WD - Earnings call transcript Q3 2019

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Operator

Welcome to Walker & Dunlop's Third Quarter 2019 Earnings Conference Call and Webcast. Hosting the call today from Walker & Dunlop is Willy Walker, Chairman and CEO. He is joined by Steve Theobald, Chief Financial Officer; and Kelsey Duffey, Vice President of Investor Relations. Today's call is being recorded and will be available via webcast on the company's website. [Operator Instructions]

pleasure the my Kelsey over now Duffey. is to floor turn to It go Please ahead.

Kelsey Duffey

on Good Thank release This and call. be and morning, as press the Brie. our our website, archived Chairman and you, Thank on everyone. website, Investor earnings Walker; accessing Willy our of being the details posted Dunlop release the slides a me morning, later This provide earnings and Relations quarter available webcast Both and with on CEO, some touch for Walker Steve presentation you during call. will what we third morning, XXXX serve morning. is have a point www.walkerdunlop.com. These earnings our webcast. and Theobald. recording website I Willy CFO, will this the this our call & reference section joining our of for live to Steve

forward-looking carefully release. made not our Securities Private this of in urged read Act XXXX. reference also adjusted Statements statements will Please release financial the metric. a are the our be statements to historical Please meaning call earnings which posted that deemed during may the of to on facts reconciliation forward-looking of earnings the on metric the non-GAAP website EBITDA language note this Investors within financial this refer for call. we the Litigation of non-GAAP are course Reform

of about our factors our is so. expressly statements, or SEC. describe quarterly disclaim forward-looking filed new annual current actual can with alter may Dunlop More update result and be under as statements Forward-looking to & and otherwise, information, a detailed whether obligation materially. any obligation or in results differ we to expectations events no reports Walker the our and found do risk information future

to I will call turn the now Willy. over

Willy Walker

everyone, and for Good thank joining Kelsey. Thank you you, morning, us.

to strong Walker goal quarters in of the $X of numbers billion technology financial generating positive quarter annual bankers due new Dunlop’s the revenues. results, hired, most XXXX implementation and and & one innovative history, of The the successful our of brokers record towards and was in third decisions, regulatory in progress continued ways

of we on increase year shown earnings Slide per $XXX X, increase which QX, year's of million XX% XX% QX. generated drove revenues ago, from a in total share over a $X.XX, a last As diluted

per of over will employee, quarter $X when strength times. Steve we a during a As generated platform, $XX of brokers huge and the With We model. to growing our continue financial the portfolio business due revenue exceedingly our outstanding later, ratio a business. servicing to billion of number positioned amounts X.X debt generating underlying well million equity feel financially cash significant to added to returns of and discuss bankers still of

recruiting On JLL three on firms HFF. the it, for first an unprecedented the of closed created QX, its W&D two are XX% There during combination our competitor opportunity of force we quarter. reasons took success. The acquisition and of by our primary sales growing for advantage day of these recruiting

a estate recruited reputation a talented in in the we global large of and that First, within XXXX succeed. away number industry teams role establishing a real work services a W&D the major from place played teams those is to and firms great

feel commercial client-focused The with of world yet finance the small sales, of combination company out touch as finance business. a and is company estate JLL family-owned of client-focused that commercial somewhat Dunlop acquired by estate, and HFF capabilities and of big the with and big Secured company sits Wells real feel & Fargo, gold. being uniquely Walker company Eastdil touch capabilities Second, being spun with real

sales as to cultural fantastic successful. performance. we is talented culture factors firms combined professionals reward exceptional for of our W&D and place the collaboration competitor Those very from Dunlop and make & at Walker join three highly be a many third, different market and And celebrate

GSE the Freddie Slide of you FHFA white $XXX September the FHFA’s outlined scorecard the conservatorship clear multifamily provides of annual is each with the quarters, And see multifamily The for message On market of announced America. up Dunlop. lending regulatory the the solution on welcome paper, capital from part XXXX X, vital, the as in the to affordable leadership from during Mac Fannie Fannie of and Walker scorecard GSE of past housing Mark new coupled housing positive a the over can as would Director, very The by billion the Freddie were quarter. volumes. finance developments release by five and which front, the agency capacity be next Trump sent housing is has in finance housing the the federal paper provided administration's a to finance in development & as under with that GSEs and in industry current particularly reform scorecard XXXX administration's multifamily the Mae white crisis the Calabria

Slide can growth their to pushes XX% provided regulator complement market from market future of of to It also our volume business XXXX share our & also continue is $XXX their with on down our scorecard in will They other market to associations multifamily for GSEs. Walker for expanding that most mortgage Buying billion. growth. both the to be in market will building see XXXX would capacity. an around XX%. bankers use combined levels strong areas allows like provides GSEs. by them. forecasts all X, scale and share see position market the finance you benefit We'll Dunlop clarity share on continue The As out focus market Fannie the recent for and to the of size Freddie's the where the

Vision transforming Steve? our and the call to in business. to to towards XXXX then turn technology our back discuss financial progress performance is and more now Steve come QX I'll over detail how I'll discuss our

Steve Theobald

unique good model and business our morning, the again, market Thank Board. Once focused and strong position you, generated performance across financial everyone. Willy,

to The Total the Mae exceptional XX% to a Fannie first billion, was our add us volumes. financial increase property third transaction year $XX.X of positioning meet the XXXX well led volume performance, months nine year-over-year brokered and for in by sales, quarter targets. results our growth year-to-date

We enjoy estate, continue to that a commercial multifamily. real backdrop particularly macro for constructive U.S. economic is

up the $X.X including Turning now in XX% overall originations from our XX% and XX% billion, quarter, investing those from have up X, the last year by quarters billion, coming areas been are brokered last two we property our to the through volumes for in Slide of volumes. $X.X record sales during at transaction which from increased of efforts and heavily year. last transaction can see success These you year,

quarter was slightly increase volume overall Mae an was Our year-over-year, as Mac decline in billion volumes. of GSE volumes in Freddie down our the by offset Fannie $X.X in a

picked basis from our quarter the up from increase during of quarter million, increase XX% year. an to with Mae Fannie HUD, the of volumes gain last XXX Our points and higher in HUD a resulted the margin an The basis points, $XXX XXXX. of margin volume XXX sale QX combination on business in up Fannie and on in

partners. opportunity scorecard the as next see new to Freddie To with, want forward. what for five clarity GSE combined largest GSEs one Fannie capacity over on begin dominant XXXX, over spend few potential our is and we be a as capital I of the of the benefit impacts and quarters will W&D With multifamily the industry, financials the to to about billion lending providers talking their of continue moments of market $XXX through is the the end welcome. of will the what the this

it again. October as QX. see with results, did scorecard of the up October, GSE You it they them to their market both Fannie waited volumes to with out our but to what start know new the and in billion wouldn't significant of QX FHFA business, September strong back for $X.X in from bring. most September financial slowdown see expect With GSEs each only and of in loans originate lending we lending around Freddie's would ramp winning and And we took a

typical capacity below XXXX. and volume of given construct scorecard, QX is a for slow Freddie, lending that into While the will new more push QX our Fannie the simply

in Both back the GSEs market today. fully are

across pipelines and platform, our our optimistic next I entire quarters. GSE outlook five would W&D the with have finish of volumes earnings in the lending QX, about we the over add established still we should in light we with are revenues very XXXX the year. growth Given at robust beginning even that double-digit as

bringing QX XXXX in the same from driven XX% $XXX million, million, transaction total $XXX up to from the was up revenues quarter increase largely by XX% XXXX, period to year-to-date in year-over-year. the volumes for Revenue

XX% the from deliver we earnings Diluted $X.XX diluted metrics to $X.XX, while up EPS on last double-digit was track are XX% growth year, same on quarter, highlighted X. Our XXXX. for year year-to-date from period as financial was up EPS per year-to-date the in share last Slide remain

you Slide servicing and million $XXX year-over-year. continues billion year-to-date see $XX.X an to at As September increase at of and can contribute XX portfolio to on fees fuel X% was to servicing which growth X, revenues,

Our and to loans portfolio strong now continues includes over X,XXX exhibit fundamentals. credit

new levels that the cycle. was times debt historical XX% quarter, coverage with estate average healthy ratio X.XX commercial for and have this the respectively, service loans LTV consistent During and the real characterized

in XXXX, quarter did primarily servicing growth by our million, growth increase EBITDA revenues. revenues the QX MSR Year-to-date adjusted of therefore EBITDA third by was and down largely cash driven adjusted contribute cash the $XX $XX strong slightly in non-cash in The driven from increased million, in expense. will the QX expenses, year-over-year XX% months was $XX outpaced in $XXX higher was in personnel EBITDA to not the in commission periods. $XX by future growth quarter revenues increase million costs, million strong cash in X first growth up Adjusted at adjusted remained benefit as in fees from XXXX, but in which million EBITDA

third year-to-date to XX%, target annual XX%. We a margin operating of quarter our XX%, to of within range XX% operating bringing well margin achieved

origination XX% in on-boarding a to personnel during slightly from our $X.X the historical the million. percentage past success within in the related XX% Willy in XX from approximately mentioned, over up XX%, had of XX%, Company year, employees the added revenue was our recruits range. up third revenue and we new XXXX, a of to As our personnel last Year-to-date quarter. even Company Expenses we of was totaled teams into but percentage recruiting as QX XXX new have maiden as as a recruiting months. quarter XXXX

$XX sheet, to million $XXX We available ended rather million. lines, bringing with $XXX to loans Agency additional total million cash our warehouse than used on fund the our the balance borrowing quarter on of third cash an being and

leaving During shares capacity. XX.X million to XX,XXX the of million us quarter, buyback $X.X repurchase we authorized with Board used

payment. Yesterday, payable authorized dividend cash Board of strong financial $X.XX of quarterly of dividend continue results record per our XXXX. Directors to to XX, November share Our position and shareholders our support a on

a We right high-teens range. to XX% while grow strong of the with of third our the continue year-to-date generating for base, overall target return XX% equity on quarter to still period and capital middle XX% for low the in our returns

year-to-date close beyond our stage cash even market we in future fantastic and Our third for done investing are reflective model, in quarter The sets profitable and our as to as business financial are competitive today, success advantage quarter yet. aren't the growth. the both which achieved the we this continues and well XXXX recruiting a to results of generate

call I that, now will Willy. over back to turn With the

Willy Walker

end QX provide several & through will established QX and have annual focused United sales Vision creating our mission company The the Walker by $X commercial by hired Steve. finance generating the and capital in illustrate of that investments a the you, just as ran the in and financial we we was years, in the including has XX States. XXXX billion remaining The brokers over talented and achieve human roadmap growth of past estate growth real to to on Thank results Steve long-term the revenues XXXX. hiring XXXX the premier XXXX. Vision Dunlop made year-to-date bankers alone, in achieved

five goal. incremental revenues Our people million. that the revenues to of brought the were next $XXX September have real quarters a we the on ended investments but over achieving have XX-months will Adding made be challenging, $XXX XXth for and shot million the at

when to we The while GSEs billion $XX to outlined as Slide cornerstone volume, Is loan platform HUD leader billion continuing annual Vision scale a our market with already financing on X of debt originate were XXXX $XX the the and established of to last XXXX we billion a our to Vision the over there in billion our just brokerage business across was $X.X from scale XX We knew $X.X to debt have nation. brokered XXXX. volume opportunity large that, done months. And growing we

billion $XX has have banking a volumes, trailing growth were grown our our billion XXXX platform fantastic Scaling mortgage over a fuel overall to which brokerage $XX increase XX% debt helped in to XXXX. basis, and in XX-month on

to end of year reach we our debt the overall environment, goal Given to $XX should and our billion additions by the $XX financing of this the XXXX. team billion macroeconomic

Engler The and $XX property with launching second billion. of in of sales business We with annual growing past was four months. this component volume of a Vision sales the XXXX XXXX added property the multifamily business XX $X billion over across over and country, grown to the billion volume acquisition Financial, entered years, sales have last and brokers we to our XX $X.X the

$X on the our properties Our current joined dramatic XX% growth us to and team $XX with billion with brokering has visibility just having been in and year, XXXX. multifamily of this have billion we impressive,

of and most clearly pillar the billion is loan XXXX portfolio. The lucrative third servicing $XXX Vision building

past of added have an an basis. striking average to billion loans are servicing today, $XXX we with of distance $XX billion net $XX goal. portfolio And annual portfolio several within the at billion on our years, new our of we For the

and largest the have loan commercial prepayment management provide make can that Crossing mortgage in cash the business. under long-term XX XXXX points, basis fee in be look just over and asset a cash firm of continue billion average in now the an milestone flows seventh servicing base we years, is an amazing than XX servicer like lot average and that just with W&D an $XXX to our loan of protected an with flows W&D an duration we will more reinvest a mark country, us asset bank.

in to the to to business. fund build The months as component it around is management final a management, unlikely but great with $X $XX registered an scaling in well platform of as achieve, we and piece $XXX billion raise of assets are over that Capital of JCR XXXX funds. entering past This to XX acquisition million this brought XXXX XXXX we made Vision new The in advisory Vision investment business. one is under billion the progress

billion and end joint Walker raising the management to account XXXX & a a as partner, given assets as platform established billion Trust the at new under Blackstone ended Walker long-standing in Dunlop We QX & AUM well we a to with seeing the And XXXX with in Dunlop JCR years. of management have our in & of Dunlop separate we will with at the venture. JCR V $XX are Walker good sized $X.X momentum opportunity Mortgage the in goal by following fund reach billion $X in Fund

already our for focus next XXXX, While strategic are we five-year building we achieving Vision setting on in place plan. blocks

at Hairy W&D's established Jim and component We BHAGs. his of To One invariably Walker establishing had term BHAG for legendary record BHAG of by XXXX be amazing have Collins an book technology. Big & Built stands track Goals, achieving a in will Dunlop Last. five-year Audacious

driving strides in made our processes. past months, the significant have Over efficiencies in we business XX

may implemented technology credit clients. loan Dunlop. also efficient, have and property make loan have allows aggregated We've become even borrower in database amounts on we've of the us details in that us to a portfolio project with more built borrower's never data with combines insightful performance a that we more As cases that Walker from where a large data our underwriting our to our to operating entire done & portfolio, servicing informed also more accurately

originated XX billion different $X.X activity. new XX ago, we totaling sponsors, using a started year database loan loans of we Since this have for over

data continue way scratched through brokers our we analytics clients achieved our about surface the excited and insight and very W&D just can investments the initiatives be are change and the of We these how and to we will provide. can what technology have view bankers our

of quarters quarters XXXX Dunlop's Walker Before history, the to was due our close I'd QX I our I to this in one beginning prepared to like successful & the back call. regulatory look or of financial goals. at most remarks, what said all exciting. one progress showing is extremely of long-term plenty but and that success, We've fantastic performance, with those of five, recruiting two strategic toward clarity, had and performance, technological rarely continued implementation our areas

for in a the hear makes what company The retreat from a at speakers, great to sessions work the our XXX Smith to to brought things and celebrate Two executive QX, big. outside said, our first them welcome we ever, underscore ago, Dunlop entire was We in training team and weeks our and when way W&D, Because new time such us we success. collective place Walker for meeting together who all-company we participate do the our Howard Dallas, our employees Texas. held President joined & wonderful in employees. as do

as work single-family being States. One into finds implement. started his of technology." incredibly of anyone commercial Emerson, to to the mission was executing itself today our in transformed in outside Bill become Quicken mortgage culture place audience Quicken as tell a a he long-term informative spoke the exceptional company consistently need Bill plan we and described before estate but United didn't innovation and Loans, finance think insights appropriate and he in ranked that scaled technological at after "the W&D number encouraged of think United W&D XX years of intersection great the Quicken premier big, given the where real what in to We're to growth and in on having have presentations our the big Bill W&D who to for speakers to and largest down while listened States, the CEO the originator service. customer with path to continue

touch family-owned exceptional of Dunlop, company with off and brokers the will a feel a leveraging Walker firm. capabilities, big position our as continue company & We and to to yet bankers recruit

drive our XXXX the grow deploy to loyal and continue we customers. technology our us great, make smarter, toward we you and provide continue congratulations more I'd will develop to we all and services like to to to & We so to Vision colleagues on efficient financial and will company make fantastic do. to do QX. and achieve goals more my thank insightful Dunlop a in for Walker all fantastic our And

operator like for line to I'd ask the to the that, questions. With open

Operator

for we'll Rahmani The floor from And is [Operator now Instructions] question Jade questions. Go take first our with KBW. open ahead.

Jade Rahmani

for very the taking much Thanks question.

you MBA you're commentary expecting what that provided of the the that about Just implies overall the billion internally growth. in XXXX with of Is market? X% to respect $XXX terms for forecast

Willy Walker

market the that Jade, Mac size. velocity numbers, reason Freddie group a you I MBA a mean, size projections We estimate a But given overall that's we look as those any of market know, well. of at have from to not good own make the it's shocks as gives without good pretty also an think the I internal as the today, their probably far as standpoint, number. our don't external calculation has, think market to macroeconomic no economist

Jade Rahmani

drivers And the deliveries? new in production? growth have – cumulative that you the Is years this growth? point dug it would driving What into strong loans? driving of cycle, what's extremely Is at it that of are increase? refis? level be it Is of multiple given What the construction

Willy Walker

MBA XXXX. units – XXX,XXX So believe delivered projected I there were new had the in

of the lot deals volumes I Jade. that that of all have a – well therefore been a deliveries, number, think So which have you by and the capital market. way, chasing also And are lot extremely just underpinning have transaction you then those absorbed by

So a a sales investment way sales. volume a is the number there's refinancing on beneficiary M&A big for of given as XXXX. growth there in refinancing in to investment volume we core be But significant side a there new portfolio lending our and do have there, refinancings our of not lot which both And core is and investment of side. look the by platform, the sales well the on of as we a activity trades

Jade Rahmani

FHFA releases and believe this just in on In terms I the stepped the meaningfully quarter scorecard. you've recruiting of it up advance is the recruiting environment, in press of seems based

and to So business? I gave you those margins conduit potentially having up could the have insight the your recruiting, about – the carry just CMBS potentially and ramp to even of what wanted thinking into business, the grow some dynamic than agency which get to confidence the about private lower your brokered costs, personnel label thinking

Willy Walker

us in you the the that capital markets investment bankers and were at If business did in our of our the in quarter, and recruiting business. sales Jade, majority look we the brokers joined

and lines huge have those those us business a So businesses. amount those during both been scaling we been the of there I to same remarks and Steve the outstanding, for two both of – as is and time, growth mentioned platforms the our still at yet of has in growth prepared capture two

of for new are the instance investment base, So those all we did in putting in sales recruiting the hires brokers geographies.

places quarter Southern we San the added team Diego. Florida, in sales Portland, banking we sales in So investment added team another Houston, in we an team Oregon, in added team an teams in like Chicago, investment sales added we added in investment we

to in adding have where past. the had the in we're So not talent platform geographies we coverage

that is markets but to those hires. of accretive only great geographies, don't in and it's And to into XXX% we degree, even because some brokers those bankers have expand those to prior so all not

net we do. we an underlying operation, where today, So and all just the that don't existing of is to have beneficial very platform

Jade Rahmani

I'll Thanks very questions. the the in back get for much taking queue.

Operator

Our JMP Go DeLaney with next Securities. Steve come question will from ahead.

Steve DeLaney

the and morning congratulations Good quarter. on you. Thank strong

driven for going due is a the that an they the know in well. be Or cap seeing? yes, Willy, rate possibly need securitization as back August Going it also to but issue, the and caps were we I minute they execution – volumes? momentum to loans, market volatility mean, what also GSEs pricing in to to in back are and September. close to away the was when they they're – XXX% mind, late their the just have been your could in

gave so So you. to kind any has they that on you curious why some I'm clarity talked you have or if on cautiously? of just reacted that anybody at Thank thoughts GSEs, the

Willy Walker

thanks on and Steve, for morning, call. being the Good

Steve DeLaney

Sure.

Willy Walker

to were do Director their volumes, rates forth with very regulator scorecard the XXXX annual volumes. downward do to a with that one, not new trying that put make to the you and the to had everything regulator things, and and XXXX as volumes would they doing sure that under it Mark cap make that little the on Calabria FHFA would two defining was put I

And were both pace think to a was north them August at each. they pace I of think origination for of they that XXXX. both was in well volumes billion continued at up until put put running that a there would real a I So that felt caps that a number going $XX into if to of annual chance that the regulator them the revision downward

over So both going to to going not number for number we're brakes and they basically saying hit stay XXXX. that the we're that at go

it I said the the on put the into brakes fingers we no right say have And you are the Director cap, came back is provided as well out both has the the scorecard fantastic has just under would play first add can scorecard we're their the GSE, clarity that but it seen they doing back Steve took the right new the the with them snap playing a commensurate then if going prepared I get his get markets they're the to all, going or would to But in as come will, role while and business that their because lender scorecard, forward is in love once what up the they're and you that and regulator And market. in and we know we of back them going. to and neither market also Calabria. and today, cut been before both remarks,

Freddie where wanted the would was positive space scorecard. the this very role was see it very, in establish he Fannie and to and the moment multifamily Calabria a So Director play

Steve DeLaney

and out been I requirement lot, That's gave took we us like And have helpful mean, was much is sounds the at and caps to unclear giving rolling we over but think $XXX all thanks. also I to and that think, on XQ for old it quarters Thank that us XXXX, in the now. But XQ because you of new improvement of the that be $XXX I billion, XQ. classified the the impact market, have XX.X% answer how you overlook a we and and to Steve clarity five being the structure, billion affordable. under an can't that needs structure would

larger be that be look loans at that not affordable, we in your and in a deemed may newer of you business – now get be of a could affordable, regard? next as little that borrower barrier demand you is a terms of projects still loans mix and larger considered potential terms could wouldn't So also in Thanks. that for year for tight

Willy Walker

requirement Yes, on the that Freddie affordable their the affordable and historic side, Steve, both mix. given no personally well and said publicly hitting XX.X% have problem both Fannie business should they

segment much they will So capital been it's great very is that needed. to that continue to market it segment that provide because the regulator has focused on market that

relates going as challenging. As concerns of that's no, if that lending it challenges will, heard to to overly mix, relates or to them any warning we've it from signs their be either you

W&D our $XX sort of loans, our And million. size mega we've $XX you but done then as it had somewhere or relates we've of million loan know, portfolios, well average is in as history, to larger around

JLL So from actually some those and finding where it a issues from moment might those I as little such not see CB, our say financing. Fannie to million a there away shy larger overall and them, and us, that firm, doing of but large for a them a competitors loans. which don't do of A bit I bit, and they be and a little relates still $XX shy they'll away Class Freddie there and stuff, our middle-market might flow the million as loans that deal sitting do is would $XX more they any does home for business, institutional are

Steve DeLaney

ahead. go Steve, Yes, Willy. Thanks,

Steve Theobald

respect ourselves. we're space in with extremely to affordable W&D, the sorry, Yes, active

Steve DeLaney

Okay.

Steve Theobald

of agencies. one largest lenders community We'll the the do manufactured with We're to housing continue that.

So I contributing of think our XX.X% over certainly time. we that share be will

Steve DeLaney

– I but look remind trends And one X, decline? EBITDA that. you, that there caused Page surprisingly on X%. up for there XX%, down me what Steve, is? year-over-year, it. could in explained and obviously is that Got if if you that the item great, to But you apologize you – particular all Or one XX%

Steve Theobald

I those Yes, income, of increase think, out back cash revenues did plus the on of cash EBITDA which out the amount you particular revenue. success if quarter in we a that we this had that And this had significant count quarter, Steve, side, we essentially we because the the just particular quarter, in look commission – the hiring obviously toward doesn't volume given at our quarter. this expense cash we we exceeded paid MSR expenses

Steve DeLaney

Got for it. comments. it. the you both Got Thank

Operator

Our next Wedbush. will come with question Henry Coffey from

Henry Coffey

morning. Good

me great Let When some points? you matures. fees did we for on know quarters basis that a you know profitability the where mention be that that – congratulations next are of Are we your as metrics, sort quarter. about at down my coming of product I number servicing will gross add few MSR the XX around look older

Steve Theobald

Fannie this that that decline look last certainly past hard is going slowed we not what Henry, over our average but servicing that margins to future few quarters in see quarter. servicing to rate I – remarks and did it's increase we the an in like, QX. seen obviously I the mentioned this predict, in super my knowing in had fee Mae

in I bit competitive less in there. think space an that seeing little a us function dynamic resulted increase a of

outside activity that ago out were still years rolling there servicing of period a fees of the financial portfolio. the much was we you're And from removed XX wasn't long not I from and going agencies. crisis great XX time of think on ago, when still the lending years seeing

dynamic that So exists. still

the is other of portfolio changing brokered the insurance life is mix, business doing on at being our and think as servicing cases fee are servicing portfolio occurring mix with we're is the more our overall our that that servicing still thing rate. added is than those in I average many lower to coming companies,

Henry Coffey

robust all this impact more rates to the they GAAP the into with be EBITDA. basically then know not have but be to then our an and positive over that off less much? going business on volumes, but going be Freddie year-end origination quarter, talking could out Should are? equally you but you. Fannie basically turning know Freddie, in where could in brokered, just total of Thank $X altering billion. estimates Fannie, earnings, And dramatic we're went I fall this, sort I brokered a more to Is fourth a have about we

should what than I So side got about the billion the am there we a be about? right way? for We've expectation the number. brokerage business? offset an of then be thinking obviously from And this bigger expected thinking the $X all would March, the Is

Steve Theobald

fourth giving obviously volumes QX, think without discussed origination Fannie, that are think I expect around still are volumes pretty what for about asked Jade for those were below markets I future we obviously guidance the Henry, the quarter, the see we still good. very would while we're in specifically a about Freddie QX, optimistic Yes. typically forecast. call to The in here. the MBA

are we clearly still in the volumes marketplace. So financing seeing strong out

Willy Walker

just that, I jump Henry, do quick. in just to on in jump I want on.

First of month all, QX. we're one into

our to at where it QX our is which going September what to So we're the were Fannie there. and about and think October, has pipeline Freddie some pipeline tell giving driven is we're to today we where market look for and we like people trying into look insight and

so are nothing the our line, significantly should that and continue think question, markets show business QX the standpoint, a grow. that and in not capital capital yes, to it market your to numbers that in has broadly I growing markets would that the from growth experiencing been there business is say we

And sales good are and of this it’s very a said, market today healthy our I in earnings reporting overall industry great so a forward. markets Steve pace, property that not think is opportunity company people just transacting quarter, we’re environment, a financing tremendous lot the the only underscoring what at and going see

hired when take hiring in it XXXX QX I this XXXX, to we of ourselves across would did increased you well pointed what say volumes that’s P&L prepared in we his great. the is lines have the XXXX, growth that of that our we positioned exciting in year and all XXXX into play the have and done, with a and QX remarks, you really hiring exceedingly gets in we’ve to that’s and Steve lot and for of

Henry Coffey

talking that went is is? FHA the business or picture, was with way Or but white and paper $XX that IPO GSEs a on just, go bigger is this? evolves, between he paper white through it business insurance nice, comments, a about the build market could I there and the as the think the up people that there other Are hey, is this we a picked companies? just GSEs, developing with the and on said, Just billion tweener it of we business multifamily something something let’s inside

Willy Walker

billion at each, at Fannie two you $XXX-plus meet them multifamily capital Freddie do still of MBA from leaves $XXX for market the for $XXX market look If size XXXX to and take between billion that billion other $XX that billion the you combined expectation the in should and space.

lenders industry Walker largest. was multifamily & So year, who were provided and X,XXX capital Dunlop fifth there distinct last the to Henry,

asking an Dunlop billion And $XXX so opportunity to there multifamily that to is, be XXXX? out that’s other I going think the providing you’re real to & question in is for to capital Walker go

direct the answer yes. very And is,

we’ve loan small space the broaden the entered we with out. that agencies, So can

We joint loans. to have with multifamily to be bridge Blackstone venture able our originate

to companies, have life Capital Group sending We is and loans which Markets across banks CMBS. our insurance

raise management We funding have capital our fund group, consistently market. deploy the who are deployed loans. for CMBS looking find And into our new to that stable is own either CMBS be we opportunities and capital can at or can brokers business bankers it

capital other in currently. So a that covering that part and to aren’t providing lot we see Freddie of the of opportunity Fannie market

Henry Coffey

of is it the kind for of GSE third in I so there reform Freddie, as merger going be think a like themselves. either Freddie Fannie or and Fannie, GSE And or seems now and taking urban our it’s of goes. business the GSE the just the but mean is to And, structure like business steady right myth care she the emergence market, an – you not of

Willy Walker

achieving Fannie Fannie and time securitization as underestimate securitization not FHFA appreciate of a the would mission. get on lot desire the would is lot second of Freddie out being to and Calabria’s Director focus I spent conservatorship, And is thing and and that say a I in models of and there the has declaratory emerging models that want saying they loans. Freddie the greatly and and multifamily Freddie have that multifamily to for and two relates to space, distinct Fannie it been maintain so

as So of enterprises platform I see two those one together merging exceedingly into remote. the common

Henry Coffey

Great, thank very you much.

Willy Walker

Thanks, Henry.

Operator

question Weaver Our with come Go Jason Point. ahead. Compass next will from

Jason Weaver

the in outlook and to trying in thanks for just management for the as I’m are morning, taking it Fund funds? us and to my AUM targeted on close question. good pipeline JCR the you pertains for V other asset Can Hi, plans goals. tell further what size

Willy Walker

morning, Thanks joining Jason. Good us. for

out can haven’t the marketing – we on are JCR what tell is that? We V I – cover Fund

Steve Theobald

Met with target. the

Willy Walker

Yes.

we fund What back and actual out Jason, find continue update close and company looking at as a on Fund a XXXX investors the we’re then $XXX to raise comes to what we XXXX with or goal portfolios? some So go platforms little do It business. to still relates us fund And for an took then and bit VI wanted that either acquire. is it other and and first million, how in to XXXX XXXX kind we that a JCR is commitments established no fund, that looking acquire management into great quite have give to to of TBD. soon on of and Fund V and business, grow we

that to say, achieve But have that billion JCR of probably see and but we that end right don’t don’t some We’re the a by achieving acquired this opportunity thrilled barring billion tried moment, I $XX we $X solid as XXXX. JCR really AUM acquired the goal had we’ve that million build goal well as platform, is at now $X.XX combination we’re billion we’ve that what’s our we the of can to got a upon, when JCR, at Blackstone start and we business significant. $XXX them great with as of platform and growth given to that

Jason Weaver

All of do of right, any sales the thank same expectations investment you you. new regarding subject add number in have near you’re term? brokers looking goals, XXXX to And on a

Willy Walker

just put haven’t way that no the now. there. settled is I would right market We out say that in

to continue opportunity the So additional of our of momentum there to is talent to for us still off significant platform. bringing a build and amount QX on

a feel tried small a I with capabilities in very unique that we that really want a market today As people my to comments, firm there’s part company. do of of to is have has big underscore be positioning paying of and and the who really but dividends company touch a growth

time our And they done they and some benefit we builds great and the that that they a platform from W&D positioning recruiting join that upon is a continue such just from momentum be under productive can to itself. so company every benefit I think on how because and market in we place to add will also we’ve the work, see

Jason Weaver

on congratulations Okay, thank you. I’d strong say also quarter. another

Willy Walker

Thank you.

Steve Theobald

Thanks Jason.

Willy Walker

for Thanks on. being

Operator

is question from Jade KBW. a follow-up next Our Rahmani with

Jade Rahmani

for taking the you Thank follow-up.

the line In target that has does out? FHFA of XX.X% the W&D’s component of put business, affordable it up terms the with

Willy Walker

originator big In a affordable. sense of Jade, We Steve housing, qualifies very said, have, we’re what as as up? line manufactured typically which

we significant all on the we the that side business space a we’re and affordable Fannie quarter have the come doing saw business well HUD bankers as there HUD bank our and which and HUD growth housing owners. affordable is the of We pretty some have in developers opportunities also both Freddie, lot as into affordable that in and and many into specific who

I the segment guess brokers bankers so So that have we who very see focus saying, if you’re do big and we and on Yes, much opportunity so, market? of there.

And and running there opportunity on team about small ground space, as they’ve well significant hit say as lending the also we’ve, and would that know, ago brought the you for affordable a as year I well. our an in in we a see XXXX. operation balance growth now qualifies

Jason Weaver

the I category? guess affordable the question volumes W&D’s in GSE is, XX.X% origination is of

Willy Walker

table, of don’t we – of top that question, that to know across the have I don’t I the – answer I head. I’m have my could Jade. looking don’t

Jade Rahmani

Okay.

levels on more from do In sale I would outlook, you that pullback expect to terms expect the GSEs because mix a on that Or the increase should on decline in widened an could be as had? we think result toward of a XQ brokered of gain sale margins – of benefit the they shift the XQ margins business? sale their pricing margins. gain and gain

Willy Walker

to As a know, given range XXX has basis we’ve is been and points. basis we – there what XXX don’t the you points range

As the and of range the sense that we of number, healthy you in points very basis points. didn’t from points a didn’t QX on came up XX XXXX, in anything would read XXX in basis is basis not which XXX more it we points, I change saw QX, points Steve into the modify range. and at basis to basis QX XXX was XXX

So volume as points QX, Agency, exactly all there, in building I to are it go for of what to put just percentage the of lot points the outside what’s the our model, basis if basis points. you a parts there relates volume the range range but where moving here, that volume? wouldn’t of XXX specific is is on to XXX then the pricing on loans brokered So, non-Agency and Agency you’re

close probably where you’re to want point very your pick you wherever so and we’ll it changed within haven’t be. that We in range, to somewhere

Jade Rahmani

a just sharing Okay, risk side. the technical on Fannie question Mae

eventually terms of if were the post, just have In that pledged represents that absorb believe there X% around Is it million? the the you have to which loss that losses. first $XXX you you securities capital is I of post, would that

Steve Theobald

requirements are pledged associated Jade, security against guarantee. collateral that aside the right. Fannie’s is our That’s but the specific account, net I with and liquidity minimum set is which minimum mean, requirements essentially there business, worth

Jade Rahmani

requirement is increasing any considered? that what of there has And in risk FHFA the

Steve Theobald

Fannie This that move requirements point. assess. is least look in provision the at a is at – annually no to there this increase they there To my is knowledge, those at to a can documents it

Jade Rahmani

Okay.

Steve Theobald

risk there is, question now that right always to is is suggest a right The that happening. nothing is risk, It’s but a risk? happening it

Willy Walker

space, point. in And hot-button with this Fannie that’s a to hard pressed the regulator that I’m either thereof lack at for this or the think losses issue or

Jade Rahmani

enough. fair Okay,

Willy Walker

just point. data the about, Steve quick, gave talked real We

average our QX in X.XX LTV lending average Our and XX% in times service was our QX coverage debt book.

Freddie We over relates it any are loans that Fannie competitor our putting out skis the our are or with out time. as or firms of not to at this as we nor

Steve Theobald

would at loss the history, the Yes. collateralized given over I If argue anything, that moment. we’re way

Jade Rahmani

you & your Walker Realty, M&A, was with I competitors terms wondering asked about has. ever of smaller I Arbor often which and mergers, designation a a to REIT or acquisitions In think elect REIT combine it Dunlop, potential if sense make get could for

Willy Walker

of couple a say things. I’d

HFF of it and marketplace, First have after beneficiary net all, what’s been JLL this the merger relates to we size given clearly happened as the of our and combinations, scale in that.

and of idea size. the market today, positioned in form Jade, So in – the very our well current we’re

funding it a relates public As to it mortgage a or that source would we that very be use REIT, of effectively. REIT, would a whether be be private able to

at the have past in might that something that looked clearly We do. as we

knows, And deploy so, we’re the constantly platform looking at creating I and that who mean, our sense the in to a given for to success ability it. capital additional raise

Steve Theobald

our clear, to manage to opposed transforming from would I we love to that think be REIT, a into REIT, a Jade. as C said, company corporation But

as not to we’ve shareholders to and think And for and past don’t that to the looked we that’s our REIT raise us. things occasions new model grow in one that in amount think order insignificant indecipherable you work us company. think multiple obviously over think not well of capital really to or fact One, on long we’ve I this a two at the I might driven that able is to run. into you as that continue revenue is all has the of our right secondly, for borrow been a efficiencies the a our wouldn’t just the equity good of of reinvest growth that income REIT. so And been and all to in gain having not success a future the tax you I capital your dividend by that model, and REIT

Jade Rahmani

contributing is the ever to of and be of of very out a in some cash that carving consistency which consideration structure? portion terms of there Would a REIT MSR like portfolio, REIT flow

Willy Walker

unless at you really that That’s REIT. given us the in looked the past become not a think agencies. requirements for I of feasible the We’ve

Jade Rahmani

create have in the related or that deeper order potentially company’s built or lastly, other to of services also you And in and diversify way to I touch Property a you’ve platform, revenue those off question, Management landlord-centric then points the guess network a leverage the consider terms as just relationships, would with you streams?

Willy Walker

Yes, estate in I want clearly never says that to say, would mission real company. commercial our never. what not But We be a say finance today. is statement

a in are premier a company, we estate commercial not finance saying And real real want company, estate are finance definitive those we very have one, estate been estate and the company. are real we services we are We real services. to be

several we points, platform it and people the that really have given for to all customer at years. and feel looked we good next to relates the the as our strategy about in our growth we’ve now opportunities the but all the past, and space areas added interesting So touch

reiterate, never, clearly And that’s not today. I’d so strategy but the say never

Jade Rahmani

for very the much Thanks taking questions.

Willy Walker

you, Thank Jade.

Operator

And time, closing at so there for this it are further I remarks. questions will no speakers to turn back

Willy Walker

Great. morning to Fantastic QX. and thanks us you joined call the Bye-bye. day. all Many of great a have you I who this on hope

Operator

your today’s conclude does for participation. This program. Thanks

disconnect. may You now

Walker & Dunlop (WD) 6 Nov 192019 Q3 Earnings call transcript