Walker & Dunlop, Inc.WDNYSE
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Operator: Good day, and welcome to the Q3 2025 Walker & Dunlop, Inc. Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Kelsey Duffey. Please go ahead.
Kelsey Montz: Thank you, and good morning, everyone. Thank you for joining Walker & Dunlop's Third Quarter 2025 Earnings Call. I have with me this morning our Chairman and CEO, Willy Walker; and our CFO, Greg Florkowski. This call is being webcast live on our website, and a recording will be available later today. Both our earnings press release and website provide details on accessing the archived webcast. This morning, we posted our earnings release and presentation to the Investor Relations section of our website, www.walkerdunlop.com. These slides serve as a reference point for some of what Willy and Greg will touch on during the call. Please also note that we will reference the non-GAAP financial metrics, adjusted EBITDA and adjusted core EPS during the course of this call. Please refer to the appendix of the earnings presentation for a reconciliation of these non-GAAP financial metrics. Investors are urged to carefully read the forward-looking statements language in our earnings release. Statements made on this call, which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe our current expectations, and actual results may differ materially. Walker & Dunlop is under no obligation to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise, and we expressly disclaim any obligation to do so. More detailed information about risk factors can be found in our annual and quarterly reports filed with the SEC. I will now turn the call over to Willy.
Willy Walker: Thank you, Kelsey, and good morning, everyone. Our third quarter financial results underscore an improving commercial real estate market and Walker & Dunlop's strong brand and market position. Pent-up demand for assets and a material increase in the supply of debt capital drove increased transaction volumes across our platform, generating $15.5 billion of total transaction volume on the quarter, up 34% year-over-year. Strong transaction activity across all capital markets executions, sales, debt financing, equity and structured finance, investment banking, research and appraisals led to third quarter revenues of $338 million and $0.98 of diluted earnings per share, up 16% and 15%, respectively, year-over-year. Adjusted EBITDA grew 4% to $82 million and adjusted core EPS increased 3% to $1.22. With the 10-year sitting just above 4% and a strong forward pipeline, we expect a gradual increase in commercial real estate capital markets activity to continue forward. The 34% increase in total transaction volume to $15.5 billion was led by an extremely active quarter of lending with Freddie Mac, up 137% to $3.7 billion, along with solid growth in Fannie Mae volumes, up 7% to $2.1 billion. It is important to note that while the growth in GSE lending and W&D's market share is fantastic, the mortgage servicing rights associated with our GSE business have decreased significantly due to the majority of our loans being 5-year loans versus 10-year loans. This shift, which began in 2023, has a large impact on the capitalized mortgage servicing rights we book, as Greg will speak to momentarily. But given the growth we are seeing from both existing and new clients to W&D, this shorter duration presents a huge opportunity for asset refinancing and/or sales over the next 2 to 5 years. Compounding this opportunity are the upcoming refinancings on the 10-year loans written in 2018, '19 and '20. As you can see on this slide, there is $31 billion of scheduled agency maturities in 2025, mostly comprised of 10-year loans originated in 2015. The level of agency maturity steps up to around $50 billion for both '26 and '27 and then increases dramatically to $97 billion in 2028 and $144 billion in 2029 as those later vintages of both 10-year and 5-year loans mature. And as we have seen in previous cycles where there appears to be a wall of loan maturities, assets will get sold and refinanced, pulling forward a large portion of the refinancing wall. HUD lending volumes were up 20% in the quarter to $325 million. And while the government shutdown is impacting HUD's ability to process business, the newly implemented efficiencies at HUD and increased borrower demand for HUD capital makes us bullish on the outlook for this lending business going forward. Our Q3 investment sales volume was very strong, up 30% to $4.7 billion and outperforming overall market growth of 17% according to RCA. While oversupplied high-growth markets such as Austin and Nashville, where our team sold $3.5 billion of assets in 2021 and 2022, are still struggling and not seeing much sales activity, gateway cities in their suburbs have operating fundamentals attracting capital. A good example of this is the $550 million multifamily portfolio we sold in Boston in Q3 and the $350 million financing we arranged for the buyer of that portfolio, reflecting the broad geographic coverage of our team that is driving our growth in 2025. And while suburban gateway and slower growth Midwestern cities have stronger supply-demand fundamentals today, the Sunbelt will come back due to job growth and lifestyle choice, and we have the teams in place to capture deal flow when that rebound occurs. Our investment sales platform has 26 teams across the country, including 4 national specialty practices and is well positioned to take advantage of an increase in activity across geographies as the next cycle gains momentum. There is still a tremendous amount of equity capital that needs to be recycled to investors before commercial real estate private equity funds can raise fresh new capital. As Slide 6 shows, there is over $600 billion of equity capital invested in historic funds for over 5 years that needs to be returned to investors and nearly $300 billion that was raised in 2021 and 2022 that is yet to be invested. This pressure to return capital and deploy uninvested capital is an important component part of what is driving increased transaction volumes in 2025. Our brokered debt financing team placed $4.5 billion in Q3, up 12% over Q3 '24. Debt funds, banks and life insurance companies are all active in the marketplace, increasing liquidity, which in turn is beginning to drive down cap rates. Our technology-enabled businesses of small balance lending and appraisals continue to grow with appraise revenues up 21% in the quarter and small balance lending revenues up 69%. We continue to invest in customer-facing technology like Client Navigator, our digital experience for W&D clients. We currently have over 2,700 clients actively monitoring their loans and properties through this portal. Similarly, our clients are increasingly using WDSuite, a new web-based software that provides instantaneous market and asset level insights. Galaxy, our proprietary loan database, continues to source new clients and loans for W&D with 16% of our transaction volume year-to-date being with new clients and 68% of our refinancing volume being new loans to Walker & Dunlop. Our success continuing to broaden our client base and win loans from our competitors is a testament to the powerful combination of our talented bankers and brokers, innovative technology and exceptional customer service. As you can see from every client-facing execution experiencing strong growth in Q3, W&D's people, brand and technology are well positioned in the marketplace and winning. We see the secular tailwinds behind our business, almost 3 years of pent-up demand, lower interest rates and the need to recycle capital to investors for future investment continuing over the next several years as the economy continues to grow and commercial real estate fundamentals improve. We are seeing very similar market dynamics in 2025 to what we saw after the great financial crisis in 2011, '12 and '13 and have built Walker & Dunlop to meet the market's needs and grow. I will now turn the call over to Greg to talk through our financial results in more detail.
Greg Florkowski: Thank you, Willy, and good morning, everyone. As Willy just outlined, the continued momentum of the commercial real estate transaction markets drove growth across every one of our product offerings in Q3 '25. Both of our operating segments, Capital Markets and Servicing and Asset Management grew revenues this quarter, reflecting the strength of our overall business model as the market continues to improve. Diving into our segments, our capital markets team continued to build momentum, delivering volume growth across every product offering this quarter when compared to the year ago quarter. As a result, loan origination fees grew 32%, property sales broker fees grew 37% and MSR revenues increased 12% year-over-year. Over the past 2 years, we highlighted 2 trends in our GSE lending volumes. The first is a shift away from 10-year loan products towards shorter duration 5-year products. As this graph shows, back in 2020, 82% of W&D's GSE lending was 10-year or longer paper and 0% was 5-year. Fast forward to today, and those numbers have essentially inverted. Year-to-date in 2025, 23% of loans are 10-year or longer, while 60% are 5-year. The second trend we have seen over the past 2 years is tighter servicing fees due to the higher interest rate environment. Both of these trends continued this quarter, which led to lower valuations for our noncash MSRs. So even though the 64% growth in GSE lending volumes this quarter was fantastic, it only drove a 12% increase in our noncash MSR revenues compared to the year ago quarter. These clients are part of our ecosystem and their loans are now in our servicing portfolio, and we will be in the pole position to address those loans for our clients as they prepare to transact over the next 5 years. As shown on Slide 9, total Capital Markets segment revenues grew 26% year-over-year. Net income grew 28% to $28 million, and adjusted EBITDA improved 83% to a loss of less than $1 million. This segment's performance this quarter is a reflection of the team on the field and what they are capable of delivering as market conditions continue improving. We expect to see more quarters like this as momentum in the markets continue building. Our Servicing and Asset Management, or SAM segment grew third quarter total revenues by 4% year-over-year, as shown on Slide 10. Our $139 billion servicing portfolio continues to generate steady cash servicing fees that grew 4% this quarter. Our placement fees and other interest income also grew this quarter by 5%, even though short-term interest rates declined year-over-year. We experienced an uptick in loan payoffs this quarter, many of which we refinanced for our clients, temporarily increasing the balance of our escrow accounts and offsetting the year-over-year decline in interest rates. This is a nice surprise in Q3, but not something we expect to persist in future quarters. Overall, SAM segment net income declined 1%, but adjusted EBITDA grew 2% to $119 million. Turning to credit. Our at-risk servicing portfolio continues to perform exceptionally well with only 10 defaulted loans totaling just 21 basis points. We recognized a $1 million provision for loan losses this quarter compared to $2.9 million in the year ago quarter. The provision this quarter was driven by updated loss estimates on 2 previously defaulted loans as well as standard loss provisions for the growth in our overall at-risk portfolio. We continue to see strengthening operating fundamentals across the portfolio as rates come down, excess supply in certain high-growth markets get absorbed and national occupancy increases. While our portfolio performance is exceptional, and we feel extremely good about the credit quality of our book, we continue to investigate in collaboration with the GSEs, specific incidences of borrower fraud that took place largely as a result of changes in industry practices in the aftermath of the pandemic. We are currently in negotiations with Freddie Mac on the indemnification of 2 such loan portfolios totaling $100 million. While Freddie Mac and Walker & Dunlop jointly underwrote these loans, we have a long-standing partnership with Freddie Mac that requires us to repurchase loans or indemnify them if certain borrower documentation is determined to be fraudulent. Our current expectation is to use approximately $20 million of Walker & Dunlop capital to collateralize our indemnification of Freddie Mac for these loans, and we expect to take the credit losses associated with this portfolio in the fourth quarter. While loan buybacks and the associated losses are never welcome, we do not have other fraud investigations underway with either GSE and feel confident that the policies, procedures and new technology we have in place today protect us from the type of borrower fraud that transpired during and in the immediate aftermath of the pandemic from occurring again. As Willy just outlined, we have significant momentum heading into the fourth quarter and the strength of our pipeline and the macroeconomic environment has our core business on the path toward achieving our annual guidance for EPS, adjusted core EPS and adjusted EBITDA, absent any losses related to loan buybacks. We ended the quarter with $275 million of cash on our balance sheet, reflecting the continued recurring revenues from our SAM segment, combined with a rebound in capital markets activity. Our capital deployment strategy remains focused on organic growth opportunities through recruiting and retention, reinvestment in strategic areas of the business and continued support of our quarterly dividend. To that end, yesterday, our Board of Directors approved a quarterly dividend of $0.67 per share payable to shareholders of record as of November 21. As I said previously, we feel very good about our business model, credit outlook, market positioning and growth opportunities for 2026 and beyond. Thank you for your time this morning. I will now turn the call back over to Willy.
Willy Walker: Thank you, Greg. As Greg just described, our business is very strong as we finish off 2025 and start looking ahead to the coming year. Our bankers and brokers are winning, driving strong transaction volume and revenue growth. And while our clients borrowing for shorter duration is putting downward pressure on noncash mortgage servicing rights, we are being set up for an extremely strong run of both cash origination fees and new mortgage servicing rights as the shorter duration loans of 2023, '24 and '25 come up for refinancing over the next 2 to 5 years. Our market share with the GSEs continues to grow. And as Fannie and Freddie get ready for potential public offerings, we expect to see their multifamily lending volumes increase. Similarly, we see HUD becoming a more efficient and competitive source of capital. We remain at the top of the league tables with Fannie, Freddie and HUD, and we see a tremendous amount of opportunity ahead as the Trump administration focuses on lowering the cost of housing in America. We saw the opportunity and necessity to be a scaled player in multifamily investment sales back in 2015. And after a decade of growth, our sales volumes have increased 40% in 2025, handily beating the industry average of 17%. We can still grow this group further in the United States, Europe as well as into new asset classes such as hospitality, retail and industrial. Investment sales is the tip of the spear with regard to real estate capital markets activity, and we will continue to invest in great talent for many years to come. We are focused on the continued expansion of our debt brokerage business. We split this business into 2 units earlier this year, one led by Aaron Appel, focusing on institutional clients and the other run by Alison Williams, focusing on middle market and regional borrowers. Both of these groups have a massive total addressable market of almost $3 trillion of refinancing volume based on our contractual maturities over the next 5 years. We will both add bankers and brokers as well as expand our investment sales business to make W&D as competitive in banking, the retail, hospitality and industrial sectors as we are in multifamily. Given the strong total transaction volume we closed in Q3 and the strength of our Q4 pipeline, it is clear that our bankers and brokers are meeting their clients' broad needs today. Year-to-date, our annualized average transaction volume per banker broker is $220 million, ahead of our 2025 goal of $200 million per banker broker and tracking towards our 2021 peak of $311 million. We see data becoming increasingly important to us and our clients. As I mentioned earlier, our Galaxy database continues to identify new clients and loans to W&D. Our client portal developed completely in-house provides our borrowers with data on their loans and portfolio of assets that we believe is unique and differentiating in the marketplace. And while there are multitudes of point solutions for technology and data in the marketplace today, we see the combination of our people, technology and data as the way to differentiate us today and going forward. Aggregating data from our Zelman research, brokers' opinions of value, appraisals, loan underwriting and servicing portfolio to identify trends and investment opportunities for our clients is where we will continue to invest. W&D is the 10th largest commercial loan servicer in the United States. We have invested heavily in people and technology and believe we have one of the best servicing platforms in the world. But we know there are economies of scale we can gain by expanding our servicing business by either buying mortgage servicing rights or increasing our loan origination capabilities significantly. Our fund management business continues to grow, but we need to raise more capital. In 2025, our team will invest just under $1 billion of capital in debt and equity investments, and over half of that deal flow was sourced by Walker & Dunlop bankers and brokers. We see great value in both our fund management professionals' ability to structure and deploy capital as well as our large distribution network of 225 bankers and brokers across the country who have placed $28 billion of capital year-to-date. We are extremely focused on growing our fund management business by raising additional capital vehicles to meet our clients' varying capital needs. We see the continued institutionalization of the commercial real estate industry as capital raising and technology become more differentiators. W&D has best-in-class point solutions in lending, property brokerage, research and appraisals with a very real opportunity to combine these service offerings into a scaled suite to the institutional investor community. Our capital markets group is increasingly selling more than one service to our clients, debt financing along with investment sales or fund valuation services along with research. The opportunities for growth in our industry with W&D's people, brand and technology are enormous. And the challenge and opportunity over the coming years will be to integrate our service offerings to meet the needs of our customers, particularly institutional investors, where we see capital and assets aggregating. Finally, our brand could not be stronger. The Walker Webcast is about to surpass 20 million views on YouTube and Spotify, placing it as the preeminent voice to the commercial real estate industry by a wide margin. Zelman research continues to expand its coverage universe and maintains its reputation as one of the most insightful housing research companies in the United States. And our bankers and brokers exceed their clients' expectations consistently, which in the services business is the best branding and marketing possible. W&D's net promoter score year-to-date is 86, a number well above the financial services industry average and a reflection of the exceptional people, technology and client focus of Walker & Dunlop. These are exciting times for our company. We see an enormous opportunity ahead to expand our capabilities, bring technology to our business that makes our clients and us more insightful and more efficient and continue growing to drive exceptional shareholders' returns. I'd like to thank our entire team for a terrific Q3, and I would ask the operator to open the line for questions. Thank you.
Operator: [Operator Instructions] We'll go first to Jade Rahmani with KBW.
Jade Rahmani: Just to start off with on the 2 new loan repurchase requests. So far this quarter, we have seen some of the agency multifamily lenders, particularly Greystone take charges, JLL and Arbor also have taken charges. W&D's credit has been pristine through this cycle. So this is a modest surprise, although I don't think it's huge. But just can you give any context as to how widespread the issue might be? I think the last repurchase requests you received were in 2024.
Willy Walker: Yes, Jade, thanks for joining us. As Greg underscored, this is isolated to the portfolios that have been identified by us and by Freddie, so we do not have any other investigations underway with either GSE. And so we feel good about that. And at the same time, as Greg said, we never like it when this happens, but feel very good that we have the people, the processes and the systems in place to make sure that this doesn't happen again.
Jade Rahmani: And in terms of credit trends within the portfolio beyond these select instances of apparent fraud, how has credit been performing? I know in the past, you've talked about 2x debt service coverage ratio in the Fannie portfolio, but are you seeing any credit deterioration at this point?
Willy Walker: No. Actually, if you look at the provision for loss sharing in Q3 of last year at $2.9 million and it lowering to $1 million this quarter and Greg's comment as it relates to the overall performance fundamentals of the portfolio, it's exceptionally good. I would underscore the fact that our at-risk portfolio right now as it relates to defaulted loans is sitting at less than 20 basis points. If you look out into CMBS portfolios, the multifamily default rate in CMBS portfolios just eclipsed 7%. And so I think it's a testament to us and to the underwriting policies and procedures that the agencies have had in place for decades that has maintained such a pristine credit track record. And we feel extremely good about the underlying credit fundamentals of our portfolio, particularly with the amount of debt capital that has come back to the market as well as where interest rates and cap rates appear to be trending.
Greg Florkowski: Just to add to what Willy said just real quick. I mean there's still really strong national occupancy and just fundamental tailwinds behind multifamily as a sector. So that just contributes to the strength of the portfolio. So it's not just our assets, but it just broadly, there's really strong tailwinds behind the sector that just continue to strengthen overall credit. So I think the repurchases are isolated relative to the broader credit of our book.
Jade Rahmani: Just turning to volumes. Fannie Mae volumes seemed a little light and the strength was clearly in the Freddie business. Was there anything that weighed on Fannie volumes in the quarter? And do you expect to pick up in the fourth quarter?
Willy Walker: As you know, Jade, from having covered us for quite some time, Fannie and Freddie sort of wax and wane as it relates to market participation and market volumes. And when one sort of steps in, the other one goes down a little bit. The nice thing for us is that we are #1 with Fannie Mae and our indication right now, there are no league tables that have come out year-to-date, but our indication is that we're right at the very top of the league tables with Freddie Mac as well. And so as a very large scaled agency lender, as one or the other is more competitive, we're going to benefit from getting more deal flow done with the agency that is doing more transaction volume at that time. And so we feel extremely good about where both agencies are today as it relates to annual volumes. As you know, neither Fannie nor Freddie hit their caps in 2024 or 2023. And it is very clear that both Fannie and Freddie are headed towards hitting their caps in 2025. The regulator has not given the cap number for 2026 yet, but there is a lot of talk about an increase in the cap. How much of an increase is to be determined, but we see that it's great that both agencies are headed towards hitting their 2025 caps and that my sense from having spoken with officials at FHFA that we'll probably see a cap increase in 2026.
Operator: We'll take our next question from Steve Delaney with Citizens Capital Markets.
Steven Delaney: Willy, my question was going to be would you see the possibility of a refi wave coming later this year as the Fed cuts and maybe the bond market rallies a little bit? It sounds like you're in one. And if you could comment on that -- those vintage, the post-COVID vintage loans, the nature of those transactions, do you think that those borrowers had a shorter mindset? In other words, was it more opportunistic money and that's why you're seeing some exiting of properties as opposed to simply doing a rate and term refinance? Just your thoughts on if the nature of the recent originations is really what's causing the prepayments that you're seeing now.
Willy Walker: Sure, Steve, thanks for joining us. I think you have to underscore the recycling of capital as one of the major drivers of the market we're in today. Many, many of the large participants in the broader commercial real estate markets and more specifically the multifamily markets are fund businesses that have finite lives and have a tremendous amount of capital that needs to be recycled back to investors before they are going to be able to go and raise that next fund. And with essentially very limited to -- you can't say no deal activity in 2023 and 2024, but very muted deal activity in '23 and '24, we sort of arrived in '25 with a lot of people sitting there saying, I've got to start recycling capital back to my investors if I have a chance of going and raising my next fund. And so a lot of the sales activity and financing activity that we've seen in 2025 has not been because cap rates have been, if you will, exceptionally low or exceptionally exciting for someone to sell into. It's been that need to recycle capital that has driven the transaction markets. And what that's also done is it's closed off the bid ask. A lot of sellers have sat there and said, I don't really like the price that I'm selling at. And yet at the same time, they have to recycle that capital. So they have, to some degree, capitulated on the pricing of the market and allowed the buyer to step in and buy the asset at a price that they find to be attractive. And so throughout the year, we've seen that bid-ask shrink. The beginning of the year was much wider and it's gotten tighter and tighter. Interest rates have obviously played into that, making it so that both on the buy side, you're buying the asset at a relatively cheaper price. And we've also seen cap rates come down modestly. I think that what we're now looking at is with that transaction volume going on, you now have buyers and sellers back in the market. That bid-ask has come down, which just drives that transaction activity. And it's getting a lot of people off the sidelines, if you will. And so you know this, Steve, we're in a cyclical business. We have been in a down cycle for the last 3 years since the great tightening began. And we're now starting that next cycle, and it's not just happening at Walker & Dunlop. If you look at the commentary of all of our competitor firms on their Q3 capital markets activity, there is pretty widespread commentary that transaction volumes are picking up. I would also say that everyone has been very tempered in their commentary to say this is a slow build back to where we were at the end of the last cycle. I don't think anybody is saying there's some massive amount of activity that's going to happen in the upcoming quarter because I think everyone is quite honestly a little scared to get over their skis and say, hey, this is going to be game on. But we clearly, from looking at our transaction volumes from Q1 to Q2, Q2 to Q3 and what we're looking in our forward pipeline for Q4, are seeing a resurgence of activity in the real estate capital markets.
Steven Delaney: Interesting. And it sounds like the loan product has definitely shifted to more demand for a 5-year term than a 10-year term, if I heard you correctly. What are you quoting a 5-year Fannie or Freddie multifamily loan at just the range of what you're quoting the coupon at today for 5 years? And how would that compare to the weighted average coupon in your servicing book?
Willy Walker: Steve, well, I can tell you this, first of all, there are a couple of factors that play into that. One of the things that I think is an important data point is that the spread between a 5-year treasury and a 10-year treasury, last I looked at it, it was about 50 basis points. But if you actually do a 10-year loan versus a 5-year loan, it's actually only 15 basis points more expensive to the borrower. And so one of the big things that's going on in the market is, I believe, borrowers look at that 50 basis point spread between the 10-year treasury and the 5-year treasury and they say, well, I want to go short. But given where spreads are on 5-year agency paper versus 10-year agency paper, you're only 15 basis points more expensive going long than you are going relatively shorter. The other piece to your specific question is whether the client is doing a rate buydown or whether the client is just taking the existing rate and spread on top of it. But if you're taking the existing rate and the spread on top, we're doing a lot of financing in the high 4s right now. Last one I looked at yesterday was a 4.83% coupon on a 5-year deal. But that 4% to 5% number is also something that a lot of clients are sort of getting attracted to where they sit there and look at, hey, I can do a 5-year deal at a 4.78% coupon. And if I do a 10-year deal, that's going to push it up closer to 5%, I want to go with the lower one. The other piece to it, Steve, is the prepayment flexibility that a 5-year loan gives you versus a 10-year loan. What we're seeing a lot of borrowers do is sit there and say, I don't want to sell the asset today, but I probably want to sell the asset in the next 3 to 5 years. Therefore, let's go with a 5-year loan that gives us prepayment flexibility and a lower prepayment penalty in year 3 or opens up at 4.5, then go and lock in a 10-year instrument that is rate lock, that is prepayment protected for 9.5 years. And so one of the things that that says to me is that if they're buying that optionality today and only going with a shorter structure, that sales activity or refinancing activity that's going to come up in 2, 3 and 4 years is going to be quite robust because they're buying that optionality to do something with the asset in the next 3, 4, 5 years. So that's the reason why the shorter durations. We don't like the downward pressure it's put on our mortgage servicing rights, but we also are sitting there saying, wow, there's going to be a great opportunity in the next 3, 4 and 5 years as this 5-year paper from '23, '24 and '25 needs to either be sold or refinanced.
Steven Delaney: A lot of transaction activity potential, it sounds like. Willy, new clients, that's been a focus of W&D, just trying to broaden out your brand and more touch points with the institutional multifamily community. When you look at your third quarter transactions, do you have any data as to on those transactions, can you estimate how many of those were with new clients to WD or repeat borrowers?
Willy Walker: Yes. I cited that in my script, Steve, and I don't have the exact data point in front of me, but I think it's 14% were new clients to Walker & Dunlop and 60-some-odd percent were new loans to Walker & Dunlop. So the new loans are pieces of business with an existing Walker & Dunlop client, just a loan that one of our competitor firms had done that we refinanced or financed the acquisition for our client. So over 60% is new product to Walker & Dunlop. And then totally new clients, I think was it 14%?
Steven Delaney: 16%.
Willy Walker: 16%, yes. 16% were new clients to Walker & Dunlop. And so look, as you know, Steve, we operate in an exceedingly competitive market. We have great competitor firms that have wide distribution networks and in some cases, seemingly a banker and broker on every corner. And so the opportunity for W&D is to go and attract new clients and bring new loans and new sales opportunities to our platform. And as our Q3 numbers show, we did just that. And I would also say, as our growth numbers show, we are outstripping a number of our competitor firms as it relates to growth in our capital markets executions, from aggregate volume numbers.
Steven Delaney: Just one final thing for me, Willy, big picture. The S&P is up 16% or so year-to-date 2025. You're putting up good numbers, but W&D share is down about 18% year-to-date '25. What do you think people are missing? I mean this is a strong report. Rates are headed down, not up, that generally is a good thing for real estate-related firms. I know you're probably frustrated by it, but I don't see the negative bear case for W&D shares. I think my notes reflect that. So I'm not saying anything that's not out there on the street. But it just seems to be a disconnect between the way your shares are trading and where the market is and where the rate outlook is.
Willy Walker: So Steve, a couple of things. One, and clearly, as the largest individual shareholder in Walker & Dunlop, I take your comments very seriously. Two, as having been fortunate enough to be CEO of this company for all 15 years of its public life, I've been around this too long to let it frustrate me and really just focusing on what we need to do to execute as a company. Third thing I would say is, look, Q1 of 2025, given where rates went at the end of 2024, was a very slow start to the year. As I hope investors can see, we have been building momentum in Q2 into Q3. And Greg's and my commentary talk about a forward look on Q4 that looks quite good. And I think that '26 is going to present to us and all of our competitor firms a very big opportunity to continue to grow in the capital markets area. The fourth thing I'd say, Steve, is that, look, some of our big competitor firms have steady Eddie real estate services businesses that are not as cyclical as the capital markets businesses are and have provided them with significant ballast in their financial performance for '23 and '24 and into 2025. But those businesses are not nearly as high growth as the real estate capital markets are. And so if you look at some of our larger scale competitor firms, they've done very well as capital markets transaction volumes have been way down in '23 and '24 and started to come back in '25. We are a real estate capital markets pure play for all practical purposes. And we better get the benefit of the growth that we are seeing coming to us in '26 and '27 as the capital markets reflate. And that's on us to go and perform and put up the numbers. And so I appreciate you pointing out where we stand, and I also appreciate the positive outlook you have on W&D and our forward performance. But we also know it's up to us to go address the market and put up the numbers going forward to make it so that our investors are benefiting from that growth and from that performance.
Operator: At this time, there are no further questions. I will now turn the call back to Willy for any additional or closing remarks.
Willy Walker: I just want to thank everyone for joining us this morning. Thank the W&D for a fantastic Q3. And I wish everyone a very nice day and end of the week. Thank you very much, operator.
Operator: Thank you. This does conclude today's conference. We thank you for your participation.