Diversification Pays Off for W&D New Figures Show

BETHESDA, MD-On Wednesday Walker & Dunlop announced its fourth quarter and full year 2013 results. Revenues for 2013 totaled $319 million, a 24% increase from $256.8 million the prior year that was driven by a 73% increase in servicing fees and an 18% increase in loan origination volume.

GAAP net income for 2013 increased 23% to $41.5 million, or $1.21 per diluted share, from $33.8 million, or $1.31 per diluted share in 2012.

GAAP net income for the fourth quarter 2013 decreased 3% to $11.2 million, or $0.33 per diluted share, from $11.5 million, or $0.34 per diluted share, in the prior year.

The company is meeting all of the markers its set for itself when it embarked on a path of diversification, said Willy Walker, Walker & Dunlop's chairman and CEO, in a prepared statement.

"In 2013 we established a goal of having over 50% of revenues derived from servicing and asset management fees by 2017," he says. "Our 2013 servicing fee revenue was $90.2 million, or 28% of total revenues, up from $52.2 million, or 20% of total revenues in 2012. As we continue to grow our servicing and asset management business, cash flow will grow with it."

In 2012, for various reasons, the company decided it wanted to expand it service capabilities and launched a number of initiatives. It went on to hire Capital Markets origination talent, open new offices around the country and then raise proprietary capital for its distribution network. "We grew brokered originations by 117% and proprietary capital originations by 444% year-over-year while increasing total origination volumes by 18% and revenues by 24%," Walker noted.

These moves came as the future roles of Fannie Mae and Freddie Mac became less certain when, in 2013 the FHFA called for a 10% scale back in GSE multifamily originations.

Walker & Dunlop's GSE originations largely followed that cap but did not exceed it, Walker noted earlier this year when the company released its unaudited figures.

Walker said the company plans to continue to grow it loan origination platform and raise proprietary capital to meet borrowers' capital needs. This quarter it also expects to see the launch of the CMBS conduit it announced last year up and running, he also said.