BETHESDA, MD—Walker & Dunlop posted its earnings for the second quarter on Wednesday. Not surprisingly, given its recent run of phenomenal growth, the company did quite well.

Before we get into the numbers though, a comment by CEO Willy Walker bears highlighting. "We are in the midst of a mortgage refinancing cycle that is unprecedented," he said. "The volume of commercial mortgages originated in 2005, 2006, and 2007 had never been seen before, and the majority of that paper must be refinanced over the next several years."

Yes, the long awaited wall of debt maturities is here and thus far the lending community seems not only to be handling it, but continuing to loosen lending standards as well.

We'll get back to that in a moment.

Another Excellent Quarter

W&D's second quarter net income was $20.2 million, or $0.67 per diluted share, a 56% increase from second quarter 2014 net income of $12.9 million, or $0.40 per diluted share. Its total revenues were $113.9 million for the second quarter 2015, a 34% increase over the second quarter 2014. Adjusted EBITDA for the second quarter 2015 was $28.9 million compared to $20.9 million for the second quarter 2014, a 39% increase.

The company points to many factors, besides just loan origination – although was a significant share of its earnings – for its growth. For instance, its newly-launched investment sales platform posted $319.0 million for the second quarter -- its first quarter of operations.

Even its mainstay of loan originations was goosed by the company's many diversification efforts. In general, loan origination volume was $3.5 billion for the second quarter, compared to $2.4 billion for the second quarter 2014, a 45% increase. Loan originations with Fannie Mae and Freddie Mac – its original specialty -- were both $1.1 billion representing increases of 21% and 79% from the second quarter 2014, respectively.

W&D, though, has also established a CMBS offering and here too it posted some activity -- $34.7 million for the second quarter 2015 compared to zero for the same quarter last year.

Credit Conditions Continue to Ease for CRE Loans

As CEO Walker noted, it is a busy season for the commercial real estate lending community in general: the wave of refis from the highly-leveraged CMBS loans written ten years ago are coming due.

While the fears that lenders wouldn't be able to handle the onslaught – and thus more distress would enter the system – have diminished, other worries have popped up instead. Namely the easing of credit to meet demand.

This was seen in this week's Federal Reserve Bank survey of senior loan officers. Reports of stronger demand for CRE loans continued to outnumber reports of weaker demand, it found. Also, domestic banks reported that the current level of standards on loans secured by multifamily properties and loans secured by nonfarm nonresidential properties were generally easier than or near the midpoints of their ranges. However, nearly half of the respondents reported that standards on construction and land development loans were tighter than the midpoints of their longer-term ranges. Taken as a whole, these results indicate an easing of credit conditions for CRE loans from the corresponding levels reported a year ago, the Fed concluded.

An Industry Snapshot

The point of comparing the W&D earnings and the Federal Reserve Bank study? They provide an interesting snapshot of where the industry is at the moment.

Some lenders are easing standards, others are staying the course or tightening. How these lenders will fare when the next downturn arrives depends on how smart they are on their underwriting and diversification of revenue flows.

Speaking of W&D, it does appear to be handling its risk fairly well, based on its Q2 earnings.

The company's at risk servicing portfolio, which is comprised of loans subject to a defined risk-sharing formula, was $18.4 billion at June 30, 2015 compared to $15.7 billion at June 30, 2014.

Despite the increase, the firm says the credit performance of this part of its portfolio is excellent, as there were no 60+ day delinquencies as of June 30, 2015 or 2014.