Walker & Dunlop, Inc.: Form 10-Q for the period ended Mar 31, 2026

The following discussion should be read in conjunction with the historical financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q (“Form 10-Q”). The following discussion contains, in addition to historical information, forward-looking statements that include risks and uncertainties. Our actual results may differ materially from those expressed or contemplated in those forward-looking statements as a result of certain factors, including those set forth under the headings “Forward-Looking Statements” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”).

Forward-Looking Statements

Some of the statements in this Form 10-Q of Walker & Dunlop, Inc. and subsidiaries (the “Company,” “Walker & Dunlop,” “we,” “us,” or “our”) may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans, or intentions.

The forward-looking statements contained in this Form 10-Q reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions, and changes in circumstances that may cause actual results to differ significantly from those expressed or contemplated in any forward-looking statement. Statements regarding the following subjects, among others, may be forward-looking:

• the future of the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac,” and together with Fannie Mae, the “GSEs”), including their existence, relationship to the U.S. federal government, recapitalization, origination capacities, and their impact on our business;
• our obligations to repurchase or indemnify the GSEs for loans we originate under their programs and any potential losses we may incur as a result;
• changes to and trends in the interest rate environment and its impact on our business;
• our growth strategy;
• our projected financial condition, liquidity, and results of operations;
• our ability to obtain and maintain warehouse and other loan funding arrangements;
• our ability to make future dividend payments or repurchase shares of our common stock;
• availability of and our ability to attract and retain qualified personnel and our ability to develop and retain relationships with borrowers, key principals, and lenders;
• degree and nature of our competition;
• changes in governmental regulations, policies, and programs, tax laws and rates, tariffs and global trade policies, and similar matters, and the impact of such regulations, policies, and actions;
• our ability to comply with the laws, rules, and regulations applicable to us, including additional regulatory requirements for broker-dealer and other financial services firms;
• trends in the commercial real estate finance market, commercial real estate values, the credit and capital markets, or the general economy, including rent growth and demand for multifamily housing and low-income housing tax credits;
• general volatility of the capital markets and the market price of our common stock; and
• other risks and uncertainties associated with our business described in our 2025 Form 10-K and our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange Commission.

While forward-looking statements reflect our good-faith projections, assumptions, and expectations, they do not guarantee future results. Furthermore, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by applicable law. For a further discussion of these and other factors that could cause future results to differ materially from those expressed or contemplated in any forward-looking statements, see Part I, Item 1A. Risk Factors in our 2025 Form 10-K.

Business

Overview

Walker & Dunlop is one of the largest commercial real estate capital markets platforms. We are focused on originating, selling, and servicing loans, with a market-leading position in the U.S. multifamily sector. Our longstanding multifamily focus has established us as one of the largest multifamily property sales brokerage platforms in the U.S., and perennially as one of the largest lenders for Fannie Mae and Freddie Mac (collectively, the “GSEs”), and the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (together with Ginnie Mae, “HUD”) (collectively, the “Agencies”). We also provide investment management and other ancillary services to commercial real estate owners and investors.

Our business is driven by two primary sources of revenues:

(i) Transaction related revenues, which includes loan origination and debt brokerage fees, property sales fees, and other revenues earned when we facilitate financing or execute transactions for our customers. These revenues are influenced by market conditions and commercial real estate transaction activity.

(ii) Recurring fee-based revenues, which includes loan servicing fees, asset management fees, and related income streams generated from our loan servicing portfolio and assets under management. These revenues are contractual in nature, more stable than transaction-related revenues, and largely tied to the size and composition of our loan servicing portfolio and assets under management.

A core element of our strategy is to convert transaction activity into contractual, long-duration, recurring revenue streams. When we originate loans—particularly through Agency programs—we typically retain the right to service those loans, which increases the size of our commercial real estate loan servicing portfolio, and generates ongoing cash flows over the life of the loan. Our strategy has established Walker & Dunlop as the sixth largest commercial real estate loan servicer in the U.S. As of March 31, 2026, we serviced $146.4 billion of commercial real estate loans (primarily multifamily) that provide durable, largely prepayment protected cash flows. This servicing platform is a foundational component of our business that supports our ability to invest in growth initiatives.

Business Mix and Growth Strategy

Our business is currently driven primarily by our multifamily-focused lending, brokerage, property sales and servicing activities in the United States. These operations benefit from our long-standing relationships with the Agencies and other institutional capital providers, as well as our scale within the multifamily sector.

Over the past several years, we have been investing in expanding and diversifying our service offerings to commercial real estate owners and investors, including appraisal, valuation, research, investment banking, and additional investment management services. We have also been expanding our lending, brokerage and property sales capabilities across other commercial real estate asset classes, including hospitality, industrial, and digital infrastructure and expanding our presence and service offerings in Europe to better serve many of our institutional clients that operate global investment strategies. These initiatives represent long-term growth opportunities. Many of these businesses are currently operating at or near break-even as we continue to invest in their development. As a result, our near-term financial performance continues to be driven predominantly by our core multifamily lending, brokerage, property sales services, loan servicing, and investment management platform.

We are also investing in proprietary technology and software solutions to enhance our competitive position and support the long-term evolution of our business. These investments are designed to increase our touchpoints with current and prospective clients, improve the delivery and scalability of our existing and future services, and drive operating efficiencies across our business. As advancements in artificial intelligence and related technologies continue to reshape financial and real estate services, we believe it is critical to invest proactively to ensure we remain an essential intermediary to our clients and well-positioned within the evolving transaction ecosystem. Our technology initiatives are intended to strengthen client engagement, improve data-driven decision-making, and enhance our ability to originate transactions and grow our servicing and asset management platforms over time.

Segment Overview

We manage our business through three reportable segments:

(i) Capital Markets, which primarily generates transaction-based revenues through loan origination, debt brokerage, property sales, and related services.

(ii) Servicing & Asset Management, which primarily generates recurring, fee-based revenue from servicing our commercial real estate loan portfolio and managing third-party capital through our investment management operations.

(iii) Corporate, which includes our treasury activities and corporate-level functions that support the overall business.

These reportable segments are determined based on the product or service provided and reflect the manner in which management evaluates the Company’s financial performance. The segments and related services are further described in the following paragraphs.

Capital Markets (“CM”)

CM provides a comprehensive range of commercial real estate finance products to our customers, including Agency lending, debt brokerage, property sales, appraisal and valuation services, and real estate-related investment banking and advisory services, including housing market research. Our long-established relationships with the Agencies and institutional investors enable us to offer a broad range of loan products and services to our customers. We provide property sales services to owners and developers of multifamily and hospitality properties and commercial real estate appraisals for various lenders and investors. Additionally, we earn subscription fees for our housing related research. The primary services within CM are described below. For additional information on our CM services, refer to Item 1. Business in our 2025 Form 10-K.

Agency Lending

We are one of the leading lenders with the Agencies, where we originate and sell multifamily, manufactured housing communities, student housing, affordable housing, seniors housing, and small-balance multifamily loans.

We recognize Loan origination and debt brokerage fees, net and the Fair value of expected net cash flows from servicing, net of guaranty obligation from our lending with the Agencies when we commit to both originate a loan with a borrower and sell that loan to an investor. The loan origination and debt brokerage fees, net and the fair value of expected net cash flows from servicing, net of guaranty obligation for these transactions reflect the fair value attributable to loan origination fees, premiums on the sale of loans, net of any co-broker fees, and the fair value of the expected net cash flows associated with servicing the loans, net of any guaranty obligations retained.

We generally fund our Agency loan products through warehouse facility financing and sell them to investors in accordance with the related loan sale commitment, which we obtain concurrent with rate lock. Proceeds from the sale of the loan are used to pay off the warehouse facility borrowing. The sale of the loan is typically completed within 60 days after the loan is closed. We earn net warehouse interest income or expense from loans held for sale while they are outstanding equal to the difference between the note rate on the loan and the cost of borrowing of the warehouse facility. Our cost of borrowing can exceed the note rate on the loan, resulting in a net interest expense.

Our loan commitments and loans held for sale are currently not exposed to unhedged interest rate risk during the loan commitment, closing, and delivery process. The sale or placement of each loan to an investor is negotiated at the same time as we establish the coupon rate for the loan. We also seek to mitigate the risk of a loan not closing by collecting good faith deposits from the borrower. The deposit is returned to the borrower only after the loan is closed. Any potential loss from a catastrophic change in the property condition while the loan is held for sale using warehouse facility financing is mitigated through property insurance equal to replacement cost. We are also protected contractually from an investor’s failure to purchase the loan. We have experienced an insignificant number of failed deliveries in our history and have incurred insignificant losses on such failed deliveries.

We have been and may in the future be obligated to repurchase loans that are originated for the Agencies’ programs if certain representations and warranties that we provide in connection with such originations are breached. NOTE 2 and NOTE 5 of our 2025 Form 10-K and NOTE 5 to the condensed consolidated financial statements above contain disclosures regarding our repurchase activity and the accounting for such repurchases. At times, we may agree to indemnify the relevant Agency pursuant to a forbearance and indemnification agreement. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Credit Quality, Allowance for Risk-Sharing Obligations, and Loan Repurchases” below for additional details.

Debt Brokerage

Our mortgage bankers who focus on debt brokerage are engaged by borrowers to work with banks and various other institutional lenders to find the most appropriate debt and/or equity solution for the borrowers’ needs. These financing solutions are funded directly by the lender, and we receive an origination fee for our services. On occasion, we service the loans after they are originated by the lender.

Property Sales

We offer nationwide property sales brokerage services to owners and developers of multifamily and hospitality properties that are seeking to sell these properties. Through these property sales brokerage services, we seek to maximize proceeds and certainty of closure for our clients using our knowledge of the commercial real estate and capital markets and relying on our experienced transaction professionals. We receive a sales commission for brokering the sale of these assets on behalf of our clients, and we often are able to provide financing for the purchaser of the properties through our Agency lending or debt brokerage services. Our geographical reach covers many major markets in the United States, and our service offerings include sales of land, student, senior housing, hospitality, and affordable properties. We have broadened the types of assets we sell, increased the number of property sales brokers, and expanded the geographical reach of this platform through hiring and acquisitions and intend to continue this expansion in support of our growth strategy. Our property sales services are executed through our subsidiary Walker & Dunlop Investment Sales, LLC (“WDIS”).

Housing Market Research and Real Estate Investment Banking Services

We are a nationally recognized housing market research and investment banking firm that enhances the information we provide to our clients and increases our access to high-quality market insights in many areas of the housing market, including construction trends, demographics, housing demand and mortgage finance. We generate revenues through the sale of housing market research data and related publications to banks, investment banks and other financial institutions. We are also a leading independent investment bank providing comprehensive M&A advisory services and capital markets solutions to our clients within the housing and commercial real estate sectors. We sell our research and investment banking services through our subsidiary WDIB, LLC d/b/a Zelman & Associates (“Zelman”).

Appraisal and Valuation Services

We offer multifamily appraisal and valuation services. We leverage technology and data science to dramatically improve the consistency, transparency, and speed of multifamily property appraisals in the U.S. through our proprietary technology and provides appraisal services to a client list that includes many national commercial real estate lenders. We also provide quarterly and annual valuation services to some of the largest institutional commercial real estate investors in the country. The growth strategy has resulted in an increase in our market share of the appraisal market over the past several years. Additionally, these valuation specialists provide support for and insight to our Agency lending and property sales professionals. We offer our appraisal and valuation services through our subsidiary, Apprise.

Servicing & Asset Management (“SAM”)

SAM focuses on servicing and asset-managing the portfolio of loans we originate and sell to the Agencies, broker to certain life insurance companies, originate loans through our principal lending and investing activities, and manage through our tax credit equity funds focused on the affordable housing sector and other commercial real estate. We earn servicing fees for overseeing the loans in our servicing portfolio and asset management fees for the capital invested in our funds. Additionally, we earn revenue through net interest income on the loans held for investment and the associated warehouse interest expense. The primary services within SAM are described below. For additional information on our SAM services, refer to Item 1. Business in our 2025 Form 10-K.

Loan Servicing

We retain servicing rights and asset management responsibilities on substantially all of our Agency loan products that we originate and sell and generate cash revenues from the fees we receive for servicing the loans, from the placement fees on escrow deposits held on behalf of borrowers, and from other ancillary fees relating to servicing the loans. Servicing fees, which are based on servicing fee rates set at the time an investor agrees to purchase the loan and on the unpaid principal balance of the loan, are generally paid monthly for the duration of the loan. Our Fannie Mae and Freddie Mac servicing arrangements generally provide prepayment protection to us in the event of a voluntary prepayment. For loans serviced outside of Fannie Mae and Freddie Mac, we typically do not have similar prepayment protections. For most loans we service under the Fannie Mae Delegated Underwriting and Servicing (“DUS”) program, we are required to advance the principal and interest payments and guarantee fees for four months should a borrower cease making payments under the terms of their loan, including while that loan is in forbearance. After advancing for four months, we may request reimbursement by Fannie Mae for the principal and interest advances, and Fannie Mae will reimburse us for these advances within 60 days of the request. Under the Ginnie Mae program, we are obligated to advance the principal and interest payments and guarantee fees until the HUD loan is brought current, fully paid or assigned to HUD. We are eligible to assign a loan to HUD once it is in default for 30 days. If the loan is not brought current, or the loan otherwise defaults, we are not reimbursed for our advances until such time as we assign the loan to HUD and file a claim for mortgage insurance benefits or work out a payment modification for the borrower. For loans in default, we may repurchase those loans out of the Ginnie Mae security, at which time our advance requirements cease, and we may then modify and resell the loan or assign the loan back to HUD and be reimbursed for our advances. We are not obligated to make advances on the loans we service under the Freddie Mac Optigo® program or our bank and life insurance company servicing agreements.

We have risk-sharing obligations on substantially all loans we originate under the Fannie Mae DUS program. When a Fannie Mae DUS loan is subject to full risk-sharing, we absorb losses on the first 5% of the unpaid principal balance (“UPB”) of a loan at the time of loss settlement, and above 5% we share a percentage of the loss with Fannie Mae, with our maximum loss capped at 20% of the original unpaid principal balance of the loan (subject to doubling or tripling if the loan does not meet specific underwriting criteria or if the loan defaults within 12 months of its sale to Fannie Mae). Our full risk-sharing is currently limited to loans up to $400 million, which equates to a maximum loss per loan of $80 million (such exposure would occur in the event that the underlying collateral is determined to be completely without value at the time of loss). For loans in excess of $400 million, we receive modified risk-sharing. We also may request modified risk-sharing at the time of origination on loans below $400 million, which reduces our potential risk-sharing losses from the levels described above if we do not believe that we are being fully compensated for the risks of the transactions. The full risk-sharing limit has varied over time. Accordingly, loans originated in prior years may have been subject to modified risk-sharing losses at lower levels. In limited circumstances we have agreed, and may in the future agree, with Fannie Mae to increase our loss sharing up to 100% of a loan’s UPB in lieu of the risk-sharing agreement described above.

Our servicing fees for risk-sharing loans include compensation for the risk-sharing obligations and are larger than the servicing fees we would receive from Fannie Mae for loans with no risk-sharing obligations. We receive a lower servicing fee for modified risk-sharing than for full risk-sharing. For brokered loans that we also service, we collect ongoing servicing fees while those loans remain in our servicing portfolio. The scope of services we perform for brokered capital sources is typically limited to cashiering only; as a result, the servicing fees we typically earn on brokered loan transactions are lower than the servicing fees we earn on Agency loans.

Investment Management

We are the operator of a private commercial real estate investment adviser focused on the management of senior debt, mezzanine debt, preferred equity, and joint venture (“JV”) equity investments in commercial real estate funds. Our current regulatory assets under management (“AUM”) is $2.6 billion primarily consisting of four equity investment vehicles: Fund IV, Fund V, Fund VI, and Fund VII (the “Equity Funds”) and two credit funds, Debt Fund I and Debt Fund II (the “Debt Funds” and, together with the Equity Funds, the “Funds”), as well as separate accounts managed primarily for life insurance companies and a preferred equity JV with a large Canadian pension fund. AUM for the Funds and for the separate accounts consists of both unfunded commitments and funded investments. Unfunded commitments are highest during the fundraising and investment phases. We receive management fees based on both unfunded commitments and funded investments. Additionally, with respect to the Funds, we receive a percentage of the return above the fund return hurdle rate specified in the fund agreements. We are a co-investor in the Funds and certain separate accounts. We offer these investment management services through our subsidiary, WDIP.

Affordable Housing Real Estate Services

We provide affordable housing investment management and real estate services through our subsidiaries, collectively known as Walker & Dunlop Affordable Equity (“WDAE”). We are one of the largest tax credit syndicators and affordable housing developers in the U.S. and provide alternative investment management services focused on the affordable housing sector through LIHTC syndication and development of affordable housing projects through joint ventures. Our affordable housing investment management team works with our developer clients to identify properties that will generate LIHTCs and meet our affordable investors’ needs, and forms limited partnership funds (“LIHTC funds”) with third-party investors that invest in the limited partnership interests in these properties and earns a syndication fee for these services. We serve as the general partner of these LIHTC funds, and we receive fees, such as asset management fees, and a portion of refinance and disposition proceeds as compensation for its work as the general partner of the fund.

We invest, as the managing or non-managing member of joint ventures, with developers of affordable housing projects that are partially funded through LIHTCs. When possible, we syndicate the LIHTC investment necessary to build properties through these joint venture partnerships. The joint ventures earn developer fees, and we receive the portion of the economic benefits commensurate with our investment in the joint ventures, including cash flows from operating activities and sales/refinancing.

We provide LIHTC investment management services and make non-managing investments in developer joint ventures through our subsidiaries, collectively known as Walker & Dunlop Affordable Equity (“WDAE”).

Corporate

The Corporate segment consists primarily of our treasury operations and other corporate-level activities. Our treasury operations include monitoring and managing our liquidity and funding requirements, including our corporate debt. Other major corporate-level functions include our equity-method investments, accounting, information technology, legal, human resources, marketing, internal audit, and various other corporate groups. For additional information on our Corporate segment, refer to Item 1. Business in our 2025 Form 10-K.

Basis of Presentation

Walker & Dunlop, Inc. is a holding company. The accompanying condensed consolidated financial statements include all the accounts of the Company and its wholly owned subsidiaries, and all intercompany transactions have been eliminated. We conduct the majority of our operations through Walker & Dunlop, LLC, our operating company.

During the fourth quarter of 2025, we granted profit interest awards to certain non-executive employees of Walker & Dunlop, LLC to better align their incentive compensation with our goals. The profit interest awards allocate 15% of the income before taxes of a wholly owned subsidiary to these employees. The wholly owned subsidiary is focused on debt financing transactions closed by these employees and is part of our CM segment.

Critical Accounting Estimates

Our condensed consolidated financial statements have been prepared in accordance with GAAP, which require management to make estimates based on certain judgments and assumptions that are inherently uncertain and affect reported amounts. The estimates and assumptions are based on historical experience and other factors management believes to be reasonable. Actual results may differ from those estimates and assumptions, and the use of different judgments and assumptions may have a material impact on our results. The following critical accounting estimates involve significant estimation uncertainty that may have or is reasonably likely to have a material impact on our financial condition or results of operations. Additional information about our critical accounting estimates and other significant accounting policies is discussed in NOTE 2 of the consolidated financial statements in our 2025 Form 10-K.

Mortgage Servicing Rights (“MSRs”). MSRs are recorded at fair value at loan sale. The fair value at loan sale is based on estimates of expected net cash flows associated with the servicing rights and takes into consideration an estimate of loan prepayment. Initially, the fair value amount is included as a component of the derivative asset fair value at the loan commitment date. The estimated net cash flows from servicing, which includes assumptions for discount rate, placement fees on escrow accounts (“placement fees”), prepayment speeds, and servicing costs, are discounted using a discounted cash flow model at a rate that reflects the credit and liquidity risk of the MSR over the estimated life of the underlying loan. The discount rates used throughout the periods presented for all MSRs were between 8-14% and varied based on the loan type. The life of the underlying loan is estimated giving consideration to the prepayment provisions in the loan and assumptions about loan behaviors around those provisions. Our model for MSRs assumes no prepayment prior to the expiration of the prepayment provisions and full prepayment of the loan at or near the point when the prepayment provisions have expired. The estimated net cash flows also include cash flows related to the future earnings from placement of escrow accounts associated with servicing the loans. We include a servicing cost assumption to account for our expected costs to service a loan. The estimated placement fee rate associated with servicing the loan increases estimated cash flows, and the estimated future cost to service the loan decreases estimated future cash flows. The servicing cost assumption has had a de minimis impact on the estimate historically. We record an individual MSR asset for each loan at loan sale.

The assumptions used to estimate the fair value of capitalized MSRs are developed internally and are periodically compared to assumptions used by other market participants. Due to the relatively few transactions in the multifamily MSR market and the lack of significant changes in assumptions by market participants, we have experienced limited volatility in the assumptions historically and do not expect to observe significant changes in the foreseeable future, including the assumption that most significantly impacts the estimate: the discount rate. We actively monitor the assumptions used and make adjustments when market conditions change, or other factors indicate such adjustments are warranted. Over the past several years, we have adjusted the placement fee rate assumption several times to reflect the current and expected future earnings rate projected for the life of the MSR as the interest rate environment has experienced significant volatility over the past several years.

Subsequent to loan origination, the carrying value of the MSR is amortized over the expected life of the loan. We engage a third party to assist in determining an estimated fair value of our existing and outstanding MSRs on at least a semi-annual basis, primarily for financial statement disclosure purposes. Changes in our discount rate and placement fee rate assumptions on existing and outstanding MSRs may materially impact the fair value of our MSRs (NOTE 3 of the condensed consolidated financial statements details the portfolio-level impact of hypothetical changes in the discount rate and placement fee rate).

Allowance for Risk-Sharing Obligations. This reserve liability (referred to as “allowance”) for risk-sharing obligations relates to our Fannie Mae at-risk and Freddie Mac SBL servicing portfolios and is presented as a separate liability on our balance sheets. We record an estimate of the loss reserve for the current expected credit losses (“CECL”) for all loans in these servicing portfolios. For those loans that are collectively evaluated, we use the weighted-average remaining maturity method (“WARM”). WARM uses an average annual loss rate that contains loss content over multiple vintages and loan terms and is used as a foundation for estimating the collective reserves. The average annual loss rate is applied to the estimated unpaid principal balance over the contractual term, adjusted for estimated prepayments and amortization to arrive at the allowance on loans that are collectively evaluated (“CECL Allowance”) as described further below.

One of the key components of a WARM calculation is the runoff rate, which is the expected rate at which loans in the current portfolio will amortize and prepay in the future based on our historical prepayment and amortization experience. We group loans by similar origination dates (vintage) and contractual maturity terms for purposes of calculating the runoff rate. We originate 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 runoff rates applied to each vintage and contractual maturity term are determined using historical data; however, changes in prepayment and amortization behavior may significantly impact the estimate. We have not experienced significant changes in the runoff rate since we implemented CECL in 2020.

The weighted-average annual loss rate is calculated using a ten-year look-back period, utilizing the average portfolio balance and settled losses for each year. A ten-year lookback period is used as we believe 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. As the weighted-average annual loss rate utilizes a rolling ten-year look-back period, the loss rate used in the estimate often changes as loss data from earlier periods in the look-back period continue to roll off as new loss data are added. For example, in the first quarter of 2024, loss data from earlier periods in the look-back period with significantly higher losses rolled off and were replaced with more recent loss data with fewer losses, resulting in the weighted-average historical annual loss rate changing from 0.6 basis points to 0.3 basis points.

We currently use one year for our reasonable and supportable forecast period (“forecast period”), as we believe forecasts beyond one year are inherently less reliable. During the forecast period we apply an adjusted loss factor based on generally available economic and unemployment forecasts and a blended loss rate from historical periods that we believe reflect the forecasts. We revert to the historical loss rate over a one-year period on a straight-line basis. Over the past couple of years, the loss rate used in the forecast period has been updated to reflect our expectations of the economic conditions impacting the multifamily sector over the coming year in relation to the historical period. For example, over the past two years, we updated the loss rate used in the forecast period several times within a range of 2.1 basis points to 2.3 basis points. The forecast loss rate fluctuating within a tight range reflects our relatively unchanged view of the uncertainty of the evolving macroeconomic conditions facing the multifamily sector. We made multiple revisions to the loss rate used in the forecast period in the past, and those changes have significantly impacted the CECL reserve.

NOTE 4 of the condensed consolidated financial statements outlines adjustments made in the loss rates used to account for the expected economic conditions as of a given period and the related impact on the CECL Allowance.

Changes in our expectations and forecasts have materially impacted, and in the future may materially impact, these inputs and the CECL Allowance.

We evaluate our risk-sharing loans on a quarterly basis to determine whether there are loans that are probable of foreclosure and thus collateral dependent. Specifically, we assess a loan’s qualitative and quantitative risk factors, such as payment status, property financial performance, local real estate market conditions, loan-to-value ratio, debt-service-coverage ratio, and property condition. When a loan is determined to be probable of foreclosure based on these factors (or has foreclosed), we remove the loan from the WARM calculation and individually assess the loan for potential credit loss. This assessment requires certain judgments and assumptions to be made regarding the property values and other factors, which may differ significantly from actual results. Loss settlement with Fannie Mae has historically concluded within 18 to 36 months after foreclosure. Historically, the initial collateral-based reserves have not varied significantly from the final settlement.

We actively monitor the judgments and assumptions used in our Allowance for Risk-Sharing Obligation estimate and make adjustments to those assumptions when market conditions change, or when other factors indicate such adjustments are warranted. We believe the level of Allowance for Risk-Sharing Obligation is appropriate based on our expectations of future market conditions; however, changes in one or more of the judgments or assumptions used above could have a significant impact on the reserve.

Property Valuations. As noted above, property valuations are a key component of our collateral-based reserves for our risk-sharing portfolio. Additionally, property valuations impact our impairment analyses for real estate held for use (“real estate HFU”), the carrying value of real estate held for sale (“real estate HFS”), the assessment of allowances for loan losses, and the assessment of any expected principal losses on loan repurchase. Those property values are determined using (i) standard appraisals obtained from certified appraisers at national firms subjected to management review or (ii) internal management valuations using inputs and assumptions such as capitalization rates (“cap rates”), net operating income of the property, vacancy rates, bad debt expense, and rental rates. The appraisals often include assumptions about comparable sales and cap rates, among other things. Management reviews those assumptions against its own experience and market data to assess the reasonableness of the assumptions and the resulting property valuations. When management determines the property valuation using an internal model, management maximizes the use of its historical experience with the property and market data from well-recognized data providers. We also may benchmark our historical experience with external data sources to assess the reasonableness of our inputs and assumptions.

We believe our property valuations are reasonable and in line with those a market participant would develop. However, actual sales prices for these properties may differ from the estimates used by management. Additionally, significant changes in the assumptions or judgments would have a significant impact on our reserves and impairment analyses and thus our reported financial results. As noted above, with respect to the property valuations and associated reserves for our risk-sharing portfolio, we have not experienced significant changes from the time of initial reserve and final settlement. However, with respect to properties used to calculate reserves on repurchased loans and impairment analyses for real estate HFU and carrying value of real estate HFS, we have never disposed of a property.

Goodwill. As of both March 31, 2026 and December 31, 2025, we reported goodwill of $868.7 million. Goodwill represents the excess of cost over the identifiable net assets of businesses acquired. Goodwill is assigned to the reporting unit to which the acquisition relates. Goodwill is recognized as an asset and is reviewed for impairment annually as of October 1. Between annual impairment analyses, we perform an evaluation of recoverability, when events and circumstances indicate that it is more likely than not that the fair value of a reporting unit is below its carrying value. Impairment testing requires an assessment of qualitative factors to determine if there are indicators of potential impairment, followed by, if necessary, an assessment of quantitative factors. These factors include, but are not limited to, whether there has been a significant or adverse change in the business climate that could affect the value of an asset and/or significant or adverse changes in cash flow projections or earnings forecasts. These assessments require management to make judgments, assumptions, and estimates about projected cash flows, discount rates and other factors.

Overview of Current Business Environment

During the first quarter of 2026, the U.S. macroeconomic environment remained constructive but uneven. Inflation continued to moderate, with the Consumer Price Index (“CPI”) rising 2.4% year over year in February 2026 and core CPI rising 2.5%, both slightly above the Federal Reserve’s targets, while the labor market remained relatively stable, with March 2026 non-farm payroll growth of 178,000 and unemployment of 4.3%. At its March 2026 meeting, the Federal Reserve maintained the federal funds target range at 3.50% to 3.75%, reflecting a still-cautious policy stance.

Longer-term interest rates declined during the early part of the quarter, which supported transaction activity across commercial real estate asset classes and benefited our lending, brokerage, and property sales services. Toward the end of the quarter, interest rate volatility increased, and the 10-year Treasury yield rose to the mid 4% range, where it has remained. While this increase in rates has introduced some near-term uncertainty, it has not materially impacted transaction activity to date.

Commercial real estate owners and investors have demonstrated increased willingness to transact following a prolonged period of constrained capital markets. Since the beginning of the current interest rate cycle in 2022, many market participants delayed transactions through loan extensions and extended hold periods. Over the past several quarters, this dynamic has begun to shift, with transaction activity becoming less sensitive to short-term interest rate movements. As a result, changes in interest rates are more frequently causing temporary pauses in execution rather than cancellations of transactions.

Within commercial real estate, capital markets conditions continued improving compared with the more restrictive environment of 2023 and early 2024, but execution remained highly selective and sensitive to asset quality, market, sponsorship, and basis.

In the multifamily sector, demand fundamentals remained resilient, supported by continued renter demand and homeownership affordability constraints, but rent growth remained below historical norms as the market continued to absorb the elevated level of new supply delivered over the past several years. New multifamily supply remained elevated entering 2026, but the forward pipeline of deliveries continued to contract. U.S. Census data indicates that March 2026 starts for buildings with five units or more were at a 446,000 seasonally adjusted annual rate, while permits for five-plus-unit buildings were 427,000, suggesting that future deliveries are likely to moderate through 2026 and into 2027. We believe this reduction in new supply, together with continued absorption, should gradually reduce lease-up pressure and support improved rent growth over time, although the pace and timing of recovery are expected to vary by market.

As of the end of the first quarter of 2026, we believe the multifamily market is in a transition period characterized by improving, but still-fragile, capital markets, elevated but moderating supply pressures, and a more normalized operating environment. In this environment, performance is increasingly driven by local market fundamentals, affordability, sponsorship quality, and execution.

We believe these conditions continue to create opportunities for well-capitalized and experienced market participants, particularly in Agency lending, debt brokerage, property sales, and loan servicing.

Consolidated Results of Operations

The following is a discussion of our consolidated results of operations for the three months ended March 31, 2026 and 2025. The financial results are not necessarily indicative of future results. Our quarterly results have fluctuated in the past and are expected to fluctuate in the future, reflecting the interest-rate environment, the volume of transactions, business acquisitions, regulatory actions, industry trends, and general economic conditions. The table below provides supplemental data regarding our financial performance.

SUPPLEMENTAL OPERATING DATA

CONSOLIDATED

(1) This is a non-GAAP financial measure. For more information on adjusted EBITDA, refer to the section below titled “Non-GAAP Financial Measure.”

The following table presents a period-to-period comparison of our financial results for the three months ended March 31, 2026 and 2025.

FINANCIAL RESULTS – THREE MONTHS

CONSOLIDATED

(in thousands)

Revenue increases this quarter were driven primarily by significantly higher transaction volumes executed by our Capital Markets business. Higher transaction volumes drove increases in loan origination and debt brokerage fees, net (“origination fees”) and the fair value of expected net cash flows from servicing, net of guaranty obligation (“MSR income”). Origination fees and MSR income did not increase in tandem with transaction activity due to declines in average margins, which was driven by a combination of product mix and a large $1.7 billion transaction. Margins on large transactions are typically lower than standard transactions. Higher transaction volumes also expanded the balance of our loan servicing portfolio, which in turn increased servicing fees.

The increase in expenses was primarily due to increases in personnel expense, amortization and depreciation, and indemnified and repurchased loan expenses, partially offset by a decrease in other operating expenses. Personnel expense increased primarily due to an increase in commission costs mainly due to the aforementioned increase in origination fees combined with an increase in salaries and benefits due to an increase in average headcount and growth in our bonus accrual due to improved company performance. The increase in amortization and depreciation was primarily driven by an increase in write-offs due to prepayments, along with an increase in recurring amortization of MSRs. Indemnified and repurchased loan expenses increased primarily due to increased loan repurchase losses with no comparable activity in the prior year, combined with increased repurchased loan operating costs due to the increase in the number of loans indemnified year over year. Other operating expenses decreased primarily driven by a downward adjustment in a loss estimate.

Income tax expense increased $5.5 million, or 218%, year over year, primarily driven by a 395% increase in income before taxes during the first quarter of 2026 compared to the first quarter of 2025. Additionally, we recognized a higher balance of realizable tax shortfall. We recognized a $2.0 million shortfall during the first quarter of 2026 compared to a $1.3 million shortfall during the first quarter of 2025, resulting from changes between the grant date fair value and vesting date fair value of share-based compensation awards that vested during the first quarter of 2026. Absent the impact from tax shortfalls, income tax expense increased 394%, which is consistent with the growth in income before taxes.

Non-GAAP Financial Measure

To supplement our financial statements presented in accordance with GAAP, we use adjusted EBITDA, a non-GAAP financial measure. The presentation of adjusted EBITDA is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. When analyzing our operating performance, readers should use adjusted EBITDA in addition to, and not as an alternative for, net income. Adjusted EBITDA represents net income before income taxes, interest expense on our corporate debt, and amortization and depreciation, adjusted for provision (benefit) for credit losses, net write-offs based on the final resolution of the defaulted loans or collateral, loan repurchase losses, stock-based compensation, the fair value of expected net cash flows from servicing, net of guaranty obligation, the write-off of the unamortized balance of deferred issuance costs associated with the repayment of a portion of our corporate debt, goodwill impairment, and contingent consideration liability fair value adjustments when the fair value adjustment is a triggering event for a goodwill impairment assessment. In cases where the fair value adjustment of contingent consideration liabilities is a trigger for goodwill impairment, the goodwill impairment is netted against the fair value adjustment of contingent consideration liabilities and included as a net number. Because not all companies use identical calculations, our presentation of adjusted EBITDA may not be comparable to similarly titled measures of other companies. Furthermore, adjusted EBITDA is not intended to be a measure of free cash flow for our management’s discretionary use, as it does not reflect certain cash requirements such as tax and debt service payments. The amounts shown for adjusted EBITDA may also differ from the amounts calculated under similarly titled definitions in our debt instruments, which are further adjusted to reflect certain other cash and non-cash charges that are used to determine compliance with financial covenants.

We use adjusted EBITDA to evaluate the operating performance of our business, for comparison with forecasts and strategic plans, and for benchmarking performance externally against competitors. We believe that this non-GAAP measure, when read in conjunction with our GAAP financials, provides useful information to investors by offering:

• the ability to make more meaningful period-to-period comparisons of our ongoing operating results;
• the ability to better identify trends in our underlying business and perform related trend analyses; and
• a better understanding of how management plans and measures our underlying business.

We believe that adjusted EBITDA has limitations in that it does not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that adjusted EBITDA should only be used to evaluate our results of operations in conjunction with net income on both a consolidated and segment basis. Adjusted EBITDA is reconciled to net income as follows:

ADJUSTED FINANCIAL MEASURE RECONCILIATION TO GAAP

CONSOLIDATED

(in thousands)

(1) Presented as a component of Indemnified and repurchased loan expenses in the Condensed Consolidated Statements of Income.

(2) Presented as a component of Other operating expenses in the Condensed Consolidated Statements of Income.

The following table presents a period-to-period comparison of the components of adjusted EBITDA for the three months ended March 31, 2026 and 2025.

ADJUSTED EBITDA – THREE MONTHS

CONSOLIDATED

(in thousands)

Origination fees increased largely due to the increase in debt financing volume, partially offset by a decrease in the margin. Servicing fees increased largely due to growth in the average servicing portfolio. Personnel expense increased primarily due to an increase in commission costs mainly due to the aforementioned increase in origination fees combined with an increase in salaries and benefits due to an increase in average headcount and growth in our bonus accrual due to improved company performance. Indemnified and repurchased loan expenses increased due to increased repurchased loan operating costs. Net income from noncontrolling interest and temporary equity holders increased due to (i) a lack of temporary equity holders in the first quarter of 2025 and (ii) an increase in net income from noncontrolling interest holders year over year.

Financial Condition

Cash Flows from Operating Activities

Our cash flows from operating activities are generated from loan sales, servicing fees, placement fees, net warehouse interest income (expense), property sales broker fees, investment management fees, research subscription fees, investment banking advisory fees, and other income, net of loan origination and operating costs. Our cash flows from operating activities are impacted by the fees generated by our loan originations and property sales, the timing of loan closings, and the period of time loans are held for sale in the warehouse loan facility prior to delivery to the investor.

Cash Flows from Investing Activities

We usually lease facilities and equipment for our operations. Our cash flows from investing activities include the funding and repayment of loans held for investment, including repurchased loans, contributions to and distributions from joint ventures, purchases of equity-method investments, cash paid for acquisitions, and the purchase of available-for-sale (“AFS”) securities pledged to Fannie Mae.

Cash Flows from Financing Activities

We use our warehouse loan facilities and, when necessary, our corporate cash to fund loan closings, both for loans held for sale and loans held for investment. We believe that our current warehouse loan facilities are adequate to meet our loan origination needs. Historically, we used a combination of long-term debt and cash flows from operating activities to fund large acquisitions. Additionally, we repurchase shares, pay cash dividends, make long-term debt principal payments, and repay short-term borrowings on a regular basis. We issue stock primarily in connection with the exercise of stock options and occasionally for acquisitions (non-cash transactions).

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

The following table presents a period-to-period comparison of the significant components of cash flows for the three months ended March 31, 2026 and 2025.

SIGNIFICANT COMPONENTS OF CASH FLOWS

(in thousands)

Operating Activities

Net cash provided by (used in) operating activities changed primarily due to:

(i) Loan origination activity. Agency loans originated are held for short periods of time, generally less than 60 days, and impact cash flows presented as of a point in time due to the timing difference between the date of origination and date of delivery. The increase in net cash used in loan origination activities is primarily attributable to originations outpacing sales by $1.1 billion in 2026 compared to $200.0 million in 2025.

(ii) Other activities. Cash flows used in other operating activities were $32.6 million in 2026, down from $81.1 million in 2025. The decrease was primarily due to the following beneficial factors: (i) a $15.2 million increase in net income before noncontrolling interests and temporary equity holders, (ii) a $5.3 million increase in the adjustment for amortization and depreciation, (iii) a $7.0 million increase in adjustments for loan repurchase losses, and (iv) a $54.1 million decrease in adjustment for other operating activities such as receivables, other assets, and other liabilities. Partially offsetting the beneficial factors were the following unfavorable factors: a $19.0 million increase in the adjustment for MSR income and a $14.5 million change in the adjustment for the change in the fair value of premiums and origination fees.

Investing Activities

Net cash provided by (used in) investing activities changed primarily due to:

(i) Purchases of pledged AFS securities, net of proceeds from prepayment. The increase in cash used was primarily driven by a $5.9 million increase in purchases of pledged AFS securities, partially offset by a small increase in proceeds from prepayment of AFS securities. The increase in purchases was due to a continued shift in pledged collateral from money market funds to AFS securities due to the decline in interest rates for money market funds compared to interest paid on AFS securities.

(ii) Originations and repurchase of loans held for investment. The increase was primarily driven by the $17.5 million increase in originations of interim loans, partially offset by a $7.5 million decrease in the number and amount of loans repurchased from the GSEs.

Partially offsetting the aforementioned changes that decreased cash were the following activities that increased cash:

(i) Capital invested in equity-method investments. The decrease was primarily due to a decrease in capital calls for our investments.

(ii) Other investing activities, net. The increase in cash provided was primarily driven by a $5.2 million increase in distributions from equity method investments and joint ventures combined with a $1.5 million increase in principal collected on loans held for investment due to the increased balance of these loans.

Financing Activities

Net cash provided by (used in) financing activities changed primarily due to:

(i) Net borrowings of warehouse notes payable. The increase was due to the aforementioned increase in cash used in loan origination activity.

(ii) Repayments of notes payable. The decrease in cash used was largely due to using $328.5 million of the $400.0 million proceeds from the issuance of our Senior Notes to pay down our Term Loan in 2025, with no comparable activity in 2026. In 2026, the activity was limited to our quarterly principal payment.

(iii) Debt issuance costs. The decrease in debt issuance costs paid was driven by the issuance of our Senior Notes and amendment of the Term Loan in 2025, with no comparable activity in 2026.

Partially offsetting the aforementioned changes that increased cash were the following activities that decreased cash:

(i) Borrowings of corporate notes payable. The decrease in borrowings was attributable to the issuance of our Senior Notes in 2025, with no comparable activity in 2026.

(ii) Repurchase of common stock. The increase in cash used for repurchases was primarily due to the $13.3 million in share repurchases executed as part of our share repurchase program during 2026 with no comparable activity in 2025.

Segment Results

The Company is managed based on our three reportable segments: (i) Capital Markets, (ii) Servicing & Asset Management, and (iii) Corporate. The segment results below are intended to present each of the reportable segments on a stand-alone basis.

Capital Markets

SUPPLEMENTAL OPERATING DATA

CAPITAL MARKETS

(1) Brokered transactions for life insurance companies, commercial banks, and other capital sources.

(2) This is a non-GAAP financial measure. For more information on adjusted EBITDA, refer to the section below titled “Non-GAAP Financial Measure.”

FINANCIAL RESULTS – THREE MONTHS

CAPITAL MARKETS

(in thousands)

Revenues

Origination fees and MSR income. The following tables provide additional information that helps explain changes in origination fees and MSR income period over period:

(1) Origination fees as a percentage of total debt financing volume.

(2) MSR income as a percentage of Agency debt financing volume.

The increase in origination fees was largely the result of the 132% increase in total debt financing volume, partially offset by a decline in our origination fee rate. The decrease in the origination fee rate related to a $1.7 billion Freddie Mac portfolio that was originated in the first quarter of 2026 with no comparable activity in the first quarter of 2025 and a shift in our volume mix towards brokered transactions. Portfolio transactions have lower origination fee rates than non-portfolio transactions. Brokered transactions, which carry lower fee margins, represented 56% of our debt financing volume in the first quarter of 2026 compared to 51% in the first quarter of 2025.

The increase in our MSR income was largely driven by the increase in total debt financing volume, partially offset by a 19% decrease in the Agency MSR rate. The decrease in the Agency MSR rate reflects a shift in mix of Agency volume, with Freddie Mac representing 61% of Agency volume in the first quarter of 2026 compared to 33% in the first quarter of 2025. The aforementioned Freddie Mac portfolio caused a decline in the weighted-average servicing fee (“WASF”) on Freddie Mac debt financing volume. Portfolio transactions typically have lower servicing fees than non-portfolio transactions. Partially offsetting the decline in the Agency MSR rate due to the mix of volume and the portfolio transaction was an increase in the WASF for Fannie Mae debt financing volume.

Other revenues. The decrease was principally due to a $4.7 million decrease in investment banking revenues, partially offset by a $2.5 million increase in application and appraisal fees. Investment banking revenues decreased primarily due to several M&A transactions that closed during the first quarter of 2025 compared to fewer transactions in the first quarter of 2026. Application and appraisal fees increased due to the aforementioned increase in transaction volume.

Expenses

Personnel. The increase was primarily due to a $17.3 million increase in commission costs resulting from increased origination and property sales broker fees, a $4.2 million increase in salaries and benefits and subjective bonus accrual, and a $1.3 million increase in retention bonuses due to the increase in headcount. The increase in salaries and benefits was largely related to an 8% increase in average segment headcount, while the increase in subjective bonus accrual was related to improved company performance.

Non-GAAP Financial Measure

A reconciliation of adjusted EBITDA for our CM segment is presented below. Our segment-level adjusted EBITDA represents the segment portion of consolidated adjusted EBITDA. A detailed description and reconciliation of consolidated adjusted EBITDA is provided above in our Consolidated Results of Operations—Non-GAAP Financial Measure. CM adjusted EBITDA is reconciled to net income as follows:

ADJUSTED FINANCIAL MEASURE RECONCILIATION TO GAAP

CAPITAL MARKETS

(in thousands)

(1) Presented as a component of Other Operating Expenses on Condensed Consolidated Statements of Income.

The following table presents a period-to-period comparison of the components of CM adjusted EBITDA for the three months ended March 31, 2026 and 2025.

ADJUSTED EBITDA – THREE MONTHS

CAPITAL MARKETS

(in thousands)

Origination fees increased due principally to an increase in debt financing volume, partially offset by a decrease in our origination fee rate. Other revenues decreased due to a decline in investment banking revenues, partially offset by an increase in appraisal and application fees. Personnel expense increased primarily due to increased commission costs, salaries and benefits expense, subjective bonus accrual, and retention bonus expense.

Servicing & Asset Management

SUPPLEMENTAL OPERATING DATA

SERVICING & ASSET MANAGEMENT

(dollars in thousands, except per share data)

(in thousands)

(1) Brokered loans serviced primarily for life insurance companies, commercial banks, and other capital sources.

(2) Consists of interim loans not managed for the Interim Program JV.

(3) Amount of equity called and syndicated into LIHTC funds.

(4) Comprised solely of WDIP separate account originations.

(5) This is a non-GAAP financial measure. For more information on adjusted EBITDA, refer to the section below titled “Non-GAAP Financial Measure.”

(6) As of March 31, 2026, included $20.6 million of equity under management and $17.1 million of assets under management of Interim program JV loans. The remainder consisted of WDIP debt funds. As of March 31, 2025, included $45.0 million of equity under management and $173.3 million of assets under management of Interim program JV loans. The remainder consisted of WDIP debt funds.

FINANCIAL RESULTS – THREE MONTHS

SERVICING & ASSET MANAGEMENT

(in thousands)

Revenues

Servicing fees. As seen below, the increase was primarily attributable to an increase in the average servicing portfolio period over period. The increase in the average servicing portfolio was driven primarily by the $6.3 billion and $4.3 billion increases in Freddie Mac and Fannie Mae, respectively, loans serviced. Partially offsetting the increase from growth in the servicing portfolio was a decline in the WASF as seen below due largely to a decline in Fannie Mae WASF, as loans paying off had higher WASF than loans originated year over year.

Other revenues. The increase was primarily due to a $4.7 million increase in other LIHTC fees and a $2.7 million increase in prepayment fees, partially offset by a $4.2 million decrease in income from equity-method investments. The increase in other LIHTC fees was primarily driven by an increase in fee income and reimbursable fees from our LIHTC operations, partially offset by a decrease in syndication fees. Prepayment fees increased due to an increase in prepayment activity due to the interest rate environment and refinance volume during the quarter. Income from equity method investments decreased due to elevated performance from our equity method investments in 2025.

Expenses

Amortization and depreciation. The increase was primarily driven by increases in recurring amortization of MSRs and write-offs due to increased prepayments.

Indemnified and repurchased loan expenses. The increase was primarily driven by a $7.0 million net increase in loan repurchase losses, combined with a $1.8 million increase in repurchased loans operating costs. The net increase in loan repurchase losses was driven by an increase in the number of loans indemnified year over year. The increase in repurchased loans operating costs was driven by the increase in the number of indemnified and repurchased loans in our portfolio.

Other operating expenses. The decrease was primarily driven by a $2.9 million true up to the estimate of losses upon disposition of certain affordable preservation assets, with no comparable activity in the prior year.

Income tax expense (benefit). Income tax expense is determined at a consolidated corporate level and allocated to each segment proportionally based on each segment’s income before taxes, except for significant, one-time tax activities, which are allocated entirely to the segment impacted by the tax activity.

Non-GAAP Financial Measure

A reconciliation of adjusted EBITDA for our SAM segment is presented below. Our segment-level adjusted EBITDA represents the segment portion of consolidated adjusted EBITDA. A detailed description and reconciliation of consolidated adjusted EBITDA is provided above in our Consolidated Results of Operations—Non-GAAP Financial Measure. SAM adjusted EBITDA is reconciled to net income as follows:

ADJUSTED FINANCIAL MEASURE RECONCILIATION TO GAAP

SERVICING & ASSET MANAGEMENT

(in thousands)

(1) Presented as a component of Indemnified and repurchased loan expenses in the Condensed Consolidated Statements of Income.

(2) Presented as a component of Other operating expenses in the Condensed Consolidated Statements of Income.

The following table presents a period-to-period comparison of the components of SAM adjusted EBITDA for the three months ended March 31, 2026 and 2025.

ADJUSTED EBITDA – THREE MONTHS

SERVICING & ASSET MANAGEMENT

(in thousands)

Servicing fees increased primarily due to growth in the average servicing portfolio period over period. Other revenues increased due to an increase in other LIHTC fees and prepayment fees, partially offset by a decrease in syndication fees and income from equity method investments. Indemnified and repurchased loan expenses increased due to increased operating costs related to indemnified and repurchased loans.

Corporate

FINANCIAL RESULTS – THREE MONTHS

CORPORATE

(in thousands)

(1) This is a non-GAAP financial measure. For more information on adjusted EBIDTA, refer to the section below titled “Non-GAAP Financial Measure.”

Revenues

Other revenues. The decrease was primarily due to a $2.2 million decrease in income from equity method investments.

Expenses

Personnel. The increase was primarily due to a $3.3 million increase in salaries and benefits due to a 9% increase in average segment headcount in support of the overall growth in transaction activity and business volumes and a $4.3 million increase in subjective bonus accrual due to our improved financial performance in the first quarter of 2026 compared to the first quarter of 2025.

Income tax expense (benefit). Income tax expense (benefit) is determined at a consolidated corporate level and allocated to each segment proportionally based on each segment’s income before taxes, except for significant, one-time tax activities, which are allocated entirely to the segment impacted by the tax activity.

Non-GAAP Financial Measure

A reconciliation of adjusted EBITDA for our Corporate segment is presented below. Our segment-level adjusted EBITDA represents the segment portion of consolidated adjusted EBITDA. A detailed description and reconciliation of consolidated adjusted EBITDA is provided above in our Consolidated Results of Operations—Non-GAAP Financial Measure. Corporate adjusted EBITDA is reconciled to net income as follows:

ADJUSTED FINANCIAL MEASURE RECONCILIATION TO GAAP

CORPORATE

(in thousands)

(1) Presented as a component of Other operating expenses in the Condensed Consolidated Statements of Income.

The following table presents a period-to-period comparison of the components of Corporate adjusted EBITDA for the three months ended March 31, 2026 and 2025.

ADJUSTED EBITDA – THREE MONTHS

CORPORATE

(in thousands)

Other revenues decreased primarily due to a decrease in income from equity method investments. The increase in personnel expense was primarily due to higher salaries and benefit costs and subjective bonus accrual.

Liquidity and Capital Resources

Uses of Liquidity, Cash and Cash Equivalents

Our significant recurring cash flow requirements consist of liquidity to (i) fund loans held for sale; (ii) pay cash dividends; (iii) fund our portion of the equity necessary to support equity-method investments; (iv) fund investments in properties to be syndicated to LIHTC investment funds that we will asset-manage; (v) make payments related to earnouts from acquisitions; (vi) meet working capital needs to support our day-to-day operations, including debt service payments, joint venture development partnership contributions, advances for servicing, loan repurchases, and payments for salaries, commissions, and income taxes; and (vii) meet working capital to satisfy collateral requirements for our Fannie Mae DUS risk-sharing obligations and to meet the operational liquidity requirements of Fannie Mae, Freddie Mac, HUD, Ginnie Mae, and our warehouse facility lenders.

Fannie Mae has established benchmark standards for capital adequacy and reserves the right to terminate our servicing authority for all or some of the portfolio if, at any time, it determines that our financial condition is not adequate to support our obligations under the DUS agreement. We are required to maintain acceptable net worth as defined in the standards, and we satisfied the requirements as of March 31, 2026. The net worth requirement is derived primarily from UPB on Fannie Mae loans and the level of risk-sharing. As of March 31, 2026, the net worth requirement was $356.8 million, and our net worth was $1.0 billion, as measured at our wholly owned operating subsidiary, Walker & Dunlop, LLC. As of March 31, 2026, we were required to maintain at least $71.0 million of liquid assets to meet our operational liquidity requirements for Fannie Mae, Freddie Mac, HUD, Ginnie Mae and our warehouse facility lenders. As of March 31, 2026, we had operational liquidity of $178.1 million, as measured at our wholly owned operating subsidiary, Walker & Dunlop, LLC.

We paid a cash dividend of $0.68 per share during the first quarter of 2026, which is 1.5% higher than the quarterly dividend paid in the first quarter of 2025. On May 6, 2026, the Company’s Board of Directors declared a dividend of $0.68 per share for the second quarter of 2026. The dividend will be paid on June 4, 2026 to all holders of record of our restricted and unrestricted common stock as of May 21, 2026.

In February 2026, our Board of Directors approved a stock repurchase program that permits the repurchase of up to $75.0 million of shares of our common stock over a 12-month period beginning February 26, 2026 (the “2026 Stock Repurchase Program”). During the three months ended March 31, 2026, we repurchased 283 thousand shares under the 2026 Stock Repurchase Program, and we had $61.7 million of remaining capacity under the 2026 Stock Repurchase Program as of March 31, 2026.

Historically, our cash flows from operations and warehouse facilities have been sufficient to enable us to meet our short-term liquidity needs and other funding requirements. We believe that cash flows from operations will continue to be sufficient for us to meet our current obligations for the foreseeable future.

Restricted Cash and Pledged Securities

Restricted cash consists primarily of good faith deposits held on behalf of borrowers between the time we enter into a loan commitment with the borrower and when the investor purchases the loan. We are generally required to share the risk of any losses associated with loans sold under the Fannie Mae DUS program, which is an off-balance sheet arrangement. We are required to secure this obligation by assigning collateral to Fannie Mae. We meet this obligation by assigning pledged securities to Fannie Mae. 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 collateral 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. Collateral held in the form of money market funds holding U.S. Treasuries is discounted 5%, and Agency MBS are discounted 4% for purposes of calculating compliance with the collateral requirements. As of March 31, 2026, we held substantially all of our restricted liquidity in Agency MBS in the aggregate amount of $221.2 million. Additionally, the majority of the loans for which we have risk-sharing are Tier 2 loans. We fund any growth in our Fannie Mae required operational liquidity and collateral requirements from our working capital.

We are in compliance with the March 31, 2026 collateral requirements as outlined above. As of March 31, 2026, reserve requirements for the March 31, 2026 DUS loan portfolio will require us to fund $90.6 million in additional restricted liquidity over the next 48 months, assuming no further principal paydowns, prepayments, or defaults within our at-risk portfolio. Fannie Mae has assessed the DUS Capital Standards in the past and may make changes to these standards in the future. We generate sufficient cash flows from our operations to meet these capital standards and do not expect any future changes to have a material impact on our future operations; however, any future changes to collateral requirements may adversely impact our available cash.

Under the provisions of the DUS agreement, we must also maintain a certain level of liquid assets referred to as the operational and unrestricted portions of the required reserves each year. We satisfied these requirements as of March 31, 2026.

Sources of Liquidity: Warehouse Facilities and Corporate Notes Payable

Warehouse Facilities

We use a combination of warehouse facilities and notes payable to provide funding for our operations. We use warehouse facilities to fund our Agency Lending. Our ability to originate Agency mortgage loans depends upon our ability to secure and maintain these types of financing agreements on acceptable terms. For a detailed description of the terms of each warehouse agreement, refer to “Warehouse Facilities” in NOTE 7 in the consolidated financial statements in our 2025 Form 10-K, as updated in NOTE 7 in the condensed consolidated financial statements in this Form 10-Q.

Corporate Notes Payable

For a detailed description of the terms of our various corporate debt instruments and related amendments, refer to “Corporate Notes Payable” in NOTE 7 in the consolidated financial statements in our 2025 Form 10-K.

The warehouse facilities and corporate notes payable are subject to various financial covenants. The Company is in compliance with all of these financial covenants as of March 31, 2026.

Credit Quality, Allowance for Risk-Sharing Obligations, and Loan Repurchases

The following table sets forth certain information useful in evaluating our credit performance.

(1) As of March 31, 2026 and 2025, this balance consisted of Interim Program JV managed loans. We indirectly share in a portion of the risk of loss associated with Interim Program JV managed loans through our 15% equity ownership in the Interim Program JV, which was $3.1 million and $6.7 million at March 31, 2026 and 2025, respectively. We have no exposure to risk of loss for the loans serviced directly for the Interim Program JV partner. The balance of this line is included as a component of assets under management in the Supplemental Operating Data table above.

(2) At-risk servicing portfolio is defined as the balance of Fannie Mae DUS loans subject to the risk-sharing formula described below, as well as a small number of Freddie Mac loans on which we share in the risk of loss. Use of the at-risk portfolio provides for comparability of the full risk-sharing and modified risk-sharing loans because the provision and allowance for risk-sharing obligations are based on the at-risk balances of the associated loans. Accordingly, we have presented the key statistics as a percentage of the at-risk portfolio.

For example, a $15 million loan with 50% risk-sharing has the same potential risk exposure as a $7.5 million loan with full DUS risk-sharing. Accordingly, if the $15 million loan with 50% risk-sharing were to default, we would view the overall loss as a percentage of the at-risk balance, or $7.5 million, to ensure comparability between all risk-sharing obligations. To date, substantially all of the risk-sharing obligations that we have settled have been from full risk-sharing loans.

(3) Represents the maximum loss we would incur under our risk-sharing obligations if all of the loans we service, for which we retain some risk of loss, were to default and all of the collateral underlying these loans was determined to be without value at the time of settlement. The maximum exposure is not representative of the actual loss we would incur.

(4) Defaulted loans represent loans in our Fannie Mae at-risk portfolio or Freddie Mac SBL pre-securitized portfolio that are probable of foreclosure or that have foreclosed and for which the Company has recorded a collateral-based reserve (i.e., loans where we have assessed a probable loss). Other loans that are delinquent but not foreclosed or that are not probable of foreclosure are not included here. Additionally, loans that have foreclosed or are probable of foreclosure but are not expected to result in a loss to the Company are not included here.

Fannie Mae DUS risk-sharing obligations are based on a tiered formula and represent substantially all of our risk-sharing activities. The risk-sharing tiers and the amount of the risk-sharing obligations we absorb under full risk-sharing are provided below. Except as described in the following paragraph, the maximum amount of risk-sharing obligations we absorb at the time of default is generally 20% of the origination UPB of the loan.

Fannie Mae can double or triple our risk-sharing obligation if the loan does not meet specific underwriting criteria or if a loan defaults within 12 months of its sale to Fannie Mae. We may request modified risk-sharing at the time of origination, which reduces our potential risk-sharing obligation from the levels described above. At times, we have, and may in the future, agree to a higher risk-sharing percentage (up to 100% of UPB) after origination and under limited circumstances.

We have a loss-sharing arrangement with Freddie Mac related to SBLs that is only applicable to SBLs that are pre-securitized and outstanding for more than 12 months. If a loan defaults prior to securitization, we are required to share the losses with Freddie Mac. Our loss-sharing arrangement is a 10% top loss, meaning that we are responsible for the first 10% of the losses incurred on such defaulted loans. We received an insignificant loss settlement notice from Freddie Mac in the first quarter of 2026 related to one defaulted loan and paid the loss settlement accordingly.

We use several techniques to manage our risk exposure under the Fannie Mae DUS risk-sharing program. These techniques include maintaining a strong underwriting and approval process, evaluating and modifying our underwriting criteria given the underlying multifamily housing market fundamentals, limiting our geographic market and borrower exposures, and electing the modified risk-sharing option under the Fannie Mae DUS program.

The “Business” section of “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Form 10-K contains a discussion of the risk-sharing caps we have with Fannie Mae.

We regularly monitor the credit quality of all loans for which we have a risk-sharing obligation. Loans with indicators of underperforming credit are placed on a watch list, assigned a numerical risk rating based on our assessment of the relative credit weakness, and subjected to additional evaluation or loss mitigation. Indicators of underperforming credit include poor financial performance, poor physical condition, poor management, and delinquency. A collateral-based reserve is recorded when it is probable that a risk-sharing loan will foreclose or has foreclosed and it is expected to result in a loss for the Company, and a reserve for estimated credit losses and a guaranty obligation are recorded for all other risk-sharing loans. We do not record a collateral-based reserve when it is probable that a risk-sharing loan will foreclose or has foreclosed, and the disposition proceeds are expected to be higher than the UPB, resulting in no losses for the Company.

The allowance for risk-sharing obligations related to the Company’s $68.9 billion at-risk Fannie Mae servicing portfolio and our Freddie Mac defaulted SBLs that is based on a collective evaluation as of March 31, 2026 was $25.4 million compared to $25.0 million as of December 31, 2025.

As of March 31, 2026, 14 loans (12 Fannie Mae loans and two Freddie Mac SBLs) were in default with an aggregate UPB of $167.5 million compared to eight loans (five Fannie Mae loans and three Freddie Mac SBLs) with an aggregate UPB of $108.5 million that were in default as of March 31, 2025. The collateral-based reserve on defaulted loans was $13.3 million and $7.5 million as of March 31, 2026 and 2025, respectively. We had a provision for risk-sharing obligations of $1.6 million for the three months ended March 31, 2026 compared to $3.7 million for the three months ended March 31, 2025.

We are obligated to repurchase loans that are originated for the GSEs’ programs if certain representations and warranties that we provide in connection with the sale of the loans through these programs are breached. In lieu of repurchasing a loan directly from the GSEs, we have entered into Indemnification and Repurchase Agreements. These indemnification agreements delay the requirement to repurchase the loan for periods of up to two years, and in exchange we fund a collateral reserve generally equal to 20% of the UPB of the loans or an agreed upon amount based on the unsecured portion of the loans and pay a financing fee to the GSE for the uncollateralized portion of the UPB. When we agree to repurchase or indemnify the GSEs, we are required to report the loan or underlying collateral as an asset and the related obligation to repurchase the loans or indemnification liability to the GSE as a liability on our Condensed Consolidated Balance Sheets. NOTE 5 in the condensed consolidated financial statements provides additional details related to our repurchase and indemnification activity.

New/Recent Accounting Pronouncements

As seen in NOTE 2 in the condensed consolidated financial statements in Item 1 of Part I of this Form 10-Q, there were no accounting pronouncements that the Financial Accounting Standards Board has issued that have the potential to materially impact us as of March 31, 2026.

Interest Rate Risk

For loans held for sale to Fannie Mae, Freddie Mac, and HUD, we are not currently exposed to unhedged interest rate risk during the loan commitment, closing, and delivery processes. The sale or placement of each loan to an investor is negotiated prior to closing on the loan with the borrower, and the sale or placement is typically effectuated within 60 days of closing. The coupon rate for the loan is set at the same time we establish the interest rate with the investor.

Some of our assets and liabilities are subject to changes in interest rates. Placement fee revenue from escrow deposits generally track the effective Federal Funds Rate (“EFFR”). The EFFR was 364 basis points and 433 basis points as of March 31, 2026 and 2025, respectively. The following table shows the impact on our placement fee revenue due to a 100-basis point increase and decrease in EFFR based on our escrow balances outstanding at each period end. A portion of these changes in earnings as a result of a 100-basis point increase in the EFFR would be delayed by several months due to the negotiated nature of some of our placement arrangements.

(in thousands)

The borrowing cost of our warehouse facilities used to fund loans held for sale is based on SOFR. The base SOFR was 368 basis points and 441 basis points as of March 31, 2026 and 2025, respectively. The following table shows the impact on our annual net warehouse interest income due to a 100-basis point increase and decrease in SOFR, based on our warehouse borrowings outstanding at each period end. The changes shown below do not reflect an increase or decrease in the interest rate earned on our loans held for sale.

(in thousands)

57

All of our Corporate Debt is effectively based on Adjusted Term SOFR as of March 31, 2026. The following table shows the impact on our annual earnings due to a 100-basis point increase and decrease in SOFR as of March 31, 2026 and 2025, respectively, based on the debt balances outstanding at each period end.

(in thousands)

Market Value Risk

The fair value of our MSRs is subject to market-value risk. A 100-basis point increase or decrease in the weighted average discount rate would decrease or increase, respectively, the fair value of our MSRs by approximately $39.9 million as of March 31, 2026 compared to $42.1 million as of March 31, 2025. Additionally, a 50-basis point increase or decrease in the placement fee rates would increase or decrease, respectively, the fair value of our MSRs by approximately $50.3 million as of March 31, 2026. Our Fannie Mae and Freddie Mac loans include economic deterrents that reduce the risk of loan prepayment prior to the expiration of the prepayment protection period, including prepayment premiums, loan defeasance, or yield maintenance fees. These prepayment protections generally extend the duration of a loan compared to a loan without similar protections. As of both March 31, 2026 and 2025, 90% of the loans for which we earn servicing fees are protected from the risk of prepayment through prepayment provisions; given this significant level of prepayment protection, we do not hedge our servicing portfolio for prepayment risk.

As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of our management, including the principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Based on that evaluation, the principal executive officer and principal financial officer concluded that the design and operation of these disclosure controls and procedures as of the end of the period covered by this report were effective to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

There have been no changes in our internal control over financial reporting during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

We have included in Part I, Item 1A of our 2025 Form 10-K descriptions of certain risks and uncertainties that could affect our business, future performance, or financial condition (the “Risk Factors”). There have been no material changes from the disclosures provided in our 2025 Form 10-K. Investors should consider the Risk Factors prior to making an investment decision with respect to the Company’s stock.