Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 31, 2022 | Jun. 30, 2021 | |
Document And Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity File Number | 001-35000 | ||
Entity Registrant Name | Walker & Dunlop, Inc. | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 80-0629925 | ||
Entity Address, Address Line One | 7272 Wisconsin Avenue | ||
Entity Address, Address Line Two | Suite 1300 | ||
Entity Address, City or Town | Bethesda | ||
Entity Address, State or Province | MD | ||
Entity Address, Postal Zip Code | 20814 | ||
City Area Code | 301 | ||
Local Phone Number | 215-5500 | ||
Title of 12(b) Security | Common Stock, $0.01 Par Value Per Share | ||
Trading Symbol | WD | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 32,891,423 | ||
Entity Public Float | $ 2.2 | ||
Entity Central Index Key | 0001497770 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | KPMG LLP | ||
Auditor Firm ID | 185 | ||
Auditor Location | McLean, Virginia |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and cash equivalents | $ 305,635 | $ 321,097 |
Restricted cash | 42,812 | 19,432 |
Pledged securities, at fair value | 148,996 | 137,236 |
Loans held for sale, at fair value | 1,811,586 | 2,449,198 |
Loans held for investment, net | 269,125 | 360,402 |
Mortgage servicing rights | 953,845 | 862,813 |
Goodwill | 698,635 | 248,958 |
Other intangible assets | 183,904 | 1,880 |
Derivative assets | 37,364 | 49,786 |
Receivables, net | 212,019 | 65,735 |
Committed investments in tax credit equity | 177,322 | |
Other assets | 364,746 | 134,438 |
Total assets | 5,205,989 | 4,650,975 |
Liabilities | ||
Warehouse notes payable | 1,941,572 | 2,517,156 |
Note payable | 740,174 | 291,593 |
Allowance for risk-sharing obligations | 62,636 | 75,313 |
Guaranty obligation, net | 47,378 | 52,306 |
Deferred tax liabilities, net | 225,240 | 185,658 |
Derivative liabilities | 6,403 | 5,066 |
Performance deposits from borrowers | 15,720 | 14,468 |
Commitments to fund tax credit equity investments | 162,747 | |
Other liabilities | 425,912 | 313,193 |
Total liabilities | 3,627,782 | 3,454,753 |
Equity | ||
Preferred stock (authorized 50,000 shares; none issued) | ||
Common stock ($0.01 par value; authorized 200,000 shares; issued and outstanding 32,049 shares at December 31, 2021 and 30,678 shares at December 31, 2020) | 320 | 307 |
Additional paid-in capital ("APIC") | 393,022 | 241,004 |
Accumulated other comprehensive income ("AOCI") | 2,558 | 1,968 |
Retained earnings | 1,154,252 | 952,943 |
Total stockholders' equity | 1,550,152 | 1,196,222 |
Noncontrolling interests | 28,055 | |
Total equity | 1,578,207 | 1,196,222 |
Commitments and contingencies (NOTES 2 and 10) | ||
Total liabilities and equity | $ 5,205,989 | $ 4,650,975 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheets | ||
Preferred shares, authorized | 50,000 | 50,000 |
Preferred shares, issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 200,000 | 200,000 |
Common stock, issued | 32,049 | 30,678 |
Common stock, outstanding | 32,049 | 30,678 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | |||
Loan origination and debt brokerage fees, net | $ 446,014 | $ 359,061 | $ 258,471 |
Fair value of expected net cash flows from servicing, net | 287,145 | 358,000 | 180,766 |
Servicing fees | 278,466 | 235,801 | 214,550 |
Property sales broker fees. | 119,981 | 38,108 | 30,917 |
Escrow earnings and other interest income | 8,150 | 18,255 | 56,835 |
Other revenues | 97,314 | 45,156 | 49,981 |
Total revenues | 1,259,178 | 1,083,707 | 817,219 |
Expenses | |||
Personnel | 603,487 | 468,819 | 346,168 |
Amortization and depreciation | 210,284 | 169,011 | 152,472 |
Provision (benefit) for credit losses | (13,287) | 37,479 | 7,273 |
Interest expense on corporate debt | 7,981 | 8,550 | 14,359 |
Other operating expenses | 98,655 | 69,582 | 66,596 |
Total expenses | 907,120 | 753,441 | 586,868 |
Income from operations | 352,058 | 330,266 | 230,351 |
Income tax expense | 86,428 | 84,313 | 57,121 |
Net income before noncontrolling interests | 265,630 | 245,953 | 173,230 |
Less: net income (loss) from noncontrolling interests | (132) | (224) | (143) |
Walker and Dunlop net income | 265,762 | 246,177 | 173,373 |
Net change in unrealized gains (losses) on pledged available-for-sale securities, net of taxes | 590 | 1,231 | 812 |
Walker and Dunlop comprehensive income | $ 266,352 | $ 247,408 | $ 174,185 |
Basic earnings per share (NOTE 12) | $ 8.27 | $ 7.85 | $ 5.61 |
Diluted earnings per share (NOTE 12) | $ 8.15 | $ 7.69 | $ 5.45 |
Basic weighted average shares outstanding | 31,081 | 30,444 | 29,913 |
Diluted weighted average shares outstanding | 31,533 | 31,083 | 30,815 |
Loans Held for Sale | |||
Revenues | |||
Net warehouse interest income | $ 14,396 | $ 17,936 | $ 1,917 |
Loans Held for Investment | |||
Revenues | |||
Net warehouse interest income | $ 7,712 | $ 11,390 | $ 23,782 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | APIC | AOCI | Retained EarningsCumulative Effect Adjustment | Retained Earnings | Noncontrolling Interests | Cumulative Effect Adjustment | Total |
Balances at the beginning of the period (ASU 2016-02) at Dec. 31, 2018 | $ (1,002) | $ (1,002) | ||||||
Balances at the beginning of the period at Dec. 31, 2018 | $ 295 | $ 235,152 | $ (75) | $ 666,752 | $ 5,068 | $ 907,192 | ||
Balance at the beginning of the period (in shares) at Dec. 31, 2018 | 29,497 | |||||||
Change in Stockholders' Equity | ||||||||
Walker and Dunlop net income | 173,373 | 173,373 | ||||||
Net income (loss) from noncontrolling interests | (143) | (143) | ||||||
Contributions from noncontrolling interests | 1,671 | 1,671 | ||||||
Other comprehensive income (loss), net of tax | 812 | 812 | ||||||
Stock-based compensation - equity classified | 22,819 | 22,819 | ||||||
Issuance of common stock in connection with equity compensation plans | $ 11 | 5,500 | 5,511 | |||||
Issuance of common stock in connection with equity compensation plans (in shares) | 1,118 | |||||||
Repurchase and retirement of common stock | $ (6) | (25,594) | (5,076) | (30,676) | ||||
Repurchase and retirement of common stock (in shares) | (580) | |||||||
Cash dividends paid | (37,272) | (37,272) | ||||||
Balances at the end of the period (ASU 2016-13) at Dec. 31, 2019 | $ (23,678) | $ (23,678) | ||||||
Balances at the end of the period at Dec. 31, 2019 | $ 300 | 237,877 | 737 | 796,775 | 6,596 | 1,042,285 | ||
Balance at the end of the period (in shares) at Dec. 31, 2019 | 30,035 | |||||||
Change in Stockholders' Equity | ||||||||
Walker and Dunlop net income | 246,177 | 246,177 | ||||||
Net income (loss) from noncontrolling interests | (224) | (224) | ||||||
Purchase of noncontrolling interests | (24,090) | (7,047) | (31,137) | |||||
Contributions from noncontrolling interests | 675 | 675 | ||||||
Other comprehensive income (loss), net of tax | 1,231 | 1,231 | ||||||
Stock-based compensation - equity classified | 27,090 | 27,090 | ||||||
Issuance of common stock in connection with equity compensation plans | $ 14 | 24,913 | 24,927 | |||||
Issuance of common stock in connection with equity compensation plans (in shares) | 1,414 | |||||||
Repurchase and retirement of common stock | $ (7) | (24,786) | (20,981) | (45,774) | ||||
Repurchase and retirement of common stock (in shares) | (771) | |||||||
Cash dividends paid | (45,350) | (45,350) | ||||||
Balances at the end of the period at Dec. 31, 2020 | 1,196,222 | |||||||
Balances at the end of the period at Dec. 31, 2020 | $ 307 | 241,004 | 1,968 | 952,943 | $ 1,196,222 | |||
Balance at the end of the period (in shares) at Dec. 31, 2020 | 30,678 | 30,678 | ||||||
Change in Stockholders' Equity | ||||||||
Walker and Dunlop net income | 265,762 | $ 265,762 | ||||||
Net income (loss) from noncontrolling interests | (132) | (132) | ||||||
Other comprehensive income (loss), net of tax | 590 | 590 | ||||||
Stock-based compensation - equity classified | 35,491 | 35,491 | ||||||
Issuance of common stock in connection with acquisitions | $ 9 | 120,562 | 120,571 | |||||
Issuance of common stock in connection with acquisitions (in shares) | 859 | |||||||
Issuance of common stock in connection with equity compensation plans | $ 7 | 14,834 | 14,841 | |||||
Issuance of common stock in connection with equity compensation plans (in shares) | 686 | |||||||
Repurchase and retirement of common stock | $ (3) | (18,869) | (18,872) | |||||
Repurchase and retirement of common stock (in shares) | (174) | |||||||
Noncontrolling interests from acquisitions | 28,187 | 28,187 | ||||||
Cash dividends paid | (64,453) | (64,453) | ||||||
Balances at the end of the period at Dec. 31, 2021 | 1,550,152 | |||||||
Balances at the end of the period at Dec. 31, 2021 | $ 320 | $ 393,022 | $ 2,558 | $ 1,154,252 | $ 28,055 | $ 1,578,207 | ||
Balance at the end of the period (in shares) at Dec. 31, 2021 | 32,049 | 32,049 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
TOTAL EQUITY. | |||
Cash dividends paid. amount per common share | $ 2 | $ 1.44 | $ 1.20 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | |||
Net income before noncontrolling interests | $ 265,630 | $ 245,953 | $ 173,230 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Gains attributable to the fair value of future servicing rights, net of guaranty obligation | (287,145) | (358,000) | (180,766) |
Change in the fair value of premiums and origination fees | 19,450 | (32,981) | 6,041 |
Amortization and depreciation | 210,284 | 169,011 | 152,472 |
Stock compensation-equity and liability classified | 36,582 | 28,319 | 24,075 |
Provision (benefit) for credit losses | (13,287) | 37,479 | 7,273 |
Deferred tax expense | 34,222 | 47,165 | 22,012 |
Amortization of deferred loan fees and costs | (2,423) | (1,723) | (6,587) |
Amortization of debt issuance costs and debt discount | 7,077 | 4,652 | 5,451 |
Origination fees received from loans held for investment | 2,550 | 786 | 2,553 |
Originations of loans held for sale | (17,810,768) | (22,828,602) | (15,746,949) |
Proceeds from transfers of loans held for sale | 18,431,542 | 21,216,975 | 16,007,910 |
Cash paid for cloud computing implementation costs | (1,682) | (1,199) | (6,194) |
Changes in: | |||
Receivables, net | (42,873) | (19,264) | (2,298) |
Other assets | (26,613) | 2,205 | (20,924) |
Other liabilities | 46,657 | 71,382 | 2,601 |
Performance deposits from borrowers | 1,252 | 6,472 | (12,339) |
Net cash provided by (used in) operating activities | 870,455 | (1,411,370) | 427,561 |
Cash flows from investing activities | |||
Capital expenditures | (9,208) | (2,983) | (4,711) |
Purchase of equity-method investments | (33,446) | (1,682) | (923) |
Purchase of pledged available-for-sale ("AFS") securities | (31,750) | (24,883) | (30,611) |
Proceeds from prepayment and sale of pledged AFS securities | 45,301 | 19,635 | 22,756 |
Investments in joint ventures | (66,718) | (24,369) | (57,573) |
Distributions from joint ventures | 47,065 | 15,907 | 41,629 |
Acquisitions, net of cash received | (420,555) | (46,784) | (7,180) |
Originations of loans held for investment | (557,706) | (199,153) | (362,924) |
Principal collected on loans held for investment upon payoff | 649,466 | 379,491 | 319,832 |
Net cash provided by (used in) investing activities | (377,551) | 115,179 | (79,705) |
Cash flows from financing activities | |||
Borrowings (repayments) of warehouse notes payable, net | (635,912) | 1,718,470 | (367,864) |
Borrowings of interim warehouse notes payable | 266,575 | 60,770 | 179,765 |
Repayments of interim warehouse notes payable | (227,999) | (167,960) | (67,871) |
Repayments of notes payable | (294,773) | (2,977) | (2,250) |
Borrowings of notes payable | 598,500 | ||
Proceeds from secured borrowings | 2,766 | ||
Repayments of secured borrowings | (73,312) | ||
Proceeds from issuance of common stock | 5,252 | 14,021 | 5,511 |
Repurchase of common stock | (18,872) | (45,774) | (30,676) |
Purchase of noncontrolling interests | (10,400) | ||
Cash dividends paid | (64,453) | (45,350) | (37,272) |
Payment of contingent consideration | (1,641) | (6,450) | |
Debt issuance costs | (12,732) | (4,298) | (4,531) |
Net cash provided by (used in) financing activities | (457,726) | 1,517,627 | (331,638) |
Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents (NOTE 2) | 35,178 | 221,436 | 16,218 |
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period | 358,002 | 136,566 | 120,348 |
Total of cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period | 393,180 | 358,002 | 136,566 |
Supplemental Disclosure of Cash Flow Information: | |||
Cash paid to third parties for interest | 37,947 | 45,944 | 63,564 |
Cash paid for income taxes | $ 43,427 | $ 29,708 | $ 39,908 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2021 | |
ORGANIZATION | |
Organization | NOTE 1—ORGANIZATIO N These financial statements represent the consolidated financial position and results of operations of Walker & Dunlop, Inc. and its subsidiaries. Unless the context otherwise requires, references to “we,” “us,” “our,” “Walker & Dunlop” and the “Company” mean the Walker & Dunlop consolidated companies. Walker & Dunlop, Inc. is a holding company and conducts the majority of its operations through Walker & Dunlop, LLC, the operating company. Walker & Dunlop is one of the leading commercial real estate services and finance companies in the United States. The Company originates, sells, and services a range of commercial real estate debt and equity financing products, provides multifamily property sales brokerage and valuation services, engages in commercial real estate and affordable housing investment management activities, provides housing market research, and delivers real estate-related investment banking and advisory services. Through its agency lending products, the Company originates and sells loans pursuant to the programs of the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac” and, together with Fannie Mae, the “GSEs”), the Government National Mortgage Association (“Ginnie Mae”), and the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (together with Ginnie Mae, “HUD”). Through its debt brokerage products, the Company brokers, and in some cases services, loans for various life insurance companies, commercial banks, commercial mortgage-backed securities issuers, and other institutional investors, in which cases the Company does not fund the loan. The Company also provides a variety of commercial real estate debt and equity solutions through its principal lending and investing products. Interim loans on multifamily properties are offered (i) through the Company and recorded on the Company’s balance sheet (the “Interim Loan Program”) and (ii) through a joint venture with an affiliate of Blackstone Mortgage Trust, Inc., in which the Company holds a 15% ownership interest (the “Interim Program JV”). The Company has a joint venture with an international technology services company (“GeoPhy”) to offer automated multifamily valuation and appraisal services, branded Apprise by Walker & Dunlop (“Appraisal JV”). The Company owns a 50% interest in the Appraisal JV and accounts for the interest as an equity-method investment. On February 4, 2022, the Company entered into a purchase agreement to acquire GeoPhy for $85 million in cash and with a cash earn-out up to $205 million, contingent on achieving certain Apprise revenue and productivity milestones and small balance loan volume and revenue milestones over a four-year period. During the third quarter of 2021, the Company acquired certain assets and assumed certain liabilities of Zelman Holdings, LLC (“Zelman”) through a 75% interest in a newly formed entity, which provides housing market research and real estate-related investment banking and advisory services. During the fourth quarter of 2021, the Company acquired Alliant Capital, Ltd. and certain of its affiliates (as defined in NOTE 7) through a newly formed entity. The Company wholly owns Alliant and its affiliates, except for an Alliant subsidiary, for which the Company recognized a noncontrolling interest for the minority interest owned by third parties. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Summary of Significant Accounting Policies | NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation —The consolidated financial statements include the accounts of Walker & Dunlop, Inc., its wholly owned subsidiaries, and its majority owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. The Company consolidates entities in which it has a controlling financial interest based on either the variable interest entity (“VIE”) or the voting interest model. The Company is required to first apply the VIE model to determine whether it holds a variable interest in an entity, and if so, whether the entity is a VIE. If the Company determines it holds a variable interest in a VIE and has a controlling financial interest and therefore is considered the primary beneficiary, the Company consolidates the entity. In instances where the Company holds a variable interest in a VIE but is not the primary beneficiary, the Company uses the equity-method of accounting. If the Company determines it does not hold a variable interest in a VIE, it then applies the voting interest model. Under the voting interest model, the Company consolidates an entity when it holds a majority voting interest in an entity. If the Company does not have a majority voting interest but has significant influence, it uses the equity-method of accounting. In instances where the Company owns less than 100% of the equity interests of an entity but owns a majority of the voting interests or has control over an entity, the Company accounts for the portion of equity not attributable to Walker & Dunlop, Inc. as Noncontrolling interests on the Consolidated Balance Sheets and the portion of net income not attributable to Walker & Dunlop, Inc. as Net income from noncontrolling interests in the Consolidated Statements of Income. Subsequent Events —The Company has evaluated the effects of all events that have occurred subsequent to December 31, 2021. The Company has made certain disclosures in the notes to the consolidated financial statements of events that have occurred subsequent to December 31, 2021. There have been no other material subsequent events that would require recognition in the consolidated financial statements. Use of Estimates —The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, allowance for risk-sharing obligations, capitalized mortgage servicing rights, derivative instruments, and the disclosure of contingent assets and liabilities. Actual results may vary from these estimates. Transfers of Financial Assets—Transfers of financial assets are reported as sales when (i) the transferor surrenders control over those assets, (ii) the transferred financial assets have been legally isolated from the Company’s creditors, (iii) the transferred assets can be pledged or exchanged by the transferee, and (iv) consideration other than beneficial interests in the transferred assets is received in exchange. The transferor is considered to have surrendered control over transferred assets if, and only if, certain conditions are met. The Company determined that all loans sold during the periods presented met these specific conditions and accounted for all transfers of loans held for sale as completed sales, except as otherwise noted. Derivative Assets and Liabilities —Loan commitments that meet the definition of a derivative are recorded at fair value on the Consolidated Balance Sheets upon the executions of the commitments to originate a loan with a borrower and to sell the loan to an investor, with a corresponding amount recognized as revenue on the Consolidated Statements of Income. The estimated fair value of loan commitments includes (i) the fair value of loan origination fees and premiums on the anticipated sale of the loan, net of co-broker fees (included in Derivative assets in the Consolidated Balance Sheets and as a component of Loan origination and debt brokerage fees, net in the Consolidated Income Statements), (ii) the fair value of the expected net cash flows associated with the servicing of the loan, net of any estimated net future cash flows associated with the guarantee obligation (included in Derivative assets in the Consolidated Balance Sheets and in Fair value of expected net cash flows from servicing, net in the Consolidated Income Statements), and (iii) the effects of interest rate movements between the trade date and balance sheet date. Loan commitments are generally derivative assets but can become derivative liabilities if the effects of the interest rate movement between the trade date and the balance sheet date are greater than the combination of (i) and (ii) above. Forward sale commitments that meet the definition of a derivative are recorded as either derivative assets or derivative liabilities depending on the effects of the interest rate movements between the trade date and the balance sheet date. Adjustments to the fair value are reflected as a component of income within Loan origination and debt brokerage fees, net in the Consolidated Statements of Income. Co-broker fees, which are netted against Loan origination and debt brokerage fees, net in the Consolidated Statements of Income, were $21.0 million, $33.1 million and $20.6 million for the years ended December 31, 2021, 2020, and 2019, respectively. Mortgage Servicing Rights —When a loan is sold and the Company retains the right to service the loan, the aforementioned derivative asset is reclassified and capitalized as an individual originated mortgage servicing right (“OMSR”) at fair value. The initial capitalized amount is equal to the estimated fair value of the expected net cash flows associated with servicing the loans, net of the expected cash flows associated with any guaranty obligations. The following describes the principal assumptions used in estimating the fair value of capitalized OMSRs. Discount Rate —Depending upon loan type, the discount rate used is management's best estimate of market discount rates. The rates used for loans sold were between 8% and 14% during 2021 and between 10% and 15% during 2020 and varied based on loan type. Estimated Life —The estimated life of the OMSRs is derived based upon the stated term of the prepayment protection provisions of the underlying loan and may be reduced by six to 12 months based upon the expiration or reduction of the prepayment provisions prior to the stated maturity date. The Company’s model for OMSRs assumes no prepayment while the prepayment provisions have not expired and full prepayment of the loan at or near the point where the prepayment provisions have expired. The Company’s historical experience is that the prepayment provisions typically do not provide a significant deterrent to a borrower’s paying off the loan within six to 12 months of the expiration of the prepayment provisions. Escrow Earnings —The estimated earnings rate on escrow accounts associated with the servicing of the loans for the life of the OMSR is added to the estimated future cash flows. The assumptions used to estimate the fair value of capitalized OMSRs at loan sale are based on internal models and are compared to assumptions used by other market participants periodically. When such comparisons indicate that these assumptions have changed significantly, the Company adjusts its assumptions accordingly. For example, during the year ended December 31, 2020, the Company adjusted the escrow earnings rate assumptions twice based on changes observed from other market participants. Additionally, the Company made adjustments to the discount rate and escrow earnings rate in 2021 based on observations from other market participants and economic conditions. Subsequent to the initial measurement date, OMSRs are amortized using the interest method over the period that servicing income is expected to be received and presented as a component of Amortization and depreciation in the Consolidated Statements of Income. The individual loan-level OMSR is written off through a charge to Amortization and depreciation when a loan prepays, defaults, or is probable of default. The Company evaluates all MSRs for impairment quarterly. The predominant risk characteristic affecting the OMSRs is prepayment risk, and we do not believe there is sufficient variation within the portfolio to warrant stratification. Therefore, we assess OMSR impairment at the portfolio level. The Company engages a third party to assist in determining an estimated fair value of our existing and outstanding MSRs on at least a semi-annual basis. The Company tests for impairment on purchased stand-alone servicing portfolios (“PMSRs”) separately from the Company’s OMSRs. The fair value of PMSRs is equal to the purchase price paid. For PMSRs, the Company records a portfolio-level MSR asset and determines the estimated life of the portfolio based on the prepayment characteristics of the portfolio. The Company subsequently amortizes such PMSRs and tests for impairment quarterly as discussed in more detail above. For PMSRs, a constant rate of prepayments and defaults is included in the determination of the portfolio’s estimated life (and thus included as a component of the portfolio’s amortization). Accordingly, prepayments and defaults of individual loans do not change the level of amortization expense recorded for the portfolio unless the pattern of actual prepayments and defaults varies significantly from the estimated pattern. When such a significant difference in the pattern of estimated and actual prepayments and defaults occurs, the Company prospectively adjusts the estimated life of the portfolio (and thus future amortization) to approximate the actual pattern observed. For the periods reported, there were no material MSR purchases. Guaranty Obligation, net— When a loan is sold under the Fannie Mae DUS program, the Company undertakes an obligation to partially guarantee the performance of the loan. Upon loan sale, a liability for the fair value of the obligation undertaken in issuing the guaranty is recognized and presented as Guaranty obligation, net of accumulated amortization on the Consolidated Balance Sheets. The recognized guaranty obligation is the fair value of the Company’s obligation to stand ready to perform and credit risk over the term of the guaranty. Generally, the estimated fair value of the guaranty obligation is based on the present value of the cash flows expected to be paid under the guaranty over the estimated life of the loan discounted using a rate consistent with what is used for the calculation of the mortgage servicing right for each loan. The life of the guaranty obligation is the estimated period over which the Company believes it will be required to stand ready under the guaranty. Subsequent to the initial measurement date, the liability is amortized over the life of the guaranty period using the straight-line method as a component of and reduction to Amortization and depreciation in the Consolidated Statements of Income. Allowance for Risk-Sharing Obligations— Substantially all loans sold under the Fannie Mae DUS program contain partial or full risk-sharing guaranties that are based on the performance of the loan serviced in the at-risk servicing portfolio. The Company records an estimate of the loss reserve for the current expected credit losses (“CECL”) for all loans in our Fannie Mae at-risk servicing portfolio and presents this loss reserve as Allowance for Risk-Sharing Obligations on the Consolidated Balance Sheets. Prior to the adoption of Accounting Standards Update 2016-13 (“ASU 2016-13”), Financial Instruments—Credit Losses (Topic 326) on January 1, 2020, the Company recognized credit losses on risk-sharing loans and loans held for investment under the incurred loss model. Overall Current Expected Credit Losses Approach The Company uses the weighted-average remaining maturity method (“WARM”) for calculating its allowance for risk-sharing obligations, the Company’s liability for the off-balance-sheet credit exposure associated with the Fannie Mae at-risk DUS loans. WARM uses an average annual charge-off rate that contains loss content over multiple vintages and loan terms and is used as a foundation for estimating the CECL reserve. The average annual charge-off rate is applied to the unpaid principal balance (“UPB”) over the contractual term, adjusted for estimated prepayments and amortization to arrive at the CECL reserve for the entire current portfolio as described further below. The Company maximizes the use of historical internal data because the Company has extensive historical data servicing Fannie Mae DUS loans from which to calculate historical loss rates and principal paydown by loan term type for its exposure to credit loss on its homogeneous portfolio of Fannie Mae DUS multifamily loans. Additionally, the Company believes its properties, loss history, and underwriting standards are not similar to public data such as loss histories for loans originated for collateralized mortgage-backed securities conduits. Runoff Rate One of the key inputs into a WARM calculation is the runoff rate, which is the expected rate at which loans in the current portfolio will prepay and amortize in the future. As the loans the Company originates have different original lives and run off over different periods, the Company groups loans by similar origination dates (vintage) and contractual maturity terms for purposes of calculating the runoff rate. The Company originates loans under the DUS program with various terms generally ranging from several years to 15 years ; each of these various loan terms has a different runoff rate. The Company uses its historical runoff rate for each of the different loan term pools as a proxy for the expected runoff rate. The Company believes that borrower behavior and macroeconomic conditions will not deviate significantly from historical performance over the approximately ten-year period in which the Company has compiled the actual loss data. The ten-year period captures the various cycles of industry performance and provides a period that is long enough to capture sufficient observations of runoff history. In addition, due to the prepayment protection provisions for Fannie Mae DUS loans, the Company has not seen significant volatility in historical prepayment rates due to changes in interest rates and would not expect this to change materially in future periods. The historical annual runoff rate is calculated for each year of a loan’s life for each vintage in the portfolio and aggregated with the calculated runoff rate for each comparable year in every vintage. For example, the annual runoff rate for the first year of loans originated in 2010 is aggregated with the annual runoff rate for the first year of loans originated in 2011, 2012, and so on to calculate the average annual runoff rate for the first year of a loan. This average runoff calculation is performed for each year of a loan’s life for each of the various loan terms to create a matrix of historical average annual runoffs by year for the entire portfolio. The Company segments its current portfolio of at-risk DUS loans outstanding by original loan term type and years remaining and then applies the appropriate historical average runoff rates to calculate the expected remaining balance at the end of each reporting period in the future. For example, for a loan with an original ten-year term and seven years remaining, the Company applies the historical average annual runoff rate for a ten-year loan for year four to arrive at the estimated remaining UPB one year from the current period, the historical average runoff rate for year five to arrive at the estimated remaining UPB two years from the current period, and so on up to the loan’s maturity date. CECL Reserve Calculation Once the Company has calculated the estimated outstanding UPB for each future year until maturity for each loan term type, the Company then applies the average annual charge-off rate (as further described below) to each future year’s estimated UPB. The Company then aggregates the allowance calculated for each year within each loan term type and for all different maturity years to arrive at the CECL reserve for the portfolio. The weighted-average annual charge-off rate is calculated using a ten-year look-back period, utilizing the average portfolio balance and settled losses for each year. A ten-year period is used as the Company believes that this period of time includes sufficiently different economic conditions to generate a reasonable estimate of expected results in the future, given the relatively long-term nature of the current portfolio. This approach captures the adverse impact of the years following the great financial crisis of 2007-2010 because multifamily commercial loans have a lag period from the time of initial distress indications through the timing of loss settlement. The same loss rate is utilized across each loan term type as the Company has not observed any historical or industry-published data to indicate there is any difference in the occurrence probability or loss severity for a loan based on its loan origination term. Reasonable and Supportable Forecast Period The Company currently uses one year for its reasonable and supportable forecast period (the “forecast period”). The Company uses a forecast of unemployment rates, historically a highly correlated indicator for multifamily occupancy rates, to assess what macroeconomic and multifamily market conditions are expected to be like over the coming year. The Company then associates the forecasted conditions with a similar historical period over the past ten years, which could be one or several years, and uses the Company’s average loss rate for that historical period as a basis for the loss rate used for the forecast period. The Company reverts to a historical loss rate over a one-year period on a straight-line basis. For all remaining years until maturity, the Company uses the weighted-average annual charge-off rate as described above to estimate losses. The average loss rate from a historical period used for the forecast period may be adjusted as necessary if the forecasted macroeconomic and industry conditions differ materially from the historical period. Identification of Collateral-Based Reserves for Defaulted Loans The Company monitors the performance of each risk-sharing loan for events or conditions which may signal a potential default. The Company’s process for identifying which risk-sharing loans may be probable of default consists of an assessment of several qualitative and quantitative factors, including payment status, property financial performance, local real estate market conditions, loan-to-value ratio, debt-service-coverage ratio (“DSCR”), property condition, and financial strength of the borrower or key principal(s). In instances where payment under the guaranty on a specific loan is determined to be probable (as the loan is probable of foreclosure or has foreclosed), the Company separately measures the expected loss through an assessment of the underlying fair value of the asset, disposition costs, and the risk-sharing percentage (the “collateral-based reserve”) through a charge to the provision for risk-sharing obligations, which is a component of Provision (benefit) for credit losses in the Consolidated Statements of Income. These loans are removed from the WARM calculation described above, and the associated loan-specific mortgage servicing right and guaranty obligation are written off. The expected loss on the risk-sharing obligation is dependent on the fair value of the underlying property as the loans are collateral dependent. Historically, initial recognition of a collateral-based reserve occurs at or before a loan becomes 60 days delinquent. The amount of the collateral-based reserve considers historical loss experience, adverse situations affecting individual loans, the estimated disposition value of the underlying collateral, and the level of risk sharing. The estimate of property fair value at initial recognition of the collateral-based reserve is based on appraisals, broker opinions of value, or net operating income and market capitalization rates, depending on the facts and circumstances associated with the loan. The Company regularly monitors the collateral-based reserves on all applicable loans and updates loss estimates as current information is received. The settlement with Fannie Mae is based on the actual sales price of the property and selling and property preservation costs and considers the Fannie Mae loss-sharing requirements. The maximum amount of the loss the Company absorbs at the time of default is generally 20% of the origination UPB of the loan. Loans Held for Investment, net — Loans held for investment are multifamily loans originated by the Company through the Interim Loan Program for properties that currently do not qualify for permanent GSE or HUD (collectively, the “Agencies”) financing. These loans have terms of up to three years and are all interest-only, multifamily loans with similar risk characteristics and no geographic concentration. The loans are carried at their unpaid principal balances, adjusted for net unamortized loan fees and costs, and net of any allowance for loan losses. As of December 31, 2021, Loans held for investment, net consisted of 12 loans with an aggregate $274.5 million of unpaid principal balance less $1.2 million of net unamortized deferred fees and costs and $4.2 million of allowance for loan losses. As of December 31, 2020, Loans held for investment, net consisted of 18 loans with an aggregate $366.3 million of unpaid principal balance less $1.1 million of net unamortized deferred fees and costs and $4.8 million of allowance for loan losses During the third quarter of 2018, the Company transferred a portfolio of participating interests in loans held for investment to a third party that was paid off in the second quarter of 2021. The Company accounted for the transfer as a secured borrowing, with the aggregate unpaid principal balance of the loans of $81.5 million presented as a component of Loans held for investment, net and the secured borrowing of $73.3 million presented within Other liabilities in the Consolidated Balance Sheets as of December 31, 2020. The Company assesses the credit quality of loans held for investment in the same manner as it does for the loans in the Fannie Mae at-risk portfolio as described above and records an allowance for these loans as necessary. The allowance for loan losses is estimated collectively for loans with similar characteristics. The collective allowance is based on the same methodology that the Company uses to estimate its allowance for risk-sharing obligations under the CECL standard for at-risk Fannie Mae Delegated Underwriting and Servicing (“DUS”) loans (with the exception of a reversion period) because the nature of the underlying collateral is the same, and the loans have similar characteristics, except they are significantly shorter in maturity. The reasonable and supportable forecast period used for the CECL allowance for loans held for investment is one year. The loss rate for the forecast period was 15 basis points and 36 basis points as of December 31, 2021 and December 31, 2020, respectively. The loss rate for the remaining period until maturity was nine basis points as of both December 31, 2021 and December 31, 2020. One loan held for investment with an unpaid principal balance of $14.7 million was delinquent and on non-accrual status as of December 31, 2021 and December 31, 2020. The Company had $3.7 million in collateral-based reserves for this loan as of both December 31, 2021 and 2020 and has not recorded any interest related to this loan since it went on non-accrual status. All other loans were current as of December 31, 2021 and 2020. The amortized cost basis of loans that were current as of December 31, 2021 and 2020 was $258.6 million and $350.5 million, respectively. As of December 31, 2021, $231.5 million and $28.3 million of the loans that were current were originated in 2021 and 2019, respectively. No loans originated in 2020 were outstanding as of December 31, 2021. Prior to 2019, the Company had not experienced any delinquencies related to loans held for investment. Provision (Benefit) for Credit Losses— The Company records the income statement impact of the changes in the allowance for loan losses and the allowance for risk-sharing obligations within Provision (benefit) for credit losses in the Consolidated Statements of Income. NOTE 4 contains additional discussion related to the allowance for risk-sharing obligations. Provision (benefit) for credit losses consisted of the following activity for the years ended December 31, 2021, 2020, and 2019: Components of Provision (Benefit) for Credit Losses (in thousands) 2021 2020 2019 Provision (benefit) for loan losses $ (610) $ 3,739 $ 875 Provision (benefit) for risk-sharing obligations (12,677) 33,740 6,398 Provision (benefit) for credit losses $ (13,287) $ 37,479 $ 7,273 Business Combinations —The Company accounts for business combinations using the acquisition method of accounting, under which the purchase price of the acquisition is allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date. The Company recognizes identifiable assets acquired and liabilities (both specific and contingent) assumed at their fair values at the acquisition date. Furthermore, acquisition-related costs, such as due diligence, legal and accounting fees, are not capitalized or applied in determining the fair value of the acquired assets. The excess of the purchase price over the fair value of (i) the assets acquired, (ii) the identifiable intangible assets, and (iii) the liabilities assumed is recognized as goodwill. During the measurement period, the Company records adjustments to the assets acquired and liabilities assumed with corresponding adjustments to goodwill in the reporting period in which the adjustment is identified. After the measurement period, which could be up to one year after the transaction date, subsequent adjustments are recorded to the Company’s Consolidated Statements of Income. Goodwill —The Company evaluates goodwill for impairment annually. In addition to the annual impairment evaluation, the Company evaluates at least quarterly whether events or circumstances have occurred in the period subsequent to the annual impairment testing which indicate that it is more likely than not an impairment loss has occurred. The Company currently has only one reporting unit; therefore, all goodwill is allocated to that one reporting unit. The Company performs its impairment testing annually as of October 1. For the 2021 assessment, the Company performed a qualitative assessment and also considered the comparison of the Company’s market capitalization to its net assets. Based on the October 1, 2021 qualitative assessment performed, the Company’s market capitalization exceeded its net asset value by $2.4 billion or 173% . As of December 31, 2021, there have been no events subsequent to that analysis that are indicative of an impairment loss. Loans Held for Sale —Loans held for sale represent originated loans that are generally transferred or sold within 60 days from the date that a mortgage loan is funded. The Company elects to measure all originated loans at fair value, unless the Company documents at the time the loan is originated that it will measure the specific loan at the lower of cost or fair value for the life of the loan. Electing to use fair value allows a better offset of the change in fair value of the loan and the change in fair value of the derivative instruments used as economic hedges. During the period prior to its sale, interest income on a loan held for sale is calculated in accordance with the terms of the individual loan. There were no loans held for sale that were valued at the lower of cost or fair value or on a non-accrual status at December 31, 2021 and 2020. Share-Based Payment —The Company recognizes compensation costs for all share-based payment awards made to employees and directors, including restricted stock, restricted stock units, and employee stock options based on the grant date fair value. Restricted stock awards are granted without cost to the Company’s officers, employees, and non-employee directors, for which the fair value of the award is calculated as the fair value of the Company’s common stock on the date of grant. Stock option awards were granted to executive officers in the past, with an exercise price equal to the closing price of the Company’s common stock on the date of the grant, and were granted with a ten-year exercise period, vesting ratably over three years dependent solely on continued employment. To estimate the grant-date fair value of stock options, the Company used the Black-Scholes pricing model. The Company has not granted any stock option awards since 2017 and does not expect to issue stock options for the foreseeable future. Generally, the Company’s restricted stock awards for its officers and employees vest ratably over a three-year period based solely on continued employment. Restricted stock awards for non-employee directors fully vest after one year . Awards issued to the Company's production personnel often times vest over a period greater than three years . The Company offers a performance share plan (“PSP”) principally for the Company’s executives and certain other members of senior management. The performance period for each PSP is three full calendar years beginning on January 1 of the grant year. Participants in the PSP receive restricted stock units (“RSUs”) on the grant date for the PSP in an amount equal to achievement of all performance targets at a maximum level. If the performance targets are met at the end of the performance period and the participant remains employed by the Company, the participant fully vests in the RSUs, which immediately convert to unrestricted shares of common stock. If the performance targets are not met at the maximum level, the participant generally forfeits a portion of the RSUs. If the participant is no longer employed by the Company, the participant forfeits all of the RSUs. The performance targets for all the PSPs issued by the Company are based on meeting diluted earnings per share, return on equity, and total revenues goals. The Company records compensation expense for the PSP based on the grant-date fair value in an amount proportionate to the service time rendered by the participant and the expected achievement level of the goals. Compensation expense for restricted shares is adjusted for actual forfeitures and is recognized on a straight-line basis, for each separately vesting portion of the award as if the award were in substance multiple awards, over the requisite service period of the award. Share-based compensation is recognized within the income statement as Personnel , the same expense line as the cash compensation paid to the respective employees. Net Warehouse Interest Income— The Company presents warehouse interest income net of warehouse interest expense. Warehouse interest income is the interest earned from loans held for sale and loans held for investment. Generally, a substantial portion of the Company’s loans is financed with matched borrowings under one of its warehouse facilities. The remaining portion of loans not funded with matched borrowings is financed with the Company’s own cash. The Company also fully funds a small number of loans held for sale or loans held for investment with its own cash. Warehouse interest expense is incurred on borrowings used to fund loans solely while they are held for sale or for investment. Warehouse interest income and expense are earned or incurred on loans held for sale after a loan is closed and before a loan is sold. Warehouse interest income and expense are earned or incurred on loans held for investment after a loan is closed and before a loan is repaid. Included in Net warehouse interest income for the years ended December 31, 2021 and 2020, and 2019 are the following components: For the year ended December 31, Components of Net Warehouse Interest Income (in thousands) 2021 2020 |
MORTGAGE SERVICING RIGHTS
MORTGAGE SERVICING RIGHTS | 12 Months Ended |
Dec. 31, 2021 | |
MSRs | |
Mortgage Servicing Rights | |
Mortgage Servicing Rights | NOTE 3—MORTGAGE SERVICING RIGHTS The fair value of MSRs at December 31, 2021 and December 31, 2020 was $1.3 billion and $1.1 billion, respectively. The Company uses a discounted static cash flow valuation approach, and the key economic assumption is the discount rate. See the following sensitivities related to the discount rate: The impact of a 100 -basis point increase in the discount rate at December 31, 2021 would be a decrease in the fair value of $38.4 million to the MSRs outstanding as of December 31, 2021. The impact of a 200 -basis point increase in the discount rate at December 31, 2021 would be a decrease in the fair value of $74.3 million to the MSRs outstanding as of December 31, 2021. These sensitivities are hypothetical and should be used with caution. These estimates do not include interplay among assumptions and are estimated as a portfolio rather than individual assets. Activity related to capitalized MSRs (net of accumulated amortization) for the years ended December 31, 2021 and 2020 follows: For the year ended December 31, Roll Forward of MSRs (in thousands) 2021 2020 Beginning balance $ 862,813 $ 718,799 Additions, following the sale of loan 313,376 321,225 Amortization (176,428) (149,888) Pre-payments and write-offs (45,916) (27,323) Ending balance $ 953,845 $ 862,813 The following table summarizes the gross value, accumulated amortization, and net carrying value of the Company’s MSRs as of December 31, 2021 and 2020: Components of MSRs (in thousands) December 31, 2021 December 31, 2020 Gross value $ 1,548,870 $ 1,394,901 Accumulated amortization (595,025) (532,088) Net carrying value $ 953,845 $ 862,813 The expected amortization of MSRs held in the Consolidated Balance Sheet as of December 31, 2021 is shown in the table below. Actual amortization may vary from these estimates. Expected (in thousands) Amortization Year Ending December 31, 2022 $ 175,191 2023 163,741 2024 143,803 2025 122,262 2026 102,269 Thereafter 246,579 Total $ 953,845 The Company recorded write-offs of OMSRs related to loans that were repaid prior to the expected maturity and loans that defaulted. These write-offs are included as a component of the MSR roll forward shown above and as a component of Amortization and depreciation in the Consolidated Statements of Income and relate to OMSRs only. Prepayment fees totaling $40.1 million, $22.0 million, and $26.8 million were earned for 2021, 2020, and 2019, respectively, and are included as a component of Other revenues in the Consolidated Statements of Income. Escrow earnings totaling $5.6 million, $14.9 million, and $51.4 million were earned for the years ended December 31, 2021, 2020, and 2019, respectively, and are included as a component of Escrow earnings and other interest income in the Consolidated Statements of Income. All other ancillary servicing fees were immaterial for the periods presented. Management reviews the MSRs for temporary impairment quarterly by comparing the aggregate carrying value of the MSR portfolio to the aggregate estimated fair value of the portfolio. Additionally, MSRs related to Fannie Mae loans where the Company has risk-sharing obligations are assessed for permanent impairment on an asset-by-asset basis, considering factors such as debt service coverage ratio, property location, loan-to-value ratio, and property type. Except for defaulted or prepaid loans, no temporary or permanent impairment was recognized for the years ended December 31, 2021, 2020, and 2019. As of December 31, 2021, the weighted average remaining life of the aggregate MSR portfolio was 7.5 years. |
GUARANTY OBLIGATION AND ALLOWAN
GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS | 12 Months Ended |
Dec. 31, 2021 | |
GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS | |
Guaranty Obligation and Allowance for Risk-Sharing Obligations | NOTE 4—GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS When a loan is sold under the Fannie Mae DUS program, the Company typically agrees to guarantee a portion of the ultimate loss incurred on the loan should the borrower fail to perform. The compensation for this risk is a component of the servicing fee on the loan. The guaranty is in force while the loan is outstanding. The Company does not provide a guaranty for any other loan product it sells or brokers. Activity related to the guaranty obligation for the years ended December 31, 2021 and 2020 is presented in the following table: For the year ended December 31, Roll Forward of Guaranty Obligation (in thousands) 2021 2020 Beginning balance $ 52,306 $ 54,695 Additions, following the sale of loan 5,607 5,755 Amortization and write-offs (10,535) (9,612) Other — 1,468 Ending balance $ 47,378 $ 52,306 Substantially all loans sold under the Fannie Mae DUS program contain partial or full risk-sharing guaranties that are based on the credit performance of the loan. The Company records an estimate of the loss reserve for CECL for all loans in its Fannie Mae at-risk servicing portfolio and presents this loss reserve as Allowance for risk-sharing obligations on the Consolidated Balance Sheets. Activity related to the allowance for risk-sharing obligations for the years ended December 31, 2021 and 2020 follows: For the year ended December 31, Roll Forward of Allowance for Risk-Sharing Obligations (in thousands) 2021 2020 Beginning balance $ 75,313 $ 11,471 Adjustment related to adoption of CECL — 31,570 Provision (benefit) for risk-sharing obligations (12,677) 33,740 Write-offs — — Other (1,468) Ending balance $ 62,636 $ 75,313 As a result of the onset of the pandemic and the resulting forecasts for elevated unemployment rates during 2020, the Company’s loss rate for the forecast period was six basis points as of December 31, 2020, resulting in the substantial provision for risk-sharing obligations for the year ended December 31, 2020 and an increase in the allowance for risk-sharing obligations as of December 31, 2020 as seen above. During 2021, economic conditions have improved significantly compared to 2020, with reported and forecast unemployment rates significantly better compared to December 31, 2020. In response to improving unemployment statistics and the current and expected overall health of the multifamily market, the Company adjusted the loss rate for the forecast period from six basis points as of December 31, 2020 to three basis points as December 31, 2021. The decrease in the loss rate resulted in the benefit for risk-sharing obligations seen above for the year ended December 31, 2021. For the remaining expected life of the portfolio, the Company reverted over a one-year period on a straight-line basis to a historical loss rate of just under two basis points for all periods shown in the roll forward above. The calculated CECL reserve for the Company’s $48.0 billion at-risk Fannie Mae servicing portfolio as of December 31, 2021 was $52.3 million compared to $67.0 million as of December 31, 2020. The decrease in the CECL reserve was principally related to the improvements in the unemployment statistics and overall health of the multifamily market noted above. The weighted-average remaining life of the at-risk Fannie Mae servicing portfolio as of December 31, 2021 was 7.5 years. Three loans had aggregate collateral-based reserves of $10.3 million as of December 31, 2021. Two of those loans also had collateral-based reserves of $8.3 million as of December 31, 2020 as we have not yet settled the risk-sharing losses on those two loans with Fannie Mae. As of December 31, 2021 and 2020, the maximum quantifiable contingent liability associated with the Company’s guarantees under the Fannie Mae DUS agreement was $10.1 billion and $9.0 billion, respectively. This maximum quantifiable contingent liability relates to the at-risk loans serviced for Fannie Mae at the specific point in time indicated. The maximum quantifiable contingent liability is not representative of the actual loss the Company would incur. The Company would be liable for this amount only if all of the loans it services for Fannie Mae, for which the Company retains some risk of loss, were to default and all of the collateral underlying these loans were determined to be without value at the time of settlement. |
SERVICING
SERVICING | 12 Months Ended |
Dec. 31, 2021 | |
Loans and Other Servicing Accounts | |
Servicing | |
Servicing | NOTE 5—SERVICING The total unpaid principal balance of loans the Company was servicing for various institutional investors was $115.7 billion as of December 31, 2021 compared to $107.2 billion as of December 31, 2020. As of December 31, 2021 and 2020, custodial escrow accounts relating to loans serviced by the Company totaled $3.7 billion and $3.1 billion, respectively. These amounts are not included in the Consolidated Balance Sheets as such amounts are not Company assets; however, the Company is entitled to earn interest income on these escrow balances, presented as Escrow earnings and other interest income in the Consolidated Statements of Income. Certain cash deposits at other financial institutions exceed the Federal Deposit Insurance Corporation insured limits. The Company places these deposits with financial institutions that meet the requirements of the Agencies and where it believes the risk of loss to be minimal. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2021 | |
Debt | |
Debt | NOTE 6 —DEBT Warehouse Facilities At December 31, 2021 , to provide financing to borrowers under the Agencies’ programs, the Company has committed and uncommitted warehouse lines of credit in the amount of $4.1 billion with certain national banks and a $1.5 billion uncommitted facility with Fannie Mae (collectively, the “Agency Warehouse Facilities”). In support of these Agency Warehouse Facilities, the Company has pledged substantially all of its loans held for sale under the Company's approved programs. The Company’s ability to originate mortgage loans for sale depends upon its ability to secure and maintain these types of short-term financings on acceptable terms. Additionally, at December 31, 2021 , the Company has arranged for warehouse lines of credit in the amount of $0.5 billion with certain national banks to assist in funding loans held for investment under the Interim Loan Program (“Interim Warehouse Facilities”). The Company has pledged substantially all of its loans held for investment against these Interim Warehouse Facilities. The Company’s ability to originate loans held for investment depends upon its ability to secure and maintain these types of short-term financings on acceptable terms. The maximum amount and outstanding borrowings under Warehouse notes payable at December 31, 2021 and 2020 are as follows: December 31, 2021 (dollars in thousands) Committed Uncommitted Total Facility Outstanding Facility (1) Amount Amount Capacity Balance Interest rate (2) Agency Warehouse Facility #1 $ 425,000 $ — $ 425,000 $ 34,032 Adjusted Term SOFR plus 1.30% Agency Warehouse Facility #2 700,000 300,000 1,000,000 147,055 30-day LIBOR plus 1.30% Agency Warehouse Facility #3 600,000 265,000 865,000 156,705 30-day LIBOR plus 1.30% Agency Warehouse Facility #4 350,000 — 350,000 45,337 30-day LIBOR plus 1.30% Agency Warehouse Facility #5 — 1,000,000 1,000,000 175,608 Adjusted Term SOFR plus 1.45% Agency Warehouse Facility #6 150,000 100,000 250,000 — 30-day LIBOR plus 1.40% Agency Warehouse Facility #7 150,000 50,000 200,000 16,289 30-day LIBOR plus 1.30% Total National Bank Agency Warehouse Facilities $ 2,375,000 $ 1,715,000 $ 4,090,000 $ 575,026 Fannie Mae repurchase agreement, uncommitted line and open maturity — 1,500,000 1,500,000 1,186,306 Total Agency Warehouse Facilities $ 2,375,000 $ 3,215,000 $ 5,590,000 $ 1,761,332 Interim Warehouse Facility #1 $ 135,000 $ — $ 135,000 $ — 30-day LIBOR plus 1.90% Interim Warehouse Facility #2 100,000 — 100,000 — 30-day LIBOR plus 1.65% to 2.00% Interim Warehouse Facility #3 200,000 — 200,000 153,009 30-day LIBOR plus 1.75% to 3.25% Interim Warehouse Facility #4 19,810 — 19,810 19,810 30-day LIBOR plus 3.00% Total National Bank Interim Warehouse Facilities $ 454,810 $ — $ 454,810 $ 172,819 Alliant Warehouse Facility $ 30,000 $ — $ 30,000 $ 8,296 Daily LIBOR plus 3.00% Debt issuance costs — — — (875) Total warehouse facilities $ 2,859,810 $ 3,215,000 $ 6,074,810 $ 1,941,572 December 31, 2020 (dollars in thousands) Committed Uncommitted Total Facility Outstanding Facility (1) Amount Amount Capacity Balance Interest rate (2) Agency Warehouse Facility #1 $ 425,000 $ — $ 425,000 $ 83,336 30-day LIBOR plus 1.40% Agency Warehouse Facility #2 700,000 300,000 1,000,000 460,388 30-day LIBOR plus 1.40% Agency Warehouse Facility #3 600,000 265,000 865,000 410,546 30-day LIBOR plus 1.15% Agency Warehouse Facility #4 350,000 — 350,000 181,996 30-day LIBOR plus 1.40% Agency Warehouse Facility #5 — 1,000,000 1,000,000 522,507 30-day LIBOR plus 1.45% Total National Bank Agency Warehouse Facilities $ 2,075,000 $ 1,565,000 $ 3,640,000 $ 1,658,773 Fannie Mae repurchase agreement, uncommitted line and open maturity — 1,500,000 1,500,000 725,085 Total agency warehouse facilities $ 2,075,000 $ 3,065,000 $ 5,140,000 $ 2,383,858 Interim Warehouse Facility #1 $ 135,000 $ — $ 135,000 $ 71,572 30-day LIBOR plus 1.90% Interim Warehouse Facility #2 100,000 — 100,000 34,000 30-day LIBOR plus 1.65% Interim Warehouse Facility #3 75,000 75,000 150,000 8,861 30-day LIBOR plus 1.75% to 3.25% Interim Warehouse Facility #4 19,810 — 19,810 19,810 30-day LIBOR plus 3.00% Total interim warehouse facilities $ 329,810 $ 75,000 $ 404,810 $ 134,243 Debt issuance costs — — — (945) Total warehouse facilities $ 2,404,810 $ 3,140,000 $ 5,544,810 $ 2,517,156 (1) Agency Warehouse Facilities, including the Fannie Mae repurchase agreement are used to fund loans held for sale, while Interim Warehouse Facilities are used to fund loans held for investment. (2) Interest rate presented does not include the effect of interest rate floors. Interest expense under the warehouse notes payable for the years ended December 31, 2021, 2020, and 2019 aggregated to $34.5 million, $45.0 million, and $58.1 million, respectively. Included in interest expense in 2021, 2020, and 2019 are the amortization of facility fees totaling $3.8 million, $4.1 million, and $4.9 million, respectively. The warehouse notes payable are subject to various financial covenants, and the Company was in compliance with all such covenants at December 31, 2021 . Agency Warehouse Facilities The following section provides a summary of the key terms related to each of the Agency Warehouse Facilities. The Company believes that the seven remaining committed and uncommitted credit facilities from national banks and the uncommitted credit facility from Fannie Mae provide the Company with sufficient borrowing capacity to conduct its Agency lending operations. Agency Warehouse Facility #1: The Company has a warehousing credit and security agreement with a national bank for a $425.0 million committed warehouse line that is scheduled to mature on October 24, 2022 . The agreement provides the Company with the ability to fund Fannie Mae, Freddie Mac, HUD, and FHA loans. Advances are made at 100% of the loan balance and borrowings under this line bear interest at the Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus 130 basis points. The agreement contains certain affirmative and negative covenants that are binding on the Company’s operating subsidiary, Walker & Dunlop, LLC (which are in some cases subject to exceptions), including, but not limited to, restrictions on its ability to assume, guarantee, or become contingently liable for the obligation of another person, to undertake certain fundamental changes such as reorganizations, mergers, amendments to the Company’s certificate of formation or operating agreement, liquidations, dissolutions or dispositions or acquisitions of assets or businesses, to cease to be directly or indirectly wholly owned by the Company, to pay any subordinated debt in advance of its stated maturity or to take any action that would cause Walker & Dunlop, LLC to lose all or any part of its status as an eligible lender, seller, servicer or issuer or any license or approval required for it to engage in the business of originating, acquiring, or servicing mortgage loans. In addition, the agreement requires compliance with certain financial covenants, which are measured for the Company and its subsidiaries on a consolidated basis, as follows: ● tangible net worth of the Company of not less than (i) $200.0 million plus (ii) 75% of the net proceeds of any equity issuances by the Company or any of its subsidiaries after the closing date; ● compliance with the applicable net worth and liquidity requirements of Fannie Mae, Freddie Mac, Ginnie Mae, FHA, and HUD; ● liquid assets of the Company of not less than $15.0 million; ● maintenance of aggregate unpaid principal amount of all mortgage loans comprising the Company’s consolidated servicing portfolio of not less than $20.0 billion or all Fannie Mae DUS mortgage loans comprising the Company’s consolidated servicing portfolio of not less than $10.0 billion, exclusive in both cases of mortgage loans which are 60 or more days past due or are otherwise in default or have been transferred to Fannie Mae for resolution; ● aggregate unpaid principal amount of Fannie Mae DUS mortgage loans within the Company’s consolidated servicing portfolio which are 60 or more days past due or otherwise in default not to exceed 3.5% of the aggregate unpaid principal balance of all Fannie Mae DUS mortgage loans within the Company’s consolidated servicing portfolio; and ● maximum indebtedness (excluding warehouse lines) to tangible net worth of 2.25 to 1.00 (the “leverage ratio”). The agreement contains customary events of default, which are in some cases subject to certain exceptions, thresholds, notice requirements, and grace periods. During 2021, the Company executed amendments to the agreement that extended the maturity date to October 24, 2022 and transitioned the base rate from 30-day LIBOR to Adjusted Term SOFR effective December 21, 2021. No other material modifications were made to the agreement in 2021. Agency Warehouse Facility #2 The Company has a warehousing credit and security agreement with a national bank for a $700.0 million committed warehouse line that is scheduled to mature on April 14, 2022 . The committed warehouse facility provides the Company with the ability to fund Fannie Mae, Freddie Mac, HUD, and FHA loans. Advances are made at 100% of the loan balance, and borrowings under this line bear interest at 30-day LIBOR plus 130 basis points. In addition to the committed borrowing capacity, the agreement provides $300.0 million of uncommitted borrowing capacity that bears interest at the same rate as the committed facility. During 2021, the Company executed amendments to the warehouse agreement that extended the maturity date thereunder until April 14, 2022 and decreased the borrowing rate as noted in the tables above. No other material modifications were made to the agreement during 2021. The negative and financial covenants of the amended and restated warehouse agreement conform to those of the warehouse agreement for Agency Warehouse Facility #1, described above, with the exception of the leverage ratio covenant, which is not included in the warehouse agreement for Agency Warehouse Facility #2. Agency Warehouse Facility #3: The Company has a $600.0 million committed warehouse credit and security agreement with a national bank that is scheduled to mature on May 14, 2022 . The committed warehouse facility provides the Company with the ability to fund Fannie Mae, Freddie Mac, HUD and FHA loans. Advances are made at 100% of the loan balance, and the borrowings under the warehouse agreement bear interest at a rate of 30-day LIBOR plus 130 basis points. In addition to the committed borrowing capacity, the agreement provides $265.0 million of uncommitted borrowing capacity that bears interest at the same rate as the committed facility. During 2021, the Company executed amendments to the warehouse agreement related to this facility that extended the maturity date to May 14, 2022 , increased the borrowing rate as noted in the tables above, and decreased the 30-day LIBOR floor to zero basis points. No other material modifications were made to the agreement during 2021. The negative and financial covenants of the warehouse agreement conform to those of the warehouse agreement for Agency Warehouse Facility #1, described above. Agency Warehouse Facility #4: The Company has a $350.0 million committed warehouse credit and security agreement with a national bank that is scheduled to mature on June 22, 2022 . The committed warehouse facility provides the Company with the ability to fund Fannie Mae, Freddie Mac, HUD, and FHA loans and has a sublimit of $75.0 million to fund defaulted HUD and FHA loans. Advances are made at 100% of the loan balance, and the borrowings under the warehouse agreement bear interest at a rate of 30-day LIBOR plus 130 basis points, with a 30-day LIBOR floor of five basis points. During 2021, the Company executed an amendment to the warehouse agreement that extended the maturity date of the warehouse agreement to June 22, 2022 , decreased the borrowing rate as noted in the tables above, and decreased the 30-day LIBOR floor to five basis points. No other material modifications were made to the agreement during 2021. The negative and financial covenants of the warehouse agreement conform to those of the warehouse agreement for Agency Warehouse Facility #1, described above, with the exception of the leverage ratio covenant, which is not included in the warehouse agreement for Agency Warehouse Facility #4. Agency Warehouse Facility #5: The Company has a master repurchase agreement with a national bank for a $1.0 billion uncommitted advance credit facility that is scheduled to mature on September 15, 2022. The facility provides the Company with the ability to fund Fannie Mae, Freddie Mac, HUD, and FHA loans. Advances are made at 100% of the loan balance, and the borrowings under the repurchase agreement bear interest at a rate of Adjusted Term SOFR plus 145 basis points. During 2021, the Company executed an amendment to extend the maturity date to September 15, 2022. No other material modifications were made to the agreement during 2021. The negative and financial covenants of the repurchase agreement conform to those of the warehouse agreement for Agency Warehouse Facility #1, described above, with the exception of a four-quarter rolling EBITDA, as defined, . Agency Warehouse Facility #6: During 2021, the Company executed an agreement with a national bank to establish Agency Warehouse Facility #6. The warehouse facility has a $150.0 million maximum committed borrowing capacity, provides us with the ability to fund Fannie Mae, Freddie Mac, HUD, and FHA loans, and matures on March 5, 2022 . Advances are made at 100% of the loan balance, and the borrowings under the warehouse agreement bear interest at a rate of 30-day LIBOR plus 140 basis points with a 30-day LIBOR floor of 25 basis points. In addition to the committed borrowing capacity, the agreement provides $100.0 million of uncommitted borrowing capacity that bears interest at the same rate as the committed facility. No material modifications have been made to the agreement during 2021. The facility agreement requires the Company’s compliance with the same financial covenants as provided in the facility agreement for Agency Warehouse Facility #1, as described above. Agency Warehouse Facility #7: During 2021, the Company executed an agreement with a national bank to establish Agency Warehouse Facility #7. The warehouse facility has a $150.0 million maximum committed borrowing capacity, provides us with the ability to fund Fannie Mae, Freddie Mac, HUD, and FHA loans, and matures on August 24, 2022 . Advances are made at 100% of the loan balance, and the borrowings under the warehouse agreement bear interest at a rate of 30-day LIBOR plus 130 basis points. In addition to the committed borrowing capacity, the agreement provides $50.0 million of uncommitted borrowing capacity that bears interest at the same rate as the committed facility. No material modifications have been made to the agreement during 2021. The facility agreement requires the Company’s compliance with the same financial covenants as provided in the facility agreement for Agency Warehouse Facility #1, as described above. Uncommitted Agency Warehouse Facility: The Company has a $1.5 billion uncommitted facility with Fannie Mae under its ASAP funding program. After approval of certain loan documents, Fannie Mae will fund loans after closing, and the advances are used to repay the primary warehouse line. Fannie Mae will advance 99% of the loan balance. There is no expiration date for this facility. The uncommitted facility has no specific negative or financial covenants. Interim Warehouse Facilities The following section provides a summary of the key terms related to each of the Interim Warehouse Facilities. Interim Warehouse Facility #1 : The Company has a $135.0 million committed warehouse line agreement that is scheduled to mature on May 14, 2022 . The facility provides the Company with the ability to fund first mortgage loans on multifamily real estate properties for periods of up to three years , using available cash in combination with advances under the facility. Borrowings under the facility are full recourse to the Company and bear interest at 30-day LIBOR plus 190 basis points, with a 30-day LIBOR floor of zero basis points. Repayments under the credit agreement are interest-only, with principal repayments made upon the earlier of the refinancing of an underlying mortgage or the maturity of an advance under the credit agreement. During 2021, the Company executed amendments to the agreement that extended the maturity date to May 14, 2022 and decreased the 30-day LIBOR floor to zero basis points. No other material modifications were made to the agreement during 2021. The facility agreement requires the Company’s compliance with the same financial covenants as Agency Warehouse Facility #1, described above, and also includes the following additional financial covenant: minimum rolling four-quarter EBITDA, as defined, to total debt service ratio of 2.00 to 1.00 that is applicable to Interim Warehouse Facility #1. Interim Warehouse Facility #2 : The Company has a $100.0 million committed warehouse line agreement that is scheduled to mature on December 13, 2023 . The agreement provides the Company with the ability to fund first mortgage loans on multifamily real estate properties for periods of up to three years , using available cash in combination with advances under the facility. Borrowings under the facility are full recourse to the Company. All borrowings originally bear interest at 30-day LIBOR plus 165 to 200 basis points (“the spread”). The spread varies according to the type of asset the borrowing finances. The lender retains a first priority security interest in all mortgages funded by such advances on a cross-collateralized basis. Repayments under the credit agreement are interest-only, with principal repayments made upon the earlier of the refinancing of an underlying mortgage or the maturity of an advance under the credit agreement. No material modifications were made to the agreement during 2021. During February 2022, the Company executed an amended and restated agreement that extended the maturity date to December 13, 2023 and transitioned the interest rate from 30-day LIBOR to Adjusted Term SOFR plus 135 to 185 basis points, with a SOFR floor of zero basis points. The credit agreement requires the borrower and the Company to abide by the same financial covenants as Agency Warehouse Facility #1, described above, with the exception of the leverage ratio covenant, which is not included in the warehouse agreement for Interim Warehouse Facility #2. Additionally, Interim Warehouse Facility #2 has the following additional financial covenants: ● rolling four-quarter EBITDA, as defined, of not less than $35.0 million and ● debt service coverage ratio, as defined, of not less than 2.75 to 1.00. Interim Warehouse Facility #3 : The Company has a $200.0 million repurchase agreement with a national bank that is scheduled to mature on September 29, 2022 . The agreement provides the Company with the ability to fund first mortgage loans on multifamily real estate properties for periods of up to three years , using available cash in combination with advances under the facility. Borrowings under the facility are full recourse to the Company. The borrowings under the agreement bear interest at a rate of 30-day LIBOR plus 175 to 325 basis points (“the spread”). The spread varies according to the type of asset the borrowing finances. Repayments under the credit agreement are interest-only, with principal repayments made upon the earlier of the refinancing of an underlying mortgage or the maturity of an advance under the credit agreement. During 2021, the Company executed an amendment that extended the maturity date to September 29, 2022 , increased the committed borrowing capacity to $200.0 million, and eliminated the uncommitted borrowing capacity. No other material modifications were made to the agreement during 2021. The repurchase agreement requires the borrower and the Company to abide by the following financial covenants: ● tangible net worth of the Company of not less than (i) $200.0 million plus (ii) 75% of the net proceeds of any equity issuances by the Company or any of its subsidiaries after the closing date; ● liquid assets of the Company of not less than $15.0 million; ● leverage ratio, as defined, of not more than 3.0 to 1.0; and ● debt service coverage ratio, as defined, of not less than 2.75 to 1.00. Interim Warehouse Facility #4 : The Company has a $19.8 million warehouse loan and security agreement with a national bank that funds one specific loan. The agreement provides for a maturity date to coincide with the earlier of the maturity date for the underlying loan or the stated maturity date of October 1, 2022 . Borrowings under the facility are full recourse and bear interest at 30-day LIBOR plus 300 basis points, with a floor of 450 basis points. Repayments under the credit agreement are interest-only, with principal repayments made upon the earlier of the refinancing of an underlying mortgage or the maturity of an advance under the credit agreement. During 2021, the Company executed an amendment that extended the stated maturity date to October 1, 2022 . We may request additional capacity under the agreement to fund specific loans. No other material modifications were made to the agreement in 2021. The facility agreement has only two financial covenants: ● tangible net worth of the Company of not less than (i) $200.0 million plus (ii) 75% of the net proceeds of any equity issuances by the Company or any of its subsidiaries after the closing date; and ● liquid assets of the Company of not less than $15.0 million We believe that the four committed and uncommitted interim credit facilities from national banks and our corporate cash provide us with sufficient borrowing capacity to conduct our Interim Loan Program lending operations. The warehouse agreements contain cross-default provisions, such that if a default occurs under any of the Company’s warehouse agreements, generally the lenders under the other warehouse agreements could also declare a default. As of December 31, 2021, the Company was in compliance with all of its warehouse facility covenants. Alliant Warehouse Facility: In December 2021, the Company acquired Alliant and assumed the liabilities of Alliant and its subsidiaries (as defined in NOTE 7), including a warehouse line of credit with a national bank that is used to fund the Company’s Committed investments in tax credit equity before transferring them to a tax credit fund. The warehouse facility is a revolving commitment that is expected to renew bi-annually. The credit agreement is scheduled to mature on April 30, 2022 . The facility provides the Company with up to $30.0 million in committed borrowing capacity to fund investments in affordable housing limited partnerships that also secure the borrowings. Borrowings under this facility bear interest at the Daily LIBOR plus 300 basis points with a Daily LIBOR floor of 150 basis points. In December 2021, the Company executed an amendment that extended the maturity date to April 30, 2022 . No other material modifications were made to the agreement since the acquisition of Alliant. The agreement requires compliance with certain financial covenants, which are measured for Alliant and its subsidiaries, as follows: ● liquid assets of the Company of not less than $5.0 million and $10.0 million measured as of June 30 and December 31, respectively, of each year; ● tangible net worth of the Company of not less than $200.0 million; and ● annual cash flows of $15.0 million as defined by the agreement. As of December 31, 2021, the outstanding balance was $8.3 million, and the Company was in compliance with the covenants outlined above. Due to the short-term nature of the facility and variable interest rate, no purchase accounting adjustment was applied to the carrying value on the Consolidated Balance Sheets. Notes payable The following section provides a summary of the key terms related to each of the Company’s notes payable. Term Loan Note Payable On December 16, 2021, the Company entered into a senior secured credit agreement (the “Credit Agreement”) that amended and restated the Company’s prior credit agreement and provided for a $600.0 million term loan (the “Term Loan”). The Credit Agreement replaces our $300 million term loan agreement (the “Prior Term Loan”), which was governed by that certain amended and restated credit agreement, dated November 7, 2018. The Term loan was issued at a 0.25% discount, has a stated maturity date of December 16, 2028 (or, if earlier, the date of acceleration of the Term Loan pursuant to the term of the Term Loan Agreement) , and bears interest at Adjusted Term SOFR rate plus 225 basis points with an Adjusted Term SOFR floor of 50 basis points. At any time, the Company may also elect to request one or more incremental term loan commitments not to exceed $230.0 million and 100% of trailing four-quarter Consolidated Adjusted EBITDA , provided that the total indebtedness would not cause the leverage ratio (as defined in the Credit Agreement) to exceed 3.00 to 1.00. The Company used $292.5 million of the Term Loan proceeds to repay in full the prior term loan. In connection with the repayment of the prior term loan, the Company recognized a $2.7 million loss on extinguishment of debt related to unamortized debt issuance costs and unamortized debt discount, which is included in Other operating expenses in the Consolidated Statements of Income and Amortization of debt issuance costs and debt discount in the Consolidated Statement of Cash flows for the year ended December 31, 2021. The Company is obligated to repay the aggregate outstanding principal amount of the Term Loan in consecutive quarterly installments equal to 0.25% of the aggregate original principal amount of the term loan on the last business day of each of March, June, September, and December commencing on March 31, 2022. The term loan also requires certain other prepayments in certain circumstances pursuant to the terms of the Term Loan Agreement. The final principal installment of the term loan is required to be paid in full on December 16, 2028 (or, if earlier, the date of acceleration of the term loan pursuant to the terms of the Term Loan Agreement) and will be in an amount equal to the aggregate outstanding principal of the term loan on such date (together with all accrued interest thereon). The obligations of the Company under the Credit Agreement are guaranteed by Walker & Dunlop Multifamily, Inc., Walker & Dunlop, LLC, Walker & Dunlop Capital, LLC, W&D BE, Inc., and Walker & Dunlop Investment Sales, LLC, each of which is a direct or indirect wholly owned subsidiary of the Company (together with the Company, the “Loan Parties”), pursuant to the Amended and Restated Guarantee and Collateral Agreement entered into on December 16, 2021 among the Loan Parties and JPMorgan Chase Bank, N.A., as administrative agent (the “Guarantee and Collateral Agreement”). Subject to certain exceptions and qualifications contained in the Credit Agreement, the Company is required to cause any newly created or acquired subsidiary, unless such subsidiary has been designated as an Excluded Subsidiary (as defined in the Credit Agreement) by the Company in accordance with the terms of the Credit Agreement, to guarantee the obligations of the Company under the Credit Agreement and become a party to the Guarantee and Collateral Agreement. The Company may designate a newly created or acquired subsidiary as an Excluded Subsidiary, so long as certain conditions and requirements provided for in the Credit Agreement are met. The Credit Agreement contains certain affirmative and negative covenants that are binding on the Loan Parties, including, but not limited to, restrictions (subject to specified exceptions and qualifications) on the ability of the Loan Parties to incur indebtedness, to create liens on their property, to make investments, to merge, consolidate or enter into any similar combination, or enter into any asset disposition of all or substantially all assets, or liquidate, wind-up or dissolve, to make asset dispositions, to declare or pay dividends or make related distributions, to enter into certain transactions with affiliates, to enter into any negative pledges or other restrictive agreements, and to engage in any business other than the business of the Loan Parties as of the date of the Credit Agreement and business activities reasonably related or ancillary thereto, or to amend certain material contracts. The Credit Agreement contains only one financial covenant, which requires the Company not to permit its asset coverage ratio (as defined in the Credit Agreement) to be less than 1.50 to 1.00, tested quarterly. The Credit Agreement contains customary events of default (which are, in some cases, subject to certain exceptions, thresholds, notice requirements and grace periods), including, but not limited to, non-payment of principal or interest or other amounts, misrepresentations, failure to perform or observe covenants, cross-defaults with certain other indebtedness or material agreements, certain change in control events, voluntary or involuntary bankruptcy proceedings, failure of the Credit Agreements or other loan documents to be valid and binding, certain ERISA events and judgments. As of December 31, 2021, the Company was in compliance with all covenants related to the Credit Agreement. Alliant Note Payable Through the acquisition of Alliant, the Company assumed Alliant’s note payable, which has an outstanding balance of $145.2 million as of December 31, 2021 and bears interest at a fixed rate of 4.75% . The note has a stated maturity of January 15, 2035 . The Company’s carrying value of the Alliant note payable was $150.6 million, inclusive of a $5.4 million purchase accounting fair value adjustment. The note requires quarterly payments of principal, interest, and other required priority items shortly after the beginning of each quarter. The note is collateralized by specific legal rights to receive a formulaic portion of future cash flows from Alliant’s LIHTC operations. These cash flows are deposited into a collection account and used to make a minimum principal payment that is based on a defined amortization schedule. If funds remain after making the minimum principal payment, an amount based on a defined percentage of the remaining funds may be used to make an additional principal payment. If the funds in the collection account are insufficient to cover the minimum principal payment, the entire balance of the collection account is used to pay down the principal balance. The Company may elect to make principal payments in addition to the amount required by the note agreement. The balance of the collection account is included in Restricted cash on our Consolidated Balance Sheets. The following table shows the components of the note payable as of December 31, 2021 and 2020 : (in thousands, unless otherwise specified) December 31, 2021 2020 Interest rate and repayments Term Loan Note Payable Unpaid principal balance $ 600,000 $ 294,773 Interest rate varies - see above for further details; Unamortized debt discount (1,491) (1,026) Quarterly principal payments of $1.5 million and $0.8 million, respectively Unamortized debt issuance costs (8,914) (2,154) Carrying balance $ 589,595 $ 291,593 Alliant Note Payable Unpaid principal balance $ 145,175 $ — 4.75% Fixed-rate Fair value adjustment (1) 5,404 — Carrying balance $ 150,579 $ — Total Notes Payable Carrying Balance $ 740,174 $ 291,593 (1) Fair value adjustment related to the purchas |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2021 | |
ACQUISITIONS | |
Acquisitions | NOTE 7—ACQUISITIONS The Company acquired four entities during 2021, which caused an increase in goodwill compared to December 31, 2020. The additions to goodwill from acquisitions during 2021 shown in NOTE 8 during the year ended December 31, 2021 relate to the following acquisitions: Detail of Acquisition Activity (in thousands) Acquisition Purchase Consideration Assets Liabilities Noncontrolling Goodwill Acquisition Date Cash Stock (1) Contingent Total Acquired Assumed Interest Recognized Acquisition #1 Q1 2021 $ 7,506 $ — $ 5,229 $ 12,735 $ 504 $ — $ — $ 12,231 Acquisition #2 Q2 2021 3,000 — 2,275 5,275 — — — 5,275 Acquisition #3 Q3 2021 53,459 5,250 — 58,709 22,866 5,886 19,569 61,298 Acquisition #4 Q4 2021 379,677 115,321 85,800 580,798 688,977 470,434 8,618 370,873 Total $ 443,642 $ 120,571 $ 93,304 $ 657,517 $ 712,347 $ 476,320 $ 28,187 $ 449,677 (1) The stock consideration shown above is a non-cash transaction not impacting the amount of cash consideration paid on the Consolidated Statements of Cash Flows. The assets acquired and liabilities assumed presented above were recorded at fair value. Acquisition #1 relates to a property sales brokerage company. Acquisition #2 relates to a company with a technology platform that streamlines and accelerates the quoting, processing, and underwriting of small-balance multifamily loans while providing the borrower with a web-based, user-friendly interface. The acquisition is part of the Company’s overall strategy to significantly increase its small-balance lending volumes using technology. Acquisition #3 relates to the purchase of a 75% controlling interest in Zelman, which specializes in housing market research and real estate-related investment banking and advisory services. The assets acquired for Acquisition #3 include $14.6 million of intangible assets. During the fourth quarter of 2021, the Company made immaterial measurement-period adjustments to goodwill related to working capital and other activity related to Acquisition #3. Acquisition #4 relates to the purchase of Alliant Capital, Ltd. and certain of its affiliates (“Alliant”). The purchase accounting for Acquisition #4 is pending the finalization of working capital adjustments in the first quarter of 2022. The purchase accounting for all other acquisitions completed in 2021 has been finalized. All of the Company’s interests in the goodwill recognized in the acquisitions above are expected to be deductible for tax purposes. On December 16, 2021, the Company closed on its acquisition of Alliant. Upon closing of the acquisition, Alliant became a wholly owned subsidiary of the Company. Pursuant to the terms and conditions of the purchase agreement, the Company acquired Alliant for a total consideration of $580.8 million, which was comprised of: ● $379.7 million of cash; ● issuance of 808,698 shares of common stock of the Company, which had an aggregate value of $115.3 million on the date of acquisition, which are subject to a four-year , graded vesting sale restriction lifted in four annual 25% increments; ● an earn-out of up to $100 million with an estimated fair value of $85.8 million at acquisition that is contingent on the achievement of a cash-flow-based performance metric of Alliant over the next four years . The Company estimated the initial fair value of the contingent consideration using a Monte Carlo simulation analysis factoring in management’s estimate of the future performance of Alliant (as more fully described in NOTE 9). Alliant provides alternative investment management services focused on the affordable housing sector through LIHTC syndication, joint venture development, and community preservation fund management. In 2021, Alliant ranked as the 6 th largest LIHTC syndicator in the United States by units syndicated, and since inception, has participated in the development of over 100,000 affordable housing units. The Company contemplated several factors in reaching its decision to acquire Alliant, including but not limited to, the strategic benefits and synergies of combining the Company’s affordable housing lending platform with Alliant’s LIHTC syndication and development platform, Alliant’s operating results, financial condition and management, and in place assets under management. The Company provisionally allocated the purchase price to the fair value of (i) the assets acquired, (ii) the separately identifiable intangible assets, and (iii) the liabilities. A change to the provisional amounts recorded for these assets and liabilities during the measurement period will affect the amount of the purchase price allocated to goodwill. The following table presents the purchase price allocation recorded as of the acquisition date for the assets the Company acquired in the Alliant acquisition: Acquisition Date (in thousands) December 16, 2021 Assets acquired Cash and cash equivalents $ 13,431 Restricted cash 7,898 Other Intangible Assets 170,800 Committed investments in tax credit equity 261,936 Receivables, net 103,439 Other assets 131,473 Total assets acquired $ 688,977 At the acquisition date, the Company also assumed certain of Alliant’s liabilities. The most significant liability assumed was Alliant’s Note payable , previously discussed above in NOTE 6. The following table presents the purchase price allocation recorded as of the acquisition date for the liabilities the Company assumed in the Alliant acquisition: Acquisition Date (in thousands) December 16, 2021 Liabilities assumed Warehouse notes payable $ 21,682 Note payable 150,579 Commitments to fund investments in tax credit equity 244,329 Other liabilities 53,844 Total liabilities assumed $ 470,434 The total revenues and income from operations of Alliant and the other acquisitions listed above, since their acquisition dates and included in the accompany Consolidated Statement of Income for the year ended December 31, 2021 were immaterial. The revenues and earnings of the combined entity, as though the Alliant acquisition had occurred as of January 1, 2020, for the years ended December 31, 2021 and 2020 are presented in the table below. The pro forma information does not include the effects of the other acquisitions listed above as these amounts were immaterial. The pro forma information is not indicative of what would have occurred had the acquisition taken place on January 1, 2020. The pro forma financial information does not include the impact of possible business model changes. Additionally, the Company expects to achieve further operating cost savings and other business synergies, including revenue growth, as a result of the acquisition that are not reflected in the pro forma amounts that follow. As a result, actual results will differ from the unaudited pro forma information presented. For the year ended December 31, Supplementary pro forma information (unaudited) 2021 2020 (in thousands, except per share data) Revenues $ 1,387,227 $ 1,187,820 Income from operations (1) 391,237 361,489 Walker & Dunlop net income (2) 293,062 277,400 Basic Earnings per share 8.90 8.62 Diluted earnings per share 8.78 8.45 Weighted-average earnings shares outstanding 31,856 31,253 Weighted-average diluted shares outstanding 32,308 31,892 (1) Income from operations includes pro forma adjustments related to interest expense for additional term debt financing obtained to close the acquisition. Pro forma adjustments increasing interest expense by $9.7 million and $7.3 million are include in the supplementary pro forma information presented for 2021 and 2020, respectively . (2) In addition to pro forma adjustments for interest expense, Walker & Dunlop net income includes pro forma adjustments for purchase accounting and income tax expenses of $21.6 million and $12.9 million that decrease Alliant’s operating results for the years ended December 31, 2021 and 2020, respectively . |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Goodwill and Other Intangible Assets | NOTE 8—GOODWILL AND OTHER INTANGIBLE ASSETS A summary of the Company’s goodwill as of and for the years ended December 31, 2021 and 2020 follows: For the year ended December 31, Roll Forward of Goodwill (in thousands) 2021 2020 Beginning balance $ 248,958 $ 180,424 Additions from acquisitions 449,677 68,534 Impairment — — Ending balance $ 698,635 $ 248,958 The additions from acquisitions during 2021 shown in the table above relate to the strategic purchases of four companies as outlined in NOTE 7. As of December 31, 2021 and December 31, 2020, the balance of intangible assets acquired from acquisitions totaled $183.9 million and $1.9 million, respectively. As of December 31, 2021, the weighted-average period over which the Company expects the intangible assets to be amortized is 14.1 years. A summary of the Company’s contingent consideration, which is included in Other liabilities , as of and for the years ended December 31, 2021 and 2020 follows: For the year ended December 31, Roll Forward of Contingent Consideration Liabilities (in thousands) 2021 2020 Beginning balance $ 28,829 $ 5,752 Additions 93,304 27,645 Accretion and revaluation 9,755 1,232 Payments (6,080) (5,800) Ending balance $ 125,808 $ 28,829 The contingent consideration liabilities above relate to (i) acquisitions of debt brokerage companies and an investment sales brokerage company completed over the past several years, including 2021, (ii) the purchase of noncontrolling interests in 2020, (iii) the aforementioned technology company acquired in 2021, and (iv) the acquisition of Alliant. The contingent consideration for each of the acquisitions may be earned over various lengths of time after each acquisition, with a maximum earn-out period of five years , provided certain revenue targets and other metrics have been met. The last of the earn-out periods related to the contingent consideration ends in the first quarter of 2026. In each case, the Company estimated the initial fair value of the contingent consideration using a probability-based, discounted cash flow model. The contingent consideration included for the acquisitions and purchase of noncontrolling interests is non-cash and thus not reflected in the amount of cash consideration paid on the Consolidated Statements of Cash Flows. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2021 | |
FAIR VALUE MEASUREMENTS | |
Fair Value Measurements | NOTE 9—FAIR VALUE MEASUREMENTS The Company uses valuation techniques that are consistent with the market approach, the income approach, and/or the cost approach to measure assets and liabilities that are measured at fair value. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, accounting standards establish a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: ● Level 1 —Financial assets and liabilities whose values are based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. ● Level 2 —Financial assets and liabilities whose values are based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. ● Level 3 —Financial assets and liabilities whose values are based on inputs that are both unobservable and significant to the overall valuation. The Company's MSRs are measured at fair value at inception, and thereafter on a nonrecurring basis. That is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value measurement when there is evidence of impairment and for disclosure purposes (NOTE 3). The Company's MSRs do not trade in an active, open market with readily observable prices. While sales of multifamily MSRs do occur on occasion, precise terms and conditions vary with each transaction and are not readily available. Accordingly, the estimated fair value of the Company’s MSRs was developed using discounted cash flow models that calculate the present value of estimated future net servicing income. The model considers contractually specified servicing fees, prepayment assumptions, estimated revenue from escrow accounts, delinquency rates, late charges, costs to service, and other economic factors. The Company periodically reassesses and adjusts, when necessary, the underlying inputs and assumptions used in the model to reflect observable market conditions and assumptions that a market participant would consider in valuing MSR assets. During the first quarter of 2021, the Company reduced the discount rate and escrow earnings rate assumptions for its capitalized MSRs based on market participant data. MSRs are carried at the lower of amortized cost or fair value. A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. ● Derivative Instruments —The derivative positions consist of interest rate lock commitments and forward sale agreements to the Agencies. The fair value of these instruments is estimated using a discounted cash flow model developed based on changes in the U.S. Treasury rate and other observable market data. The value was determined after considering the potential impact of collateralization, adjusted to reflect nonperformance risk of both the counterparty and the Company, and are classified within Level 3 of the valuation hierarchy. ● Loans Held for Sale —All loans held for sale presented in the Consolidated Balance Sheets are reported at fair value. The Company determines the fair value of the loans held for sale using discounted cash flow models that incorporate quoted observable inputs from market participants such as changes in the U.S. Treasury rate. Therefore, the Company classifies these loans held for sale as Level 2. ● Pledged Securities —Investments in money market funds are valued using quoted market prices from recent trades. Therefore, the Company classifies this portion of pledged securities as Level 1. The Company determines the fair value of its AFS investments in Agency debt securities using discounted cash flows that incorporate observable inputs from market participants and then compares the fair value to broker estimates of fair value. Consequently, the Company classifies this portion of pledged securities as Level 2. ● Contingent Consideration Liabilities —Contingent consideration liabilities from acquisitions are initially recognized at fair value at acquisition and subsequently remeasured based on the change in probability of achievement of the performance objectives and fair value accretion. The Company determines the fair value of each contingent consideration liability based on a probability of achievement, which incorporates management estimates. As a result, the Company classifies these liabilities as Level 3. The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of December 31, 2021 and 2020, segregated by the level of the valuation inputs within the fair value hierarchy used to measure fair value: Balance as of (in thousands) Level 1 Level 2 Level 3 Period End December 31, 2021 Assets Loans held for sale $ — $ 1,811,586 $ — $ 1,811,586 Pledged securities 44,733 104,263 — 148,996 Derivative assets — — 37,364 37,364 Total $ 44,733 $ 1,915,849 $ 37,364 $ 1,997,946 Liabilities Derivative liabilities $ — $ — $ 6,403 $ 6,403 Contingent consideration liabilities 125,808 125,808 Total $ — $ — $ 132,211 $ 132,211 December 31, 2020 Assets Loans held for sale $ — $ 2,449,198 $ — $ 2,449,198 Pledged securities 17,473 119,763 — 137,236 Derivative assets — — 49,786 49,786 Total $ 17,473 $ 2,568,961 $ 49,786 $ 2,636,220 Liabilities Derivative liabilities $ — $ — $ 5,066 $ 5,066 Contingent consideration liabilities 28,829 28,829 Total $ — $ — $ 33,895 $ 33,895 There were no transfers between any of the levels within the fair value hierarchy during the year ended December 31, 2021. Derivative instruments (Level 3) are outstanding for short periods of time (generally less than 60 days). A roll forward of derivative instruments is presented below for the years ended December 31, 2021 and 2020: For the year ended December 31, Derivative Assets and Liabilities, net (in thousands) 2021 2020 Beginning balance $ 44,720 $ 15,532 Settlements (746,918) (687,874) Realized gains recorded in earnings (1) 702,198 672,342 Unrealized gains (losses) recorded in earnings (1) 30,961 44,720 Ending balance $ 30,961 $ 44,720 (1) Realized and unrealized gains from derivatives are recognized in Loan origination and debt brokerage fees, net and Fair value of expected net cash flows from servicing, net in the Consolidated Statements of Income. The following table presents information about significant unobservable inputs used in the recurring measurement of the fair value of the Company’s Level 3 assets and liabilities as of December 31, 2021: Quantitative Information about Level 3 Fair Value Measurements (in thousands) Fair Value Valuation Technique Unobservable Input (1) Input Range (1) Weighted Average (3) Derivative assets $ 37,364 Discounted cash flow Counterparty credit risk — — Derivative liabilities $ 6,403 Discounted cash flow Counterparty credit risk — — Contingent consideration liabilities $ 125,808 Various (2) Probability of earn-out achievement 88% - 100% 92% (1) Significant changes in this input may lead to significant changes in the fair value measurements. (2) Valuation techniques used include probability-weighted achievement analysis and Monte Carlo simulation analysis. (3) Contingent consideration weighted based on maximum gross earn-out amount. The carrying amounts and the fair values of the Company's financial instruments as of December 31, 2021 and December 31, 2020 are presented below: December 31, 2021 December 31, 2020 Carrying Fair Carrying Fair (in thousands) Amount Value Amount Value Financial Assets: Cash and cash equivalents $ 305,635 $ 305,635 $ 321,097 $ 321,097 Restricted cash 42,812 42,812 19,432 19,432 Pledged securities 148,996 148,996 137,236 137,236 Loans held for sale 1,811,586 1,811,586 2,449,198 2,449,198 Loans held for investment, net 269,125 270,826 360,402 362,586 Derivative assets 37,364 37,364 49,786 49,786 Total financial assets $ 2,615,518 $ 2,617,219 $ 3,337,151 $ 3,339,335 Financial Liabilities: Derivative liabilities $ 6,403 $ 6,403 $ 5,066 $ 5,066 Contingent consideration liabilities 125,808 125,808 28,829 28,829 Secured borrowings — — 73,314 73,314 Warehouse notes payable 1,941,572 1,942,448 2,517,156 2,518,101 Notes payable 740,174 745,175 291,593 294,773 Total financial liabilities $ 2,813,957 $ 2,819,834 $ 2,915,958 $ 2,920,083 The following methods and assumptions were used for recurring fair value measurements as of December 31, 2021: Cash and Cash Equivalents and Restricted Cash —The carrying amounts approximate fair value because of the short maturity of these instruments (Level 1). Pledged Securities —Consist of cash, highly liquid investments in money market accounts invested in government securities, and investments in Agency debt securities. The investments of the money market funds typically have maturities of 90 days or less and are valued using quoted market prices from recent trades. The fair value of the Agency debt securities incorporates the contractual cash flows of the security discounted at market-rate, risk-adjusted yields. Loans Held For Sale —Consist of originated loans that are generally transferred or sold within 60 days from the date that a mortgage loan is funded and are valued using discounted cash flow models that incorporate observable prices from market participants. Contingent Consideration Liability —Consists of the estimated fair values of expected future earn-out payments related to acquisitions completed in 2020 and 2021 as described in NOTE 8. The earn-out liabilities are valued using a probability-weighted achievement analysis or Monte Carlo simulation analysis. The fair value of the contingent consideration liabilities incorporates unobservable inputs, such as the probability of earn-out achievement, to determine the expected earn-out cash flows. The probability of the earn-out achievement is based on management’s estimate of the expected future performance and other financial metrics of each of the acquired entities, which are subject to significant uncertainty. Derivative Instruments —Consist of interest rate lock commitments and forward sale agreements. These instruments are valued using discounted cash flow models developed based on changes in the U.S. Treasury rate and other observable market data. The value is determined after considering the potential impact of collateralization, adjusted to reflect nonperformance risk of both the counterparty and the Company. Fair Value of Derivative Instruments and Loans Held for Sale —In the normal course of business, the Company enters into contractual commitments to originate and sell multifamily mortgage loans at fixed prices with fixed expiration dates. The commitments become effective when the borrowers "lock-in" a specified interest rate within time frames established by the Company. All mortgagors are evaluated for creditworthiness prior to the extension of the commitment. Market risk arises if interest rates move adversely between the time of the "lock-in" of rates by the borrower and the sale date of the loan to an investor. To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers, the Company enters into a sale commitment with the investor simultaneously with the rate lock commitment with the borrower. The sale contract with the investor locks in an interest rate and price for the sale of the loan. The terms of the contract with the investor and the rate lock with the borrower are matched in substantially all respects, with the objective of eliminating interest rate risk to the extent practical. Sale commitments with the investors have an expiration date that is longer than our related commitments to the borrower to allow, among other things, for the closing of the loan and processing of paperwork to deliver the loan into the sale commitment. Both the rate lock commitments to borrowers and the forward sale contracts to buyers are undesignated derivatives and, accordingly, are marked to fair value through Loan origination and debt brokerage fees, net in the Consolidated Statements of Income. The fair value of the Company's rate lock commitments to borrowers and loans held for sale and the related input levels includes, as applicable: ● the estimated gain of the expected loan sale to the investor (Level 2); ● the expected net cash flows associated with servicing the loan, net of any guaranty obligations retained (Level 2); ● the effects of interest rate movements between the date of the rate lock and the balance sheet date (Level 2); and ● the nonperformance risk of both the counterparty and the Company (Level 3; derivative instruments only). The estimated gain considers the origination fees the Company expects to collect upon loan closing (derivative instruments only) and premiums the Company expects to receive upon sale of the loan (Level 2). The fair value of the expected net cash flows associated with servicing the loan is calculated pursuant to the valuation techniques applicable to the fair value of future servicing, net at loan sale (Level 2). To calculate the effects of interest rate movements, the Company uses applicable published U.S. Treasury prices, and multiplies the price movement between the rate lock date and the balance sheet date by the notional loan commitment amount (Level 2). The fair value of the Company's forward sales contracts to investors considers effects of interest rate movements between the trade date and the balance sheet date (Level 2). The market price changes are multiplied by the notional amount of the forward sales contracts to measure the fair value. The fair value of the Company’s interest rate lock commitments and forward sales contracts is adjusted to reflect the risk that the agreement will not be fulfilled. The Company’s exposure to nonperformance in interest rate lock commitments and forward sale contracts is represented by the contractual amount of those instruments. Given the credit quality of our counterparties and the short duration of interest rate lock commitments and forward sale contracts, the risk of nonperformance by the Company’s counterparties has historically been minimal (Level 3). The following table presents the components of fair value and other relevant information associated with the Company’s derivative instruments and loans held for sale as of December 31, 2021 and 2020. Fair Value Adjustment Components Balance Sheet Location Fair Value Notional or Estimated Total Adjustment Principal Gain Interest Rate Fair Value Derivative Derivative to Loans (in thousands) Amount on Sale Movement Adjustment Assets Liabilities Held for Sale December 31, 2021 Rate lock commitments $ 1,115,829 $ 29,837 $ (4,604) $ 25,233 $ 26,526 $ (1,293) $ — Forward sale contracts 2,881,224 — 5,728 5,728 10,838 (5,110) — Loans held for sale 1,765,395 47,315 (1,124) 46,191 — — 46,191 Total $ 77,152 $ — $ 77,152 $ 37,364 $ (6,403) $ 46,191 December 31, 2020 Rate lock commitments $ 1,374,784 $ 45,581 $ (1,697) $ 43,884 $ 43,895 $ (11) $ — Forward sale contracts 3,760,953 — 836 836 5,891 (5,055) — Loans held for sale 2,386,169 62,167 861 63,028 — — 63,028 Total $ 107,748 $ — $ 107,748 $ 49,786 $ (5,066) $ 63,028 |
FANNIE MAE COMMITMENTS AND PLED
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES | 12 Months Ended |
Dec. 31, 2021 | |
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES | |
Fannie Mae Commitments and Pledged Securities | NOTE 10—FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES Fannie Mae DUS Related Commitments —Commitments for the origination and subsequent sale and delivery of loans to Fannie Mae represent those mortgage loan transactions where the borrower has locked an interest rate and scheduled closing and the Company has entered into a mandatory delivery commitment to sell the loan to Fannie Mae. As discussed in NOTE 9, the Company accounts for these commitments as derivatives recorded at fair value. The Company is generally required to share the risk of any losses associated with loans sold under the Fannie Mae DUS program. The Company is required to secure these obligations by assigning restricted cash balances and securities to Fannie Mae, which are classified as Pledged securities, at fair value on the Consolidated Balance Sheets. The amount of collateral required by Fannie Mae is a formulaic calculation at the loan level and considers the balance of the loan, the risk level of the loan, the age of the loan, and the level of risk-sharing. Fannie Mae requires restricted liquidity for Tier 2 loans of 75 basis points, which is funded over a 48-month period that begins upon delivery of the loan to Fannie Mae. Pledged securities held in the form of money market funds holding U.S. Treasuries are discounted 5% , and Agency MBS are discounted 4% for purposes of calculating compliance with the restricted liquidity requirements. As seen below, the Company held substantially all of its pledged securities in Agency MBS as of December 31, 2021. The majority of the loans for which the Company has risk sharing are Tier 2 loans. The Company is in compliance with the December 31, 2021 collateral requirements as outlined above. As of December 31, 2021, reserve requirements for the December 31, 2021 DUS loan portfolio will require the Company to fund $65.3 million in additional restricted liquidity over the next 48-months , assuming no further principal paydowns, prepayments, or defaults within the at-risk portfolio. Fannie Mae has in the past reassessed the DUS Capital Standards and may make changes to these standards in the future. The Company generates sufficient cash flow from its operations to meet these capital standards and does not expect any future changes to have a material impact on its future operations; however, any future increases to collateral requirements may adversely impact the Company’s available cash. Fannie Mae has established benchmark standards for capital adequacy and reserves the right to terminate the Company's servicing authority for all or some of the portfolio if at any time it determines that the Company's financial condition is not adequate to support its obligations under the DUS agreement. The Company is required to maintain acceptable net worth as defined in the agreement, and the Company satisfied the requirements as of December 31, 2021. The net worth requirement is derived primarily from unpaid balances on Fannie Mae loans and the level of risk sharing. At December 31, 2021, the net worth requirement was $258.2 million, and the Company's net worth was $722.4 million, as measured at our wholly owned operating subsidiary, Walker & Dunlop, LLC. As of December 31, 2021, the Company was required to maintain at least $51.1 million of liquid assets to meet operational liquidity requirements for Fannie Mae, Freddie Mac, HUD, and Ginnie Mae. The Company had operational liquidity of $251.7 million, as measured at our wholly owned operating subsidiary, Walker & Dunlop, LLC. Pledged Securities Pledged securities, at fair value December 31, Pledged Securities (in thousands) 2021 2020 2019 2018 Restricted cash $ 3,779 $ 4,954 $ 2,150 $ 3,029 Money market funds 40,954 12,519 5,054 6,440 Total pledged cash and cash equivalents $ 44,733 $ 17,473 $ 7,204 $ 9,469 Agency MBS 104,263 119,763 114,563 106,862 Total pledged securities, at fair value $ 148,996 $ 137,236 $ 121,767 $ 116,331 The information in the preceding table is presented to reconcile beginning and ending cash, cash equivalents, restricted cash, and restricted cash equivalents in the Consolidated Statements of Cash Flows as more fully discussed in NOTE 2. The following table provides additional information related to the AFS Agency MBS as of December 31, 2021 and 2020: Fair Value and Amortized Cost of Agency MBS (in thousands) December 31, 2021 December 31, 2020 Fair value $ 104,263 $ 119,763 Amortized cost 100,847 117,136 Total gains for securities with net gains in AOCI 3,636 2,669 Total losses for securities with net losses in AOCI (220) (42) Fair value of securities with unrealized losses 4,757 12,267 None of the pledged securities has been in a continuous unrealized loss position for more than 12-months. The following table provides contractual maturity information related to Agency MBS. The money market funds invest in short-term Federal Government and Agency debt securities and have no stated maturity date. December 31, 2021 Detail of Agency MBS Maturities (in thousands) Fair Value Amortized Cost Within one year $ — $ — After one year through five years 2,416 2,412 After five years through ten years 73,025 72,224 After ten years 28,822 26,211 Total $ 104,263 $ 100,847 |
SHARE-BASED PAYMENT
SHARE-BASED PAYMENT | 12 Months Ended |
Dec. 31, 2021 | |
SHARE-BASED PAYMENT | |
Share-Based Payment | NOTE 11—SHARE-BASED PAYMENT As of December 31, 2021, there were 10.5 million shares of stock authorized for issuance to directors, officers, and employees under the 2020 Equity Incentive Plan (and predecessor plans). At December 31, 2021, 1.7 million shares remain available for grant under the 2020 Equity Incentive Plan. Under the 2020 Equity Incentive Plan (and predecessor plans), the Company granted stock options to executive officers in the past and restricted shares to executive officers, employees, and non-employee directors during 2021, 2020, and 2019, all without cost to the grantee. For each of the three years ended December 31, 2021, 2020, and 2019, the Company also granted 0.3 million RSUs to the executive officers and certain other employees in connection with PSPs (“performance awards”). The Company granted the RSUs at the maximum performance thresholds for each metric each year. As of December 31, 2021, the RSUs issued in connection with the 2021, 2020, and 2019 PSPs are unvested and outstanding. The performance period for the 2018 PSP concluded on December 31, 2020. The three performance goals related to the 2018 PSP were met at varying levels. Accordingly, 0.1 million shares related to the 2018 PSP vested in the first quarter of 2021. As of December 31, 2021, the Company concluded that the three performance targets related to the 2019 2019 The following table summarizes stock compensation expense for the years ended December 31, 2021, 2020, and 2019: For the year ended December 31, Components of stock compensation expense (in thousands) 2021 2020 2019 Restricted shares $ 25,520 $ 18,924 $ 17,818 Stock options — 71 625 PSP "RSUs" 11,062 9,324 5,632 Total stock compensation expense $ 36,582 $ 28,319 $ 24,075 Excess tax benefit recognized $ 8,620 $ 7,273 $ 4,632 The amounts attributable to restricted shares in the table above include both equity-classified awards granted in restricted shares and liability-classified awards to be granted in restricted shares. The excess tax benefits recognized above reduced income tax expense. The following table summarizes restricted share activity for the year ended December 31, 2021: Weighted- Average Grant-date Restricted Shares Activity Shares Fair Value Nonvested at January 1, 2021 1,122,614 $ 62.41 Granted 447,619 101.48 Vested (403,473) 61.16 Forfeited (44,067) 79.65 Nonvested at December 31, 2021 1,122,693 $ 77.70 The fair value of restricted share awards granted during 2021 was estimated using the closing price on the date of grant. The weighted average grant date fair values of restricted shares granted in 2020 and 2019 were $74.75 per share and $48.39 per share, respectively. The fair values of the restricted shares that vested during the years ended December 31, 2021, 2020, and 2019 were $44.6 million, $30.4 million, and $30.5 million, respectively. As of December 31, 2021, the total unrecognized compensation cost for outstanding restricted shares was $51.1 million. As of December 31, 2021, the weighted-average period over which this unrecognized compensation cost will be recognized is 3.7 years. The following table summarizes activity related to performance awards for the year ended December 31, 2021: Weighted- Average Grant-date Restricted Share Units Activity Share Units Fair Value Nonvested at January 1, 2021 770,493 $ 50.37 Granted 263,845 101.04 Vested (55,483) 100.36 Forfeited (196,709) 49.80 Cancelled (3,600) 67.13 Nonvested at December 31, 2021 778,546 $ 67.66 The fair value of performance awards granted during 2021 was estimated using the closing price on the date of grant. The weighted average grant date fair values of performance awards granted in 2020 and 2019 were $50.26 per share and $52.84 per share, respectively. The fair value of the performance awards that vested during the years ended December 31, 2021, 2020 and 2019 was $5.6 million and $17.5 million, and $26.6 million, respectively. As of December 31, 2021, the total unrecognized compensation cost for outstanding performance awards was $10.5 million. As of December 31, 2021, the weighted-average period over which this unrecognized compensation cost will be recognized is 1.5 years. The unrecognized compensation cost is based on the achievement levels that are probable as of December 31, 2021. The following table summarizes stock options activity for the year ended December 31, 2021: Weighted- Weighted- Average Aggregate Average Remaining Intrinsic Exercise Contract Life Value Stock Options Activity Options Price (Years) (in thousands) Outstanding at January 1, 2021 461,340 $ 22.51 Exercised (227,334) 22.78 Outstanding at December 31, 2021 234,006 $ 22.25 $ Exercisable at December 31, 2021 234,006 $ 22.25 3.7 $ 30,101 The total intrinsic value of the stock options exercised during the years ended December 31, 2021, 2020, and 2019 was $17.5 million, $21.6 million, and $2.7 million, respectively. We received no cash from the exercise of options for each of the years ended December 31, 2021, 2020, and 2019. |
EARNINGS PER SHARE AND STOCKHOL
EARNINGS PER SHARE AND STOCKHOLDERS EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY | |
Earnings Per Share and Stockholders' Equity | NOTE 12—EARNINGS PER SHARE AND STOCKHOLDERS’ EQUITY Earnings per share (“EPS”) is calculated under the two-class method. The two-class method allocates all earnings (distributed and undistributed) to each class of common stock and participating securities based on their respective rights to receive dividends. The Company grants share-based awards to various employees and nonemployee directors under the 2020 Equity Incentive Plan that entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. These unvested awards meet the definition of participating securities. The following table presents the calculation of basic and diluted EPS for the years ended December 31, 2021, 2020, and 2019 under the two-class method. Participating securities were included in the calculation of diluted EPS using the two-class method, as this computation was more dilutive than the treasury-stock method. For the years ended December 31, EPS Calculations (in thousands, except per share amounts) 2021 2020 2019 Calculation of basic EPS Walker & Dunlop net income $ 265,762 $ 246,177 $ 173,373 Less: dividends and undistributed earnings allocated to participating securities 8,837 7,337 5,649 Net income applicable to common stockholders $ 256,925 $ 238,840 $ 167,724 Weighted-average basic shares outstanding 31,081 30,444 29,913 Basic EPS $ 8.27 $ 7.85 $ 5.61 Calculation of diluted EPS Net income applicable to common stockholders $ 256,925 $ 238,840 $ 167,724 Add: reallocation of dividends and undistributed earnings based on assumed conversion 93 120 126 Net income allocated to common stockholders $ 257,018 $ 238,960 $ 167,850 Weighted-average basic shares outstanding 31,081 30,444 29,913 Add: weighted-average diluted non-participating securities 452 639 902 Weighted-average diluted shares outstanding 31,533 31,083 30,815 Diluted EPS $ 8.15 $ 7.69 $ 5.45 The assumed proceeds used for calculating the dilutive impact of restricted stock awards under the treasury method includes the unrecognized compensation costs associated with the awards. An immaterial number of average outstanding options to purchase common stock and average restricted shares were excluded from the computation of diluted earnings per share under the treasury method for the years ended December 31, 2021, 2020, and 2019 because the effect would have been anti-dilutive (the exercise price of the options or the grant date market price of the restricted shares was greater than the average market price of the Company’s shares during the periods presented). Under the 2020 Equity Incentive Plan (and predecessor plans), subject to the Company’s approval, grantees have the option of electing to satisfy tax withholding obligations at the time of vesting or exercise by allowing the Company to withhold and purchase the shares of stock otherwise issuable to the grantee. For the years ended December 31, 2021, 2020, and 2019, the Company repurchased and retired 150 thousand, 179 thousand, and 200 thousand restricted shares at a weighted average market price of $109.57 , $66.38 , and $54.02 , upon grantee vesting, respectively. For the years ended December 31, 2021 and 2020, the Company repurchased and retired 24 thousand and 99 thousand restricted share units at a weighted average market price of $100.36 and $78.79 , respectively. Stock Repurchase Programs In February 2022, the Company’s Board of Directors approved a new stock repurchase program that permits the repurchase of up to $75.0 million of the Company’s common stock over a 12-month period beginning on February 13, 2022. In February 2021, the Company’s Board of Directors authorized the Company to repurchase up to $75.0 million of its common stock over a 12-month period beginning on February 12, 2021. In 2021, the Company did not repurchase any shares of its common stock under the share repurchase program. The Company had $75.0 million of authorized share repurchase capacity remaining under the 2021 share repurchase program as of December 31, 2021. In 2020, the Company repurchased 459 thousand shares of its common stock under a share repurchase program at a weighted average price of $56.77 per share and immediately retired the shares, reducing stockholders’ equity by $26.1 million. In 2019, the Company repurchased 135 thousand shares of its common stock under a share repurchase program at a weighted average price of $48.52 per share and immediately retired the shares, reducing stockholders’ equity by $6.6 million. Dividends In February 2022, our Board of Directors declared a dividend of $0.60 per share for the first quarter of 2022. The dividend will be paid on March 10, 2022 to all holders of record of our restricted and unrestricted common stock as of February 22, 2022. The Term Loan contains direct restrictions to the amount of dividends the Company may pay, and the warehouse debt facilities and agreements with the Agencies contain minimum equity, liquidity, and other capital requirements that indirectly restrict the amount of dividends the Company may pay . The Company does not believe that these restrictions currently limit the amount of dividends the Company can pay for the foreseeable future. Other Equity-Related Transactions As disclosed in NOTE 7, the Company issued $120.6 million of Company stock in connection with acquisitions in 2021, a non-cash transaction. Additionally, in 2021, $9.6 million of stock was issued to employees for which we had an accrued liability prior to the issuance of the award. Upon issuance, the accrued liability was reclassed to APIC, a non-cash transaction. In 2020, the Company purchased the noncontrolling interests held by two members of WDIS for an aggregate consideration of $32.0 million, which consisted of $10.4 million in cash, a $5.7 million reduction in receivables (a non-cash transaction), $5.9 million in Company stock (a non-cash transaction), and $10.0 million of contingent consideration (a non-cash transaction). The $32.0 million aggregated purchase price resulted in reductions to APIC of $24.1 million for the excess of the purchase price over the noncontrolling interest balance. As a result of the transactions, the Company recorded Net income (loss) from noncontrolling interests only for the first quarter of 2020 on the Consolidated Statements of Income. During 2019, the Company made an advance to one of the noncontrolling interest holders in the amount of $1.7 million to allow the noncontrolling interest holder to make a required contribution to WDIS. As this was a non-cash transaction, the amounts are not presented in the Consolidated Statements of Cash Flows. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
INCOME TAXES | NOTE 13—INCOME TAXES Income Tax Expense The Company calculates its provision for federal and state income taxes based on current tax law. The reported tax provision differs from the amounts currently receivable or payable because some income and expense items are recognized in different time periods for financial reporting purposes than for income tax purposes. The following is a summary of income tax expense for the years ended December 31, 2021, 2020, and 2019: For the year ended December 31, Components of Income Tax Expense (in thousands) 2021 2020 2019 Current Federal $ 40,025 $ 26,854 $ 28,150 State 12,181 10,294 6,959 Total current expense $ 52,206 $ 37,148 $ 35,109 Deferred Federal $ 26,630 $ 37,354 $ 17,484 State 7,592 9,811 4,528 Total deferred expense $ 34,222 $ 47,165 $ 22,012 Total income tax expense $ 86,428 $ 84,313 $ 57,121 Excess tax benefits recognized for the years ended December 31, 2021, 2020, and 2019 reduced income tax expense by $8.6 million, $7.3 million, and $4.6 million, respectively. In the reconciliation of income tax expense presented below, the reduction of income tax expense from excess tax benefits recognized is included as a component of the “Other” line item. Under the provisions of Section 162(m) of the Internal Revenue Code, the deductibility of executive compensation is limited to $1 million per year for each named executive officer (“NEO”). Based on the information available as of December 31, 2021, 2020, and 2019, the Company believed that it is more likely than not a significant portion of NEO stock-based compensation book expense will exceed the $1 million limitation in future years when the shares vest, resulting in no tax deductibility for the book expense associated with these compensation agreements and no deferred tax assets. Additionally, for each of the years presented above, significant portions of NEO compensation were above the $1 million limitation, resulting in no tax deductibility for amounts above the $1 million limitation. The following table presents a reconciliation of the statutory federal tax expense to the income tax expense in the accompanying Consolidated Statements of Income: For the year ended December 31, (in thousands) 2021 2020 2019 Statutory federal expense $ 73,932 $ 69,356 $ 48,374 Statutory state income tax expense, net of federal tax benefit 16,409 13,828 9,281 Other (3,913) 1,129 (534) Income tax expense $ 86,428 $ 84,313 $ 57,121 Deferred Tax Assets/Liabilities The tax effects of temporary differences between reported earnings and taxable earnings consisted of the following: As of December 31, Components of Deferred Tax Liabilities, Net (in thousands) 2021 2020 Deferred Tax Assets Compensation related $ 5,811 $ 8,760 Credit losses 16,748 20,163 Total deferred tax assets $ 22,559 $ 28,923 Deferred Tax Liabilities Mark-to-market of derivatives and loans held for sale $ (16,874) $ (22,367) Mortgage servicing rights related (208,718) (180,129) Acquisition related (1) (12,977) (9,594) Depreciation (2,317) (2,267) Other (6,913) (224) Total deferred tax liabilities $ (247,799) $ (214,581) Deferred tax liabilities, net $ (225,240) $ (185,658) (1) Acquisition-related deferred tax liabilities consist of book-to-tax differences associated with basis step ups related to the amortization of goodwill recorded from acquisitions and book-to-tax differences in intangible asset amortization. The Company believes it is more likely than not that it will generate sufficient taxable income in future periods to realize the deferred tax assets. During the year ended December 31, 2021, the Company recognized deferred tax assets of $5.4 million in conjunction with the acquisition of solar income tax credits and other activity, which are not included as a component of deferred tax expense. Tax Uncertainties The Company periodically assesses its liabilities and contingencies for all periods open to examination by tax authorities based on the latest available information. Where the Company believes it is more likely than not that a tax position will not be sustained, management records its best estimate of the resulting tax liability, including interest and penalties, in the consolidated financial statements. As of December 31, 2021, based on all known facts and circumstances and current tax law, management believes that there are no material tax positions for which it is reasonably possible that the unrecognized tax benefits will materially increase or decrease over the next 12 months, producing, individually or in the aggregate, a material effect on the Company’s results of operations, financial condition, or cash flows. |
SEGMENTS
SEGMENTS | 12 Months Ended |
Dec. 31, 2021 | |
SEGMENTS | |
Segments | NOTE 14—SEGMENTS The Company is one of the leading commercial real estate services and finance companies in the United States, with a primary focus on multifamily lending. The Company originates a range of multifamily and other commercial real estate loans that are sold to the Agencies or placed with institutional investors. The Company also services nearly all of the loans it sells to the Agencies and some of the loans that it places with institutional investors. Substantially all of the Company’s operations involve the delivery and servicing of loan products for its customers. Management makes operating decisions and assesses performance based on an ongoing review of these integrated operations, which constitute the Company's only operating segment for financial reporting purposes. The Company evaluates the performance of its business and allocates resources based on a single-segment concept. As of December 31, 2021 and 2020, no one borrower/key principal accounted for more than 2% and 3% , respectively, of our total risk-sharing loan portfolio. An analysis of the product concentrations and geographic dispersion that impact the Company’s servicing revenue is shown in the following tables. This information is based on the distribution of the loans serviced for others. The principal balance of the loans serviced for others, by product, as of December 31, 2021, 2020, and 2019 follows: As of December 31, Components of Loan Servicing Portfolio (in thousands) 2021 2020 2019 Fannie Mae $ 53,401,457 $ 48,818,185 $ 40,049,095 Freddie Mac 37,138,836 37,072,587 32,583,842 Ginnie Mae-HUD 9,889,289 9,606,506 9,972,989 Life insurance companies and other 15,270,982 11,714,694 10,619,243 Total $ 115,700,564 $ 107,211,972 $ 93,225,169 The percentage of unpaid principal balance of the loans serviced for others as of December 31, 2021, 2020, and 2019 by geographical area is shown in the following table. No other state accounted for more than 5% of the unpaid principal balance and related servicing revenues in any of the years presented. The Company does not have any operations outside of the United States. Percent of Total UPB as of December 31, Loan Servicing Portfolio Concentration by State 2021 2020 2019 California 16.1 % 16.2 % 16.2 % Florida 10.0 10.4 9.4 Texas 8.6 8.8 9.3 Georgia 5.9 5.9 5.8 All other states 59.4 58.7 59.3 Total 100.0 % 100.0 % 100.0 % |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
LEASES | |
Leases | NOTE 15—LEASES Right-of-use (“ROU”) assets and lease liabilities associated with the Company’s operating leases are recorded as Other assets and Other liabilities , respectively, in the Consolidated Balance Sheet. As of December 31, 2021, our leases have terms varying in duration, with the longest term ending in 2029. The following table presents information about the Company’s lease arrangements: As of and for the years ended December 31, Operating Lease Arrangements (dollars in thousands) 2021 2020 2019 Operating Leases Right-of-use assets $ 24,825 $ 17,405 $ 22,307 Lease Liabilities 29,523 22,579 28,156 Weighted-average remaining lease term 4.0 years 3.2 years 3.7 years Weighted-average discount rate 3.3% 4.6% 4.7% Operating Lease Expenses Single lease costs $ 9,435 $ 8,856 $ 7,593 Cash paid for amounts included in the measurement of lease liabilities 9,617 8,833 8,218 Right-of-use assets obtained in exchange for new lease obligations 13,215 1,488 3,013 Maturities of lease liabilities as of December 31, 2021 are presented below (in thousands): Year Ending December 31, 2022 $ 10,412 2023 9,228 2024 3,585 2025 2,223 Thereafter 4,094 Total lease payments $ 29,542 Less imputed interest (19) Total $ 29,523 |
OTHER OPERATING EXPENSES
OTHER OPERATING EXPENSES | 12 Months Ended |
Dec. 31, 2021 | |
OTHER OPERATING EXPENSES | |
Other Operating Expenses | NOTE 16—OTHER OPERATING EXPENSES The following table is a summary of the major components of other operating expenses for the years ended December 31, 2021, 2020, and 2019. For the year ended December 31, Components of Other Operating Expenses (in thousands) 2021 2020 2019 Professional fees $ 26,920 $ 18,345 $ 20,896 Travel and entertainment 7,203 4,685 10,759 Rent (1) 11,262 10,486 9,136 Marketing and preferred broker 12,526 9,139 8,534 Office expenses 15,056 17,360 9,972 All other 25,688 9,567 7,299 Total $ 98,655 $ 69,582 $ 66,596 (1) |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 12 Months Ended |
Dec. 31, 2021 | |
Variable Interest Entities | |
Variable Interest Entities | NOTE 17—VARIABLE INTEREST ENTITIES The Company, through its subsidiary Alliant, provides alternative investment management services through the syndication of tax credit funds and development of affordable housing projects. To facilitate the syndication and development of affordable housing projects, the Company is involved with the acquisition and/or formation of limited partnerships and joint ventures with investors, property developers, and property managers that are VIEs. The Company’s continuing involvement in the VIEs usually includes either serving as the manager of the VIE or as a majority investor in the VIE with a property developer or manager serving as the manager of the VIE. When the Company determines that it is the primary beneficiary of a material VIE, the Company consolidates the VIE. The primary beneficiary of a VIE is determined as the entity that has both (1) the power to direct the activities of the VIE that most significantly impact its economic performance and (2) exposure to losses or benefits that could potentially be significant to the VIE. When the Company determines that it is not the primary beneficiary, the Company recognizes its investment in the VIE through the equity-method of accounting. The Company regularly assesses the primary beneficiary of the VIE as its involvement and ownership may change over time. Syndication of Tax Credit Funds The Company’s affordable housing syndication services subsidiary forms limited partnership funds (“the funds”) that are VIEs and hold investments in affordable housing projects. The Company identifies and enters into a commitment to invest equity in the limited partnership interests in affordable housing VIEs that own and operate affordable housing properties. The limited partnership interest exposes the Company to economic losses or benefits of the VIE but does not give it the power to direct the activities that most significantly impact the VIE’s economic performance. In such cases, the Company determined it is not the primary beneficiary and recognizes the VIE as an investment and a liability for the unfunded committed capital to the VIE. The Company’s exposure is limited to its contributed capital and remaining unfunded committed capital. The investments are included as Committed investments in tax credit equity and the unfunded committed capital are included as Commitments to fund investments in tax credit equity in the Consolidated Balance Sheets until they are transferred to the credit fund as described below. The investments and unfunded committed capital are presented in the table below. As part of the syndication of the tax credit fund, the Company transfers its limited partnership interest in affordable housing partnerships to the funds, where the Company serves as the general partner and manager and holds an insignificant ownership percentage of the funds. As the manager of the funds, the Company has the power to direct the activities that most significantly impact the economic performance of the funds; however, it does not have exposure to the economic losses or benefits significant to the VIE. Accordingly, the Company is not the primary beneficiary of the fund and does not consolidate the VIE. The Company records its general partnership interest as an equity-method investment included in Other assets in the Consolidated Balance Sheets. The Company may purchase an investor’s partnership interest. In these circumstances, the Company assesses whether its new ownership percentage could potentially be significant to the VIE. When the Company determines the new ownership percentage is significant, it consolidates the fund as the Company is the primary beneficiary. As of December 31, 2021, the assets and liabilities of the consolidated funds were immaterial. Joint Development of Affordable Housing Projects The Company enters joint ventures with affordable property developers and/or investors to develop affordable housing projects. The joint ventures’ objectives are to: (1) develop the affordable housing project for syndication into a tax credit fund or (2) develop the affordable housing project for capital appreciation. When the Company develops affordable housing projects to ultimately syndicate the property into a tax credit fund, the Company invests in the joint venture but does not have management rights. The Company has significant exposure to the economic losses or benefits but does not have the power to direct the activities that most significantly impact the VIE’s economic performance; consequently, the Company determined that it is not the primary beneficiary in the VIE and recognizes an equity-method investment in the VIE included in Other assets in the Consolidated Balance Sheets. When the Company develops affordable housing projects for capital appreciation, the Company actively manages the joint venture and generally has an insignificant ownership percentage compared to third-party investors. The Company has the power to direct the activities that most significantly impact the VIE’s economic performance but does not have exposure to the economic losses or benefits that could be significant to the VIE; therefore, the Company determined it is not the primary beneficiary of the VIE and recognizes an equity-method investment included in Other assets in the Consolidated Balance Sheets. In certain circumstances, the Company may hold a significant ownership percentage and have exposure to significant economic losses or benefits of the VIE. When this occurs, the Company determines it has both the power to direct the activities that most significantly impact the VIE’s economic performance and the exposure to the economic losses or benefits that could be significant to the VIE. Accordingly, the Company consolidates the VIE. As of December 31, 2021, the Company consolidated a real-estate owned investment of $54.9 million and related mortgage debt of $36.5 million related to an affordable housing project VIE, included in Other assets and Other Liabilities , respectively, on the Consolidated Balance Sheets. The table below presents the carrying value and classification of the Company’s interests in nonconsolidated VIEs included in the Consolidated Balance Sheets: (in thousands) December 31, 2021 (1) Assets Committed investments in tax credit equity 177,322 Other assets: 74,997 Total interests in nonconsolidated VIEs 252,319 Liabilities Commitments to fund investments in tax credit equity 162,747 Total commitments to fund nonconsolidated VIEs $ 162,747 Maximum exposure to losses (2)(3) $ 252,319 (1) Prior to the Alliant acquisition in the fourth quarter of 2021, the Company did not have an interest in any VIEs. (2) Maximum exposure determined as Total interests in nonconsolidated VIEs . The maximum exposure for the Company’s investments in tax credit equity is limited to the carrying value of its investment, as there are no funding obligations or other commitments related to the nonconsolidated VIEs other than the amounts presented in the table above. (3) Based on historical experience and the underlying expected cash flows from the underlying investment, the maximum exposure of loss is not representative of the actual loss, if any, that the Company may incur. |
RELATED PARTY TRANSACTION
RELATED PARTY TRANSACTION | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions | |
Related Party Transactions | NOTE 18—RELATED PARTY TRANSACTION The Company, through its Alliant subsidiaries, has related party loans with its affordable housing project partners, which include property developers and managers. To facilitate the development of affordable housing projects prior to syndication into a tax credit fund, the Company extends pre-development and working capital loans to its partners in affordable housing project partnerships. The outstanding balance of these loans was $36.6 million as of December 31, 2021, and the related interest income was immaterial for the year ended December 31, 2021 as the Alliant acquisition closed on December 16, 2021. The balance of these receivables is included as Receivables, net |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation —The consolidated financial statements include the accounts of Walker & Dunlop, Inc., its wholly owned subsidiaries, and its majority owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. The Company consolidates entities in which it has a controlling financial interest based on either the variable interest entity (“VIE”) or the voting interest model. The Company is required to first apply the VIE model to determine whether it holds a variable interest in an entity, and if so, whether the entity is a VIE. If the Company determines it holds a variable interest in a VIE and has a controlling financial interest and therefore is considered the primary beneficiary, the Company consolidates the entity. In instances where the Company holds a variable interest in a VIE but is not the primary beneficiary, the Company uses the equity-method of accounting. If the Company determines it does not hold a variable interest in a VIE, it then applies the voting interest model. Under the voting interest model, the Company consolidates an entity when it holds a majority voting interest in an entity. If the Company does not have a majority voting interest but has significant influence, it uses the equity-method of accounting. In instances where the Company owns less than 100% of the equity interests of an entity but owns a majority of the voting interests or has control over an entity, the Company accounts for the portion of equity not attributable to Walker & Dunlop, Inc. as Noncontrolling interests on the Consolidated Balance Sheets and the portion of net income not attributable to Walker & Dunlop, Inc. as Net income from noncontrolling interests in the Consolidated Statements of Income. |
Subsequent Events | Subsequent Events —The Company has evaluated the effects of all events that have occurred subsequent to December 31, 2021. The Company has made certain disclosures in the notes to the consolidated financial statements of events that have occurred subsequent to December 31, 2021. There have been no other material subsequent events that would require recognition in the consolidated financial statements. |
Use of Estimates | Use of Estimates —The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, allowance for risk-sharing obligations, capitalized mortgage servicing rights, derivative instruments, and the disclosure of contingent assets and liabilities. Actual results may vary from these estimates. |
Transfers of Financial Assets | Transfers of Financial Assets—Transfers of financial assets are reported as sales when (i) the transferor surrenders control over those assets, (ii) the transferred financial assets have been legally isolated from the Company’s creditors, (iii) the transferred assets can be pledged or exchanged by the transferee, and (iv) consideration other than beneficial interests in the transferred assets is received in exchange. The transferor is considered to have surrendered control over transferred assets if, and only if, certain conditions are met. The Company determined that all loans sold during the periods presented met these specific conditions and accounted for all transfers of loans held for sale as completed sales, except as otherwise noted. |
Derivative Assets and Liabilities | Derivative Assets and Liabilities —Loan commitments that meet the definition of a derivative are recorded at fair value on the Consolidated Balance Sheets upon the executions of the commitments to originate a loan with a borrower and to sell the loan to an investor, with a corresponding amount recognized as revenue on the Consolidated Statements of Income. The estimated fair value of loan commitments includes (i) the fair value of loan origination fees and premiums on the anticipated sale of the loan, net of co-broker fees (included in Derivative assets in the Consolidated Balance Sheets and as a component of Loan origination and debt brokerage fees, net in the Consolidated Income Statements), (ii) the fair value of the expected net cash flows associated with the servicing of the loan, net of any estimated net future cash flows associated with the guarantee obligation (included in Derivative assets in the Consolidated Balance Sheets and in Fair value of expected net cash flows from servicing, net in the Consolidated Income Statements), and (iii) the effects of interest rate movements between the trade date and balance sheet date. Loan commitments are generally derivative assets but can become derivative liabilities if the effects of the interest rate movement between the trade date and the balance sheet date are greater than the combination of (i) and (ii) above. Forward sale commitments that meet the definition of a derivative are recorded as either derivative assets or derivative liabilities depending on the effects of the interest rate movements between the trade date and the balance sheet date. Adjustments to the fair value are reflected as a component of income within Loan origination and debt brokerage fees, net in the Consolidated Statements of Income. Co-broker fees, which are netted against Loan origination and debt brokerage fees, net in the Consolidated Statements of Income, were $21.0 million, $33.1 million and $20.6 million for the years ended December 31, 2021, 2020, and 2019, respectively. |
Mortgage Servicing Rights | Mortgage Servicing Rights —When a loan is sold and the Company retains the right to service the loan, the aforementioned derivative asset is reclassified and capitalized as an individual originated mortgage servicing right (“OMSR”) at fair value. The initial capitalized amount is equal to the estimated fair value of the expected net cash flows associated with servicing the loans, net of the expected cash flows associated with any guaranty obligations. The following describes the principal assumptions used in estimating the fair value of capitalized OMSRs. Discount Rate —Depending upon loan type, the discount rate used is management's best estimate of market discount rates. The rates used for loans sold were between 8% and 14% during 2021 and between 10% and 15% during 2020 and varied based on loan type. Estimated Life —The estimated life of the OMSRs is derived based upon the stated term of the prepayment protection provisions of the underlying loan and may be reduced by six to 12 months based upon the expiration or reduction of the prepayment provisions prior to the stated maturity date. The Company’s model for OMSRs assumes no prepayment while the prepayment provisions have not expired and full prepayment of the loan at or near the point where the prepayment provisions have expired. The Company’s historical experience is that the prepayment provisions typically do not provide a significant deterrent to a borrower’s paying off the loan within six to 12 months of the expiration of the prepayment provisions. Escrow Earnings —The estimated earnings rate on escrow accounts associated with the servicing of the loans for the life of the OMSR is added to the estimated future cash flows. The assumptions used to estimate the fair value of capitalized OMSRs at loan sale are based on internal models and are compared to assumptions used by other market participants periodically. When such comparisons indicate that these assumptions have changed significantly, the Company adjusts its assumptions accordingly. For example, during the year ended December 31, 2020, the Company adjusted the escrow earnings rate assumptions twice based on changes observed from other market participants. Additionally, the Company made adjustments to the discount rate and escrow earnings rate in 2021 based on observations from other market participants and economic conditions. Subsequent to the initial measurement date, OMSRs are amortized using the interest method over the period that servicing income is expected to be received and presented as a component of Amortization and depreciation in the Consolidated Statements of Income. The individual loan-level OMSR is written off through a charge to Amortization and depreciation when a loan prepays, defaults, or is probable of default. The Company evaluates all MSRs for impairment quarterly. The predominant risk characteristic affecting the OMSRs is prepayment risk, and we do not believe there is sufficient variation within the portfolio to warrant stratification. Therefore, we assess OMSR impairment at the portfolio level. The Company engages a third party to assist in determining an estimated fair value of our existing and outstanding MSRs on at least a semi-annual basis. The Company tests for impairment on purchased stand-alone servicing portfolios (“PMSRs”) separately from the Company’s OMSRs. The fair value of PMSRs is equal to the purchase price paid. For PMSRs, the Company records a portfolio-level MSR asset and determines the estimated life of the portfolio based on the prepayment characteristics of the portfolio. The Company subsequently amortizes such PMSRs and tests for impairment quarterly as discussed in more detail above. For PMSRs, a constant rate of prepayments and defaults is included in the determination of the portfolio’s estimated life (and thus included as a component of the portfolio’s amortization). Accordingly, prepayments and defaults of individual loans do not change the level of amortization expense recorded for the portfolio unless the pattern of actual prepayments and defaults varies significantly from the estimated pattern. When such a significant difference in the pattern of estimated and actual prepayments and defaults occurs, the Company prospectively adjusts the estimated life of the portfolio (and thus future amortization) to approximate the actual pattern observed. For the periods reported, there were no material MSR purchases. |
Guaranty Obligation, net | Guaranty Obligation, net— When a loan is sold under the Fannie Mae DUS program, the Company undertakes an obligation to partially guarantee the performance of the loan. Upon loan sale, a liability for the fair value of the obligation undertaken in issuing the guaranty is recognized and presented as Guaranty obligation, net of accumulated amortization on the Consolidated Balance Sheets. The recognized guaranty obligation is the fair value of the Company’s obligation to stand ready to perform and credit risk over the term of the guaranty. Generally, the estimated fair value of the guaranty obligation is based on the present value of the cash flows expected to be paid under the guaranty over the estimated life of the loan discounted using a rate consistent with what is used for the calculation of the mortgage servicing right for each loan. The life of the guaranty obligation is the estimated period over which the Company believes it will be required to stand ready under the guaranty. Subsequent to the initial measurement date, the liability is amortized over the life of the guaranty period using the straight-line method as a component of and reduction to Amortization and depreciation in the Consolidated Statements of Income. |
Allowance for Risk-Sharing Obligations | Allowance for Risk-Sharing Obligations— Substantially all loans sold under the Fannie Mae DUS program contain partial or full risk-sharing guaranties that are based on the performance of the loan serviced in the at-risk servicing portfolio. The Company records an estimate of the loss reserve for the current expected credit losses (“CECL”) for all loans in our Fannie Mae at-risk servicing portfolio and presents this loss reserve as Allowance for Risk-Sharing Obligations on the Consolidated Balance Sheets. Prior to the adoption of Accounting Standards Update 2016-13 (“ASU 2016-13”), Financial Instruments—Credit Losses (Topic 326) on January 1, 2020, the Company recognized credit losses on risk-sharing loans and loans held for investment under the incurred loss model. Overall Current Expected Credit Losses Approach The Company uses the weighted-average remaining maturity method (“WARM”) for calculating its allowance for risk-sharing obligations, the Company’s liability for the off-balance-sheet credit exposure associated with the Fannie Mae at-risk DUS loans. WARM uses an average annual charge-off rate that contains loss content over multiple vintages and loan terms and is used as a foundation for estimating the CECL reserve. The average annual charge-off rate is applied to the unpaid principal balance (“UPB”) over the contractual term, adjusted for estimated prepayments and amortization to arrive at the CECL reserve for the entire current portfolio as described further below. The Company maximizes the use of historical internal data because the Company has extensive historical data servicing Fannie Mae DUS loans from which to calculate historical loss rates and principal paydown by loan term type for its exposure to credit loss on its homogeneous portfolio of Fannie Mae DUS multifamily loans. Additionally, the Company believes its properties, loss history, and underwriting standards are not similar to public data such as loss histories for loans originated for collateralized mortgage-backed securities conduits. Runoff Rate One of the key inputs into a WARM calculation is the runoff rate, which is the expected rate at which loans in the current portfolio will prepay and amortize in the future. As the loans the Company originates have different original lives and run off over different periods, the Company groups loans by similar origination dates (vintage) and contractual maturity terms for purposes of calculating the runoff rate. The Company originates loans under the DUS program with various terms generally ranging from several years to 15 years ; each of these various loan terms has a different runoff rate. The Company uses its historical runoff rate for each of the different loan term pools as a proxy for the expected runoff rate. The Company believes that borrower behavior and macroeconomic conditions will not deviate significantly from historical performance over the approximately ten-year period in which the Company has compiled the actual loss data. The ten-year period captures the various cycles of industry performance and provides a period that is long enough to capture sufficient observations of runoff history. In addition, due to the prepayment protection provisions for Fannie Mae DUS loans, the Company has not seen significant volatility in historical prepayment rates due to changes in interest rates and would not expect this to change materially in future periods. The historical annual runoff rate is calculated for each year of a loan’s life for each vintage in the portfolio and aggregated with the calculated runoff rate for each comparable year in every vintage. For example, the annual runoff rate for the first year of loans originated in 2010 is aggregated with the annual runoff rate for the first year of loans originated in 2011, 2012, and so on to calculate the average annual runoff rate for the first year of a loan. This average runoff calculation is performed for each year of a loan’s life for each of the various loan terms to create a matrix of historical average annual runoffs by year for the entire portfolio. The Company segments its current portfolio of at-risk DUS loans outstanding by original loan term type and years remaining and then applies the appropriate historical average runoff rates to calculate the expected remaining balance at the end of each reporting period in the future. For example, for a loan with an original ten-year term and seven years remaining, the Company applies the historical average annual runoff rate for a ten-year loan for year four to arrive at the estimated remaining UPB one year from the current period, the historical average runoff rate for year five to arrive at the estimated remaining UPB two years from the current period, and so on up to the loan’s maturity date. CECL Reserve Calculation Once the Company has calculated the estimated outstanding UPB for each future year until maturity for each loan term type, the Company then applies the average annual charge-off rate (as further described below) to each future year’s estimated UPB. The Company then aggregates the allowance calculated for each year within each loan term type and for all different maturity years to arrive at the CECL reserve for the portfolio. The weighted-average annual charge-off rate is calculated using a ten-year look-back period, utilizing the average portfolio balance and settled losses for each year. A ten-year period is used as the Company believes that this period of time includes sufficiently different economic conditions to generate a reasonable estimate of expected results in the future, given the relatively long-term nature of the current portfolio. This approach captures the adverse impact of the years following the great financial crisis of 2007-2010 because multifamily commercial loans have a lag period from the time of initial distress indications through the timing of loss settlement. The same loss rate is utilized across each loan term type as the Company has not observed any historical or industry-published data to indicate there is any difference in the occurrence probability or loss severity for a loan based on its loan origination term. Reasonable and Supportable Forecast Period The Company currently uses one year for its reasonable and supportable forecast period (the “forecast period”). The Company uses a forecast of unemployment rates, historically a highly correlated indicator for multifamily occupancy rates, to assess what macroeconomic and multifamily market conditions are expected to be like over the coming year. The Company then associates the forecasted conditions with a similar historical period over the past ten years, which could be one or several years, and uses the Company’s average loss rate for that historical period as a basis for the loss rate used for the forecast period. The Company reverts to a historical loss rate over a one-year period on a straight-line basis. For all remaining years until maturity, the Company uses the weighted-average annual charge-off rate as described above to estimate losses. The average loss rate from a historical period used for the forecast period may be adjusted as necessary if the forecasted macroeconomic and industry conditions differ materially from the historical period. Identification of Collateral-Based Reserves for Defaulted Loans The Company monitors the performance of each risk-sharing loan for events or conditions which may signal a potential default. The Company’s process for identifying which risk-sharing loans may be probable of default consists of an assessment of several qualitative and quantitative factors, including payment status, property financial performance, local real estate market conditions, loan-to-value ratio, debt-service-coverage ratio (“DSCR”), property condition, and financial strength of the borrower or key principal(s). In instances where payment under the guaranty on a specific loan is determined to be probable (as the loan is probable of foreclosure or has foreclosed), the Company separately measures the expected loss through an assessment of the underlying fair value of the asset, disposition costs, and the risk-sharing percentage (the “collateral-based reserve”) through a charge to the provision for risk-sharing obligations, which is a component of Provision (benefit) for credit losses in the Consolidated Statements of Income. These loans are removed from the WARM calculation described above, and the associated loan-specific mortgage servicing right and guaranty obligation are written off. The expected loss on the risk-sharing obligation is dependent on the fair value of the underlying property as the loans are collateral dependent. Historically, initial recognition of a collateral-based reserve occurs at or before a loan becomes 60 days delinquent. The amount of the collateral-based reserve considers historical loss experience, adverse situations affecting individual loans, the estimated disposition value of the underlying collateral, and the level of risk sharing. The estimate of property fair value at initial recognition of the collateral-based reserve is based on appraisals, broker opinions of value, or net operating income and market capitalization rates, depending on the facts and circumstances associated with the loan. The Company regularly monitors the collateral-based reserves on all applicable loans and updates loss estimates as current information is received. The settlement with Fannie Mae is based on the actual sales price of the property and selling and property preservation costs and considers the Fannie Mae loss-sharing requirements. The maximum amount of the loss the Company absorbs at the time of default is generally 20% of the origination UPB of the loan. |
Loans Held for Investment, net | Loans Held for Investment, net — Loans held for investment are multifamily loans originated by the Company through the Interim Loan Program for properties that currently do not qualify for permanent GSE or HUD (collectively, the “Agencies”) financing. These loans have terms of up to three years and are all interest-only, multifamily loans with similar risk characteristics and no geographic concentration. The loans are carried at their unpaid principal balances, adjusted for net unamortized loan fees and costs, and net of any allowance for loan losses. As of December 31, 2021, Loans held for investment, net consisted of 12 loans with an aggregate $274.5 million of unpaid principal balance less $1.2 million of net unamortized deferred fees and costs and $4.2 million of allowance for loan losses. As of December 31, 2020, Loans held for investment, net consisted of 18 loans with an aggregate $366.3 million of unpaid principal balance less $1.1 million of net unamortized deferred fees and costs and $4.8 million of allowance for loan losses During the third quarter of 2018, the Company transferred a portfolio of participating interests in loans held for investment to a third party that was paid off in the second quarter of 2021. The Company accounted for the transfer as a secured borrowing, with the aggregate unpaid principal balance of the loans of $81.5 million presented as a component of Loans held for investment, net and the secured borrowing of $73.3 million presented within Other liabilities in the Consolidated Balance Sheets as of December 31, 2020. The Company assesses the credit quality of loans held for investment in the same manner as it does for the loans in the Fannie Mae at-risk portfolio as described above and records an allowance for these loans as necessary. The allowance for loan losses is estimated collectively for loans with similar characteristics. The collective allowance is based on the same methodology that the Company uses to estimate its allowance for risk-sharing obligations under the CECL standard for at-risk Fannie Mae Delegated Underwriting and Servicing (“DUS”) loans (with the exception of a reversion period) because the nature of the underlying collateral is the same, and the loans have similar characteristics, except they are significantly shorter in maturity. The reasonable and supportable forecast period used for the CECL allowance for loans held for investment is one year. The loss rate for the forecast period was 15 basis points and 36 basis points as of December 31, 2021 and December 31, 2020, respectively. The loss rate for the remaining period until maturity was nine basis points as of both December 31, 2021 and December 31, 2020. One loan held for investment with an unpaid principal balance of $14.7 million was delinquent and on non-accrual status as of December 31, 2021 and December 31, 2020. The Company had $3.7 million in collateral-based reserves for this loan as of both December 31, 2021 and 2020 and has not recorded any interest related to this loan since it went on non-accrual status. All other loans were current as of December 31, 2021 and 2020. The amortized cost basis of loans that were current as of December 31, 2021 and 2020 was $258.6 million and $350.5 million, respectively. As of December 31, 2021, $231.5 million and $28.3 million of the loans that were current were originated in 2021 and 2019, respectively. No loans originated in 2020 were outstanding as of December 31, 2021. Prior to 2019, the Company had not experienced any delinquencies related to loans held for investment. |
Provision (Benefit) for Credit Losses | Provision (Benefit) for Credit Losses— The Company records the income statement impact of the changes in the allowance for loan losses and the allowance for risk-sharing obligations within Provision (benefit) for credit losses in the Consolidated Statements of Income. NOTE 4 contains additional discussion related to the allowance for risk-sharing obligations. Provision (benefit) for credit losses consisted of the following activity for the years ended December 31, 2021, 2020, and 2019: Components of Provision (Benefit) for Credit Losses (in thousands) 2021 2020 2019 Provision (benefit) for loan losses $ (610) $ 3,739 $ 875 Provision (benefit) for risk-sharing obligations (12,677) 33,740 6,398 Provision (benefit) for credit losses $ (13,287) $ 37,479 $ 7,273 |
Business Combinations | Business Combinations —The Company accounts for business combinations using the acquisition method of accounting, under which the purchase price of the acquisition is allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date. The Company recognizes identifiable assets acquired and liabilities (both specific and contingent) assumed at their fair values at the acquisition date. Furthermore, acquisition-related costs, such as due diligence, legal and accounting fees, are not capitalized or applied in determining the fair value of the acquired assets. The excess of the purchase price over the fair value of (i) the assets acquired, (ii) the identifiable intangible assets, and (iii) the liabilities assumed is recognized as goodwill. During the measurement period, the Company records adjustments to the assets acquired and liabilities assumed with corresponding adjustments to goodwill in the reporting period in which the adjustment is identified. After the measurement period, which could be up to one year after the transaction date, subsequent adjustments are recorded to the Company’s Consolidated Statements of Income. |
Goodwill | Goodwill —The Company evaluates goodwill for impairment annually. In addition to the annual impairment evaluation, the Company evaluates at least quarterly whether events or circumstances have occurred in the period subsequent to the annual impairment testing which indicate that it is more likely than not an impairment loss has occurred. The Company currently has only one reporting unit; therefore, all goodwill is allocated to that one reporting unit. The Company performs its impairment testing annually as of October 1. For the 2021 assessment, the Company performed a qualitative assessment and also considered the comparison of the Company’s market capitalization to its net assets. Based on the October 1, 2021 qualitative assessment performed, the Company’s market capitalization exceeded its net asset value by $2.4 billion or 173% . As of December 31, 2021, there have been no events subsequent to that analysis that are indicative of an impairment loss. |
Loans Held for Sale | Loans Held for Sale —Loans held for sale represent originated loans that are generally transferred or sold within 60 days from the date that a mortgage loan is funded. The Company elects to measure all originated loans at fair value, unless the Company documents at the time the loan is originated that it will measure the specific loan at the lower of cost or fair value for the life of the loan. Electing to use fair value allows a better offset of the change in fair value of the loan and the change in fair value of the derivative instruments used as economic hedges. During the period prior to its sale, interest income on a loan held for sale is calculated in accordance with the terms of the individual loan. There were no loans held for sale that were valued at the lower of cost or fair value or on a non-accrual status at December 31, 2021 and 2020. |
Share-Based Payment | Share-Based Payment —The Company recognizes compensation costs for all share-based payment awards made to employees and directors, including restricted stock, restricted stock units, and employee stock options based on the grant date fair value. Restricted stock awards are granted without cost to the Company’s officers, employees, and non-employee directors, for which the fair value of the award is calculated as the fair value of the Company’s common stock on the date of grant. Stock option awards were granted to executive officers in the past, with an exercise price equal to the closing price of the Company’s common stock on the date of the grant, and were granted with a ten-year exercise period, vesting ratably over three years dependent solely on continued employment. To estimate the grant-date fair value of stock options, the Company used the Black-Scholes pricing model. The Company has not granted any stock option awards since 2017 and does not expect to issue stock options for the foreseeable future. Generally, the Company’s restricted stock awards for its officers and employees vest ratably over a three-year period based solely on continued employment. Restricted stock awards for non-employee directors fully vest after one year . Awards issued to the Company's production personnel often times vest over a period greater than three years . The Company offers a performance share plan (“PSP”) principally for the Company’s executives and certain other members of senior management. The performance period for each PSP is three full calendar years beginning on January 1 of the grant year. Participants in the PSP receive restricted stock units (“RSUs”) on the grant date for the PSP in an amount equal to achievement of all performance targets at a maximum level. If the performance targets are met at the end of the performance period and the participant remains employed by the Company, the participant fully vests in the RSUs, which immediately convert to unrestricted shares of common stock. If the performance targets are not met at the maximum level, the participant generally forfeits a portion of the RSUs. If the participant is no longer employed by the Company, the participant forfeits all of the RSUs. The performance targets for all the PSPs issued by the Company are based on meeting diluted earnings per share, return on equity, and total revenues goals. The Company records compensation expense for the PSP based on the grant-date fair value in an amount proportionate to the service time rendered by the participant and the expected achievement level of the goals. Compensation expense for restricted shares is adjusted for actual forfeitures and is recognized on a straight-line basis, for each separately vesting portion of the award as if the award were in substance multiple awards, over the requisite service period of the award. Share-based compensation is recognized within the income statement as Personnel , the same expense line as the cash compensation paid to the respective employees. |
Net Warehouse Interest Income | Net Warehouse Interest Income— The Company presents warehouse interest income net of warehouse interest expense. Warehouse interest income is the interest earned from loans held for sale and loans held for investment. Generally, a substantial portion of the Company’s loans is financed with matched borrowings under one of its warehouse facilities. The remaining portion of loans not funded with matched borrowings is financed with the Company’s own cash. The Company also fully funds a small number of loans held for sale or loans held for investment with its own cash. Warehouse interest expense is incurred on borrowings used to fund loans solely while they are held for sale or for investment. Warehouse interest income and expense are earned or incurred on loans held for sale after a loan is closed and before a loan is sold. Warehouse interest income and expense are earned or incurred on loans held for investment after a loan is closed and before a loan is repaid. Included in Net warehouse interest income for the years ended December 31, 2021 and 2020, and 2019 are the following components: For the year ended December 31, Components of Net Warehouse Interest Income (in thousands) 2021 2020 2019 Warehouse interest income - loans held for sale $ 42,480 $ 53,090 $ 48,211 Warehouse interest expense - loans held for sale (28,084) (35,154) (46,294) Net warehouse interest income - loans held for sale $ 14,396 $ 17,936 $ 1,917 Warehouse interest income - loans held for investment $ 12,406 $ 17,741 $ 32,059 Warehouse interest expense - loans held for investment (4,694) (6,351) (8,277) Warehouse interest income - secured borrowings 1,748 3,449 3,549 Warehouse interest expense - secured borrowings (1,748) (3,449) (3,549) Net warehouse interest income - loans held for investment $ 7,712 $ 11,390 $ 23,782 |
Statement of Cash Flows | Statement of Cash Flows —The Company records the fair value of premiums and origination fees as a component of the fair value of derivative assets on the loan commitment date and records the related income within Loan origination and debt brokerage fees, net within the Consolidated Statements of Income. The cash for the origination fee is received upon closing of the loan, and the cash for the premium is received upon loan sale, resulting in a timing mismatch of the recognition of income and the receipt of cash in a given period when the derivative or loan held for sale remains outstanding at period end. The Company accounts for this mismatch by recording an adjustment called Change in the fair value of premiums and origination fees within the Consolidated Statements of Cash Flows. The amount of the adjustment reflects a reduction to cash provided by or used in operations for the amount of income recognized upon rate lock (i.e., non-cash income) for derivatives and loans held for sale outstanding at period end and an increase to cash provided by or used in operations for cash received upon loan origination or sale for derivatives and loans held for sale that were outstanding at prior period end. When income recognized upon rate lock is greater than cash received upon loan origination or sale, the adjustment is a negative amount. When income recognized upon rate lock is less than cash received upon loan origination or loan sale, the adjustment is a positive amount. For presentation in the Consolidated Statements of Cash Flows, the Company considers pledged cash and cash equivalents (as detailed in NOTE 10) to be restricted cash and restricted cash equivalents. The following table presents a reconciliation of the total of cash, cash equivalents, restricted cash, and restricted cash equivalents as presented in the Consolidated Statements of Cash Flows to the related captions in the Consolidated Balance Sheets as of December 31, 2021, 2020, 2019, and 2018. December 31, (in thousands) 2021 2020 2019 2018 Cash and cash equivalents $ 305,635 $ 321,097 $ 120,685 $ 90,058 Restricted cash 42,812 19,432 8,677 20,821 Pledged cash and cash equivalents (NOTE 10) 44,733 17,473 7,204 9,469 Total cash, cash equivalents, restricted cash, and restricted cash equivalents $ 393,180 $ 358,002 $ 136,566 $ 120,348 |
Income Taxes | Income Taxes —The Company files income tax returns in the applicable U.S. federal, state, and local jurisdictions and generally is subject to examination by the respective jurisdictions for three years from the filing of a tax return. The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. Deferred tax assets are recognized only to the extent that it is more likely than not that they will be realizable based on consideration of available evidence, including future reversals of existing taxable temporary differences, projected future taxable income, and tax planning strategies. The Company had an immaterial accrual for uncertain tax positions as of December 31, 2021 and 2020. |
Pledged Securities | Pledged Securities —As collateral against its Fannie Mae risk-sharing obligations (NOTES 4 and 10), certain securities have been pledged to the benefit of Fannie Mae to secure the Company's risk-sharing obligations. Substantially all of the balance of Pledged securities, at fair value within the Consolidated Balance Sheets as of December 31, 2021 and 2020 was pledged against Fannie Mae risk-sharing obligations. The Company’s investments included within Pledged securities, at fair value consist primarily of money market funds and Agency debt securities. The investments in Agency debt securities consist of multifamily Agency mortgage-backed securities (“Agency MBS”) and are all accounted for as available-for-sale (“AFS”) securities. The Company does not record an allowance for credit losses for its AFS securities, including those whose fair value is less than amortized cost, when the AFS securities are issued by the GSEs. The contractual cash flows of these AFS securities are guaranteed by the GSEs, which are government-sponsored enterprises under the conservatorship of the Federal Housing Finance Agency. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost of these securities. The Company does not intend to sell any of the Agency MBS, nor does the Company believe that it is more likely than not that it would be required to sell these investments before recovery of their amortized cost basis, which may be at maturity. |
Asset Management Fees | Asset Management Fees— The Company provides investment management services to investors in low-income housing tax credits (“LIHTC”) funds and earns an asset management fee. The asset management fees are earned each year over the 15-year compliance period of the properties held by the fund; however, due to the uncertainty of the timing and collectability of the asset management fees, the Company only recognizes a receivable for the amount expected to be collected from the funds over the following year. The receivable is based on the Company’s estimates of the ability of the funds to pay the asset management fees using a combination of historical and projected cash proceeds from the funds’ investments. The receivable is reduced as actual cash is received during the quarter. At quarter end, the Company reassesses the amount expected to be collected as described above and recognizes revenue for the difference between the receivable net of cash collections and the receivable based on expected collections. The asset management fee receivable was $42.3 million as of December 31, 2021 and zero as of December 31, 2020 as the Company did not have LIHTC operations prior to the acquisition of Alliant as defined and described in NOTE 7. The asset management fee receivable is included within Receivables, net on the Consolidated Balance Sheets. |
Contracts with Customers | Contracts with Customers —A majority of the Company’s revenues are derived from the following sources, all of which are excluded from the accounting provisions applicable to contracts with customers: (i) financial instruments, (ii) transfers and servicing, (iii) derivative transactions, and (iv) investments in debt securities/equity-method investments. The remaining portion of revenues is derived from contracts with customers. The Company’s contracts with customers generally do not require significant judgment or material estimates that affect the determination of the transaction price (including the assessment of variable consideration, except as noted above), the allocation of the transaction price to performance obligations, and the determination of the timing of the satisfaction of performance obligations. Additionally, the earnings process for the Company’s contracts with customers is generally not complicated and is generally completed in a short period of time. The following table presents information about the Company’s contracts with customers for the years ended December 31, 2021, 2020, and 2019: Description in thousands 2021 2020 2019 Statement of income line item Certain loan origination fees $ 186,986 $ 64,528 $ 75,599 Loan origination and debt brokerage fees, net Property sales broker fees 119,981 38,108 30,917 Property sales broker fees Investment management fees, application fees, subscription revenues, revenues from LIHTC operations, and other 56,557 22,999 20,968 Other revenues Total revenues derived from contracts with customers $ 363,524 $ 125,635 $ 127,484 |
Cash and Cash Equivalents | Cash and Cash Equivalents —The term cash and cash equivalents, as used in the accompanying consolidated financial statements, includes currency on hand, demand deposits with financial institutions, and short-term, highly liquid investments purchased with an original maturity of three months or less. The Company had no cash equivalents as of December 31, 2021 and 2020. |
Restricted Cash | Restricted Cash —Restricted cash represents primarily good faith deposits from borrowers and cash held in a collection account to be used to fund the repayment of the Alliant note payable as described more fully in NOTE 6. The Company records a corresponding liability for the good faith deposits from borrowers within Performance deposits from borrowers in the Consolidated Balance Sheets. |
Net Receivables | Receivables, Net —Receivables, net represents amounts currently due to the Company pursuant to contractual servicing agreements, investor good faith deposits held in escrow by others, general accounts receivable, advances to and notes receivable from the developers of affordable housing projects, asset management fees receivable, and advances of principal and interest payments and tax and insurance escrow amounts if the borrower is delinquent in making loan payments, to the extent such amounts are determined to be reimbursable and recoverable. Substantially all of these receivables are expected to be collected within a short period of time and are with counterparties with high credit quality (such as the Agencies). Additionally, the Company has not experienced any credit losses related to these receivables. Consequently, the Company has not recorded an allowance for credit losses associated with its receivables as of December 31, 2021 and 2020. |
Concentrations of Credit Risk | Concentrations of Credit Risk —Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents, loans held for sale, and derivative financial instruments. The Company places the cash and temporary investments with high-credit-quality financial institutions and believes no significant credit risk exists. The counterparties to the loans held for sale and funding commitments are owners of residential multifamily properties located throughout the United States. Mortgage loans are generally transferred or sold within 60 days from the date that a mortgage loan is funded. There is no material residual counterparty risk with respect to the Company's funding commitments as each potential borrower must make a non-refundable good faith deposit when the funding commitment is executed. The counterparty to the forward sale is Fannie Mae, Freddie Mac, or a broker-dealer that has been determined to be a credit-worthy counterparty by us and our warehouse lenders. There is a risk that the purchase price agreed to by the investor will be reduced in the event of a late delivery. The risk for non-delivery of a loan primarily results from the risk that a borrower does not close on the funding commitment in a timely manner. This risk is generally mitigated by the non-refundable good faith deposit. |
Leases | Leases —In the normal course of business, the Company enters into lease arrangements for all of its office space. All such lease arrangements are accounted for as operating leases. The Company initially recognizes a lease liability for the obligation to make lease payments and a right-of-use (“ROU”) asset for the right to use the underlying asset for the lease term. The lease liability is measured at the present value of the lease payments over the lease term. The ROU asset is measured at the lease liability amount, adjusted for lease prepayments, accrued rent, lease incentives received, and the lessee’s initial direct costs. Lease expense is generally recognized on a straight-line basis over the term of the lease. These operating leases do not provide an implicit discount rate; therefore, the Company uses the incremental borrowing rate of its note payable at lease commencement to calculate lease liabilities as the terms on this debt most closely resemble the terms on the Company’s largest leases. The Company’s lease agreements often include options to extend or terminate the lease. Single lease cost related to these lease agreements is recognized on the straight-line basis over the term of the lease, which includes options to extend when it is reasonably certain that such options will be exercised and the Company knows what the lease payments will be during the optional periods. |
Litigation | Litigation —In the ordinary course of business, the Company may be party to various claims and litigation, none of which the Company believes is material. The Company cannot predict the outcome of any pending litigation and may be subject to consequences that could include fines, penalties, and other costs, and the Company’s reputation and business may be impacted. The Company believes that any liability that could be imposed on the Company in connection with the disposition of any pending lawsuits would not have a material adverse effect on its business, results of operations, liquidity, or financial condition. |
Recently Adopted and Recently Announced Accounting Pronouncements | Recently Adopted and Recently Announced Accounting Pronouncements —There were no recently announced but not yet effective accounting pronouncements issued that have the potential to impact the Company’s consolidated financial statements. The Company did not adopt any new accounting policies except those related to the acquisition of Alliant (as defined in NOTE 7). The significant policies resulting from the acquisition of Alliant are discussed above. |
Reclassifications | Reclassifications |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of Components of Provision (Benefit) for Credit Losses | Components of Provision (Benefit) for Credit Losses (in thousands) 2021 2020 2019 Provision (benefit) for loan losses $ (610) $ 3,739 $ 875 Provision (benefit) for risk-sharing obligations (12,677) 33,740 6,398 Provision (benefit) for credit losses $ (13,287) $ 37,479 $ 7,273 |
Schedule of Net Warehouse Interest Income | For the year ended December 31, Components of Net Warehouse Interest Income (in thousands) 2021 2020 2019 Warehouse interest income - loans held for sale $ 42,480 $ 53,090 $ 48,211 Warehouse interest expense - loans held for sale (28,084) (35,154) (46,294) Net warehouse interest income - loans held for sale $ 14,396 $ 17,936 $ 1,917 Warehouse interest income - loans held for investment $ 12,406 $ 17,741 $ 32,059 Warehouse interest expense - loans held for investment (4,694) (6,351) (8,277) Warehouse interest income - secured borrowings 1,748 3,449 3,549 Warehouse interest expense - secured borrowings (1,748) (3,449) (3,549) Net warehouse interest income - loans held for investment $ 7,712 $ 11,390 $ 23,782 |
Schedule of Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | December 31, (in thousands) 2021 2020 2019 2018 Cash and cash equivalents $ 305,635 $ 321,097 $ 120,685 $ 90,058 Restricted cash 42,812 19,432 8,677 20,821 Pledged cash and cash equivalents (NOTE 10) 44,733 17,473 7,204 9,469 Total cash, cash equivalents, restricted cash, and restricted cash equivalents $ 393,180 $ 358,002 $ 136,566 $ 120,348 |
Schedule of Contracts with Customers | Description in thousands 2021 2020 2019 Statement of income line item Certain loan origination fees $ 186,986 $ 64,528 $ 75,599 Loan origination and debt brokerage fees, net Property sales broker fees 119,981 38,108 30,917 Property sales broker fees Investment management fees, application fees, subscription revenues, revenues from LIHTC operations, and other 56,557 22,999 20,968 Other revenues Total revenues derived from contracts with customers $ 363,524 $ 125,635 $ 127,484 |
MORTGAGE SERVICING RIGHTS (Tabl
MORTGAGE SERVICING RIGHTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
MORTGAGE SERVICING RIGHTS | |
Schedule of Activity Related to MSRs | For the year ended December 31, Roll Forward of MSRs (in thousands) 2021 2020 Beginning balance $ 862,813 $ 718,799 Additions, following the sale of loan 313,376 321,225 Amortization (176,428) (149,888) Pre-payments and write-offs (45,916) (27,323) Ending balance $ 953,845 $ 862,813 |
Summary of Components of Net Carrying Value of MSRs | Components of MSRs (in thousands) December 31, 2021 December 31, 2020 Gross value $ 1,548,870 $ 1,394,901 Accumulated amortization (595,025) (532,088) Net carrying value $ 953,845 $ 862,813 |
Schedule of Expected Amortization of MSRs | Expected (in thousands) Amortization Year Ending December 31, 2022 $ 175,191 2023 163,741 2024 143,803 2025 122,262 2026 102,269 Thereafter 246,579 Total $ 953,845 |
GUARANTY OBLIGATION AND ALLOW_2
GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS | |
Schedule of Activity Related to Guaranty Obligation | For the year ended December 31, Roll Forward of Guaranty Obligation (in thousands) 2021 2020 Beginning balance $ 52,306 $ 54,695 Additions, following the sale of loan 5,607 5,755 Amortization and write-offs (10,535) (9,612) Other — 1,468 Ending balance $ 47,378 $ 52,306 |
Summary of Allowance for Risk-Sharing Obligations | For the year ended December 31, Roll Forward of Allowance for Risk-Sharing Obligations (in thousands) 2021 2020 Beginning balance $ 75,313 $ 11,471 Adjustment related to adoption of CECL — 31,570 Provision (benefit) for risk-sharing obligations (12,677) 33,740 Write-offs — — Other (1,468) Ending balance $ 62,636 $ 75,313 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt | |
Schedule of Maturities of Warehouse Notes Payable and Note Payable | Year Ending December 31, Maturities 2022 $ 1,836,813 2023 110,290 2024 53,520 2025 26,000 2026 24,000 Thereafter 637,000 Total $ 2,687,623 |
Warehouse Facilities | |
Debt | |
Schedule of warehouse lines of credit | December 31, 2021 December 31, 2020 (dollars in thousands) Committed Uncommitted Total Facility Outstanding Facility (1) Amount Amount Capacity Balance Interest rate (2) Agency Warehouse Facility #1 $ 425,000 $ — $ 425,000 $ 83,336 30-day LIBOR plus 1.40% Agency Warehouse Facility #2 700,000 300,000 1,000,000 460,388 30-day LIBOR plus 1.40% Agency Warehouse Facility #3 600,000 265,000 865,000 410,546 30-day LIBOR plus 1.15% Agency Warehouse Facility #4 350,000 — 350,000 181,996 30-day LIBOR plus 1.40% Agency Warehouse Facility #5 — 1,000,000 1,000,000 522,507 30-day LIBOR plus 1.45% Total National Bank Agency Warehouse Facilities $ 2,075,000 $ 1,565,000 $ 3,640,000 $ 1,658,773 Fannie Mae repurchase agreement, uncommitted line and open maturity — 1,500,000 1,500,000 725,085 Total agency warehouse facilities $ 2,075,000 $ 3,065,000 $ 5,140,000 $ 2,383,858 Interim Warehouse Facility #1 $ 135,000 $ — $ 135,000 $ 71,572 30-day LIBOR plus 1.90% Interim Warehouse Facility #2 100,000 — 100,000 34,000 30-day LIBOR plus 1.65% Interim Warehouse Facility #3 75,000 75,000 150,000 8,861 30-day LIBOR plus 1.75% to 3.25% Interim Warehouse Facility #4 19,810 — 19,810 19,810 30-day LIBOR plus 3.00% Total interim warehouse facilities $ 329,810 $ 75,000 $ 404,810 $ 134,243 Debt issuance costs — — — (945) Total warehouse facilities $ 2,404,810 $ 3,140,000 $ 5,544,810 $ 2,517,156 (1) Agency Warehouse Facilities, including the Fannie Mae repurchase agreement are used to fund loans held for sale, while Interim Warehouse Facilities are used to fund loans held for investment. (2) Interest rate presented does not include the effect of interest rate floors. |
Notes Payable | |
Debt | |
Schedule of notes payable | (in thousands, unless otherwise specified) December 31, 2021 2020 Interest rate and repayments Term Loan Note Payable Unpaid principal balance $ 600,000 $ 294,773 Interest rate varies - see above for further details; Unamortized debt discount (1,491) (1,026) Quarterly principal payments of $1.5 million and $0.8 million, respectively Unamortized debt issuance costs (8,914) (2,154) Carrying balance $ 589,595 $ 291,593 Alliant Note Payable Unpaid principal balance $ 145,175 $ — 4.75% Fixed-rate Fair value adjustment (1) 5,404 — Carrying balance $ 150,579 $ — Total Notes Payable Carrying Balance $ 740,174 $ 291,593 (1) Fair value adjustment related to the purchase accounting for Alliant (as defined in NOTE 7). |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ACQUISITIONS | |
Schedule of Acquisition Activity | Detail of Acquisition Activity (in thousands) Acquisition Purchase Consideration Assets Liabilities Noncontrolling Goodwill Acquisition Date Cash Stock (1) Contingent Total Acquired Assumed Interest Recognized Acquisition #1 Q1 2021 $ 7,506 $ — $ 5,229 $ 12,735 $ 504 $ — $ — $ 12,231 Acquisition #2 Q2 2021 3,000 — 2,275 5,275 — — — 5,275 Acquisition #3 Q3 2021 53,459 5,250 — 58,709 22,866 5,886 19,569 61,298 Acquisition #4 Q4 2021 379,677 115,321 85,800 580,798 688,977 470,434 8,618 370,873 Total $ 443,642 $ 120,571 $ 93,304 $ 657,517 $ 712,347 $ 476,320 $ 28,187 $ 449,677 (1) The stock consideration shown above is a non-cash transaction not impacting the amount of cash consideration paid on the Consolidated Statements of Cash Flows. |
Schedule of Assets and Liabilities Acquired | Acquisition Date (in thousands) December 16, 2021 Assets acquired Cash and cash equivalents $ 13,431 Restricted cash 7,898 Other Intangible Assets 170,800 Committed investments in tax credit equity 261,936 Receivables, net 103,439 Other assets 131,473 Total assets acquired $ 688,977 Acquisition Date (in thousands) December 16, 2021 Liabilities assumed Warehouse notes payable $ 21,682 Note payable 150,579 Commitments to fund investments in tax credit equity 244,329 Other liabilities 53,844 Total liabilities assumed $ 470,434 |
Schedule of Supplementary Pro Forma Information | For the year ended December 31, Supplementary pro forma information (unaudited) 2021 2020 (in thousands, except per share data) Revenues $ 1,387,227 $ 1,187,820 Income from operations (1) 391,237 361,489 Walker & Dunlop net income (2) 293,062 277,400 Basic Earnings per share 8.90 8.62 Diluted earnings per share 8.78 8.45 Weighted-average earnings shares outstanding 31,856 31,253 Weighted-average diluted shares outstanding 32,308 31,892 (1) Income from operations includes pro forma adjustments related to interest expense for additional term debt financing obtained to close the acquisition. Pro forma adjustments increasing interest expense by $9.7 million and $7.3 million are include in the supplementary pro forma information presented for 2021 and 2020, respectively . (2) In addition to pro forma adjustments for interest expense, Walker & Dunlop net income includes pro forma adjustments for purchase accounting and income tax expenses of $21.6 million and $12.9 million that decrease Alliant’s operating results for the years ended December 31, 2021 and 2020, respectively . |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of Goodwill | For the year ended December 31, Roll Forward of Goodwill (in thousands) 2021 2020 Beginning balance $ 248,958 $ 180,424 Additions from acquisitions 449,677 68,534 Impairment — — Ending balance $ 698,635 $ 248,958 |
Schedule of Contingent Liability | For the year ended December 31, Roll Forward of Contingent Consideration Liabilities (in thousands) 2021 2020 Beginning balance $ 28,829 $ 5,752 Additions 93,304 27,645 Accretion and revaluation 9,755 1,232 Payments (6,080) (5,800) Ending balance $ 125,808 $ 28,829 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
FAIR VALUE MEASUREMENTS | |
Summary of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis | Balance as of (in thousands) Level 1 Level 2 Level 3 Period End December 31, 2021 Assets Loans held for sale $ — $ 1,811,586 $ — $ 1,811,586 Pledged securities 44,733 104,263 — 148,996 Derivative assets — — 37,364 37,364 Total $ 44,733 $ 1,915,849 $ 37,364 $ 1,997,946 Liabilities Derivative liabilities $ — $ — $ 6,403 $ 6,403 Contingent consideration liabilities 125,808 125,808 Total $ — $ — $ 132,211 $ 132,211 December 31, 2020 Assets Loans held for sale $ — $ 2,449,198 $ — $ 2,449,198 Pledged securities 17,473 119,763 — 137,236 Derivative assets — — 49,786 49,786 Total $ 17,473 $ 2,568,961 $ 49,786 $ 2,636,220 Liabilities Derivative liabilities $ — $ — $ 5,066 $ 5,066 Contingent consideration liabilities 28,829 28,829 Total $ — $ — $ 33,895 $ 33,895 |
Schedule of Roll Forward of Derivative Instruments | For the year ended December 31, Derivative Assets and Liabilities, net (in thousands) 2021 2020 Beginning balance $ 44,720 $ 15,532 Settlements (746,918) (687,874) Realized gains recorded in earnings (1) 702,198 672,342 Unrealized gains (losses) recorded in earnings (1) 30,961 44,720 Ending balance $ 30,961 $ 44,720 (1) Realized and unrealized gains from derivatives are recognized in Loan origination and debt brokerage fees, net and Fair value of expected net cash flows from servicing, net in the Consolidated Statements of Income. |
Schedule of Significant Unobservable Inputs Used in the Measurement of the Fair Value of Level 3 Assets and Liabilities | Quantitative Information about Level 3 Fair Value Measurements (in thousands) Fair Value Valuation Technique Unobservable Input (1) Input Range (1) Weighted Average (3) Derivative assets $ 37,364 Discounted cash flow Counterparty credit risk — — Derivative liabilities $ 6,403 Discounted cash flow Counterparty credit risk — — Contingent consideration liabilities $ 125,808 Various (2) Probability of earn-out achievement 88% - 100% 92% (1) Significant changes in this input may lead to significant changes in the fair value measurements. (2) Valuation techniques used include probability-weighted achievement analysis and Monte Carlo simulation analysis. (3) Contingent consideration weighted based on maximum gross earn-out amount. |
Schedule of Carrying Amounts and the Fair Values of the Company's Financial Instruments | December 31, 2021 December 31, 2020 Carrying Fair Carrying Fair (in thousands) Amount Value Amount Value Financial Assets: Cash and cash equivalents $ 305,635 $ 305,635 $ 321,097 $ 321,097 Restricted cash 42,812 42,812 19,432 19,432 Pledged securities 148,996 148,996 137,236 137,236 Loans held for sale 1,811,586 1,811,586 2,449,198 2,449,198 Loans held for investment, net 269,125 270,826 360,402 362,586 Derivative assets 37,364 37,364 49,786 49,786 Total financial assets $ 2,615,518 $ 2,617,219 $ 3,337,151 $ 3,339,335 Financial Liabilities: Derivative liabilities $ 6,403 $ 6,403 $ 5,066 $ 5,066 Contingent consideration liabilities 125,808 125,808 28,829 28,829 Secured borrowings — — 73,314 73,314 Warehouse notes payable 1,941,572 1,942,448 2,517,156 2,518,101 Notes payable 740,174 745,175 291,593 294,773 Total financial liabilities $ 2,813,957 $ 2,819,834 $ 2,915,958 $ 2,920,083 |
Schedule of Fair Value of Derivative Instruments and Loans Held for Sale | Fair Value Adjustment Components Balance Sheet Location Fair Value Notional or Estimated Total Adjustment Principal Gain Interest Rate Fair Value Derivative Derivative to Loans (in thousands) Amount on Sale Movement Adjustment Assets Liabilities Held for Sale December 31, 2021 Rate lock commitments $ 1,115,829 $ 29,837 $ (4,604) $ 25,233 $ 26,526 $ (1,293) $ — Forward sale contracts 2,881,224 — 5,728 5,728 10,838 (5,110) — Loans held for sale 1,765,395 47,315 (1,124) 46,191 — — 46,191 Total $ 77,152 $ — $ 77,152 $ 37,364 $ (6,403) $ 46,191 December 31, 2020 Rate lock commitments $ 1,374,784 $ 45,581 $ (1,697) $ 43,884 $ 43,895 $ (11) $ — Forward sale contracts 3,760,953 — 836 836 5,891 (5,055) — Loans held for sale 2,386,169 62,167 861 63,028 — — 63,028 Total $ 107,748 $ — $ 107,748 $ 49,786 $ (5,066) $ 63,028 |
FANNIE MAE COMMITMENTS AND PL_2
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES | |
Schedule of Pledged Securities at Fair Value | December 31, Pledged Securities (in thousands) 2021 2020 2019 2018 Restricted cash $ 3,779 $ 4,954 $ 2,150 $ 3,029 Money market funds 40,954 12,519 5,054 6,440 Total pledged cash and cash equivalents $ 44,733 $ 17,473 $ 7,204 $ 9,469 Agency MBS 104,263 119,763 114,563 106,862 Total pledged securities, at fair value $ 148,996 $ 137,236 $ 121,767 $ 116,331 |
Schedule of Investment Information Related to AFS Agency MBS | Fair Value and Amortized Cost of Agency MBS (in thousands) December 31, 2021 December 31, 2020 Fair value $ 104,263 $ 119,763 Amortized cost 100,847 117,136 Total gains for securities with net gains in AOCI 3,636 2,669 Total losses for securities with net losses in AOCI (220) (42) Fair value of securities with unrealized losses 4,757 12,267 |
Schedule of Contractual Maturity Information Related to Agency MBS | December 31, 2021 Detail of Agency MBS Maturities (in thousands) Fair Value Amortized Cost Within one year $ — $ — After one year through five years 2,416 2,412 After five years through ten years 73,025 72,224 After ten years 28,822 26,211 Total $ 104,263 $ 100,847 |
SHARE-BASED PAYMENT (Tables)
SHARE-BASED PAYMENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SHARE-BASED PAYMENT | |
Schedule of Stock Compensation Expense | For the year ended December 31, Components of stock compensation expense (in thousands) 2021 2020 2019 Restricted shares $ 25,520 $ 18,924 $ 17,818 Stock options — 71 625 PSP "RSUs" 11,062 9,324 5,632 Total stock compensation expense $ 36,582 $ 28,319 $ 24,075 Excess tax benefit recognized $ 8,620 $ 7,273 $ 4,632 |
Schedule of Restricted Share Activity | Weighted- Average Grant-date Restricted Shares Activity Shares Fair Value Nonvested at January 1, 2021 1,122,614 $ 62.41 Granted 447,619 101.48 Vested (403,473) 61.16 Forfeited (44,067) 79.65 Nonvested at December 31, 2021 1,122,693 $ 77.70 |
Schedule of Restricted Share Units Activity | Weighted- Average Grant-date Restricted Share Units Activity Share Units Fair Value Nonvested at January 1, 2021 770,493 $ 50.37 Granted 263,845 101.04 Vested (55,483) 100.36 Forfeited (196,709) 49.80 Cancelled (3,600) 67.13 Nonvested at December 31, 2021 778,546 $ 67.66 |
Schedule of Stock Option Activity | Weighted- Weighted- Average Aggregate Average Remaining Intrinsic Exercise Contract Life Value Stock Options Activity Options Price (Years) (in thousands) Outstanding at January 1, 2021 461,340 $ 22.51 Exercised (227,334) 22.78 Outstanding at December 31, 2021 234,006 $ 22.25 $ Exercisable at December 31, 2021 234,006 $ 22.25 3.7 $ 30,101 |
EARNINGS PER SHARE AND STOCKH_2
EARNINGS PER SHARE AND STOCKHOLDERS EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY | |
Schedule of Basic and Diluted EPS Under Two-Class Method | For the years ended December 31, EPS Calculations (in thousands, except per share amounts) 2021 2020 2019 Calculation of basic EPS Walker & Dunlop net income $ 265,762 $ 246,177 $ 173,373 Less: dividends and undistributed earnings allocated to participating securities 8,837 7,337 5,649 Net income applicable to common stockholders $ 256,925 $ 238,840 $ 167,724 Weighted-average basic shares outstanding 31,081 30,444 29,913 Basic EPS $ 8.27 $ 7.85 $ 5.61 Calculation of diluted EPS Net income applicable to common stockholders $ 256,925 $ 238,840 $ 167,724 Add: reallocation of dividends and undistributed earnings based on assumed conversion 93 120 126 Net income allocated to common stockholders $ 257,018 $ 238,960 $ 167,850 Weighted-average basic shares outstanding 31,081 30,444 29,913 Add: weighted-average diluted non-participating securities 452 639 902 Weighted-average diluted shares outstanding 31,533 31,083 30,815 Diluted EPS $ 8.15 $ 7.69 $ 5.45 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
Summary of Provision for Income Taxes | For the year ended December 31, Components of Income Tax Expense (in thousands) 2021 2020 2019 Current Federal $ 40,025 $ 26,854 $ 28,150 State 12,181 10,294 6,959 Total current expense $ 52,206 $ 37,148 $ 35,109 Deferred Federal $ 26,630 $ 37,354 $ 17,484 State 7,592 9,811 4,528 Total deferred expense $ 34,222 $ 47,165 $ 22,012 Total income tax expense $ 86,428 $ 84,313 $ 57,121 |
Schedule of Reconciliation of the Statutory Federal Tax Provision to Income Tax Provision | For the year ended December 31, (in thousands) 2021 2020 2019 Statutory federal expense $ 73,932 $ 69,356 $ 48,374 Statutory state income tax expense, net of federal tax benefit 16,409 13,828 9,281 Other (3,913) 1,129 (534) Income tax expense $ 86,428 $ 84,313 $ 57,121 |
Schedule of Deferred Tax Assets and Liabilities | As of December 31, Components of Deferred Tax Liabilities, Net (in thousands) 2021 2020 Deferred Tax Assets Compensation related $ 5,811 $ 8,760 Credit losses 16,748 20,163 Total deferred tax assets $ 22,559 $ 28,923 Deferred Tax Liabilities Mark-to-market of derivatives and loans held for sale $ (16,874) $ (22,367) Mortgage servicing rights related (208,718) (180,129) Acquisition related (1) (12,977) (9,594) Depreciation (2,317) (2,267) Other (6,913) (224) Total deferred tax liabilities $ (247,799) $ (214,581) Deferred tax liabilities, net $ (225,240) $ (185,658) (1) Acquisition-related deferred tax liabilities consist of book-to-tax differences associated with basis step ups related to the amortization of goodwill recorded from acquisitions and book-to-tax differences in intangible asset amortization. |
SEGMENTS (Tables)
SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SEGMENTS | |
Schedule of Loans Serviced for Others, by Product | As of December 31, Components of Loan Servicing Portfolio (in thousands) 2021 2020 2019 Fannie Mae $ 53,401,457 $ 48,818,185 $ 40,049,095 Freddie Mac 37,138,836 37,072,587 32,583,842 Ginnie Mae-HUD 9,889,289 9,606,506 9,972,989 Life insurance companies and other 15,270,982 11,714,694 10,619,243 Total $ 115,700,564 $ 107,211,972 $ 93,225,169 |
Schedule of Percentage of Unpaid Principal Balance of the Loans Serviced for Others | Percent of Total UPB as of December 31, Loan Servicing Portfolio Concentration by State 2021 2020 2019 California 16.1 % 16.2 % 16.2 % Florida 10.0 10.4 9.4 Texas 8.6 8.8 9.3 Georgia 5.9 5.9 5.8 All other states 59.4 58.7 59.3 Total 100.0 % 100.0 % 100.0 % |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
LEASES | |
Schedule of Lease Information | As of and for the years ended December 31, Operating Lease Arrangements (dollars in thousands) 2021 2020 2019 Operating Leases Right-of-use assets $ 24,825 $ 17,405 $ 22,307 Lease Liabilities 29,523 22,579 28,156 Weighted-average remaining lease term 4.0 years 3.2 years 3.7 years Weighted-average discount rate 3.3% 4.6% 4.7% Operating Lease Expenses Single lease costs $ 9,435 $ 8,856 $ 7,593 Cash paid for amounts included in the measurement of lease liabilities 9,617 8,833 8,218 Right-of-use assets obtained in exchange for new lease obligations 13,215 1,488 3,013 |
Schedule of Maturities of Lease Liabilities | Year Ending December 31, 2022 $ 10,412 2023 9,228 2024 3,585 2025 2,223 Thereafter 4,094 Total lease payments $ 29,542 Less imputed interest (19) Total $ 29,523 |
OTHER OPERATING EXPENSES (Table
OTHER OPERATING EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
OTHER OPERATING EXPENSES | |
Summary of Major Components of Other Operating Expenses | For the year ended December 31, Components of Other Operating Expenses (in thousands) 2021 2020 2019 Professional fees $ 26,920 $ 18,345 $ 20,896 Travel and entertainment 7,203 4,685 10,759 Rent (1) 11,262 10,486 9,136 Marketing and preferred broker 12,526 9,139 8,534 Office expenses 15,056 17,360 9,972 All other 25,688 9,567 7,299 Total $ 98,655 $ 69,582 $ 66,596 (1) |
ORGANIZATION (Details)
ORGANIZATION (Details) - USD ($) $ in Thousands | Feb. 04, 2022 | Dec. 16, 2021 | Dec. 31, 2021 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Joint Venture | |||||||
Contingent consideration | $ 125,808 | $ 125,808 | $ 28,829 | $ 5,752 | |||
GeoPhy | |||||||
Joint Venture | |||||||
Cash consideration | $ 85,000 | ||||||
Contingent consideration | $ 205,000 | ||||||
Contingent consideration liability earnout period | 4 years | ||||||
Acquisition #4 - Alliant Capital | |||||||
Joint Venture | |||||||
Cash consideration | $ 379,700 | 379,677 | |||||
Contingent consideration | $ 100,000 | $ 85,800 | $ 85,800 | ||||
Contingent consideration liability earnout period | 4 years | ||||||
Interim Program JV | |||||||
Joint Venture | |||||||
Ownership interest | 15.00% | 15.00% | |||||
Appraisal JV | |||||||
Joint Venture | |||||||
Ownership interest | 50.00% | 50.00% | |||||
Zellman | |||||||
Subsidiary | |||||||
Ownership interest in WDIB | 75.00% | ||||||
Maximum | |||||||
Joint Venture | |||||||
Contingent consideration liability earnout period | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Derivative Assets and Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Mortgage Banking Activities | |||
Co-broker fees | $ 21 | $ 33.1 | $ 20.6 |
OMSRs | Minimum | |||
Mortgage Banking Activities | |||
Discount rate used for estimated capitalized MSRs (as a percent) | 8.00% | 10.00% | |
Reduction in estimated life of originated MSRs | 6 months | ||
OMSRs | Maximum | |||
Mortgage Banking Activities | |||
Discount rate used for estimated capitalized MSRs (as a percent) | 14.00% | 15.00% | |
Reduction in estimated life of originated MSRs | 12 months |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Allowance for Risk Sharing Obligations (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Debt | |
Reasonable and supportable forecast period used for determining CECL reserves | 1 year |
Period of time rate reverts to historical rate | 1 year |
Fannie Mae DUS program | Maximum | |
Debt | |
Term of targeted debt | 15 years |
Maximum delinquency period of loans at which initial loss recognition occurs | 60 days |
Amount of loss absorbed at time of loan default as a percent of the origination unpaid principal balance | 20.00% |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Loans Held-for-Investment, Net (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021USD ($)loan | Dec. 31, 2020USD ($)loan | Dec. 31, 2019USD ($) | |
Loans Held-for-Investment, Net | |||
Number of loans held for investment | loan | 12 | 18 | |
Unpaid principal balance of loans held for investment | $ 274.5 | $ 366.3 | |
Net unamortized deferred fees and costs | 1.2 | 1.1 | |
Allowance for loan losses | $ 4.2 | $ 4.8 | |
Reasonable and supportable forecast period used for determining CECL reserves | 1 year | ||
Charge off rate for forecasted period | 0.03% | 0.06% | |
Charge off rate for the remaining period | 0.02% | ||
Loans Held for Investment | |||
Transfers of financial assets accounted for as secured borrowings | |||
Loan portfolio transferred to third party | $ 81.5 | ||
Other Liabilities | |||
Transfers of financial assets accounted for as secured borrowings | |||
Secured borrowing | $ 73.3 | ||
Loans Held for Investment | |||
Loans Held-for-Investment, Net | |||
Number of delinquent loans | loan | 1 | 1 | |
Charge off rate for forecasted period | 0.15% | 0.36% | |
Charge off rate for the remaining period | 0.09% | 0.09% | |
Loans held for investment, delinquent | $ 14.7 | $ 14.7 | |
Number of loans on nonaccrual status | loan | 1 | 1 | |
Loans, non-accrual status | $ 14.7 | $ 14.7 | |
Specific reserve for loan | 3.7 | 3.7 | |
Amortized cost of loans held for investment, current | 258.6 | 350.5 | |
Loans originated in 2021 | $ 231.5 | ||
Loans originated in 2020 | $ 0 | ||
Loans originated in 2019 | $ 28.3 | ||
Loans Held for Investment | Maximum | |||
Loans Held-for-Investment, Net | |||
Term of loans | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Provision for Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Components of Provision for Credit Losses | |||
Provision (benefit) for loan losses | $ (610) | $ 3,739 | $ 875 |
Provision (benefit) for risk-sharing obligations | (12,677) | 33,740 | 6,398 |
Provision (benefit) for credit losses | $ (13,287) | $ 37,479 | $ 7,273 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill (Detail) $ in Millions | 12 Months Ended | |
Dec. 31, 2021segment | Oct. 01, 2021USD ($) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Number of reporting units | segment | 1 | |
Market capitalization in excess net asset value | $ | $ 2.4 | |
Market capitalization in excess net asset value, percentage | 173.00% |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Loans Held-for-Sale (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Loans Held for Sale | ||
Loans Held-for-Sale | ||
Period of originated loans within which they are transferred or sold | 60 days | |
Loans held for sale carried at lower of cost or fair value | $ 0 | $ 0 |
Loans, non-accrual status | $ 0 | $ 0 |
Mortgage Loans | ||
Loans Held-for-Sale | ||
Period of originated loans within which they are transferred or sold | 60 days |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Share-Based Payment (Detail) | 12 Months Ended |
Dec. 31, 2021 | |
Stock Option | |
Fair value assumptions, Black-Scholes | |
Expiration period | 10 years |
Vesting period | 3 years |
Restricted Stock Units (RSUs) | PSP | |
Fair value assumptions, Black-Scholes | |
Vesting period | 3 years |
Restricted Shares | Officers And Employees | |
Fair value assumptions, Black-Scholes | |
Vesting period | 3 years |
Restricted Shares | Officers And Employees | Minimum | |
Fair value assumptions, Black-Scholes | |
Vesting period | 3 years |
Restricted Shares | Non-Employee Directors | |
Fair value assumptions, Black-Scholes | |
Vesting period | 1 year |
Restricted Shares | Production Personnel | Minimum | |
Fair value assumptions, Black-Scholes | |
Vesting period | 3 years |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Net Warehouse Interest Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Loans Held for Sale | |||
Net Warehouse Interest Income | |||
Warehouse interest income | $ 42,480 | $ 53,090 | $ 48,211 |
Warehouse interest expense | (28,084) | (35,154) | (46,294) |
Net warehouse interest income | 14,396 | 17,936 | 1,917 |
Loans Held for Investment | |||
Net Warehouse Interest Income | |||
Warehouse interest income | 12,406 | 17,741 | 32,059 |
Warehouse interest expense | (4,694) | (6,351) | (8,277) |
Net warehouse interest income | 7,712 | 11,390 | 23,782 |
Secured Borrowings | |||
Net Warehouse Interest Income | |||
Warehouse interest income | 1,748 | 3,449 | 3,549 |
Warehouse interest expense | $ (1,748) | $ (3,449) | $ (3,549) |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash Flows (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | ||||
Cash and cash equivalents | $ 305,635 | $ 321,097 | $ 120,685 | $ 90,058 |
Restricted cash | 42,812 | 19,432 | 8,677 | 20,821 |
Pledged cash and cash equivalents (NOTE 9) | 44,733 | 17,473 | 7,204 | 9,469 |
Total cash, cash equivalents, restricted cash, and restricted cash equivalents | $ 393,180 | $ 358,002 | $ 136,566 | $ 120,348 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contracts with Customers and Asset Management Fees (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Contracts with Customers | |||
Revenue from contracts with customer | $ 363,524,000 | $ 125,635,000 | $ 127,484,000 |
Cash and Cash Equivalents | |||
Cash equivalents | $ 0 | 0 | |
Asset management fees | |||
Compliance period for properties held in the LIHTC fund | 15 years | ||
Asset management fee receivable | $ 42,300,000 | ||
Loan Origination Fees | Loan Origination and Debt Brokerage Fees, Net | |||
Contracts with Customers | |||
Revenue from contracts with customer | 186,986,000 | 64,528,000 | 75,599,000 |
Property Sales Broker Fees | Property Sales Broker Fees | |||
Contracts with Customers | |||
Revenue from contracts with customer | 119,981,000 | 38,108,000 | 30,917,000 |
Investment management fees, application fees, subscription revenues, revenues from LIHTC operations, and other | Other Revenues | |||
Contracts with Customers | |||
Revenue from contracts with customer | $ 56,557,000 | $ 22,999,000 | $ 20,968,000 |
MORTGAGE SERVICING RIGHTS - Fai
MORTGAGE SERVICING RIGHTS - Fair Value Disclosures (Detail) - MSRs - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Servicing | ||
Fair value of the MSRs | $ 1.3 | $ 1.1 |
Sensitivity Analysis of Fair Value, example 1, impact of percent adverse change in discount rate, percent | 1.00% | |
Decrease in fair value as a result of 100 basis point increase in discount rate | $ 38.4 | |
Sensitivity Analysis of Fair Value, example 2, impact of percent adverse change in discount rate, percent | 2.00% | |
Decrease in fair value as a result of 200 basis point increase in discount rate | $ 74.3 |
MORTGAGE SERVICING RIGHTS - Sch
MORTGAGE SERVICING RIGHTS - Schedule of Activity Related to MSRs (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Mortgage Servicing Rights | |||
Beginning balance | $ 862,813 | ||
Ending balance | 953,845 | $ 862,813 | |
Servicing portfolio loans unpaid principal balance | 115,700,564 | 107,211,972 | $ 93,225,169 |
MSRs | |||
Mortgage Servicing Rights | |||
Beginning balance | 862,813 | 718,799 | |
Additions, following the sale of loan | 313,376 | 321,225 | |
Amortization | (176,428) | (149,888) | |
Pre-payments and write-offs | (45,916) | (27,323) | |
Ending balance | $ 953,845 | $ 862,813 |
MORTGAGE SERVICING RIGHTS - Sum
MORTGAGE SERVICING RIGHTS - Summary of Components of Net Carrying Value of Acquired and Originated MSRs (Detail) - MSRs - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Mortgage Servicing Rights Acquired and Originated | ||
Gross value | $ 1,548,870 | $ 1,394,901 |
Accumulated amortization | (595,025) | (532,088) |
Net carrying value | $ 953,845 | $ 862,813 |
MORTGAGE SERVICING RIGHTS - S_2
MORTGAGE SERVICING RIGHTS - Schedule of Expected Amortization of MSRs (Detail) - MSRs - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Future amortization | ||
2022 | $ 175,191 | |
2023 | 163,741 | |
2024 | 143,803 | |
2025 | 122,262 | |
2026 | 102,269 | |
Thereafter | 246,579 | |
Net carrying value | $ 953,845 | $ 862,813 |
MORTGAGE SERVICING RIGHTS - Pre
MORTGAGE SERVICING RIGHTS - Prepayment fees and Other information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Escrow earnings and other interest income | |||
Servicing | |||
Escrow earnings | $ 5.6 | $ 14.9 | $ 51.4 |
MSRs | |||
Servicing | |||
Expected amortization period for net carrying value | 7 years 6 months | ||
MSRs | Other Revenues | |||
Servicing | |||
Prepayment fees | $ 40.1 | $ 22 | $ 26.8 |
GUARANTY OBLIGATION AND ALLOW_3
GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS - Schedule of Activity Related to Guaranty Obligation (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS | ||
Guaranty obligation, net of accumulated amortization - beginning balance | $ 52,306 | $ 54,695 |
Additions, following the sale of loan | 5,607 | 5,755 |
Amortization | (10,535) | (9,612) |
Other | 1,468 | |
Guaranty obligation, net of accumulated amortization - ending balance | $ 47,378 | $ 52,306 |
GUARANTY OBLIGATION AND ALLOW_4
GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS - Summary of Allowance for Risk-Sharing Obligations (Detail) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021USD ($)loan | Dec. 31, 2020USD ($)loan | Dec. 31, 2019USD ($) | |
Allowance for Risk-Sharing Contracts | |||
Beginning balance | $ 75,313 | $ 11,471 | |
Adjustment related to adoption of CECL | 31,570 | ||
Provision (benefit) for risk-sharing obligations | (12,677) | 33,740 | $ 6,398 |
Other | (1,468) | ||
Ending balance | $ 62,636 | $ 75,313 | 11,471 |
Number of defaulted loans | loan | 3 | 2 | |
Amount of specific reserves placed on defaulted at risk loans | $ 10,300 | $ 8,300 | |
Charge off rate for forecasted period | 0.03% | 0.06% | |
Reversion period used for determining CECL reserves | 1 year | ||
Charge off rate for the remaining period | 0.02% | ||
At risk servicing portfolio | $ 115,700,564 | $ 107,211,972 | $ 93,225,169 |
Fannie Mae DUS program | |||
Allowance for Risk-Sharing Contracts | |||
Maximum quantifiable contingent liability associated with guarantees | 10,100,000 | 9,000,000 | |
Fannie Mae DUS Program | |||
Allowance for Risk-Sharing Contracts | |||
At risk servicing portfolio | 48,000,000 | ||
CECL reserve for at risk servicing portfolio | $ 52,300 | $ 67,000 | |
Weighted average remaining life of the at risk servicing portfolio | 7 years 6 months |
SERVICING - (Detail)
SERVICING - (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Servicing | |||
Servicing portfolio loans unpaid principal balance | $ 115,700,564 | $ 107,211,972 | $ 93,225,169 |
Loans serviced | |||
Servicing | |||
Servicing portfolio loans unpaid principal balance | 115,700,000 | 107,200,000 | |
Custodial escrow accounts | $ 3,700,000 | $ 3,100,000 |
DEBT - Summary Information (Det
DEBT - Summary Information (Detail) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Feb. 28, 2022 | Dec. 31, 2021USD ($) | Dec. 31, 2021USD ($)facilityitemloan | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Warehouse notes payable | |||||
Outstanding Balance | $ 1,941,572 | $ 1,941,572 | $ 2,517,156 | ||
Warehouse Facilities | |||||
Warehouse notes payable | |||||
Committed Amount | 2,859,810 | 2,859,810 | 2,404,810 | ||
Uncommitted Amount | 3,215,000 | 3,215,000 | 3,140,000 | ||
Total Facility Capacity | 6,074,810 | 6,074,810 | 5,544,810 | ||
Outstanding Balance | 1,941,572 | 1,941,572 | 2,517,156 | ||
Interest expense | 34,500 | 45,000 | $ 58,100 | ||
Debt issuance costs | (875) | (875) | (945) | ||
Facility fees | 3,800 | 4,100 | 4,900 | ||
Loans Held for Sale | |||||
Warehouse notes payable | |||||
Interest expense | 28,084 | 35,154 | 46,294 | ||
Loans Held for Sale | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 2,375,000 | 2,375,000 | 2,075,000 | ||
Uncommitted Amount | 3,215,000 | 3,215,000 | 3,065,000 | ||
Total Facility Capacity | 5,590,000 | 5,590,000 | 5,140,000 | ||
Outstanding Balance | 1,761,332 | 1,761,332 | 2,383,858 | ||
Loans Held for Sale | Agency Warehouse Facility #4 | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 350,000 | 350,000 | |||
Loans Held for Investment | |||||
Warehouse notes payable | |||||
Interest expense | 4,694 | 6,351 | $ 8,277 | ||
Loans Held for Investment | Interim Warehouse Facility #2 | Interim Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 100,000 | $ 100,000 | |||
National Banks | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Number of credit facilities | facility | 7 | ||||
National Banks | Alliant Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 30,000 | $ 30,000 | |||
Total Facility Capacity | 30,000 | 30,000 | |||
Outstanding Balance | $ 8,296 | $ 8,296 | |||
Maturity date | Apr. 30, 2022 | Apr. 30, 2022 | |||
Acquisition adjustments | $ 0 | ||||
National Banks | Alliant Warehouse Facility | Daily LIBOR | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 3.00% | ||||
National Banks | Alliant Warehouse Facility | Daily LIBOR | Minimum | |||||
Warehouse notes payable | |||||
Interest rate floor | 1.50% | ||||
National Banks | Loans Held for Sale | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | $ 2,375,000 | $ 2,375,000 | 2,075,000 | ||
Uncommitted Amount | 1,715,000 | 1,715,000 | 1,565,000 | ||
Total Facility Capacity | 4,090,000 | 4,090,000 | 3,640,000 | ||
Outstanding Balance | 575,026 | 575,026 | 1,658,773 | ||
National Banks | Loans Held for Sale | Agency Warehouse Facility #1 | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 425,000 | 425,000 | 425,000 | ||
Total Facility Capacity | 425,000 | 425,000 | 425,000 | ||
Outstanding Balance | 34,032 | $ 34,032 | $ 83,336 | ||
Maturity date | Oct. 24, 2022 | ||||
Advances made as a percentage of the loan balance | 100.00% | ||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #1 | Agency Warehouse Facility | 30-day LIBOR | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 1.40% | ||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #1 | Agency Warehouse Facility | Adjusted Term SOFR | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 1.30% | ||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #2 | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 700,000 | $ 700,000 | $ 700,000 | ||
Uncommitted Amount | 300,000 | 300,000 | 300,000 | ||
Total Facility Capacity | 1,000,000 | 1,000,000 | 1,000,000 | ||
Outstanding Balance | 147,055 | $ 147,055 | $ 460,388 | ||
Maturity date | Apr. 14, 2022 | ||||
Advances made as a percentage of the loan balance | 100.00% | ||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #2 | Agency Warehouse Facility | 30-day LIBOR | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 1.30% | 1.40% | |||
National Banks | Loans Held for Sale | Agency Warehouse Facility #3 | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 600,000 | $ 600,000 | $ 600,000 | ||
Uncommitted Amount | 265,000 | 265,000 | 265,000 | ||
Total Facility Capacity | 865,000 | 865,000 | 865,000 | ||
Outstanding Balance | 156,705 | $ 156,705 | $ 410,546 | ||
Maturity date | May 14, 2022 | ||||
Advances made as a percentage of the loan balance | 100.00% | ||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #3 | Agency Warehouse Facility | 30-day LIBOR | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 1.30% | 1.15% | |||
National Banks | Loans Held for Sale | Agency Warehouse Facility #3 | Agency Warehouse Facility | 30-day LIBOR | Minimum | |||||
Warehouse notes payable | |||||
Interest rate floor | 0.00% | ||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #4 | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 350,000 | $ 350,000 | $ 350,000 | ||
Total Facility Capacity | 350,000 | 350,000 | 350,000 | ||
Outstanding Balance | 45,337 | $ 45,337 | $ 181,996 | ||
Maturity date | Jun. 22, 2022 | ||||
Advances made as a percentage of the loan balance | 100.00% | ||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #4 | Agency Warehouse Facility | 30-day LIBOR | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 1.30% | 1.40% | |||
National Banks | Loans Held for Sale | Agency Warehouse Facility #4 | Agency Warehouse Facility | 30-day LIBOR | Minimum | |||||
Warehouse notes payable | |||||
Interest rate floor | 0.05% | ||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #4, Defaulted FHA Sublimit | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 75,000 | $ 75,000 | |||
National Banks | Loans Held for Sale | Agency Warehouse Facility #5 | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 1,000,000 | 1,000,000 | |||
Uncommitted Amount | 1,000,000 | 1,000,000 | $ 1,000,000 | ||
Total Facility Capacity | 1,000,000 | 1,000,000 | 1,000,000 | ||
Outstanding Balance | 175,608 | $ 175,608 | $ 522,507 | ||
Maturity date | Sep. 15, 2022 | ||||
Advances made as a percentage of the loan balance | 100.00% | ||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #5 | Agency Warehouse Facility | 30-day LIBOR | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 1.45% | ||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #5 | Agency Warehouse Facility | Adjusted Term SOFR | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 1.45% | ||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #6 | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 150,000 | $ 150,000 | |||
Uncommitted Amount | 100,000 | 100,000 | |||
Total Facility Capacity | 250,000 | $ 250,000 | |||
Maturity date | Mar. 5, 2022 | ||||
Advances made as a percentage of the loan balance | 100.00% | ||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #6 | Agency Warehouse Facility | 30-day LIBOR | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 1.40% | ||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #6 | Agency Warehouse Facility | 30-day LIBOR | Minimum | |||||
Warehouse notes payable | |||||
Interest rate floor | 0.25% | ||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #7 | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 150,000 | $ 150,000 | |||
Uncommitted Amount | 50,000 | 50,000 | |||
Total Facility Capacity | 200,000 | 200,000 | |||
Outstanding Balance | 16,289 | $ 16,289 | |||
Maturity date | Aug. 24, 2022 | ||||
Advances made as a percentage of the loan balance | 100.00% | ||||
National Banks | Loans Held for Sale | Agency Warehouse Facility #7 | Agency Warehouse Facility | 30-day LIBOR | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 1.30% | ||||
National Banks | Loans Held for Investment | Interim Warehouse Facility | |||||
Warehouse notes payable | |||||
Number of credit facilities | facility | 4 | ||||
Committed Amount | 454,810 | $ 454,810 | $ 329,810 | ||
Uncommitted Amount | 75,000 | ||||
Total Facility Capacity | 454,810 | 454,810 | 404,810 | ||
Outstanding Balance | 172,819 | 172,819 | 134,243 | ||
National Banks | Loans Held for Investment | Interim Warehouse Facility #1 | Interim Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 135,000 | 135,000 | 135,000 | ||
Total Facility Capacity | 135,000 | $ 135,000 | 135,000 | ||
Outstanding Balance | $ 71,572 | ||||
Maturity date | May 14, 2022 | ||||
National Banks | Loans Held for Investment | Interim Warehouse Facility #1 | Interim Warehouse Facility | Maximum | |||||
Warehouse notes payable | |||||
Term over which funding of first mortgage loans on multi-family real estate properties can be made using a combination of available cash and facility advances | 3 years | ||||
National Banks | Loans Held for Investment | Interim Warehouse Facility #1 | Interim Warehouse Facility | 30-day LIBOR | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 1.90% | 1.90% | |||
National Banks | Loans Held for Investment | Interim Warehouse Facility #1 | Interim Warehouse Facility | 30-day LIBOR | Minimum | |||||
Warehouse notes payable | |||||
Interest rate floor | 0.00% | ||||
National Banks | Loans Held for Investment | Interim Warehouse Facility #2 | Interim Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 100,000 | $ 100,000 | $ 100,000 | ||
Total Facility Capacity | 100,000 | $ 100,000 | 100,000 | ||
Outstanding Balance | $ 34,000 | ||||
Maturity date | Dec. 13, 2023 | Dec. 13, 2023 | |||
National Banks | Loans Held for Investment | Interim Warehouse Facility #2 | Interim Warehouse Facility | Maximum | |||||
Warehouse notes payable | |||||
Term over which funding of first mortgage loans on multi-family real estate properties can be made using a combination of available cash and facility advances | 3 years | ||||
National Banks | Loans Held for Investment | Interim Warehouse Facility #2 | Interim Warehouse Facility | 30-day LIBOR | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 1.65% | ||||
National Banks | Loans Held for Investment | Interim Warehouse Facility #2 | Interim Warehouse Facility | 30-day LIBOR | Minimum | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 1.65% | ||||
National Banks | Loans Held for Investment | Interim Warehouse Facility #2 | Interim Warehouse Facility | 30-day LIBOR | Maximum | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 2.00% | ||||
National Banks | Loans Held for Investment | Interim Warehouse Facility #2 | Interim Warehouse Facility | Adjusted Term SOFR | Minimum | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 1.35% | ||||
Interest rate floor | 0.00% | ||||
National Banks | Loans Held for Investment | Interim Warehouse Facility #2 | Interim Warehouse Facility | Adjusted Term SOFR | Maximum | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 1.85% | ||||
National Banks | Loans Held for Investment | Interim Warehouse Facility #3 | Interim Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 200,000 | $ 200,000 | $ 75,000 | ||
Uncommitted Amount | 75,000 | ||||
Total Facility Capacity | 200,000 | 200,000 | 150,000 | ||
Outstanding Balance | 153,009 | $ 153,009 | $ 8,861 | ||
Maturity date | Sep. 29, 2022 | ||||
National Banks | Loans Held for Investment | Interim Warehouse Facility #3 | Interim Warehouse Facility | Maximum | |||||
Warehouse notes payable | |||||
Term over which funding of first mortgage loans on multi-family real estate properties can be made using a combination of available cash and facility advances | 3 years | ||||
National Banks | Loans Held for Investment | Interim Warehouse Facility #3 | Interim Warehouse Facility | 30-day LIBOR | Minimum | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 1.75% | 1.75% | |||
National Banks | Loans Held for Investment | Interim Warehouse Facility #3 | Interim Warehouse Facility | 30-day LIBOR | Maximum | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 3.25% | 3.25% | |||
National Banks | Loans Held for Investment | Interim Warehouse Facility #4 | Interim Warehouse Facility | |||||
Warehouse notes payable | |||||
Committed Amount | 19,810 | $ 19,810 | $ 19,810 | ||
Total Facility Capacity | 19,810 | 19,810 | 19,810 | ||
Outstanding Balance | 19,810 | $ 19,810 | $ 19,810 | ||
Number of loans funded | loan | 1 | ||||
Maturity date | Oct. 1, 2022 | ||||
Number of financial covenants | item | 2 | ||||
National Banks | Loans Held for Investment | Interim Warehouse Facility #4 | Interim Warehouse Facility | 30-day LIBOR | |||||
Warehouse notes payable | |||||
Percentage added to reference rate | 3.00% | 3.00% | |||
National Banks | Loans Held for Investment | Interim Warehouse Facility #4 | Interim Warehouse Facility | 30-day LIBOR | Minimum | |||||
Warehouse notes payable | |||||
Interest rate floor | 4.50% | ||||
Fannie Mae | Fannie Mae Repurchase Agreement, Uncommitted Line and Open Maturity | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Uncommitted Amount | 1,500,000 | $ 1,500,000 | |||
Fannie Mae | Loans Held for Sale | Fannie Mae Repurchase Agreement, Uncommitted Line and Open Maturity | Agency Warehouse Facility | |||||
Warehouse notes payable | |||||
Uncommitted Amount | 1,500,000 | 1,500,000 | $ 1,500,000 | ||
Total Facility Capacity | 1,500,000 | 1,500,000 | 1,500,000 | ||
Outstanding Balance | $ 1,186,306 | $ 1,186,306 | $ 725,085 | ||
Advances made as a percentage of the loan balance | 99.00% |
DEBT - Covenants and Terms (Det
DEBT - Covenants and Terms (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Jun. 30, 2021 | |
Agency Warehouse Facilities and Interim Warehouse Facilities #1 and #2 | ||
Warehouse notes payable | ||
Minimum tangible net worth under covenant requirement | $ 200 | |
Percentage of equity issued by the company or its subsidiaries added to base amount to determine compliance with tangible net worth covenants | 75.00% | |
Minimum liquid asset to be maintained under financial covenants | $ 15 | |
Debt covenant, aggregate minimum unpaid principal amount of all mortgage loans comprising the company's consolidated servicing portfolio | 20,000 | |
Debt covenant, aggregate minimum unpaid principal amount of all Fannie Mae DUS mortgage loans comprising the company's consolidated servicing portfolio | $ 10,000 | |
Debt covenant, exclusion from servicing portfolio measure of loans past due period | 60 days | |
Debt covenant, maximum percentage of Fannie Mae DUS loans 60 days past due to total servicing portfolio | 3.50% | |
Maximum indebtedness to tangible net worth | 2.25 | |
Agency Warehouse Facility #5 | ||
Warehouse notes payable | ||
Minimum rolling four-quarter EBITDA to total debt service ratio | 2.75 | |
Interim Warehouse Facility #1 [Member] | ||
Warehouse notes payable | ||
Minimum rolling four-quarter EBITDA to total debt service ratio | 2 | |
Interim Warehouse Facility #4 | ||
Warehouse notes payable | ||
Minimum tangible net worth under covenant requirement | $ 200 | |
Percentage of equity issued by the company or its subsidiaries added to base amount to determine compliance with tangible net worth covenants | 75.00% | |
Minimum liquid asset to be maintained under financial covenants | $ 15 | |
Interim Warehouse Facility #2 [Member] | ||
Warehouse notes payable | ||
Minimum EBITDA to be maintained under financial covenants | $ 35 | |
Minimum debt service coverage ratio | 2.75 | |
Interim Warehouse Facility #3 [Member] | ||
Warehouse notes payable | ||
Minimum tangible net worth under covenant requirement | $ 200 | |
Percentage of equity issued by the company or its subsidiaries added to base amount to determine compliance with tangible net worth covenants | 75.00% | |
Minimum liquid asset to be maintained under financial covenants | $ 15 | |
Maximum indebtedness to tangible net worth | 3 | |
Minimum debt service coverage ratio | 2.75 | |
Alliant Warehouse Facility | ||
Warehouse notes payable | ||
Minimum tangible net worth under covenant requirement | $ 200 | |
Minimum liquid asset to be maintained under financial covenants | 10 | $ 5 |
Minimum annual cash flows | $ 15 |
DEBT - Notes Payable - Term Not
DEBT - Notes Payable - Term Note Payable (Detail) $ in Millions | Dec. 16, 2021USD ($)itemloan | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Nov. 07, 2018USD ($) |
Term Loan | ||||
Debt | ||||
Quarterly equal installments | $ 1.5 | $ 0.8 | ||
Credit Agreement | ||||
Debt | ||||
Number of financial covenants | item | 1 | |||
Credit Agreement | Minimum | ||||
Debt | ||||
Asset Coverage Ratio | 1.50 | |||
Credit Agreement | Term Loan | ||||
Debt | ||||
Amount of loan agreement | $ 600 | |||
Discount on issue of term loan (as a percent) | 0.25% | |||
Percentage of original principal amount required as quarterly installment | 0.25% | |||
Debt instrument maturity date | Dec. 16, 2028 | |||
Credit Agreement | Term Loan | Minimum | ||||
Debt | ||||
Number of additional term loans | loan | 1 | |||
Credit Agreement | Term Loan | Maximum | ||||
Debt | ||||
Maximum amount of all incremental term loans | $ 230 | |||
Maximum percentage of trailing four-quarter consolidated EBITDA limit for incremental term loan commitments | 100.00% | |||
Consolidated Corporate Leverage Ratio | 3 | |||
Credit Agreement | Term Loan | Adjusted Term SOFR | ||||
Debt | ||||
Percentage added to reference rate | 2.25% | |||
Credit Agreement | Term Loan | Adjusted Term SOFR | Minimum | ||||
Debt | ||||
Interest rate floor | 0.50% | |||
Credit Agreement | Prior Term Loan | ||||
Debt | ||||
Amount of loan agreement | $ 300 | |||
Repayment of previous term loan | 292.5 | |||
Credit Agreement | Prior Term Loan | Other operating expense | ||||
Debt | ||||
Loss on extinguishment of debt | $ 2.7 |
DEBT - Notes Payable - Summary
DEBT - Notes Payable - Summary (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Debt | ||
Unpaid principal balance | $ 2,687,623 | |
Carrying balance | 740,174 | $ 291,593 |
Term Loan | ||
Debt | ||
Quarterly equal installments | 1,500 | 800 |
Unpaid principal balance | 600,000 | 294,773 |
Unamortized debt discount | (1,491) | (1,026) |
Debt issuance costs | (8,914) | (2,154) |
Carrying balance | 589,595 | $ 291,593 |
Period for amounts drawn and repaid | 60 days | |
Alliant Note Payable | ||
Debt | ||
Unpaid principal balance | 145,175 | |
Fair value adjustments | 5,404 | |
Carrying balance | $ 150,579 | |
Stated interest rate | 4.75% |
DEBT - Notes Payable - Maturiti
DEBT - Notes Payable - Maturities (Detail) $ in Thousands | Dec. 31, 2021USD ($) |
Debt | |
2022 | $ 1,836,813 |
2023 | 110,290 |
2024 | 53,520 |
2025 | 26,000 |
2026 | 24,000 |
Thereafter | 637,000 |
Total | $ 2,687,623 |
ACQUISITIONS - Acquisition Acti
ACQUISITIONS - Acquisition Activity (Details) $ in Thousands | Dec. 16, 2021USD ($) | Dec. 31, 2021USD ($) | Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($)itemcompany | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Acquisitions | ||||||||
Number of acquisitions during the period | company | 4 | |||||||
Contingent consideration | $ 125,808 | $ 125,808 | $ 28,829 | $ 5,752 | ||||
Goodwill recognized | 698,635 | 698,635 | 248,958 | $ 180,424 | ||||
Intangible assets acquired | 183,900 | $ 183,900 | $ 1,900 | |||||
2021 Acquisitions | ||||||||
Acquisitions | ||||||||
Number of acquisitions during the period | item | 4 | |||||||
Cash consideration | $ 443,642 | |||||||
Stock consideration | 120,571 | |||||||
Contingent consideration | 93,304 | 93,304 | ||||||
Total consideration | 657,517 | |||||||
Assets acquired | 712,347 | 712,347 | ||||||
Liabilities assumed | 476,320 | 476,320 | ||||||
Noncontrolling interest recognized | 28,187 | 28,187 | ||||||
Goodwill recognized | 449,677 | 449,677 | ||||||
Acquisition #1 | ||||||||
Acquisitions | ||||||||
Cash consideration | $ 7,506 | |||||||
Contingent consideration | 5,229 | |||||||
Total consideration | 12,735 | |||||||
Assets acquired | 504 | |||||||
Goodwill recognized | $ 12,231 | |||||||
Acquisition #2 | ||||||||
Acquisitions | ||||||||
Cash consideration | $ 3,000 | |||||||
Contingent consideration | 2,275 | |||||||
Total consideration | 5,275 | |||||||
Goodwill recognized | $ 5,275 | |||||||
Acquisition #3 - Zellman & Associates | ||||||||
Acquisitions | ||||||||
Cash consideration | $ 53,459 | |||||||
Stock consideration | 5,250 | |||||||
Total consideration | 58,709 | |||||||
Assets acquired | 22,866 | |||||||
Liabilities assumed | 5,886 | |||||||
Noncontrolling interest recognized | 19,569 | |||||||
Goodwill recognized | 61,298 | |||||||
Intangible assets acquired | $ 14,600 | |||||||
Acquisition #3 - Zellman & Associates | Zellman | ||||||||
Acquisitions | ||||||||
Ownership interest acquired | 75.00% | |||||||
Acquisition #4 - Alliant Capital | ||||||||
Acquisitions | ||||||||
Cash consideration | $ 379,700 | 379,677 | ||||||
Stock consideration | 115,300 | 115,321 | ||||||
Contingent consideration | 100,000 | 85,800 | 85,800 | |||||
Total consideration | 580,800 | 580,798 | ||||||
Assets acquired | 688,977 | 688,977 | 688,977 | |||||
Liabilities assumed | 470,434 | 470,434 | 470,434 | |||||
Noncontrolling interest recognized | 8,618 | 8,618 | ||||||
Goodwill recognized | $ 370,873 | $ 370,873 | ||||||
Intangible assets acquired | $ 170,800 |
ACQUISITIONS - Alliant Capital
ACQUISITIONS - Alliant Capital (Details) $ in Thousands | Dec. 16, 2021USD ($)itemshares | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Acquisitions | ||||
Contingent consideration | $ 125,808 | $ 28,829 | $ 5,752 | |
Assets acquired | ||||
Other intangible assets | 183,900 | $ 1,900 | ||
Committed investments in tax credit equity | 177,322 | |||
Liabilities assumed | ||||
Commitments to fund tax credit equity investments | 162,747 | |||
Acquisition #4 - Alliant Capital | ||||
Acquisitions | ||||
Total consideration | $ 580,800 | 580,798 | ||
Cash consideration | $ 379,700 | 379,677 | ||
Common stock issued | shares | 808,698 | |||
Stock consideration | $ 115,300 | 115,321 | ||
Contingent consideration | 100,000 | 85,800 | ||
Estimated fair value of contingent liability | $ 85,800 | |||
Term of graded vesting sale restriction on shares issued | 4 years | |||
Number of annual vesting increments | item | 4 | |||
Annual vesting of graded sale restriction on common shares issued, percent | 25.00% | |||
Contingent consideration liability earnout period | 4 years | |||
Assets acquired | ||||
Cash and cash equivalents | $ 13,431 | |||
Restricted cash | 7,898 | |||
Other intangible assets | 170,800 | |||
Committed investments in tax credit equity | 261,936 | |||
Receivables, net | 103,439 | |||
Other assets | 131,473 | |||
Total assets acquired | 688,977 | 688,977 | ||
Liabilities assumed | ||||
Warehouse notes payable | 21,682 | |||
Note payable | 150,579 | |||
Commitments to fund tax credit equity investments | 244,329 | |||
Other liabilities | 53,844 | |||
Total liabilities assumed | $ 470,434 | $ 470,434 |
ACQUISITIONS - Pro Forma Inform
ACQUISITIONS - Pro Forma Information (Details) - Acquisition #4 - Alliant Capital - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Supplementary pro forma information | ||
Revenues | $ 1,387,227 | $ 1,187,820 |
Income from operations | 391,237 | 361,489 |
Walker and Dunlop net income | $ 293,062 | $ 277,400 |
Earnings per share | $ 8.90 | $ 8.62 |
Diluted earnings per share | $ 8.78 | $ 8.45 |
Weighted average earnings shares outstanding | 31,856 | 31,253 |
Weighted average diluted shares outstanding | 32,308 | 31,892 |
Acquisition-Related Adjustments | ||
Supplementary pro forma information | ||
Income from operations | $ (9,700) | $ (7,300) |
Walker and Dunlop net income | $ (21,600) | $ (12,900) |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Goodwill (Detail) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)company | Dec. 31, 2020USD ($) | |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Number of acquisitions during the period | company | 4 | |
Intangible assets acquired | $ 183,900 | $ 1,900 |
Weighted average amortization period | 14 years 1 month 6 days | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 248,958 | 180,424 |
Additions from acquisitions | 449,677 | 68,534 |
Impairment | 0 | 0 |
Ending balance | $ 698,635 | $ 248,958 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Contingent Consideration Liabilities (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Contingent consideration liabilities | ||
Beginning balance | $ 28,829 | $ 5,752 |
Additions | 93,304 | 27,645 |
Accretion and revaluation | 9,755 | 1,232 |
Payments | (6,080) | (5,800) |
Ending balance | $ 125,808 | $ 28,829 |
Maximum | ||
Contingent consideration liabilities | ||
Contingent consideration liability earnout period | 5 years |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||||
Loans held for sale | $ 1,811,586 | $ 2,449,198 | ||
Pledged securities | 148,996 | 137,236 | $ 121,767 | $ 116,331 |
Derivative assets | 37,364 | 49,786 | ||
Liabilities | ||||
Derivative liabilities | 6,403 | 5,066 | ||
Contingent consideration | 125,808 | 28,829 | $ 5,752 | |
Recurring Basis | ||||
Assets | ||||
Loans held for sale | 1,811,586 | 2,449,198 | ||
Pledged securities | 148,996 | 137,236 | ||
Derivative assets | 37,364 | 49,786 | ||
Total financial assets | 1,997,946 | 2,636,220 | ||
Liabilities | ||||
Derivative liabilities | 6,403 | 5,066 | ||
Contingent consideration | 125,808 | 28,829 | ||
Total financial liabilities | 132,211 | 33,895 | ||
Level 1 | Recurring Basis | ||||
Assets | ||||
Pledged securities | 44,733 | 17,473 | ||
Total financial assets | 44,733 | 17,473 | ||
Level 2 | Recurring Basis | ||||
Assets | ||||
Loans held for sale | 1,811,586 | 2,449,198 | ||
Pledged securities | 104,263 | 119,763 | ||
Total financial assets | 1,915,849 | 2,568,961 | ||
Level 3 | Recurring Basis | ||||
Assets | ||||
Derivative assets | 37,364 | 49,786 | ||
Total financial assets | 37,364 | 49,786 | ||
Liabilities | ||||
Derivative liabilities | 6,403 | 5,066 | ||
Contingent consideration | 125,808 | 28,829 | ||
Total financial liabilities | $ 132,211 | $ 33,895 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Fair Value Measurements | |
Amount of transfers between any of the levels within the fair value hierarchy | $ 0 |
Maximum | |
Fair Value Measurements | |
Contract term | 60 days |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Roll Forward of Derivative Instruments (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative assets and liabilities, net | ||
Beginning balance | $ 44,720 | $ 15,532 |
Settlements | (746,918) | (687,874) |
Realized gains recorded in earnings | 702,198 | 672,342 |
Unrealized gains recorded in earnings | 30,961 | 44,720 |
Ending balance | $ 30,961 | $ 44,720 |
FAIR VALUE MEASUREMENTS - Sch_2
FAIR VALUE MEASUREMENTS - Schedule of Significant Unobservable Inputs Used in the Measurement of the Fair Value of Level 3 Assets and Liabilities (Detail) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Fair Value Measurements | |||
Derivative assets | $ 37,364,000 | $ 49,786,000 | |
Derivative liabilities | 6,403,000 | 5,066,000 | |
Contingent consideration | 125,808,000 | 28,829,000 | $ 5,752,000 |
Recurring Basis | |||
Fair Value Measurements | |||
Derivative assets | 37,364,000 | 49,786,000 | |
Derivative liabilities | 6,403,000 | 5,066,000 | |
Contingent consideration | 125,808,000 | 28,829,000 | |
Recurring Basis | Level 3 | |||
Fair Value Measurements | |||
Derivative assets | 37,364,000 | 49,786,000 | |
Derivative liabilities | 6,403,000 | 5,066,000 | |
Contingent consideration | 125,808,000 | $ 28,829,000 | |
Recurring Basis | Level 3 | Discounted Cash Flow | Counterparty credit risk | |||
Fair Value Measurements | |||
Derivative assets | 37,364,000 | ||
Derivative liabilities | 6,403,000 | ||
Recurring Basis | Level 3 | Various | |||
Fair Value Measurements | |||
Contingent consideration | $ 125,808,000 | ||
Recurring Basis | Level 3 | Various | Probability of earnout achievement | Minimum | |||
Fair Value Measurements | |||
Contingent consideration liabilities, Measurement input | 0.88 | ||
Recurring Basis | Level 3 | Various | Probability of earnout achievement | Maximum | |||
Fair Value Measurements | |||
Contingent consideration liabilities, Measurement input | 1 | ||
Recurring Basis | Level 3 | Various | Probability of earnout achievement | Weighted Average | |||
Fair Value Measurements | |||
Contingent consideration liabilities, Measurement input | 0.92 |
FAIR VALUE MEASUREMENTS - Sch_3
FAIR VALUE MEASUREMENTS - Schedule of Carrying Amounts and the Fair Values of the Company's Financial Instruments (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Financial assets: | ||||
Cash and cash equivalents | $ 305,635 | $ 321,097 | $ 120,685 | $ 90,058 |
Restricted cash | 42,812 | 19,432 | 8,677 | 20,821 |
Pledged securities | 148,996 | 137,236 | 121,767 | $ 116,331 |
Loans held for sale | 1,811,586 | 2,449,198 | ||
Loans held for investment, net | 269,125 | 360,402 | ||
Derivative assets | 37,364 | 49,786 | ||
Financial liabilities: | ||||
Derivative liabilities | 6,403 | 5,066 | ||
Contingent consideration | 125,808 | 28,829 | $ 5,752 | |
Warehouse notes payable | 1,941,572 | 2,517,156 | ||
Note payable | 740,174 | 291,593 | ||
Carrying Amount | ||||
Financial assets: | ||||
Cash and cash equivalents | 305,635 | 321,097 | ||
Restricted cash | 42,812 | 19,432 | ||
Pledged securities | 148,996 | 137,236 | ||
Loans held for sale | 1,811,586 | 2,449,198 | ||
Loans held for investment, net | 269,125 | 360,402 | ||
Derivative assets | 37,364 | 49,786 | ||
Total financial assets | 2,615,518 | 3,337,151 | ||
Financial liabilities: | ||||
Derivative liabilities | 6,403 | 5,066 | ||
Contingent consideration | 125,808 | 28,829 | ||
Secured borrowings | 73,314 | |||
Warehouse notes payable | 1,941,572 | 2,517,156 | ||
Note payable | 740,174 | 291,593 | ||
Total financial liabilities | 2,813,957 | 2,915,958 | ||
Fair Value | ||||
Financial assets: | ||||
Cash and cash equivalents | 305,635 | 321,097 | ||
Restricted cash | 42,812 | 19,432 | ||
Pledged securities | 148,996 | 137,236 | ||
Loans held for sale | 1,811,586 | 2,449,198 | ||
Loans held for investment, net | 270,826 | 362,586 | ||
Derivative assets | 37,364 | 49,786 | ||
Total financial assets | 2,617,219 | 3,339,335 | ||
Financial liabilities: | ||||
Derivative liabilities | 6,403 | 5,066 | ||
Contingent consideration | 125,808 | 28,829 | ||
Secured borrowings | 73,314 | |||
Warehouse notes payable | 1,942,448 | 2,518,101 | ||
Note payable | 745,175 | 294,773 | ||
Total financial liabilities | $ 2,819,834 | $ 2,920,083 |
FAIR VALUE MEASUREMENTS - Gener
FAIR VALUE MEASUREMENTS - General information (Detail) | 12 Months Ended |
Dec. 31, 2021 | |
Loans Held for Sale | |
Other information | |
Period of originated loans within which they are transferred or sold | 60 days |
FAIR VALUE MEASUREMENTS - Sch_4
FAIR VALUE MEASUREMENTS - Schedule of Fair Value of Derivative Instruments and Loans Held for Sale (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative notional amount and balance sheet location | ||
Estimated Gain on Sale | $ 77,152 | $ 107,748 |
Total Fair Value Adjustment | 77,152 | 107,748 |
Derivative assets | 37,364 | 49,786 |
Derivative Liabilities | (6,403) | (5,066) |
Fair Value Adjustment to Loans Held for Sale | 46,191 | 63,028 |
Loans Held for Sale | ||
Derivative notional amount and balance sheet location | ||
Notional or Principal Amount | 1,765,395 | 2,386,169 |
Estimated Gain on Sale | 47,315 | 62,167 |
Interest Rate Movement | (1,124) | 861 |
Total Fair Value Adjustment | 46,191 | 63,028 |
Fair Value Adjustment to Loans Held for Sale | 46,191 | 63,028 |
Forward Sale Contracts | ||
Derivative notional amount and balance sheet location | ||
Notional or Principal Amount | 2,881,224 | 3,760,953 |
Interest Rate Movement | 5,728 | 836 |
Total Fair Value Adjustment | 5,728 | 836 |
Derivative assets | 10,838 | 5,891 |
Derivative Liabilities | (5,110) | (5,055) |
Rate Lock Commitments | ||
Derivative notional amount and balance sheet location | ||
Notional or Principal Amount | 1,115,829 | 1,374,784 |
Estimated Gain on Sale | 29,837 | 45,581 |
Interest Rate Movement | (4,604) | (1,697) |
Total Fair Value Adjustment | 25,233 | 43,884 |
Derivative assets | 26,526 | 43,895 |
Derivative Liabilities | $ (1,293) | $ (11) |
FANNIE MAE COMMITMENTS AND PL_3
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES - Commitments (Detail) - Fannie Mae $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Period of funding for collateral requirement | 48 months |
Money Market Funds | |
LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Restricted liquidity collateral reduction percentage | 5.00% |
Agency Mortgage Backed Securities | |
LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Restricted liquidity collateral reduction percentage | 4.00% |
New Tier 2 loans | |
LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Collateral requirements percentage | 0.75% |
DUS Risk-Sharing Obligations | |
LITIGATION, COMMITMENTS, AND CONTINGENCIES | |
Period of funding for collateral requirement | 48 months |
Amount of additional capital required to be funded over the next 48 months | $ 65.3 |
Net worth requirement | 258.2 |
Net worth | 722.4 |
Minimum liquid assets to be maintained to meet operational liquidity requirements | 51.1 |
Operational liquidity | $ 251.7 |
FANNIE MAE COMMITMENTS AND PL_4
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES - Pledged Securities at Fair Value (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Pledged Securities | ||||
Restricted cash | $ 3,779 | $ 4,954 | $ 2,150 | $ 3,029 |
Money market funds | 40,954 | 12,519 | 5,054 | 6,440 |
Total pledged cash and cash equivalents | 44,733 | 17,473 | 7,204 | 9,469 |
Agency MBS | 104,263 | 119,763 | 114,563 | 106,862 |
Pledged securities, at fair value | $ 148,996 | $ 137,236 | $ 121,767 | $ 116,331 |
FANNIE MAE COMMITMENTS AND PL_5
FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES - Agency Multifamily Mortgage Based Securities Pledged Securities (Detail) - Agency Mortgage Backed Securities - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Investments in Agency debt securities | ||
Fair Value | $ 104,263 | $ 119,763 |
Amortized Cost | 100,847 | 117,136 |
Total gains for securities with net gains in AOCI | 3,636 | 2,669 |
Total losses for securities with net losses in AOCI | (220) | (42) |
Fair value of securities with unrealized losses | 4,757 | 12,267 |
Maturities - Fair Value | ||
After one year through five years | 2,416 | |
After five years through ten years | 73,025 | |
After ten years | 28,822 | |
Total | 104,263 | 119,763 |
Maturities - Amortized Cost | ||
After one year through five years | 2,412 | |
After five years through ten years | 72,224 | |
After ten years | 26,211 | |
Total | $ 100,847 | $ 117,136 |
SHARE-BASED PAYMENT - Plan Info
SHARE-BASED PAYMENT - Plan Information (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021shares | Dec. 31, 2021itemshares | Dec. 31, 2020itemshares | Dec. 31, 2019shares | |
Restricted Stock Units (RSUs) | ||||
Share-Based Payment | ||||
Granted (in shares) | 263,845 | |||
Performance shares vested | 55,483 | |||
2020 Equity Incentive Plan | ||||
Share-Based Payment | ||||
Stock authorized for issuance | 10,500,000 | |||
Number of shares remaining available for grant | 1,700,000 | |||
PSP | Restricted Stock Units (RSUs) | Officers And Employees | ||||
Share-Based Payment | ||||
Granted (in shares) | 300,000 | 300,000 | 300,000 | |
2017 PSP | ||||
Share-Based Payment | ||||
Number of performance targets achieved at some level | item | 3 | |||
Number of performance targets deemed probable of achievement at some level | item | 3 | |||
2017 PSP | Restricted Stock Units (RSUs) | ||||
Share-Based Payment | ||||
Performance shares vested | 100,000 | |||
2018 PSP | ||||
Share-Based Payment | ||||
Number of performance targets deemed probable of achievement at some level | item | 2 | |||
2019 PSP | ||||
Share-Based Payment | ||||
Number of performance targets deemed probable of achievement at some level | item | 3 | 3 | ||
2020 PSP | ||||
Share-Based Payment | ||||
Number of performance targets deemed probable of achievement at some level | item | 3 |
SHARE-BASED PAYMENT - Compensat
SHARE-BASED PAYMENT - Compensation Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Compensation costs | |||
Share-based compensation | $ 36,582 | $ 28,319 | $ 24,075 |
Excess tax benefit recognized | 8,620 | 7,273 | 4,632 |
Restricted Shares | |||
Compensation costs | |||
Share-based compensation | 25,520 | 18,924 | 17,818 |
Stock Option | |||
Compensation costs | |||
Share-based compensation | 71 | 625 | |
PSP | Restricted Stock Units (RSUs) | |||
Compensation costs | |||
Share-based compensation | $ 11,062 | $ 9,324 | $ 5,632 |
SHARE-BASED PAYMENT - Plan Acti
SHARE-BASED PAYMENT - Plan Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Restricted Shares | |||
Restricted Shares - Shares | |||
Nonvested at beginning of period (in shares) | 1,122,614 | ||
Granted (in shares) | 447,619 | ||
Vested (in shares) | (403,473) | ||
Forfeited (in shares) | (44,067) | ||
Nonvested at end of period (in shares) | 1,122,693 | 1,122,614 | |
Restricted Shares - Weighted Average Grant-date Fair Value | |||
Nonvested at beginning of period (in dollars per share) | $ 62.41 | ||
Granted (in dollars per share) | 101.48 | $ 74.75 | $ 48.39 |
Vested (in dollars per share) | 61.16 | ||
Forfeited (in dollars per share) | 79.65 | ||
Nonvested at end of period (in dollars per share) | $ 77.70 | $ 62.41 | |
Additional disclosures | |||
Fair value, vested shares (in dollars) | $ 44,600 | $ 30,400 | $ 30,500 |
Unrecognized compensation | |||
Unrecognized compensation for outstanding restricted shares/units | $ 51,100 | ||
Unrecognized compensation cost, period for recognition | 3 years 8 months 12 days | ||
Stock Option | |||
Options | |||
Outstanding at beginning of period (in shares) | 461,340 | ||
Exercised (in shares) | (227,334) | ||
Outstanding at end of period (in shares) | 234,006 | 461,340 | |
Exercisable at end of period (in shares) | 234,006 | ||
Weighted Average Exercise Price | |||
Outstanding at beginning of period (in dollars per share) | $ 22.51 | ||
Exercised (in dollars per share) | 22.78 | ||
Outstanding at end of period (in dollars per share) | 22.25 | $ 22.51 | |
Exercisable at end of period (in dollars per share) | $ 22.25 | ||
Weighted-Average Remaining Contract Life (Years) | |||
Exercisable at end of period (in years) | 3 years 8 months 12 days | ||
Aggregate Intrinsic Value | |||
Exercisable at end of period (in dollars) | $ 30,101 | ||
Intrinsic value of options exercised, (in dollars) | 17,500 | $ 21,600 | 2,700 |
Cash received from the exercise of options | $ 0 | $ 0 | $ 0 |
Restricted Stock Units (RSUs) | |||
Restricted Shares - Shares | |||
Nonvested at beginning of period (in shares) | 770,493 | ||
Granted (in shares) | 263,845 | ||
Vested (in shares) | (55,483) | ||
Forfeited (in shares) | (196,709) | ||
Cancelled (in shares) | (3,600) | ||
Nonvested at end of period (in shares) | 778,546 | 770,493 | |
Restricted Shares - Weighted Average Grant-date Fair Value | |||
Nonvested at beginning of period (in dollars per share) | $ 50.37 | ||
Granted (in dollars per share) | 101.04 | $ 50.26 | $ 52.84 |
Vested (in dollars per share) | 100.36 | ||
Forfeited (in dollars per share) | 49.80 | ||
Cancelled (in dollars per share) | 67.13 | ||
Nonvested at end of period (in dollars per share) | $ 67.66 | $ 50.37 | |
Additional disclosures | |||
Fair value, vested shares (in dollars) | $ 5,600 | $ 17,500 | $ 26,600 |
Unrecognized compensation | |||
Unrecognized compensation for outstanding restricted shares/units | $ 10,500 | ||
Unrecognized compensation cost, period for recognition | 1 year 6 months |
EARNINGS PER SHARE AND STOCKH_3
EARNINGS PER SHARE AND STOCKHOLDERS EQUITY - Basic and Diluted EPS (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Calculation of basic EPS | |||
Walker and Dunlop net income | $ 265,762 | $ 246,177 | $ 173,373 |
Less: dividends and undistributed earnings allocated to participating securities | 8,837 | 7,337 | 5,649 |
Net income applicable to common stockholders | $ 256,925 | $ 238,840 | $ 167,724 |
Basic weighted average shares outstanding | 31,081 | 30,444 | 29,913 |
Basic EPS | $ 8.27 | $ 7.85 | $ 5.61 |
Calculation of diluted EPS | |||
Add: reallocation of dividends and undistributed earnings based on assumed conversion | $ 93 | $ 120 | $ 126 |
Net income allocated to common stockholders | $ 257,018 | $ 238,960 | $ 167,850 |
Add: weighted-average diluted non-participating securities | 452 | 639 | 902 |
Weighted average diluted shares outstanding | 31,533 | 31,083 | 30,815 |
Diluted EPS | $ 8.15 | $ 7.69 | $ 5.45 |
EARNINGS PER SHARE AND STOCKH_4
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY - Restricted Stock Awards and Share Repurchases (Detail) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Feb. 28, 2022USD ($)$ / shares | Feb. 28, 2021USD ($) | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)item$ / sharesshares | |
Repurchases of common stock | |||||
Reduction of equity for retirement of repurchased shares | $ 18,872 | $ 45,774 | $ 30,676 | ||
Dividends | |||||
Cash dividends paid per common share | $ / shares | $ 2 | $ 1.44 | $ 1.20 | ||
Dividend declared per share | $ / shares | $ 0.60 | ||||
Dividend payment date | Mar. 10, 2022 | ||||
Restricted Shares | |||||
Repurchases of common stock | |||||
Repurchased and retired shares | shares | 150 | 179 | 200 | ||
Weighted average market price of shares repurchased and retired (in dollars per share) | $ / shares | $ 109.57 | $ 66.38 | $ 54.02 | ||
Restricted Stock Units (RSUs) | |||||
Repurchases of common stock | |||||
Repurchased and retired shares | shares | 24 | 99 | |||
Weighted average market price of shares repurchased and retired (in dollars per share) | $ / shares | $ 100.36 | $ 78.79 | |||
Share Repurchase Program 2022 | Common shares | |||||
Repurchases of common stock | |||||
Share repurchase program, period for repurchases | 12 months | ||||
Share Repurchase Program 2022 | Common shares | Maximum | |||||
Repurchases of common stock | |||||
Repurchase authorization | $ 75,000 | ||||
Share Repurchase Program 2021 | Common shares | |||||
Repurchases of common stock | |||||
Share repurchase program, period for repurchases | 12 months | ||||
Authorized share repurchase capacity remaining | $ 75,000 | ||||
Share Repurchase Program 2021 | Common shares | Maximum | |||||
Repurchases of common stock | |||||
Repurchase authorization | $ 75,000 | ||||
Share repurchase program 2020 | |||||
Repurchases of common stock | |||||
Reduction of equity for retirement of repurchased shares | $ 26,100 | ||||
Share repurchase program 2020 | Common shares | |||||
Repurchases of common stock | |||||
Repurchased and retired shares | shares | 459 | ||||
Weighted average market price of shares repurchased and retired (in dollars per share) | $ / shares | $ 56.77 | ||||
Share repurchase program 2019 | |||||
Repurchases of common stock | |||||
Reduction of equity for retirement of repurchased shares | $ 6,600 | ||||
Share repurchase program 2019 | Common shares | |||||
Repurchases of common stock | |||||
Repurchased and retired shares | shares | 135 | ||||
Weighted average market price of shares repurchased and retired (in dollars per share) | $ / shares | $ 48.52 | ||||
Noncontrolling interest holder | |||||
Related party transaction | |||||
Number of affiliates to whom advances were made | item | 1 | ||||
Advance made to affiliate | $ 1,700 |
EARNINGS PER SHARE AND STOCKH_5
EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY - Other Equity Related Transactions (Detail) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($)shareholder | |
Noncontrolling interests | ||
Number of noncontrolling interest shareholders | shareholder | 2 | |
Aggregate consideration for purchase of noncontrolling interest | $ 32,000 | |
Cash paid for purchase of noncontrolling interest | 10,400 | |
Reduction in receivables | 5,700 | |
Stock issued for purchase of noncontrolling interests | $ 5,900 | |
Contingent consideration for purchase of noncontrolling interest | 10,000 | |
Reduction in APIC, excess of purchase price over noncontrolling interest balance | $ 24,100 | |
Employees | ||
Acquisitions | ||
Stock issued in noncash settlement of accrued liability | 9,600 | |
2021 Acquisitions | ||
Acquisitions | ||
Stock consideration | $ 120,571 |
INCOME TAXES - Provision (Detai
INCOME TAXES - Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current | |||
Federal | $ 40,025 | $ 26,854 | $ 28,150 |
State | 12,181 | 10,294 | 6,959 |
Total current expense | 52,206 | 37,148 | 35,109 |
Deferred | |||
Federal | 26,630 | 37,354 | 17,484 |
State | 7,592 | 9,811 | 4,528 |
Total deferred expense (benefit) | 34,222 | 47,165 | 22,012 |
Income tax expense | 86,428 | 84,313 | 57,121 |
Excess tax benefit recognized | $ 8,620 | $ 7,273 | $ 4,632 |
INCOME TAXES - Statutory Reconc
INCOME TAXES - Statutory Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation | |||
Statutory federal expense (35%) | $ 73,932 | $ 69,356 | $ 48,374 |
Statutory state income tax expense, net of federal tax benefit | 16,409 | 13,828 | 9,281 |
Other | (3,913) | 1,129 | (534) |
Income tax expense | $ 86,428 | $ 84,313 | $ 57,121 |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred Tax Assets: | ||
Compensation related | $ 5,811 | $ 8,760 |
Credit losses | 16,748 | 20,163 |
Total deferred tax assets | 22,559 | 28,923 |
Deferred Tax Liabilities: | ||
Mark-to-market of derivatives and loans held for sale | (16,874) | (22,367) |
Mortgage servicing rights related | (208,718) | (180,129) |
Acquisition related | (12,977) | (9,594) |
Depreciation | (2,317) | (2,267) |
Other | (6,913) | (224) |
Total deferred tax liabilities | (247,799) | (214,581) |
Deferred tax liabilities, net | (225,240) | $ (185,658) |
Deferred tax assets recognized, not included as component of deferred tax expense | $ 5,400 |
SEGMENTS - Concentration of Ris
SEGMENTS - Concentration of Risk (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
SEGMENTS | ||
Maximum borrower/key principal exposure (as a percent) | 2.00% | 3.00% |
SEGMENTS - Product Concentratio
SEGMENTS - Product Concentration (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Product concentration | |||
Servicing portfolio loans unpaid principal balance | $ 115,700,564 | $ 107,211,972 | $ 93,225,169 |
Fannie Mae DUS Program | |||
Product concentration | |||
Servicing portfolio loans unpaid principal balance | 53,401,457 | 48,818,185 | 40,049,095 |
Freddie Mac | |||
Product concentration | |||
Servicing portfolio loans unpaid principal balance | 37,138,836 | 37,072,587 | 32,583,842 |
Ginnie Mae-HUD | |||
Product concentration | |||
Servicing portfolio loans unpaid principal balance | 9,889,289 | 9,606,506 | 9,972,989 |
Life insurance companies and other | |||
Product concentration | |||
Servicing portfolio loans unpaid principal balance | $ 15,270,982 | $ 11,714,694 | $ 10,619,243 |
SEGMENTS - Geographic Concentra
SEGMENTS - Geographic Concentration (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Geographic concentration | |||
Percentage of unpaid principal balance of the loans serviced for others | 100.00% | 100.00% | 100.00% |
Maximum | |||
Geographic concentration | |||
Threshold percentage, unpaid principal balance and related servicing revenues by geographical area | 5.00% | 5.00% | 5.00% |
California | |||
Geographic concentration | |||
Percentage of unpaid principal balance of the loans serviced for others | 16.10% | 16.20% | 16.20% |
Florida | |||
Geographic concentration | |||
Percentage of unpaid principal balance of the loans serviced for others | 10.00% | 10.40% | 9.40% |
Texas | |||
Geographic concentration | |||
Percentage of unpaid principal balance of the loans serviced for others | 8.60% | 8.80% | 9.30% |
Georgia | |||
Geographic concentration | |||
Percentage of unpaid principal balance of the loans serviced for others | 5.90% | 5.90% | 5.80% |
All Other States | |||
Geographic concentration | |||
Percentage of unpaid principal balance of the loans serviced for others | 59.40% | 58.70% | 59.30% |
LEASES - Operating Leases (Deta
LEASES - Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Leases | |||
Operating lease right-of-use assets | $ 24,825 | $ 17,405 | $ 22,307 |
Operating lease, right-of-use asset, Statement of Financial Position | Other assets | Other assets | Other assets |
Operating lease liabilities | $ 29,523 | $ 22,579 | $ 28,156 |
Operating lease liability, Statement of Financial Position | Other liabilities | Other liabilities | Other liabilities |
Operating leases, weighted average remaining lease term | 4 years | 3 years 2 months 12 days | 3 years 8 months 12 days |
Operating lease, weighted average discount rate (as a percent) | 3.30% | 4.60% | 4.70% |
Operating Lease Expense | |||
Single lease cost | $ 9,435 | $ 8,856 | $ 7,593 |
Cash paid for amounts included in the measurement of lease liabilities | 9,617 | 8,833 | 8,218 |
ROU assets obtained in exchange for new lease obligations | $ 13,215 | $ 1,488 | $ 3,013 |
LEASES - Future Operating Lease
LEASES - Future Operating Lease Commitments (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Maturities of lease liabilities | |||
2022 | $ 10,412 | ||
2023 | 9,228 | ||
2024 | 3,585 | ||
2025 | 2,223 | ||
Thereafter | 4,094 | ||
Total | 29,542 | ||
Less imputed interest | (19) | ||
Total | $ 29,523 | $ 22,579 | $ 28,156 |
OTHER OPERATING EXPENSES (Detai
OTHER OPERATING EXPENSES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
OTHER OPERATING EXPENSES | |||
Professional fees | $ 26,920 | $ 18,345 | $ 20,896 |
Travel and entertainment | 7,203 | 4,685 | 10,759 |
Rent | 11,262 | 10,486 | 9,136 |
Marketing and preferred broker | 12,526 | 9,139 | 8,534 |
Office expenses | 15,056 | 17,360 | 9,972 |
All other | 25,688 | 9,567 | 7,299 |
Total | $ 98,655 | $ 69,582 | $ 66,596 |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Committed investments in tax credit equity | $ 177,322 | |
Other assets | 364,746 | $ 134,438 |
Total assets | 5,205,989 | 4,650,975 |
Liabilities | ||
Commitments to fund tax credit equity investments | 162,747 | |
Total liabilities | 3,627,782 | 3,454,753 |
Other Liabilities | 425,912 | $ 313,193 |
Consolidated VIEs | Other Assets | ||
Assets | ||
Real-estate owned investment | 54,900 | |
Consolidated VIEs | Other Liabilities | ||
Liabilities | ||
Mortgage debt on real estate investment | 36,500 | |
Nonconsolidated VIEs | ||
Assets | ||
Committed investments in tax credit equity | 177,322 | |
Other assets | 74,997 | |
Total assets | 252,319 | |
Liabilities | ||
Commitments to fund tax credit equity investments | 162,747 | |
Total liabilities | 162,747 | |
Maximum exposure | $ 252,319 |
RELATED PARTY TRANSACTION (Deta
RELATED PARTY TRANSACTION (Details) $ in Millions | Dec. 31, 2021USD ($) |
Affordable Housing Project Partners | Receivables, net | |
Related party transactions | |
Related party loans outstanding | $ 36.6 |