Walker & Dunlop, Inc

Please stand by. Good day and welcome to the Q4 2025 Walker and Dunlop, Inc. earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Kelsey Duffy. Please go ahead.

Thank you, Cynthia. Good morning, everyone. Thank you for joining Walker and Dunlop's fourth quarter and full year 2025 earnings call. I have with me this morning our chairman and CEO, Willie Walker, and our CFO, Greg Florkowski. This call is being webcast live on our website, and a recording will be available later today. Both our earnings press release and website provide details on accessing the archived webcast. This morning, we posted our earnings release and presentation to the investor relations section of our website, www.walkerdunlop.com. These slides serve as a reference point for some of what Willie and Greg will touch on during the call. Please also note that we will reference the non-GAAP financial metrics, adjusted EBITDA, and adjusted core EPS during the course of this call. Please refer to the appendix of the earnings presentation for a reconciliation of these non-GAAP financial metrics. Investors are urged to carefully read the forward-looking statements language in our earnings release. Statements made on this call which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe our current expectations and actual results may differ materially. Walker & Dunlop is under no obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise, and we expressly disclaim any obligation to do so. More detailed information about risk factors can be found in our annual and quarterly reports filed with the SEC. I'll now turn the call over to Willie.

Thank you, Kelsey, and good morning, everyone, and thank you for joining us. Walker & Dunlop's fourth quarter and full year results demonstrate continued success in our real estate capital markets business with significant and sustained growth in transaction volumes. Our people and brand are winning, demonstrated by transaction volumes, market share, and year-end lead tables. At the same time, our Q4 and annual results were impacted by loan buybacks and valuation marks on our real estate-owned portfolio. Notwithstanding the charges, WND's core business and market presence is extremely strong. We have an incredible team and brand that is meeting our clients' needs and winning. WND's capital markets transaction volumes grew throughout the year, from $7 billion in Q1 to $18 billion in Q4. That 161% growth in transaction volumes was due to a recovering market and the strength of WND's team and brand. And we start 2026 with an extremely strong pipeline of both flow business as well as some very large portfolio financings. WMD is very well positioned to benefit from increased deal flow across the commercial real estate industry as the down cycle of the great tightening wanes and the up cycle of an expansionary macro economy sets in. Walker & Deloff's multifamily property sales volumes grew from $1.8 billion in Q1 2025 to $4.5 billion in Q4. up 146%. Our team increased their share of institutional multifamily sales from 8.7% in 2024 to 10.2% in 2025, ending the year as the fourth largest multifamily broker, according to Real Estate Alert. The breadth of WND's service offering allowed us to finance 42% of our 2025 multifamily property sales for the buyer. This collaboration between our sales and financing teams was an important part of how we ended 2025 as the largest Fannie Mae dust lender for the seventh consecutive year and moved up with Freddie Mac to be the third largest Optigo lender by growing volumes 58% in 2025. We finished the year number one with Fannie Mae, number three with Freddie Mac, and is the second largest GSE loan originator in the nation with 11.2% market share and $17.8 billion of total lending volume. W&D's people, brand, and technology are winning in one of the most competitive markets in commercial real estate. As we mentioned in our Q3 earnings call, We were asked by Freddie Mac to investigate a portfolio of loans totaling $100 million where the borrower committed fraud by submitting false documents to Walker & Dunlop and Freddie Mac. We retained excellent outside counsel to conduct the investigation, and several conclusions were reached. First, not a single employee at Walker & Dunlop had knowledge of or participated in the borrower's fraudulent flip transactions. However, while investigating the loans, it was determined that a Walker & Dunlop banking team had not adhered to our loan origination policies and procedures. This team is no longer at Walker & Dunlop. Due to the investigation findings, Walker & Dunlop, at our own initiative and expense, did further loan diligence on the approximately 266 loans originated by that team. Through that review, we found one additional portfolio of loans totaling $34 million that where it appeared the borrower misrepresented financial information. We presented the results of our investigation to Freddie Mac in January of 2026 and offered to indemnify them for losses arising out of the aggregate $134 million of loans, which led to the $29 million of loan loss expense we booked in the fourth quarter. Freddie Mac is performing an additional review of our work on that portfolio, and we expect them to finalize their diligence over the next 90 days. We have built Walker & Dunlop over the past 89 years as not only one of the best companies in our industry, but one with impeccable credit standards and ethics. Our track record speaks for itself. But what we found through this investigation did not hold to our high standards. Yet let me also be very clear about how we responded to these issues. We acted swiftly, hired skilled outside counsel, acted with full transparency, took accountability for what transpired, and improved our people, processes, and systems as a result. While we can never say we will not have further loan losses or fraudulent borrowers, these improvements make us an even better company going forward. As Greg will discuss in a moment, we completed our annual business strategy review and made two important decisions that also impacted our Q4 and full year financial results. First, we shifted our strategy for 2024 loan repurchases from long-term hold to near-term exit and mark down the carrying value of several assets in the fourth quarter. Last year was spent stabilizing the properties behind those loans, and we are now focused on selling them and recovering the capital we invested in the buybacks. Second, we took an impairment charge on affordable assets we hold in the Walker & Dunlop Affordable Equity Platform. We evaluated the cost of operating these assets and their long-term returns and decided to sell the assets. The impairment charges we took this quarter reduced the carrying value of these assets to fair value. While loan buybacks and additional provision expenses are never welcome, we are taking several charges this quarter to set W&D up for growth and success in 2026 and beyond. Excluding impairment and repurchase-related charges, Q4 generated $1.04 in diluted earnings per share, reflecting the increasing strength of our capital markets business. We also ended the year with $299 million of cash on our balance sheet, plenty to absorb these loan repurchases and continue investing in the growth of our company. I'm going to turn the call over to Greg now to discuss our financials in more detail, and I'll return to talk about what we are seeing to begin 2026 and our go-forward strategy, which is both focused and exciting.