Walker & Dunlop Reports Second Quarter 2013 Results

08 Aug, 2013, 06:00 ET from Walker & Dunlop, Inc.

BETHESDA, Md., Aug. 8, 2013 /PRNewswire/ -- 

SECOND QUARTER 2013 HIGHLIGHTS

  • Origination volume of $2.6 billion, up 91% over second quarter 2012
  • Total revenues of $90.7 million, up 94% over second quarter 2012
  • Adjusted net income up 65% over second quarter 2012 to $15.3 million, or $0.44 per diluted share
  • GAAP net income up 57% over second quarter 2012 to $14.5 million, or $0.42 per diluted share
  • Servicing fees of $22.4 million, up 128% over second quarter 2012
  • Servicing portfolio of $37.9 billion at June 30, 2013, up 116% over June 30, 2012

Walker & Dunlop, Inc. (NYSE: WD) (the "Company") announced today second quarter 2013 revenues of $90.7 million, a 94% increase from $46.7 million in the second quarter 2012.  Revenue growth was driven by a 91% increase in loan origination volume and a 128% increase in servicing fees.  Adjusted net income for the second quarter 2013, which excludes selected expenses relating to the acquisition of CWCapital1, increased 65% to $15.3 million, or $0.44 per diluted share, from $9.3 million, or $0.42 per diluted share, in the prior year.  GAAP net income for the second quarter 2013 increased 57% from the second quarter 2012 to $14.5 million, or $0.42 per diluted share.

"91% loan origination growth, 94% revenue growth, and 65% adjusted net income growth are great numbers for the quarter," stated Willy Walker, Walker & Dunlop's Chairman and Chief Executive Officer. "We continue to grow significantly faster than the industry average by diversifying our lending operations and retaining the exceptional people we have at Walker & Dunlop.  HUD origination volumes rebounded nicely in the second quarter, and contributed to a 325% increase over the second quarter of 2012. Capital Markets origination volume of $758 million is a record and grew 87% year-on-year.  We made significant investments to build out our Capital Markets business in 2012 and we are very pleased with its growth and ability to meet our customers' financing needs."  Walker continued, "Fannie Mae became somewhat more selective during the quarter as it adjusted to its new lending cap, producing only modest growth of 26% over the second quarter 2012; however, we had record origination volumes and very robust growth of 176% with Freddie Mac.

"When we began the year, we laid out a plan to grow our Capital Market business and raise proprietary capital.  We have grown Capital Markets originations by 73% to $1.1 billion in the first half of 2013 and announced this week the launch of our largest proprietary capital initiative to date, a large loan bridge program.  However, when we established 2013 origination guidance, we did not know HUD would run out of commitment authority or that FHFA would impose a 10% reduction on the GSEs' 2013 multifamily lending volumes. Given these changes, we are revising annual origination guidance from $10.0 to $12.0 billion to $9.0 to $11.0 billion, and we are establishing third quarter 2013 origination guidance of $2.0 to $2.5 billion."

OPERATING RESULTS

LOAN ORIGINATIONS were $2.6 billion for the second quarter 2013 compared to $1.3 billion for the second quarter 2012, a 91% increase.  Capital Markets represented 30% of the quarter's volume due to strong demand for commercial real estate loans by Life Companies and CMBS lenders. The combination of Walker & Dunlop and CWCapital's origination teams contributed to a 325% increase in HUD originations.  Originations with Fannie Mae were $772 million, up 26% over second quarter 2012.  Freddie Mac originations of $616 million represented 176% growth year-on-year. 

TOTAL REVENUES were $90.7 million for the second quarter 2013 compared to $46.7 million for the second quarter 2012, a 94% increase, driven by our increased loan origination volume and continued growth in servicing fees. 

GAINS FROM MORTGAGE BANKING ACTIVITIES for the second quarter 2013 were $63.1 million compared to $33.9 million for the second quarter 2012, an 86% increase.  The increase was driven by the year-over-year increase in loan volumes. LOAN ORIGINATION FEES were $34.6 million for the second quarter 2013 compared to $17.1 million for the second quarter 2012, a 102% increase.  GAINS ATTRIBUTABLE TO MORTGAGE SERVICING RIGHTS ("MSRs") were $28.5 million for the second quarter 2013 compared to $16.8 million for the second quarter 2012, a 69% increase.  

TOTAL EXPENSES were $66.9 million for the second quarter 2013 compared to $31.6 million for the second quarter 2012, an increase of $35.3 million, or 112%.  Expenses increased due to acquiring CWCapital, investing in the growth of our Capital Markets platform, significant increases in amortization expense due to the growth of our MSR portfolio, write-offs of MSRs due to loan prepayments, and continued investments in our efforts to raise proprietary capital. Personnel expense was 41% of revenues for the second quarter 2013, compared to 37% for the second quarter 2012, reflecting the increase in compensation cost for attracting new members of our sales force and retaining existing originators. Amortization and depreciation expense increased $11.4 million to $18.2 million for the second quarter 2013, from $6.7 million for the second quarter 2012, due to the 129% growth of our MSR portfolio since June 30, 2012 and a $2.0 million increase in write-offs due to prepayments.

ADJUSTED INCOME FROM OPERATIONS was $25.1 million for the second quarter 2013, an increase of 66% over the second quarter 2012, resulting in a 28% ADJUSTED OPERATING MARGIN compared to 32% for the same period last year.  GAAP INCOME FROM OPERATIONS was $23.8 million for the second quarter 2013, an increase of 58% over the second quarter 2012, resulting in a GAAP OPERATING MARGIN of 26% compared to 32% for the same period last year.

SERVICING PORTFOLIO

The SERVICING PORTFOLIO totaled $37.9 billion at June 30, 2013, a 116% increase from $17.6 billion at June 30, 2012.

SERVICING FEES were $22.4 million for the second quarter 2013 compared to $9.8 million for the second quarter 2012, a 128% increase. 

The WEIGHTED AVERAGE SERVICING FEE was 24 basis points at June 30, 2013 compared to 23 basis points at June 30, 2012.

CREDIT QUALITY AND RISK-SHARING OBLIGATIONS

The Company's AT RISK SERVICING PORTFOLIO, which is comprised of loans subject to a defined risk-sharing formula, was $14.6 billion at June 30, 2013 compared to $8.3 billion at June 30, 2012.  The 77% increase is primarily due to the addition of at risk loans acquired from CWCapital.

The Company's at risk portfolio continues to demonstrate strong credit performance, as exemplified by the following credit metrics:

60+ DAY DELINQUENCIES were $9.1 million, or six basis points of the at risk servicing portfolio, at June 30, 2013 compared to $4.0 million, or five basis points of the at risk servicing portfolio, at June 30, 2012.

PROVISION FOR RISK-SHARING OBLIGATIONS for the second quarter 2013 was $0.8 million, or one basis point of the at risk servicing portfolio, unchanged from the second quarter 2012.

NET WRITE-OFFS for the quarter ended June 30, 2013 were $4.5 million, or three basis points of the June 30, 2013 at risk servicing portfolio compared to $1.6 million or two basis points for the second quarter of the prior year.  Write-offs represent the cash settlement of provisions for losses recognized in prior periods.  During the second quarter, we settled six properties for which provisions were taken during 2010 and 2011 and have subsequently resulted in no additional charges to the Company.

YEAR-TO-DATE RESULTS

TOTAL REVENUES for the six months ended June 30, 2013 were $159.9 million compared to $81.1 million for the same period last year, a 97% increase.  The increase in total revenues was largely driven by increased LOAN ORIGINATIONS, from $2.0 billion to $4.3 billion and significant growth in our servicing portfolio. GAINS FROM MORTGAGE BANKING ACTIVITIES for the six months ended June 30, 2012 were $106.0 million, a 97% increase over the same period last year.  Servicing fees increased 127%, over the same period last year to $43.5 million.

TOTAL EXPENSES for the six months ended June 30, 2013 were $123.8 million compared to $56.5 million for the same period last year, a 119% increase.  The increase in total expenses was due to the acquisition of CWCapital, investments made in our Capital Markets and Proprietary Capital groups, as well as the organic growth of the Company.  Personnel expense as a percentage of total revenues for the six months ended June 30, 2012 was 41% compared to 36% for the same period last year.

ADJUSTED OPERATING MARGIN for the six months ended June 30, 2013 was 24% compared to 30% for the same period last year. GAAP OPERATING MARGIN was 23% for the six months ended June 30, 2013 compared to 30% for the same period last year.  ADJUSTED NET INCOME for the six months ended June 30, 2013 was $23.8 million compared to $15.1 million for the same period last year.  GAAP NET INCOME for the six months ended June 30, 2013 was $22.3 million.

1 Selected expenses include acquisition and integration costs related specifically to the CWCapital acquisition, and amortization of customer contracts acquired from CWCapital.  For details of these selected expenses, and a reconciliation of adjusted net income, adjusted diluted earnings per share, adjusted total expenses, adjusted income from operations, and adjusted operating margin, refer to the section of this press release below titled "Adjusted Financial Metrics Reconciliation to GAAP" and "Non-GAAP Financial Measures".

Conference Call Information

The Company will host a conference call to discuss its quarterly results on Thursday, August 8, 2013 at 8:30 a.m. Eastern time. Analysts and investors interested in participating are invited to call (866) 952-1906 from within the United States or (785) 424-1825 from outside the United States and are asked to reference the Conference ID: WDQ213. A simultaneous webcast of the call will be available on the Investor Relations section of the Walker & Dunlop website at http://www.walkerdunlop.com. Presentation materials, related to the conference call, will be posted to the Investor Relations section of the Company's website prior to the call.

A telephonic replay of the call will also be available from approximately 11:00 a.m. Eastern time August 8, 2013 through August 22, 2013. Please call (800) 688-7339 from the United States or (402) 220-1347 from outside the United States.  An audio replay will also be available on the Investor Relations section of the Company's website, along with the presentation materials.

About Walker & Dunlop

Through its subsidiary Walker & Dunlop, LLC, Walker & Dunlop, Inc. (NYSE: WD) is one of the leading commercial real estate finance companies in the United States, with a primary focus on multifamily lending. As a Fannie Mae DUS®, Freddie Mac Program Plus® and MAP- and LEAN-approved FHA lender, the Multifamily and FHA Finance groups are focused on lending to property owners, investors, and developers of multifamily properties across the country. The Capital Markets group specializes in financing commercial real estate for owners and investors across the United States, securing capital from large institutions such as life insurance companies, commercial banks, CMBS lenders, pension funds, and specialty finance companies.  The Proprietary Capital group develops new financial products and provides institutional advisory, asset management, and investment management services with respect to debt, structured debt and equity, including interim financing. Walker & Dunlop, LLC has over 400 employees located in 20 offices nationwide. More information about the Company can be found at www.walkerdunlop.com.

Non-GAAP Financial Measures

To supplement the financial statements presented in accordance with United States generally accepted accounting principles (GAAP), the Company presents the following non-GAAP financial measures, each of which excludes selected expenses related to the CWCapital acquisition:  adjusted net income, adjusted diluted earnings per share, adjusted total expenses, adjusted income from operations and adjusted operating margin.

These supplemental measures exclude acquisition and integration costs specifically related to the CWCapital acquisition, and amortization of customer contracts and other intangible assets acquired from CWCapital.  The Company believes that these non-GAAP measures facilitate a review of the comparability of the Company's operating performance on a period-to-period basis because such costs are not, in our view, related to the Company's ongoing operational performance. We use these non-GAAP measures to evaluate the operating performance of our business, for comparison with forecasts and strategic plans, and for benchmarking performance externally against competitors. Since we find these measures to be useful, we believe that investors benefit from seeing results "through the eyes" of management in addition to seeing GAAP results. We believe that these non-GAAP measures, when read in conjunction with the Company's GAAP financials, provide useful information to investors by offering:

  • the ability to make more meaningful period-to-period comparisons of the Company's on-going operating results;
  • the ability to better identify trends in the Company's underlying business and perform related trend analyses; and
  • a better understanding of how management plans and measures the Company's underlying business.

These non-GAAP measures are not in accordance with or an alternative for GAAP, and may be different from non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. We compensate for the limitations of non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance.

For more information on these non-GAAP financial measures, refer to the section of this press release below entitled "Adjusted Financial Metrics Reconciliation to GAAP."

Forward-Looking Statements

Some of the statements contained in this press release may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as ''may,'' ''will,'' ''should,'' ''expects,'' ''intends,'' ''plans,'' ''anticipates,'' ''believes,'' ''estimates,'' ''predicts,'' or ''potential'' or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.

The forward-looking statements contained in this press release reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause actual results to differ significantly from those expressed or contemplated in any forward-looking statement.

While forward-looking statements reflect our good faith projections, assumptions and expectations, they are not guarantees of future results. Furthermore, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by applicable law. For a further discussion of these and other factors that could cause future results to differ materially from those expressed or contemplated in any forward-looking statements, see the section entitled ''Risk Factors" in our most recent Annual Report on Form 10-K and in our subsequent SEC filings.

Walker & Dunlop, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

June 30, 2013 and December 31, 2012

(In thousands, except share and per share data)

June 30,

December 31,

2013

2012

(unaudited)

Assets

Cash and cash equivalents

$

66,289

$

65,027

Restricted cash

9,403

7,130

Pledged securities, at fair value

39,974

33,481

Loans held for sale, at fair value

443,279

1,101,561

Loans held for investment

47,151

9,468

Servicing fees and other receivables, net

25,704

40,933

Derivative assets

39,651

21,258

Mortgage servicing rights

341,770

315,524

Goodwill

60,212

59,735

Intangible assets

2,900

4,644

Other assets

21,899

29,872

Total assets

$

1,098,232

$

1,688,633

Liabilities and Stockholders' Equity

Liabilities

Accounts payable and other accruals

$

104,926

$

122,798

Performance deposits from borrowers

10,210

9,503

Derivative liabilities

5,315

867

Guaranty obligation, net of accumulated amortization

22,735

21,155

Allowance for risk-sharing obligations

12,322

15,670

Warehouse notes payable

485,896

1,084,539

Notes payable

76,775

80,925

Total liabilities

$

718,179

$

1,335,457

Stockholders' Equity

Stockholders' equity:

Preferred shares, Authorized 50,000,000, none issued.

$

$

Common stock, $0.01 par value. Authorized 200,000,000; issued

and outstanding 33,794,868 shares in 2013 and 33,567,730 shares

in 2012.

338

336

Additional paid-in capital

241,429

236,823

Retained earnings

138,286

116,017

Total stockholders' equity

$

380,053

$

353,176

Commitments and contingencies 

Total liabilities and stockholders' equity

$

1,098,232

$

1,688,633

 

Walker & Dunlop, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(In thousands, except share and per share data)

(Unaudited)

For the three months ended

June 30,

For the six months ended 

June 30,

2013

2012

2013

2012

Revenues

Gains from mortgage banking activities

$

63,076

$

33,934

$

106,007

$

53,736

Servicing fees

22,370

9,827

43,511

19,206

Net warehouse interest income

1,760

1,074

3,383

2,011

Escrow earnings and other interest income

916

525

1,858

1,064

Other

2,612

1,360

5,160

5,105

Total revenues

$

90,734

$

46,720

$

159,919

$

81,122

Expenses

Personnel

$

37,308

$

17,363

$

65,591

$

29,004

Amortization and depreciation

17,728

6,725

34,984

13,966

Amortization of intangible assets

448

18

1,744

36

Provision for risk-sharing obligations

751

750

1,152

1,974

Interest expense on corporate debt

870

163

1,838

331

Other operating expenses

9,827

6,592

18,478

11,208

Total expenses

$

66,932

$

31,611

$

123,787

$

56,519

Income from operations 

$

23,802

$

15,109

$

36,132

$

24,603

Income tax expense

9,259

5,817

13,863

9,472

Net income

$

14,543

$

9,292

$

22,269

$

15,131

Basic earnings per share

$

0.43

$

0.43

$

0.66

$

0.70

Diluted earnings per share

$

0.42

$

0.42

$

0.65

$

0.69

Basic weighted average shares outstanding

33,699,944

21,779,379

33,635,472

21,764,976

Diluted weighted average shares outstanding

34,485,750

21,975,853

34,330,639

21,914,452

 

OPERATING DATA

(dollars in thousands)

For the three months ended June 30,

For the six months ended June 30,

2013

2012

2013

2012

Origination Data:

Origination Volumes by Investor

Fannie Mae

$

771,766

$

610,139

$

1,534,739

$

878,040

Freddie Mac

615,783

223,291

1,130,378

307,808

Ginnie Mae - HUD

413,719

97,317

561,152

209,920

Other (1)

758,146

406,235

1,064,497

615,670

Total

$

2,559,414

$

1,336,982

$

4,290,766

$

2,011,438

Key Metrics (as a percentage of 

total revenues):

Personnel expenses

41%

37%

41%

36%

Other operating expenses

11%

14%

12%

14%

Total expenses

74%

68%

77%

70%

Adjusted total expenses (2)

72%

68%

76%

70%

Operating margin

26%

32%

23%

30%

Adjusted operating margin (2)

28%

32%

24%

30%

Key Origination Metrics (as a percentage

of origination volume):

Origination related fees

1.35%

1.28%

1.32%

1.36%

Fair value of MSRs created, net

1.11%

1.26%

1.15%

1.31%

Fair value of MSRs created, net as a percentage

of GSE and HUD origination volume (3)

1.58%

1.81%

1.52%

1.89%

As of June 30,

Servicing Portfolio by Type:

2013

2012

Fannie Mae

$

19,541,380

$

10,618,195

Freddie Mac

10,017,202

3,395,683

Ginnie Mae - HUD

4,650,472

1,578,227

Other (1)

3,676,216

1,970,727

Total

$

37,885,270

$

17,562,832

Key Servicing Metrics (end of period):

Weighted-average servicing fee rate

0.24%

0.23%

(1) Commercial mortgage backed securities, life insurance companies, commercial banks, and interim loan program originations

(2) This is a non-GAAP financial measure

(3) The fair value of the expected net cash flows associated with the servicing of the loan, net of any guaranty

         obligation retained, as a percentage of GSE and HUD volume reflects revenue recognized, as a percentage of loan

         origination volume, on those loans which the Company will record an MSR upon sale of the loan. No MSRs are

         recorded for "Other" originations or interim loan originations. 

 

ADJUSTED FINANCIAL METRICS RECONCILIATION TO GAAP

For the three months ended June 30,

For the six months ended June 30,

2013

2012

2013

2012

(in thousands, except per share amounts) 

Reconciliation of GAAP Net Income and GAAP Diluted Earnings Per Share to Adjusted Net Income and Adjusted Diluted

Earnings Per Share

GAAP net income

$

14,543

$

9,292

$

22,269

$

15,131

Shares (1)

34,486

21,976

34,331

21,914

GAAP diluted earnings per share

$

0.42

$

0.42

$

0.65

$

0.69

GAAP net income

$

14,543

$

9,292

$

22,269

$

15,131

Adjustments:

Amortization of intangibles

430

1,709

Lease modification

825

825

Income tax impact of adjustments

(488)

(986)

Adjusted net income

$

15,310

$

9,292

$

23,817

$

15,131

Shares (1)

34,486

21,976

34,331

21,914

Adjusted diluted earnings per share

$

0.44

$

0.42

$

0.69

$

0.69

Reconciliation of GAAP Income from Operations and GAAP Operating Margin to Adjusted Income from Operations and 

Adjusted Operating Margin

GAAP income from operations

$

23,802

$

15,109

$

36,132

$

24,603

Total revenues

90,734

46,720

159,919

81,122

GAAP operating margin

26%

32%

23%

30%

GAAP income from operations

$

23,802

$

15,109

$

36,132

$

24,603

Adjustments:

Amortization of intangibles

430

1,709

Lease modification

825

825

Adjusted income from operations

$

25,057

$

15,109

$

38,666

$

24,603

Total revenues

90,734

46,720

159,919

81,122

Adjusted operating margin

28%

32%

24%

30%

Reconciliation of GAAP Total Expenses to Adjusted Total Expenses

GAAP total expenses

$

66,932

$

31,611

$

123,787

$

56,519

Adjustments:

Amortization of intangibles

430

1,709

Lease modification

825

825

Adjusted total expenses

$

65,677

$

31,611

$

121,253

$

56,519

(1): Diluted weighted average shares outstanding.

 

KEY CREDIT METRICS

(dollars in thousands)

As of and for the three months  ended June 30,

As of and for the six months  ended June 30,

2013

2012

2013

2012

Key Credit Metrics

Fannie Mae servicing portfolio:

Fannie Mae Full Risk

$

12,725,049

$

7,286,612

$

12,725,049

$

7,286,612

Fannie Mae Modified Risk

4,282,776

2,214,869

4,282,776

2,214,869

Fannie Mae No Risk

2,533,555

1,116,714

2,533,555

1,116,714

Total Fannie Mae

$

19,541,380

$

10,618,195

$

19,541,380

$

10,618,195

Freddie Mac servicing portfolio:

Freddie Mac Modified Risk

$

68,790

$

$

68,790

$

Freddie Mac No Risk

9,948,412

3,395,683

9,948,412

3,395,683

Total Freddie Mac

$

10,017,202

$

3,395,683

$

10,017,202

$

3,395,683

GNMA/HUD servicing portfolio:

GNMA/HUD Full Risk

$

4,926

$

$

4,926

$

GNMA/HUD No Risk

4,645,546

1,578,227

4,645,546

1,578,227

Total GNMA/HUD

$

4,650,472

$

1,578,227

$

4,650,472

$

1,578,227

Interim loan (full risk) servicing portfolio

$

47,420

$

16,500

$

47,420

$

16,500

Capital markets servicing portfolio

$

3,628,796

$

1,954,227

$

3,628,796

$

1,954,227

Total servicing portfolio unpaid principal balance

$

37,885,270

$

17,562,832

$

37,885,270

$

17,562,832

At risk servicing portfolio (1)

$

14,624,757

$

8,269,204

$

14,624,757

$

8,269,204

60+ Day delinquencies, within at risk portfolio

9,115

4,008

9,115

4,008

At risk loan balances associated with 

allowance for risk-sharing obligations

$

112,958

$

133,070

$

112,958

$

133,070

Allowance for risk-sharing obligations:

Beginning balance

$

16,071

$

14,522

$

15,670

$

14,917

Provision for risk-sharing obligations

751

750

1,152

1,974

Net write-offs

(4,500)

(1,643)

(4,500)

(3,262)

Ending balance

$

12,322

$

13,629

$

12,322

$

13,629

60+ Day delinquencies as a percentage

of the at risk portfolio

0.06%

0.05%

0.06%

0.05%

Provision for risk-sharing as a percentage

of the at risk portfolio

0.01%

0.01%

0.01%

0.02%

Allowance for risk-sharing as a percentage

of the at risk portfolio

0.08%

0.16%

0.08%

0.16%

Net write-offs as a percentage of the

at risk portfolio

0.03%

0.02%

0.03%

0.04%

Allowance for risk-sharing as a percentage

of the specifically identified at risk balances

10.91%

10.24%

10.91%

10.24%

 

(1) At risk servicing portfolio is defined as the balance of Fannie Mae DUS loans subject to the risk-sharing formula described below, as well as an immaterial number of Freddie Mac and GNMA/HUD loans on which we share in the risk of loss. Use of the at risk portfolio provides for comparability of the full risk-sharing and modified risk-sharing loans because the provision and allowance for risk-sharing obligations are based on the at risk balances of the associated loans. Accordingly, we have presented the key statistics as a percentage of the at risk portfolio.

For example, a $15 million loan with 50% risk-sharing has the same potential risk exposure as a $7.5 million loan with full DUS risk-sharing. Accordingly, if the $15 million loan with 50% risk-sharing was to default, the Company would view the overall loss as a percentage of the at risk balance, or $7.5 million, to ensure comparability between all risk-sharing obligations. To date, all but three of the Company's risk-sharing obligations that we have settled have been from full risk-sharing loans.

SOURCE Walker & Dunlop, Inc.



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http://www.walkerdunlop.com