2022 Annual Review

Dear Fellow Shareholders

Walker & Dunlop’s people, brand, and technology differentiated the company in 2022, and despite an extremely challenging market, we met our clients’ needs across all of our business lines. In the process, we gained significant market share, continued investing in growth, and delivered financial results reflective of our company’s diversified and durable business model.

The Federal Reserve raised interest rates 425 basis points during 2022, disrupting liquidity and the cost of capital and dramatically reducing commercial real estate transaction activity in the second half of the year. In the face of those headwinds, we delivered $63 billion of transaction volumes, down 7%, and held annual total revenues flat at $1.3 billion. Although our diluted earnings per share was down 22% to $6.36, we grew adjusted EBITDA¹ 5% to $325 million. The reduction in earnings per share was primarily due to lower non-cash revenue from mortgage servicing rights from the loans we originated, and the increase in adjusted EBITDA was primarily due to cash revenues and earnings from our scaled loan servicing and asset management businesses.

Our people, brand, and technology in multifamily financing and property sales allowed us to gain significant market share in our core businesses during the year. We ended 2022 as the third largest Freddie Mac Optigo^® lender, up one notch in the annual rankings; second largest HUD lender, up one notch in the league tables; and the #1 Fannie Mae DUS^® lender for the fourth consecutive year. Our combined market share with Fannie Mae and Freddie Mac was 12.7%, making us the largest Agency lender in the country in 2022 — something we have never done before! And our multifamily property sales team grew annual volume by 2% in a market that was down 17%², taking W&D’s market share from 7.8% in 2021 to 10.2% of the market in 2022³. This is exceptional performance in a wildly competitive and challenging market.

We expect market conditions to remain challenging in the first half of 2023 but are extremely well positioned to provide solutions to our clients, retain our exceptional team, and execute on our five-year business plan, the Drive to '25.

The Drive to '25’s ambitious goals can all be achieved due the investments we have made and W&D’s incredible team. Yet, originating close to $100 billion in total transaction volume will be challenging. We need our technology-enabled businesses of small balance lending and appraisals to grow rapidly. We also need to broaden the depth and capabilities of our research and investment banking businesses acquired through Zelman & Associates. Our acquisition of Alliant was strategic and has the ability to dramatically grow our business volumes in affordable lending, tax credit syndication, and affordable property sales. Finally, we expect the technology acquired with GeoPhy, applied to both our core and emerging businesses, to transform the way we find clients and process their business. By achieving these components of the Drive to '25, we will generate over $2 billion in annual revenues and $13 of diluted earnings per share in 2025.

Beyond financial metrics, the Drive to '25 contains environmental, social, and governance (ESG) targets to increase diversity, reduce our carbon footprint, and expand our affordable housing activity. In the context of our mission — to create communities - with ideas and capital - where people live, work, shop, and play — our ambitious Drive to '25 goals and ESG targets reflect our commitment to the people of Walker & Dunlop, the communities where we work and live, and our customers who use our ideas and capital to create communities across the country.

Since going public in 2010, we have generated outstanding shareholder returns. While our financial performance and stock price significantly underperformed in 2022, we are committed to returning to the level of growth that investors have come to expect from Walker & Dunlop in the coming years. We are focused on the things we control — meeting our clients’ needs, investing in new businesses and technologies, closely managing expenses, and maintaining an extraordinary team of professionals. Due to the strength of our business model and recurring revenues from our scaled servicing and asset management businesses, we are extremely well positioned to emerge from the Fed tightening cycle with the people, brand, and technology to win.

I would like to personally thank you for your investment in Walker & Dunlop and continued confidence in our team and mission.

Sincerely,

William M. Walker
Chairman & CEO

This Annual Report contains forward-looking statements within the meaning of federal securities law. Please see page 3 of our 2022 Form 10-K filed with the Securities and Exchange Commission for additional information regarding forward-looking statements.