Walker & Dunlop, Inc. (NYSE:WD) Q4 2018 Earnings Conference Call - Final Transcript

Feb 06, 2019 • 08:30 am ET


Walker & Dunlop, Inc. (NYSE:WD) Q4 2018 Earnings Conference Call - Final Transcript


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Kelsey Duffey

(Starts Abruptly) financial metric, adjusted EBITDA, during the course of this call. Please refer to the earnings release posted on our website for a reconciliation of this non-GAAP financial metric.

Investors are urged to carefully read the forward-looking statements language in our earnings release. Statements made on this call which are nonhistorical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements describe our current expectations, and actual results may differ materially. Walker & Dunlop is under no obligation to update or alter our forward-looking statements whether as a result of new information, future events or otherwise. We expressly disclaim any obligation to do so. More detailed information about risk factors can be found on our annual and quarterly reports filed with the SEC.

I will now turn the call over to Willy.

Willy Walker

Thank you, Kelsey, and good morning, and thank you for joining us today for our first earnings call of 2019 to review Q4 and full year 2018 performance.

We had an exceptional fourth quarter, which allowed us to finish off the year with top line growth and strong profitability. Our team really performed in Q4, generating record transaction volume of $9.4 billion and record quarterly revenues of $215 million, as shown on slide three.

The surge of activity in Q4 was the result of Walker & Dunlop working collaboratively with our clients, along with the evolving macroeconomic environment that gave commercial real estate investors the confidence to move forward with acquisitions and refinancings. The strong activity in Q4, coupled with the Fed's recent commentary on interest rate policy going forward, gives us a positive outlook for 2019 and Walker & Dunlop's ability to continue executing on our Vision 2020 of generating $1 billion in revenues, while marching towards our mission to become the premier commercial real estate finance company in the United States.

Strong fourth quarter transaction volumes pushed our 2018 total transaction volume to a record $28 billion. As you can see on slide four, we have grown total transaction volumes at a compound annual growth rate of 27% over the past five years by expanding our client base and consistently adding bankers and brokers across the country. 84% of our 2018 transaction volume came from the multifamily sector, where our standing is one of the largest Fannie Mae, Freddie Mac and HUD lenders has created a wonderful brand and defendable market presence.

Our GSE originations were strong for the year, but we slipped in the lead tables from number one with Fannie Mae to number two and from number three with Freddie Mac to number four. While we were disappointed to drop down in the lead tables, we are very well positioned to maintain or increase our market share in the coming years.

Our HUD volumes were strong in Q4 at $218 million, yet overall our HUD volumes were down year-over-year by 26% to $999 million. We recently welcomed Sheri Thompson as the new Head of