Monte Carlo Simulation Probability of earnout achievement 48% - 100% 66% (1) Significant changes in this input may lead to significant changes in the fair value measurements. (2) Contingent consideration weighted based on maximum gross earnout amount. |
Schedule of Carrying Amounts and the Fair Values of the Company's Financial Instruments | September 30, 2023 December 31, 2022 Carrying Fair Carrying Fair (in thousands) Amount Value Amount Value Financial Assets: Cash and cash equivalents $ 236,321 $ 236,321 $ 225,949 $ 225,949 Restricted cash 17,768 17,768 17,676 17,676 Pledged securities 177,509 177,509 157,282 157,282 Loans held for sale 758,926 758,926 396,344 396,344 Loans held for investment, net (1) 39,891 40,000 200,247 200,900 Derivative assets (1) 33,617 33,617 17,636 17,636 Total financial assets $ 1,264,032 $ 1,264,141 $ 1,015,134 $ 1,015,787 Financial Liabilities: Derivative liabilities (2) $ 2,065 $ 2,065 $ 2,076 $ 2,076 Contingent consideration liabilities (2) 161,183 161,183 200,346 200,346 Warehouse notes payable 790,742 791,178 537,531 538,134 Notes payable 774,677 788,500 704,103 708,546 Total financial liabilities $ 1,728,667 $ 1,742,926 $ 1,444,056 $ 1,449,102 (1) Included as a component of Other Assets in the Condensed Consolidated Balance Sheets. (2) Included as a component of Other Liabilities in the Condensed Consolidated Balance Sheets. |
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 September 30, 2023 Rate lock commitments $ 349,336 $ 10,990 $ (6,049) $ 4,941 $ 5,142 $ (201) $ — Forward sale contracts 1,120,941 — 26,611 26,611 28,475 (1,864) — Loans held for sale 771,605 7,883 (20,562) (12,679) — — (12,679) Total $ 18,873 $ — $ 18,873 $ 33,617 $ (2,065) $ (12,679) December 31, 2022 Rate lock commitments $ 376,870 $ 12,349 $ (4,495) $ 7,854 $ 7,854 $ — $ — Forward sale contracts 769,585 — 7,706 7,706 9,782 (2,076) — Loans held for sale 392,715 6,840 (3,211) 3,629 — — 3,629 Total $ 19,189 $ — $ 19,189 $ 17,636 $ (2,076) $ 3,629 |
FANNIE MAE COMMITMENTS AND PL_2
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES | |
Schedule of Pledged Securities at Fair Value | September 30, December 31, Pledged Securities (in thousands) 2023 2022 2022 2021 Restricted cash $ 10,523 $ 8,454 $ 5,788 $ 3,779 Money market funds 36,035 4,170 8,870 40,954 Total pledged cash and cash equivalents $ 46,558 $ 12,624 $ 14,658 $ 44,733 Agency MBS 130,951 138,789 142,624 104,263 Total pledged securities, at fair value $ 177,509 $ 151,413 $ 157,282 $ 148,996 |
Schedule of Investment Information Related to AFS Agency MBS | Fair Value and Amortized Cost of Agency MBS (in thousands) September 30, 2023 December 31, 2022 Fair value $ 130,951 $ 142,624 Amortized cost 133,421 144,801 Total gains for securities with net gains in AOCI 381 797 Total losses for securities with net losses in AOCI (2,851) (2,974) Fair value of securities with unrealized losses 115,337 118,565 |
Schedule of Contractual Maturity Information Related to Agency MBS | September 30, 2023 Detail of Agency MBS Maturities (in thousands) Fair Value Amortized Cost Within one year $ — $ — After one year through five years 18,045 18,132 After five years through ten years 92,267 93,322 After ten years 20,639 21,967 Total $ 130,951 $ 133,421 |
EARNINGS PER SHARE AND STOCKH_2
EARNINGS PER SHARE AND STOCKHOLDERS EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY | |
Schedule of basic and diluted EPS under two-class method | For the three months ended September 30, For the nine months ended September 30, EPS Calculations (in thousands, except per share amounts) 2023 2022 2023 2022 Calculation of basic EPS Walker & Dunlop net income $ 21,458 $ 46,833 $ 75,758 $ 172,328 Less: dividends and undistributed earnings allocated to participating securities 534 1,296 1,942 4,984 Net income applicable to common stockholders $ 20,924 $ 45,537 $ 73,816 $ 167,344 Weighted-average basic shares outstanding 32,737 32,290 32,654 32,300 Basic EPS $ 0.64 $ 1.41 $ 2.26 $ 5.18 Calculation of diluted EPS Net income applicable to common stockholders $ 20,924 $ 45,537 $ 73,816 $ 167,344 Add: reallocation of dividends and undistributed earnings based on assumed conversion — 7 2 34 Net income allocated to common stockholders $ 20,924 $ 45,544 $ 73,818 $ 167,378 Weighted-average basic shares outstanding 32,737 32,290 32,654 32,300 Add: weighted-average diluted non-participating securities 158 330 199 345 Weighted-average diluted shares outstanding 32,895 32,620 32,853 32,645 Diluted EPS $ 0.64 $ 1.40 $ 2.25 $ 5.13 |
SEGMENTS (Tables)
SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
SEGMENTS | |
Schedule of segment results and total assets | Segment Results (in thousands) For the three months ended September 30, 2023 Revenues CM SAM Corporate Consolidated Loan origination and debt brokerage fees, net $ 56,149 $ — $ — $ 56,149 Fair value of expected net cash flows from servicing, net 35,375 — — 35,375 Servicing fees — 79,200 — 79,200 Property sales broker fees 16,862 — — 16,862 Investment management fees — 13,362 — 13,362 Net warehouse interest income (expense) (2,565) 534 — (2,031) Placement fees and other interest income — 39,475 3,525 43,000 Other revenues 11,875 15,569 (618) 26,826 Total revenues $ 117,696 $ 148,140 $ 2,907 $ 268,743 Expenses Personnel $ 97,973 $ 17,139 $ 21,395 $ 136,507 Amortization and depreciation 1,137 54,375 1,967 57,479 Provision (benefit) for credit losses — 421 — 421 Interest expense on corporate debt 4,874 11,096 1,624 17,594 Other operating expenses 4,193 5,039 19,297 28,529 Total expenses $ 108,177 $ 88,070 $ 44,283 $ 240,530 Income (loss) from operations $ 9,519 $ 60,070 $ (41,376) $ 28,213 Income tax expense (benefit) 2,386 15,040 (10,357) 7,069 Net income (loss) before noncontrolling interests $ 7,133 $ 45,030 $ (31,019) $ 21,144 Less: net income (loss) from noncontrolling interests 83 (397) — (314) Walker & Dunlop net income (loss) $ 7,050 $ 45,427 $ (31,019) $ 21,458 Segment Results (in thousands) For the three months ended September 30, 2022 Revenues CM SAM Corporate Consolidated Loan origination and debt brokerage fees, net $ 89,752 $ 1,106 $ — $ 90,858 Fair value of expected net cash flows from servicing, net 55,291 — — 55,291 Servicing fees — 75,975 — 75,975 Property sales broker fees 30,308 — — 30,308 Investment management fees — 16,301 — 16,301 Net warehouse interest income (expense) 2,178 1,802 — 3,980 Placement fees and other interest income — 17,760 369 18,129 Other revenues 11,011 16,378 (2,620) 24,769 Total revenues $ 188,540 $ 129,322 $ (2,251) $ 315,611 Expenses Personnel $ 128,981 $ 18,728 $ 9,350 $ 157,059 Amortization and depreciation 1,052 57,139 1,655 59,846 Provision (benefit) for credit losses — 1,218 — 1,218 Interest expense on corporate debt 2,430 6,324 552 9,306 Other operating expenses 6,869 5,237 21,885 33,991 Total expenses $ 139,332 $ 88,646 $ 33,442 $ 261,420 Income (loss) from operations $ 49,208 $ 40,676 $ (35,693) $ 54,191 Income tax expense (benefit) 12,468 10,204 (15,140) 7,532 Net income (loss) before noncontrolling interests $ 36,740 $ 30,472 $ (20,553) $ 46,659 Less: net income (loss) from noncontrolling interests 277 (451) — (174) Walker & Dunlop net income (loss) $ 36,463 $ 30,923 $ (20,553) $ 46,833 Segment Results and Total Assets (in thousands) As of and for the nine months ended September 30, 2023 Revenues CM SAM Corporate Consolidated Loan origination and debt brokerage fees, net $ 167,679 $ 522 $ — $ 168,201 Fair value of expected net cash flows from servicing, net 107,446 — — 107,446 Servicing fees — 232,027 — 232,027 Property sales broker fees 38,831 — — 38,831 Investment management fees — 44,844 — 44,844 Net warehouse interest income (expense) (7,006) 3,450 — (3,556) Placement fees and other interest income — 100,636 8,674 109,310 Other revenues 40,735 42,697 (431) 83,001 Total revenues $ 347,685 $ 424,176 $ 8,243 $ 780,104 Expenses Personnel $ 281,502 $ 53,669 $ 53,254 $ 388,425 Amortization and depreciation 3,412 161,935 5,390 170,737 Provision (benefit) for credit losses — (11,088) — (11,088) Interest expense on corporate debt 13,870 31,385 4,623 49,878 Other operating expenses 15,037 16,465 51,820 83,322 Total expenses $ 313,821 $ 252,366 $ 115,087 $ 681,274 Income (loss) from operations $ 33,864 $ 171,810 $ (106,844) $ 98,830 Income tax expense (benefit) 8,462 42,931 (26,698) 24,695 Net income (loss) before noncontrolling interests $ 25,402 $ 128,879 $ (80,146) $ 74,135 Less: net income (loss) from noncontrolling interests 1,741 (3,364) — (1,623) Walker & Dunlop net income (loss) $ 23,661 $ 132,243 $ (80,146) $ 75,758 Total assets $ 1,424,270 $ 2,361,245 $ 492,336 $ 4,277,851 Segment Results and Total Assets (in thousands) As of and for the nine months ended September 30, 2022 Revenues CM SAM Corporate Consolidated Loan origination and debt brokerage fees, net $ 273,660 $ 2,113 $ — $ 275,773 Fair value of expected net cash flows from servicing, net 159,970 — — 159,970 Servicing fees — 222,916 — 222,916 Property sales broker fees 100,092 — — 100,092 Investment management fees — 47,345 — 47,345 Net warehouse interest income (expense) 9,415 4,606 — 14,021 Placement fees and other interest income — 26,166 517 26,683 Other revenues 29,838 57,624 41,641 129,103 Total revenues $ 572,975 $ 360,770 $ 42,158 $ 975,903 Expenses Personnel $ 372,656 $ 53,211 $ 43,741 $ 469,608 Amortization and depreciation 2,191 170,501 4,409 177,101 Provision (benefit) for credit losses — (13,120) — (13,120) Interest expense on corporate debt 5,488 15,388 1,247 22,123 Other operating expenses 19,943 15,535 66,922 102,400 Total expenses $ 400,278 $ 241,515 $ 116,319 $ 758,112 Income (loss) from operations $ 172,697 $ 119,255 $ (74,161) $ 217,791 Income tax expense (benefit) 41,878 28,919 (24,302) 46,495 Net income (loss) before noncontrolling interests $ 130,819 $ 90,336 $ (49,859) $ 171,296 Less: net income (loss) from noncontrolling interests 995 (2,027) — (1,032) Walker & Dunlop net income (loss) $ 129,824 $ 92,363 $ (49,859) $ 172,328 Total assets $ 3,093,803 $ 2,543,730 $ 365,480 $ 6,003,013 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Consolidated VIEs | |
Schedule of the carrying value and classification of assets and liabilities of VIEs | Consolidated VIEs (in thousands) September 30, 2023 December 31, 2022 Assets: Cash and cash equivalents $ 379 $ 201 Restricted cash 2,828 1,532 Receivables, net 31,948 33,593 Other Assets 50,501 49,768 Total assets of consolidated VIEs $ 85,656 $ 85,094 Liabilities: Other liabilities $ 44,745 $ 39,148 Total liabilities of consolidated VIEs $ 44,745 $ 39,148 |
Nonconsolidated VIEs | |
Schedule of the carrying value and classification of assets and liabilities of VIEs | Nonconsolidated VIEs (in thousands) September 30, 2023 December 31, 2022 Assets Committed investments in tax credit equity $ 212,296 $ 254,154 Other assets: Equity-method investments 60,188 57,981 Total interests in nonconsolidated VIEs $ 272,484 $ 312,135 Liabilities Commitments to fund investments in tax credit equity $ 196,250 $ 239,281 Total commitments to fund nonconsolidated VIEs $ 196,250 $ 239,281 Maximum exposure to losses (1)(2) $ 272,484 $ 312,135 (1) Maximum exposure determined as Total interests in nonconsolidated VIEs . The maximum exposure for the Company’s investments in tax credit equity is limited to the carrying value of its investment, as there are no funding obligations or other commitments related to the nonconsolidated VIEs other than the amounts presented in the table above. (2) Based on historical experience and the underlying expected cash flows from the underlying investment, the maximum exposure of loss is not representative of the actual loss, if any, that the Company may incur. |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Loans Held-for-Investment, Net (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jun. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) loan | Dec. 31, 2022 USD ($) loan | |
Loans Held-for-Investment, Net | |||
Number of loans held for investment | loan | 2 | 9 | |
Unpaid principal balance of loans held for investment | $ 40,000 | $ 206,800 | |
Net unamortized deferred fees and costs | 400 | ||
Financing receivable allowance for credit loss | $ 6,200 | ||
Number of delinquent loans | loan | 0 | 1 | |
Loans held for investment, delinquent | $ 14,700 | ||
Number of loans on nonaccrual status | loan | 0 | 1 | |
Loans, non-accrual status | $ 14,700 | ||
Sale of loan held for investment | $ 8,700 | ||
Net write-off of collateral-based reserves for loan losses | $ 6,000 | $ 6,033 | |
Specific reserve for loan | 5,900 | ||
Amortized cost of loans held for investment, current | $ 39,900 | $ 191,700 | |
Maximum | |||
Loans Held-for-Investment, Net | |||
Loan term (in years) | 3 years | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash Flows (Detail) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | ||||
Cash and cash equivalents | $ 236,321 | $ 225,949 | $ 152,188 | $ 305,635 |
Restricted cash | 17,768 | 17,676 | 40,246 | 42,812 |
Total cash, cash equivalents, restricted cash, and restricted cash equivalents | 300,647 | 258,283 | 205,058 | 393,180 |
Total pledged cash and cash equivalents | ||||
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | ||||
Pledged cash and cash equivalents (NOTE 9) | $ 46,558 | $ 14,658 | $ 12,624 | $ 44,733 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Income Taxes (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Excess tax benefits recognized | $ 0.7 | $ 0.3 | $ 2.2 | $ 5.5 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Net Warehouse Interest Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Warehouse interest income | $ 11,912 | $ 18,413 | $ 34,015 | $ 44,816 |
Warehouse interest expense | (13,943) | (14,433) | (37,571) | (30,795) |
Net warehouse interest income (expense) | (2,031) | 3,980 | (3,556) | 14,021 |
Co-broker fees | $ 2,500 | $ 3,100 | $ 9,300 | $ 13,400 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contracts with Customers and Asset Management Fees (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Contracts with Customers | ||||
Revenue from contracts with customer | $ 61,621 | $ 99,328 | $ 191,259 | $ 333,543 |
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | Revenues | Revenues | Revenues | Revenues |
Loan origination and debt brokerage fees, Net | ||||
Contracts with Customers | ||||
Revenue from contracts with customer | $ 16,259 | $ 40,076 | $ 50,982 | $ 130,722 |
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | Revenues | Revenues | Revenues | Revenues |
Property Sales Broker Fees | ||||
Contracts with Customers | ||||
Revenue from contracts with customer | $ 16,862 | $ 30,308 | $ 38,831 | $ 100,092 |
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | Revenues | Revenues | Revenues | Revenues |
Investment management fees | ||||
Contracts with Customers | ||||
Revenue from contracts with customer | $ 13,362 | $ 16,301 | $ 44,844 | $ 47,345 |
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | Revenues | Revenues | Revenues | Revenues |
Application fees, appraisal revenues, subscription revenues, syndication fees, and other revenues | ||||
Contracts with Customers | ||||
Revenue from contracts with customer | $ 15,138 | $ 12,643 | $ 56,602 | $ 55,384 |
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | Revenues | Revenues | Revenues | Revenues |
MORTGAGE SERVICING RIGHTS - Fai
MORTGAGE SERVICING RIGHTS - Fair Value Disclosures (Detail) - MSRs - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Servicing | ||
Fair value of the MSRs | $ 1,400 | $ 1,400 |
Sensitivity Analysis of Fair Value, example 1, impact of percent adverse change in discount rate, percent | 1% | |
Decrease in fair value as a result of 100 basis point increase in discount rate | $ 43.2 | |
Sensitivity Analysis of Fair Value, example 2, impact of percent adverse change in discount rate, percent | 2% | |
Decrease in fair value as a result of 200 basis point increase in discount rate | $ 83.5 |
MORTGAGE SERVICING RIGHTS - Sch
MORTGAGE SERVICING RIGHTS - Schedule of Activity Related to MSRs (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Mortgage Servicing Rights | ||||
Beginning balance | $ 975,226 | |||
Ending balance | $ 921,746 | 921,746 | ||
MSRs | ||||
Mortgage Servicing Rights | ||||
Beginning balance | 932,131 | $ 978,745 | 975,226 | $ 953,845 |
Additions, following sale of loan | 42,495 | 45,454 | 104,644 | 182,753 |
Amortization | (50,276) | (47,391) | (149,185) | (140,846) |
Pre-payments and write-offs | (2,604) | (9,038) | (8,939) | (27,982) |
Ending balance | $ 921,746 | $ 967,770 | $ 921,746 | $ 967,770 |
MORTGAGE SERVICING RIGHTS - Sum
MORTGAGE SERVICING RIGHTS - Summary of Components of Net Carrying Value of Acquired and Originated MSRs (Detail) - MSRs - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Mortgage Servicing Rights Acquired and Originated | ||
Gross value | $ 1,710,517 | $ 1,659,185 |
Accumulated amortization | (788,771) | (683,959) |
Net carrying value | $ 921,746 | $ 975,226 |
MORTGAGE SERVICING RIGHTS - S_2
MORTGAGE SERVICING RIGHTS - Schedule of Expected Amortization of MSRs (Detail) - MSRs - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Future amortization | ||
Three Months Ending December 31, 2023 | $ 49,384 | |
2024 | 187,062 | |
2025 | 164,837 | |
2026 | 139,019 | |
2027 | 118,031 | |
2028 | 95,632 | |
Thereafter | 167,781 | |
Net carrying value | $ 921,746 | $ 975,226 |
ALLOWANCE FOR RISK-SHARING OB_3
ALLOWANCE FOR RISK-SHARING OBLIGATIONS - Summary of Allowance for Risk-Sharing Obligations (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2023 USD ($) loan | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) loan | |
Allowance for Risk-Sharing Contracts | |||||||||
Beginning balance | $ 32,410 | $ 44,057 | $ 48,475 | $ 62,636 | $ 44,057 | $ 62,636 | $ 62,636 | ||
Provision (benefit) for risk-sharing obligations | 555 | $ (700) | $ (11,000) | 1,183 | $ (4,800) | $ (9,400) | (11,092) | (12,978) | |
Write-offs | (2,008) | (2,008) | |||||||
Ending balance | 30,957 | $ 32,410 | 49,658 | $ 48,475 | $ 30,957 | 49,658 | $ 44,057 | ||
Number of defaulted loans | loan | 0 | 2 | |||||||
Amount of specific reserves placed on defaulted at risk loans | $ 4,400 | ||||||||
Settlement of risk sharing obligation with Fannie Mae | 2,000 | ||||||||
Weighted average remaining life of the at risk servicing portfolio | 6 years 7 months 6 days | 7 years 2 months 12 days | |||||||
Fannie Mae DUS program | |||||||||
Allowance for Risk-Sharing Contracts | |||||||||
Maximum quantifiable contingent liability associated with guarantees | $ 11,800,000 | $ 10,800,000 | $ 11,800,000 | $ 10,800,000 |
ALLOWANCE FOR RISK-SHARING OB_4
ALLOWANCE FOR RISK-SHARING OBLIGATIONS - CECL Provision Impact (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
ALLOWANCE FOR RISK-SHARING OBLIGATIONS | ||||||||
Forecast-period loss rate | 0.023 | 0.023 | 0.023 | 0.022 | 0.022 | 0.030 | ||
Reversion-period loss rate | 0.015 | 0.015 | 0.015 | 0.017 | 0.017 | 0.020 | ||
Historical loss rate | 0.006 | 0.006 | 0.006 | 0.012 | 0.012 | 0.012 | ||
At-risk Fannie Mae servicing portfolio UPB | $ 57,400,000 | $ 55,700,000 | $ 54,500,000 | $ 52,100,000 | $ 51,200,000 | $ 49,700,000 | ||
CECL allowance | 31,000 | 28,900 | 28,700 | 38,900 | 37,700 | 42,500 | ||
Provision (benefit) for risk-sharing obligations | $ 555 | $ (700) | $ (11,000) | $ 1,183 | $ (4,800) | $ (9,400) | $ (11,092) | $ (12,978) |
SERVICING - (Detail)
SERVICING - (Detail) - Loans serviced - USD ($) $ in Billions | Sep. 30, 2023 | Dec. 31, 2022 |
Servicing | ||
Servicing portfolio loans unpaid principal balance | $ 129 | $ 123.1 |
Custodial escrow accounts | $ 2.8 | $ 2.7 |
WAREHOUSE NOTES PAYABLE AND N_3
WAREHOUSE NOTES PAYABLE AND NOTES PAYABLE - Summary Information (Detail) $ in Thousands | 1 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 USD ($) | Aug. 31, 2023 | Jun. 30, 2023 item | May 31, 2023 | Apr. 30, 2023 | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Warehouse notes payable | |||||||
Outstanding Balance | $ 790,742 | $ 790,742 | $ 537,531 | ||||
Loans Held for Sale | Agency Warehouse Facility | |||||||
Warehouse notes payable | |||||||
Committed Amount | 1,825,000 | 1,825,000 | |||||
Uncommitted Amount | 3,540,000 | 3,540,000 | |||||
Total Facility Capacity | 5,365,000 | 5,365,000 | |||||
Outstanding Balance | 765,594 | 765,594 | |||||
National Banks | Loans Held for Sale | Agency Warehouse Facility | |||||||
Warehouse notes payable | |||||||
Committed Amount | 1,825,000 | 1,825,000 | |||||
Uncommitted Amount | 2,040,000 | 2,040,000 | |||||
Total Facility Capacity | 3,865,000 | 3,865,000 | |||||
Outstanding Balance | 552,783 | 552,783 | |||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #1 | Agency Warehouse Facility | |||||||
Warehouse notes payable | |||||||
Committed Amount | 325,000 | 325,000 | |||||
Uncommitted Amount | 250,000 | 250,000 | |||||
Total Facility Capacity | 575,000 | 575,000 | |||||
Outstanding Balance | 92,872 | $ 92,872 | |||||
Maturity date | Aug. 28, 2024 | ||||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #1 | Agency Warehouse Facility | SOFR | |||||||
Warehouse notes payable | |||||||
Percentage added to reference rate | 1.30% | ||||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #2 | Agency Warehouse Facility | |||||||
Warehouse notes payable | |||||||
Committed Amount | 700,000 | $ 700,000 | |||||
Uncommitted Amount | 300,000 | 300,000 | |||||
Total Facility Capacity | 1,000,000 | 1,000,000 | |||||
Outstanding Balance | 133,366 | $ 133,366 | |||||
Maturity date | Apr. 12, 2024 | ||||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #2 | Agency Warehouse Facility | SOFR | |||||||
Warehouse notes payable | |||||||
Percentage added to reference rate | 1.30% | ||||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #3 | Agency Warehouse Facility | |||||||
Warehouse notes payable | |||||||
Committed Amount | 600,000 | $ 600,000 | |||||
Uncommitted Amount | 265,000 | 265,000 | |||||
Total Facility Capacity | 865,000 | 865,000 | |||||
Outstanding Balance | 106,856 | $ 106,856 | |||||
Maturity date | May 15, 2024 | ||||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #3 | Agency Warehouse Facility | SOFR | |||||||
Warehouse notes payable | |||||||
Percentage added to reference rate | 1.35% | ||||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #4 | Agency Warehouse Facility | |||||||
Warehouse notes payable | |||||||
Committed Amount | 200,000 | $ 200,000 | |||||
Uncommitted Amount | 225,000 | 225,000 | |||||
Total Facility Capacity | 425,000 | 425,000 | |||||
Outstanding Balance | 124,934 | $ 124,934 | |||||
Maturity date | Jun. 22, 2024 | ||||||
Number of financial covenants updated | item | 1 | ||||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #4 | Agency Warehouse Facility | SOFR | Minimum | |||||||
Warehouse notes payable | |||||||
Percentage added to reference rate | 1.30% | ||||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #4 | Agency Warehouse Facility | SOFR | Maximum | |||||||
Warehouse notes payable | |||||||
Percentage added to reference rate | 1.35% | ||||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #5 | Agency Warehouse Facility | |||||||
Warehouse notes payable | |||||||
Uncommitted Amount | 1,000,000 | $ 1,000,000 | |||||
Total Facility Capacity | 1,000,000 | 1,000,000 | |||||
Outstanding Balance | $ 94,755 | $ 94,755 | |||||
Maturity date | Sep. 12, 2024 | ||||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #5 | Agency Warehouse Facility | SOFR | |||||||
Warehouse notes payable | |||||||
Percentage added to reference rate | 1.45% | ||||||
National Banks | Loans Held for Investment | Interim Warehouse Facility | |||||||
Warehouse notes payable | |||||||
Total Facility Capacity | $ 454,800 | $ 454,800 | |||||
Outstanding Balance | 25,600 | $ 25,600 | |||||
National Banks | Loans Held for Investment | Interim Warehouse Facility | SOFR | Minimum | |||||||
Warehouse notes payable | |||||||
Percentage added to reference rate | 1.35% | ||||||
National Banks | Loans Held for Investment | Interim Warehouse Facility | SOFR | Maximum | |||||||
Warehouse notes payable | |||||||
Percentage added to reference rate | 3.25% | ||||||
Fannie Mae | Loans Held for Sale | Fannie Mae Repurchase Agreement, Uncommitted Line and Open Maturity | 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 | $ 212,811 | $ 212,811 |
WAREHOUSE NOTES PAYABLE AND N_4
WAREHOUSE NOTES PAYABLE AND NOTES PAYABLE - Notes Payable - Term Note Payable (Detail) - USD ($) $ in Millions | Jan. 12, 2023 | Dec. 31, 2022 |
Alliant Note Payable | ||
Debt | ||
Unpaid principal balance | $ 114.5 | |
Credit Agreement | Term Loan | ||
Debt | ||
Amount of loan agreement | $ 600 | |
Credit Agreement | Incremental Term Loan | ||
Debt | ||
Amount of loan agreement | $ 200 | |
Discount on issue of term loan (as a percent) | 2% | |
Term Loan proceeds used to repay certain existing indebtedness | $ 115.9 | |
Percentage of original principal amount required as quarterly installment | 0.25% | |
Maturity date | Dec. 16, 2028 | |
Credit Agreement | Incremental Term Loan | SOFR | ||
Debt | ||
Percentage added to reference rate | 3% |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Goodwill (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 959,712 | $ 698,635 |
Additions from acquisitions | 222,670 | |
Measurement-period adjustments | 3,998 | 26,859 |
Impairment | (14,000) | |
Ending balance | $ 949,710 | $ 948,164 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill by Reportable Segment (Details) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Goodwill | ||||
Remaining contingent consideration liability earnout period | 2 years | |||
Goodwill. | $ 949,710 | $ 959,712 | $ 948,164 | $ 698,635 |
Capital Markets | ||||
Goodwill | ||||
Number of reporting units to which goodwill impairment was allocated | segment | 1 | |||
Number of reporting units with assigned goodwill | segment | 2 | |||
Goodwill. | $ 510,189 | 520,191 | ||
Servicing and Asset Management | ||||
Goodwill | ||||
Goodwill. | $ 439,521 | $ 439,521 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) - Other intangible assets - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Other intangible assets | |||
Beginning Balance | $ 198,643 | $ 183,904 | |
Additions from acquisitions | 31,000 | ||
Amortization | (12,716) | (12,070) | |
Ending balance | 185,927 | 202,834 | $ 198,643 |
Components of other intangible assets | |||
Gross value | 220,682 | 220,682 | |
Accumulated amortization | (34,755) | (22,039) | |
Net carrying value | $ 185,927 | $ 202,834 | $ 198,643 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Expected Amortization of Other Intangible Assets (Details) - Other intangible assets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Future amortization | ||||
Three Months Ending December 31, 2023 | $ 4,257 | |||
2024 | 16,235 | |||
2025 | 16,235 | |||
2026 | 16,235 | |||
2027 | 16,235 | |||
2028 | 16,235 | |||
Thereafter | 100,495 | |||
Net carrying value | $ 185,927 | $ 198,643 | $ 202,834 | $ 183,904 |
GOODWILL AND OTHER INTANGIBLE_7
GOODWILL AND OTHER INTANGIBLE ASSETS - Contingent Consideration Liabilities (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Contingent consideration liabilities | ||
Additions | $ 119,955 | |
Stock issued for settlement of contingent liabilities | 8,750 | |
Maximum | ||
Contingent consideration liabilities | ||
Contingent consideration liability earnout period | 5 years | |
Other Liabilities | ||
Contingent consideration liabilities | ||
Beginning balance | $ 200,346 | 125,809 |
Additions | 119,955 | |
Accretion | 927 | 3,767 |
Fair value adjustments | (14,000) | |
Payments | (26,090) | (28,547) |
Ending balance | $ 161,183 | $ 220,984 |
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 | Sep. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Loans held for sale | $ 758,926 | $ 396,344 |
Pledged securities | 177,509 | 157,282 |
Derivative assets | 33,617 | 17,636 |
Liabilities | ||
Derivative liabilities | 2,065 | 2,076 |
Recurring Basis | ||
Assets | ||
Loans held for sale | 758,926 | 396,344 |
Pledged securities | 177,509 | 157,282 |
Derivative assets | 33,617 | 17,636 |
Total financial assets | 970,052 | 571,262 |
Liabilities | ||
Derivative liabilities | 2,065 | 2,076 |
Contingent consideration liabilities | 161,183 | 200,346 |
Total financial liabilities | 163,248 | 202,422 |
Level 1 | Recurring Basis | ||
Assets | ||
Pledged securities | 46,558 | 14,658 |
Total financial assets | 46,558 | 14,658 |
Level 2 | Recurring Basis | ||
Assets | ||
Loans held for sale | 758,926 | 396,344 |
Pledged securities | 130,951 | 142,624 |
Total financial assets | 889,877 | 538,968 |
Level 3 | Recurring Basis | ||
Assets | ||
Derivative assets | 33,617 | 17,636 |
Total financial assets | 33,617 | 17,636 |
Liabilities | ||
Derivative liabilities | 2,065 | 2,076 |
Contingent consideration liabilities | 161,183 | 200,346 |
Total financial liabilities | $ 163,248 | $ 202,422 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
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 | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Derivative assets and liabilities, net | ||||
Beginning balance | $ 20,241 | $ 42,634 | $ 15,560 | $ 30,961 |
Settlements | (80,213) | 42,458 | (259,655) | (235,463) |
Realized gains (losses) recorded in earnings | 59,972 | (85,092) | 244,095 | 204,502 |
Unrealized gains (losses) recorded in earnings | 31,552 | 231,241 | 31,552 | 231,241 |
Ending balance | $ 31,552 | $ 231,241 | $ 31,552 | $ 231,241 |
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) $ in Thousands | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Fair Value Measurements | ||
Derivative assets | $ 33,617 | $ 17,636 |
Derivative liabilities | 2,065 | 2,076 |
Recurring Basis | ||
Fair Value Measurements | ||
Derivative assets | 33,617 | 17,636 |
Derivative liabilities | 2,065 | 2,076 |
Contingent consideration liabilities | 161,183 | 200,346 |
Recurring Basis | Level 3 | ||
Fair Value Measurements | ||
Derivative assets | 33,617 | 17,636 |
Derivative liabilities | 2,065 | 2,076 |
Contingent consideration liabilities | 161,183 | $ 200,346 |
Recurring Basis | Level 3 | Derivative Liabilities | Discounted Cash Flows | ||
Fair Value Measurements | ||
Derivative liabilities | 2,065 | |
Recurring Basis | Level 3 | Contingent Consideration Liabilities | Monte Carlo Simulation | ||
Fair Value Measurements | ||
Contingent consideration liabilities | $ 161,183 | |
Recurring Basis | Level 3 | Contingent Consideration Liabilities | Monte Carlo Simulation | Probability of earnout achievement | Minimum | ||
Fair Value Measurements | ||
Contingent consideration liabilities, Measurement input | 0.48 | |
Recurring Basis | Level 3 | Contingent Consideration Liabilities | Monte Carlo Simulation | Probability of earnout achievement | Maximum | ||
Fair Value Measurements | ||
Contingent consideration liabilities, Measurement input | 1 | |
Recurring Basis | Level 3 | Contingent Consideration Liabilities | Monte Carlo Simulation | Probability of earnout achievement | Weighted Average | ||
Fair Value Measurements | ||
Contingent consideration liabilities, Measurement input | 0.66 | |
Recurring Basis | Level 3 | Derivative Assets | Discounted Cash Flows | ||
Fair Value Measurements | ||
Derivative assets | $ 33,617 |
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 | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Financial assets: | ||||
Cash and cash equivalents | $ 236,321 | $ 225,949 | $ 152,188 | $ 305,635 |
Restricted cash | 17,768 | 17,676 | $ 40,246 | $ 42,812 |
Pledged securities | 177,509 | 157,282 | ||
Loans held for sale | 758,926 | 396,344 | ||
Derivative assets | 33,617 | 17,636 | ||
Financial liabilities: | ||||
Derivative liabilities | 2,065 | 2,076 | ||
Warehouse notes payable | 790,742 | 537,531 | ||
Notes payable | 774,677 | 704,103 | ||
Carrying Amount | ||||
Financial assets: | ||||
Cash and cash equivalents | 236,321 | 225,949 | ||
Restricted cash | 17,768 | 17,676 | ||
Pledged securities | 177,509 | 157,282 | ||
Loans held for sale | 758,926 | 396,344 | ||
Loans held for investment, net | 39,891 | 200,247 | ||
Derivative assets | 33,617 | 17,636 | ||
Total financial assets | 1,264,032 | 1,015,134 | ||
Financial liabilities: | ||||
Derivative liabilities | 2,065 | 2,076 | ||
Contingent consideration liabilities | 161,183 | 200,346 | ||
Warehouse notes payable | 790,742 | 537,531 | ||
Notes payable | 774,677 | 704,103 | ||
Total financial liabilities | 1,728,667 | 1,444,056 | ||
Fair Value | ||||
Financial assets: | ||||
Cash and cash equivalents | 236,321 | 225,949 | ||
Restricted cash | 17,768 | 17,676 | ||
Pledged securities | 177,509 | 157,282 | ||
Loans held for sale | 758,926 | 396,344 | ||
Loans held for investment, net | 40,000 | 200,900 | ||
Derivative assets | 33,617 | 17,636 | ||
Total financial assets | 1,264,141 | 1,015,787 | ||
Financial liabilities: | ||||
Derivative liabilities | 2,065 | 2,076 | ||
Contingent consideration liabilities | 161,183 | 200,346 | ||
Warehouse notes payable | 791,178 | 538,134 | ||
Notes payable | 788,500 | 708,546 | ||
Total financial liabilities | $ 1,742,926 | $ 1,449,102 |
FAIR VALUE MEASUREMENTS - Gener
FAIR VALUE MEASUREMENTS - General information (Detail) | 9 Months Ended |
Sep. 30, 2023 | |
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 | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Derivative notional amount and balance sheet location | ||
Estimated Gain on Sale | $ 18,873 | $ 19,189 |
Total Fair Value Adjustment | 18,873 | 19,189 |
Derivative assets | 33,617 | 17,636 |
Derivative Liabilities | (2,065) | (2,076) |
Fair Value Adjustment to Loans Held for Sale | (12,679) | 3,629 |
Rate Lock Commitments | ||
Derivative notional amount and balance sheet location | ||
Notional Amount | 349,336 | 376,870 |
Estimated Gain on Sale | 10,990 | 12,349 |
Interest Rate Movement | (6,049) | (4,495) |
Total Fair Value Adjustment | 4,941 | 7,854 |
Derivative assets | 5,142 | 7,854 |
Derivative Liabilities | (201) | |
Forward Sale Contracts | ||
Derivative notional amount and balance sheet location | ||
Notional Amount | 1,120,941 | 769,585 |
Interest Rate Movement | 26,611 | 7,706 |
Total Fair Value Adjustment | 26,611 | 7,706 |
Derivative assets | 28,475 | 9,782 |
Derivative Liabilities | (1,864) | (2,076) |
Loans Held for Sale | ||
Derivative notional amount and balance sheet location | ||
Principal Amount | 771,605 | 392,715 |
Estimated Gain on Sale | 7,883 | 6,840 |
Interest Rate Movement | (20,562) | (3,211) |
Total Fair Value Adjustment | (12,679) | 3,629 |
Fair Value Adjustment to Loans Held for Sale | $ (12,679) | $ 3,629 |
FANNIE MAE COMMITMENTS AND PL_3
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES - Commitments (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Fannie Mae, Freddie Mac, HUD and Ginnie Mae | |
LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Operational liquidity | $ 186.4 |
DUS Risk-Sharing Obligations | Fannie Mae | |
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 | $ 79.6 |
Net worth | 1,000 |
Minimum liquid assets to be maintained to meet operational liquidity requirements | 60 |
DUS Risk-Sharing Obligations | Fannie Mae | Minimum | |
LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Net worth requirement | $ 301.6 |
DUS Risk-Sharing Obligations | Fannie Mae | New Tier 2 loans | |
LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Collateral requirements percentage | 0.75% |
Period of funding for collateral requirement | 48 months |
DUS Risk-Sharing Obligations | Fannie Mae | New Tier 2 loans | Money Market Funds | |
LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Restricted liquidity collateral reduction percentage | 5% |
DUS Risk-Sharing Obligations | Fannie Mae | New Tier 2 loans | Agency Mortgage Backed Securities | |
LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Restricted liquidity collateral reduction percentage | 4% |
FANNIE MAE COMMITMENTS AND PL_4
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES - Pledged Securities at Fair Value (Detail) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Pledged securities | ||||
Pledged securities | $ 177,509 | $ 157,282 | ||
Pledged Securities - Fannie Mae DUS Program | ||||
Pledged securities | ||||
Fair value of pledged securities in a continuous unrealized loss position for more than 12 months | 99,200 | |||
Amortized cost of pledged securities in a continuous unrealized loss position for more than 12 months | 102,000 | |||
Net unrealized loss of pledged securities in a continuous unrealized loss position for more than 12 months | 2,800 | |||
Total pledged cash and cash equivalents | ||||
Pledged securities | ||||
Pledged securities | 46,558 | 14,658 | $ 12,624 | $ 44,733 |
Restricted Cash - Pledged | ||||
Pledged securities | ||||
Pledged securities | 10,523 | 5,788 | 8,454 | 3,779 |
Money Market Funds | ||||
Pledged securities | ||||
Pledged securities | 36,035 | 8,870 | 4,170 | 40,954 |
Agency MBS | ||||
Pledged securities | ||||
Pledged securities | 130,951 | 142,624 | 138,789 | 104,263 |
Asset Pledged as Collateral with Right | Pledged Securities - Fannie Mae DUS Program | ||||
Pledged securities | ||||
Pledged securities | $ 177,509 | $ 157,282 | $ 151,413 | $ 148,996 |
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 | Sep. 30, 2023 | Dec. 31, 2022 |
Investments in Agency debt securities | ||
Fair Value | $ 130,951 | $ 142,624 |
Amortized Cost | 133,421 | 144,801 |
Total gains for securities with net gains in AOCI | 381 | 797 |
Total losses for securities with net losses in AOCI | (2,851) | (2,974) |
Fair value of securities with unrealized losses | 115,337 | 118,565 |
Maturities - Fair Value | ||
After one year through five years | 18,045 | |
After five years through ten years | 92,267 | |
After ten years | 20,639 | |
Total | 130,951 | 142,624 |
Maturities - Amortized Cost | ||
After one year through five years | 18,132 | |
After five years through ten years | 93,322 | |
After ten years | 21,967 | |
Total | $ 133,421 | $ 144,801 |
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 | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Calculation of basic EPS | ||||||||
Net Income (Loss) | $ 21,458 | $ 27,635 | $ 26,665 | $ 46,833 | $ 54,286 | $ 71,209 | $ 75,758 | $ 172,328 |
Less: dividends and undistributed earnings allocated to participating securities | 534 | 1,296 | 1,942 | 4,984 | ||||
Net income applicable to common stockholders | $ 20,924 | $ 45,537 | $ 73,816 | $ 167,344 | ||||
Basic weighted-average shares outstanding | 32,737 | 32,290 | 32,654 | 32,300 | ||||
Basic EPS | $ 0.64 | $ 1.41 | $ 2.26 | $ 5.18 | ||||
Calculation of diluted EPS | ||||||||
Add: reallocation of dividends and undistributed earnings based on assumed conversion | $ 7 | $ 2 | $ 34 | |||||
Net income allocated to common stockholders | $ 20,924 | $ 45,544 | $ 73,818 | $ 167,378 | ||||
Add: weighted-average diluted non-participating securities | 158 | 330 | 199 | 345 | ||||
Weighted average diluted shares outstanding | 32,895 | 32,620 | 32,853 | 32,645 | ||||
Diluted EPS | $ 0.64 | $ 1.40 | $ 2.25 | $ 5.13 | ||||
Shares outstanding excluded from computation of earnings per share | 169 | 218 | 343 | 111 |
EARNINGS PER SHARE AND STOCKH_4
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY - Other Equity Related Transactions (Detail) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) item | Dec. 31, 2022 USD ($) | |
Acquisitions | |||
Additional paid-in capital ("APIC") | $ 420,062 | $ 412,636 | |
Noncontrolling interests | 24,812 | 27,403 | |
Receivables, net | 265,234 | 202,251 | |
Other Assets | 552,414 | 658,122 | |
Other Liabilities | 754,234 | $ 803,558 | |
Noncontrolling interests | |||
Distributions to noncontrolling interest | $ 3,328 | $ 2,035 | |
Consolidation of joint venture | |||
Acquisitions | |||
Number of joint ventures with operating agreement changes causing reconsideration of consolidation conclusion | item | 3 | ||
Additional paid-in capital ("APIC") | $ 3,700 | ||
Noncontrolling interests | 6,800 | ||
Receivables, net | 35,000 | ||
Other Assets | (21,300) | ||
Other Liabilities | $ 3,600 |
EARNINGS PER SHARE AND STOCKH_5
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY - Restricted Stock Awards and Share Repurchases (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Nov. 08, 2023 | Feb. 28, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | |
Dividends | |||||||||
Cash dividends paid per common share | $ 0.63 | $ 0.63 | $ 0.63 | $ 0.60 | $ 0.60 | $ 0.60 | |||
Cash dividends declared per common share | $ 0.63 | ||||||||
Share Repurchase Program 2023 | |||||||||
Repurchases of common stock | |||||||||
Shares repurchased during the period | 0 | ||||||||
Share repurchase program, period for repurchases | 12 months | ||||||||
Authorized share repurchase capacity remaining | $ 75 | $ 75 | |||||||
Share Repurchase Program 2023 | Maximum | |||||||||
Repurchases of common stock | |||||||||
Repurchase authorization | $ 75 |
SEGMENTS (Details)
SEGMENTS (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Segments | |||||||||
Number of operating segments | segment | 3 | ||||||||
Revenues | |||||||||
Total revenues | $ 268,743 | $ 315,611 | $ 780,104 | $ 975,903 | |||||
Expenses | |||||||||
Personnel | 136,507 | 157,059 | 388,425 | 469,608 | |||||
Amortization and depreciation | 57,479 | 59,846 | 170,737 | 177,101 | |||||
Provision (benefit) for credit losses | 421 | 1,218 | (11,088) | (13,120) | |||||
Interest expense on corporate debt | 17,594 | 9,306 | 49,878 | 22,123 | |||||
Other operating expenses | 28,529 | 33,991 | 83,322 | 102,400 | |||||
Total expenses | 240,530 | 261,420 | 681,274 | 758,112 | |||||
Income (loss) from operations | 28,213 | 54,191 | 98,830 | 217,791 | |||||
income tax expense (benefit) | 7,069 | 7,532 | 24,695 | 46,495 | |||||
Net income (loss) before noncontrolling interests | 21,144 | 46,659 | 74,135 | 171,296 | |||||
Net income (loss) from noncontrolling interests | (314) | $ (2,114) | $ 805 | (174) | $ (179) | $ (679) | (1,623) | (1,032) | |
Walker & Dunlop net income (loss) | 21,458 | $ 27,635 | $ 26,665 | 46,833 | $ 54,286 | $ 71,209 | 75,758 | 172,328 | |
Total assets | 4,277,851 | 6,003,013 | 4,277,851 | 6,003,013 | $ 4,045,359 | ||||
Loan origination and debt brokerage fees, Net | |||||||||
Revenues | |||||||||
Total revenues | 56,149 | 90,858 | 168,201 | 275,773 | |||||
Fair value of expected net cash flows from servicing, net | |||||||||
Revenues | |||||||||
Total revenues | 35,375 | 55,291 | 107,446 | 159,970 | |||||
Servicing fees | |||||||||
Revenues | |||||||||
Total revenues | 79,200 | 75,975 | 232,027 | 222,916 | |||||
Property sales broker fees | |||||||||
Revenues | |||||||||
Total revenues | 16,862 | 30,308 | 38,831 | 100,092 | |||||
Investment management fees | |||||||||
Revenues | |||||||||
Total revenues | 13,362 | 16,301 | 44,844 | 47,345 | |||||
Net warehouse interest income (expense) | |||||||||
Revenues | |||||||||
Total revenues | (2,031) | 3,980 | (3,556) | 14,021 | |||||
Placement fees and other interest income | |||||||||
Revenues | |||||||||
Total revenues | 43,000 | 18,129 | 109,310 | 26,683 | |||||
Other revenue | |||||||||
Revenues | |||||||||
Total revenues | 26,826 | 24,769 | 83,001 | 129,103 | |||||
Operating Segments | Capital Markets | |||||||||
Revenues | |||||||||
Total revenues | 117,696 | 188,540 | 347,685 | 572,975 | |||||
Expenses | |||||||||
Personnel | 97,973 | 128,981 | 281,502 | 372,656 | |||||
Amortization and depreciation | 1,137 | 1,052 | 3,412 | 2,191 | |||||
Interest expense on corporate debt | 4,874 | 2,430 | 13,870 | 5,488 | |||||
Other operating expenses | 4,193 | 6,869 | 15,037 | 19,943 | |||||
Total expenses | 108,177 | 139,332 | 313,821 | 400,278 | |||||
Income (loss) from operations | 9,519 | 49,208 | 33,864 | 172,697 | |||||
income tax expense (benefit) | 2,386 | 12,468 | 8,462 | 41,878 | |||||
Net income (loss) before noncontrolling interests | 7,133 | 36,740 | 25,402 | 130,819 | |||||
Net income (loss) from noncontrolling interests | 83 | 277 | 1,741 | 995 | |||||
Walker & Dunlop net income (loss) | 7,050 | 36,463 | 23,661 | 129,824 | |||||
Total assets | 1,424,270 | 3,093,803 | 1,424,270 | 3,093,803 | |||||
Operating Segments | Capital Markets | Loan origination and debt brokerage fees, Net | |||||||||
Revenues | |||||||||
Total revenues | 56,149 | 89,752 | 167,679 | 273,660 | |||||
Operating Segments | Capital Markets | Fair value of expected net cash flows from servicing, net | |||||||||
Revenues | |||||||||
Total revenues | 35,375 | 55,291 | 107,446 | 159,970 | |||||
Operating Segments | Capital Markets | Property sales broker fees | |||||||||
Revenues | |||||||||
Total revenues | 16,862 | 30,308 | 38,831 | 100,092 | |||||
Operating Segments | Capital Markets | Net warehouse interest income (expense) | |||||||||
Revenues | |||||||||
Total revenues | (2,565) | 2,178 | (7,006) | 9,415 | |||||
Operating Segments | Capital Markets | Other revenue | |||||||||
Revenues | |||||||||
Total revenues | 11,875 | 11,011 | 40,735 | 29,838 | |||||
Operating Segments | Servicing and Asset Management | |||||||||
Revenues | |||||||||
Total revenues | 148,140 | 129,322 | 424,176 | 360,770 | |||||
Expenses | |||||||||
Personnel | 17,139 | 18,728 | 53,669 | 53,211 | |||||
Amortization and depreciation | 54,375 | 57,139 | 161,935 | 170,501 | |||||
Provision (benefit) for credit losses | 421 | 1,218 | (11,088) | (13,120) | |||||
Interest expense on corporate debt | 11,096 | 6,324 | 31,385 | 15,388 | |||||
Other operating expenses | 5,039 | 5,237 | 16,465 | 15,535 | |||||
Total expenses | 88,070 | 88,646 | 252,366 | 241,515 | |||||
Income (loss) from operations | 60,070 | 40,676 | 171,810 | 119,255 | |||||
income tax expense (benefit) | 15,040 | 10,204 | 42,931 | 28,919 | |||||
Net income (loss) before noncontrolling interests | 45,030 | 30,472 | 128,879 | 90,336 | |||||
Net income (loss) from noncontrolling interests | (397) | (451) | (3,364) | (2,027) | |||||
Walker & Dunlop net income (loss) | 45,427 | 30,923 | 132,243 | 92,363 | |||||
Total assets | 2,361,245 | 2,543,730 | 2,361,245 | 2,543,730 | |||||
Operating Segments | Servicing and Asset Management | Loan origination and debt brokerage fees, Net | |||||||||
Revenues | |||||||||
Total revenues | 1,106 | 522 | 2,113 | ||||||
Operating Segments | Servicing and Asset Management | Servicing fees | |||||||||
Revenues | |||||||||
Total revenues | 79,200 | 75,975 | 232,027 | 222,916 | |||||
Operating Segments | Servicing and Asset Management | Investment management fees | |||||||||
Revenues | |||||||||
Total revenues | 13,362 | 16,301 | 44,844 | 47,345 | |||||
Operating Segments | Servicing and Asset Management | Net warehouse interest income (expense) | |||||||||
Revenues | |||||||||
Total revenues | 534 | 1,802 | 3,450 | 4,606 | |||||
Operating Segments | Servicing and Asset Management | Placement fees and other interest income | |||||||||
Revenues | |||||||||
Total revenues | 39,475 | 17,760 | 100,636 | 26,166 | |||||
Operating Segments | Servicing and Asset Management | Other revenue | |||||||||
Revenues | |||||||||
Total revenues | 15,569 | 16,378 | 42,697 | 57,624 | |||||
Operating Segments | Corporate | |||||||||
Revenues | |||||||||
Total revenues | 2,907 | (2,251) | 8,243 | 42,158 | |||||
Expenses | |||||||||
Personnel | 21,395 | 9,350 | 53,254 | 43,741 | |||||
Amortization and depreciation | 1,967 | 1,655 | 5,390 | 4,409 | |||||
Interest expense on corporate debt | 1,624 | 552 | 4,623 | 1,247 | |||||
Other operating expenses | 19,297 | 21,885 | 51,820 | 66,922 | |||||
Total expenses | 44,283 | 33,442 | 115,087 | 116,319 | |||||
Income (loss) from operations | (41,376) | (35,693) | (106,844) | (74,161) | |||||
income tax expense (benefit) | (10,357) | (15,140) | (26,698) | (24,302) | |||||
Net income (loss) before noncontrolling interests | (31,019) | (20,553) | (80,146) | (49,859) | |||||
Walker & Dunlop net income (loss) | (31,019) | (20,553) | (80,146) | (49,859) | |||||
Total assets | 492,336 | 365,480 | 492,336 | 365,480 | |||||
Operating Segments | Corporate | Placement fees and other interest income | |||||||||
Revenues | |||||||||
Total revenues | 3,525 | 369 | 8,674 | 517 | |||||
Operating Segments | Corporate | Other revenue | |||||||||
Revenues | |||||||||
Total revenues | $ (618) | $ (2,620) | $ (431) | $ 41,641 |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||||
Cash and cash equivalents | $ 236,321 | $ 225,949 | $ 152,188 | $ 305,635 |
Restricted cash | 17,768 | 17,676 | 40,246 | $ 42,812 |
Receivables, net | 265,234 | 202,251 | ||
Committed investments in tax credit equity | 212,296 | 254,154 | ||
Other assets | 552,414 | 658,122 | ||
Total assets | 4,277,851 | 4,045,359 | $ 6,003,013 | |
Liabilities | ||||
Commitments to fund investments in tax credit equity | 196,250 | 239,281 | ||
Other Liabilities | 754,234 | 803,558 | ||
Total liabilities | 2,546,860 | 2,328,530 | ||
Consolidated VIEs | ||||
Assets | ||||
Cash and cash equivalents | 379 | 201 | ||
Restricted cash | 2,828 | 1,532 | ||
Receivables, net | 31,948 | 33,593 | ||
Other assets | 50,501 | 49,768 | ||
Total assets | 85,656 | 85,094 | ||
Liabilities | ||||
Other Liabilities | 44,745 | 39,148 | ||
Total liabilities | 44,745 | 39,148 | ||
Nonconsolidated VIEs | ||||
Assets | ||||
Committed investments in tax credit equity | 212,296 | 254,154 | ||
Other assets | 60,188 | 57,981 | ||
Total assets | 272,484 | 312,135 | ||
Liabilities | ||||
Commitments to fund investments in tax credit equity | 196,250 | 239,281 | ||
Total liabilities | 196,250 | 239,281 | ||
Maximum exposure | $ 272,484 | $ 312,135 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||||||
Net Income (Loss) | $ 21,458 | $ 27,635 | $ 26,665 | $ 46,833 | $ 54,286 | $ 71,209 | $ 75,758 | $ 172,328 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |