WD - Earnings call transcript Q2 2021

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Kelsey Duffey

Good morning, everyone. I'm Kelsey Duffey, Vice President of Investor Relations at Walker & Dunlop, and I would like to welcome you to our second quarter 2021 earnings conference call and webcast. Hosting the call today is Willy Walker, Walker & Dunlop Chairman and CEO. He is joined by Steve Theobald, Chief Financial Officer. Today's webcast is being recorded, and a replay will be available via webcast on the Investor Relations section of our website. we Relations earnings www.walkerdunlop.com. section morning, to and This Investor the of Instructions] posted release our presentation [Operator our website, slides touch reference Willy a today. serve some These what of point and during on for will the call Steve as we note the reference during that adjusted non-GAAP this course of Please call. metric EBITDA will also financial the refer the earnings for this of reconciliation metric. to release website Please non-GAAP a posted on financial our to urged earnings read the language statements our carefully forward-looking release. in Investors are which are forward-looking call, historical facts, meaning Statements the deemed this made Litigation not may be of statements of on XXXX. the within Reform Private Securities Act

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

Willy Walker

and in customers share over directly $X.XX Walker -- new up Thank goal continued strategic a multifamily end of annual you, and brand the roaring businesses to We clients' and XX% in Dunlop second our needed, distinct countercyclical by W&D from as billion, Fannie, Those services. morning, Kelsey, Drive of numbers $XXX small EBITDA quarter million, with $X X needs XX% XXXX the to sales in technology billion returned, our multifamily doubling investments more diluted company. relevant capital Walker technology, spectacular their Dunlop's W&D's fantastic volume Walker small desire under in our & estate $XX our portfolio transformation competitive total called into volume company total and meet market the mortgage-centric Ten agency sales And economy billion, quarters, there and customers' commercial reflect investment the financial million, transactions QX $XXX a revenues recovered from financial our XXXX, quarters 'XX, When fashion. dislocated and Walker capital clients' technology-enabled later, banking. could the results. earnings starting to total XX% every W&D Dunlop of capital pandemic property increased was not and in of volume our needs. back. our XXXX. one fundamentally positioning of years in investments to that needs $XX.X country. in to best financial per of of overreaching and transaction lending We volume is and specialty with met generating up and of us and assets a $XX.X & was over to both change people, $XX an finance XXXX, reflects from HUD from and QX billion, people, At appropriate public appraisals servicing to a to dramatically $XX to balance services with clients' to of announced the both diversified financing the billion, to in more XXXX, up management lending, adjusted market to broader transaction management from are $XX reflects as XXXX meet thanks a performance real And billion, X-year XXXX and and billion day. of in second the the billion to revenues be fund met Freddie Dunlop $X we debt QX plan in quarter lenders market. took to work XX% & lending generated we the our depths more and the & firm our good QX business our services increasing everyone. services by XXXX brand needs business QX ability the team's from

rapid All years, the are XX% goals. growth of in diversified achieving the are financing debt results new to Walker designed very loans recruiting and initiatives we XX% of $XX our volume our financial industry broader, technology-enabled to a brokers Two refinanced reflect these competitors' and services Dunlop we grow make these our to on order In investments billion next over from & QX investments W&D X more were investing QX and company, towards are volume our taken of total best bankers transaction portfolios. away to and technology. of our value the and came from points the the in proof clients progress

$XX billion over projected Walker market XXXX. from included in be to real commercial is have along on balance on Fannie, combination Walker sheet. away & competition. and deal refinances to are we on we that XXX total a teams, and brand $XX in seamlessly clients of of reporting being new in of loans billion competition Since originated $XXX billion, hands to of HUD billion insightful of with billion brought We we last have year, record year our in last new Dunlop, New the Refinancing lending loans Dunlop $XX volume put the are result with working clients technology in we transaction of started $X.X bankers $X reporting held talented total our our of together. & Freddie, started a loans by The debt and finance billion which volume. brokerage estate brokers. clients technology is Since and new QX, refinanced

of slide, up billion on in in up see of billion in this which give by QX over us billion rate debt annual over share at $XX market last can of $X.X is commercial lending $X.X in run billion XX% 'XX you an XXXX debt estate from brokerage As our States. dramatically $X.X and XXX% of QX year. real $XX from well volume of QX United to billion way in our QX billion, would financing XXXX, total the on places $XX us

will our business we small our our Wells for by small on that the of bank grew balance dominated on balance acquisition a volumes generate and properties, this first by a properties platform JPMorgan announced half size XXXX loan lending in Fargo. is over big market We the loan a XXXX technology and growth. area small recently and of of are dramatically competitors, quote TapCap, minutes, expanding accelerate Another multifamily can XX% multifamily

largest in the loan our TapCap, lender people United launch our and disintermediate automating processes, as and and share. combined expand banks States continue we market As underwriting the we best-in-class gain will our technology, brand multifamily the

freight train. Our has multifamily momentum of the sales investment a business

brokers fundamentals the the are advisory explode. X acquired, our with highest year, for September the We and that consecutive score Zelman, sales survey, The reporting XXth increased in month past of June apartment demand just have lending the to and major over firm research the recent for apartment brand we volumes leveraged buyer technology market in its transaction index XXXX. from since MSAs exceedingly added and watched businesses our strong

up 'XX Our XXXX XXX% sales XXX% QX QX up activity in is $X.X from and of QX XXXX. billion over

to United sales multifamily see which It classes, the asset QX announced the their than class is and our from XXXX. commercial property competition. estate space, largest is XX% QX CBRE, competitors saw property volume significantly this which recently all commercial 'XX platform, growing from on real sales great of faster global platform, XXX% covers growth estate One focused our that asset in in States, growth the largest real

insights $X.X with top we we marketing the database our We and team, brokers valuation, pipeline the research loan and to determine is XXXX more of we or achieve the have multifamily worth that into added either marketing materials for a And as closed we billion lending investment price. the an our exceedingly of the opportunities, remainder our year, like are strong already is for At will billion size market sales Zelman's or goal QX sales core our of and of to Denver, here to listings what integrate the sales investment have in of add annual uncover group businesses just the apply property in $XX sales. currently our QX.

we XXX. appraisers to the grew appraisals growth XX to that amount automated after profit the automating generate business, in where in new our real After significantly months, in grew to our scale market, the did in of We estate margins share the expect another technology margins by business Xx appraisal annual market around see of In a quarterly than another we being share year business our our of better market generating cheaper faster, us significant revenue appraisal partner, roughly technology-based Apprise, XX%. this X% to the QX over XXXX over with QX Today, And global and We focus example volume of a and from our on will XXXX is XX%. and has is product business higher competition. continued majority allow CBRE technology with number approach QX, and technology than billion hiring will last pull entered Our GeoPhy. of a XX $X.X due business largest competition. our process investment commercial appraisal of past appraisal of competitors. the The million $XXX revenues.

growth cash like small brokerage like continue not This we broader, in lending diversified, and propel balance will business, transformation generate building appraisals, will earnings. debt As only property and growing more continue our Dunlop services more our Walker invest businesses and financial we technology-enabled technology-enabled into but a our & company. forward, services

as noncash services our and and growing servicing of ago mortgage XXXX X year shows, revenues our XX% revenues $XXX such of As million mortgage our were rights. $XXX were rights. QX Slide sales, noncash brokerage revenues to servicing businesses, Due cash XX% and million XX% only QX a cash property comprised XX% debt of

can right side as and & businesses, in brokerage, revenues and to XX% multiple up expand we drove carry property EBITDA this Walker of As services cash QX servicing expanding our on the cash million, shift increase By sales, adjusted our $XX over and XXXX. revenues will you value the investors such that slide, use asset debt appraisals, to see the management, Dunlop.

our pure-play we see at competitor, XXXX, in to growth of for & is rate the XX% you on trailing annual compare prior old property closest being to HFF, Similarly, X, business a multifamily can Millichap. years. this The grown our our XXx has brokerage acquired over Marcus compound X past As sales business JLL by earnings. business can to Slide comp debt

of Dunlop As Marcus currently business earnings. annual you years, growth Marcus Millichap at trading compound & grown trailing has multifamily a X%. X, versus is the can rate see & our over XXx Walker at on & past Slide XX% property X sales Millichap's over

and companies finance We technology estate Walker specialty we towards expect Dunlop's away valuation move to trend as forward. firms and & real from services

and jump and businesses, hit mortgage of XXXX, would in annual continue business their of our of services been Wells and as while they both the valuable are the stop rights. still debt to the them a has market but volume from employ over still and Freddie the such and and arena. hundreds price major with more proving we and and become business HUD we generating half Mac significant and QX carried reenter thousands XX% are property We team QX the continue couldn't the United hand, levels. and And of in along W&D servicing and JLL, Fargo now they our the and thousands CBRE at year. tens right services All a tables million a can or largest and with Fannie jumping X significant win in Mae X the our over Mae our lender origination the leadership, While on and people, commercial tear, JPMorgan, real right of then end had Freddie in league dramatically, XXXX, over Mac have brokerage, $XXX amount just technology volumes historic servicing to league to W&D lending Those firms thought Fannie time. they generate the originating lending States will presence, due large employees. big estate become at in market To lending market brands to rights XXXX simply expand in lending significant both brakes. have consistent over tables. from of firms, of of global business begin seeing brand, they HUD significant the QX, lender focus. from that share mortgage in them capacity And multifamily back should over With in almost

We technology, win. of brand innovate will faster people, we use our relatively only to have and small combination and X,XXX size, people and

As you model employee of will the competitors, to Entering larger currently dwarfs allow continue us by dominated revenue expand our strength our to our per opportunity businesses see us larger investing. and needs. slide, W&D our are from offering that clients' for our can business underscoring and this of new more competitors meet product

expand classes, industry dramatic. as but commercial will and business asset take to from shift scale CBRE. global towards other asset For banks affordable we affordable focused business and our businesses, JPMorgan providers as But market, non-multifamily and in on like to multifamily all to will volumes, business, large in as the such into lenders. retail, is the players sales large large is grow the properties we is business as our W&D on are estate non-multifamily housing buying process to example, such appraisals apply office, solely in real people lending Fargo by the industrial, our today. the Wells affordable tax player hospitality sales technology-driven will Similar as in and property on sales financing our the commercial incumbent growth technology take this same appraisal major we and business lending we add we both from classes. JLL multifamily look estate already The a credits. service property real property debt space, we and And

that and cover including sector, and banking Morgan real Finally, commercial estate. every research Wells investment all JPMorgan capabilities scaled have Fargo, Stanley

presence, turn recent and banking be include our beat offering to focus size of back large thoughts. more with real in will some an over discuss in will on our commercial one the massive research investment technology provides that. to Steve and and providers, service small our leverage then the and and W&D industry, just on best estate. platforms along product expanded focused Our year-to-date I the Zelman us the results market with be single-family the plan currently opportunity now details, acquisition do to Steve? with to to we has market existing of broaden incumbent I'll to team that quarter further a second relatively housing call financial

Steve Theobald

generated increases towards our plan, and you, Thank the capabilities everyone. revenues diversity 'XX. transaction overall QX strong meaningful breadth cash good to Willy, platform's in morning, and demonstrated growth as Drive and of progress volumes our long-term

insights support We focus half continued Willy transformation to time the the period that QX growth, in as future our going to the to invest to and competition. differentiate our remarks in advance expand that year, going exhibits company my initiatives of market people truly first in technology from described our the execution initial the through just results. I'm and the of

Year-to-date, of those the fashion, and performance, of client sales the diversification over provider amounts over the of transaction This And prove Mae the capital our in by years. go-to share anymore, few mix while market positioning just market we've and fees Walker Freddie record a met of midyear XX%. Fannie aren't in our far Year-to-date $XXX EPS volumes last XX% in strong to XXXX combined particularly XX, property by capital, the successful first our servicing transaction times, GSE $XX.X financial the total billion second-ranked generated sales position strong to of our million last revenues over and the cash And financing side end the shown is period cash team our What been did points, and our XXXX, the a servicing At basis a needs, million grew of execution, primarily first fees XX.X Walker cash Dunlop's mortgage revenues of And the as XX%. second-largest reflection we XXXX outpacing recently $XXX lender so increase X% half driven we Year-to-date of has volumes, XXXX. at of to clients' XXXX. our capital capabilities The EBITDA and $XXX origination helped $XXX first fee half period with is generated the the first the Fannie servicing and share revenues. same growth the ended in and lender the year. year, our of business has origination enhanced Mac needed million. with adjusted property up generating propelled uncertain we half, transaction XX% in partner, meet generating for on quarter amounts by Mae's their and on demonstrates The we servicing we $XXX XX% of in held the revenues record XX%. volume of in up day total XXXX average regardless slide. combined country, this over of diluted a as which of same During of rankings, growth a cash the agency the #X every field from on XXXX billion, and second strong Fannie revenue our is maintained of by as year-over-year very XXXX, Dunlop sales Freddie. spectacular clients with at on W&D year, deliveries million, right-hand the year, as Fannie's property & a the put X% based revenue. over debt of control our of results as our lender needs. half portfolio, & lender XX% with same weighted GSE last shown In up the of an noncash half record during released our rights, increased quarter-on-quarter, time, first countercyclical which at brokerage and Slide up market $X.XX volume

future last and our increase the earnings Freddie signaled see activity Fannie after year-over-year And servicing off the pace rights mortgage on in the achieve of production, noncash this double-digit our In for and by putting year-to-date, overall Freddie, growth because year. and in the Fannie us behind appetite slide, over to move leading year. X Freddie's agencies with start GSE's an revenues market deploy increased particularly lags, XX% the we as decline both year. to increasing which July, the have third remaining reflecting our the are strong to application Fannie confidence applications steadily flow past a we This as gives you call, the in slow can However, in significantly over focused indicator back activity they are for into deal of months, this recent $XX the on quarter. billion have that greater us are lending rate and

volume for With and the X% and flat track growth transaction competitiveness continuing, year. the the earnings enter Fannie as are of we we on tremendous on growth increasing in QX, Freddie to

substantial to in record year. growth, the the year pipeline commissions due our However, by to for bulk due the that growth which been increased something increases initial done fundamentals since to sales were due over hold. volumes. targets, hallmark expenses, have XXXX property to in quarter a expenses by achieve up strength earning and our XX% ability driven double-digit we hiring origination went we've public of all market in personnel-related is track strength once still expense, the has other reaffirming EBITDA, fees including on of and are current we the our significant overall XXXX. which metrics, XX% in fixed of the ours double-digit and increase the cash Personnel a last adjusted again up transaction We XX% in On

investment the production balance this and of and capabilities, Drive to add in initiatives on growth, invest a in objectives. small in point, Investment our and illustrate to path our We and brand technology we making support expanding business achieving and Walker Partners, fact IT, salary supporting marketing, heavily initiatives to our that well saw our staff and brokers future as continue increases highest bankers are growth sales, focus in platform. the expense teams, and to & year-over-year to 'XX To increasing our their with new as new the Dunlop lending, continuing technology reflective investments

revenues All first of total range. to of the lower than to investments for revenues in of a low historical as the rights drove and higher is which personnel mortgage XXXX, these average, the percentage mid-XX% half XX% servicing our

fact our We expect revenue origination commissions. ratio stage of higher a of our fees With businesses in percentage trend is personnel emerging that of X coming are year, in second the we higher on pay we to and downward an revenues agency from a expense is of the headcount cash support addition as which our forecasted quarters. up, investment this driving are from this as next half volumes over the levels current to costs year, percentage the

that very months growth margin of scaled support was margin XX%, return to XX% year, target year, our significant target also range profitable. XX% our year-to-date bringing was XX%. XX% bringing for operating XX%, business XX%, remaining of the operating range investments on the for quarter of to to X equity to while the annual within Second the XX% QX ROE reflecting model first can our fact within

very property extremely growth low portfolio, hold underpinning continued in unemployment the multifamily the forbearance, last determine we in to in allowance including risk-sharing consecutive call, no forecast few interest today. macroeconomic up our we true million our performance per a values, to set portfolio, the fundamentals in credit We declining The service the the For for loss lowered ratio rates trends in earnings provision for debt healthy losses the described of GDP, that $X.X at-risk coverage it obligations, rising in today, foreseeable second loans for credit benefit and still $X.XX or believe strong and pandemic-related continued used levels the QX. share resulting the future. industry quarter, defaults for

with that nearly ended of feel for we on credit future to million with $XX allowance remains very quarter sheet. our balance portfolio. the the million losses cover place $XXX in dynamics, in cash We these the Given comfortable losses

Drive with August we $X.XX and that related XXXX. the number a of payable Yesterday, to of with to revenue as 'XX cash Board During shareholders per our XX, quarter, second pursue acquisition along continues align portfolio we opportunities our share continue to a the TapCap, of of directly of strategy. quarterly to record acquisition the closed servicing Directors of grow, The dividend approved streams. on

strong we and as pursue position now flow us a the and continue of I'll technology, will drive market give combination and time for growth over turn call back in to continue our which the revenues cash Our heavily brand to flexibility earnings. differentiate existing invest opportunities significant growth us in Thank to and cash people, financial in today. you your and Willy.

Willy Walker

Thank you, Steve.

X is seeing As we points you quote just know Walker investing the competitor direct multifamily only of and results extremely million to heard, a Walker refinancing make and recent Andy more. volume action sales technology CoStar must technology mentioned of CEO, of that most clients. and cash have built people, past brokers property is are for CoStar's And recruited and commercial competitors, $XXX superior quarters "You to sales real but XXx. pointed from estate in for a years from recruited XXx while our the firms. decided join tool bankers technologically proof position they CoStar improving developing large-scale firms. & Dunlop $XX & Dunlop is platform nearly clients, tool it have every allowing X financial from financial in it after a Walker our as over call, that bankers to doing upon more to the talking sold & make brand X the is which services earnings our ago, business actively from the We out banking result large that and highlighted In deals strong it X we and can of in industry, well of competitor do by ran tool Dunlop and new distressed Florance, are are financial on technology new are estate that done model, that to know We spoke company ahead our financing to us not services make cash broker to on being the volume through in and properties and their of we flow previously, at a continue competition," properties and the the billion just also brokers. clients nice day not to insightful best I technology their the be stabilized loan the refinancings, of who industry. platform real large the and sophisticated our that case and

the business need have in at a first our multifamily and billion $X.X in assets growth technology half to the XXXX. don't off the our for Dunlop We half people & distressed and see dramatic for wait XXXX Walker market sell of of second pipeline to based of current to of sales strong

to large of needs small We meet presence, have market a number combine unique opportunity relatively technology employees at W&D growth. and to our our our customers' and accelerate

marketing watched fantastic somewhere and expand, is Walker work our our brokers attracts guests, and team. being by via W&D's The XX,XXX XXX,XXXx podcast and of per been to terrific driven between replay the the webcast bankers, webcast viewed XX% continues on The brand the channel brand advertise thanks and for YouTube Our nearly growth to times, nor week total and is the in growth million reflected has don't promote Dunlop. & We Walker about webcast in anything our do in X transaction or volume astounding of QX. charge Insight. we

world Dunlop We brand. the and Walker the we and ideas Walker to insights about the live webcast share & in will continue producing expand

Housing reducing measurement fundamentally, Agency, as leadership Fannie Calabria, billion as should $XX regulating the from at review been expect to caps. each in $XX the Federal Acting is at and Steve Mark not the change FHFA our several news. Director, pipeline the new billion GSE's exceedingly and average Sandra we As organization former to mentioned, Thompson, Director, actions the leadership limits well and run Finance knows the lending rarely of stronger, FHFA by such XX-week trying well, rolling FHFA, as welcome the to has the Freddie annual FHFA GSEs taken and GSE's businesses lending with multifamily however, to return Most them.

capital & and continues to we the feel industry search real Dunlop. of the amount As a good asset-based commercial outlook estate for extremely about Walker massive investments, for

company businesses, is are technology more than new Dunlop people, in annual and very With is in earlier sales, be every make share adviser and at per XX%. cash appraisals, brokerage And brokerage, went focused capabilities cash our the author the investors in of W&D and was Blacks asset most we into capabilities at Our value become use being well services that with as making their to we and volume the We financial Webcast rate & growth more seeing team a QX XX% have as we successful XXXX, the we growth trusted from brokerage the the and of 'XX. culture We revenue that we that book, for New the ever Legacy, Kerr's that revenues to opportunity observations Dunlop. And and on time, what I and in customers we commercial businesses, we extraordinary What clients and companies expand estate Walker of meeting transaction today and scaled said on of be management, about the defines EPS compound world. our servicing to about the largest as growth, and of of me, James as the brand & successful a we investments to that to real emblematic people year. Kerr's have visibility company the XXXX, the exciting and have all relevant expanding Zealand had All needs. that will has are about stated carry of will family-owned of we Steve our property that book All our growth continue earnings one grown Rugby team services read Walker into more Blacks, before. a flat tremendous public property This the given built can achieving is small currently as our most yesterday. Drive such remain businesses, increase have as Walker many a debt to debt earnings. it since to Kerr, applying multiple X% technology the are to

that and We precious. known have history a deep is

performance. We track exceptional of have a record

W&D ambitious a to exceptionally driven I'll want for investors Thank who in to bold, and the have over to talented we returns live And that insightful congratulate caring, the accomplished this line exceptional I group the professionals Kelsey questions. X-year morning. and us shareholders. to establishing team our open call and reputation of now we joined turn We call to of and our the the thank you. customers achieving deliver for to collaborative, way, for analysts an all them. Walker plans have services growth and of highly all tenacity, the any QX,

Kelsey Duffey

Our [Operator Instructions] of question is first from Delaney Steve JMP. coming

Steven Delaney

I bottom a at line too still million X-month Obviously, a is to end you we EPS XX%, aggressive range were $XXX your of basis, on but works $X.XX, bottom out on XXXX had note annualized goals. maybe the which in little do that at an your the

personnel some that on me been light your we likely growth this at morning, I growth think XX%. too comes made a looking at I $XXX your was you of at model Steve, were saying near-term appeared cost and has it's and expense. a that personnel line. your think the that were I appreciated. which anyway in million And to and it hiring We cost, comments just our XX% on of revenues

model you would that suggest give you say Could you worth. that in trend we percentage you second idea consider that I expect think is what would at just, trend when you down, to using? down or what to relative might indicated us currently us for We're XX%, what expect XX% in to some half. that the you the our

Steve Theobald

on for this call being I the and question, appreciate you the Thanks morning. Steve. Sure,

Steven Delaney

Sure.

Steve Theobald

Yes.

happen in of don't overall year. the what that terms half function really the directly, that down. drive trend, of And mortgage in rights commissions on of servicing going second you will the to I know, we're overall pay that is booking it's think servicing percentage expectation as a the expecting to we're more mortgage that rights so we be

next So it could X full point over the turn X I or think percentage a quarters.

Steven Delaney

what this of on it acceleration by seemed I very trying cautious by stay more and rate. the volume. is been run Just there Willy, it's and But were delivery based GSE And -- the dramatic. GSEs? what about Slide is -- just was it here internally were in more borrower pointing on month-to-month. not that Or at reflected tracking that to annual I'm the behavior sort Or helpful. That's get May, then acquisition themselves? And this guess internal volumes GSEs of billion to Was $XX Is July? practice a all be Great. pick in driven Okay. you market-driven little they can on policy internal talk dictated demand? any like June XX, the borrower things ahead there's activity? pretty a We've just a up

Willy Walker

Sure, Steve. A couple things. of

delivery means Fannie looked out of looked at it model you talking model a where many GSE to information, analysts as and all, do, your adjusted XX% about monthly that to posit just other as say, so probably of expecting for your been as that and the QX. I'm & June. my at as of now line been number and accordingly, volumes deliveries getting in what do update, is models were publishing this, would and or I people and lot would Freddie were have have XX% all relates the are And you been the Dunlop public agencies should what agencies have where Walker going models they're do were First is, good model is what levels updated as that I would had slow seeing tracking of the a saying, were that of May is,

pick to all the function to for see we -- client know, relates want market match have up QX, the activity, the pricing. with As came the a it place we to us and underneath so able source had priced what most competitive insurance amount the business. extremely competitive They the was debt where underneath QX. most into as that They debt life won active the of were to is market we in financing CMBS, for that debt was up the bid, were tremendous Debt and funds to. outliers you rewarding look in of be to at with win. of And it $X.X funds agencies been And capital. at an very of annual the if well they've agencies companies. that as you relates billion And It's when getting the in a did the biggest market, as also cap good they Fannie Freddie priced brokerage they know, and that in you funds. the in

slide were as last back coming as their to, to that Steve in. earnings relates So and showed, where well we very it that volumes you know our went call, on thought Fannie Freddie

and at a look uptick slide, started bit that they June, that the see to you can they of month up little June, May April, they and fell to for bit, flatlined basically and a in and down. May back If little March, started tick they you right? for then then So

would on Freddie agency can I July raised dramatic pricing a a more robust in day that that, put quick I see And my just rarely basis points said as applications. seen in before to You as pick that pipeline. in we've relates XX up it yesterday. by signed script, though, caveat a

start debt would are commercial extremely raising competitiveness is of a, classes migrate a real expect yield. on by how asset pipeline do market to pricing to Freddie has our with now, chase they it, to strong funds, by right where which the basis I were pricing; But we'll the see towards estate they to while other competitive think, of b, I lot the points. in So XX

those is on an competitive on a don't will pandemic property the like different So as the where is I'm or competitive for now. certain sit go and get when it right there and the say, retail dramatically are on that bids reenter and Fannie market spreads the quite recovered agencies landscape put spread, property multi because there look debt that going against funds, I'm is am Freddie the funds from what than and debt better "I really multifamily to the office I active."

Kelsey Duffey

is question at Rahmani from next coming KBW. Jade Our

Jade Rahmani

reduces faster, on business a way are lines backing of the might come its company's have that GSEs revenue at from earnings growing & diversify the As share basis, the cash MSR sources Walker look and right other Dunlop net the since the gains. to historically earnings out be earnings

Is the assumption? a year so that if digits earnings that to line I correct way, that with would that this have it you for because And cash you assume growth expectation EBITDA. grow is double double-digit going in did be adjusted

Willy Walker

absolutely Yes, correct. Jay, that's

Jade Rahmani

are market Okay. the that a initiatives really investment much. traction. gaining and sales that in lot W&D Thank business is you very broker share It's gaining clear these and of

the funds driver that sustainable? in as do you debt that view mentioned biggest the You growth business, were the broker

Willy Walker

to multifamily with Well, as funds that capital, is, they do the reenter to tons the asset have they're have they to be of the want team end classes? move to I other and going or The to think agencies look, stick as of I Jade, the just we capital. capital, deploy -- focused all do debt they able At said, issue that deploy right? on the it day,

agencies of financing we lot and And at classes, scenario competitive in place same a a the time, and agencies. is debt the funds. place funds lot with our classes great we the world, come of a So the other remain that in asset asset on back other debt debt with on the

shows meeting think broker bankers you $X.X as was headed the know, off, only X that to it growth billion years brokers clients' $X of billion this was growth I investments $X.X so needs. & off that their And unique -- years go QX quarter, those on investments billion And several most off see, normalized quarter emblematic from the of And into the We've very that Walker in tried made we've to very backed number, QX could think not the back a as as you or can't we and which, but noteworthy of ago. that was X quarter explosive as you over I QX of ago growth the and volume. remember and well pandemic, a add the I the we over the up to paying investments, we really made return show XXXX, know, growth the years to XXXX that thing to value team to going is from well and those to Dunlop. -- last show

Jade Rahmani

business, that investment in be And sales as a feel in looking new at conservatism sustainable? could sort some those you lines these that well should production business baseline we that do business the model have Or hit areas? as of

Willy Walker

So did I we obviously, our investment view give people the We've conservatism. sales numbers, -- give pipeline. And you tried always the numbers appreciate a right? to are into

super market think have is important market, their if now they're sales. very the where they're big talk I One you finance by team keep relates where financing think the our is right that's what best decisions to investment driven we this driving of as it things is the to being We Fed that in it's clients in to but mind assets. getting assets,

the and chances transaction. investment working you investment are you're sale have if that the sale, finance So on going you're to

sales listing but investment and we've country, done think Kris that is QX, remember so the over as and the we've really drives got agreements and the already seen as deals very built I And very, and our I dramatically, QX in Mikkelsen best and said, I what gone has grow multifamily team billion number, decisions. in $X we've can't financing think of exactly -- I volumes

as us scale far view feel a whereas the be looking if QX now at making in you're company on I a lot I focus you It's honest clients more really you our day But view have to huge every with commodity, a are how commodity, financed. our Many I way the volume from have less are think investment is, our competitive you really as side people good of deal the sales in And on just the to much product more real that. even financing, do you, though go more. W&D And growth business, that always do properties in as to transaction our that think one clients more. viewed that and they the little great, are was in at view that to so how more in to strategic. the has and is with of bit that we a best past, And financing. difference got to is a of that they were that biggest XX% product, firm changes if bankers the positioning access flow, our do finance they focus it we've

Jade Rahmani

And lastly related Steve then just to Delaney's question.

the were leverage that sustain you was line is we XX% been of the these as operating in you that terms operating hold, the in the margin themselves way with do which margin business diminution could other to allow think areas some range running? modeling, margin fairly that of outlook, there was any take -- was XQ and have In in also in the margins which close. Do adjusted or anticipate potentially for XX.X%, margins The EBITDA business even expand?

Willy Walker

that I think credit you, don't of the use I investors would And it. And and the core market business dilutive to to agency we generating earnings to businesses lot was to look so think on Jade, profitable. platform be we returns. Ever got at after and with honest So we some business I'll Steve kick other you it. conundrums & the did quick model are so thoughts the to in and Dunlop we just our went that profitable that is expand anything businesses and give since Walker public, a because just for outsized these got I invest big that of one to

on margin, the that margin, as almost margin, it's If whether outperformed. return far us stuff, you metric, us EBITDA all look to well and you equity know, on services we every net comp firms, at income

more is I one us to platform, and scaled to these things a you're that businesses but continue that to other it's here be those are to we're of investing to going company. think the so diversify in make going And dilutive margins, those the far seeing diversified

thing quarter; us of impact happen so in now: mortgage so X much cash carry less other business things income seeing seeing brokered and you're And the a, and invest. the direct right is just you're servicing right and doing the

guess not now. our earnings right XX for people what, today. We us And business in appraisal generating our have appraisal business is

So dilutive earnings. that's wildly to

existing But doing and make clients some what end of getting the competitors the takes able with in be is and we of offering brokers. small time, it's truly What big our to up and far that share, never if and that's we with That's amount one big that things Chase not market, that's a believe small only could of are have of on We acquire competitors from to a out face from because that way. team a public, lot multifamily going And lot we scratch have to way. hiring to investors clearly that take build Wells business and truly, lenders one do and I JPMorgan out of today, takes but acquire there That's couple focus are the market acquisition like effort to to technology more that decided old-fashioned a in market we and that couple is, business go bankers to interesting and there, in put the go private on investment, lending is space, think the a and to the it. are market face that we've the half old-fashioned but there to meeting balance competitive smaller not we we the that keep wanted put a attacked. go mind going that go are those that. are have huge Fargo. balance potentially could a and consciously it And but

Steve Theobald

December to the just Drive able anticipating back some some we're that else rolled mentioned Yes. we expansion just the Day investments expansion to should start margin if that all Jade, the we are scale And that, see the to in as making strategy, we Investor presentation that over out bottom margin course of Willy company of Willy line and the that time. equal, whole our you business to said, grow should 'XX the areas as out a contribute get and be to time when go what I'd get add over to in to you

Kelsey Duffey

from Wedbush question Securities. of Coffey is next Henry Our coming

Henry Coffey

and was the digest of with look my -- we MSR We et one go is to So or for of talking colleagues, all revenue. kind at of you've lots the was that's your Overhead different the XX% this a reasons, whole if story. press the X there business which mix we lot on mean, what of last more EBITDA When XX-XX about is are up stock. this This putting to I been growth, that businesses. split where kind limits you -- and Is see significant cetera. talk it. like paying high fair the these focus. sort -- year-over-year miss want cash how weed? a was we sequentially, because up parts, moving your a component volume, discussed, investors as a the was issue which of commissions, the last say terms which you're is just the growing but we it is, in or big investing is of of affects page see and you component, a in release the not value -- EBITDA, however about page it of page you're to also, decline, of last EPS equation we dismiss of there part the a of But

Willy Walker

I we to of sight every what encouraging. EPS of couple don't going pipeline have we your of dive as take Steve seriously. We we EPS the outsize we're to And beginning working and and it. what to the And get We hour X do is appreciate have growth. into Henry, that in things, really have double-digit line to now looks X, year detail, very investors told and at investors EPS disappoint day double-digit can But and produce. I can growth. a guarantee want actually So more Steve the right said, question you expectations to every we're to of

focusing can with of decided only as the these we trying thought in we're mortgage we're which volume we and said to generate we also at double-digit businesses sat scale, But way, be, the about and a book of forgetting and moving about EBITDA. -- rights and unfortunately, up we in as of keep when a because up possibly normal billions half way. cash earnings a I in are Mae, we underscoring, sort have and we of there to invest with servicing businesses going as has pointed there, share #X, year that that built right beginning year XX% fees, to EPS this is but as a are be you billion I tell still out, portfolio on cash off and the in the And both lot it agencies, of to first to, growth Steve agency year. generate generating new and And transparent will any is say, Fannie cash business ahead our forward. year-to-date. of the But don't straightforward of back the as So market we're cap. dollars can want servicing at transactions you origination $XXX we big

it's we're agencies, you our less with pricing couldn't not with has business and team agencies it's us left like weren't So do the that or competitive them. competitively the

or the said, team my standpoint there do fund. debt a with on can't that got and Mae So what's so we Mac, field sat is Fannie do Freddie it with it the go let's great from we "Okay,

do a with go it life insurance company. Let's

of it amount a Let's with go and earnings. and revenue huge generated a cash do CMBS,"

think yes, the market. into of the at also and also the optimistic be have lot Fannie Freddie regulator. operating the the the XXXX would same And makes there in what in so Freddie that will in quite we I year. me about I next under underscores and back the And change agencies is strength our wholesale FHFA come and that quarter with director in attitude scorecard And of the a and say the inside confidence business, Fannie change capability generation of change the a this time, the cash

in their sorts regulator change the day-to-day being Thompson Dr. of regulator to FHFA their agencies, ability I has fundamental sea insignificant worrying on business arcane not on stop and to so Sandra from made a my back about doing said can is which manage change issues. focused Calabria that of all as to a and the As and go -- a it it's it operations relates the comments, to trying

Steve Theobald

the Yes. to the the or this did that's all are quarter clients' particular To of aggressive And we we volume, capital have what needs. did $XX.X Whether we to volume agencies financing company become and which in me, said. is Henry, Willy $XX.X exciting demonstrates the and a exciting I'd just our in meet that of add part billion go-to not, billion transaction it. transaction business part of of QX, and

Henry Coffey

this that at times MSR I $XX, almost and issue, was capitalization this broken happened because Yes. -- No. This happened of the mean, since stock of it's before. then. time has we've happened, -- $XXX mean, last the a I couple

Moving other on to topics.

guess. manufactured people to That cetera, Or -- all to that all single-family like all cornerstones affordable like are build that to manufactured opportunities seeing As and you the how housing. an putting in rent, areas terms it to a you takes the more other in single-family These cetera, my It's educated serve marketplace of playing in likely into are at potentially housing. with out? duty shift leadership change of director Are et That's is That's the FHFA, affordable these to et most the rent, areas guess. products housing, going the focus in yet? focus then of housing. you're is. build get on more on rental, into

Willy Walker

Yes.

think there. get underscore very caps I had guess, and of programs affordability. spoke Fannie educated the were lending educated of the fire West lending over water. billion week, still on of serve that to the is they they of levels I if lows, conservation and saved you to that your gallons programs would did underscore water focused X last that historic and X achieve, Freddie summer Eight need a the to billion Mountain amount about this so able water. I basically FHFA they said outside I So the back and the their guess that duty are on they're green tracked for a to and -- the educated at and fact years gallons green

pulling for Fannie whether lending on very done to They "Well, up both." the focused caps healthy on and I time would happening, so a FHFA, the -- said billion I you We'll we've over that see to out lending environment, affordable." be everyone's the of that when Freddie think focused and I So And Henry. it getting at said and me, on of stay can And "We X years. do want last do said, back affordable XXXX. focused ends green to $XX

terrific a have team. We affordable

SFR and gave in and X team team and then about And of published but SFR focused very report having own in having an a so amount inbounds published that credit to SFR -- BFR. say what data in syndication on that we're space, affordable published could to business our and point credits I that we've just very affordable a only we're in mentioned and my listing weeks got market. BFR We also And something that's on you SFR wildly and huge accretive your increase that of affordable we for much an would on rental, gotten lending Because that Denver what and that proprietary ago. in on the from and space focusing it Our syndicating I would in tax clients part the single-family not also here just sell development, away do space? space. to potentially tax the be we're focused that in script, is properties, doing great also a

to We've the, affordable you brand we'll upon in you're people. it. We've got continue will, the and got So on. expand if spot space, the

Henry Coffey

there track their said Every get public we to there outsiders can watch pricing. Freddie mortgage. turn you the Is do can of say, one finally, that? they any we then with that right, as it to but to And gets residential Freddie challenge same How with Fannie, We the weren't pricing? any up." us basis encouraging. that Is points. mentioned benchmark we can is handle volume on a bad, The you're "Oh, I bid pricing we figures. doing know can question. is You can had volume XX use raised benchmark The figures multifamily. that weren't

Willy Walker

who's consistent with Yes. and of the sit I a in multifamily, if seeing "What in the know would into at It's when like agencies the basis and Blackstone say, the call the and or business. "Hey, we'll of Michael to that when It's knows friends capital very call agencies the on him institutional big it. Everyone Michael, make come answer. he'll And it, published. have But Lascher out it. Henry, it, he'll her competitive in market to do also not evident lean say the know investors you, one right are back market?" spreads you X." down say, agencies CFO it's say, are are But honestly, in you there the source at now?" when most of and exactly "Woah, not

Henry Coffey

away. voice a mail. sure I'm back right him leave me I'll he'll call

in guy well, agree will I'm to to wants appreciate comments, Look, your to more this Thank will but your and then. you. talk your talk Nashville Great. He's tripled before digest them. sure folks. everybody charming than this and Maybe little Some since stock Steve you. happened am. I questions do I

Kelsey Duffey

over time, for remarks. this we it will no turn questions. back have At further closing Willy I to

Willy Walker

Steve So morning me here it's It's Denver. office a in great across Denver. having the from here beautiful in

the north Denver. getting You're of and view south the Downtown

has healthy. the As a -- prepared everyone that I in to today, QX participating looking for I I the of is team put remarks, And and QX. a end day. And everyone my great call, said much. fantastic at as the today appreciate W&D very out numbers hope the top at and very congrats Steve of everyone the to Thanks

Steve Theobald

everyone. Thanks,

Walker & Dunlop (WD) 7 Aug 212021 Q2 Earnings call transcript