PART I FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Walker & Dunlop, Inc. as of June 30, 2019 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $2.99 billion, liabilities to $2.03 billion, and equity to $964.2 million as of June 30, 2019 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2019 (unaudited) | December 31, 2018 | | :--- | :--- | :--- | | **Total Assets** | **$2,994,217** | **$2,782,057** | | Loans held for sale, at fair value | $1,302,938 | $1,074,348 | | Mortgage servicing rights | $688,027 | $670,146 | | **Total Liabilities** | **$2,029,982** | **$1,874,865** | | Warehouse notes payable | $1,313,955 | $1,161,382 | | **Total Equity** | **$964,235** | **$907,192** | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q2 2019 total revenues increased 12% to $200.3 million, with H1 revenues growing 19% to $387.8 million Q2 2019 vs Q2 2018 Income Statement (in thousands, except EPS) | Metric | Q2 2019 | Q2 2018 | | :--- | :--- | :--- | | Total revenues | $200,325 | $178,204 | | Income from operations | $56,978 | $52,970 | | Walker & Dunlop net income | $42,196 | $41,112 | | Diluted earnings per share | $1.33 | $1.26 | Six Months 2019 vs 2018 Income Statement (in thousands, except EPS) | Metric | H1 2019 | H1 2018 | | :--- | :--- | :--- | | Total revenues | $387,762 | $325,656 | | Income from operations | $113,062 | $96,861 | | Walker & Dunlop net income | $86,414 | $77,973 | | Diluted earnings per share | $2.72 | $2.40 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For H1 2019, net cash used in operations was $159.2 million, with investing activities providing $30.7 million Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Activity | 2019 | 2018 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(159,204) | $(254,150) | | Net cash provided by (used in) investing activities | $30,707 | $(138,590) | | Net cash provided by (used in) financing activities | $101,869 | $275,887 | | **Net (decrease) in cash** | **$(26,628)** | **$(116,853)** | [Notes to Financial Statements](index=7&type=section&id=Notes%20to%20Financial%20Statements) The notes detail business operations, significant accounting policies, and specific financial statement accounts - The company is a leading commercial real estate services and finance company in the U.S., offering Agency Lending, Debt Brokerage, Principal Lending and Investing, and Multifamily Property Sales services[16](index=16&type=chunk) - The company's MSRs had a net carrying value of **$688.0 million** as of June 30, 2019, up from **$670.1 million** at year-end 2018, with an estimated fair value of **$874.0 million**[41](index=41&type=chunk)[42](index=42&type=chunk) - The allowance for risk-sharing obligations related to the Fannie Mae DUS program increased to **$8.0 million** as of June 30, 2019, from **$4.6 million** at year-end 2018[45](index=45&type=chunk) - As of June 30, 2019, the company had total warehouse facility capacity of **$4.9 billion**, with **$1.3 billion** outstanding[50](index=50&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's business, economic environment, and financial results for Q2 and H1 2019 [Business and Market Overview](index=27&type=section&id=Business%20and%20Market%20Overview) The company operates in four segments, with strong commercial real estate market fundamentals, especially in multifamily - The company's business focuses on originating, selling, and servicing commercial real estate debt and equity, primarily for multifamily properties[108](index=108&type=chunk)[109](index=109&type=chunk) - Management views commercial real estate market fundamentals as strong, driven by high demand for multifamily housing due to low home ownership and new household formation[133](index=133&type=chunk)[134](index=134&type=chunk) - The FHFA set 2019 loan origination caps for Fannie Mae and Freddie Mac at **$35.0 billion** each, consistent with 2018, excluding certain affordable and green loans[140](index=140&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Q2 2019 total transaction volume grew to $7.3 billion, with revenues up 12% to $200.3 million Total Transaction Volume (in thousands) | Period | Q2 2019 | Q2 2018 | H1 2019 | H1 2018 | | :--- | :--- | :--- | :--- | :--- | | Mortgage Banking Volume | $6,204,851 | $5,709,448 | $11,449,544 | $10,220,965 | | Property Sales Volume | $1,101,518 | $483,575 | $1,798,129 | $821,320 | | **Total Transaction Volume** | **$7,306,369** | **$6,193,023** | **$13,247,673** | **$11,042,285** | - Gains from mortgage banking activities in Q2 2019 increased **5%** to **$106.9 million**, but MSR income declined **12%** due to a **24%** year-over-year drop in the weighted-average servicing fee rate on Fannie Mae volume[158](index=158&type=chunk)[167](index=167&type=chunk) - Personnel expenses for Q2 2019 rose **18%** to **$84.4 million**, primarily due to a **12%** increase in average headcount and higher commission costs tied to increased origination and sales fees[158](index=158&type=chunk)[176](index=176&type=chunk) - The effective tax rate for Q2 2019 was **26.0%**, up from **22.5%** in Q2 2018, mainly due to a decrease in realizable excess tax benefits from stock option exercises[182](index=182&type=chunk) [Non-GAAP Financial Measures](index=43&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA increased 25% to $62.6 million in Q2 2019 and 27% to $129.3 million for H1 - Adjusted EBITDA is defined as net income before taxes, interest on corporate debt, amortization, and depreciation, adjusted for certain non-cash items like MSR gains and stock compensation[185](index=185&type=chunk) Adjusted EBITDA Reconciliation (in thousands) | Period | Q2 2019 | Q2 2018 | H1 2019 | H1 2018 | | :--- | :--- | :--- | :--- | :--- | | Walker & Dunlop Net Income | $42,196 | $41,112 | $86,414 | $77,973 | | Adjustments | $20,413 | $8,857 | $42,879 | $24,146 | | **Adjusted EBITDA** | **$62,609** | **$49,969** | **$129,293** | **$102,119** | [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity sources include cash from operations and $4.9 billion in warehouse facilities, meeting all regulatory requirements - The company's operational liquidity was **$209.8 million** as of June 30, 2019, significantly exceeding the required **$36.7 million**[211](index=211&type=chunk) - In February 2019, the Board approved a new **$50.0 million** stock repurchase program, with **$48.5 million** remaining available as of June 30, 2019[212](index=212&type=chunk)[213](index=213&type=chunk) - The company has a **$300.0 million** senior secured term loan maturing in 2025, with an outstanding balance of **$298.5 million** as of June 30, 2019[236](index=236&type=chunk)[238](index=238&type=chunk) [Credit Quality and Allowance for Risk-Sharing Obligations](index=53&type=section&id=Credit%20Quality%20and%20Allowance%20for%20Risk-Sharing%20Obligations) The at-risk servicing portfolio grew to $34.8 billion, with an $8.0 million allowance for risk-sharing obligations Key Credit Metrics (as of June 30) | Metric | 2019 | 2018 | | :--- | :--- | :--- | | At risk servicing portfolio | $34.8 billion | $30.0 billion | | Maximum exposure to at risk portfolio | $7.1 billion | $6.2 billion | | Defaulted loans as a percentage of at risk portfolio | 0.06% | 0.02% | - The provision for risk-sharing obligations for the first six months of 2019 was **$3.0 million**, compared to **$0.3 million** in the prior-year period[250](index=250&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include interest rate risk, affecting earnings and borrowing costs, and market value risk for MSRs - A **100-basis point** increase in 30-day LIBOR would increase annual escrow earnings by **$19.9 million** but also increase annual net warehouse interest expense by **$6.6 million** and corporate debt interest expense by **$3.0 million**[258](index=258&type=chunk)[259](index=259&type=chunk)[261](index=261&type=chunk) - A **100-basis point** increase in the discount rate would decrease the fair value of MSRs by approximately **$27.1 million** as of June 30, 2019[262](index=262&type=chunk) [Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2019, with no material changes - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of the end of the period[264](index=264&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) The company is party to various claims and litigation, none of which are considered material - The company states that it is not party to any material legal proceedings[267](index=267&type=chunk) [Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the 2018 Annual Report on Form 10-K were reported - No material changes to the Risk Factors disclosed in the 2018 Form 10-K were reported[268](index=268&type=chunk)[269](index=269&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2019, the company repurchased 33,826 shares at $51.88 per share, with $48.5 million remaining for repurchase Issuer Purchases of Equity Securities (Q2 2019) | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Program | Remaining Program Value | | :--- | :--- | :--- | :--- | :--- | | **2nd Quarter** | **33,826** | **$51.88** | **29,803** | **$48,453,857** | [Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including agreements, CEO/CFO certifications, and XBRL documents

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-35000 Walker & Dunlop, Inc. (Exact name of registrant as specified in its charter) | Maryland 80-0629925 | | ...

OR Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Washington, D.C. 20549 FORM 10-K For the transition period from to ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-35000 For the fiscal year ended December 31, 2018 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the ...