Walker & Dunlop — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported a net loss of $37.3 million and a diluted loss per share of $1.15 for Q3 2026, compared to net income of $33.5 million and diluted EPS of $0.98 in Q3 2025.
• Total revenues were $298.4 million, a 12% decline from $337.7 million in Q3 2025, driven by lower transaction volumes and a shift toward lower-fee brokered transactions.
• Adjusted core EPS was $0.92, a 25% decrease from $1.22 in Q3 2025, primarily due to lower revenue and increased costs within the repurchased portfolio.
• The Capital Markets segment reported revenues of $148 million (down 18% YoY) and net income of $11 million (down 59% YoY).
• The Servicing & Asset Management segment reported revenues of $148 million (down 2% YoY) and a net loss of $12 million (down 133% YoY), impacted by $63 million in repurchase-related charges.
• The Corporate segment reported revenues of $2 million (down 62% YoY) and a net loss of $36 million.
• Adjusted EBITDA was $61.1 million for Q3 2026, compared to $82.1 million in Q3 2025.
• The servicing portfolio increased 5% year-over-year to $146.6 billion as of September 30, 2026.
• Assets under management totaled $19.2 billion as of September 30, 2026.
• Mortgage servicing rights (MSRs) had an amortized cost of $775.5 million and an estimated fair value of $1.4 billion as of September 30, 2026.
• Defaulted loans in the at-risk portfolio were $255 million as of September 30, 2026, representing 0.36% of the at-risk portfolio, up from 0.21% in Q3 2025.
• Warehouse notes payable were $762.5 million as of September 30, 2026, down from $2.18 billion in Q3 2025.
• Corporate notes payable were $804.6 million as of September 30, 2026, down from $829.9 million in Q3 2025.

Guidance and Future Outlook:

• Management expects the increased costs associated with the repurchased portfolio to be eliminated by early 2027.
• The company intends to dispose of all remaining repurchased and indemnified assets by early 2027.
• Management anticipates a wave of debt maturities over the next four years, with nearly $1 trillion of maturing loans in the multifamily market, presenting refinancing and recapitalization opportunities.
• Approximately $16.9 billion of Agency loans are scheduled to mature over the next two years, creating a pipeline for future transaction activity.
• The company is leveraging technology to improve productivity and reduce its fixed cost structure.

Business Segments and Product Lines:

• Capital Markets: Total debt financing volume declined 5% to $10.3 billion, with a 58% increase in brokered volume offset by declines in Agency lending. Origination fee rate was 0.79% compared to 0.90% in Q3 2025. Agency MSR rate was 1.02% compared to 0.79% in Q3 2025.
• Servicing & Asset Management: Servicing fees increased 3% year-over-year, though total segment revenue declined 2% due to lower placement fee earnings from escrow accounts. The segment includes $63 million of repurchase-related charges ($56 million non-cash valuation adjustments and $7 million operating expenses).
• Transaction Volumes: Total transaction volume was $13.8 billion, down 11% from $15.5 billion in Q3 2025. Property sales volume was $3.5 billion, down 25% from $4.7 billion in Q3 2025.
• GSE Market Share: W&D's year-to-date GSE market share increased 290 basis points to 13.7% from the prior-year period.
• Brokered Volume: Brokered debt volume grew 58% to $7.2 billion in Q3 2026 from $4.5 billion in Q3 2025.
• Principal Lending: Principal Lending and Investing volume was $266 million in Q3 2026, up 34% from $199 million in Q3 2025.

Market and Competitive Landscape:

• The Ten-Year Treasury rate increased 84 basis points during the quarter, increasing volatility and slowing capital markets activity.
• GSE lending volumes declined 30% market-wide during the quarter.
• W&D gained market share in the non-Agency multifamily market while simultaneously increasing GSE market share.
• The company maintains a strong brand in the multifamily market and continues to expand its presence in the non-Agency sector.

Risks and Challenges:

• The net loss was primarily driven by charges associated with the accelerated resolution of legacy loan repurchases and indemnifications related to GSE investigations.
• Higher interest rates and lower asset values present significant challenges for property owners.
• Continued interest rate volatility delayed some investment decisions during the quarter.
• The at-risk portfolio growth reflects continued Fannie Mae loan production, though credit exposure remains concentrated in loans backed by multifamily assets.
• A decline in brokered servicing was driven by a large partner consolidating servicing relationships for one of its funds in Q2 2026.

Management Commentary and Tone:

• Chairman and CEO Willy Walker stated that despite headwinds, revenues remained resilient with total debt financing volume down only 5%.
• Management confirmed that Fannie Mae has completed its fraud review of Walker & Dunlop, following a similar completion by Freddie Mac in Q2 2026, with no further buybacks or indemnifications expected from these investigations.
• Walker emphasized the company's commitment to proactively resolving credit issues, reducing balance sheet risk, and strengthening its financial position for the future.
• Management expressed confidence in the company's ability to execute and grow amidst the upcoming wave of debt maturations, citing a "tremendous opportunity ahead."
• The company underwent a reduction in force and reorganization in Q3 to reduce its fixed cost structure.

Other Key Points:

• The Board of Directors declared a dividend of $0.68 per share for the fourth quarter of 2026, payable on December 4, 2026, to holders of record as of November 20, 2026.
• The 2026 Stock Repurchase Program authorized the repurchase of up to $75.0 million of common stock. The company repurchased 283,000 shares in Q1 2026 for $13.3 million and did not repurchase any shares in Q2 or Q3 2026. As of September 30, 2026, $61.7 million of authorized capacity remained.
• During Q3 2026, the company exited $39.4 million of repurchased loans at prices approximating carrying values, reducing total repurchased loans to $164.8 million from $221.6 million at year-end 2025.
• The company recognized $56 million of valuation adjustments for the remaining repurchased loan portfolio to accelerate disposition.
• Approximately $25 million of the remaining non-performing repurchased portfolio has been placed under a letter of intent.
• The company reclassified all repurchased assets and non-performing notes to "held for sale."
• Average headcount was 1,488 in Q3 2026.
• Market capitalization at period end was $1.21 billion, with a closing share price of $35.11.