Walker & Dunlop(US:WD)2022-08-04 11:35Loan Origination and Transaction Volumes - In Q1 2022, new loans represented 68% of refinancing volumes and 25% of total transaction volumes from new customers [136]. - Total transaction volumes increased by 56% in the first half of 2022 compared to the same period in 2021, with multifamily property sales up 141% [182]. - Fannie Mae and Freddie Mac had multifamily origination volumes of $34.7 billion and $29.6 billion for the six months ended June 30, 2022, representing increases of 7.1% and 9.2% respectively from the first half of 2021 [184]. - Total debt financing volume for the three months ended June 30, 2022, was $14.65 billion, up from $10.19 billion in the same period in 2021 [193]. - Property sales volume for the six months ended June 30, 2022, was $11.42 billion, compared to $4.74 billion in the same period in 2021 [193]. Company Acquisitions and Subsidiaries - The company acquired GeoPhy B.V. on February 28, 2022, to enhance its small-balance lending platform and technology-enabled appraisal services [139]. - Apprise, a subsidiary of the company, has seen rapid revenue growth and increased volume of appraisal reports generated [150]. - Zelman & Associates, a subsidiary owned 75% by the company, enhances market insight in housing trends and generates revenue through the sale of research data and investment banking services [162]. Financial Performance and Revenue Growth - Total revenues for the three months ended June 30, 2022, increased by 21% to $340,848,000 compared to $281,411,000 in the same period of 2021 [198]. - For the six months ended June 30, 2022, total revenues increased by 31% to $660,292,000 compared to $505,699,000 in the same period of 2021 [200]. - Adjusted EBITDA for the three months ended June 30, 2022, was $94,844,000, an increase of 43% compared to $66,514,000 for the same period in 2021 [218]. - The company reported a net income of $70,236,000 for the six months ended June 30, 2022, a 40% increase from $50,125,000 in 2021 [269]. Expenses and Cost Management - Total expenses for the three months ended June 30, 2022, rose by 29% to $267,238,000 compared to $207,113,000 in the same period of 2021 [198]. - The company experienced a 23% increase in personnel expenses for the three months ended June 30, 2022, totaling $138,913 compared to $119,994 in 2021 [238]. - Other operating expenses for the three months ended June 30, 2022, increased by $3.9 million, primarily due to higher professional fees and costs from acquired subsidiaries [277]. Risk Management and Credit Losses - The company has risk-sharing obligations on nearly all loans originated under the Fannie Mae DUS program, absorbing losses on the first 5% of the unpaid principal balance, with a maximum loss capped at 20% of the original unpaid principal balance [154]. - The calculated CECL reserve for the company's $51.2 billion at-risk Fannie Mae servicing portfolio as of June 30, 2022, was $37.7 million, down from $52.3 million as of December 31, 2021 [324]. - Defaulted loans as a percentage of the at-risk portfolio increased to 0.15% as of June 30, 2022, compared to 0.10% in the previous year [316]. Technology and Operational Efficiency - The company leverages technology and data analytics to improve the consistency and speed of multifamily property appraisals [150]. - The company’s growth strategy includes strategic investments in technology to enhance customer experience and operational efficiencies [136]. Shareholder Returns and Dividends - The company paid a cash dividend of $0.60 per share for Q2 2022, which is 20% higher than the dividend paid in Q2 2021 [304]. - Cash dividends paid increased by 25% to $40,143,000 in 2022, up from $32,122,000 in 2021 [231]. Market Conditions and Economic Indicators - Multifamily occupancy rates and demand for new leases reached record highs, with overall vacancy rates at 3.7% [179]. - The loss rate used in the forecast period was updated from three basis points to 2.2 basis points in Q2 2022, reflecting expectations of economic conditions [169].