Specialty commercial lender Walker & Dunlop released its fourth-quarter financial report on Feb. 10. Though the report showed some mixed results, the company remains upbeat about the real estate market in Missouri and nationwide.
Investors expected the company to show continued growth in the fourth quarter, but it brought in $121.4 million, which is only up 8 percent over the same period in 2014. Investors were looking for a 14 percent growth rate. On a more positive note, the company's net income rose 26 percent to $20.4 million, which resulted in an earnings per share of $0.67. That was $0.03 higher than what was forecast. Meanwhile, the company's transaction volume rose 10 percent to $4.7 billion, but that was less than its third-quarter number and indicative of recent turbulence in the real estate market.
Mortgage banking activities jumped 7 percent to $71.9 million, which was attributed to higher loan originations and a rise in average servicing fees for Fannie Mae. Gains in mortgage servicing rights rose 13 percent, and servicing fees jumped 17 percent. However, the company saw a dip in prepayment fee income, which held back sales growth.
In other areas, Walker & Dunlop's total expenses jumped just 2 percent, and credit quality remained strong. The company reported no net write-offs in the fourth quarter, and its servicing portfolio showed no delinquencies of 60 days or longer. Based on the report, commercial real estate experts expect the company to show continued growth going forward.
Commercial developers often find themselves riding a rollercoaster, depending upon the region of the country and the type of property. They often obtain the assistance of legal counsel when conducting due diligence on proposed projects.
Source: The Motley Fool, "Walker & Dunlop Expects More From Real Estate in 2016," Dan Caplinger, Feb. 10, 2016