Walker & Dunlop Reports 17% Drop in Q2 Net Income

(Save the date: RealShare Apartments comes to the Westin Bonaventure, Los Angeles, October 24.)

BETHESDA, MD-Walker & Dunlop reported a 17% drop in second-quarter net income over the second quarter of 2011. The company posted $9.3 million, or $0.42 per share, compared to $11.1 million, or $0.51 per share for Q2 of 2011. Its Q2 total revenues rose 10%, however, over the same period in 2011, to reach $46.7 million.

Despite the drop in net income, Q2 was the third most profitable quarter in the company’s 74-year history, CEO Willy Walker said in a prepared statement. It was also a transformative one, he added. “We announced the definitive agreement to acquire CWCapital; we tripled the origination capacity in our capital markets group by adding two terrific origination teams; and we achieved record loan origination volume of $1.34 billion.” The CWCapital acquisition is scheduled to close at the end of this month.

Walker also noted that the company’s capital markets business had “an exceptional quarter” with 57% growth and a good bit of diversification. The percentage of Walker & Dunlop’s loan originations on non-multifamily properties grew from 13% for the first half of 2011 to 22% for the first half of 2012 with no fee compression, he said. "In tandem with growing originations, our servicing portfolio grew 14% to $17.6 billion with the average servicing fee increasing to 23 basis points, driving our fee income up 22% quarter on quarter.”

Total expenses were $31.6 million for the second quarter 2012 compared to $24.2 million for the second quarter 2011. Of that increase, personnel expense accounted for $4.5 million, including $1.7 million that was due to higher commissions on the 11% increase in loan origination fees during the quarter. Since June 30, 2011, W&D has grown its direct origination sales force by 32%, adding new teams in Florida, Tennessee, California, and Wisconsin.