Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2023 | Jan. 31, 2024 | Jun. 30, 2023 | |
Document And Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 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 | ||
Entity Address, Address Line Two | 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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 33,521,285 | ||
Entity Public Float | $ 1.8 | ||
Entity Central Index Key | 0001497770 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | KPMG LLP | ||
Auditor Firm ID | 185 | ||
Auditor Location | McLean, Virginia |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and cash equivalents | $ 328,698 | $ 225,949 |
Restricted cash | 21,422 | 17,676 |
Pledged securities, at fair value | 184,081 | 157,282 |
Loans held for sale, at fair value | 594,998 | 396,344 |
Mortgage servicing rights | 907,415 | 975,226 |
Goodwill | 901,710 | 959,712 |
Other intangible assets | 181,975 | 198,643 |
Receivables, net | 233,563 | 202,251 |
Committed investments in tax credit equity | 154,028 | 254,154 |
Other assets | 544,457 | 658,122 |
Total assets | 4,052,347 | 4,045,359 |
Liabilities | ||
Warehouse notes payable | 596,178 | 537,531 |
Notes payable | 773,358 | 704,103 |
Allowance for risk-sharing obligations | 31,601 | 44,057 |
Deferred tax liabilities, net | 245,372 | 243,485 |
Commitments to fund investments in tax credit equity | 140,259 | 239,281 |
Other liabilities | 519,450 | 560,073 |
Total liabilities | 2,306,218 | 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 32,874 shares at December 31, 2023 and 32,396 shares at December 31, 2022) | 329 | 323 |
Additional paid-in capital ("APIC") | 425,488 | 412,636 |
Accumulated other comprehensive income (loss) ("AOCI") | (479) | (1,568) |
Retained earnings | 1,298,412 | 1,278,035 |
Total stockholders' equity | 1,723,750 | 1,689,426 |
Noncontrolling interests | 22,379 | 27,403 |
Total equity | 1,746,129 | 1,716,829 |
Commitments and contingencies (NOTES 2 and 9) | ||
Total liabilities and equity | $ 4,052,347 | $ 4,045,359 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
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 | 32,874 | 32,396 |
Common stock, outstanding | 32,874 | 32,396 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues | |||
Total revenues | $ 1,054,440 | $ 1,258,753 | $ 1,259,178 |
Expenses | |||
Personnel | 514,290 | 607,366 | 603,487 |
Amortization and depreciation | 226,752 | 235,031 | 210,284 |
Provision (benefit) for credit losses | (10,452) | (11,978) | (13,287) |
Interest expense on corporate debt | 68,476 | 34,233 | 7,981 |
Goodwill impairment | 62,000 | ||
Fair value adjustments to contingent consideration liabilities | (62,500) | (13,512) | 6,889 |
Other operating expenses | 117,677 | 142,648 | 91,766 |
Total expenses | 916,243 | 993,788 | 907,120 |
Income from operations | 138,197 | 264,965 | 352,058 |
Income tax expense | 35,026 | 56,034 | 86,428 |
Net income before noncontrolling interests | 103,171 | 208,931 | 265,630 |
Net income (loss) from noncontrolling interests | (4,186) | (4,889) | (132) |
Walker & Dunlop net income | 107,357 | 213,820 | 265,762 |
Net change in unrealized gains (losses) on pledged available-for-sale securities, net of taxes | 1,089 | (4,126) | 590 |
Walker & Dunlop comprehensive income | $ 108,446 | $ 209,694 | $ 266,352 |
Basic earnings per share (NOTE 11) | $ 3.20 | $ 6.43 | $ 8.27 |
Diluted earnings per share (NOTE 11) | $ 3.18 | $ 6.36 | $ 8.15 |
Basic weighted-average shares outstanding | 32,697 | 32,326 | 31,081 |
Diluted weighted-average shares outstanding | 32,875 | 32,687 | 31,533 |
Loan origination and debt brokerage fees, net | |||
Revenues | |||
Total revenues | $ 234,409 | $ 348,007 | $ 446,014 |
Fair value of expected net cash flows from servicing, net | |||
Revenues | |||
Total revenues | 141,917 | 191,760 | 287,145 |
Servicing fees | |||
Revenues | |||
Total revenues | 311,914 | 300,191 | 278,466 |
Property sales broker fees | |||
Revenues | |||
Total revenues | 53,966 | 120,582 | 119,981 |
Investment management fees | |||
Revenues | |||
Total revenues | 45,381 | 71,931 | 25,637 |
Net warehouse interest income (expense) | |||
Revenues | |||
Total revenues | (5,633) | 15,777 | 22,108 |
Placement fees and other interest income | |||
Revenues | |||
Total revenues | 154,520 | 52,830 | 8,150 |
Other revenue | |||
Revenues | |||
Total revenues | $ 117,966 | $ 157,675 | $ 71,677 |
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, 2020 | $ 307 | $ 241,004 | $ 1,968 | $ 952,943 | $ 1,196,222 | |
Balance at the beginning of the period (in shares) at Dec. 31, 2020 | 30,678 | |||||
Change in Stockholders' Equity | ||||||
Net Income (Loss) | 265,762 | 265,762 | ||||
Net income (loss) from noncontrolling interests | $ (132) | (132) | ||||
Other comprehensive income (loss), net of tax | 590 | 590 | ||||
Stock-based compensation - equity classified | 35,491 | 35,491 | ||||
Issuance of common stock in connection with acquisitions | $ 9 | 120,562 | 120,571 | |||
Issuance of common stock in connection with acquisitions (in shares) | 859 | |||||
Issuance of common stock in connection with equity compensation plans | $ 7 | 14,834 | 14,841 | |||
Issuance of common stock in connection with equity compensation plans (in shares) | 686 | |||||
Repurchase and retirement of common stock (NOTE 11) | $ (3) | (18,869) | (18,872) | |||
Repurchase and retirement of common stock (in shares) (NOTE 11) | (174) | |||||
Noncontrolling interests from acquisitions | 28,187 | 28,187 | ||||
Cash dividends paid | (64,453) | (64,453) | ||||
Balances at the end of the period at Dec. 31, 2021 | $ 320 | 393,022 | 2,558 | 1,154,252 | 28,055 | 1,578,207 |
Balance at the end of the period (in shares) at Dec. 31, 2021 | 32,049 | |||||
Change in Stockholders' Equity | ||||||
Net Income (Loss) | 213,820 | 213,820 | ||||
Net income (loss) from noncontrolling interests | (4,889) | (4,889) | ||||
Other comprehensive income (loss), net of tax | (4,126) | (4,126) | ||||
Stock-based compensation - equity classified | 32,555 | 32,555 | ||||
Issuance of common stock in connection with equity compensation plans | $ 6 | 15,858 | 15,864 | |||
Issuance of common stock in connection with equity compensation plans (in shares) | 695 | |||||
Repurchase and retirement of common stock (NOTE 11) | $ (3) | (32,474) | (9,892) | (42,369) | ||
Repurchase and retirement of common stock (in shares) (NOTE 11) | (348) | |||||
Distributions to noncontrolling interest holders | (2,535) | (2,535) | ||||
Cash dividends paid | (80,145) | (80,145) | ||||
Other activity (NOTE 17) | 3,675 | 6,772 | 10,447 | |||
Balances at the end of the period at Dec. 31, 2022 | $ 323 | 412,636 | (1,568) | 1,278,035 | 27,403 | $ 1,716,829 |
Balance at the end of the period (in shares) at Dec. 31, 2022 | 32,396 | 32,396 | ||||
Change in Stockholders' Equity | ||||||
Net Income (Loss) | 107,357 | $ 107,357 | ||||
Net income (loss) from noncontrolling interests | (4,186) | (4,186) | ||||
Other comprehensive income (loss), net of tax | 1,089 | 1,089 | ||||
Stock-based compensation - equity classified | 27,033 | 27,033 | ||||
Issuance of common stock in connection with equity compensation plans | $ 7 | 6,329 | 6,336 | |||
Issuance of common stock in connection with equity compensation plans (in shares) | 699 | |||||
Repurchase and retirement of common stock (NOTE 11) | $ (1) | (20,510) | (20,511) | |||
Repurchase and retirement of common stock (in shares) (NOTE 11) | (221) | |||||
Distributions to noncontrolling interest holders | (3,198) | (3,198) | ||||
Cash dividends paid | (84,836) | (84,836) | ||||
Other activity (NOTE 17) | (2,144) | 2,360 | 216 | |||
Balances at the end of the period at Dec. 31, 2023 | $ 329 | $ 425,488 | $ (479) | $ 1,298,412 | $ 22,379 | $ 1,746,129 |
Balance at the end of the period (in shares) at Dec. 31, 2023 | 32,874 | 32,874 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
TOTAL EQUITY. | |||
Cash dividends paid. amount per common share | $ 2.52 | $ 2.40 | $ 2 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | |||
Net income before noncontrolling interests | $ 103,171 | $ 208,931 | $ 265,630 |
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 | (141,917) | (191,760) | (287,145) |
Change in the fair value of premiums and origination fees (NOTE 2) | (2,460) | 14,160 | 19,450 |
Amortization and depreciation | 226,752 | 235,031 | 210,284 |
Stock compensation-equity and liability classified | 27,842 | 33,987 | 36,582 |
Provision (benefit) for credit losses | (10,452) | (11,978) | (13,287) |
Deferred tax expense | 1,198 | 18,439 | 34,222 |
Goodwill impairment | 62,000 | ||
Fair value adjustments to contingent consideration liabilities | (62,500) | (13,512) | 6,889 |
Cash paid to settle risk-sharing obligations | (2,008) | (4,631) | |
Gain from revaluation of previously held equity-method investment | (39,641) | ||
Originations of loans held for sale | (11,379,540) | (17,952,129) | (17,810,768) |
Proceeds from transfers of loans held for sale | 11,199,916 | 19,324,810 | 18,431,542 |
Other operating activities, net | 776 | 2,080 | 5,522 |
Changes in: | |||
Receivables, net | (35,309) | 44,842 | (42,873) |
Other assets | (4,721) | (69,552) | (26,613) |
Other liabilities | 16,734 | (16,373) | 41,020 |
Net cash provided by (used in) operating activities | (518) | 1,582,704 | 870,455 |
Cash flows from investing activities | |||
Capital expenditures | (16,201) | (21,995) | (9,208) |
Purchases of equity-method investments | (24,679) | (26,099) | (33,446) |
Purchases of pledged available-for-sale ("AFS") securities | (12,548) | (60,802) | (31,750) |
Proceeds from prepayment and sale of pledged AFS securities | 10,679 | 14,040 | 45,301 |
Investments in joint ventures | (5,040) | (66,718) | |
Distributions from joint ventures | 8,956 | 12,573 | 47,065 |
Acquisitions, net of cash received | (114,163) | (420,555) | |
Originations of loans held for investment | (54,402) | (557,706) | |
Principal collected on loans held for investment | 160,662 | 122,111 | 649,466 |
Net cash provided by (used in) investing activities | 126,869 | (133,777) | (377,551) |
Cash flows from financing activities | |||
Borrowings (repayments) of warehouse notes payable, net | 189,736 | (1,370,705) | (635,912) |
Borrowings of interim warehouse notes payable | 36,459 | 266,575 | |
Repayments of interim warehouse notes payable | (119,835) | (63,858) | (227,999) |
Repayments of notes payable | (122,046) | (36,629) | (294,773) |
Borrowings of notes payable | 196,000 | 598,500 | |
Repayment of secured borrowings | (73,312) | ||
Proceeds from issuance of common stock | 3,383 | 486 | 5,252 |
Repurchase of common stock | (20,511) | (42,369) | (18,872) |
Cash dividends paid | (84,836) | (80,145) | (64,453) |
Payment of contingent consideration | (26,090) | (21,191) | |
Distributions to noncontrolling interest holders | (3,198) | (2,535) | |
Debt issuance costs | (5,834) | (3,337) | (12,732) |
Net cash provided by (used in) financing activities | 6,769 | (1,583,824) | (457,726) |
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents (NOTE 2) | 133,120 | (134,897) | 35,178 |
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period | 258,283 | 393,180 | 358,002 |
Total of cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period | 391,403 | 258,283 | 393,180 |
Supplemental Disclosure of Cash Flow Information: | |||
Cash paid to third parties for interest | 114,095 | 76,661 | 37,947 |
Cash paid for income taxes | $ 30,903 | $ 58,524 | $ 43,427 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Supplemental Disclosure of Non-Cash Activity: | |||
Issuance of common stock in connection with acquisitions | $ 120,571 | ||
Issuance of common stock to settle compensation liabilities | $ 2,953 | $ 6,551 | 9,589 |
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 17) | 10,447 | ||
Net increase in total assets due to consolidations of tax credit entities (NOTE 17) | 13,700 | ||
Net increase in total liabilities due to consolidations of tax credit entities (NOTE 17) | 3,559 | ||
Forgiveness of receivables related to acquisitions | 5,460 | ||
Allowance charge-off of loan held for investment | $ (6,033) | ||
Additions of contingent consideration liabilities from acquisitions (NOTE 7) | $ 117,955 | $ 93,304 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2023 | |
ORGANIZATION | |
ORGANIZATION | NOTE 1—ORGANIZATIO N These financial statements represent the 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. 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 | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation —The consolidated financial statements include the accounts of Walker & Dunlop, Inc., its wholly owned subsidiaries, and its majority owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. The Company consolidates entities in which it has a controlling financial interest based on either the variable interest entity (“VIE”) or the voting interest model. The Company is required to first apply the VIE model to determine whether it holds a variable interest in an entity, and if so, whether the entity is a VIE. If the Company determines it holds a variable interest in a VIE and has a controlling financial interest and therefore is considered the primary beneficiary, the Company consolidates the entity. In instances where the Company holds a variable interest in a VIE but is not the primary beneficiary, the Company uses the equity-method of accounting. 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 on the Consolidated Balance Sheets and the portion of net income not attributable to Walker & Dunlop, Inc. as Net income (loss) from noncontrolling interests in the Consolidated Statements of Income. Subsequent Events —The Company has evaluated the effects of all events that have occurred subsequent to December 31, 2023. The Company has made certain disclosures in the notes to the consolidated financial statements of events that have occurred subsequent to December 31, 2023, including the discussion below. There have been no other material subsequent events that would require recognition in the consolidated financial statements. The Company is obligated to repurchase loans that are originated for the Agencies’ programs if certain representations and warranties that we provide in connection with the sale of loans through these programs, are breached. In the first quarter of 2024, the Company expects to repurchase a Fannie Mae loan with a UPB of $13.5 million. Based on the information available at this time, the Company does not believe it will incur a material loss associated with this loan. Additionally, the Company received a repurchase request from Freddie Mac related to a loan with a UPB of $11.4 million, and the Company has appealed Freddie Mac's request. In January 2024, Freddie Mac informed the Company that they were considering requesting that it repurchase a second loan with a UPB of $34.8 million, but the Company has not received a formal request to repurchase the loan. The Company is currently evaluating its options to resolve both loans with Freddie Mac, and the Company believes it is likely that it will ultimately repurchase both Freddie Mac loans in 2024 or otherwise indemnify Freddie Mac for any losses it incurs on the loans. With respect to the $11.4 million loan, based on the information available at this time, the Company does not believe it will incur a material loss regardless of the resolution negotiated with Freddie Mac. With respect to the $34.8 million loan, the Company has not yet been given access to the underlying property for inspection and evaluation such that it can properly estimate the amount of any such loss. Based on the information available at this time, the Company believes that the value of the underlying property is likely less than the UPB of the loan. Use of Estimates —The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses; including the allowance for risk-sharing obligations, initial fair value of capitalized mortgage servicing rights, initial and recurring fair value assessments of contingent consideration, and goodwill impairment, actual results may vary from these estimates. Mortgage Servicing Rights —When a loan is sold and the Company retains the right to service the loan, the derivative asset discussed below is reclassified and capitalized as an individual mortgage servicing right (“MSR”) at fair value. The initial capitalized amount is equal to the estimated fair value of the expected net cash flows associated with servicing the loans, net of the expected cash flows associated with any guaranty obligations. The following describes the principal assumptions used in estimating the fair value of capitalized MSRs. Discount Rate —Depending upon loan type, the discount rate used is management's best estimate of market discount rates. The rates used for loans sold were between 8% and 14% for the years ended December 31, 2023, 2022 and 2021 and varied based on loan type. Estimated Life —The estimated life of the MSRs is derived based upon the stated term of the prepayment protection provisions of the underlying loan and may be reduced by six to 12 months based upon the expiration or reduction of the prepayment provisions prior to the stated maturity date. The Company’s model for MSRs assumes full prepayment of the loan at or near the point when the prepayment provisions expire. The Company’s historical experience is that the prepayment provisions typically do not provide a significant deterrent to a borrower’s paying off the loan within six to 12 months of the expiration of the prepayment provisions. Placement Fees —The estimated earnings rate on escrow accounts associated with the servicing of the loans for the life of the MSR is added to the estimated future cash flows. The assumptions used to estimate the fair value of capitalized MSRs at loan sale are based on internal models and are compared to assumptions used by other market participants periodically. When such comparisons indicate that these assumptions have changed significantly, the Company adjusts its assumptions accordingly. For example, the Company made adjustments to the discount rates in 2021 and escrow earnings rate in 2021, 2022, and 2023 based on observations from other market participants and economic conditions. Subsequent to the initial measurement date, MSRs are amortized using the interest method over the period that servicing income is expected to be received and presented as a component of Amortization and depreciation in the Consolidated Statements of Income. The individual loan-level MSR is written off through a charge to Amortization and depreciation when a loan prepays, defaults, or is probable of default. The Company evaluates all MSRs for impairment quarterly. The predominant risk characteristic affecting the MSRs is prepayment risk, and we do not believe there is sufficient variation within the portfolio to warrant stratification. Therefore, we assess MSR impairment at the portfolio level. The Company engages a third party to assist in determining an estimated fair value of our existing and outstanding MSRs on at least a semi-annual basis. Business Combinations —The Company accounts for business combinations using the acquisition method of accounting, under which the purchase price of the acquisition is allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date. The Company recognizes identifiable assets acquired (including intangible assets) and liabilities (both specific and contingent) assumed at their fair values at the acquisition date. Furthermore, acquisition-related costs, such as due diligence, legal and accounting fees, are not capitalized or applied in determining the fair value of the acquired assets. The excess of the purchase price over the fair value of the assets the liabilities assumed is recognized as goodwill. During the measurement period, the Company records adjustments to the assets acquired and liabilities assumed with corresponding adjustments to goodwill in the reporting period in which the adjustment is identified. These adjustments during the measurement period are recorded to goodwill only in circumstances where the adjustment is related to additional information obtained subsequent to the acquisition about facts and circumstances that existed at the time of the acquisition. After the measurement period, which could be up to one year after the transaction date, subsequent adjustments are recorded to the Company’s Consolidated Statements of Income. Goodwill —The Company evaluates goodwill for impairment annually. In addition to the annual impairment evaluation, the Company evaluates at least quarterly whether events or circumstances have occurred in the period subsequent to the annual impairment testing which indicate that it is more likely than not an impairment loss has occurred. The Company’s goodwill is allocated to five reporting units, each of which is a component of either the Capital Markets (“CM”) segment or the Servicing & Asset Management (“SAM”) segment. The Company performs its impairment testing annually as of October 1 for each reporting unit for which goodwill has been allocated. The Company’s October 1, 2023, impairment test consisted of a qualitative assessment for three reporting units as there were no indicators of impairment. For the other two reporting units, the Company performed a quantitative analysis and recognized a total of $62.0 million of goodwill impairment, as described in NOTE 7. Allowance for Risk-Sharing Obligations— Substantially all loans sold under the Fannie Mae DUS program contain partial or full risk-sharing guaranties that are based on the performance of the loan serviced in the at-risk servicing portfolio. The Company records an estimate of the loss reserve for the current expected credit losses (“CECL”) for all loans in our Fannie Mae at-risk servicing portfolio and presents this loss reserve as Allowance for risk-sharing obligations on the Consolidated Balance Sheets. Overall Current Expected Credit Losses Approach The Company uses the weighted-average remaining maturity method (“WARM”) for calculating its allowance for risk-sharing obligations, the Company’s liability for the off-balance-sheet credit exposure associated with the Fannie Mae at-risk DUS loans. WARM uses a historical weighted average annual charge-off rate (“historical loss rate”) that contains loss content over multiple vintages and loan terms and is used as a foundation for estimating the CECL reserve. The historical loss rate is applied to the unpaid principal balance (“UPB”) over the contractual term, adjusted for estimated prepayments and amortization to arrive at the CECL reserve for the entire current portfolio as described further below. The Company maximizes the use of historical internal data because the Company has extensive historical data servicing Fannie Mae DUS loans from which to calculate historical loss rates and principal paydown by loan term type for its exposure to credit loss on its homogeneous portfolio of Fannie Mae DUS multifamily loans. Additionally, the Company believes its properties, loss history, and underwriting standards are not similar to public data such as loss histories for loans originated for collateralized mortgage-backed securities conduits. Runoff Rate One of the key inputs into a WARM calculation is the runoff rate, which is the expected rate at which loans in the current portfolio will prepay and amortize in the future. As the loans the Company originates have different original lives and run off over different periods, the Company groups loans by similar origination dates (vintage) and contractual maturity terms for purposes of calculating the runoff rate. The Company originates loans under the DUS program with various terms generally ranging from several years to 15 years ; each of these various loan terms has a different runoff rate. The Company uses its historical runoff rate for each of the different loan term pools as a proxy for the expected runoff rate. The Company believes that borrower behavior and macroeconomic conditions will not deviate significantly from historical performance over the approximately ten-year period in which the Company has compiled the actual loss data. The 10-year period is intended to capture the various cycles of industry performance and provides a period that is long enough to capture sufficient observations of runoff history. In addition, due to the prepayment protection provisions for Fannie Mae DUS loans, the Company has not seen significant volatility in historical prepayment rates due to gradual changes in interest rates and would not expect this to change materially in future periods. The historical annual runoff rate is calculated for each year of a loan’s life for each vintage in the portfolio and aggregated with the calculated runoff rate for each comparable year in every vintage. For example, the annual runoff rate for the first year of loans originated in 2010 is aggregated with the annual runoff rate for the first year of loans originated in 2011, 2012, and so on to calculate the average annual runoff rate for the first year of a loan. This average runoff calculation is performed for each year of a loan’s life for each of the various loan terms to create a matrix of historical average annual runoffs by year for the entire portfolio. The Company segments its current portfolio of at-risk DUS loans outstanding by original loan term type and years remaining and then applies the appropriate historical average runoff rates to calculate the expected remaining balance at the end of each reporting period in the future. For example, for a loan with an original ten-year term and seven years remaining, the Company applies the historical average annual runoff rate for a ten-year loan for year four to arrive at the estimated remaining UPB one year from the current period, the historical average runoff rate for year five to arrive at the estimated remaining UPB two years from the current period, and so on up to the loan’s maturity date. CECL Reserve Calculation Once the Company has calculated the estimated outstanding UPB for each future year until maturity for each loan term type, the Company then applies the historical loss rate (as further described below) to each future year’s estimated UPB. The Company then aggregates the allowance calculated for each year within each loan term type and for all different maturity years to arrive at the CECL reserve for the portfolio. The historical loss rate is calculated using a ten-year look-back period, utilizing the average portfolio balance and settled losses for each year. A ten-year period is used as the Company believes that this period of time includes sufficiently different economic conditions to generate a reasonable estimate of expected results in the future, given the relatively long-term nature of the current portfolio. This approach captures a portion of the adverse impact of the years following the great financial crisis of 2007-2010 because multifamily commercial loans have a lag period from the time of initial distress indications through the timing of loss settlement. The same loss rate is utilized across each loan term type as the Company has not observed any historical or industry-published data to indicate there is any difference in the occurrence probability or loss severity for a loan based on its loan origination term. Reasonable and Supportable Forecast Period The Company currently uses one year for its reasonable and supportable forecast period (the “forecast period”). The Company uses a forecast of unemployment rates, historically a highly correlated indicator for multifamily occupancy rates, and general economic forecasts from third parties to assess what macroeconomic and multifamily market conditions are expected to be like over the coming year. The Company then associates the forecasted conditions with a similar historical period over the past ten years, which could be one or several years, and uses the Company’s average loss rate for that historical period as a basis for the loss rate used for the forecast period. The Company reverts to the historical loss rate over a one-year period on a straight-line basis. For all remaining years until maturity, the Company uses the historical loss rate as described above to estimate losses. The average loss rate from a historical period used for the forecast period may be qualitatively adjusted as necessary if the forecasted macroeconomic and industry conditions differ materially from the historical period. Identification of Collateral-Based Reserves for Defaulted Loans The Company monitors the performance of each risk-sharing loan for events or conditions which may signal a potential default. The Company’s process for identifying which risk-sharing loans may be probable of default consists of an assessment of several qualitative and quantitative factors, including payment status, property financial performance, local real estate market conditions, loan-to-value ratio, debt-service-coverage ratio (“DSCR”), property condition, and financial strength of the borrower or key principal(s). In instances where payment under the guaranty on a specific loan is determined to be probable, the Company separately measures the expected loss through an assessment of the underlying fair value of the asset, disposition costs, and the risk-sharing percentage (the “collateral-based reserve”) through a charge to the provision for risk-sharing obligations, which is a component of Provision (benefit) for credit losses in the Consolidated Statements of Income. These loans are removed from the WARM calculation described above, and the associated loan-specific mortgage servicing right and guaranty obligation are written off. The expected loss on the risk-sharing obligation is dependent on the fair value of the underlying property as the loans are collateral dependent. Historically, initial recognition of a collateral-based reserve occurs at or before a loan becomes 60 days delinquent. The amount of the collateral-based reserve considers historical loss experience, adverse situations affecting individual loans, the estimated disposition value of the underlying collateral, and the level of risk sharing. The estimate of property fair value at initial recognition of the collateral-based reserve is based on appraisals, broker opinions of value, or net operating income and market capitalization rates, depending on the facts and circumstances associated with the loan and underlying collateral. The Company regularly monitors the collateral-based reserves on all applicable loans and updates loss estimates as current information is received. The settlement with Fannie Mae is based on the actual sales price of the property and selling and property preservation costs and considers the Fannie Mae loss-sharing requirements. The maximum amount of the loss the Company absorbs at the time of default is 20% of the origination UPB of the loan. Provision (Benefit) for Credit Losses— The Company records the income statement impact of the changes in the allowance for loan losses and the allowance for risk-sharing obligations within Provision (benefit) for credit losses in the Consolidated Statements of Income. NOTE 4 contains additional discussion related to the allowance for risk-sharing obligations. Substantially all of the Provision (benefit) for credit losses for the years ended December 31, 2023, 2022, and 2021 is related to the provision (benefit) for risk-sharing obligations, with the other portion attributable to the provision (benefit) for loan losses related to loans held for investment. Transfers of Financial Assets—Transfers of financial assets are reported as sales when (i) the transferor surrenders control over those assets, (ii) the transferred financial assets have been legally isolated from the Company’s creditors, (iii) the transferred assets can be pledged or exchanged by the transferee, and (iv) consideration other than beneficial interests in the transferred assets is received in exchange. The transferor is considered to have surrendered control over transferred assets if, and only if, certain conditions are met. The Company determined that all loans sold during the periods presented met these specific conditions and accounted for all transfers of loans held for sale as completed sales, except as otherwise noted. Derivative Assets and Liabilities —Loan commitments that meet the definition of a derivative are recorded at fair value on the Consolidated Balance Sheets upon the executions of the commitments to originate a loan with a borrower and to sell the loan to an investor, with a corresponding amount recognized as revenue on the Consolidated Statements of Income. The estimated fair value of loan commitments includes (i) the fair value of loan origination fees and premiums on the anticipated sale of the loan, net of co-broker fees (included in derivative assets, a component of Other Assets, on the Consolidated Balance Sheets and as a component of Loan origination and debt brokerage fees, net in the Consolidated Income Statements), (ii) the fair value of the expected net cash flows associated with the servicing of the loan, net of any estimated net future cash flows associated with the guarantee obligation (included in derivative assets, a component of Other Assets, on the Consolidated Balance Sheets and in Fair value of expected net cash flows from servicing, net in the Consolidated Income Statements), and (iii) the effects of interest rate movements between the trade date and balance sheet date. Loan commitments are generally derivative assets but can become derivative liabilities if the effects of the interest rate movement between the trade date and the balance sheet date are greater than the combination of (i) and (ii) above. Forward sale commitments that meet the definition of a derivative are recorded as either derivative assets or derivative liabilities depending on the effects of the interest rate movements between the trade date and the balance sheet date. Adjustments to the fair value are reflected as a component of income within Loan origination and debt brokerage fees, net in the Consolidated Statements of Income. Loans Held for Sale —Loans held for sale represent originated loans that are generally transferred or sold within 60 days from the date that a mortgage loan is funded. The Company elects to measure all originated loans at fair value, unless the Company documents at the time the loan is originated that it will measure the specific loan at the lower of cost or fair value for the life of the loan. Electing to use fair value allows a better offset of the change in fair value of the loan and the change in fair value of the derivative instruments used as economic hedges. During the period prior to its sale, interest income on a loan held for sale is calculated in accordance with the terms of the individual loan. There were no loans held for sale that were valued at the lower of cost or fair value or on a non-accrual status at December 31, 2023 and 2022. Co-broker fees, which are netted against Loan origination and debt brokerage fees, net in the Consolidated Statements of Income, were $12.0 million, $17.3 million, and $21.0 million for the years ended December 31, 2023, 2022, and 2021, respectively. Share-Based Payment —The Company recognizes compensation costs for all share-based payment awards made to employees and directors, including restricted stock and restricted stock units based on the grant date fair value. Restricted stock awards are granted without cost to the Company’s officers, employees, and non-employee directors. The fair value of the award is calculated as the fair value of the Company’s common stock on the date of grant. Stock option awards were granted to executive officers in the past. The Company has not granted any stock option awards since 2017 and does not expect to issue stock options for the foreseeable future. A small number of vested but unexercised stock options is outstanding as of December 31, 2023. Generally, the Company’s restricted stock awards for its officers and employees vest ratably over a three-year period based solely on continued employment. Restricted stock awards for non-employee directors fully vest after one year . Awards issued to the Company's production personnel sometimes vest over a period greater than three years . The Company offers a performance share plan (“PSP”) principally for the Company’s executives and certain other members of senior management. The performance period for each PSP is three full calendar years beginning on January 1 of the grant year. Participants in the PSP receive restricted stock units (“RSUs”) on the grant date for the PSP in an amount equal to achievement of all performance targets at a maximum level. If the performance targets are met at the end of the performance period and the participant remains employed by the Company, the participant fully vests in the RSUs, which immediately convert to unrestricted shares of common stock. If the performance targets are not met at the maximum level, the participant generally forfeits a portion of the RSUs. Generally, if the participant is no longer employed by the Company, the participant forfeits all of the RSUs. The performance targets for all the PSPs issued by the Company are based on meeting diluted earnings per share, return on equity, and total revenues goals. The Company records compensation expense for the PSP based on the grant-date fair value in an amount proportionate to the service time rendered by the participant and the expected achievement level of the goals. Compensation expense for restricted shares is adjusted for actual forfeitures and is recognized on a straight-line basis, for each separately vesting portion of the award as if the award were in substance multiple awards, over the requisite service period of the award. Share-based compensation is recognized within the income statement as Personnel , the same expense line as the cash compensation paid to the respective employees. Statement of Cash Flows —The Company records the fair value of premiums and origination fees as a component of the fair value of derivative assets on the loan commitment date and records the related income within Loan origination and debt brokerage fees, net within the Consolidated Statements of Income. The cash for the origination fee is received upon closing of the loan, and the cash for the premium is received upon loan sale, resulting in a timing mismatch of the recognition of income and the receipt of cash in a given period when the derivative or loan held for sale remains outstanding at period end. The Company accounts for this mismatch by recording an adjustment called Change in the fair value of premiums and origination fees within the Consolidated Statements of Cash Flows. The amount of the adjustment reflects a reduction to cash provided by or used in operations for the amount of income recognized upon rate lock (i.e., non-cash income) for derivatives and loans held for sale outstanding at period end and an increase to cash provided by or used in operations for cash received upon loan origination or sale for derivatives and loans held for sale that were outstanding at prior period end. When income recognized upon rate lock is greater than cash received upon loan origination or sale, the adjustment is a negative amount. When income recognized upon rate lock is less than cash received upon loan origination or loan sale, the adjustment is a positive amount. For presentation in the Consolidated Statements of Cash Flows, the Company considers pledged cash and cash equivalents (as detailed in NOTE 9) to be restricted cash and restricted cash equivalents. The following table presents a reconciliation of the total of cash, cash equivalents, restricted cash, and restricted cash equivalents as presented in the Consolidated Statements of Cash Flows to the related captions on the Consolidated Balance Sheets as of December 31, 2023, 2022, 2021, and 2020. December 31, (in thousands) 2023 2022 2021 2020 Cash and cash equivalents $ 328,698 $ 225,949 $ 305,635 $ 321,097 Restricted cash 21,422 17,676 42,812 19,432 Pledged cash and cash equivalents (NOTE 9) 41,283 14,658 44,733 17,473 Total cash, cash equivalents, restricted cash, and restricted cash equivalents $ 391,403 $ 258,283 $ 393,180 $ 358,002 Income Taxes —The Company files income tax returns in the applicable U.S. federal, state, and local jurisdictions and generally is subject to examination by the respective jurisdictions for three to four years from the filing of a tax return. The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. Deferred tax assets are recognized only to the extent that it is more likely than not that they will be realizable based on consideration of available evidence, including future reversals of existing taxable temporary differences, projected future taxable income, and tax planning strategies. The Company had an immaterial accrual for uncertain tax positions as of December 31, 2023 and 2022. Net Warehouse Interest Income (Expense)— The Company presents warehouse interest income net of warehouse interest expense. Warehouse interest income is the interest earned from loans held for sale and loans held for investment. Generally, a substantial portion of the Company’s loans is financed with matched borrowings under one of its warehouse facilities. The remaining portion of loans not funded with matched borrowings is financed with the Company’s own cash. Occasionally, the Company also fully funds a small number of loans held for sale or loans held for investment with its own cash. Warehouse interest income is earned on loans held for sale after a loan is closed and before a loan is sold. Warehouse interest income is earned on loans held for investment after a loan is closed and before a loan is repaid. Warehouse interest expense is incurred on borrowings used to fund loans solely while they are held for sale or for investment. The Company had a portfolio of participating interests in loans held for investment that was accounted for as a secured borrowing and paid off at the end of the second quarter of 2021. The Company recognized Net warehouse interest income on the unpaid principal balance of the loans and secured borrowing for the year ended December 31, 2021. The interest income and expense on the secured borrowing, which offset each other and are included in Net warehouse interest income (expenses), was $1.7 million for the year ended December 31, 2021. Included in Net warehouse interest income, (expense) for the three years ended December 31, 2023, 2022, and 2021 are the following components: For the year ended December 31, Components of Net Warehouse Interest Income (Expense) (in thousands) 2023 2022 2021 Warehouse interest income $ 44,705 $ 65,065 $ 54,886 Warehouse interest expense (50,338) (49,288) (32,778) Net warehouse interest income (expense) $ (5,633) $ 15,777 $ 22,108 Pledged Securities —As collateral against its Fannie Mae risk-sharing obligations (NOTES 4 and 9), certain cash, cash equivalents, and securities have been pledged to the benefit of Fannie Mae to secure the Company's risk-sharing obligations. Substantially all of the balance of Pledged securities, at fair value within the Consolidated Balance Sheets as of December 31, 2023 and 2022 was pledged against Fanni |
MORTGAGE SERVICING RIGHTS
MORTGAGE SERVICING RIGHTS | 12 Months Ended |
Dec. 31, 2023 | |
MSRs | |
Mortgage Servicing Rights | |
MORTGAGE SERVICING RIGHTS | NOTE 3—MORTGAGE SERVICING RIGHTS The fair value of MSRs was $1.4 billion as of both December 31, 2023 and 2022. The Company uses a discounted static cash flow valuation approach, and the key economic assumption is the discount rate. See the following sensitivities related to the discount rate: The impact of a 100 -basis point increase in the discount rate as of December 31, 2023 would be a decrease in the fair value of $44.0 million to the MSRs outstanding as of December 31, 2023. The impact of a 200 -basis point increase in the discount rate as of December 31, 2023 would be a decrease in the fair value of $85.0 million to the MSRs outstanding as of December 31, 2023. These sensitivities are hypothetical and should be used with caution. These estimates do not include interplay among assumptions and are estimated as a portfolio rather than individual assets. Activity related to capitalized MSRs (net of accumulated amortization) for the years ended December 31, 2023 and 2022 follows: For the year ended December 31, Roll Forward of MSRs (in thousands) 2023 2022 Beginning balance $ 975,226 $ 953,845 Additions, following the sale of loan 142,129 244,259 Amortization (199,633) (189,211) Pre-payments and write-offs (10,307) (33,667) Ending balance $ 907,415 $ 975,226 The following table summarizes the gross value, accumulated amortization, and net carrying value of the Company’s MSRs as of December 31, 2023 and 2022: Components of MSRs (in thousands) December 31, 2023 December 31, 2022 Gross value $ 1,733,844 $ 1,659,185 Accumulated amortization (826,429) (683,959) Net carrying value $ 907,415 $ 975,226 The expected amortization of MSRs held in the Consolidated Balance Sheet as of December 31, 2023 is shown in the table below. Actual amortization may vary from these estimates. Expected (in thousands) Amortization Year Ending December 31, 2024 $ 191,224 2025 169,310 2026 143,500 2027 122,149 2028 98,344 Thereafter 182,888 Total $ 907,415 The Company recorded write-offs of MSRs related to loans that were repaid prior to the expected maturity and loans that defaulted. These write-offs are included as a component of the MSR roll forward shown above and as a component of Amortization and depreciation in the Consolidated Statements of Income. Prepayment fees totaling $3.5 million, $26.5 million, and $40.1 million were earned for 2023, 2022, and 2021, respectively, and are included as a component of Other revenues in the Consolidated Statements of Income. Placement fees totaling $127.4 million, $43.3 million, and $5.6 million were earned for the years ended December 31, 2023, 2022, and 2021, respectively, and are included as a component of Placement fees and other interest income in the Consolidated Statements of Income. All other ancillary servicing fees were immaterial for the periods presented. Management reviews the MSRs for temporary impairment quarterly by comparing the aggregate carrying value of the MSR portfolio to the aggregate estimated fair value of the portfolio. Additionally, MSRs related to Fannie Mae loans where the Company has risk-sharing obligations are assessed for permanent impairment on an asset-by-asset basis in conjunction with the Company’s assessment of the allowance for risk-sharing obligations. Except for defaulted or prepaid loans, no temporary or permanent impairment was recognized for the years ended December 31, 2023, 2022, and 2021. As of December 31, 2023, the weighted average remaining life of the aggregate MSR portfolio was 6.5 years. |
ALLOWANCE FOR RISK-SHARING OBLI
ALLOWANCE FOR RISK-SHARING OBLIGATIONS AND GUARANTY OBLIGATION | 12 Months Ended |
Dec. 31, 2023 | |
ALLOWANCE FOR RISK-SHARING OBLIGATIONS AND GUARANTY OBLIGATION | |
ALLOWANCE FOR RISK-SHARING OBLIGATIONS AND GUARANTY OBLIGATION | NOTE 4—ALLOWANCE FOR RISK-SHARING OBLIGATIONS AND GUARANTY OBLIGATION 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 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 on the Consolidated Balance Sheets. Additionally, a guaranty obligation is presented as a component of Other liabilities on the Consolidated Balance Sheets. Activity related to the allowance for risk-sharing obligations for the years ended December 31, 2023 and 2022 follows: For the year ended December 31, Roll Forward of Allowance for Risk-Sharing Obligations (in thousands) 2023 2022 Beginning balance $ 44,057 $ 62,636 Provision (benefit) for risk-sharing obligations (10,448) (13,948) Write-offs (2,008) (4,631) Ending balance $ 31,601 $ 44,057 The Company assesses several qualitative and quantitative factors impacting the current and expected unemployment rate, macroeconomic conditions, and the multifamily market to calculate the Company’s CECL allowance each quarter. The key inputs for the CECL allowance are the historic loss rate, the forecast-period loss rate, the reversion-period loss rate, and the 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 impact during each quarter for the years ended December 31, 2023, 2022, and 2021 follows. 2023 CECL Calculation Inputs, Details, and Provision Impact Q1 Q2 Q3 Q4 Total Forecast-period loss rate in basis points 2.3 2.3 2.3 2.4 N/A Reversion-period loss rate in basis points 1.5 1.5 1.5 1.5 N/A Historical loss rate in basis points 0.6 0.6 0.6 0.6 N/A At-risk Fannie Mae servicing portfolio UPB in billions $ 54.5 $ 55.7 $ 57.4 $ 58.5 N/A CECL allowance (in millions) $ 28.7 $ 28.9 $ 31.0 $ 31.6 N/A Provision (benefit) for risk-sharing obligations in millions $ (10.9) $ (0.7) $ 0.6 $ 0.6 $ (10.4) 2022 CECL Calculation Inputs, Details, and Provision Impact Q1 Q2 Q3 Q4 Total Forecast-period loss rate in basis points 3.0 2.2 2.2 2.1 N/A Reversion-period loss rate in basis points 2.0 1.7 1.7 1.7 N/A Historical loss rate in basis points 1.2 1.2 1.2 1.2 N/A At-risk Fannie Mae servicing portfolio UPB in billions $ 49.7 $ 51.2 $ 52.1 $ 54.0 N/A CECL allowance (in millions) $ 42.5 $ 37.7 $ 38.9 $ 39.7 N/A Provision (benefit) for risk-sharing obligations in millions $ (9.4) $ (4.8) $ 1.2 $ (0.9) $ (13.9) 2021 CECL Calculation Inputs, Details, and Provision Impact Q1 Q2 Q3 Q4 Total Forecast-period loss rate in basis points 4.0 3.0 3.0 3.0 N/A Reversion-period loss rate in basis points 2.0 2.0 2.0 2.0 N/A Historical loss rate in basis points 1.8 1.8 1.8 1.8 N/A At-risk Fannie Mae servicing portfolio UPB in billions $ 45.4 $ 45.9 $ 47.0 $ 48.0 N/A CECL allowance (in millions) $ 57.0 $ 52.8 $ 54.0 $ 52.3 N/A Provision (benefit) for risk-sharing obligations in millions $ (10.7) $ (4.3) $ 1.3 $ 1.0 $ (12.7) The weighted-average remaining life of the at-risk Fannie Mae servicing portfolio as of December 31, 2023 was 6.4 years compared to 7.2 years as of December 31, 2022. Three loans had aggregate collateral-based reserves of $2.8 million as of December 31, 2023 compared to two loans that had aggregate collateral-based reserves of $4.4 million as of December 31, 2022. Activity related to the guaranty obligation for the years ended December 31, 2023 and 2022 follows: For the year ended December 31, Roll Forward of Guaranty Obligation (in thousands) 2023 2022 Beginning balance $ 43,950 $ 47,378 Additions, following the sale of loan 4,040 6,532 Amortization and write-offs (8,122) (9,960) Ending balance $ 39,868 $ 43,950 As of December 31, 2023 and 2022, the maximum quantifiable contingent liability associated with the Company’s guarantees for the at-risk loan serviced under the Fannie Mae DUS agreement was $11.9 billion and $11.0 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 | 12 Months Ended |
Dec. 31, 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 $130.5 billion as of December 31, 2023 compared to $123.1 billion as of December 31, 2022 As of both December 31, 2023 and 2022, custodial deposit accounts relating to loans serviced by the Company totaled $2.7 billion. These amounts are not included in the Consolidated Balance Sheets as such amounts are not Company assets; however, the Company is entitled to placement fees on these escrow deposit, presented within Placement fees and other interest income in the Consolidated Statements of Income. Certain cash deposits exceed the FDIC insured limits; however, the Company believes it has mitigated this risk by holding uninsured deposits at large national banks. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2023 | |
DEBT | |
DEBT | NOTE 6—DEBT Warehouse Facilities As of December 31, 2023, to provide financing to borrowers under the Agencies’ programs, the Company had 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 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 short-term financings on acceptable terms. Additionally, as of December 31, 2023, the Company had 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 had 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 short-term financings on acceptable terms. The interest rate for all our warehouse facilities is based on an Adjusted Term Secured Overnight Financing Rate (“SOFR”). The maximum amount and outstanding borrowings under Warehouse notes payable as of December 31, 2023 and 2022 follow: December 31, 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 $ 88,586 SOFR plus 1.30% Agency Warehouse Facility #2 700,000 300,000 1,000,000 7,500 SOFR plus 1.30% Agency Warehouse Facility #3 600,000 265,000 865,000 177,262 SOFR plus 1.35% Agency Warehouse Facility #4 200,000 225,000 425,000 53,403 SOFR plus 1.30% to 1.35% Agency Warehouse Facility #5 — 1,000,000 1,000,000 42,120 SOFR plus 1.45% Total National Bank Agency Warehouse Facilities $ 1,825,000 $ 2,040,000 $ 3,865,000 $ 368,871 Fannie Mae repurchase agreement, uncommitted line and open maturity — 1,500,000 1,500,000 201,973 Total Agency Warehouse Facilities $ 1,825,000 $ 3,540,000 $ 5,365,000 $ 570,844 December 31, 2022 (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 $ 141,965 SOFR plus 1.30% Agency Warehouse Facility #2 700,000 300,000 1,000,000 102,926 SOFR plus 1.30% Agency Warehouse Facility #3 600,000 265,000 865,000 110,394 SOFR plus 1.35% Agency Warehouse Facility #4 200,000 225,000 425,000 26,079 SOFR plus 1.30% Agency Warehouse Facility #5 — 1,000,000 1,000,000 — SOFR plus 1.45% Total National Bank Agency Warehouse Facilities $ 1,825,000 $ 2,040,000 $ 3,865,000 $ 381,364 Fannie Mae repurchase agreement, uncommitted line and open maturity — 1,500,000 1,500,000 11,350 Total Agency Warehouse Facilities $ 1,825,000 $ 3,540,000 $ 5,365,000 $ 392,714 (1) Interest rate presented does not include the effect of any interest rate floors. Interest expense under the warehouse notes payable for the years ended December 31, 2023, 2022, and 2021 aggregated to $50.3 million, $49.3 million, and $34.5 million, respectively. Included in interest expense in 2023, 2022, and 2021 were the amortization of facility fees totaling $3.2 million, $3.6 million, and $3.8 million, respectively. The warehouse notes payable are subject to various financial covenants, and the Company was in compliance with all such covenants at December 31, 2023. Agency Warehouse Facilities The following section provides a summary of the key terms related to each of the Agency Warehouse Facilities. The Company believes that the five committed and uncommitted credit facilities from national banks and the uncommitted credit facility from Fannie Mae provide the Company with sufficient borrowing capacity to conduct its Agency lending operations. The Agency Warehouse agreements contain certain affirmative and negative covenants that are binding on the Company’s operating subsidiary, Walker & Dunlop, LLC (which are in some cases subject to exceptions), including, but not limited to, restrictions on its ability to assume, guarantee, or become contingently liable for the obligation of another person, to undertake certain fundamental changes such as reorganizations, mergers, amendments to the Company’s certificate of formation or operating agreement, liquidations, dissolutions or dispositions or acquisitions of assets or businesses, to cease to be directly or indirectly wholly owned by the Company, to pay any subordinated debt in advance of its stated maturity or to take any action that would cause Walker & Dunlop, LLC to lose all or any part of its status as an eligible lender, seller, servicer or issuer or any license or approval required for it to engage in the business of originating, acquiring, or servicing mortgage loans. Agency Warehouse Facility #1: The Company has a warehousing credit and security agreement with a national bank for a $325.0 million committed warehouse line that is scheduled to mature on August 28, 2024 . The agreement provides the Company with the ability to fund Fannie Mae, Freddie Mac, HUD, and FHA loans. Advances are made at 100% of the loan balance and borrowings under this line bear interest at SOFR plus 130 basis points. In addition to the committed borrowing capacity, the agreement provides $250.0 million of uncommitted borrowing capacity that bears interest at the same rate as the committed facility. During 2023, the Company executed an amendment to the warehouse agreement related to this facility that extended the maturity date. Agency Warehouse Facility #2 The Company has a warehousing credit and security agreement with a national bank for a $700.0 million committed warehouse line that is scheduled to mature on April 12, 2024 . The committed warehouse facility provides the Company with the ability to fund Fannie Mae, Freddie Mac, HUD, and FHA loans. Advances are made at 100% of the loan balance, and borrowings under this line bear interest at SOFR plus 130 basis points. In addition to the committed borrowing capacity, the agreement provides $300.0 million of uncommitted borrowing capacity that bears interest at the same rate as the committed facility. During 2023, the Company executed an amendment to the warehouse agreement related to this facility that extended the maturity date. Agency Warehouse Facility #3: The Company has a $600.0 million committed warehouse credit and security agreement with a national bank that is scheduled to mature on May 15, 2024 . The committed warehouse facility provides the Company with the ability to fund Fannie Mae, Freddie Mac, HUD and FHA loans. Advances are made at 100% of the loan balance, and the borrowings under the warehouse agreement bear interest at a rate of SOFR plus 135 basis points. In addition to the committed borrowing capacity, the agreement provides $265.0 million of uncommitted borrowing capacity that bears interest at the same rate as the committed facility. During 2023, the Company executed an amendment to the warehouse agreement related to this facility that extended the maturity date. Agency Warehouse Facility #4: The Company has a $200.0 million committed warehouse credit and security agreement with a national bank that is scheduled to mature on June 22, 2024 . The committed warehouse facility provides the Company with the ability to fund Fannie Mae, Freddie Mac, HUD, and FHA loans and has a sublimit of $75.0 million to fund defaulted HUD and FHA loans. Advances are made at 100% of the loan balance, and the borrowings under the warehouse agreement bear interest at a rate of SOFR plus 135 basis points. In addition to the committed borrowing capacity, the agreement provides $225.0 million of uncommitted borrowing capacity that bears interest at a rate of SOFR plus 130 basis points. During 2023, the Company Agency Warehouse Facility #5: The Company has a master repurchase agreement with a national bank for a $1.0 billion uncommitted advance credit facility that is scheduled to mature on September 12, 2024. The facility provides the Company with the ability to fund Fannie Mae, Freddie Mac, HUD, and FHA loans. Advances are made at 100% of the loan balance, and the borrowings under the repurchase agreement bear interest at a rate of SOFR plus 145 basis points. During 2023, the Company executed an amendment to the warehouse agreement related to this facility to extend the maturity date. No other material modifications were made to the Agency warehouse agreements during 2023. Uncommitted Agency Warehouse Facility: The Company has a $1.5 billion uncommitted facility with Fannie Mae under its ASAP funding program. After approval of certain loan documents, Fannie Mae will fund loans after closing, and the advances are used to repay the primary warehouse line. Fannie Mae will advance 99% of the loan balance. There is no expiration date for this facility. The uncommitted facility has no specific negative or financial covenants. The Agency Warehouse Facilities require compliance with certain financial covenants, which are measured for the Company and its subsidiaries on a consolidated basis, which include but are not limited to minimum tangible net worth requirements, minimum liquidity requirements, minimum servicing portfolio UPB requirements, debt service coverage ratios, and other customary financial covenants. The agreements contain customary events of default, which are in some cases subject to certain exceptions, thresholds, notice requirements, and grace periods. The warehouse agreements contain cross-default provisions, such that if a default occurs under any of the Company’s warehouse agreements, generally the lenders under the other warehouse agreements could also declare a default. The Company is in compliance with all of its Agency warehouse facility covenants. Notes payable The following section provides a summary of the key terms related to each of the Company’s notes payable. Term Loan Notes Payable On December 16, 2021, the Company entered into a senior secured credit agreement (the “Credit Agreement”) that replaced the Company’s prior credit agreement and provided for a $600.0 million term loan (the “Term Loan”). The Term loan was issued at a 0.25% discount, has a stated maturity date of December 16, 2028 (or, if earlier, the date of acceleration in the event of a default of the Term Loan pursuant to the term of the Term Loan Agreement) , and bears interest at SOFR plus 225 basis points with a SOFR floor of 50 basis points. At any time, the Company may also elect to request one or more incremental term loan commitments not to exceed $230.0 million and 100% of trailing four-quarter Consolidated Adjusted EBITDA , provided that the total indebtedness would not cause the leverage ratio (as defined in the Credit Agreement) to exceed 3.00 to 1.00. 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. The Company used approximately $115.9 million of the proceeds to pay off the Alliant note payable, accrued interest, and other fees. The Alliant note payable was a note payable held at the Company’s wholly owned subsidiary, Alliant (now referred to as Walker & Dunlop Affordable Equity or “WDAE”). The Company is obligated to make principal payments on the Term Loan and Incremental Term Loan (collectively “Corporate Debt”) in consecutive quarterly installments equal to 0.25% of the aggregate original principal amount of the Corporate Debt on the last business day of each of March, June, September, and December that commenced on March 31, 2022 and June 30, 2023, respectively. The Corporate Debt also requires certain other prepayments in certain circumstances pursuant to the terms of the Term Loan Agreements. The remaining unpaid principal balance of the Corporate Debt is required to be paid in full on December 16, 2028 (or, if earlier, the date of acceleration of the term loan pursuant to the terms of the Term Loan Agreements) and will be in an amount equal to the aggregate outstanding principal of the Corporate Debt on such date (together with all accrued interest thereon). The obligations of the Company under the Credit Agreement are guaranteed by Walker & Dunlop Multifamily, Inc., Walker & Dunlop, LLC, Walker & Dunlop Capital, LLC, W&D BE, Inc., and Walker & Dunlop Investment Sales, LLC, each of which is a direct or indirect wholly owned subsidiary of the Company (together with the Company, the “Loan Parties”), pursuant to the Amended and Restated Guarantee and Collateral Agreement entered into on December 16, 2021, among the Loan Parties and JPMorgan Chase Bank, N.A., as administrative agent (the “Guarantee and Collateral Agreement”). Subject to certain exceptions and qualifications contained in the Credit Agreement, the Company is required to cause any newly created or acquired subsidiary, unless such subsidiary has been designated as an Excluded Subsidiary (as defined in the Credit Agreement) by the Company in accordance with the terms of the Credit Agreement, to guarantee the obligations of the Company under the Credit Agreement and become a party to the Guarantee and Collateral Agreement. The Company may designate a newly created or acquired subsidiary as an Excluded Subsidiary, so long as certain conditions and requirements provided for in the Credit Agreement are met. The Credit Agreement contains certain affirmative and negative covenants that are binding on the Loan Parties, including, but not limited to, restrictions (subject to specified exceptions and qualifications) on the ability of the Loan Parties to incur indebtedness, to create liens on their property, to make investments, to merge, consolidate, or enter into any similar combination, or enter into any asset disposition of all or substantially all assets, or liquidate, wind-up or dissolve, to make asset dispositions, to declare or pay dividends or make related distributions, to enter into certain transactions with affiliates, to enter into any negative pledges or other restrictive agreements, and to engage in any business other than the business of the Loan Parties as of the date of the Credit Agreement and business activities reasonably related or ancillary thereto, or to amend certain material contracts. The Credit Agreement contains only one financial covenant, which requires the Company to maintain a minimum asset coverage ratio (as defined in the Credit Agreement), tested quarterly. The Credit Agreement contains customary events of default (which are, in some cases, subject to certain exceptions, thresholds, notice requirements, and grace periods), including, but not limited to, non-payment of principal, interest, or other amounts, misrepresentations, failure to perform or observe covenants, cross-defaults with certain other indebtedness or material agreements, certain change in control events, voluntary or involuntary bankruptcy proceedings, failure of the Credit Agreements or other loan documents to be valid and binding, certain ERISA events and judgments. The Company is in compliance with all covenants related to the Credit Agreement. The following table shows the components of the notes payable as of December 31, 2023 and 2022: (in thousands, unless otherwise specified) December 31, 2023 2022 Interest rate and repayments Term Loan Note Payable Unpaid principal balance $ 588,000 $ 594,000 Quarterly principal payments of $1.5 million; Unamortized debt discount (1,033) (1,270) Interest rate varies - see above for further details Unamortized debt issuance costs (6,177) (7,594) Carrying balance $ 580,790 $ 585,136 Incremental Term Loan Note Payable Unpaid principal balance $ 198,500 $ — Quarterly principal payments of $0.5 million; Unamortized debt discount (3,354) — Interest rate varies - see above for further details Unamortized debt issuance costs (2,578) — Carrying balance $ 192,568 $ — Corporate Debt $ 773,358 $ 585,136 Alliant Note Payable Unpaid principal balance $ — $ 114,546 4.75% Fixed-rate Fair value adjustment (1) — 4,421 Carrying balance $ — $ 118,967 Total Notes Payable Carrying Balance $ 773,358 $ 704,103 (1) Fair value adjustment related to the acquisition of Alliant. The scheduled maturities, as of December 31, 2023, for the aggregate of the warehouse notes payable and the notes payable are shown below. The warehouse notes payable obligations are incurred in support of the related loans held for sale and loans held for investment. Amounts advanced under the warehouse notes payable for loans held for sale are included in the subsequent year as the amounts are usually drawn and repaid within 60 days . The amounts below related to the Corporate Debt notes payable include only the quarterly and final principal payments required by the related credit agreement (i.e., the non-contingent payments) and do not include any principal payments that are contingent upon Company cash flow, as defined in the Credit Agreement (i.e., the contingent payments). The maturities below are in thousands. Year Ending December 31, Maturities 2024 $ 621,951 2025 8,000 2026 8,000 2027 8,000 2028 754,500 Thereafter — Total $ 1,400,451 All of the debt instruments, including the warehouse facilities, are senior obligations of the Company. All warehouse notes payable balances associated with loans held for sale and outstanding as of December 31, 2023 were or are expected to be repaid in 2024. Interest on the Company’s warehouse notes payable and notes payable are based on SOFR. As a result of the transition from LIBOR on June 30, 2023, the Company has transitioned all of its debt agreements to SOFR effective July 1, 2023. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 7—GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill and Acquisition Activities A summary of the Company’s goodwill by reportable segments as of and for the year ended December 31, 2023 and 2022 follows: e For the year ended December 31, (in thousands) 2023 2022 Roll Forward of Gross Goodwill CM SAM Consolidated (1) CM SAM Consolidated (1) Beginning balance $ 520,191 $ 439,521 $ 959,712 $ 297,416 $ 401,219 $ 698,635 Additions from acquisitions — — — 222,670 — 222,670 Measurement-period and other adjustments 3,998 — 3,998 105 38,302 38,407 Ending gross goodwill balance $ 524,189 $ 439,521 $ 963,710 $ 520,191 $ 439,521 $ 959,712 Roll Forward of Accumulated Goodwill Impairment Beginning balance $ — $ — $ — $ — $ — $ — Impairment 62,000 — 62,000 — — — Ending accumulated goodwill impairment $ 62,000 $ — $ 62,000 $ — $ — $ — Goodwill $ 462,189 $ 439,521 $ 901,710 $ 520,191 $ 439,521 $ 959,712 (1) As of both December 31, 2023, and 2022, no goodwill was allocated to the Corporate reportable segment. The additions to goodwill from acquisitions during 2022 shown in the table above during the year ended December 31, 2022 relate to two acquisitions. The Company acquired 100% of the equity interests of GeoPhy B.V. (“GeoPhy”), a Netherlands-based commercial real-estate technology company. As part of the acquisition, the Company also obtained GeoPhy’s 50% interest in the Company’s appraisal joint venture, Apprise. Prior to the acquisition, the Company accounted for its 50% investment in Apprise under the equity method. The remeasurement of the Company’s existing 50% interest resulted in a $39.6 million gain (“Apprise revaluation gain”) that is included as a component of Other revenues The GeoPhy acquisition included contingent consideration that is contingent on achieving certain revenue and productivity milestones over a four-year period. The maximum earnout included as part of the GeoPhy acquisition is $205.0 million. The Company estimated the fair value of this contingent consideration upon acquisition as $115.0 million using a Monte Carlo simulation. The goodwill of $214.0 million resulting from the GeoPhy acquisition was allocated to two reporting units within the Company’s Capital Markets reportable segment. The other acquisition was immaterial. Additional details related to the GeoPhy acquisition can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The measurement-period adjustments shown above for both the years ended December 31, 2023 and 2022 related primarily to routine working capital adjustments. In connection with its annual impairment evaluation performed on October 1, 2023, the Company recognized goodwill impairment totaling $62.0 million as seen above as the estimated fair value of the reporting units declined below their carrying value. The Company estimated the fair value of the reporting units based on discounted cash flow models that utilized significant unobservable inputs and assumptions. The Company allocated this goodwill impairment to the two reporting units to which the GeoPhy operations and goodwill are assigned as discussed previously, both of which are components of the Capital Markets reportable segment. Due to sustained challenging market conditions resulting from the rapidly increasing interest rate environment that has impacted the multifamily market, management’s projected cash flows for these two reporting units declined due to lower than projected revenues and growth rates. Other Intangible Assets The Company’s other intangibles assets consist primarily of acquired customer contracts and technology intellectual property intangibles. The Company had no indefinite-lived intangible assets as of December 31, 2023 and 2022, and assesses its other intangible assets for impairment periodically. Activity related to other intangible assets for the years ended December 31, 2023 and 2022 follows: For the year ended December 31, Roll Forward of Other Intangible Assets (in thousands) 2023 2022 Beginning balance $ 198,643 $ 183,904 Additions from acquisitions — 31,000 Amortization (16,668) (16,261) Ending balance $ 181,975 $ 198,643 The following table summarizes the gross value, accumulated amortization, and net carrying value of the Company’s other intangible assets as of December 31, 2023 and December 31, 2022: Components of Other Intangible Assets (in thousands) December 31, 2023 December 31, 2022 Gross value $ 220,682 $ 220,682 Accumulated amortization (38,707) (22,039) Net carrying value $ 181,975 $ 198,643 The expected amortization of other intangible assets shown in the Consolidated Balance Sheet as of December 31, 2023 is shown in the table below. Actual amortization may vary from these estimates. Expected (in thousands) Amortization Year Ending December 31, 2024 $ 16,274 2025 16,274 2026 16,274 2027 16,274 2028 16,274 Thereafter 100,605 Total $ 181,975 As of December 31, 2023, the weighted average remaining life of all the other intangible assets was 11.6 years. Contingent Consideration Liabilities A summary of the Company’s contingent consideration liabilities, which are included in Other liabilities , as of and for the years ended December 31, 2023 and 2022 follows: For the year ended December 31, Roll Forward of Contingent Consideration Liabilities (in thousands) 2023 2022 Beginning balance $ 200,346 $ 125,808 Additions — 117,955 Accretion 1,790 4,642 Fair value adjustments (62,500) (13,512) Payments (26,090) (34,547) Ending balance $ 113,546 $ 200,346 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 Company’s LIHTC subsidiary, 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 earn-out periods related to the contingent consideration ends in the third quarter of 2027. In each case, the Company estimated the initial and December 31, 2023 fair values of the contingent consideration using a Monte Carlo simulation. During 2023, the Company made fair value adjustments as seen above on contingent consideration liabilities associated with the GeoPhy acquisition based primarily on updated management forecasts that resulted in a much lower probability of achievement. During 2022, the Company made fair value adjustments on two of its contingent consideration liabilities using updated information, including the probability of achievement and discount rate. The Company’s estimate of the fair values resulted in a decrease in the fair value of one of the Company’s contingent consideration liabilities that was partially offset by an increase in the fair value of another of the Company’s contingent consideration liabilities. The adjustments to the fair value of contingent considerations for the years ended December 31, 2023 and 2022 are included within Fair value adjustments to contingent consideration liabilities in the Consolidated Statements of Income. The recognition of the contingent consideration liability for the two acquisitions in 2022 and the fair value adjustments in 2023 and 2022 are non-cash, and thus not reflected in the amount of cash consideration paid on the Consolidated Statements of Cash Flows. In addition, $8.8 million |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 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 approach, and/or the cost approach to measure assets and liabilities that are measured at fair value. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, accounting standards establish a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: ● Level 1 —Financial assets and liabilities whose values are based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. ● Level 2 —Financial assets and liabilities whose values are based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. ● Level 3 —Financial assets and liabilities whose values are based on inputs that are both unobservable and significant to the overall valuation. The Company's MSRs are measured at fair value at inception, and thereafter on a nonrecurring basis and are carried at the lower of amortized costs or fair value. That is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value measurement when there is evidence of impairment and for disclosure purposes (NOTE 3). The Company's MSRs do not trade in an active, open market with readily observable prices. While sales of multifamily MSRs do occur on occasion, precise terms and conditions vary with each transaction and are not readily available. Accordingly, the estimated fair value of the Company’s MSRs was developed using discounted cash flow models that calculate the present value of estimated future net servicing income. The model considers contractually specified servicing fees, prepayment assumptions, estimated placement fee revenue from escrow deposits, delinquency rates, late charges, costs to service, and other economic factors. The Company periodically reassesses and adjusts, when necessary, the underlying inputs and assumptions used in the model to reflect observable market conditions and assumptions that a market participant would consider in valuing MSR assets. 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 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 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 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 Agency MBS using third party 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 initially recognized at fair value at acquisition 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 a 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 December 31, 2023 and 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 December 31, 2023 Assets Loans held for sale $ — $ 594,998 $ — $ 594,998 Pledged securities 41,283 142,798 — 184,081 Derivative assets — — 31,451 31,451 Total $ 41,283 $ 737,796 $ 31,451 $ 810,530 Liabilities Derivative liabilities $ — $ — $ 28,247 $ 28,247 Contingent consideration liabilities — — 113,546 113,546 Total $ — $ — $ 141,793 $ 141,793 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 any of the years presented in the consolidated financial statements. 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 years ended December 31, 2023 and 2022: For the year ended December 31, Derivative Assets and Liabilities, net (in thousands) 2023 2022 Beginning balance $ 15,560 $ 30,961 Settlements (388,682) (555,168) Realized gains (losses) recorded in earnings (1) 373,122 524,207 Unrealized gains (losses) recorded in earnings (1) 3,204 15,560 Ending balance $ 3,204 $ 15,560 (1) Realized and unrealized gains 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 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 December 31, 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 $ 31,451 Discounted cash flow Counterparty credit risk — — Derivative liabilities $ 28,247 Discounted cash flow Counterparty credit risk — — Contingent consideration liabilities $ 113,546 Monte Carlo Simulation Probability of earnout achievement 20% - 100% 48% (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 December 31, 2023 and December 31, 2022 are presented below: December 31, 2023 December 31, 2022 Carrying Fair Carrying Fair (in thousands) Amount Value Amount Value Financial Assets: Cash and cash equivalents $ 328,698 $ 328,698 $ 225,949 $ 225,949 Restricted cash 21,422 21,422 17,676 17,676 Pledged securities 184,081 184,081 157,282 157,282 Loans held for sale 594,998 594,998 396,344 396,344 Loans held for investment, net (1) 40,056 40,139 200,247 200,900 Derivative assets (1) 31,451 31,451 17,636 17,636 Total financial assets $ 1,200,706 $ 1,200,789 $ 1,015,134 $ 1,015,787 Financial Liabilities: Derivative liabilities (2) $ 28,247 $ 28,247 $ 2,076 $ 2,076 Contingent consideration liabilities (2) 113,546 113,546 200,346 200,346 Warehouse notes payable 596,178 596,428 543,447 544,050 Notes payable 773,358 786,500 704,103 708,546 Total financial liabilities $ 1,511,329 $ 1,524,721 $ 1,449,972 $ 1,455,018 (1) Included as a component of Other Assets on the Consolidated Balance Sheets. (2) Included as a component of Other Liabilities on the Consolidated Balance Sheets. The following methods and assumptions were used for recurring fair value measurements as of December 31, 2023 and 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 third-party broker estimates of fair value. 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 Liability —Consists of the estimated fair values of expected future earnout payments related to acquisitions completed primarily in 2021 and 2022. The earn-out 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 earn-out cash flows. The probability of the earn-out 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 —Consist of interest rate lock commitments and forward sale agreements. These instruments are valued using discounted cash flow models developed based on changes in the U.S. Treasury rate and other observable market data. The value is determined after considering the potential impact of collateralization, adjusted to reflect nonperformance risk of both the counterparty and the Company. Fair Value of Derivative Instruments and Loans Held for Sale —In the normal course of business, the Company enters into contractual commitments to originate and sell multifamily mortgage loans at fixed prices with fixed expiration dates. The commitments become effective when the borrowers "lock-in" a specified interest rate within time frames established by the Company. All mortgagors are evaluated for creditworthiness prior to the extension of the commitment. Market risk arises if interest rates move 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 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 December 31, 2023 and 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 December 31, 2023 Rate lock commitments $ 463,626 $ 15,908 $ 11,492 $ 27,400 $ 27,400 $ — $ — Forward sale contracts 1,035,964 — (24,196) (24,196) 4,051 (28,247) — Loans held for sale 572,338 9,956 12,704 22,660 — — 22,660 Total $ 25,864 $ — $ 25,864 $ 31,451 $ (28,247) $ 22,660 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 | 12 Months Ended |
Dec. 31, 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 —Commitments for the origination and subsequent sale and delivery of loans to Fannie Mae represent those mortgage loan transactions where the borrower has locked an interest rate and scheduled closing, and the Company has entered into a mandatory delivery commitment to sell the loan to Fannie Mae. As discussed in NOTE 8, the Company accounts for these commitments as derivatives recorded at fair value. The Company is generally required to share the risk of any losses associated with loans sold under the Fannie Mae DUS program. The Company is required to secure these obligations by assigning restricted cash balances and securities to Fannie Mae, which are classified as Pledged securities, at fair value on the Consolidated Balance Sheets. The amount of collateral required by Fannie Mae is a formulaic calculation at the loan level and considers the balance of the loan, the risk level of the loan, the age of the loan, and the level of risk-sharing. Fannie Mae requires restricted liquidity for Tier 2 loans of 75 basis points, which is funded over a 48-month period that begins upon delivery of the loan to Fannie Mae. Pledged securities held in the form of money market funds holding U.S. Treasuries are discounted 5% , and Agency MBS are discounted 4% for purposes of calculating compliance with the restricted liquidity requirements. As seen below, the Company held substantially all of its pledged securities in Agency MBS as of December 31, 2023. The majority of the loans for which the Company has risk sharing are Tier 2 loans. The Company is in compliance with the December 31, 2023 collateral requirements as outlined above. As of December 31, 2023, reserve requirements for the December 31, 2023 DUS loan portfolio will require the Company to fund $77.1 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 in the past reassessed the DUS Capital Standards and may make changes to these standards in the future. The Company generates sufficient cash flow from its operations to meet these capital standards and does not expect any future changes to have a material impact on its future operations; however, any future 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 December 31, 2023. The net worth requirement is derived primarily from unpaid principal balances on Fannie Mae loans and the level of risk sharing. As of December 31, 2023, the net worth requirement was $304.8 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 December 31, 2023, the Company was required to maintain at least $60.7 million of liquid assets to meet operational liquidity requirements for Fannie Mae, Freddie Mac, HUD, and Ginnie Mae. The Company had operational liquidity of $225.0 million, as defined in the requirements, as measured at our wholly owned operating subsidiary, Walker & Dunlop, LLC. Pledged Securities, at Fair Value Pledged securities, at fair value December 31, Pledged Securities (in thousands) 2023 2022 2021 2020 Restricted cash $ 2,727 $ 5,788 $ 3,779 $ 4,954 Money market funds 38,556 8,870 40,954 12,519 Total pledged cash and cash equivalents $ 41,283 $ 14,658 $ 44,733 $ 17,473 Agency MBS 142,798 142,624 104,263 119,763 Total pledged securities, at fair value $ 184,081 $ 157,282 $ 148,996 $ 137,236 The information in the preceding table is presented to reconcile beginning and ending cash, cash equivalents, restricted cash, and restricted cash equivalents in the Consolidated Statements of Cash Flows as more fully discussed in NOTE 2. The following table provides additional information related to the AFS Agency MBS as of December 31, 2023 and 2022: Fair Value and Amortized Cost of Agency MBS (in thousands) December 31, 2023 December 31, 2022 Fair value $ 142,798 $ 142,624 Amortized cost 143,862 144,801 Total gains for securities with net gains in AOCI 1,036 797 Total losses for securities with net losses in AOCI (2,100) (2,974) Fair value of securities with unrealized losses 103,003 118,565 Pledged securities with a fair value of $93.2 million, an amortized cost of $95.3 million, and a net unrealized loss of $2.1 million have been in a continuous unrealized loss position for more than 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 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. December 31, 2023 Detail of Agency MBS Maturities (in thousands) Fair Value Amortized Cost Within one year $ — $ — After one year through five years 36,410 36,450 After five years through ten years 85,553 86,051 After ten years 20,835 21,361 Total $ 142,798 $ 143,862 |
SHARE-BASED PAYMENT
SHARE-BASED PAYMENT | 12 Months Ended |
Dec. 31, 2023 | |
SHARE-BASED PAYMENT | |
SHARE-BASED PAYMENT | NOTE 10—SHARE-BASED PAYMENT As of December 31, 2023, there were 10.5 million shares of stock authorized for issuance to directors, officers, and employees under the 2020 Equity Incentive Plan (and predecessor plans). As of December 31, 2023, 0.9 million shares remain available for grant under the 2020 Equity Incentive Plan. Under the 2020 Equity Incentive Plan (and predecessor plans), the Company granted stock options to executive officers in the past and restricted shares to executive officers, employees, and non-employee directors during the years presented in the Consolidated Statements of Income, all without cost to the grantee. For the year ended December 31, 2023, the Company granted 0.2 million RSUs to the executive officers and certain other employees in connection with PSPs (“performance awards”). For the years ended 2022 and 2021, the Company granted 0.2 million and 0.3 million RSUs, respectively to the executive officers and certain other employees in connection with PSPs. The Company granted the RSUs at the maximum performance thresholds for each metric each year. As of December 31, 2023, the RSUs issued in connection with the 2023, 2022, and 2021 PSPs are unvested and outstanding. The performance period for the 2020 PSP concluded on December 31, 2022. The three performance goals related to the 2020 PSP were met at varying levels. Accordingly, 0.2 million shares related to the 2020 PSP vested in the first quarter of 2023. As of December 31, 2023, the Company concluded that the three performance targets related to the 2021 2022 The following table summarizes stock compensation expense for the years ended December 31, 2023, 2022, and 2021: For the year ended December 31, Components of stock compensation expense (in thousands) 2023 2022 2021 Restricted shares $ 29,452 $ 29,650 $ 25,520 Stock options — — — PSP "RSUs" (1,610) 4,337 11,062 Total stock compensation expense $ 27,842 $ 33,987 $ 36,582 Excess tax benefit recognized $ 2,972 $ 6,106 $ 8,620 The amounts attributable to restricted shares in the table above include both equity-classified awards granted in restricted shares and liability-classified awards to be granted in restricted shares. The excess tax benefits recognized above reduced income tax expense. The following table summarizes restricted share activity for the year ended December 31, 2023: Weighted- Average Grant-date Restricted Shares Activity Shares Fair Value Nonvested at January 1, 2023 957,168 $ 89.69 Granted 339,167 84.78 Vested (350,858) 87.75 Forfeited (32,739) 98.90 Nonvested at December 31, 2023 912,738 $ 88.33 The fair value of restricted share awards granted during 2023 was estimated using the closing price on the date of grant. The weighted average grant date fair values of restricted shares granted in 2022 and 2021 were $110.98 per share and $101.48 per share, respectively. The fair values of the restricted shares that vested during the years ended December 31, 2023, 2022, and 2021 were $31.5 million, $49.8 million, and $44.6 million, respectively. As of December 31, 2023, the total unrecognized compensation cost for outstanding restricted shares was $42.9 million. As of December 31, 2023, the weighted-average period over which this unrecognized compensation cost will be recognized is 3.5 years. The following table summarizes activity related to RSU performance awards for the year ended December 31, 2023: Weighted- Average Grant-date Restricted Share Units Activity Share Units Fair Value Nonvested at January 1, 2023 692,781 $ 89.67 Granted 237,820 76.17 Vested (212,065) 96.89 Forfeited (76,748) 69.77 Cancelled — — Nonvested at December 31, 2023 641,788 $ 100.07 The fair value of performance awards granted during 2023 was estimated using the closing price on the date of grant. The weighted average grant date fair values of performance awards granted in 2022 and 2021 were $130.26 per share and $101.04 per share, respectively. The fair value of the performance awards that vested during the years ended December 31, 2023, 2022 and 2021 was $20.5 million, $29.4 million, and $5.6 million, respectively. As of December 31, 2023, the total unrecognized compensation cost for outstanding performance awards was de minimis. As of December 31, 2023, the weighted-average period over which this unrecognized compensation cost will be recognized is 1.5 years. The unrecognized compensation cost is based on the achievement levels that are probable as of December 31, 2023. The following table summarizes stock options activity for the year ended December 31, 2023: Weighted- Weighted- Average Aggregate Average Remaining Intrinsic Exercise Contract Life Value Stock Options Activity Options Price (Years) (in thousands) Outstanding at January 1, 2023 217,825 $ 22.35 Exercised (135,445) 23.97 Outstanding at December 31, 2023 82,380 $ 19.68 $ Exercisable at December 31, 2023 82,380 $ 19.68 1.5 $ 7,524 The total intrinsic value of the stock options exercised during the years ended December 31, 2023, 2022, and 2021 was $8.0 million, $1.1 million, and $17.5 million, respectively. We received no cash from the exercise of options for each of the years ended December 31, 2023, 2022, and 2021. |
EARNINGS PER SHARE AND STOCKHOL
EARNINGS PER SHARE AND STOCKHOLDERS EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY | |
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY | NOTE 11 — 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 years ended December 31, 2023, 2022, and 2021 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 years ended December 31, EPS Calculations (in thousands, except per share amounts) 2023 2022 2021 Calculation of basic EPS Walker & Dunlop net income $ 107,357 $ 213,820 $ 265,762 Less: dividends and undistributed earnings allocated to participating securities 2,752 6,100 8,837 Net income applicable to common stockholders $ 104,605 $ 207,720 $ 256,925 Weighted-average basic shares outstanding 32,697 32,326 31,081 Basic EPS $ 3.20 $ 6.43 $ 8.27 Calculation of diluted EPS Net income applicable to common stockholders $ 104,605 $ 207,720 $ 256,925 Add: reallocation of dividends and undistributed earnings based on assumed conversion 3 41 93 Net income allocated to common stockholders $ 104,608 $ 207,761 $ 257,018 Weighted-average basic shares outstanding 32,697 32,326 31,081 Add: weighted-average diluted non-participating securities 178 361 452 Weighted-average diluted shares outstanding 32,875 32,687 31,533 Diluted EPS $ 3.18 $ 6.36 $ 8.15 The assumed proceeds used for calculating the dilutive impact of restricted stock awards under the treasury method includes the unrecognized compensation costs associated with the awards. For the years ended December 31, 2023, and 2022, 312 thousand and 201 thousand average restricted shares, respectively were excluded from the computation of diluted EPS under the treasury-stock method. An immaterial number of average outstanding options to purchase common stock and average restricted shares were excluded from the computation of diluted EPS under the treasury method for the year ended December 31, 2021 because the effect would have been anti-dilutive (the exercise price of the options or 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). Under the 2020 Equity Incentive Plan (and predecessor plans), subject to the Company’s approval, grantees have the option of electing to satisfy tax withholding obligations at the time of vesting or exercise by allowing the Company to withhold and purchase the shares of stock otherwise issuable to the grantee. For the years ended December 31, 2023, 2022, and 2021, the Company repurchased and retired 130 thousand, 149 thousand, and 150 thousand restricted shares at a weighted average market price of $90.19 , $125.28 , and $109.57 , upon grantee vesting, respectively. For the years ended December 31, 2023 and 2022, the Company repurchased and retired 91 thousand and 90 thousand restricted share units at a weighted average market price of $96.89 and $139.75 , respectively. Stock Repurchase Programs In February 2024, the Company’s Board of Directors approved a new 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, 2024. In February 2023, the Company’s Board of Directors authorized the Company to repurchase up to $75.0 million of its common stock over a 12-month period beginning on February 23, 2023. In 2023, the Company repurchased no shares of its common stock under the 2023 share repurchase program. The Company had $75 million of authorized share repurchase capacity remaining under the 2023 share repurchase program as of December 31, 2023. In 2022, the Company repurchased 109 thousand shares of its common stock under a share repurchase program at a weighted average price of $101.77 per share and immediately retired the shares, reducing stockholders’ equity by $11.1 million. In 2021, the Company did not repurchase any shares of its common stock under a share repurchase program. Dividends In February 2024, our Board of Directors declared a dividend of $0.65 per share for the first quarter of 2024. The dividend will be paid on March 15, 2024 to all holders of record of our restricted and unrestricted common stock as of March 1, 2024. The Term Loan contains direct restrictions to 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. Other Equity-Related Transactions The following non-cash transactions did not impact the amount of cash paid on the Consolidated Statements of Cash Flows. The Company issued $120.6 million of Company stock in connection with acquisitions in 2021, a non-cash transaction. Additionally, in 2023, 2022, and 2021, $3.0 million, $6.6 million, and $9.6 million, respectively, of stock was issued to employees, for which we had an accrued liability prior to the issuance of the award. Upon issuance, the accrued liability was reclassed to APIC, a non-cash transaction. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
INCOME TAXES | NOTE 12—INCOME TAXES Income Tax Expense The Company calculates its provision for federal, state, and international income taxes based on current tax law. The Company began incurring income taxes in the Netherlands in 2022 in connection with the Company’s acquisition of GeoPhy. The reported tax provision differs from the amounts currently receivable or payable because some income and expense items are recognized in different time periods for financial reporting purposes than for income tax purposes. The following is a summary of income tax expense for the years ended December 31, 2023, 2022, and 2021: For the year ended December 31, Components of Income Tax Expense (in thousands) 2023 2022 2021 Current Federal $ 25,712 $ 23,014 $ 40,025 State 8,401 11,065 12,181 International (285) 3,516 — Total current expense $ 33,828 $ 37,595 $ 52,206 Deferred Federal $ 1,250 $ 19,114 $ 26,630 State (434) 3,775 7,592 International 382 (4,450) — Total deferred expense $ 1,198 $ 18,439 $ 34,222 Total income tax expense $ 35,026 $ 56,034 $ 86,428 Under the provisions of Section 162(m) of the Internal Revenue Code, the deductibility of executive compensation is limited to $1 million per year for each named executive officer (“NEO”). Based on the information available as of December 31, 2023, 2022, and 2021, the Company believed that it is more likely than not a significant portion of NEO stock-based compensation book expense will exceed the $1 million limitation in future years when the shares vest, resulting in no tax deductibility for the book expense associated with these compensation agreements and no deferred tax assets. Additionally, for each of the years presented above, significant portions of NEO compensation were above the $1 million limitation, resulting in no tax deductibility for amounts above the $1 million limitation. As discussed in NOTE 7, the Company recognized the Apprise revaluation gain in connection with its acquisition of GeoPhy in 2022. The gain is an unrealized, non-taxable gain, resulting in the reduction to income tax expense by the amount shown in the table below. The following table presents a reconciliation of the statutory federal tax expense to the income tax expense in the accompanying Consolidated Statements of Income: For the year ended December 31, (in thousands) 2023 2022 2021 Statutory federal expense $ 29,021 $ 56,350 $ 73,932 Statutory state income tax expense, net of federal tax benefit 7,097 13,567 16,409 Excess tax benefits, net of federal tax impact (2,972) (6,106) (8,620) Tax benefit of Apprise revaluation gain — (10,329) — Other 1,880 2,552 4,707 Income tax expense $ 35,026 $ 56,034 $ 86,428 Deferred Tax Assets/Liabilities The tax effects of temporary differences between reported earnings and taxable earnings consisted of the following: As of December 31, Components of Deferred Tax Liabilities, Net (in thousands) 2023 2022 Deferred Tax Assets Compensation related $ 433 $ (333) Credit losses 7,604 12,425 Total deferred tax assets $ 8,037 $ 12,092 Deferred Tax Liabilities Mark-to-market of derivatives and loans held for sale $ (5,254) $ (3,583) Mortgage servicing rights related (205,978) (218,767) Acquisition related (1) (37,056) (24,673) Depreciation (7,091) (6,261) Other 1,970 (2,293) Total deferred tax liabilities $ (253,409) $ (255,577) Deferred tax liabilities, net $ (245,372) $ (243,485) (1) Acquisition-related deferred tax liabilities consist of book-to-tax differences associated with basis step ups related to the amortization of goodwill recorded from acquisitions and book-to-tax differences in intangible asset amortization. The Company believes it is more likely than not that it will generate sufficient taxable income in future periods to realize the deferred tax assets. During the year ended December 31, 2023, the Company recognized an immaterial amount of deferred tax assets that are not included as a component of deferred tax expense. Tax Uncertainties The Company periodically assesses its liabilities and contingencies for all periods open to examination by tax authorities based on the latest available information. Where the Company believes it is more likely than not that a tax position will not be sustained, management records its best estimate of the resulting tax liability, including interest and penalties, in the consolidated financial statements. As of December 31, 2023, based on all known facts and circumstances and current tax law, management believes that there are no material tax positions for which it is reasonably possible that the unrecognized tax benefits will materially increase or decrease over the next 12 months, producing, individually or in the aggregate, a material effect on the Company’s results of operations, financial condition, or cash flows. Pillar Two In December 2021, a framework known as Pillar Two was established by a large number of member countries. Pillar Two is designed to ensure large multinational enterprises pay a minimum level of tax on the income arising in each jurisdiction where they operate. Pillar Two will be effective for some countries in 2024 and others in future years. The Company does not believe Pillar Two will have an impact on its tax liabilities as the Company’s corporate income tax rate in each of its jurisdictions it operates in is higher than the minimum thresholds established by Pillar Two. |
SEGMENTS
SEGMENTS | 12 Months Ended |
Dec. 31, 2023 | |
SEGMENTS | |
SEGMENTS | NOTE 13—SEG MENTS Reportable Segments 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 provides a comprehensive range of commercial real estate finance products to our 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’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, and (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 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, such as the acquisition of Alliant, 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 and balances as of and for the years ended December 31, 2023, 2022, and 2021. Segment Results and Total Assets (in thousands) As of and for the year ended December 31, 2023 Revenues CM SAM Corporate Consolidated Loan origination and debt brokerage fees, net $ 232,625 $ 1,784 $ — $ 234,409 Fair value of expected net cash flows from servicing, net 141,917 — — 141,917 Servicing fees — 311,914 — 311,914 Property sales broker fees 53,966 — — 53,966 Investment management fees — 45,381 — 45,381 Net warehouse interest income (expense) (9,497) 3,864 — (5,633) Placement fees and other interest income — 141,374 13,146 154,520 Other revenues 57,755 59,526 685 117,966 Total revenues $ 476,766 $ 563,843 $ 13,831 $ 1,054,440 Expenses Personnel $ 375,450 $ 74,407 $ 64,433 $ 514,290 Amortization and depreciation 4,550 214,978 7,224 226,752 Provision (benefit) for credit losses — (10,452) — (10,452) Interest expense on corporate debt 18,779 42,489 7,208 68,476 Goodwill impairment 62,000 — — 62,000 Fair value adjustments to contingent consideration liabilities (62,500) — — (62,500) Other operating expenses 19,994 28,582 69,101 117,677 Total expenses $ 418,273 $ 350,004 $ 147,966 $ 916,243 Income (loss) from operations $ 58,493 $ 213,839 $ (134,135) $ 138,197 Income tax expense (benefit) 14,824 54,198 (33,996) 35,026 Net income (loss) before noncontrolling interests $ 43,669 $ 159,641 $ (100,139) $ 103,171 Less: net income (loss) from noncontrolling interests 2,489 (6,675) — (4,186) Walker & Dunlop net income (loss) $ 41,180 $ 166,316 $ (100,139) $ 107,357 Total assets $ 1,193,137 2,273,033 586,177 $ 4,052,347 Segment Results and Total Assets (in thousands) As of and for the year ended December 31, 2022 Revenues CM SAM Corporate Consolidated Loan origination and debt brokerage fees, net $ 345,779 $ 2,228 $ — $ 348,007 Fair value of expected net cash flows from servicing, net 191,760 — — 191,760 Servicing fees — 300,191 — 300,191 Property sales broker fees 120,582 — — 120,582 Investment management fees — 71,931 — 71,931 Net warehouse interest income (expense) 9,667 6,110 — 15,777 Placement fees and other interest income — 51,010 1,820 52,830 Other revenues 41,046 75,960 40,669 157,675 Total revenues $ 708,834 $ 507,430 $ 42,489 $ 1,258,753 Expenses Personnel $ 485,958 $ 69,970 $ 51,438 $ 607,366 Amortization and depreciation 3,084 225,515 6,432 235,031 Provision (benefit) for credit losses — (11,978) — (11,978) Interest expense on corporate debt 8,647 23,621 1,965 34,233 Goodwill impairment — — — — Fair value adjustments to contingent consideration liabilities (18,000) 4,488 — (13,512) Other operating expenses 29,817 26,250 86,581 142,648 Total expenses $ 509,506 $ 337,866 $ 146,416 $ 993,788 Income (loss) from operations $ 199,328 $ 169,564 $ (103,927) $ 264,965 Income tax expense (benefit) 42,153 35,859 (21,978) 56,034 Net income (loss) before noncontrolling interests $ 157,175 $ 133,705 $ (81,949) $ 208,931 Less: net income (loss) from noncontrolling interests 1,097 (5,986) — (4,889) Walker & Dunlop net income (loss) $ 156,078 $ 139,691 $ (81,949) $ 213,820 Total assets $ 1,051,437 $ 2,539,013 $ 454,909 $ 4,045,359 As of and for the year ended December 31, 2021 Segment Results and Total Assets Servicing & (in thousands) Capital Asset Markets Management Corporate Consolidated Revenues Loan origination and debt brokerage fees, net $ 440,044 $ 5,970 $ — $ 446,014 Fair value of expected net cash flows from servicing, net 287,145 — — 287,145 Servicing fees — 278,466 — 278,466 Property sales broker fees 119,981 — — 119,981 Investment management fees — 25,637 — 25,637 Net warehouse interest income 14,396 7,712 — 22,108 Placement fees and other interest income — 7,776 374 8,150 Other revenues 20,458 52,916 (1,697) 71,677 Total revenues $ 882,024 $ 378,477 $ (1,323) $ 1,259,178 Expenses Personnel $ 500,052 $ 36,412 $ 67,023 $ 603,487 Amortization and depreciation 2,877 203,118 4,289 210,284 Provision (benefit) for credit losses — (13,287) — (13,287) Interest expense on corporate debt 5,078 1,749 1,154 7,981 Goodwill impairment — — — — Fair value adjustments to contingent consideration liabilities 6,889 — — 6,889 Other operating expenses 19,531 11,401 60,834 91,766 Total expenses $ 534,427 $ 239,393 $ 133,300 $ 907,120 Income (loss) from operations $ 347,597 $ 139,084 $ (134,623) $ 352,058 Income tax expense (benefit) 85,333 34,144 (33,049) 86,428 Net income (loss) before noncontrolling interests $ 262,264 $ 104,940 $ (101,574) $ 265,630 Less: net income (loss) from noncontrolling interests 70 (202) — (132) Walker & Dunlop net income (loss) $ 262,194 $ 105,142 $ (101,574) $ 265,762 Total assets $ 2,263,907 $ 2,430,137 $ 511,945 $ 5,205,989 Concentrations The Company is one of the leading commercial real estate services and finance companies in the United States, with a primary focus on multifamily lending. The Company originates a range of multifamily and other commercial real estate loans that are sold to the Agencies or placed with institutional investors. The Company also services nearly all of the loans it sells to the Agencies and some of the loans that it places with institutional investors. The majority of the Company’s operations involve the delivery and servicing of loan products for its customers through its Capital Markets and Servicing & Asset Management reportable segments, respectively. A single customer represented 34.8% , 32.9% , and 40.1% of total revenues for the years ended December 31, 2023, 2022, and 2021, respectively as reported through the CM and SAM reportable segments. As of both December 31, 2023 and 2022, no one borrower/key principal accounted for more than 3% of our total risk-sharing loan portfolio. An analysis of the product concentrations that impact the Company’s debt financing and servicing revenues is shown in the following tables. This information is based on the distribution of the loans sold or serviced for others. The principal balance of the loans serviced for others, by product, as of December 31, 2023, 2022, and 2021 follows: As of December 31, Loan Servicing Portfolio by Product (in thousands) 2023 2022 2021 Fannie Mae $ 63,699,106 $ 59,226,168 $ 53,401,457 Freddie Mac 39,330,545 37,819,256 37,138,836 Ginnie Mae-HUD 10,460,884 9,868,453 9,889,289 Other 16,980,989 16,219,978 15,270,982 Total $ 130,471,524 $ 123,133,855 $ 115,700,564 The volume of debt financing by product for the years ended December 31, 2023, 2022, and 2021 follows: For the year ended December 31, Debt Financing by Product (in thousands) 2023 2022 2021 Fannie Mae $ 7,021,397 $ 9,950,152 $ 9,301,865 Freddie Mac 4,568,935 6,320,201 6,154,828 Ginnie Mae-HUD 678,889 1,118,014 2,340,699 Brokered 11,714,888 25,878,519 29,670,226 Principal Lending and Investing 218,750 339,098 1,443,502 Total $ 24,202,859 $ 43,605,984 $ 48,911,120 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
LEASES | |
LEASES | N OTE 14—LEASES Right-of-use (“ROU”) assets and lease liabilities associated with the Company’s operating leases are recorded as Other assets and Other liabilities , respectively, in the Consolidated Balance Sheet. As of December 31, 2023, our leases have terms varying in duration, with the longest term ending in 2036. The following table presents information about the Company’s lease arrangements: For year ended December 31, Operating Lease Arrangements (dollars in thousands) 2023 2022 2021 Operating Leases Right-of-use assets $ 76,463 $ 60,830 $ 24,825 Lease liabilities 101,358 79,623 29,523 Weighted-average remaining lease term 9.8 years 10.2 years 4.0 years Weighted-average discount rate 4.0% 2.9% 3.3% Operating Lease Expenses Single lease costs $ 14,150 $ 16,371 $ 9,435 Cash paid for amounts included in the measurement of lease liabilities 12,406 10,093 9,617 Right-of-use assets obtained in exchange for new lease obligations 16,798 54,557 13,215 Maturities of lease liabilities as of December 31, 2023 are presented below (in thousands): Year Ending December 31, 2024 $ 14,552 2025 13,295 2026 13,188 2027 13,243 2028 12,130 Thereafter 56,820 Total lease payments $ 123,228 Less imputed interest (21,870) Total $ 101,358 |
OTHER ASSETS AND LIABILITIES
OTHER ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 2023 | |
OTHER ASSETS AND LIABILITIES | |
OTHER ASSETS AND LIABILITIES | NOTE 15 – OTHER ASSETS AND LIABILITIES The following table is a summary of the major components of other assets as of December 31, 2023 and 2022. As of December 31, Components of Other Assets (in thousands) 2023 2022 Equity-method investments $ 215,375 $ 198,848 Prepaid expenses 89,795 98,587 Right of use asset 76,463 60,830 Property and equipment, net 42,725 33,928 Loans held for investment, net 40,056 200,247 Derivative assets 31,451 17,636 All other 48,592 48,046 Total $ 544,457 $ 658,122 The following table is a summary of the major components of other liabilities as of December 31, 2023 and 2022. As of December 31, Components of Other Liabilities (in thousands) 2023 2022 Accrued expenses $ 123,352 $ 115,878 Contingent consideration liabilities 113,546 200,346 Lease liability 101,358 79,623 Guaranty obligation, net 39,868 43,950 Derivative liabilities 28,247 2,076 All other 113,079 118,200 Total $ 519,450 $ 560,073 |
OTHER REVENUES AND OTHER OPERAT
OTHER REVENUES AND OTHER OPERATING EXPENSES | 12 Months Ended |
Dec. 31, 2023 | |
OTHER REVENUES AND OTHER OPERATING EXPENSES | |
OTHER REVENUES AND OTHER OPERATING EXPENSES | NOTE 16—OTHER REVENUES AND OTHER OPERATING EXPENSES The following table is a summary of the major components of other operating expenses for the years ended December 31, 2023, 2022, and 2021. For the year ended December 31, Components of Other Revenues (in thousands) 2023 2022 2021 Housing market research subscription revenue (1) $ 35,794 $ 21,852 $ 8,744 Syndication and other LIHTC revenue (2) 26,006 36,757 6,706 Assumption and application fees 9,629 9,073 10,811 Prepayment fees 3,547 26,451 40,138 Apprise revaluation gain (3) — 39,641 — All other 42,990 23,901 5,278 Total $ 117,966 $ 157,675 $ 71,677 (1) (2) Syndication and other LIHTC revenue generated from Alliant, which was acquired in 2021. (3) One-time non-cash remeasurement gain of Apprise in 2022 from the GeoPhy acquisition (as discussed in NOTE 7). The following table is a summary of the major components of other operating expenses for the years ended December 31, 2023, 2022, and 2021. For the year ended December 31, Components of Other Operating Expenses (in thousands) 2023 2022 2021 Professional fees $ 27,213 $ 35,428 $ 26,920 Office and software expenses 26,343 24,145 15,056 Rent (1) 18,174 18,832 11,262 Travel and entertainment 12,225 15,742 7,203 Marketing and preferred broker 12,142 14,840 12,526 All other 21,580 33,661 18,799 Total $ 117,677 $ 142,648 $ 91,766 (1) |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 12 Months Ended |
Dec. 31, 2023 | |
VARIABLE INTEREST ENTITIES | |
VARIABLE INTEREST ENTITIES | NOTE 17—VARIABLE INTEREST ENTITIES The Company, through its subsidiary WDAE, formerly known as Alliant Capital, LTD., provides alternative investment management services through the syndication of tax credit funds and 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. The Company’s continuing involvement in the VIEs usually includes either serving as the manager of the VIE or as a majority investor in the VIE with a property developer or manager serving as the manager of the VIE. When the Company determines that it is the primary beneficiary of a material VIE, the Company consolidates the VIE. The primary beneficiary of a VIE is determined as the entity that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance and (ii) exposure to losses or benefits that could potentially be significant to the VIE. When the Company determines that it is not the primary beneficiary, the Company recognizes its investment in the VIE through the equity-method of accounting. The Company regularly assesses the primary beneficiary of the VIE as its involvement and ownership may change over time. Syndication of Tax Credit Funds Walker & Dunlop Affordable Equity (formerly Alliant) forms limited partnership funds (“the funds”) that are VIEs and hold investments in affordable housing projects. The Company identifies and enters into a commitment to invest equity in the limited partnership interests in affordable housing VIEs that own and operate affordable housing properties. The limited partnership interest exposes the Company to economic losses or benefits of the VIE but does not give it the power to direct the activities that most significantly impact the VIE’s economic performance. In such cases, the Company determined it is not the primary beneficiary and recognizes the VIE as an investment and a liability for the unfunded committed capital to the VIE. The Company’s exposure is limited to its contributed capital and remaining unfunded committed capital. The investments are included as Committed investments in tax credit equity, and the unfunded committed capital are included as Commitments to fund investments in tax credit equity in the Consolidated Balance Sheets until they are transferred to the credit fund as described below. The investments and unfunded committed capital are presented in the table below. As part of the syndication of the tax credit fund, the Company capitalizes the funds by raising equity capital commitments from third-party investors. The Company transfers its limited partnership interests in affordable housing partnerships to the funds, where the Company serves as the general partner and manager and holds an insignificant ownership percentage of the funds. As the manager of the funds, the Company has the power to direct the activities that most significantly impact the economic performance of the funds; however, it normally does not have exposure to the economic losses or benefits significant to the VIEs. Accordingly, the Company is not the primary beneficiary of the funds and does not consolidate the VIEs The Company records its general partnership interests as an equity-method investment included in Other assets in the Consolidated Balance Sheets. The Company may purchase an investor’s partnership interest. In these circumstances, the Company assesses whether its new ownership percentage could potentially be significant to the VIE. When the Company determines the new ownership percentage is significant, it consolidates the fund as the Company is the primary beneficiary. As of both December 31, 2023 and 2022, the assets and liabilities of the consolidated funds were immaterial. Joint Development of Affordable Housing Projects The Company enters joint ventures with affordable property developers and/or investors to develop affordable housing projects. The joint ventures’ objectives are to: (1) develop the affordable housing project for syndication into a tax credit fund or (2) develop the affordable housing project for capital appreciation. When the Company develops affordable housing projects to ultimately syndicate the property into a tax credit fund, the Company invests in the joint venture but does not have management rights. The Company has significant exposure to the economic losses or benefits but does not have the power to direct the activities that most significantly impact the VIE’s economic performance; consequently, the Company determined that it is not the primary beneficiary in the VIE and recognizes an equity-method investment in the VIE included in Other assets in the Consolidated Balance Sheets. During 2022, the operating agreements of some of the Company’s joint ventures were amended, resulting in the Company’s gaining the power to direct the activities that most significantly impact the economic performance of the joint ventures; previously, the Company only held rights to receive the significant economic benefits of the joint ventures. The Company reassessed its consolidation conclusions and determined that it was the primary beneficiary, and as a result, consolidated the joint ventures in 2022. The consolidation of these entities Receivables, net Other assets Other liabilities. This non-cash activity did not impact the amount of cash paid on the Consolidated Statements of Cash Flows. When the Company develops affordable housing projects for capital appreciation, the Company actively manages the joint venture and generally has an insignificant ownership percentage compared to third-party investors. The Company has the power to direct the activities that most significantly impact the VIE’s economic performance but does not have exposure to the economic losses or benefits that could be significant to the VIE; therefore, the Company determined it is not the primary beneficiary of the VIE and recognizes an equity-method investment included in Other assets in the Consolidated Balance Sheets. In certain circumstances, the Company may hold a significant ownership percentage and have exposure to significant economic losses or benefits of the VIE. When this occurs, the Company determines it has both the power to direct the activities that most significantly impact the VIE’s economic performance and the exposure to the economic losses or benefits that could be significant to the VIE. The table below presents the assets and liabilities of the Company’s consolidated joint development VIEs included in the Consolidated Balance Sheets: Consolidated VIEs (in thousands) December 31, 2023 December 31, 2022 Assets: Cash and cash equivalents $ 2,841 $ 201 Restricted cash 2,811 1,532 Receivables, net 28,256 33,593 Other Assets 47,249 49,768 Total assets of consolidated VIEs $ 81,157 $ 85,094 Liabilities: Other liabilities $ 53,526 $ 39,148 Total liabilities of consolidated VIEs $ 53,526 $ 39,148 The table below presents the carrying value and classification of the Company’s interests in nonconsolidated VIEs included in the Consolidated Balance Sheets: Nonconsolidated VIEs (in thousands) December 31, 2023 December 31, 2022 Assets Committed investments in tax credit equity $ 154,028 $ 254,154 Other assets: Equity-method investments 60,195 57,981 Total interests in nonconsolidated VIEs $ 214,223 $ 312,135 Liabilities Commitments to fund investments in tax credit equity $ 140,259 $ 239,281 Total commitments to fund nonconsolidated VIEs $ 140,259 $ 239,281 Maximum exposure to losses (1)(2) $ 214,223 $ 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. |
RELATED PARTY TRANSACTION
RELATED PARTY TRANSACTION | 12 Months Ended |
Dec. 31, 2023 | |
RELATED PARTY TRANSACTION | |
RELATED PARTY TRANSACTION | NOTE 18—RELATED PARTY TRANSACTION The Company, through its WDAE subsidiaries, has related party loans with its affordable housing project partners, which include property developers and managers. To facilitate the development of affordable housing projects prior to syndication into a tax credit fund, the Company extends pre-development and working capital loans to its partners in affordable housing project partnerships. The outstanding balance of these loans was $73.1 million and $69.8 million as of December 31, 2023 and 2022, respectively, and the related interest income was immaterial for both the years ended December 31, 2023 and 2022. The balance of these receivables is included as Receivables, net |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation —The consolidated financial statements include the accounts of Walker & Dunlop, Inc., its wholly owned subsidiaries, and its majority owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. The Company consolidates entities in which it has a controlling financial interest based on either the variable interest entity (“VIE”) or the voting interest model. The Company is required to first apply the VIE model to determine whether it holds a variable interest in an entity, and if so, whether the entity is a VIE. If the Company determines it holds a variable interest in a VIE and has a controlling financial interest and therefore is considered the primary beneficiary, the Company consolidates the entity. In instances where the Company holds a variable interest in a VIE but is not the primary beneficiary, the Company uses the equity-method of accounting. 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 on the Consolidated Balance Sheets and the portion of net income not attributable to Walker & Dunlop, Inc. as Net income (loss) from noncontrolling interests in the Consolidated Statements of Income. |
Subsequent Events | Subsequent Events —The Company has evaluated the effects of all events that have occurred subsequent to December 31, 2023. The Company has made certain disclosures in the notes to the consolidated financial statements of events that have occurred subsequent to December 31, 2023, including the discussion below. There have been no other material subsequent events that would require recognition in the consolidated financial statements. The Company is obligated to repurchase loans that are originated for the Agencies’ programs if certain representations and warranties that we provide in connection with the sale of loans through these programs, are breached. In the first quarter of 2024, the Company expects to repurchase a Fannie Mae loan with a UPB of $13.5 million. Based on the information available at this time, the Company does not believe it will incur a material loss associated with this loan. Additionally, the Company received a repurchase request from Freddie Mac related to a loan with a UPB of $11.4 million, and the Company has appealed Freddie Mac's request. In January 2024, Freddie Mac informed the Company that they were considering requesting that it repurchase a second loan with a UPB of $34.8 million, but the Company has not received a formal request to repurchase the loan. The Company is currently evaluating its options to resolve both loans with Freddie Mac, and the Company believes it is likely that it will ultimately repurchase both Freddie Mac loans in 2024 or otherwise indemnify Freddie Mac for any losses it incurs on the loans. With respect to the $11.4 million loan, based on the information available at this time, the Company does not believe it will incur a material loss regardless of the resolution negotiated with Freddie Mac. With respect to the $34.8 million loan, the Company has not yet been given access to the underlying property for inspection and evaluation such that it can properly estimate the amount of any such loss. Based on the information available at this time, the Company believes that the value of the underlying property is likely less than the UPB of the loan. |
Use of Estimates | Use of Estimates —The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses; including the allowance for risk-sharing obligations, initial fair value of capitalized mortgage servicing rights, initial and recurring fair value assessments of contingent consideration, and goodwill impairment, actual results may vary from these estimates. |
Mortgage Servicing Rights | Mortgage Servicing Rights —When a loan is sold and the Company retains the right to service the loan, the derivative asset discussed below is reclassified and capitalized as an individual mortgage servicing right (“MSR”) at fair value. The initial capitalized amount is equal to the estimated fair value of the expected net cash flows associated with servicing the loans, net of the expected cash flows associated with any guaranty obligations. The following describes the principal assumptions used in estimating the fair value of capitalized MSRs. Discount Rate —Depending upon loan type, the discount rate used is management's best estimate of market discount rates. The rates used for loans sold were between 8% and 14% for the years ended December 31, 2023, 2022 and 2021 and varied based on loan type. Estimated Life —The estimated life of the MSRs is derived based upon the stated term of the prepayment protection provisions of the underlying loan and may be reduced by six to 12 months based upon the expiration or reduction of the prepayment provisions prior to the stated maturity date. The Company’s model for MSRs assumes full prepayment of the loan at or near the point when the prepayment provisions expire. The Company’s historical experience is that the prepayment provisions typically do not provide a significant deterrent to a borrower’s paying off the loan within six to 12 months of the expiration of the prepayment provisions. Placement Fees —The estimated earnings rate on escrow accounts associated with the servicing of the loans for the life of the MSR is added to the estimated future cash flows. The assumptions used to estimate the fair value of capitalized MSRs at loan sale are based on internal models and are compared to assumptions used by other market participants periodically. When such comparisons indicate that these assumptions have changed significantly, the Company adjusts its assumptions accordingly. For example, the Company made adjustments to the discount rates in 2021 and escrow earnings rate in 2021, 2022, and 2023 based on observations from other market participants and economic conditions. Subsequent to the initial measurement date, MSRs are amortized using the interest method over the period that servicing income is expected to be received and presented as a component of Amortization and depreciation in the Consolidated Statements of Income. The individual loan-level MSR is written off through a charge to Amortization and depreciation when a loan prepays, defaults, or is probable of default. The Company evaluates all MSRs for impairment quarterly. The predominant risk characteristic affecting the MSRs is prepayment risk, and we do not believe there is sufficient variation within the portfolio to warrant stratification. Therefore, we assess MSR impairment at the portfolio level. The Company engages a third party to assist in determining an estimated fair value of our existing and outstanding MSRs on at least a semi-annual basis. |
Business Combinations | Business Combinations —The Company accounts for business combinations using the acquisition method of accounting, under which the purchase price of the acquisition is allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date. The Company recognizes identifiable assets acquired (including intangible assets) and liabilities (both specific and contingent) assumed at their fair values at the acquisition date. Furthermore, acquisition-related costs, such as due diligence, legal and accounting fees, are not capitalized or applied in determining the fair value of the acquired assets. The excess of the purchase price over the fair value of the assets the liabilities assumed is recognized as goodwill. During the measurement period, the Company records adjustments to the assets acquired and liabilities assumed with corresponding adjustments to goodwill in the reporting period in which the adjustment is identified. These adjustments during the measurement period are recorded to goodwill only in circumstances where the adjustment is related to additional information obtained subsequent to the acquisition about facts and circumstances that existed at the time of the acquisition. After the measurement period, which could be up to one year after the transaction date, subsequent adjustments are recorded to the Company’s Consolidated Statements of Income. |
Goodwill | Goodwill —The Company evaluates goodwill for impairment annually. In addition to the annual impairment evaluation, the Company evaluates at least quarterly whether events or circumstances have occurred in the period subsequent to the annual impairment testing which indicate that it is more likely than not an impairment loss has occurred. The Company’s goodwill is allocated to five reporting units, each of which is a component of either the Capital Markets (“CM”) segment or the Servicing & Asset Management (“SAM”) segment. The Company performs its impairment testing annually as of October 1 for each reporting unit for which goodwill has been allocated. The Company’s October 1, 2023, impairment test consisted of a qualitative assessment for three reporting units as there were no indicators of impairment. For the other two reporting units, the Company performed a quantitative analysis and recognized a total of $62.0 million of goodwill impairment, as described in NOTE 7. |
Allowance for Risk-Sharing Obligations | Allowance for Risk-Sharing Obligations— Substantially all loans sold under the Fannie Mae DUS program contain partial or full risk-sharing guaranties that are based on the performance of the loan serviced in the at-risk servicing portfolio. The Company records an estimate of the loss reserve for the current expected credit losses (“CECL”) for all loans in our Fannie Mae at-risk servicing portfolio and presents this loss reserve as Allowance for risk-sharing obligations on the Consolidated Balance Sheets. Overall Current Expected Credit Losses Approach The Company uses the weighted-average remaining maturity method (“WARM”) for calculating its allowance for risk-sharing obligations, the Company’s liability for the off-balance-sheet credit exposure associated with the Fannie Mae at-risk DUS loans. WARM uses a historical weighted average annual charge-off rate (“historical loss rate”) that contains loss content over multiple vintages and loan terms and is used as a foundation for estimating the CECL reserve. The historical loss rate is applied to the unpaid principal balance (“UPB”) over the contractual term, adjusted for estimated prepayments and amortization to arrive at the CECL reserve for the entire current portfolio as described further below. The Company maximizes the use of historical internal data because the Company has extensive historical data servicing Fannie Mae DUS loans from which to calculate historical loss rates and principal paydown by loan term type for its exposure to credit loss on its homogeneous portfolio of Fannie Mae DUS multifamily loans. Additionally, the Company believes its properties, loss history, and underwriting standards are not similar to public data such as loss histories for loans originated for collateralized mortgage-backed securities conduits. Runoff Rate One of the key inputs into a WARM calculation is the runoff rate, which is the expected rate at which loans in the current portfolio will prepay and amortize in the future. As the loans the Company originates have different original lives and run off over different periods, the Company groups loans by similar origination dates (vintage) and contractual maturity terms for purposes of calculating the runoff rate. The Company originates loans under the DUS program with various terms generally ranging from several years to 15 years ; each of these various loan terms has a different runoff rate. The Company uses its historical runoff rate for each of the different loan term pools as a proxy for the expected runoff rate. The Company believes that borrower behavior and macroeconomic conditions will not deviate significantly from historical performance over the approximately ten-year period in which the Company has compiled the actual loss data. The 10-year period is intended to capture the various cycles of industry performance and provides a period that is long enough to capture sufficient observations of runoff history. In addition, due to the prepayment protection provisions for Fannie Mae DUS loans, the Company has not seen significant volatility in historical prepayment rates due to gradual changes in interest rates and would not expect this to change materially in future periods. The historical annual runoff rate is calculated for each year of a loan’s life for each vintage in the portfolio and aggregated with the calculated runoff rate for each comparable year in every vintage. For example, the annual runoff rate for the first year of loans originated in 2010 is aggregated with the annual runoff rate for the first year of loans originated in 2011, 2012, and so on to calculate the average annual runoff rate for the first year of a loan. This average runoff calculation is performed for each year of a loan’s life for each of the various loan terms to create a matrix of historical average annual runoffs by year for the entire portfolio. The Company segments its current portfolio of at-risk DUS loans outstanding by original loan term type and years remaining and then applies the appropriate historical average runoff rates to calculate the expected remaining balance at the end of each reporting period in the future. For example, for a loan with an original ten-year term and seven years remaining, the Company applies the historical average annual runoff rate for a ten-year loan for year four to arrive at the estimated remaining UPB one year from the current period, the historical average runoff rate for year five to arrive at the estimated remaining UPB two years from the current period, and so on up to the loan’s maturity date. CECL Reserve Calculation Once the Company has calculated the estimated outstanding UPB for each future year until maturity for each loan term type, the Company then applies the historical loss rate (as further described below) to each future year’s estimated UPB. The Company then aggregates the allowance calculated for each year within each loan term type and for all different maturity years to arrive at the CECL reserve for the portfolio. The historical loss rate is calculated using a ten-year look-back period, utilizing the average portfolio balance and settled losses for each year. A ten-year period is used as the Company believes that this period of time includes sufficiently different economic conditions to generate a reasonable estimate of expected results in the future, given the relatively long-term nature of the current portfolio. This approach captures a portion of the adverse impact of the years following the great financial crisis of 2007-2010 because multifamily commercial loans have a lag period from the time of initial distress indications through the timing of loss settlement. The same loss rate is utilized across each loan term type as the Company has not observed any historical or industry-published data to indicate there is any difference in the occurrence probability or loss severity for a loan based on its loan origination term. Reasonable and Supportable Forecast Period The Company currently uses one year for its reasonable and supportable forecast period (the “forecast period”). The Company uses a forecast of unemployment rates, historically a highly correlated indicator for multifamily occupancy rates, and general economic forecasts from third parties to assess what macroeconomic and multifamily market conditions are expected to be like over the coming year. The Company then associates the forecasted conditions with a similar historical period over the past ten years, which could be one or several years, and uses the Company’s average loss rate for that historical period as a basis for the loss rate used for the forecast period. The Company reverts to the historical loss rate over a one-year period on a straight-line basis. For all remaining years until maturity, the Company uses the historical loss rate as described above to estimate losses. The average loss rate from a historical period used for the forecast period may be qualitatively adjusted as necessary if the forecasted macroeconomic and industry conditions differ materially from the historical period. Identification of Collateral-Based Reserves for Defaulted Loans The Company monitors the performance of each risk-sharing loan for events or conditions which may signal a potential default. The Company’s process for identifying which risk-sharing loans may be probable of default consists of an assessment of several qualitative and quantitative factors, including payment status, property financial performance, local real estate market conditions, loan-to-value ratio, debt-service-coverage ratio (“DSCR”), property condition, and financial strength of the borrower or key principal(s). In instances where payment under the guaranty on a specific loan is determined to be probable, the Company separately measures the expected loss through an assessment of the underlying fair value of the asset, disposition costs, and the risk-sharing percentage (the “collateral-based reserve”) through a charge to the provision for risk-sharing obligations, which is a component of Provision (benefit) for credit losses in the Consolidated Statements of Income. These loans are removed from the WARM calculation described above, and the associated loan-specific mortgage servicing right and guaranty obligation are written off. The expected loss on the risk-sharing obligation is dependent on the fair value of the underlying property as the loans are collateral dependent. Historically, initial recognition of a collateral-based reserve occurs at or before a loan becomes 60 days delinquent. The amount of the collateral-based reserve considers historical loss experience, adverse situations affecting individual loans, the estimated disposition value of the underlying collateral, and the level of risk sharing. The estimate of property fair value at initial recognition of the collateral-based reserve is based on appraisals, broker opinions of value, or net operating income and market capitalization rates, depending on the facts and circumstances associated with the loan and underlying collateral. The Company regularly monitors the collateral-based reserves on all applicable loans and updates loss estimates as current information is received. The settlement with Fannie Mae is based on the actual sales price of the property and selling and property preservation costs and considers the Fannie Mae loss-sharing requirements. The maximum amount of the loss the Company absorbs at the time of default is 20% of the origination UPB of the loan. |
Provision (Benefit) for Credit Losses | Provision (Benefit) for Credit Losses— The Company records the income statement impact of the changes in the allowance for loan losses and the allowance for risk-sharing obligations within Provision (benefit) for credit losses in the Consolidated Statements of Income. NOTE 4 contains additional discussion related to the allowance for risk-sharing obligations. Substantially all of the Provision (benefit) for credit losses for the years ended December 31, 2023, 2022, and 2021 is related to the provision (benefit) for risk-sharing obligations, with the other portion attributable to the provision (benefit) for loan losses related to loans held for investment. |
Transfers of Financial Assets | Transfers of Financial Assets—Transfers of financial assets are reported as sales when (i) the transferor surrenders control over those assets, (ii) the transferred financial assets have been legally isolated from the Company’s creditors, (iii) the transferred assets can be pledged or exchanged by the transferee, and (iv) consideration other than beneficial interests in the transferred assets is received in exchange. The transferor is considered to have surrendered control over transferred assets if, and only if, certain conditions are met. The Company determined that all loans sold during the periods presented met these specific conditions and accounted for all transfers of loans held for sale as completed sales, except as otherwise noted. |
Derivative Assets and Liabilities | Derivative Assets and Liabilities —Loan commitments that meet the definition of a derivative are recorded at fair value on the Consolidated Balance Sheets upon the executions of the commitments to originate a loan with a borrower and to sell the loan to an investor, with a corresponding amount recognized as revenue on the Consolidated Statements of Income. The estimated fair value of loan commitments includes (i) the fair value of loan origination fees and premiums on the anticipated sale of the loan, net of co-broker fees (included in derivative assets, a component of Other Assets, on the Consolidated Balance Sheets and as a component of Loan origination and debt brokerage fees, net in the Consolidated Income Statements), (ii) the fair value of the expected net cash flows associated with the servicing of the loan, net of any estimated net future cash flows associated with the guarantee obligation (included in derivative assets, a component of Other Assets, on the Consolidated Balance Sheets and in Fair value of expected net cash flows from servicing, net in the Consolidated Income Statements), and (iii) the effects of interest rate movements between the trade date and balance sheet date. Loan commitments are generally derivative assets but can become derivative liabilities if the effects of the interest rate movement between the trade date and the balance sheet date are greater than the combination of (i) and (ii) above. Forward sale commitments that meet the definition of a derivative are recorded as either derivative assets or derivative liabilities depending on the effects of the interest rate movements between the trade date and the balance sheet date. Adjustments to the fair value are reflected as a component of income within Loan origination and debt brokerage fees, net in the Consolidated Statements of Income. |
Loans Held for Sale | Loans Held for Sale —Loans held for sale represent originated loans that are generally transferred or sold within 60 days from the date that a mortgage loan is funded. The Company elects to measure all originated loans at fair value, unless the Company documents at the time the loan is originated that it will measure the specific loan at the lower of cost or fair value for the life of the loan. Electing to use fair value allows a better offset of the change in fair value of the loan and the change in fair value of the derivative instruments used as economic hedges. During the period prior to its sale, interest income on a loan held for sale is calculated in accordance with the terms of the individual loan. There were no loans held for sale that were valued at the lower of cost or fair value or on a non-accrual status at December 31, 2023 and 2022. |
Co-broker Fees | Co-broker fees, which are netted against Loan origination and debt brokerage fees, net in the Consolidated Statements of Income, were $12.0 million, $17.3 million, and $21.0 million for the years ended December 31, 2023, 2022, and 2021, respectively. |
Share-Based Payment | Share-Based Payment —The Company recognizes compensation costs for all share-based payment awards made to employees and directors, including restricted stock and restricted stock units based on the grant date fair value. Restricted stock awards are granted without cost to the Company’s officers, employees, and non-employee directors. The fair value of the award is calculated as the fair value of the Company’s common stock on the date of grant. Stock option awards were granted to executive officers in the past. The Company has not granted any stock option awards since 2017 and does not expect to issue stock options for the foreseeable future. A small number of vested but unexercised stock options is outstanding as of December 31, 2023. Generally, the Company’s restricted stock awards for its officers and employees vest ratably over a three-year period based solely on continued employment. Restricted stock awards for non-employee directors fully vest after one year . Awards issued to the Company's production personnel sometimes vest over a period greater than three years . The Company offers a performance share plan (“PSP”) principally for the Company’s executives and certain other members of senior management. The performance period for each PSP is three full calendar years beginning on January 1 of the grant year. Participants in the PSP receive restricted stock units (“RSUs”) on the grant date for the PSP in an amount equal to achievement of all performance targets at a maximum level. If the performance targets are met at the end of the performance period and the participant remains employed by the Company, the participant fully vests in the RSUs, which immediately convert to unrestricted shares of common stock. If the performance targets are not met at the maximum level, the participant generally forfeits a portion of the RSUs. Generally, if the participant is no longer employed by the Company, the participant forfeits all of the RSUs. The performance targets for all the PSPs issued by the Company are based on meeting diluted earnings per share, return on equity, and total revenues goals. The Company records compensation expense for the PSP based on the grant-date fair value in an amount proportionate to the service time rendered by the participant and the expected achievement level of the goals. Compensation expense for restricted shares is adjusted for actual forfeitures and is recognized on a straight-line basis, for each separately vesting portion of the award as if the award were in substance multiple awards, over the requisite service period of the award. Share-based compensation is recognized within the income statement as Personnel , the same expense line as the cash compensation paid to the respective employees. |
Statement of Cash Flows | Statement of Cash Flows —The Company records the fair value of premiums and origination fees as a component of the fair value of derivative assets on the loan commitment date and records the related income within Loan origination and debt brokerage fees, net within the Consolidated Statements of Income. The cash for the origination fee is received upon closing of the loan, and the cash for the premium is received upon loan sale, resulting in a timing mismatch of the recognition of income and the receipt of cash in a given period when the derivative or loan held for sale remains outstanding at period end. The Company accounts for this mismatch by recording an adjustment called Change in the fair value of premiums and origination fees within the Consolidated Statements of Cash Flows. The amount of the adjustment reflects a reduction to cash provided by or used in operations for the amount of income recognized upon rate lock (i.e., non-cash income) for derivatives and loans held for sale outstanding at period end and an increase to cash provided by or used in operations for cash received upon loan origination or sale for derivatives and loans held for sale that were outstanding at prior period end. When income recognized upon rate lock is greater than cash received upon loan origination or sale, the adjustment is a negative amount. When income recognized upon rate lock is less than cash received upon loan origination or loan sale, the adjustment is a positive amount. For presentation in the Consolidated Statements of Cash Flows, the Company considers pledged cash and cash equivalents (as detailed in NOTE 9) to be restricted cash and restricted cash equivalents. The following table presents a reconciliation of the total of cash, cash equivalents, restricted cash, and restricted cash equivalents as presented in the Consolidated Statements of Cash Flows to the related captions on the Consolidated Balance Sheets as of December 31, 2023, 2022, 2021, and 2020. December 31, (in thousands) 2023 2022 2021 2020 Cash and cash equivalents $ 328,698 $ 225,949 $ 305,635 $ 321,097 Restricted cash 21,422 17,676 42,812 19,432 Pledged cash and cash equivalents (NOTE 9) 41,283 14,658 44,733 17,473 Total cash, cash equivalents, restricted cash, and restricted cash equivalents $ 391,403 $ 258,283 $ 393,180 $ 358,002 |
Income Taxes | Income Taxes —The Company files income tax returns in the applicable U.S. federal, state, and local jurisdictions and generally is subject to examination by the respective jurisdictions for three to four years from the filing of a tax return. The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. Deferred tax assets are recognized only to the extent that it is more likely than not that they will be realizable based on consideration of available evidence, including future reversals of existing taxable temporary differences, projected future taxable income, and tax planning strategies. The Company had an immaterial accrual for uncertain tax positions as of December 31, 2023 and 2022. |
Net Warehouse Interest Income (Expense) | Net Warehouse Interest Income (Expense)— The Company presents warehouse interest income net of warehouse interest expense. Warehouse interest income is the interest earned from loans held for sale and loans held for investment. Generally, a substantial portion of the Company’s loans is financed with matched borrowings under one of its warehouse facilities. The remaining portion of loans not funded with matched borrowings is financed with the Company’s own cash. Occasionally, the Company also fully funds a small number of loans held for sale or loans held for investment with its own cash. Warehouse interest income is earned on loans held for sale after a loan is closed and before a loan is sold. Warehouse interest income is earned on loans held for investment after a loan is closed and before a loan is repaid. Warehouse interest expense is incurred on borrowings used to fund loans solely while they are held for sale or for investment. The Company had a portfolio of participating interests in loans held for investment that was accounted for as a secured borrowing and paid off at the end of the second quarter of 2021. The Company recognized Net warehouse interest income on the unpaid principal balance of the loans and secured borrowing for the year ended December 31, 2021. The interest income and expense on the secured borrowing, which offset each other and are included in Net warehouse interest income (expenses), was $1.7 million for the year ended December 31, 2021. Included in Net warehouse interest income, (expense) for the three years ended December 31, 2023, 2022, and 2021 are the following components: For the year ended December 31, Components of Net Warehouse Interest Income (Expense) (in thousands) 2023 2022 2021 Warehouse interest income $ 44,705 $ 65,065 $ 54,886 Warehouse interest expense (50,338) (49,288) (32,778) Net warehouse interest income (expense) $ (5,633) $ 15,777 $ 22,108 |
Pledged Securities | Pledged Securities —As collateral against its Fannie Mae risk-sharing obligations (NOTES 4 and 9), certain cash, cash equivalents, and securities have been pledged to the benefit of Fannie Mae to secure the Company's risk-sharing obligations. Substantially all of the balance of Pledged securities, at fair value within the Consolidated Balance Sheets as of December 31, 2023 and 2022 was pledged against Fannie Mae risk-sharing obligations. The Company’s investments included within Pledged securities, at fair value consist primarily of money market funds (cash equivalent) and Agency debt securities. The investments in Agency debt securities consist of multifamily Agency mortgage-backed securities (“Agency MBS”) and are all accounted for as available-for-sale (“AFS”) securities. The Company does not record an allowance for credit losses for its Agency MBS, including those whose fair value is less than amortized cost. Agency MBS carry the guarantee of payment from the Agencies, nor does the Company believe that it is more likely than not that it would be required to sell these investments before recovery of their amortized cost basis, which may be at maturity. The contractual cash flows of Agency MBS are guaranteed by the GSEs, which are government-sponsored enterprises under the conservatorship of the Federal Housing Finance Agency. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost of these securities. |
Contracts with Customers | Contracts with Customers —A majority of the Company’s revenues are derived from the following sources, all of which are excluded from the accounting provisions applicable to contracts with customers: (i) financial instruments, (ii) transfers and servicing, (iii) derivative transactions, and (iv) investments in debt securities/equity-method investments. The remaining portion of revenues is derived from contracts with customers. Other than LIHTC asset management fees as described below, the Company’s contracts with customers generally do not require 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 Company’s contracts with customers is generally not complicated and is generally completed in a short period of time. The Company provides asset management services to investors in low-income housing tax credits funds and earns an asset management fee (“AMF”). The AMF is generally a specified percentage of invested assets in the LIHTC fund. The LIHTC funds invest in low-income housing projects, typically for a period of 10 - 15 years to meet the qualifications for the tax credit benefit. Cash distributions are made from the low-income housing project to the LIHTC fund. These distributions are subject to significant uncertainty as to the amount and timing as they are dependent upon the availability of cash for distribution, operating performance, and liquidity of the low-income housing project investments. Due to this significant uncertainty, the Company considers the contractual AMF to be variable consideration, substantially all of which is constrained. The Company estimates the amount of consideration not subject to the constraint at each quarterly reporting period. The amount of AMF revenue recognized each period is based on an assessment of the projected cash collections expected over the next 12 months. This projection is based on historical distributions and other considerations. The Company recognized asset management fees of $36.7 million and $61.1 million for the years ended December 31, 2023, and December 31, 2022, respectively. The asset management fees for the year ended December 31, 2021, were immaterial as the acquisition of Alliant occurred in December 2021. The AMF receivable was $40.2 million as of December 31, 2023 and $43.0 million as of December 31, 2022. The asset management fee receivable is included in Receivables, net on the Consolidated Balance Sheets, and the AMF revenue is included within Investment management fees in the Consolidated Statements of Income. The following table presents information about the Company’s contracts with customers for the years ended December 31, 2023, 2022, and 2021: Description in thousands 2023 2022 2021 Statement of income line item Certain loan origination fees $ 71,445 $ 157,153 $ 186,986 Loan origination and debt brokerage fees, net Property sales broker fees 53,966 120,582 119,981 Property sales broker fees Investment management fees 45,381 71,931 25,637 Investment management fees Application fees, appraisal revenues, subscription revenues, syndication fees, and other revenues 87,417 80,304 30,920 Other revenues Total revenues derived from contracts with customers $ 258,209 $ 429,970 $ 363,524 |
Loans Held for Investment ("LHFI"), net | Loans Held for Investment, net (“LHFI”) — Loans held for investment are multifamily loans originated by the Company through the Interim Loan Program for properties that currently do not qualify for permanent GSE or HUD (collectively, the “Agencies”) financing. These loans have terms of up to three years and are all interest-only, multifamily loans with similar risk characteristics and no geographic concentration. The loans are carried at their unpaid principal balances, adjusted for net unamortized loan fees and costs, and net of any allowance for loan losses. As of December 31, 2023, LHFI consisted of two loans with an aggregate $40.1 million of unpaid principal balance less an immaterial amount of net unamortized deferred fees and costs and allowance for loans 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 in the Consolidated Financial Statements. The Company did no t have any LHFI that were defaulted and in non-accrual status as of December 31, 2023 compared to one loan held for investment with an unpaid principal balance of $14.7 million and an allowance for loan losses of $5.9 million as of December 31, 2022. During the second quarter of 2023, the Company sold the underlying collateral of the delinquent loan for $8.7 million and wrote off the $6.0 million of collateral-based reserves. The Company had not recorded any interest related to this loan since it went on non-accrual in 2019. The amortized cost basis of the loans as of December 31, 2023 and 2022 was $40.1 million and $191.7 million, respectively. As of December 31, 2023, $14.2 million and $25.9 million of the loans that were current were originated in 2021, and 2019, respectively. |
Guaranty Obligation, net | Guaranty Obligation, net— When a loan is sold under the Fannie Mae DUS program, the Company undertakes an obligation to partially guarantee the performance of the loan. Upon loan sale, a liability for the fair value of the obligation undertaken in issuing the guaranty is recognized and presented as a component of Other liabilities on the Consolidated Balance Sheets. The recognized guaranty obligation is the fair value of the Company’s obligation to stand ready to perform and credit risk over the term of the guaranty. The estimated fair value of the guaranty obligation is based on the present value of the cash flows expected to be paid under the guaranty over the estimated life of the loan discounted using a rate consistent with what is used for the calculation of the mortgage servicing right for each loan. The life of the guaranty obligation is the estimated period over which the Company believes it will be required to stand ready under the guaranty, which is generally the term of the loan. Subsequent to the initial measurement date, the liability is amortized over the life of the guaranty period using the straight-line method as a component of and reduction to Amortization and depreciation in the Consolidated Statements of Income. |
Cash and Cash Equivalents | Cash and Cash Equivalents —The term cash and cash equivalents, as used in the accompanying consolidated financial statements, includes currency on hand, demand deposits with financial institutions, and short-term, highly liquid investments purchased with an original maturity of three months or less. The Company had no cash equivalents, except as described in Pledged Securities above, as of December 31, 2023 and 2022. |
Restricted Cash | Restricted Cash —Restricted cash represents primarily good faith deposits from borrowers. The Company records a corresponding liability for the good faith deposits from borrowers within Other liabilities on the Consolidated Balance Sheets. As of December 31, 2022 only, the balance included cash held in a collection account to be used to fund the payment terms of the Alliant note payable, which was paid off in 2023. |
Net Receivables | Receivables, Net —Receivables, net represents amounts currently due to the Company pursuant to contractual servicing agreements, investor good faith deposits held in escrow by others, notes receivable from the developers of affordable housing projects, asset management fees receivable, and other receivables. Substantially all of these receivables are expected to be collected within a short period of time and are with counterparties with high credit quality (such as the Agencies). Additionally, the Company has not experienced any material credit losses related to these receivables. Consequently, the Company has not recorded an allowance for credit losses associated with its receivables as of December 31, 2023 and 2022. |
Concentrations of Credit Risk | Concentrations of Credit Risk —Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents, loans held for sale, and derivative financial instruments. The Company places the cash and temporary investments with systematically important financial institutions, which are Federal Deposit Insurance Corporation (“FDIC”) insured banks, and certain of the Company’s cash deposits exceed FDIC insurance limits. The Company believes no significant credit risk exists with these financial institutions. The counterparties to the loans held for sale and funding commitments are owners of residential multifamily properties located throughout the United States. Mortgage loans are generally transferred or sold within 60 days from the date that a mortgage loan is funded. There is no material residual counterparty risk with respect to the Company's funding commitments as each potential borrower must make a non-refundable good faith deposit when the funding commitment is executed. The counterparty to the forward sale is Fannie Mae, Freddie Mac, or a broker-dealer that has been determined to be a credit-worthy counterparty by us and our warehouse lenders. There is a risk that the purchase price agreed to by the investor will be reduced in the event of a late delivery. The risk for non-delivery of a loan primarily results from the risk that a borrower does not close on the funding commitment in a timely manner. This risk is generally mitigated by the non-refundable good faith deposit. |
Leases | Leases —In the normal course of business, the Company executes lease arrangements for all of its office space. All such lease arrangements are accounted for as operating leases. The Company initially recognizes a lease liability for the obligation to make lease payments and a right-of-use (“ROU”) asset for the right to use the underlying asset for the lease term. The lease liability is measured at the present value of the lease payments over the lease term. The ROU asset is measured at the lease liability amount, adjusted for lease prepayments, accrued rent, lease incentives received, and the lessee’s initial direct costs. These operating leases do not provide an implicit discount rate; therefore, the Company uses the incremental borrowing rate of its note payable at lease commencement to calculate lease liabilities as the terms on this debt most closely resemble the terms on the Company’s largest leases. The Company’s lease agreements often include options to extend or terminate the lease. Single lease cost related to these lease agreements is recognized on the straight-line basis over the term of the lease, which includes options to extend when it is reasonably certain that such options will be exercised and the Company knows what the lease payments will be during the optional periods. |
Litigation | Litigation —In the ordinary course of business, the Company may be party to various claims and litigation, none of which the Company believes is material. The Company cannot predict the outcome of any pending litigation and may be subject to consequences that could include fines, penalties, and other costs, and the Company’s reputation and business may be impacted. The Company believes that any liability that could be imposed on the Company in connection with the disposition of any pending lawsuits would not have a material adverse effect on its business, results of operations, liquidity, or financial condition. |
Recently Adopted and Recently Announced Accounting Pronouncements | Recently Adopted and Recently Announced Accounting Pronouncements —The Company is currently evaluating Accounting Standards Updates (“ASU”) 2023-07 Segment Reporting and 2023-09 Income Taxes, which have effective dates for fiscal years starting in 2024 and 2025, respectively. The Company believes these ASUs will not materially impact the Company’s consolidated financial statements or disclosures. There were no other recently announced but not yet effective accounting pronouncements issued that have the potential to impact the Company’s consolidated financial statements. The Company did not adopt any new accounting policies during 2023. |
Reclassifications | Reclassifications |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | December 31, (in thousands) 2023 2022 2021 2020 Cash and cash equivalents $ 328,698 $ 225,949 $ 305,635 $ 321,097 Restricted cash 21,422 17,676 42,812 19,432 Pledged cash and cash equivalents (NOTE 9) 41,283 14,658 44,733 17,473 Total cash, cash equivalents, restricted cash, and restricted cash equivalents $ 391,403 $ 258,283 $ 393,180 $ 358,002 |
Schedule of Net Warehouse Interest Income (Expense) | For the year ended December 31, Components of Net Warehouse Interest Income (Expense) (in thousands) 2023 2022 2021 Warehouse interest income $ 44,705 $ 65,065 $ 54,886 Warehouse interest expense (50,338) (49,288) (32,778) Net warehouse interest income (expense) $ (5,633) $ 15,777 $ 22,108 |
Schedule of Contracts with Customers | Description in thousands 2023 2022 2021 Statement of income line item Certain loan origination fees $ 71,445 $ 157,153 $ 186,986 Loan origination and debt brokerage fees, net Property sales broker fees 53,966 120,582 119,981 Property sales broker fees Investment management fees 45,381 71,931 25,637 Investment management fees Application fees, appraisal revenues, subscription revenues, syndication fees, and other revenues 87,417 80,304 30,920 Other revenues Total revenues derived from contracts with customers $ 258,209 $ 429,970 $ 363,524 |
MORTGAGE SERVICING RIGHTS (Tabl
MORTGAGE SERVICING RIGHTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
MORTGAGE SERVICING RIGHTS | |
Schedule of Activity Related to MSRs | For the year ended December 31, Roll Forward of MSRs (in thousands) 2023 2022 Beginning balance $ 975,226 $ 953,845 Additions, following the sale of loan 142,129 244,259 Amortization (199,633) (189,211) Pre-payments and write-offs (10,307) (33,667) Ending balance $ 907,415 $ 975,226 |
Summary of Components of Net Carrying Value of MSRs | Components of MSRs (in thousands) December 31, 2023 December 31, 2022 Gross value $ 1,733,844 $ 1,659,185 Accumulated amortization (826,429) (683,959) Net carrying value $ 907,415 $ 975,226 |
Schedule of Expected Amortization of MSRs | Expected (in thousands) Amortization Year Ending December 31, 2024 $ 191,224 2025 169,310 2026 143,500 2027 122,149 2028 98,344 Thereafter 182,888 Total $ 907,415 |
ALLOWANCE FOR RISK-SHARING OB_2
ALLOWANCE FOR RISK-SHARING OBLIGATIONS AND GUARANTY OBLIGATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
ALLOWANCE FOR RISK-SHARING OBLIGATIONS AND GUARANTY OBLIGATION | |
Summary of Allowance for Risk-Sharing Obligations | For the year ended December 31, Roll Forward of Allowance for Risk-Sharing Obligations (in thousands) 2023 2022 Beginning balance $ 44,057 $ 62,636 Provision (benefit) for risk-sharing obligations (10,448) (13,948) Write-offs (2,008) (4,631) Ending balance $ 31,601 $ 44,057 |
Schedule of CECL Calculation Details and Provision Impact | 2023 CECL Calculation Inputs, Details, and Provision Impact Q1 Q2 Q3 Q4 Total Forecast-period loss rate in basis points 2.3 2.3 2.3 2.4 N/A Reversion-period loss rate in basis points 1.5 1.5 1.5 1.5 N/A Historical loss rate in basis points 0.6 0.6 0.6 0.6 N/A At-risk Fannie Mae servicing portfolio UPB in billions $ 54.5 $ 55.7 $ 57.4 $ 58.5 N/A CECL allowance (in millions) $ 28.7 $ 28.9 $ 31.0 $ 31.6 N/A Provision (benefit) for risk-sharing obligations in millions $ (10.9) $ (0.7) $ 0.6 $ 0.6 $ (10.4) 2022 CECL Calculation Inputs, Details, and Provision Impact Q1 Q2 Q3 Q4 Total Forecast-period loss rate in basis points 3.0 2.2 2.2 2.1 N/A Reversion-period loss rate in basis points 2.0 1.7 1.7 1.7 N/A Historical loss rate in basis points 1.2 1.2 1.2 1.2 N/A At-risk Fannie Mae servicing portfolio UPB in billions $ 49.7 $ 51.2 $ 52.1 $ 54.0 N/A CECL allowance (in millions) $ 42.5 $ 37.7 $ 38.9 $ 39.7 N/A Provision (benefit) for risk-sharing obligations in millions $ (9.4) $ (4.8) $ 1.2 $ (0.9) $ (13.9) 2021 CECL Calculation Inputs, Details, and Provision Impact Q1 Q2 Q3 Q4 Total Forecast-period loss rate in basis points 4.0 3.0 3.0 3.0 N/A Reversion-period loss rate in basis points 2.0 2.0 2.0 2.0 N/A Historical loss rate in basis points 1.8 1.8 1.8 1.8 N/A At-risk Fannie Mae servicing portfolio UPB in billions $ 45.4 $ 45.9 $ 47.0 $ 48.0 N/A CECL allowance (in millions) $ 57.0 $ 52.8 $ 54.0 $ 52.3 N/A Provision (benefit) for risk-sharing obligations in millions $ (10.7) $ (4.3) $ 1.3 $ 1.0 $ (12.7) |
Schedule of Activity Related to Guaranty Obligation | For the year ended December 31, Roll Forward of Guaranty Obligation (in thousands) 2023 2022 Beginning balance $ 43,950 $ 47,378 Additions, following the sale of loan 4,040 6,532 Amortization and write-offs (8,122) (9,960) Ending balance $ 39,868 $ 43,950 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt | |
Schedule of Maturities of Warehouse Notes Payable and Note Payable | Year Ending December 31, Maturities 2024 $ 621,951 2025 8,000 2026 8,000 2027 8,000 2028 754,500 Thereafter — Total $ 1,400,451 |
Warehouse Facilities | |
Debt | |
Schedule of warehouse lines of credit | December 31, 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 $ 88,586 SOFR plus 1.30% Agency Warehouse Facility #2 700,000 300,000 1,000,000 7,500 SOFR plus 1.30% Agency Warehouse Facility #3 600,000 265,000 865,000 177,262 SOFR plus 1.35% Agency Warehouse Facility #4 200,000 225,000 425,000 53,403 SOFR plus 1.30% to 1.35% Agency Warehouse Facility #5 — 1,000,000 1,000,000 42,120 SOFR plus 1.45% Total National Bank Agency Warehouse Facilities $ 1,825,000 $ 2,040,000 $ 3,865,000 $ 368,871 Fannie Mae repurchase agreement, uncommitted line and open maturity — 1,500,000 1,500,000 201,973 Total Agency Warehouse Facilities $ 1,825,000 $ 3,540,000 $ 5,365,000 $ 570,844 December 31, 2022 (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 $ 141,965 SOFR plus 1.30% Agency Warehouse Facility #2 700,000 300,000 1,000,000 102,926 SOFR plus 1.30% Agency Warehouse Facility #3 600,000 265,000 865,000 110,394 SOFR plus 1.35% Agency Warehouse Facility #4 200,000 225,000 425,000 26,079 SOFR plus 1.30% Agency Warehouse Facility #5 — 1,000,000 1,000,000 — SOFR plus 1.45% Total National Bank Agency Warehouse Facilities $ 1,825,000 $ 2,040,000 $ 3,865,000 $ 381,364 Fannie Mae repurchase agreement, uncommitted line and open maturity — 1,500,000 1,500,000 11,350 Total Agency Warehouse Facilities $ 1,825,000 $ 3,540,000 $ 5,365,000 $ 392,714 (1) Interest rate presented does not include the effect of any interest rate floors. |
Notes Payable | |
Debt | |
Schedule of notes payable | (in thousands, unless otherwise specified) December 31, 2023 2022 Interest rate and repayments Term Loan Note Payable Unpaid principal balance $ 588,000 $ 594,000 Quarterly principal payments of $1.5 million; Unamortized debt discount (1,033) (1,270) Interest rate varies - see above for further details Unamortized debt issuance costs (6,177) (7,594) Carrying balance $ 580,790 $ 585,136 Incremental Term Loan Note Payable Unpaid principal balance $ 198,500 $ — Quarterly principal payments of $0.5 million; Unamortized debt discount (3,354) — Interest rate varies - see above for further details Unamortized debt issuance costs (2,578) — Carrying balance $ 192,568 $ — Corporate Debt $ 773,358 $ 585,136 Alliant Note Payable Unpaid principal balance $ — $ 114,546 4.75% Fixed-rate Fair value adjustment (1) — 4,421 Carrying balance $ — $ 118,967 Total Notes Payable Carrying Balance $ 773,358 $ 704,103 (1) Fair value adjustment related to the acquisition of Alliant. |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of Goodwill | e For the year ended December 31, (in thousands) 2023 2022 Roll Forward of Gross Goodwill CM SAM Consolidated (1) CM SAM Consolidated (1) Beginning balance $ 520,191 $ 439,521 $ 959,712 $ 297,416 $ 401,219 $ 698,635 Additions from acquisitions — — — 222,670 — 222,670 Measurement-period and other adjustments 3,998 — 3,998 105 38,302 38,407 Ending gross goodwill balance $ 524,189 $ 439,521 $ 963,710 $ 520,191 $ 439,521 $ 959,712 Roll Forward of Accumulated Goodwill Impairment Beginning balance $ — $ — $ — $ — $ — $ — Impairment 62,000 — 62,000 — — — Ending accumulated goodwill impairment $ 62,000 $ — $ 62,000 $ — $ — $ — Goodwill $ 462,189 $ 439,521 $ 901,710 $ 520,191 $ 439,521 $ 959,712 |
Schedule of Other Intangible Assets | For the year ended December 31, Roll Forward of Other Intangible Assets (in thousands) 2023 2022 Beginning balance $ 198,643 $ 183,904 Additions from acquisitions — 31,000 Amortization (16,668) (16,261) Ending balance $ 181,975 $ 198,643 Components of Other Intangible Assets (in thousands) December 31, 2023 December 31, 2022 Gross value $ 220,682 $ 220,682 Accumulated amortization (38,707) (22,039) Net carrying value $ 181,975 $ 198,643 |
Schedule of Expected Amortization of Other Intangible Assets | Expected (in thousands) Amortization Year Ending December 31, 2024 $ 16,274 2025 16,274 2026 16,274 2027 16,274 2028 16,274 Thereafter 100,605 Total $ 181,975 |
Schedule of Contingent Liability | For the year ended December 31, Roll Forward of Contingent Consideration Liabilities (in thousands) 2023 2022 Beginning balance $ 200,346 $ 125,808 Additions — 117,955 Accretion 1,790 4,642 Fair value adjustments (62,500) (13,512) Payments (26,090) (34,547) Ending balance $ 113,546 $ 200,346 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2023 Assets Loans held for sale $ — $ 594,998 $ — $ 594,998 Pledged securities 41,283 142,798 — 184,081 Derivative assets — — 31,451 31,451 Total $ 41,283 $ 737,796 $ 31,451 $ 810,530 Liabilities Derivative liabilities $ — $ — $ 28,247 $ 28,247 Contingent consideration liabilities — — 113,546 113,546 Total $ — $ — $ 141,793 $ 141,793 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 year ended December 31, Derivative Assets and Liabilities, net (in thousands) 2023 2022 Beginning balance $ 15,560 $ 30,961 Settlements (388,682) (555,168) Realized gains (losses) recorded in earnings (1) 373,122 524,207 Unrealized gains (losses) recorded in earnings (1) 3,204 15,560 Ending balance $ 3,204 $ 15,560 (1) Realized and unrealized gains 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 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 $ 31,451 Discounted cash flow Counterparty credit risk — — Derivative liabilities $ 28,247 Discounted cash flow Counterparty credit risk — — Contingent consideration liabilities $ 113,546 Monte Carlo Simulation Probability of earnout achievement 20% - 100% 48% (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 | December 31, 2023 December 31, 2022 Carrying Fair Carrying Fair (in thousands) Amount Value Amount Value Financial Assets: Cash and cash equivalents $ 328,698 $ 328,698 $ 225,949 $ 225,949 Restricted cash 21,422 21,422 17,676 17,676 Pledged securities 184,081 184,081 157,282 157,282 Loans held for sale 594,998 594,998 396,344 396,344 Loans held for investment, net (1) 40,056 40,139 200,247 200,900 Derivative assets (1) 31,451 31,451 17,636 17,636 Total financial assets $ 1,200,706 $ 1,200,789 $ 1,015,134 $ 1,015,787 Financial Liabilities: Derivative liabilities (2) $ 28,247 $ 28,247 $ 2,076 $ 2,076 Contingent consideration liabilities (2) 113,546 113,546 200,346 200,346 Warehouse notes payable 596,178 596,428 543,447 544,050 Notes payable 773,358 786,500 704,103 708,546 Total financial liabilities $ 1,511,329 $ 1,524,721 $ 1,449,972 $ 1,455,018 (1) Included as a component of Other Assets on the Consolidated Balance Sheets. (2) Included as a component of Other Liabilities on the 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 December 31, 2023 Rate lock commitments $ 463,626 $ 15,908 $ 11,492 $ 27,400 $ 27,400 $ — $ — Forward sale contracts 1,035,964 — (24,196) (24,196) 4,051 (28,247) — Loans held for sale 572,338 9,956 12,704 22,660 — — 22,660 Total $ 25,864 $ — $ 25,864 $ 31,451 $ (28,247) $ 22,660 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) | 12 Months Ended |
Dec. 31, 2023 | |
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES | |
Schedule of Pledged Securities at Fair Value | December 31, Pledged Securities (in thousands) 2023 2022 2021 2020 Restricted cash $ 2,727 $ 5,788 $ 3,779 $ 4,954 Money market funds 38,556 8,870 40,954 12,519 Total pledged cash and cash equivalents $ 41,283 $ 14,658 $ 44,733 $ 17,473 Agency MBS 142,798 142,624 104,263 119,763 Total pledged securities, at fair value $ 184,081 $ 157,282 $ 148,996 $ 137,236 |
Schedule of Investment Information Related to AFS Agency MBS | Fair Value and Amortized Cost of Agency MBS (in thousands) December 31, 2023 December 31, 2022 Fair value $ 142,798 $ 142,624 Amortized cost 143,862 144,801 Total gains for securities with net gains in AOCI 1,036 797 Total losses for securities with net losses in AOCI (2,100) (2,974) Fair value of securities with unrealized losses 103,003 118,565 |
Schedule of Contractual Maturity Information Related to Agency MBS | December 31, 2023 Detail of Agency MBS Maturities (in thousands) Fair Value Amortized Cost Within one year $ — $ — After one year through five years 36,410 36,450 After five years through ten years 85,553 86,051 After ten years 20,835 21,361 Total $ 142,798 $ 143,862 |
SHARE-BASED PAYMENT (Tables)
SHARE-BASED PAYMENT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SHARE-BASED PAYMENT | |
Schedule of stock compensation expense | For the year ended December 31, Components of stock compensation expense (in thousands) 2023 2022 2021 Restricted shares $ 29,452 $ 29,650 $ 25,520 Stock options — — — PSP "RSUs" (1,610) 4,337 11,062 Total stock compensation expense $ 27,842 $ 33,987 $ 36,582 Excess tax benefit recognized $ 2,972 $ 6,106 $ 8,620 |
Schedule of restricted share activity | Weighted- Average Grant-date Restricted Shares Activity Shares Fair Value Nonvested at January 1, 2023 957,168 $ 89.69 Granted 339,167 84.78 Vested (350,858) 87.75 Forfeited (32,739) 98.90 Nonvested at December 31, 2023 912,738 $ 88.33 |
Schedule of restricted share units activity | Weighted- Average Grant-date Restricted Share Units Activity Share Units Fair Value Nonvested at January 1, 2023 692,781 $ 89.67 Granted 237,820 76.17 Vested (212,065) 96.89 Forfeited (76,748) 69.77 Cancelled — — Nonvested at December 31, 2023 641,788 $ 100.07 |
Schedule of stock option activity | Weighted- Weighted- Average Aggregate Average Remaining Intrinsic Exercise Contract Life Value Stock Options Activity Options Price (Years) (in thousands) Outstanding at January 1, 2023 217,825 $ 22.35 Exercised (135,445) 23.97 Outstanding at December 31, 2023 82,380 $ 19.68 $ Exercisable at December 31, 2023 82,380 $ 19.68 1.5 $ 7,524 |
EARNINGS PER SHARE AND STOCKH_2
EARNINGS PER SHARE AND STOCKHOLDERS EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY | |
Schedule of basic and diluted EPS under two-class method | For the years ended December 31, EPS Calculations (in thousands, except per share amounts) 2023 2022 2021 Calculation of basic EPS Walker & Dunlop net income $ 107,357 $ 213,820 $ 265,762 Less: dividends and undistributed earnings allocated to participating securities 2,752 6,100 8,837 Net income applicable to common stockholders $ 104,605 $ 207,720 $ 256,925 Weighted-average basic shares outstanding 32,697 32,326 31,081 Basic EPS $ 3.20 $ 6.43 $ 8.27 Calculation of diluted EPS Net income applicable to common stockholders $ 104,605 $ 207,720 $ 256,925 Add: reallocation of dividends and undistributed earnings based on assumed conversion 3 41 93 Net income allocated to common stockholders $ 104,608 $ 207,761 $ 257,018 Weighted-average basic shares outstanding 32,697 32,326 31,081 Add: weighted-average diluted non-participating securities 178 361 452 Weighted-average diluted shares outstanding 32,875 32,687 31,533 Diluted EPS $ 3.18 $ 6.36 $ 8.15 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
Summary of provision for income taxes | For the year ended December 31, Components of Income Tax Expense (in thousands) 2023 2022 2021 Current Federal $ 25,712 $ 23,014 $ 40,025 State 8,401 11,065 12,181 International (285) 3,516 — Total current expense $ 33,828 $ 37,595 $ 52,206 Deferred Federal $ 1,250 $ 19,114 $ 26,630 State (434) 3,775 7,592 International 382 (4,450) — Total deferred expense $ 1,198 $ 18,439 $ 34,222 Total income tax expense $ 35,026 $ 56,034 $ 86,428 |
Schedule of reconciliation of the statutory federal tax provision to income tax provision | For the year ended December 31, (in thousands) 2023 2022 2021 Statutory federal expense $ 29,021 $ 56,350 $ 73,932 Statutory state income tax expense, net of federal tax benefit 7,097 13,567 16,409 Excess tax benefits, net of federal tax impact (2,972) (6,106) (8,620) Tax benefit of Apprise revaluation gain — (10,329) — Other 1,880 2,552 4,707 Income tax expense $ 35,026 $ 56,034 $ 86,428 |
Schedule of deferred tax assets and liabilities | As of December 31, Components of Deferred Tax Liabilities, Net (in thousands) 2023 2022 Deferred Tax Assets Compensation related $ 433 $ (333) Credit losses 7,604 12,425 Total deferred tax assets $ 8,037 $ 12,092 Deferred Tax Liabilities Mark-to-market of derivatives and loans held for sale $ (5,254) $ (3,583) Mortgage servicing rights related (205,978) (218,767) Acquisition related (1) (37,056) (24,673) Depreciation (7,091) (6,261) Other 1,970 (2,293) Total deferred tax liabilities $ (253,409) $ (255,577) Deferred tax liabilities, net $ (245,372) $ (243,485) (1) Acquisition-related deferred tax liabilities consist of book-to-tax differences associated with basis step ups related to the amortization of goodwill recorded from acquisitions and book-to-tax differences in intangible asset amortization. |
SEGMENTS (Tables)
SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SEGMENTS | |
Schedule of segment results and total assets | Segment Results and Total Assets (in thousands) As of and for the year ended December 31, 2023 Revenues CM SAM Corporate Consolidated Loan origination and debt brokerage fees, net $ 232,625 $ 1,784 $ — $ 234,409 Fair value of expected net cash flows from servicing, net 141,917 — — 141,917 Servicing fees — 311,914 — 311,914 Property sales broker fees 53,966 — — 53,966 Investment management fees — 45,381 — 45,381 Net warehouse interest income (expense) (9,497) 3,864 — (5,633) Placement fees and other interest income — 141,374 13,146 154,520 Other revenues 57,755 59,526 685 117,966 Total revenues $ 476,766 $ 563,843 $ 13,831 $ 1,054,440 Expenses Personnel $ 375,450 $ 74,407 $ 64,433 $ 514,290 Amortization and depreciation 4,550 214,978 7,224 226,752 Provision (benefit) for credit losses — (10,452) — (10,452) Interest expense on corporate debt 18,779 42,489 7,208 68,476 Goodwill impairment 62,000 — — 62,000 Fair value adjustments to contingent consideration liabilities (62,500) — — (62,500) Other operating expenses 19,994 28,582 69,101 117,677 Total expenses $ 418,273 $ 350,004 $ 147,966 $ 916,243 Income (loss) from operations $ 58,493 $ 213,839 $ (134,135) $ 138,197 Income tax expense (benefit) 14,824 54,198 (33,996) 35,026 Net income (loss) before noncontrolling interests $ 43,669 $ 159,641 $ (100,139) $ 103,171 Less: net income (loss) from noncontrolling interests 2,489 (6,675) — (4,186) Walker & Dunlop net income (loss) $ 41,180 $ 166,316 $ (100,139) $ 107,357 Total assets $ 1,193,137 2,273,033 586,177 $ 4,052,347 Segment Results and Total Assets (in thousands) As of and for the year ended December 31, 2022 Revenues CM SAM Corporate Consolidated Loan origination and debt brokerage fees, net $ 345,779 $ 2,228 $ — $ 348,007 Fair value of expected net cash flows from servicing, net 191,760 — — 191,760 Servicing fees — 300,191 — 300,191 Property sales broker fees 120,582 — — 120,582 Investment management fees — 71,931 — 71,931 Net warehouse interest income (expense) 9,667 6,110 — 15,777 Placement fees and other interest income — 51,010 1,820 52,830 Other revenues 41,046 75,960 40,669 157,675 Total revenues $ 708,834 $ 507,430 $ 42,489 $ 1,258,753 Expenses Personnel $ 485,958 $ 69,970 $ 51,438 $ 607,366 Amortization and depreciation 3,084 225,515 6,432 235,031 Provision (benefit) for credit losses — (11,978) — (11,978) Interest expense on corporate debt 8,647 23,621 1,965 34,233 Goodwill impairment — — — — Fair value adjustments to contingent consideration liabilities (18,000) 4,488 — (13,512) Other operating expenses 29,817 26,250 86,581 142,648 Total expenses $ 509,506 $ 337,866 $ 146,416 $ 993,788 Income (loss) from operations $ 199,328 $ 169,564 $ (103,927) $ 264,965 Income tax expense (benefit) 42,153 35,859 (21,978) 56,034 Net income (loss) before noncontrolling interests $ 157,175 $ 133,705 $ (81,949) $ 208,931 Less: net income (loss) from noncontrolling interests 1,097 (5,986) — (4,889) Walker & Dunlop net income (loss) $ 156,078 $ 139,691 $ (81,949) $ 213,820 Total assets $ 1,051,437 $ 2,539,013 $ 454,909 $ 4,045,359 As of and for the year ended December 31, 2021 Segment Results and Total Assets Servicing & (in thousands) Capital Asset Markets Management Corporate Consolidated Revenues Loan origination and debt brokerage fees, net $ 440,044 $ 5,970 $ — $ 446,014 Fair value of expected net cash flows from servicing, net 287,145 — — 287,145 Servicing fees — 278,466 — 278,466 Property sales broker fees 119,981 — — 119,981 Investment management fees — 25,637 — 25,637 Net warehouse interest income 14,396 7,712 — 22,108 Placement fees and other interest income — 7,776 374 8,150 Other revenues 20,458 52,916 (1,697) 71,677 Total revenues $ 882,024 $ 378,477 $ (1,323) $ 1,259,178 Expenses Personnel $ 500,052 $ 36,412 $ 67,023 $ 603,487 Amortization and depreciation 2,877 203,118 4,289 210,284 Provision (benefit) for credit losses — (13,287) — (13,287) Interest expense on corporate debt 5,078 1,749 1,154 7,981 Goodwill impairment — — — — Fair value adjustments to contingent consideration liabilities 6,889 — — 6,889 Other operating expenses 19,531 11,401 60,834 91,766 Total expenses $ 534,427 $ 239,393 $ 133,300 $ 907,120 Income (loss) from operations $ 347,597 $ 139,084 $ (134,623) $ 352,058 Income tax expense (benefit) 85,333 34,144 (33,049) 86,428 Net income (loss) before noncontrolling interests $ 262,264 $ 104,940 $ (101,574) $ 265,630 Less: net income (loss) from noncontrolling interests 70 (202) — (132) Walker & Dunlop net income (loss) $ 262,194 $ 105,142 $ (101,574) $ 265,762 Total assets $ 2,263,907 $ 2,430,137 $ 511,945 $ 5,205,989 |
Schedule of loans serviced for others, by product | As of December 31, Loan Servicing Portfolio by Product (in thousands) 2023 2022 2021 Fannie Mae $ 63,699,106 $ 59,226,168 $ 53,401,457 Freddie Mac 39,330,545 37,819,256 37,138,836 Ginnie Mae-HUD 10,460,884 9,868,453 9,889,289 Other 16,980,989 16,219,978 15,270,982 Total $ 130,471,524 $ 123,133,855 $ 115,700,564 |
Schedule of volume of debt financing by product | For the year ended December 31, Debt Financing by Product (in thousands) 2023 2022 2021 Fannie Mae $ 7,021,397 $ 9,950,152 $ 9,301,865 Freddie Mac 4,568,935 6,320,201 6,154,828 Ginnie Mae-HUD 678,889 1,118,014 2,340,699 Brokered 11,714,888 25,878,519 29,670,226 Principal Lending and Investing 218,750 339,098 1,443,502 Total $ 24,202,859 $ 43,605,984 $ 48,911,120 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
LEASES | |
Schedule of lease information | For year ended December 31, Operating Lease Arrangements (dollars in thousands) 2023 2022 2021 Operating Leases Right-of-use assets $ 76,463 $ 60,830 $ 24,825 Lease liabilities 101,358 79,623 29,523 Weighted-average remaining lease term 9.8 years 10.2 years 4.0 years Weighted-average discount rate 4.0% 2.9% 3.3% Operating Lease Expenses Single lease costs $ 14,150 $ 16,371 $ 9,435 Cash paid for amounts included in the measurement of lease liabilities 12,406 10,093 9,617 Right-of-use assets obtained in exchange for new lease obligations 16,798 54,557 13,215 |
Schedule of maturities of lease liabilities | Year Ending December 31, 2024 $ 14,552 2025 13,295 2026 13,188 2027 13,243 2028 12,130 Thereafter 56,820 Total lease payments $ 123,228 Less imputed interest (21,870) Total $ 101,358 |
OTHER ASSETS AND LIABILITIES (T
OTHER ASSETS AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
OTHER ASSETS AND LIABILITIES | |
Schedule of other assets | As of December 31, Components of Other Assets (in thousands) 2023 2022 Equity-method investments $ 215,375 $ 198,848 Prepaid expenses 89,795 98,587 Right of use asset 76,463 60,830 Property and equipment, net 42,725 33,928 Loans held for investment, net 40,056 200,247 Derivative assets 31,451 17,636 All other 48,592 48,046 Total $ 544,457 $ 658,122 |
Schedule of other liabilities | As of December 31, Components of Other Liabilities (in thousands) 2023 2022 Accrued expenses $ 123,352 $ 115,878 Contingent consideration liabilities 113,546 200,346 Lease liability 101,358 79,623 Guaranty obligation, net 39,868 43,950 Derivative liabilities 28,247 2,076 All other 113,079 118,200 Total $ 519,450 $ 560,073 |
OTHER REVENUES AND OTHER OPER_2
OTHER REVENUES AND OTHER OPERATING EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
OTHER REVENUES AND OTHER OPERATING EXPENSES | |
Summary of major components of other revenues | For the year ended December 31, Components of Other Revenues (in thousands) 2023 2022 2021 Housing market research subscription revenue (1) $ 35,794 $ 21,852 $ 8,744 Syndication and other LIHTC revenue (2) 26,006 36,757 6,706 Assumption and application fees 9,629 9,073 10,811 Prepayment fees 3,547 26,451 40,138 Apprise revaluation gain (3) — 39,641 — All other 42,990 23,901 5,278 Total $ 117,966 $ 157,675 $ 71,677 (1) (2) Syndication and other LIHTC revenue generated from Alliant, which was acquired in 2021. (3) One-time non-cash remeasurement gain of Apprise in 2022 from the GeoPhy acquisition (as discussed in NOTE 7). |
Summary of major components of other operating expenses | For the year ended December 31, Components of Other Operating Expenses (in thousands) 2023 2022 2021 Professional fees $ 27,213 $ 35,428 $ 26,920 Office and software expenses 26,343 24,145 15,056 Rent (1) 18,174 18,832 11,262 Travel and entertainment 12,225 15,742 7,203 Marketing and preferred broker 12,142 14,840 12,526 All other 21,580 33,661 18,799 Total $ 117,677 $ 142,648 $ 91,766 (1) |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Consolidated VIEs | |
Schedule of the carrying value and classification of assets and liabilities of VIEs | Consolidated VIEs (in thousands) December 31, 2023 December 31, 2022 Assets: Cash and cash equivalents $ 2,841 $ 201 Restricted cash 2,811 1,532 Receivables, net 28,256 33,593 Other Assets 47,249 49,768 Total assets of consolidated VIEs $ 81,157 $ 85,094 Liabilities: Other liabilities $ 53,526 $ 39,148 Total liabilities of consolidated VIEs $ 53,526 $ 39,148 |
Nonconsolidated VIEs | |
Schedule of the carrying value and classification of assets and liabilities of VIEs | Nonconsolidated VIEs (in thousands) December 31, 2023 December 31, 2022 Assets Committed investments in tax credit equity $ 154,028 $ 254,154 Other assets: Equity-method investments 60,195 57,981 Total interests in nonconsolidated VIEs $ 214,223 $ 312,135 Liabilities Commitments to fund investments in tax credit equity $ 140,259 $ 239,281 Total commitments to fund nonconsolidated VIEs $ 140,259 $ 239,281 Maximum exposure to losses (1)(2) $ 214,223 $ 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 - Subsequent Events (Details) - Subsequent Event $ in Millions | Mar. 31, 2024 USD ($) |
Fannie Mae DUS Program | |
Subsequent events | |
Unpaid principal balance of loans expected to be repurchased from agency program | $ 13.5 |
Freddie Mac Loan One | |
Subsequent events | |
Unpaid principal balance of loans expected to be repurchased from agency program | 11.4 |
Freddie Mac Loan Two | |
Subsequent events | |
Unpaid principal balance of loans expected to be repurchased from agency program | $ 34.8 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Derivative Assets and Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Mortgage Banking Activities | |||
Co-broker fees | $ 12 | $ 17.3 | $ 21 |
OMSRs | Minimum | |||
Mortgage Banking Activities | |||
Discount rate used for estimated capitalized MSRs (as a percent) | 8% | 8% | 8% |
Reduction in estimated life of originated MSRs | 6 months | ||
OMSRs | Maximum | |||
Mortgage Banking Activities | |||
Discount rate used for estimated capitalized MSRs (as a percent) | 14% | 14% | 14% |
Reduction in estimated life of originated MSRs | 12 months |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) item | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Number of reporting units tested for impairment of goodwill | 5 |
Number of reporting units which did not recognize goodwill impairment | 3 |
Number of reporting units which recognized goodwill impairment | 2 |
Goodwill impairment | $ | $ 62,000 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Allowance for Risk Sharing Obligations (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Debt | |
Reasonable and supportable forecast period used for determining CECL reserves | 1 year |
Period of time rate reverts to historical rate | 1 year |
Fannie Mae DUS program | Maximum | |
Debt | |
Term of targeted debt | 15 years |
Maximum delinquency period of loans at which initial loss recognition occurs | 60 days |
Amount of loss absorbed at time of loan default as a percent of the origination unpaid principal balance | 20% |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Loans Held-for-Sale (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Loans Held-for-Sale | ||
Period of originated loans within which they are transferred or sold | 60 days | |
Loans, non-accrual status | $ 14,700,000 | |
Loans Held for Sale | ||
Loans Held-for-Sale | ||
Period of originated loans within which they are transferred or sold | 60 days | |
Loans held for sale carried at lower of cost or fair value | $ 0 | 0 |
Loans, non-accrual status | $ 0 | $ 0 |
Mortgage Loans | ||
Loans Held-for-Sale | ||
Period of originated loans within which they are transferred or sold | 60 days |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Share-Based Payment (Detail) | 12 Months Ended |
Dec. 31, 2023 | |
Restricted Stock Units (RSUs) | PSP | |
Fair value assumptions, Black-Scholes | |
Vesting period | 3 years |
Restricted Shares | Officers And Employees | |
Fair value assumptions, Black-Scholes | |
Vesting period | 3 years |
Restricted Shares | Non-Employee Directors | |
Fair value assumptions, Black-Scholes | |
Vesting period | 1 year |
Restricted Shares | Production Personnel | Minimum | |
Fair value assumptions, Black-Scholes | |
Vesting period | 3 years |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash Flows (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | ||||
Cash and cash equivalents | $ 328,698 | $ 225,949 | $ 305,635 | $ 321,097 |
Restricted cash | 21,422 | 17,676 | 42,812 | 19,432 |
Total cash, cash equivalents, restricted cash, and restricted cash equivalents | 391,403 | 258,283 | 393,180 | 358,002 |
Total pledged cash and cash equivalents | ||||
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | ||||
Pledged cash and cash equivalents (NOTE 9) | $ 41,283 | $ 14,658 | $ 44,733 | $ 17,473 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Net Warehouse Interest Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net Warehouse Interest Income | |||
Warehouse interest income | $ 44,705 | $ 65,065 | $ 54,886 |
Warehouse interest expense | (50,338) | (49,288) | (32,778) |
Net warehouse interest income (expense) | (5,633) | 15,777 | 22,108 |
Co-broker fees | $ 12,000 | $ 17,300 | 21,000 |
Secured Borrowings | |||
Net Warehouse Interest Income | |||
Net warehouse interest income (expense) | $ 1,700 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contracts with Customers and Asset Management Fees (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Contracts with Customers | |||
Revenue from contracts with customer | $ 258,209 | $ 429,970 | $ 363,524 |
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | Revenues | Revenues | Revenues |
Asset management fees | |||
Asset management fee receivable | $ 40,200 | $ 43,000 | |
Minimum | |||
Asset management fees | |||
Compliance period for properties held in the LIHTC fund | 10 years | ||
Maximum | |||
Asset management fees | |||
Compliance period for properties held in the LIHTC fund | 15 years | ||
Loan Origination Fees | Loan Origination and Debt Brokerage Fees, Net | |||
Contracts with Customers | |||
Revenue from contracts with customer | $ 71,445 | $ 157,153 | $ 186,986 |
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | Revenues | Revenues | Revenues |
Property Sales Broker Fees | |||
Contracts with Customers | |||
Revenue from contracts with customer | $ 53,966 | $ 120,582 | $ 119,981 |
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | Revenues | Revenues | Revenues |
Investment management fees | |||
Contracts with Customers | |||
Revenue from contracts with customer | $ 45,381 | $ 71,931 | $ 25,637 |
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | Revenues | Revenues | Revenues |
Asset Management Fees | |||
Contracts with Customers | |||
Revenue from contracts with customer | $ 36,700 | $ 61,100 | |
Application fees, appraisal revenues, subscription revenues, syndication fees, and other revenues | Other Revenues | |||
Contracts with Customers | |||
Revenue from contracts with customer | $ 87,417 | $ 80,304 | $ 30,920 |
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | Revenues | Revenues | Revenues |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Loans Held-for-Investment, Net (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) 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 | $ 40,100 | $ 206,800 | |
Net unamortized deferred fees and costs | 400 | ||
Financing receivable allowance for credit loss | $ 6,200 | ||
Reasonable and supportable forecast period used for determining CECL reserves | 1 year | ||
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 | 40,100 | $ 191,700 | |
Loans originated in 2021 | 14,200 | ||
Loan originated in 2019 | $ 25,900 | ||
Maximum | |||
Loans Held-for-Investment, Net | |||
Loan term (in years) | 3 years |
MORTGAGE SERVICING RIGHTS - Fai
MORTGAGE SERVICING RIGHTS - Fair Value Disclosures (Detail) - MSRs $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Servicing | |
Fair value of the MSRs | $ 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 | $ 44 |
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 | $ 85 |
MORTGAGE SERVICING RIGHTS - Sch
MORTGAGE SERVICING RIGHTS - Schedule of Activity Related to MSRs (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Mortgage Servicing Rights | ||
Beginning balance | $ 975,226 | |
Ending balance | 907,415 | $ 975,226 |
MSRs | ||
Mortgage Servicing Rights | ||
Beginning balance | 975,226 | 953,845 |
Additions, following the sale of loan | 142,129 | 244,259 |
Amortization | (199,633) | (189,211) |
Pre-payments and write-offs | (10,307) | (33,667) |
Ending balance | $ 907,415 | $ 975,226 |
MORTGAGE SERVICING RIGHTS - Sum
MORTGAGE SERVICING RIGHTS - Summary of Components of Net Carrying Value of Acquired and Originated MSRs (Detail) - MSRs - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Mortgage Servicing Rights Acquired and Originated | ||
Gross value | $ 1,733,844 | $ 1,659,185 |
Accumulated amortization | (826,429) | (683,959) |
Net carrying value | $ 907,415 | $ 975,226 |
MORTGAGE SERVICING RIGHTS - S_2
MORTGAGE SERVICING RIGHTS - Schedule of Expected Amortization of MSRs (Detail) - MSRs - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Future amortization | ||
2024 | $ 191,224 | |
2025 | 169,310 | |
2026 | 143,500 | |
2027 | 122,149 | |
2028 | 98,344 | |
Thereafter | 182,888 | |
Net carrying value | $ 907,415 | $ 975,226 |
MORTGAGE SERVICING RIGHTS - Pre
MORTGAGE SERVICING RIGHTS - Prepayment fees and Other information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Servicing | |||
Placement fees on escrow deposits | $ 127,400 | $ 43,300 | $ 5,600 |
Other revenue | |||
Servicing | |||
Prepayment fees | $ 3,547 | $ 26,451 | $ 40,138 |
Escrow earnings and other interest income | |||
Servicing | |||
Ancillary Fee Income, Servicing Financial Asset, Statement of Income or Comprehensive Income [Extensible Enumeration] | Revenues | Revenues | Revenues |
MSRs | |||
Servicing | |||
Prepayment fees | $ 3,500 | $ 26,500 | $ 40,100 |
Expected amortization period for net carrying value | 6 years 6 months | ||
MSRs | Other revenue | |||
Servicing | |||
Ancillary Fee Income, Servicing Financial Asset, Statement of Income or Comprehensive Income [Extensible Enumeration] | Revenues | Revenues | Revenues |
ALLOWANCE FOR RISK-SHARING OB_3
ALLOWANCE FOR RISK-SHARING OBLIGATIONS AND GUARANTY OBLIGATION - Summary of Allowance for Risk-Sharing Obligations (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2023 USD ($) loan | Dec. 31, 2022 USD ($) loan | Dec. 31, 2021 USD ($) | |
Allowance for Risk-Sharing Contracts | |||||||||||||||
Beginning balance | $ 44,057 | $ 62,636 | $ 44,057 | $ 62,636 | |||||||||||
Provision (benefit) for risk-sharing obligations | $ 600 | $ 600 | $ (700) | $ (10,900) | $ (900) | $ 1,200 | $ (4,800) | $ (9,400) | $ 1,000 | $ 1,300 | $ (4,300) | $ (10,700) | (10,448) | (13,948) | $ (12,700) |
Write-offs | (2,008) | (4,631) | |||||||||||||
Ending balance | 31,601 | 44,057 | $ 62,636 | $ 31,601 | $ 44,057 | $ 62,636 | |||||||||
Number of defaulted loans | loan | 3 | 2 | |||||||||||||
Amount of specific reserves placed on defaulted at risk loans | 2,800 | 4,400 | $ 2,800 | $ 4,400 | |||||||||||
Reversion period used for determining CECL reserves | 1 year | ||||||||||||||
Fannie Mae DUS program | |||||||||||||||
Allowance for Risk-Sharing Contracts | |||||||||||||||
Maximum quantifiable contingent liability associated with guarantees | $ 11,900,000 | $ 11,000,000 | $ 11,900,000 | $ 11,000,000 | |||||||||||
Fannie Mae DUS Program | |||||||||||||||
Allowance for Risk-Sharing Contracts | |||||||||||||||
Weighted average remaining life of the at risk servicing portfolio | 6 years 4 months 24 days | 7 years 2 months 12 days |
ALLOWANCE FOR RISK-SHARING OB_4
ALLOWANCE FOR RISK-SHARING OBLIGATIONS AND GUARANTY OBLIGATION - CECL Provision Impact (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Long-Duration Contracts, Assumptions by Product and Guarantee [Line Items] | |||||||||||||||
Forecast-period loss rate | 0.024 | 0.023 | 0.023 | 0.023 | 0.021 | 0.022 | 0.022 | 0.030 | 0.030 | 0.030 | 0.030 | 0.040 | |||
Reversion-period loss rate | 0.015 | 0.015 | 0.015 | 0.015 | 0.017 | 0.017 | 0.017 | 0.020 | 0.020 | 0.020 | 0.020 | 0.020 | |||
Historical loss rate | 0.006 | 0.006 | 0.006 | 0.006 | 0.012 | 0.012 | 0.012 | 0.012 | 0.018 | 0.018 | 0.018 | 0.018 | |||
CECL allowance | $ 31,600 | $ 31,000 | $ 28,900 | $ 28,700 | $ 39,700 | $ 38,900 | $ 37,700 | $ 42,500 | $ 52,300 | $ 54,000 | $ 52,800 | $ 57,000 | |||
Provision (benefit) for risk-sharing obligations | 600 | 600 | (700) | (10,900) | (900) | 1,200 | (4,800) | (9,400) | 1,000 | 1,300 | (4,300) | (10,700) | $ (10,448) | $ (13,948) | $ (12,700) |
Fannie Mae DUS Program | |||||||||||||||
Long-Duration Contracts, Assumptions by Product and Guarantee [Line Items] | |||||||||||||||
At-risk Fannie Mae servicing portfolio UPB | $ 58,500,000 | $ 57,400,000 | $ 55,700,000 | $ 54,500,000 | $ 54,000,000 | $ 52,100,000 | $ 51,200,000 | $ 49,700,000 | $ 48,000,000 | $ 47,000,000 | $ 45,900,000 | $ 45,400,000 |
ALLOWANCE FOR RISK-SHARING OB_5
ALLOWANCE FOR RISK-SHARING OBLIGATIONS AND GUARANTY OBLIGATION - Schedule of Activity Related to Guaranty Obligation (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
ALLOWANCE FOR RISK-SHARING OBLIGATIONS AND GUARANTY OBLIGATION | ||
Guaranty obligation, net of accumulated amortization - beginning balance | $ 43,950 | $ 47,378 |
Additions, following the sale of loan | 4,040 | 6,532 |
Amortization and write-offs | (8,122) | (9,960) |
Guaranty obligation, net of accumulated amortization - ending balance | $ 39,868 | $ 43,950 |
SERVICING - (Detail)
SERVICING - (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Servicing | |||
Servicing portfolio loans unpaid principal balance | $ 130,471,524 | $ 123,133,855 | $ 115,700,564 |
Loans serviced | |||
Servicing | |||
Servicing portfolio loans unpaid principal balance | 130,500,000 | $ 123,100,000 | |
Custodial deposit accounts | $ 2,700,000 |
DEBT - Summary Information (Det
DEBT - Summary Information (Detail) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) item facility | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Warehouse notes payable | |||
Outstanding Balance | $ 596,178 | $ 537,531 | |
Interest expense | 50,338 | 49,288 | $ 32,778 |
Warehouse Facilities | |||
Warehouse notes payable | |||
Interest expense | 50,300 | 49,300 | 34,500 |
Facility fees | 3,200 | 3,600 | $ 3,800 |
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 | $ 570,844 | 392,714 | |
National Banks | Agency Warehouse Facility | |||
Warehouse notes payable | |||
Number of credit facilities | facility | 5 | ||
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 | 368,871 | 381,364 | |
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 | $ 88,586 | $ 141,965 | |
Maturity date | Aug. 28, 2024 | ||
Advances made as a percentage of the loan balance | 100% | ||
National Banks | Loans Held for Sale | Agency Warehouse Facility #1 | Agency Warehouse Facility | SOFR | |||
Warehouse notes payable | |||
Percentage added to reference rate | 1.30% | 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 | $ 7,500 | $ 102,926 | |
Maturity date | Apr. 12, 2024 | ||
Advances made as a percentage of the loan balance | 100% | ||
National Banks | Loans Held for Sale | Agency Warehouse Facility #2 | Agency Warehouse Facility | SOFR | |||
Warehouse notes payable | |||
Percentage added to reference rate | 1.30% | 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 | $ 177,262 | $ 110,394 | |
Maturity date | May 15, 2024 | ||
Advances made as a percentage of the loan balance | 100% | ||
National Banks | Loans Held for Sale | Agency Warehouse Facility #3 | Agency Warehouse Facility | SOFR | |||
Warehouse notes payable | |||
Percentage added to reference rate | 1.35% | 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 | $ 53,403 | $ 26,079 | |
Maturity date | Jun. 22, 2024 | ||
Advances made as a percentage of the loan balance | 100% | ||
Number of financial covenants updated | item | 1 | ||
National Banks | Loans Held for Sale | Agency Warehouse Facility #4 | Agency Warehouse Facility | SOFR | |||
Warehouse notes payable | |||
Percentage added to reference rate | 1.30% | ||
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 #4 | Agency Warehouse Facility | Facility Committed Amount | SOFR | |||
Warehouse notes payable | |||
Percentage added to reference rate | 1.35% | ||
National Banks | Loans Held for Sale | Agency Warehouse Facility #4 | Agency Warehouse Facility | Facility Uncommitted Amount | SOFR | |||
Warehouse notes payable | |||
Percentage added to reference rate | 1.30% | ||
National Banks | Loans Held for Sale | Agency Warehouse Facility #4, Defaulted FHA Sublimit | Agency Warehouse Facility | |||
Warehouse notes payable | |||
Committed Amount | $ 75,000 | ||
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 | $ 42,120 | ||
Maturity date | Sep. 12, 2024 | ||
Advances made as a percentage of the loan balance | 100% | ||
National Banks | Loans Held for Sale | Agency Warehouse Facility #5 | Agency Warehouse Facility | SOFR | |||
Warehouse notes payable | |||
Percentage added to reference rate | 1.45% | 1.45% | |
National Banks | Loans Held for Investment | Interim Warehouse Facility | |||
Warehouse notes payable | |||
Total Facility Capacity | $ 454,800 | ||
Outstanding Balance | $ 25,600 | ||
National Banks | Loans Held for Investment | Interim Warehouse Facility | Minimum | |||
Warehouse notes payable | |||
Percentage added to reference rate | 1.35% | ||
National Banks | Loans Held for Investment | Interim Warehouse Facility | 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 | $ 201,973 | $ 11,350 | |
Advances made as a percentage of the loan balance | 99% |
DEBT - Notes Payable - Term Not
DEBT - Notes Payable - Term Note Payable (Detail) $ in Thousands | Jan. 12, 2023 USD ($) | Dec. 16, 2021 USD ($) item loan | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Debt | ||||
Unpaid principal balance | $ 1,400,451 | |||
Alliant Note Payable | ||||
Debt | ||||
Unpaid principal balance | $ 114,546 | |||
Term Loan | ||||
Debt | ||||
Unpaid principal balance | 588,000 | $ 594,000 | ||
Incremental Term Loan | ||||
Debt | ||||
Unpaid principal balance | $ 198,500 | |||
Credit Agreement | ||||
Debt | ||||
Number of financial covenants | item | 1 | |||
Credit Agreement | Term Loan | ||||
Debt | ||||
Amount of loan agreement | $ 600,000 | |||
Discount on issue of term loan (as a percent) | 0.25% | |||
Percentage of original principal amount required as quarterly installment | 0.25% | |||
Maturity date | Dec. 16, 2028 | |||
Credit Agreement | Term Loan | Minimum | ||||
Debt | ||||
Number of additional term loans | loan | 1 | |||
Credit Agreement | Term Loan | Maximum | ||||
Debt | ||||
Maximum amount of all incremental term loans | $ 230,000 | |||
Maximum percentage of trailing four-quarter consolidated EBITDA limit for incremental term loan commitments | 100% | |||
Consolidated Corporate Leverage Ratio | 3 | |||
Credit Agreement | Term Loan | SOFR | ||||
Debt | ||||
Percentage added to reference rate | 2.25% | |||
Credit Agreement | Term Loan | SOFR | Minimum | ||||
Debt | ||||
Interest rate floor | 0.50% | |||
Credit Agreement | Incremental Term Loan | ||||
Debt | ||||
Amount of loan agreement | $ 200,000 | |||
Discount on issue of term loan (as a percent) | 2% | |||
Term Loan proceeds used to repay certain existing indebtedness | $ 115,900 |
DEBT - Notes Payable - Summary
DEBT - Notes Payable - Summary (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Debt | ||
Unpaid principal balance | $ 1,400,451 | |
Carrying balance | 773,358 | $ 704,103 |
Corporate Debt | ||
Debt | ||
Carrying balance | 773,358 | 585,136 |
Term Loan | ||
Debt | ||
Quarterly equal installments | 1,500 | |
Unpaid principal balance | 588,000 | 594,000 |
Unamortized debt discount | (1,033) | (1,270) |
Unamortized debt issuance costs | (6,177) | (7,594) |
Carrying balance | $ 580,790 | 585,136 |
Period for amounts drawn and repaid | 60 days | |
Incremental Term Loan | ||
Debt | ||
Quarterly equal installments | $ 500 | |
Unpaid principal balance | 198,500 | |
Unamortized debt discount | (3,354) | |
Unamortized debt issuance costs | (2,578) | |
Carrying balance | $ 192,568 | |
Alliant Note Payable | ||
Debt | ||
Unpaid principal balance | 114,546 | |
Fair value adjustment | 4,421 | |
Carrying balance | $ 118,967 | |
Stated interest rate | 4.75% |
DEBT - Notes Payable - Maturiti
DEBT - Notes Payable - Maturities (Detail) $ in Thousands | Dec. 31, 2023 USD ($) |
DEBT | |
2024 | $ 621,951 |
2025 | 8,000 |
2026 | 8,000 |
2027 | 8,000 |
2028 | 754,500 |
Total | $ 1,400,451 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Gross Goodwill | ||
Beginning balance | $ 959,712 | $ 698,635 |
Additions from acquisitions | 222,670 | |
Measurement-period adjustments | 3,998 | 38,407 |
Ending gross goodwill balance | 963,710 | 959,712 |
Accumulated Goodwill Impairment | ||
Impairment | 62,000 | |
Ending accumulated goodwill impairment | 62,000 | |
Goodwill | 901,710 | 959,712 |
Capital Markets | ||
Gross Goodwill | ||
Beginning balance | 520,191 | 297,416 |
Additions from acquisitions | 222,670 | |
Measurement-period adjustments | 3,998 | 105 |
Ending gross goodwill balance | 524,189 | 520,191 |
Accumulated Goodwill Impairment | ||
Impairment | 62,000 | |
Ending accumulated goodwill impairment | 62,000 | |
Goodwill | 462,189 | 520,191 |
Servicing and Asset Management | ||
Gross Goodwill | ||
Beginning balance | 439,521 | 401,219 |
Additions from acquisitions | 0 | |
Measurement-period adjustments | 0 | 38,302 |
Ending gross goodwill balance | 439,521 | 439,521 |
Accumulated Goodwill Impairment | ||
Impairment | 0 | |
Ending accumulated goodwill impairment | 0 | |
Goodwill | 439,521 | 439,521 |
Corporate | ||
Accumulated Goodwill Impairment | ||
Goodwill | $ 0 | $ 0 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill Narrative (Detail) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | |
Acquisitions | |||
Contingent consideration liabilities | $ 113,546 | $ 200,346 | $ 125,808 |
Gain on remeasurement of equity investment to fair value prior to acquisition of controlling interest | 39,641 | ||
Goodwill recognized | 901,710 | $ 959,712 | |
Goodwill impairment | $ 62,000 | ||
Number of acquisitions during the period | item | 2 | ||
Number of reporting units which recognized goodwill impairment | item | 2 | ||
Maximum | |||
Acquisitions | |||
Contingent consideration liability earnout period | 5 years | ||
Capital Markets | |||
Acquisitions | |||
Goodwill recognized | $ 462,189 | $ 520,191 | |
Goodwill impairment | 62,000 | ||
Apprise | |||
Acquisitions | |||
Total ownership interest | 50% | ||
Apprise | Other Revenues | |||
Acquisitions | |||
Gain on remeasurement of equity investment to fair value prior to acquisition of controlling interest | $ 39,600 | ||
GeoPhy | |||
Acquisitions | |||
Ownership interest acquired | 100% | ||
Contingent consideration liabilities | $ 115,000 | ||
Contingent consideration liability earnout period | 4 years | ||
Maximum earnout of contingent consideration | $ 205,000 | ||
Goodwill recognized | $ 214,000 | ||
GeoPhy | Capital Markets | |||
Acquisitions | |||
Goodwill impairment | $ 62,000 | ||
Number of reporting units allocated goodwill | item | 2 | ||
Number of reporting units which recognized goodwill impairment | item | 2 | ||
Apprise | |||
Acquisitions | |||
Ownership interest acquired | 50% |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Indefinite-lived intangible assets | ||
Indefinite-lived intangible assets | $ 0 | $ 0 |
Other intangible assets | ||
Other intangible assets | ||
Beginning Balance | 198,643 | 183,904 |
Additions from acquisitions | 31,000 | |
Amortization | (16,668) | (16,261) |
Ending balance | 181,975 | 198,643 |
Components of other intangible assets | ||
Gross value | 220,682 | 220,682 |
Accumulated amortization | (38,707) | (22,039) |
Net carrying value | $ 181,975 | $ 198,643 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Expected Amortization of Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Future amortization | |||
weighted average remaining life | 11 years 7 months 6 days | ||
Other intangible assets | |||
Future amortization | |||
2024 | $ 16,274 | ||
2025 | 16,274 | ||
2026 | 16,274 | ||
2027 | 16,274 | ||
2028 | 16,274 | ||
Thereafter | 100,605 | ||
Net carrying value | $ 181,975 | $ 198,643 | $ 183,904 |
GOODWILL AND OTHER INTANGIBLE_7
GOODWILL AND OTHER INTANGIBLE ASSETS - Contingent Consideration Liabilities (Detail) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | |
Contingent consideration liabilities | |||
Beginning balance | $ 200,346 | $ 125,808 | |
Additions | 117,955 | $ 93,304 | |
Accretion | 1,790 | 4,642 | |
Fair value adjustments | (62,500) | (13,512) | |
Payments | (26,090) | (34,547) | |
Ending balance | $ 113,546 | $ 200,346 | $ 125,808 |
Number of contingent consideration liabilities with fair value adjustments made during the period | item | 2 | ||
Stock issued for settlement of contingent liabilities | $ 8,750 | ||
Maximum | |||
Contingent consideration liabilities | |||
Contingent consideration liability earnout period | 5 years |
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 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | |||
Loans held for sale | $ 594,998 | $ 396,344 | |
Pledged securities | 184,081 | 157,282 | |
Derivative assets | 31,451 | 17,636 | |
Liabilities | |||
Derivative liabilities | 28,247 | 2,076 | |
Contingent consideration liabilities | 113,546 | 200,346 | $ 125,808 |
Recurring Basis | |||
Assets | |||
Loans held for sale | 594,998 | 396,344 | |
Pledged securities | 184,081 | 157,282 | |
Derivative assets | 31,451 | 17,636 | |
Total financial assets | 810,530 | 571,262 | |
Liabilities | |||
Derivative liabilities | 28,247 | 2,076 | |
Contingent consideration liabilities | 113,546 | 200,346 | |
Total financial liabilities | 141,793 | 202,422 | |
Level 1 | Recurring Basis | |||
Assets | |||
Pledged securities | 41,283 | 14,658 | |
Total financial assets | 41,283 | 14,658 | |
Level 2 | Recurring Basis | |||
Assets | |||
Loans held for sale | 594,998 | 396,344 | |
Pledged securities | 142,798 | 142,624 | |
Total financial assets | 737,796 | 538,968 | |
Level 3 | Recurring Basis | |||
Assets | |||
Derivative assets | 31,451 | 17,636 | |
Total financial assets | 31,451 | 17,636 | |
Liabilities | |||
Derivative liabilities | 28,247 | 2,076 | |
Contingent consideration liabilities | 113,546 | 200,346 | |
Total financial liabilities | $ 141,793 | $ 202,422 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 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 | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Derivative assets and liabilities, net | ||
Beginning balance | $ 15,560 | $ 30,961 |
Settlements | (388,682) | (555,168) |
Realized gains (losses) recorded in earnings | 373,122 | 524,207 |
Unrealized gains (losses) recorded in earnings | 3,204 | 15,560 |
Ending balance | $ 3,204 | $ 15,560 |
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) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Fair Value Measurements | |||
Derivative assets | $ 31,451,000 | $ 17,636,000 | |
Derivative liabilities | 28,247,000 | 2,076,000 | |
Contingent consideration liabilities | 113,546,000 | 200,346,000 | $ 125,808,000 |
Recurring Basis | |||
Fair Value Measurements | |||
Derivative assets | 31,451,000 | 17,636,000 | |
Derivative liabilities | 28,247,000 | 2,076,000 | |
Contingent consideration liabilities | 113,546,000 | 200,346,000 | |
Recurring Basis | Level 3 | |||
Fair Value Measurements | |||
Derivative assets | 31,451,000 | 17,636,000 | |
Derivative liabilities | 28,247,000 | 2,076,000 | |
Contingent consideration liabilities | 113,546,000 | $ 200,346,000 | |
Recurring Basis | Level 3 | Discounted Cash Flow | Counterparty credit risk | |||
Fair Value Measurements | |||
Derivative assets | 31,451,000 | ||
Derivative liabilities | 28,247,000 | ||
Recurring Basis | Level 3 | Various | |||
Fair Value Measurements | |||
Contingent consideration liabilities | $ 113,546,000 | ||
Recurring Basis | Level 3 | Various | Probability of earnout achievement | Minimum | |||
Fair Value Measurements | |||
Contingent consideration liabilities, Measurement input | 0.20 | ||
Recurring Basis | Level 3 | Various | Probability of earnout achievement | Maximum | |||
Fair Value Measurements | |||
Contingent consideration liabilities, Measurement input | 1 | ||
Recurring Basis | Level 3 | Various | Probability of earnout achievement | Weighted Average | |||
Fair Value Measurements | |||
Contingent consideration liabilities, Measurement input | 0.48 |
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 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Financial assets: | ||||
Cash and cash equivalents | $ 328,698 | $ 225,949 | $ 305,635 | $ 321,097 |
Restricted cash | 21,422 | 17,676 | 42,812 | $ 19,432 |
Pledged securities | 184,081 | 157,282 | ||
Loans held for sale | 594,998 | 396,344 | ||
Loans held for investment, net | 40,056 | 200,247 | ||
Derivative assets | 31,451 | 17,636 | ||
Financial liabilities: | ||||
Derivative liabilities | 28,247 | 2,076 | ||
Contingent consideration liabilities | 113,546 | 200,346 | $ 125,808 | |
Warehouse notes payable | 596,178 | 537,531 | ||
Notes payable | 773,358 | 704,103 | ||
Carrying Amount | ||||
Financial assets: | ||||
Cash and cash equivalents | 328,698 | 225,949 | ||
Restricted cash | 21,422 | 17,676 | ||
Pledged securities | 184,081 | 157,282 | ||
Loans held for sale | 594,998 | 396,344 | ||
Loans held for investment, net | 40,056 | 200,247 | ||
Derivative assets | 31,451 | 17,636 | ||
Total financial assets | 1,200,706 | 1,015,134 | ||
Financial liabilities: | ||||
Derivative liabilities | 28,247 | 2,076 | ||
Contingent consideration liabilities | 113,546 | 200,346 | ||
Warehouse notes payable | 596,178 | 543,447 | ||
Notes payable | 773,358 | 704,103 | ||
Total financial liabilities | 1,511,329 | 1,449,972 | ||
Fair Value | ||||
Financial assets: | ||||
Cash and cash equivalents | 328,698 | 225,949 | ||
Restricted cash | 21,422 | 17,676 | ||
Pledged securities | 184,081 | 157,282 | ||
Loans held for sale | 594,998 | 396,344 | ||
Loans held for investment, net | 40,139 | 200,900 | ||
Derivative assets | 31,451 | 17,636 | ||
Total financial assets | 1,200,789 | 1,015,787 | ||
Financial liabilities: | ||||
Derivative liabilities | 28,247 | 2,076 | ||
Contingent consideration liabilities | 113,546 | 200,346 | ||
Warehouse notes payable | 596,428 | 544,050 | ||
Notes payable | 786,500 | 708,546 | ||
Total financial liabilities | $ 1,524,721 | $ 1,455,018 |
FAIR VALUE MEASUREMENTS - Gener
FAIR VALUE MEASUREMENTS - General information (Detail) | 12 Months Ended |
Dec. 31, 2023 | |
FAIR VALUE MEASUREMENTS | |
Period of originated loans within which they are transferred or sold | 60 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 | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Derivative notional amount and balance sheet location | ||
Estimated Gain on Sale | $ 25,864 | $ 19,189 |
Total Fair Value Adjustment | 25,864 | 19,189 |
Derivative assets | 31,451 | 17,636 |
Derivative Liabilities | (28,247) | (2,076) |
Fair Value Adjustment to Loans Held for Sale | 22,660 | 3,629 |
Forward Sale Contracts | ||
Derivative notional amount and balance sheet location | ||
Notional Amount | 1,035,964 | 769,585 |
Interest Rate Movement | (24,196) | 7,706 |
Total Fair Value Adjustment | (24,196) | 7,706 |
Derivative assets | 4,051 | 9,782 |
Derivative Liabilities | (28,247) | (2,076) |
Rate Lock Commitments | ||
Derivative notional amount and balance sheet location | ||
Notional Amount | 463,626 | 376,870 |
Estimated Gain on Sale | 15,908 | 12,349 |
Interest Rate Movement | 11,492 | (4,495) |
Total Fair Value Adjustment | 27,400 | 7,854 |
Derivative assets | 27,400 | 7,854 |
Loans Held for Sale | ||
Derivative notional amount and balance sheet location | ||
Notional Amount | 572,338 | 392,715 |
Estimated Gain on Sale | 9,956 | 6,840 |
Interest Rate Movement | 12,704 | (3,211) |
Total Fair Value Adjustment | 22,660 | 3,629 |
Fair Value Adjustment to Loans Held for Sale | $ 22,660 | $ 3,629 |
FANNIE MAE COMMITMENTS AND PL_3
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES - Commitments (Detail) - Fannie Mae $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Period of funding for collateral requirement | 48 months |
DUS Risk-Sharing Obligations | |
LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Amount of additional capital required to be funded over the next 48 months | $ 77.1 |
Net worth requirement | 304.8 |
Net worth | 1,000 |
Minimum liquid assets to be maintained to meet operational liquidity requirements | 60.7 |
Operational liquidity | $ 225 |
DUS Risk-Sharing Obligations | Money Market Funds | |
LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Restricted liquidity collateral reduction percentage | 5% |
DUS Risk-Sharing Obligations | 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 | 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 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Pledged securities | ||||
Pledged securities | $ 184,081 | $ 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 | 93,200 | |||
Amortized cost of pledged securities in a continuous unrealized loss position for more than 12 months | 95,300 | |||
Net unrealized loss of pledged securities in a continuous unrealized loss position for more than 12 months | 2,100 | |||
Total pledged cash and cash equivalents | ||||
Pledged securities | ||||
Pledged securities | 41,283 | 14,658 | $ 44,733 | $ 17,473 |
Restricted Cash - Pledged | ||||
Pledged securities | ||||
Pledged securities | 2,727 | 5,788 | 3,779 | 4,954 |
Money Market Funds | ||||
Pledged securities | ||||
Pledged securities | 38,556 | 8,870 | 40,954 | 12,519 |
Agency MBS | ||||
Pledged securities | ||||
Pledged securities | 142,798 | 142,624 | 104,263 | 119,763 |
Asset Pledged as Collateral with Right | Pledged Securities - Fannie Mae DUS Program | ||||
Pledged securities | ||||
Pledged securities | $ 184,081 | $ 157,282 | $ 148,996 | $ 137,236 |
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 | Dec. 31, 2023 | Dec. 31, 2022 |
Investments in Agency debt securities | ||
Fair Value | $ 142,798 | $ 142,624 |
Amortized Cost | 143,862 | 144,801 |
Total gains for securities with net gains in AOCI | 1,036 | 797 |
Total losses for securities with net losses in AOCI | (2,100) | (2,974) |
Fair value of securities with unrealized losses | 103,003 | 118,565 |
Maturities - Fair Value | ||
After one year through five years | 36,410 | |
After five years through ten years | 85,553 | |
After ten years | 20,835 | |
Total | 142,798 | 142,624 |
Maturities - Amortized Cost | ||
After one year through five years | 36,450 | |
After five years through ten years | 86,051 | |
After ten years | 21,361 | |
Total | $ 143,862 | $ 144,801 |
SHARE-BASED PAYMENT - Plan Info
SHARE-BASED PAYMENT - Plan Information (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 shares | Dec. 31, 2023 item shares | Dec. 31, 2022 item shares | Dec. 31, 2021 shares | |
Restricted Stock Units (RSUs) | ||||
Share-Based Payment | ||||
Granted (in shares) | 237,820 | |||
Performance shares vested | 212,065 | |||
2020 Equity Incentive Plan | ||||
Share-Based Payment | ||||
Stock authorized for issuance | 10,500,000 | |||
Number of shares remaining available for grant | 900,000 | |||
PSP | Restricted Stock Units (RSUs) | Officers And Employees | ||||
Share-Based Payment | ||||
Granted (in shares) | 200,000 | 200,000 | 300,000 | |
2020 PSP | ||||
Share-Based Payment | ||||
Number of performance targets achieved at some level | item | 3 | |||
2020 PSP | Restricted Stock Units (RSUs) | ||||
Share-Based Payment | ||||
Performance shares vested | 200,000 | |||
2021 PSP | ||||
Share-Based Payment | ||||
Number of performance targets deemed probable of achievement at some level | item | 3 | |||
2022 PSP | ||||
Share-Based Payment | ||||
Number of performance targets deemed probable of achievement at some level | item | 3 | |||
2023 PSP | ||||
Share-Based Payment | ||||
Number of performance targets deemed probable of achievement at some level | item | 3 |
SHARE-BASED PAYMENT - Compensat
SHARE-BASED PAYMENT - Compensation Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Compensation costs | |||
Share-based compensation | $ 27,842 | $ 33,987 | $ 36,582 |
Excess tax benefit recognized | 2,972 | 6,106 | 8,620 |
Restricted Shares | |||
Compensation costs | |||
Share-based compensation | 29,452 | 29,650 | 25,520 |
PSP | Restricted Stock Units (RSUs) | |||
Compensation costs | |||
Share-based compensation | $ (1,610) | $ 4,337 | $ 11,062 |
SHARE-BASED PAYMENT - Plan Acti
SHARE-BASED PAYMENT - Plan Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted Shares | |||
Restricted Shares - Shares | |||
Nonvested at beginning of period (in shares) | 957,168 | ||
Granted (in shares) | 339,167 | ||
Vested (in shares) | (350,858) | ||
Forfeited (in shares) | (32,739) | ||
Nonvested at end of period (in shares) | 912,738 | 957,168 | |
Restricted Shares - Weighted Average Grant-date Fair Value | |||
Nonvested at beginning of period (in dollars per share) | $ 89.69 | ||
Granted (in dollars per share) | 84.78 | $ 110.98 | $ 101.48 |
Vested (in dollars per share) | 87.75 | ||
Forfeited (in dollars per share) | 98.90 | ||
Nonvested at end of period (in dollars per share) | $ 88.33 | $ 89.69 | |
Additional disclosures | |||
Fair value, vested shares (in dollars) | $ 31,500 | $ 49,800 | $ 44,600 |
Unrecognized compensation | |||
Unrecognized compensation for outstanding restricted shares/units | $ 42,900 | ||
Unrecognized compensation cost, period for recognition | 3 years 6 months | ||
Employee Stock Option | |||
Options | |||
Outstanding at beginning of period (in shares) | 217,825 | ||
Exercised (in shares) | (135,445) | ||
Outstanding at end of period (in shares) | 82,380 | 217,825 | |
Exercisable at end of period (in shares) | 82,380 | ||
Weighted Average Exercise Price | |||
Outstanding at beginning of period (in dollars per share) | $ 22.35 | ||
Exercised (in dollars per share) | 23.97 | ||
Outstanding at end of period (in dollars per share) | 19.68 | $ 22.35 | |
Exercisable at end of period (in dollars per share) | $ 19.68 | ||
Weighted-Average Remaining Contract Life (Years) | |||
Exercisable at end of period (in years) | 1 year 6 months | ||
Aggregate Intrinsic Value | |||
Exercisable at end of period (in dollars) | $ 7,524 | ||
Intrinsic value of options exercised, (in dollars) | 8,000 | $ 1,100 | 17,500 |
Cash received from the exercise of options | $ 0 | $ 0 | $ 0 |
Restricted Stock Units (RSUs) | |||
Restricted Shares - Shares | |||
Nonvested at beginning of period (in shares) | 692,781 | ||
Granted (in shares) | 237,820 | ||
Vested (in shares) | (212,065) | ||
Forfeited (in shares) | (76,748) | ||
Nonvested at end of period (in shares) | 641,788 | 692,781 | |
Restricted Shares - Weighted Average Grant-date Fair Value | |||
Nonvested at beginning of period (in dollars per share) | $ 89.67 | ||
Granted (in dollars per share) | 76.17 | $ 130.26 | $ 101.04 |
Vested (in dollars per share) | 96.89 | ||
Forfeited (in dollars per share) | 69.77 | ||
Nonvested at end of period (in dollars per share) | $ 100.07 | $ 89.67 | |
Additional disclosures | |||
Fair value, vested shares (in dollars) | $ 20,500 | $ 29,400 | $ 5,600 |
Unrecognized compensation | |||
Unrecognized compensation cost, period for recognition | 1 year 6 months |
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 | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Calculation of basic EPS | |||
Net Income (Loss) | $ 107,357 | $ 213,820 | $ 265,762 |
Less: dividends and undistributed earnings allocated to participating securities | 2,752 | 6,100 | 8,837 |
Net income applicable to common stockholders | $ 104,605 | $ 207,720 | $ 256,925 |
Basic weighted-average shares outstanding | 32,697 | 32,326 | 31,081 |
Basic EPS | $ 3.20 | $ 6.43 | $ 8.27 |
Calculation of diluted EPS | |||
Add: reallocation of dividends and undistributed earnings based on assumed conversion | $ 3 | $ 41 | $ 93 |
Net income allocated to common stockholders | $ 104,608 | $ 207,761 | $ 257,018 |
Add: weighted-average diluted non-participating securities | 178 | 361 | 452 |
Weighted average diluted shares outstanding | 32,875 | 32,687 | 31,533 |
Diluted EPS | $ 3.18 | $ 6.36 | $ 8.15 |
Shares outstanding excluded from computation of earnings per share | 312 | 201 |
EARNINGS PER SHARE AND STOCKH_4
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY - Restricted Stock Awards and Share Repurchases (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Feb. 29, 2024 | Feb. 28, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Repurchases of common stock | |||||
Reduction of equity for retirement of repurchased shares | $ 20,511 | $ 42,369 | $ 18,872 | ||
Dividends | |||||
Dividend declared per share | $ 0.65 | ||||
Dividend payment date | Mar. 15, 2024 | ||||
Restricted Shares | |||||
Repurchases of common stock | |||||
Shares repurchased and retired during the period | 130,000 | 149,000 | 150,000 | ||
Weighted average market price of shares repurchased and retired (in dollars per share) | $ 90.19 | $ 125.28 | $ 109.57 | ||
Restricted Stock Units (RSUs) | |||||
Repurchases of common stock | |||||
Shares repurchased and retired during the period | 91,000 | 90,000 | |||
Weighted average market price of shares repurchased and retired (in dollars per share) | $ 96.89 | $ 139.75 | |||
Share Repurchase Program 2024 | Common shares | |||||
Repurchases of common stock | |||||
Share repurchase program, period for repurchases | 12 months | ||||
Share Repurchase Program 2024 | Common shares | Maximum | |||||
Repurchases of common stock | |||||
Repurchase authorization | $ 75,000 | ||||
Share Repurchase Program 2023 | |||||
Repurchases of common stock | |||||
Shares repurchased during the period | 0 | ||||
Authorized share repurchase capacity remaining | $ 75,000 | ||||
Share Repurchase Program 2023 | Common shares | |||||
Repurchases of common stock | |||||
Share repurchase program, period for repurchases | 12 months | ||||
Share Repurchase Program 2023 | Common shares | Maximum | |||||
Repurchases of common stock | |||||
Repurchase authorization | $ 75,000 | ||||
Share Repurchase Program 2022 | |||||
Repurchases of common stock | |||||
Shares repurchased and retired during the period | 109,000 | ||||
Weighted average market price of shares repurchased and retired (in dollars per share) | $ 101.77 | ||||
Reduction of equity for retirement of repurchased shares | $ 11,100 |
EARNINGS PER SHARE AND STOCKH_5
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY - Other Equity Related Transactions (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Acquisitions | |||
Stock issued for settlement of contingent liabilities | $ 8,750 | ||
Employees | |||
Acquisitions | |||
Stock issued for settlement of contingent liabilities | $ 3,000 | $ 6,600 | $ 9,600 |
2021 Acquisitions | |||
Acquisitions | |||
Stock consideration | $ 120,600 |
INCOME TAXES - Provision (Detai
INCOME TAXES - Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current | |||
Federal | $ 25,712 | $ 23,014 | $ 40,025 |
State | 8,401 | 11,065 | 12,181 |
International | (285) | 3,516 | |
Total current expense | 33,828 | 37,595 | 52,206 |
Deferred | |||
Federal | 1,250 | 19,114 | 26,630 |
State | (434) | 3,775 | 7,592 |
International | 382 | (4,450) | |
Total deferred expense | 1,198 | 18,439 | 34,222 |
Income tax expense | $ 35,026 | $ 56,034 | $ 86,428 |
INCOME TAXES - Statutory Reconc
INCOME TAXES - Statutory Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation | |||
Statutory federal expense (35%) | $ 29,021 | $ 56,350 | $ 73,932 |
Statutory state income tax expense, net of federal tax benefit | 7,097 | 13,567 | 16,409 |
Excess tax benefits, net of federal tax impact | (2,972) | (6,106) | (8,620) |
Tax benefit of Apprise revaluation gain | (10,329) | ||
Other | 1,880 | 2,552 | 4,707 |
Income tax expense | $ 35,026 | $ 56,034 | $ 86,428 |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Tax Assets: | ||
Compensation related | $ 433 | $ (333) |
Credit losses | 7,604 | 12,425 |
Total deferred tax assets | 8,037 | 12,092 |
Deferred Tax Liabilities: | ||
Mark-to-market of derivatives and loans held for sale | (5,254) | (3,583) |
Mortgage servicing rights related | (205,978) | (218,767) |
Acquisition related | (37,056) | (24,673) |
Depreciation | (7,091) | (6,261) |
Other | 1,970 | (2,293) |
Total deferred tax liabilities | (253,409) | (255,577) |
Deferred tax liabilities, net | $ (245,372) | $ (243,485) |
SEGMENTS (Details)
SEGMENTS (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) segment | |
Segments | |||
Number of reportable segments | segment | 3 | 3 | 3 |
Revenues | |||
Total revenues | $ 1,054,440 | $ 1,258,753 | $ 1,259,178 |
Expenses | |||
Personnel | 514,290 | 607,366 | 603,487 |
Amortization and depreciation | 226,752 | 235,031 | 210,284 |
Provision (benefit) for credit losses | (10,452) | (11,978) | (13,287) |
Interest expense on corporate debt | 68,476 | 34,233 | 7,981 |
Goodwill impairment | 62,000 | ||
Fair value adjustments to contingent consideration liabilities | (62,500) | (13,512) | 6,889 |
Other operating expenses | 117,677 | 142,648 | 91,766 |
Total expenses | 916,243 | 993,788 | 907,120 |
Income from operations | 138,197 | 264,965 | 352,058 |
income tax expense (benefit) | 35,026 | 56,034 | 86,428 |
Net income before noncontrolling interests | 103,171 | 208,931 | 265,630 |
Net income (loss) from noncontrolling interests | (4,186) | (4,889) | (132) |
Walker & Dunlop net income | 107,357 | 213,820 | 265,762 |
Total assets | 4,052,347 | 4,045,359 | 5,205,989 |
Loan origination and debt brokerage fees, net | |||
Revenues | |||
Total revenues | 234,409 | 348,007 | 446,014 |
Fair value of expected net cash flows from servicing, net | |||
Revenues | |||
Total revenues | 141,917 | 191,760 | 287,145 |
Servicing fees | |||
Revenues | |||
Total revenues | 311,914 | 300,191 | 278,466 |
Property sales broker fees | |||
Revenues | |||
Total revenues | 53,966 | 120,582 | 119,981 |
Investment management fees | |||
Revenues | |||
Total revenues | 45,381 | 71,931 | 25,637 |
Net warehouse interest income (expense) | |||
Revenues | |||
Total revenues | (5,633) | 15,777 | 22,108 |
Placement fees and other interest income | |||
Revenues | |||
Total revenues | 154,520 | 52,830 | 8,150 |
Other revenue | |||
Revenues | |||
Total revenues | 117,966 | 157,675 | 71,677 |
Capital Markets | |||
Expenses | |||
Goodwill impairment | 62,000 | ||
Servicing and Asset Management | |||
Expenses | |||
Goodwill impairment | 0 | ||
Operating Segments | Capital Markets | |||
Revenues | |||
Total revenues | 476,766 | 708,834 | 882,024 |
Expenses | |||
Personnel | 375,450 | 485,958 | 500,052 |
Amortization and depreciation | 4,550 | 3,084 | 2,877 |
Interest expense on corporate debt | 18,779 | 8,647 | 5,078 |
Goodwill impairment | 62,000 | ||
Fair value adjustments to contingent consideration liabilities | (62,500) | (18,000) | 6,889 |
Other operating expenses | 19,994 | 29,817 | 19,531 |
Total expenses | 418,273 | 509,506 | 534,427 |
Income from operations | 58,493 | 199,328 | 347,597 |
income tax expense (benefit) | 14,824 | 42,153 | 85,333 |
Net income before noncontrolling interests | 43,669 | 157,175 | 262,264 |
Net income (loss) from noncontrolling interests | 2,489 | 1,097 | 70 |
Walker & Dunlop net income | 41,180 | 156,078 | 262,194 |
Total assets | 1,193,137 | 1,051,437 | 2,263,907 |
Operating Segments | Capital Markets | Loan origination and debt brokerage fees, net | |||
Revenues | |||
Total revenues | 232,625 | 345,779 | 440,044 |
Operating Segments | Capital Markets | Fair value of expected net cash flows from servicing, net | |||
Revenues | |||
Total revenues | 141,917 | 191,760 | 287,145 |
Operating Segments | Capital Markets | Property sales broker fees | |||
Revenues | |||
Total revenues | 53,966 | 120,582 | 119,981 |
Operating Segments | Capital Markets | Net warehouse interest income (expense) | |||
Revenues | |||
Total revenues | (9,497) | 9,667 | 14,396 |
Operating Segments | Capital Markets | Other revenue | |||
Revenues | |||
Total revenues | 57,755 | 41,046 | 20,458 |
Operating Segments | Servicing and Asset Management | |||
Revenues | |||
Total revenues | 563,843 | 507,430 | 378,477 |
Expenses | |||
Personnel | 74,407 | 69,970 | 36,412 |
Amortization and depreciation | 214,978 | 225,515 | 203,118 |
Provision (benefit) for credit losses | (10,452) | (11,978) | (13,287) |
Interest expense on corporate debt | 42,489 | 23,621 | 1,749 |
Fair value adjustments to contingent consideration liabilities | 4,488 | ||
Other operating expenses | 28,582 | 26,250 | 11,401 |
Total expenses | 350,004 | 337,866 | 239,393 |
Income from operations | 213,839 | 169,564 | 139,084 |
income tax expense (benefit) | 54,198 | 35,859 | 34,144 |
Net income before noncontrolling interests | 159,641 | 133,705 | 104,940 |
Net income (loss) from noncontrolling interests | (6,675) | (5,986) | (202) |
Walker & Dunlop net income | 166,316 | 139,691 | 105,142 |
Total assets | 2,273,033 | 2,539,013 | 2,430,137 |
Operating Segments | Servicing and Asset Management | Loan origination and debt brokerage fees, net | |||
Revenues | |||
Total revenues | 1,784 | 2,228 | 5,970 |
Operating Segments | Servicing and Asset Management | Servicing fees | |||
Revenues | |||
Total revenues | 311,914 | 300,191 | 278,466 |
Operating Segments | Servicing and Asset Management | Investment management fees | |||
Revenues | |||
Total revenues | 45,381 | 71,931 | 25,637 |
Operating Segments | Servicing and Asset Management | Net warehouse interest income (expense) | |||
Revenues | |||
Total revenues | 3,864 | 6,110 | 7,712 |
Operating Segments | Servicing and Asset Management | Placement fees and other interest income | |||
Revenues | |||
Total revenues | 141,374 | 51,010 | 7,776 |
Operating Segments | Servicing and Asset Management | Other revenue | |||
Revenues | |||
Total revenues | 59,526 | 75,960 | 52,916 |
Operating Segments | Corporate | |||
Revenues | |||
Total revenues | 13,831 | 42,489 | (1,323) |
Expenses | |||
Personnel | 64,433 | 51,438 | 67,023 |
Amortization and depreciation | 7,224 | 6,432 | 4,289 |
Interest expense on corporate debt | 7,208 | 1,965 | 1,154 |
Other operating expenses | 69,101 | 86,581 | 60,834 |
Total expenses | 147,966 | 146,416 | 133,300 |
Income from operations | (134,135) | (103,927) | (134,623) |
income tax expense (benefit) | (33,996) | (21,978) | (33,049) |
Net income before noncontrolling interests | (100,139) | (81,949) | (101,574) |
Walker & Dunlop net income | (100,139) | (81,949) | (101,574) |
Total assets | 586,177 | 454,909 | 511,945 |
Operating Segments | Corporate | Placement fees and other interest income | |||
Revenues | |||
Total revenues | 13,146 | 1,820 | 374 |
Operating Segments | Corporate | Other revenue | |||
Revenues | |||
Total revenues | $ 685 | $ 40,669 | $ (1,697) |
SEGMENTS - Concentrations (Deta
SEGMENTS - Concentrations (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) borrower | Dec. 31, 2022 USD ($) borrower | Dec. 31, 2021 USD ($) | |
Product concentration | |||
Maximum borrower/key principal exposure benchmark (as a percent) | 3% | 3% | |
Servicing portfolio loans unpaid principal balance | $ 130,471,524 | $ 123,133,855 | $ 115,700,564 |
Debt financing volume | 24,202,859 | 43,605,984 | 48,911,120 |
Fannie Mae DUS Program | |||
Product concentration | |||
Servicing portfolio loans unpaid principal balance | 63,699,106 | 59,226,168 | 53,401,457 |
Debt financing volume | 7,021,397 | 9,950,152 | 9,301,865 |
Freddie Mac | |||
Product concentration | |||
Servicing portfolio loans unpaid principal balance | 39,330,545 | 37,819,256 | 37,138,836 |
Debt financing volume | 4,568,935 | 6,320,201 | 6,154,828 |
Ginnie Mae-HUD | |||
Product concentration | |||
Servicing portfolio loans unpaid principal balance | 10,460,884 | 9,868,453 | 9,889,289 |
Debt financing volume | 678,889 | 1,118,014 | 2,340,699 |
Brokered | |||
Product concentration | |||
Debt financing volume | 11,714,888 | 25,878,519 | 29,670,226 |
Principal Lending and Investing | |||
Product concentration | |||
Debt financing volume | 218,750 | 339,098 | 1,443,502 |
Other | |||
Product concentration | |||
Servicing portfolio loans unpaid principal balance | $ 16,980,989 | $ 16,219,978 | $ 15,270,982 |
Revenue | Customer Concentration | Customer 1 | |||
Product concentration | |||
Percent of revenue | 34.80% | 32.90% | 40.10% |
Revenue | Risk-sharing Concentration | |||
Product concentration | |||
Number of borrower/key principals exceeding the risk-sharing benchmark | borrower | 0 | 0 |
LEASES - Operating Leases (Deta
LEASES - Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Leases | |||
Operating lease right-of-use assets | $ 76,463 | $ 60,830 | $ 24,825 |
Operating lease, right-of-use asset, Statement of Financial Position | Other assets | Other assets | Other assets |
Operating lease liabilities | $ 101,358 | $ 79,623 | $ 29,523 |
Operating lease liability, Statement of Financial Position | Other liabilities | Other liabilities | Other liabilities |
Operating leases, weighted average remaining lease term | 9 years 9 months 18 days | 10 years 2 months 12 days | 4 years |
Operating lease, weighted average discount rate (as a percent) | 4% | 2.90% | 3.30% |
Operating Lease Expense | |||
Single lease cost | $ 14,150 | $ 16,371 | $ 9,435 |
Cash paid for amounts included in the measurement of lease liabilities | 12,406 | 10,093 | 9,617 |
ROU assets obtained in exchange for new lease obligations | $ 16,798 | $ 54,557 | $ 13,215 |
LEASES - Future Operating Lease
LEASES - Future Operating Lease Commitments (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Maturities of lease liabilities | |||
2024 | $ 14,552 | ||
2025 | 13,295 | ||
2026 | 13,188 | ||
2027 | 13,243 | ||
2028 | 12,130 | ||
Thereafter | 56,820 | ||
Total lease payments | 123,228 | ||
Less imputed interest | (21,870) | ||
Total | $ 101,358 | $ 79,623 | $ 29,523 |
OTHER ASSETS AND LIABILITIES -
OTHER ASSETS AND LIABILITIES - Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Other assets | |||
Equity method investments | $ 215,375 | $ 198,848 | |
Prepaid expenses | 89,795 | 98,587 | |
Right of use asset | 76,463 | 60,830 | $ 24,825 |
Property and equipment, net | 42,725 | 33,928 | |
Loans held for investment, net | 40,056 | 200,247 | |
Derivative assets | 31,451 | 17,636 | |
All other | 48,592 | 48,046 | |
Total | $ 544,457 | $ 658,122 |
OTHER ASSETS AND LIABILITIES _2
OTHER ASSETS AND LIABILITIES - Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Other liabilities | |||
Accrued expenses | $ 123,352 | $ 115,878 | |
Contingent consideration liabilities | 113,546 | 200,346 | $ 125,808 |
Operating lease liabilities | 101,358 | 79,623 | 29,523 |
Guaranty obligation, net | 39,868 | 43,950 | $ 47,378 |
Derivative liabilities | 28,247 | 2,076 | |
All other | 113,079 | 118,200 | |
Other Liabilities, Total | $ 519,450 | $ 560,073 |
OTHER REVENUES AND OTHER OPER_3
OTHER REVENUES AND OTHER OPERATING EXPENSES - Other Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Apprise revaluation gain | $ 39,641 | ||
Total revenues | $ 1,054,440 | 1,258,753 | $ 1,259,178 |
Other revenue | |||
Housing market research subscription revenue | 35,794 | 21,852 | 8,744 |
Syndication and other LIHTC revenue | 26,006 | 36,757 | 6,706 |
Assumption and application fees | 9,629 | 9,073 | 10,811 |
Prepayment fees | 3,547 | 26,451 | 40,138 |
All other | 42,990 | 23,901 | 5,278 |
Total revenues | $ 117,966 | 157,675 | $ 71,677 |
Other revenue | Apprise | |||
Apprise revaluation gain | $ 39,641 |
OTHER REVENUES AND OTHER OPER_4
OTHER REVENUES AND OTHER OPERATING EXPENSES - Other Operating Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
OTHER REVENUES AND OTHER OPERATING EXPENSES | |||
Professional fees | $ 27,213 | $ 35,428 | $ 26,920 |
Office and software expenses | 26,343 | 24,145 | 15,056 |
Rent | 18,174 | 18,832 | 11,262 |
Travel and entertainment | 12,225 | 15,742 | 7,203 |
Marketing and preferred broker | 12,142 | 14,840 | 12,526 |
All other | 21,580 | 33,661 | 18,799 |
Total | $ 117,677 | $ 142,648 | $ 91,766 |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||||
Cash and cash equivalents | $ 328,698 | $ 225,949 | $ 305,635 | $ 321,097 |
Restricted cash | 21,422 | 17,676 | 42,812 | $ 19,432 |
Receivables, net | 233,563 | 202,251 | ||
Committed investments in tax credit equity | 154,028 | 254,154 | ||
Other assets | 544,457 | 658,122 | ||
Total assets | 4,052,347 | 4,045,359 | $ 5,205,989 | |
Liabilities | ||||
Commitments to fund investments in tax credit equity | 140,259 | 239,281 | ||
Other Liabilities | 519,450 | 560,073 | ||
Total liabilities | 2,306,218 | 2,328,530 | ||
APIC | ||||
Adjustments related to the reassessment of variable interest entities for consolidation | 3,700 | |||
Noncontrolling Interests | ||||
Adjustments related to the reassessment of variable interest entities for consolidation | 6,800 | |||
Receivables, net | ||||
Adjustments to assets relating to the reassessment of variable interest entities for consolidation | 35,000 | |||
Other Assets | ||||
Adjustments to assets relating to the reassessment of variable interest entities for consolidation | (21,300) | |||
Other Liabilities | ||||
Adjustments related to the reassessment of variable interest entities for consolidation | 3,600 | |||
Consolidated VIEs | ||||
Assets | ||||
Cash and cash equivalents | 2,841 | 201 | ||
Restricted cash | 2,811 | 1,532 | ||
Receivables, net | 28,256 | 33,593 | ||
Other assets | 47,249 | 49,768 | ||
Total assets | 81,157 | 85,094 | ||
Liabilities | ||||
Other Liabilities | 53,526 | 39,148 | ||
Total liabilities | 53,526 | 39,148 | ||
Nonconsolidated VIEs | ||||
Assets | ||||
Committed investments in tax credit equity | 154,028 | 254,154 | ||
Other assets | 60,195 | 57,981 | ||
Total assets | 214,223 | 312,135 | ||
Liabilities | ||||
Commitments to fund investments in tax credit equity | 140,259 | 239,281 | ||
Total liabilities | 140,259 | 239,281 | ||
Maximum exposure | $ 214,223 | $ 312,135 |
RELATED PARTY TRANSACTION (Deta
RELATED PARTY TRANSACTION (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
RELATED PARTY TRANSACTION | ||
Related party loans outstanding | $ 73.1 | $ 69.8 |
Accounts Receivable, after Allowance for Credit Loss, Related Party, Type | us-gaap:RelatedPartyMember | us-gaap:RelatedPartyMember |
Accounts Receivable, after Allowance for Credit Loss, Related Party, Name | wd:AffordableHousingProjectPartnersMember | wd:AffordableHousingProjectPartnersMember |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ 107,357 | $ 213,820 | $ 265,762 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 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 |