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Good day, and welcome to the first quarter 2026 Walker & Dunlop earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Kelsey Duffey. Please go ahead.

Thank you, Lisa. Good morning, everyone. Thank you for joining Walker & Dunlop's first quarter 2026 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 archive 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'll now turn the call over to Willy.

Thank you, Kelsey. Good morning, everyone. I want to start the call by thanking Kelsey for her incredible 12 years at Walker & Dunlop. She is going to take early retirement to spend more time with her family, and everyone at Walker & Dunlop, Greg and I, particularly, are extremely appreciative of all you have done for Walker & Dunlop over the last 12 years. Thank you, Kelsey. We started 2026 with active commercial real estate capital markets across the industry, Walker & Dunlop closed $13.7 billion of total transaction volume, up 94% from Q1 2025, as shown on slide three.

That strong transaction activity, coupled with continued growth in our servicing portfolio, drove total revenues of $301 million, up 27% year-over-year, and diluted earnings per share of $0.46, up 475% over Q1 2025. Adjusted EBITDA grew to $74 million, up 14% year-over-year. Our Q1 2026 financial performance reflects Walker & Dunlop's teamwork, brand, and continued standing as one of the best commercial real estate capital markets firms in the industry. Debt originations totaled $11.8 billion, more than doubling year-over-year as activity accelerated across nearly every part of our financing business. Agency lending volume was up 109% to $5.2 billion, led by $3.1 billion with Freddie Mac.

Our strong quarter with Freddie included a $1.7 billion refinancing of workforce housing assets for Starwood Capital Group, a deal that demonstrates our team's ability to execute on scaled, complex transactions. $4.7 billion of originations for the GSEs increased our market share from 11.2% at the end of 2025 to 12.3% at the end of Q1. A nice step up. Brokered debt volumes totaled $6.5 billion, up 155% year-over-year, reflecting our fantastic team and ability to place capital across commercial real estate asset classes with a multitude of capital providers. The debt capital markets are flush with capital, and allowing owners who don't like pricing in the sales market to refinance.

As slide five shows, on Zelman's quarterly research Buy, Sell, Build Sentiment Index, only 6% of multifamily owners are currently sellers, with 64% buyers and 30% builders. This phenomenon is tempering investment sales volume, which was solid but only up 4% on the quarter to $1.9 billion. We expect investment sales volumes to increase over the course of the year due to increased capital flows as well as values. One important indicator of our growth and productivity is transaction volume per banker-broker. As you can see on slide six, on a trailing 12-month basis through Q1 2026, our average production per banker broker was $282 million, up from $248 million at the end of 2025.

This increase reflects the pickup in industry activity as well as the large portfolio transaction I mentioned previously. As we continue to use technology and focus on increasing our team's productivity, we expect that this metric will continue to improve to hit our goal of $300 million of transaction volume per banker broker by the end of 2026. Loan repurchases and indemnification agreements with the GSEs have required a tremendous amount of time and effort from our Servicing & Asset Management teams over the past two quarters. During the first quarter, our total GSE loan repurchase exposure was lowered from $222 million to $192 million, which is welcome progress.

Both Fannie Mae and Freddie Mac will be performing their annual reviews of Walker & Dunlop. We are hopeful that those reviews, in conjunction with the conclusion of any loan-specific investigations, will be resolved later this year and allow us to move past these repurchase issues. We have strengthened our underwriting processes, enhanced our teamwork and protocols, and reinforced our culture of accountability to make us an even better lender going forward. I will now turn the call over to Greg to talk through our financial performance and financial outlook in more details. Greg?

Thank you, Willy, and good morning. We delivered a strong start to 2026 with a meaningful year-over-year improvement across all key financial metrics, driven by a significant rebound in transaction activity. Total transaction volume grew 94% to $13.7 billion, reflecting improving market conditions and continued strength across our platform. This translated into diluted earnings per share of $0.46, up 475% from the prior year period, alongside a 14% increase in adjusted EBITDA and a 20% increase in adjusted core EPS. Our capital markets business is benefiting from improving market-wide activity that is fueling the expansion of our Servicing & Asset Management business, which continues to generate consistent and durable cash flows. Before I discuss our segment results, I'll briefly update you on our loan repurchase exposure.

During the quarter, we repurchased one additional loan for approximately $5 million and also negotiated an indemnification agreement for a $34 million portfolio of loans without the requirement to repurchase the portfolio. As a result, our total repurchase exposure declined to $92 million at quarter end. We recorded approximately $10 million in expenses related to these assets in the quarter, split almost equally between credit reserves and operating costs. We have begun executing on our disposition plan and expect to have two assets under contract in the second quarter with a goal of reducing our repurchase exposure to between $100 million and $125 million by the end of the year. Overall, we are making steady progress reducing this exposure and expect the portfolio to become less of a factor in our results in the coming quarters.

Turning to our segments on slide seven. Our capital markets segment delivered a strong start to the year and was the primary driver of our financial performance this quarter. Transaction volumes increased 94% and were led by growth in Freddie Mac, HUD, and broker transactions, driving segment revenues up 58% to $162 million. Earnings growth for the segment was also strong, with net income of $28 million, up $26 million from the prior year, and adjusted EBITDA of $3.9 million, up from a loss of $13.3 million last year. As expected, personnel expense increased with transaction activity. However, the majority of that increase was driven by variable compensation and directly tied to production growth.

Importantly, personnel expense declined to 68% of segment revenue from 84% of revenue last year, demonstrating the operating leverage and economies of scale of the platform as volumes recover. As financing and acquisition activity continue to improve, we expect the capital markets segment to be a key driver of growth in 2026. As shown on slide eight, our Servicing & Asset Management, or SAM segment, continues to generate stable earnings and cash flow. The servicing portfolio grew to $146 billion and generated $85 million of servicing fees, up 4% year-over-year, contributing to total segment revenues of $138 million, up 5%.

Despite the $10 million of incremental provision and repurchase-related expenses this quarter, net income for the segment increased 12%, and adjusted EBITDA rose 3% to $112 million. The performance of this segment will be driven by two primary factors. First, as we execute our plan to sell repurchase loans, we expect to reduce the operating drag caused by this portfolio and further improve earnings and cash flow. Second, continued growth in our capital markets business will drive expansion of the servicing portfolio, increasing the long-term profitability of the segment. Taken together, this positions SAM to deliver consistent performance today with a clear path to incremental earnings growth over time. Turning to credit on slide nine, which highlights key metrics for our Fannie Mae at-risk portfolio.

There are over 3,200 loans in the $69 billion at-risk portfolio, just 14 are in default at the end of the first quarter, unchanged from the end of 2025, and representing only 24 basis points of the portfolio. We will be collecting and analyzing full-year 2025 results for every property in the portfolio through the end of this month. Based on the financial data collected to date, which is nearly 80% of the portfolio, the weighted average debt service coverage ratio remains strong at over 2x, only 1% of loans collected to date are below one time. Credit fundamentals also remain sound, with an average underwritten LTV of 61% for the entire portfolio and just 4% of loans above 75% LTV.

We continue to actively monitor the portfolio and remain confident in the strength and stability of the underlying credit performance at this point in the cycle. Our business continues to generate strong, steady cash flow, and we ended the quarter with $193 million of cash on the balance sheet. During the quarter, we deployed $13 million of capital to repurchase 283,000 shares of stock at a weighted average price of $47.13, leaving us with $62 million of remaining capacity under our 2026 authorization. We see a healthy pipeline of strategic opportunities and will balance investing in the growth of the business with returning capital through opportunistic repurchases. Our dividend remains a key component of our shareholder returns.

Yesterday, our board approved a quarterly dividend of $0.68 per share, consistent with last quarter, and payable to shareholders of record as of May 21st. Turning to our annual guidance on slide 10. We established our outlook assuming a gradual stabilization in interest rates and a corresponding increase in capital markets activity over the course of the year. While geopolitical dynamics have introduced some uncertainty around inflation and the near-term path of interest rates, we have seen limited disruption to transaction activity, and the broader environment for commercial real estate remains constructive. We are entering the second quarter with a healthy pipeline consistent with this time last year. Given our strong start to the year and visibility into our near-term pipeline, we remain confident in our ability to achieve our guidance and deliver on our expectations.

We're encouraged by the strong start to the year and the momentum we're seeing across both sides of the business. Capital markets activity continues to improve, and our servicing portfolio remains a strong source of stable, growing cash flow. We're entering the second quarter with a healthy pipeline and good visibility into an active transactions market, and we remain confident in our ability to deliver on our full-year 2026 guidance. Thank you for your time this morning. I'll now turn the call back over to Willy.

Thank you, Greg. As Greg just outlined, our business is delivering solid financial results as Walker & Dunlop's people, brand, and technology continue to differentiate us across the industry. I want to discuss today's market through the lens of signal versus noise, and importantly, what that means for Walker & Dunlop as we look ahead. If you start on slide 11, the market came into the year with a very constructive set of expectations. Lower energy prices, deregulation, tax reform, and a pickup in M&A activity. That backdrop, if realized, would have supported a strong commercial real estate transaction market. As slide 12 depicts, the markets have been volatile due to policy shifts, tariffs, and the Iran conflict. Unlike during many past conflicts, investors did not seek safety in treasury bonds, and as a result, equity markets fell as bond yields increased.

Yet even with this volatility in the equity and debt markets, overall transaction volume in commercial real estate is normalizing. Multifamily sales volume today is only modestly below pre-COVID levels, as you can see on slide 13. As you can see on slide 14, due to more capital being called and returned over the past decade, the black line on this chart shows the five-year rolling average at negative $240 billion. Investors are seeking capital return, which is forcing owners to sell. We expect this phenomena will push transaction volume up, which drives both sales and financing activity at Walker & Dunlop. As shown on slide 15, commercial real estate lending volumes are projected to increase meaningfully over the next several years as the next investment cycle begins to take hold. We have confidence in this forward look for two primary reasons.

First, industry volumes over the past three years have been significantly under trend, meaning there's a lot of pent-up financing and sales demand. Second, look at the 2019 and 2020 financing volumes on this chart, $602 billion and $614 billion, respectively. That volume of lending was predominantly 10-year loans set to mature in 2029 and 2030. If you then look at 2024 and 2025, a ton of that lending was done with five-year terms. For Walker & Dunlop, 54% of our 2025 GSE lending was five-year term. As a result, 2029 and 2030 are setting up to be enormous financing years.

At the same time, the near-term opportunity for Walker & Dunlop's remains very attractive as our clients are choosing shorter-term loans to buy optionality to sell or refinance assets more quickly. This will likely accelerate the financing and sales cycle and increase transaction volumes over the next one to three years. Multifamily fundamentals are very strong as you look at affordability versus single-family and the forward supply curve. As slide 16 shows, if you purchased a single-family home in 2019 when the median home in America cost $275,000, you paid $1,400, shown by the black line, in principal and interest versus $1,600 to rent the average apartment in America. If you could afford the down payment, owning was cheaper than renting.

As you can see from the bar chart, the average home price skyrocketed, driving the black line through the blue line, representing homeownership becoming wildly more expensive than renting. That is a structural advantage to multifamily over single-family today, and it will remain so until either home prices fall, interest rates fall, or multifamily rents rise significantly. Many Americans are also opting for single-family rental as an attractive alternative to owning. From a monthly payment perspective, it is currently 20% more expensive to live in an owned single-family home than a single-family rental, making SFR an extremely important piece of the solution to the affordable housing crisis in the United States. Our team is very focused on growing SFR financing volumes.

While we are in support of the ROAD to Housing Act, we have been working with other industry leaders to remove the seven-year provision sale that would severely diminish institutional investment in BFR and SFR assets. On the forward supply curve, as you can see, multifamily starts peaked in 2023, deliveries peaked in 2025, and we're headed towards significantly less supply over the coming years. This dynamic will drive improved fundamentals, increased transaction volumes, and deal flow for Walker & Dunlop. We have a deep foundation and brand recognition in the multifamily market, a sector with significant tailwinds that I just described. We've also diversified our capabilities to meet the expanding needs of our client base. The 155% increase in debt brokerage volume in Q1 is due to these investments and the strength of our team.

While W&D is known for multifamily, nearly 45% of our Q1 debt brokerage volume was on non-multifamily assets. Similarly, while we have tremendous partnerships and scale with the GSEs, in 2025, we worked with over 250 capital providers, $22 billion of non-agency debt financing. We will continue to invest in capital markets bankers, brokers, appraisers, researchers, and technology in both the U.S. and Europe over the coming months and years to become the very best real estate capital markets firm in the world. This is the mission of our newly announced five-year strategic growth plan, The Journey to 2030. From a financial perspective, the plan involves significantly growing total transaction volumes to generate $2 billion of revenues by 2030.

As we embark on this journey, we will continue to add the very best talent across geographies and across asset classes, expand our client base, invest in technology, and meet our clients' needs every day while growing our top and bottom line for our shareholders. We have a strong Q2 pipeline of deal flow and confidence in achieving our 2026 guidance. We are focused on delivering growth in 2026 and making progress towards our ambitious The Journey to 2030 goals, knowing that we have made the investments in people, brand, and technology to do so. Thank you for your time this morning. I will now ask the operator to open the line for any questions.

Thank you. If you are dialed in via the telephone and would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that is star one to ask a question. We'll take our first question from Jade Rahmani with KBW.

Thank you very much. Looks like a very strong quarter. I was wondering if you could give some color on the mix shift between 10-year and five-year deals, if you're seeing continued mix toward the five-year, and when you expect that potentially to inflect the other way, or maybe it already has begun to do so.

Jade, good morning, and thanks for joining us. You know, we and I personally watch that number quite closely. I will say this. We were actually, I think, seeing kind of a trend back towards more 10-year money. Then we had the rates go up by about 50 basis points and the steepening of the yield curve. I will say, since that movement, while as Greg and I both said, aggregate volumes have actually held in nicely, many borrowers have moved from longer term to shorter term just because of the pricing differential between five-year paper and 10-year paper. It's my hope that when and if rates settle down, we get the reversion back to longer-term duration.

For right now, given that 50 basis point increase in the long bond, many people, just from an overall proceeds and rate standpoint, have opted for shorter maturity.

Thank you for that. Secondly, can you just talk about the drivers of the strength in transaction volumes that you're seeing right now? How much of it is refinancing volume versus new acquisitions? What would you say is driving the strength as W&D posted, you know, leading industry growth?

As we mentioned, Jade, investment sales activity Q1 to Q1 was pretty much flat, only up about 4%, whereas you saw debt volumes go up by over 100% in both GSE as well as non-GSE volumes. It's very heavily on refinancing right now versus acquisitions. I will say that at the same time, the investment sales pipeline is very strong. We have a, you know, a very significant pipeline there as it relates to properties that we've done broker opinions of value on and have a lot of sellers waiting to go to market.

I think that what we have seen, particularly in the last sort of six to eight weeks since the Iran conflict began, is that the sales market has somewhat gone sideways, whereas people still need to transact because they've got a debt maturity coming up. As you can imagine, we're giving them pricing on a sale versus a refinancing. What we have seen is many people sit there and say, "I don't like what the price is I'm seeing in the market today. I'm going to go a short-term refinancing to sort of bridge through to a future sale." They're going and putting the financing on. As I said in my prepared remarks, what that is going to do is give us an increased volume in the shorter term.

People aren't taking the asset, putting 10-year financing on it, and we won't see that for another nine years. It's going shorter term, which would say that they're trying to buy optionality to either put it back in the market to sell it, or they're going to be required to refinance it sometime in the next four to five years if they've gone with a five-year instrument. We view that as a huge opportunity for us as well as our competitor firms, as it relates to sort of increased cycle time in the industry.

Thank you very much.

Once again, if you would like to ask a question, please signal by pressing star one on your telephone keypad. We'll take our next question from Chris Muller, Citizens Capital Markets.

Hey, guys. Thanks for taking the questions. Congrats to Kelsey. She's been great to work with over the years. Nice to see the repurchase loan exposure going down a little bit in the quarter. If I'm reading correctly, it looks like you guys have reached indemnification agreements on all three portfolios now. Yes. First off, is that correct? Am I reading that correctly? I guess on the broader situation, should we assume that no news is good news in regards to Freddie doing their own investigation? I think you guys said on your Q4 call that you expected them to be wrapped up with that in 90 days. Just any updates there would be very helpful.

Chris, great to hear your voice on the call. Good to have you. Yes, you're all reading that correctly. The $134 million of loans that we were working through on our last call, we've now reached either a repurchase and indemnification or just an indemnification agreement on. That's behind us. With respect to the review with Freddie, as Willy said in his remarks, we're working with them closely on that. We're sending them what they need from us in order to complete that review, and, you know, as much as we hope it'll be done in the near term, you know, maybe in the next couple of quarters, we don't control that timing, but we certainly think it'll be wrapped up here in the near future.

Got it. Very helpful. I guess it's nice to see the pickup in HUD originations in the quarter, and it looks like that was the highest origination volume since 4Q 2021 for that business. Is there anything driving that strength from a government policy standpoint? Should we expect that business to continue above 2025 levels?

Chris, first of all, good catch because we didn't mention that, and you just went and did your own homework on that. The HUD pipeline is strong. I think it is reflective of Secretary Turner and the team at HUD and what they've done to increase processing times and streamline that business, and making that business more competitive. I think you're spot on it, that that's a very attractive sort of financing option today for many of our customers. We have a very solid HUD pipeline for 2026, feeling quite good about that. As you well know, those loans carry with them very long maturities and very healthy mortgage servicing rights.

As we see an uptick in volumes there on HUD, while not a large part of our business from a volume standpoint, those MSRs are long-term and therefore quite significant from a financial standpoint.

Got it. It is great to hear. Thanks again for taking the questions.

Thank you. Thank you for your comment about Kelsey.

We'll move to our next question from Kyle Joseph with Stephens.

Hey. Good morning, guys. Congrats on a strong start to the year. Thanks for taking my questions. Yeah, Kelsey, we'll miss you. Just wanted to touch base first on, Greg, you kind of overlaid your plan for improving the profitability of the SAM segment. Can you kind of walk us through a few more details there, and more specifically, kind of how you're envisioning that and the timeline for that?

Sure. Great to have you back, Kyle. It's an early morning for you. Appreciate you tuning in. Look, I think first, you know, what we've talked about now for the last couple of quarters is just our focus on reducing the portfolio of repurchase loans. You know, that has been, you know, a $3 million-$5 million quarterly operating drag for us. You know, we have a couple of deals in the market right now, hoping to get those either sold or, you know, right around the end of Q2 or shortly thereafter.

You know, we're still evaluating the remaining part of the portfolio and think that, you know, by the end of the year, we should get the overall portfolio reduced by about half to $100 million-$125 million, which would be really nice progress. Look, most importantly, we've got a capital markets business that is delivering top-end market share right now, and that just feeds the servicing portfolio. You know, the portfolio is going to continue to grow. We don't have a lot of near-term maturity risk or maturity pressure over the next two years. As long as our team is delivering on the capital markets side, that's going to feed that portfolio and feed the growth of our servicing revenues and related fees.

I think that has a real, you know, real clear near-term growth path. And that segment overall is just going to continue to generate the cash we need to grow this business.

That's really helpful. That's it for me. As always, appreciate your perspective on macro. Thanks, Willy. Thanks, Greg.

Thanks, Kyle.

It appears there are no further questions at this time. I'd like to turn the conference back to Willy Walker for any additional or closing remarks.

I want to thank everyone for joining us today. One final thanks to Kelsey for all she's done at W&D. Enjoy the time with the kids. Thanks, everyone, for joining us. I hope you have a great day.

This concludes today's call. Thank you for your participation. You may now disconnect.

Good day, welcome to the Q4 2025 Walker & Dunlop, Inc. Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Kelsey Duffey. Please go ahead.

Thank you, Cynthia. Good morning, everyone. Thank you for joining Walker & Dunlop's fourth quarter and full year 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. A recording will be available later today. Both our earnings, press release, and website provide details on accessing the archive 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'll now turn the call over to Willy.

Thank you, Kelsey. Good morning, everyone. Thank you for joining us. Walker & Dunlop's fourth quarter and full-year results demonstrate continued success in our real estate capital markets business, with significant and sustained growth in transaction volumes. Our people and brand are winning, demonstrated by transaction volumes, market share, and year-end league tables. At the same time, our Q4 and annual results were impacted by loan buybacks and valuation marks on our real estate-owned portfolio. Notwithstanding the charges, W&D's core business and market presence is extremely strong. We have an incredible team and brand that is meeting our clients' needs and winning. W&D's capital markets transaction volumes grew throughout the year, from $7 billion in Q1 to $18 billion in Q4. That 161% growth in transaction volumes was due to a recovering market and the strength of W&D's team and brand.

We start 2026 with an extremely strong pipeline of both flow business as well as some very large portfolio financings. W&D is very well positioned to benefit from increased deal flow across the commercial real estate industry as the down cycle of the great tightening wanes and the upcycle of an expansionary macroeconomy sets in. Walker & Dunlop's multifamily property sales volumes grew from $1.8 billion in Q1 2025 to $4.5 billion in Q4, up 146%. Our team increased their share of institutional multifamily sales from 8.7% in 2024 to 10.2% in 2025, ending the year as the fourth-largest multifamily broker, according to Real Estate Alert.

The breadth of W&D's service offering allowed us to finance 42% of our 2025 multifamily property sales for the buyer. This collaboration between our sales and financing teams was an important part of how we ended 2025 as the largest Fannie Mae DUS lender for the seventh consecutive year and moved up with Freddie Mac to be the third-largest Optigo lender by growing volumes 58% in 2025. We finished the year number one with Fannie Mae, number three with Freddie Mac, and as the secondd-largest GSE loan originator in the nation, with 11.2% market share and $17.8 billion in total lending volume. W&D's people, brand, and technology are winning in one of the most competitive markets in commercial real estate.

As we mentioned in our Q3 earnings call, we were asked by Freddie Mac to investigate a portfolio of loans totaling $100 million, where the borrower committed fraud by submitting false documents to Walker & Dunlop and Freddie Mac. We retained excellent outside counsel to conduct the investigation, and several conclusions were reached. First, not a single employee at Walker & Dunlop had knowledge of or participated in the borrower's fraudulent flip transactions. However, while investigating the loans, it was determined that a Walker & Dunlop banking team had not adhered to our loan origination policies and procedures. This team is no longer at Walker & Dunlop. Due to the investigation findings, Walker & Dunlop, at our own initiative and expense, did further loan diligence on the approximately 266 loans originated by that team.

Through that review, we found one additional portfolio of loans totaling $34 million, where it appeared the borrower misrepresented financial information. We presented the results of our investigation to Freddie Mac in January 2026 and offered to indemnify them for losses arising out of the aggregate $134 million of loans, which led to the $29 million of loan loss expense we booked in the fourth quarter. Freddie Mac is performing an additional review of our work on that portfolio. We expect them to finalize their diligence over the next 90 days. We have built Walker & Dunlop over the past 89 years as not only one of the best companies in our industry, but one with impeccable credit standards and ethics. Our track record speaks for itself. What we found through this investigation did not hold to our high standards.

Let me also be very clear about how we responded to these issues. We acted swiftly, hired skilled outside counsel, acted with full transparency, took accountability for what transpired, and improved our people, processes, and systems as a result. While we can never say we will not have further loan losses or fraudulent borrowers, these improvements make us an even better company going forward. As Greg will discuss in a moment, we completed our annual business strategy review and made two important decisions that also impacted our Q4 and full year financial results. First, we shifted our strategy for 2024 loan repurchases from long-term hold to near-term exit and marked down the carrying value of several assets in the fourth quarter. Last year was spent stabilizing the properties behind those loans, and we are now focused on selling them and recovering the capital we invested in the buybacks.

Second, we took an impairment charge on affordable assets we hold in the Walker & Dunlop Affordable Equity platform. We evaluated the cost of operating these assets and their long-term returns and decided to sell the assets. The impairment charges we took this quarter reduced the carrying value of these assets to fair value. While loan buybacks and additional provision expenses are never welcome, we are taking several charges this quarter to set W&D up for growth and success in 2026 and beyond. Excluding impairment and repurchase-related charges, Q4 generated $1.04 in diluted earnings per share, reflecting the increasing strength of our capital markets business. We also ended the year with $299 million of cash on our balance sheet, plenty to absorb these loan repurchases and continue investing in the growth of our company.

I'm going to turn the call over to Greg now to discuss our financials in more detail. I'll return to talk about what we are seeing to begin 2026 and our go-forward strategy, which is both focused and exciting. Greg?

Thank you, Willy. As you outlined, we took action to address repurchases in the affordable assets, and given the consistent strength of our core business over the last three quarters, those actions position the company for stronger performance going forward. I'll begin by walking through the financial impact of those decisions and then discuss the performance and outlook for our core business. In total, we recognized $66 million of impairments and credit losses this quarter related to loan repurchases and our strategic decision to exit the affordable assets. We added two new line items to our income statement, titled Indemnified and repurchased loan expenses and Asset impairments and other expenses, to capture these charges. I'll start with the indemnified and repurchased loan expenses.

Since 2024, we have either indemnified or repurchased $222 million of loans from the GSEs, including all the loans from the investigation. In the fourth quarter, we recognized charges totaling $38 million related to these assets, including $29 million in charges related to the loans subject to the investigation. We are now evaluating the most efficient path to disposition and expect to execute over the next few quarters. Although there was underlying borrower fraud, many of the loans remain current, and we do not expect significant carry costs as we prepare to sell them. The remaining $9 million of charges this quarter relate to our shift in strategy for previously repurchased loans. Since taking control of those assets in 2024, they have cost between $2 million and $3 million per quarter to operate.

While we believe we could recover a portion of the lost value over time, doing so would take several years, and the ongoing cost of operating them dilutes near-term earnings and understates the performance of our core platforms. As a result, we will sell them in the coming quarters, in some cases, at prices below our carrying values, which made the impairment charges this quarter necessary. Going forward, we will report future credit reserve adjustments and operating costs for these assets through the indemnified and repurchased loan expenses line item. To put these repurchases in context, we have $115 billion of loans outstanding with the GSEs as of December 31st, 2025. The UPB of our repurchases represents just 19 basis points of that portfolio, and our cumulative losses total $51 million, or 4 basis points.

Nearly 90% of our repurchases to date were with four borrowers and were originated by the team that is no longer with Walker & Dunlop. The actions of a few had an outsized impact over the last two years. This is not meant to suggest we will not have future repurchases, but these figures demonstrate the overall quality of the remaining portfolio and that the recent losses are not reflective of our broader book. If we do have future repurchases, we are confident in our ability to absorb future losses and manage the capital needs, just as we have over the last two years. The second charge we recognized this quarter relates to the impairment of affordable assets held since the acquisition of Alliant Capital. This part of the Alliant Capital business was focused on raising capital from institutional investors to acquire and operate affordable assets.

The hold periods are long term, and since the business is not at scale, operating these assets has cost approximately $2 million per quarter. These assets do not align with our long-term strategy, so we made the decision to sell them and recorded impairment charges of $26 million in the fourth quarter. These charges are reported within the asset impairments and other expenses line item. As assets are sold, we will report any net gains or losses through this line item. The operating costs for personnel, interest, and depreciation are recognized in those respective line items, and those financial impacts should be reduced to zero by the end of 2026.

As we position the company to execute the Journey to '30, the long-term growth strategy Willy will begin outlining in a moment, we believe that focusing on our core businesses is the most effective use of our capital and internal resources. Selling the repurchased and affordable assets is expected to return $25 million-$35 million of capital to the balance sheet over the coming quarters and eliminate the approximately $4 million-$5 million of quarterly operating costs I mentioned previously. The capital will be redeployed into our core businesses, where we believe it can generate stronger long-term growth and shareholder returns. If you'll turn to slide six, you will see a crosswalk from each of our reported core metrics to what they would have been absent the impairment and repurchase related charges recognized in the fourth quarter.

For the quarter, we reported a diluted loss per share of $0.41, Adjusted EBITDA of $39 million, and adjusted core EPS of $0.28. All of the charges were reflected in diluted loss per share, while only the credit loss portion of those charges is added back to Adjusted EBITDA and adjusted core EPS, consistent with how we define and report those metrics. If the remaining impacts of these charges were added back to our reported results for illustrative purposes, diluted earnings per share would have been $1.04, Adjusted EBITDA would have been $85 million, and adjusted core EPS would have been $1.31, demonstrating the underlying earnings power of our core platform. Loan repurchases and credit events are an inherent part of our business model, and we will manage them conservatively and transparently.

While individual quarters may reflect that volatility, the underlying strength of our capital markets and servicing and asset management platforms remains intact, and we are optimistic about the outlook for both businesses. Turning now to segment results. Our capital markets business continues to build momentum amidst the commercial real estate recovery. We delivered $18 billion of total transaction volumes, up 36% over the year ago quarter, year-over-year. Revenues did not grow in line with volumes for two reasons. First, the volume growth year-on-year was driven primarily by debt brokerage and property sales activity, which earn lower fee margins and revenues than our GSE originations remained tight and lower than Q4 last year. We expect MSR margins to remain near 2025 levels again in 2026. Nonetheless, the capital markets business had another strong quarter of net income, delivering $26 million.

The outperformance in the fourth quarter triggered performance incentives for some of our salespeople, and those accruals caused EBITDA to fall just below breakeven. That's a timing impact, as overall, for the full year, the capital markets segment delivered $90 million in net income, up 35% from $67 million in 2024, and more than double the $41 million reported for 2023. Adjusted EBITDA for the segment also improved to a loss of $17 million, up 40% from a $28 million loss in 2024, and about one-third of the $46 million loss reported in 2023. The momentum building in the transaction markets over the last four quarters has continued into early 2026.

We are starting the year with a very strong pipeline, and we are bullish on our team and its ability to deliver another year of sequential growth that will drive our performance in 2026. The servicing and asset management, or SAM segment, had another solid quarter absent the aforementioned loan repurchase and asset impairment charges. Our servicing portfolio grew to $144 billion at the end of 2025, fueled by our success with the GSEs this year and grew 6% compared to the end of 2024. With a very strong capital markets team delivering top-end market share, we expect continued growth in the portfolio in 2026. Revenues from the SAM segment were $143 million, down 9% from the year ago quarter.

We sold an affordable asset last Q4 that generated $29 million of revenue, so the decline was expected and not due to any particular headwind facing the segment. As mentioned, repurchase and impairment charges impacted our SAM segment and were $66 million this quarter, which drove the $9 million net loss for the segment, compared to $37 million of net income in Q4 last year. Adjusted EBITDA was also negatively affected by the charges, coming in at $80 million this quarter, compared to $124 million last year. Our outlook for the SAM segment is positive for 2026. We expect growth in the servicing portfolio, which will drive earnings and cash flow, and we also see opportunities for growth in syndication revenues and investment management fees.

As we sell the affordable and repurchased assets, we will eliminate those operating costs from our ongoing results, improving the long-term financial performance for this segment. Turning to credit, slide 10, which provides key credit metrics that are specific to our at-risk portfolio. The at-risk portfolio with Fannie Mae now stands at $69 billion at December 31st, 2025. We have 14 defaulted loans at December 31st, 2025, totaling $159 million, just 23 basis points of the at-risk portfolio. As the macroeconomic environment continues to recover, our at-risk portfolio continues to demonstrate strong underlying credit performance, with low defaults and low loss severity upon default.

As this slide shows, the cash flows of the portfolio remain strong, with a weighted average debt service coverage ratio over 2x and only 3% of our loans performing below a 1x debt service coverage ratio. The underwritten LTV of the portfolio is also sound at just 61%, with only 4% of loans underwritten at an LTV above 75%. With strong cash flows and a healthy amount of equity in front of our senior debt, our at-risk portfolio is extremely well-positioned in the current environment. We ended the quarter with $299 million of cash on our balance sheet, reflecting the cash generation from our servicing and asset management business and the strength of the transaction markets.

Although we reported impairment charges this quarter, we will recover capital as we sell the assets, reduce operating costs, and further improve our cash generation. When coupled with the continued momentum building in our capital markets business, our strong cash position provides us with flexibility to support organic growth, invest strategically across the platform, and continue returning capital to shareholders. Since initiating our dividend in 2018, we have returned more than half a billion dollars to shareholders over the last seven years. As such, our board of directors increased the quarterly dividend for the seventh consecutive year to $0.68 per share, a 1.5% increase over 2025. Before discussing our guidance for 2026, it is important to put our 2025 performance in context.

2025 reported results were meaningfully impacted by a very slow start to transaction activity in the first quarter, when we generated $0.08 of diluted earnings per share, and again in the fourth quarter as a result of the loan repurchase and impairment losses. As we look ahead to 2026, a significant reduction in those charges, combined with a first quarter pipeline that is over 2x the level of the year-ago first quarter, creates a clear opportunity to step up our earnings. We expect the market to grow again in 2026 at a similar rate to 2025, and for our capital markets platform to continue gaining share. We also anticipate the interest rate environment to stabilize, with only minor reductions to short-term rates, which will support increased transaction volumes and slow the declines in escrow-related earnings.

Importantly, our core business has demonstrated a solid and consistent run rate over the last three quarters, and we expect that performance to continue into 2026. As a result, as shown on slide 11, our full year 2026 guidance is for diluted earnings per share of $3.50-$4, Adjusted EBITDA of $300 million-$325 million, and adjusted core earnings per share of $4.50-$5. We enter 2026 with momentum. Our outlook is supported by a strong balance sheet, improving transaction markets, and the durability of our recurring revenue streams. We feel extremely good about our positioning, capital flexibility, and ability to generate long-term value for shareholders. Thank you for your time this morning. I will now turn the call back over to Willy.

Thank you, Greg. I know it's been an extremely busy and challenging year-end close, and I'm very appreciative of all the time and effort you and your team have invested in making sure our results are transparent and exact. As I said earlier, we begin 2026 with a very healthy pipeline and improving macroeconomic environment. Given W&D's significant volume growth in 2025, we have confidence that 2026 will generate both top and bottom-line results for our investors. During my tenure as CEO of Walker & Dunlop, we have been fortunate to develop and execute on several bold, highly ambitious five-year business plans. We did not achieve the Drive to '25, due in large part to interest rate spikes and challenging market conditions from 2022-2025.

We begin 2026 with the Journey to '30, another bold plan that has everyone at Walker & Dunlop excited about where we are going and how we get there. As you can see on slide 12, Walker & Dunlop competes with some of the world's largest and most successful real estate finance and services firms. We have plotted on this graph where we believe Walker & Dunlop and its competitive set sit with regard to real estate capital markets capabilities on the Y-axis and real estate services capabilities on the X-axis. The Journey to '30 will drive W&D up the Y-axis deeper into commercial real estate capital markets. We will add talent, diversify our service offerings, and invest in businesses to become the very best commercial real estate capital markets company in the world. How do we get there?

Let's first focus on our top line and where we see strength in 2026. Our Q1 2026 pipeline currently sits at $15 billion, over 2 times our Q1 2025 production total, and includes several large portfolio transactions. There are several things happening in Q1 2026 that are quite distinct from last year. First, we are seeing owners refinance or transact on portfolios of scale. Second, in 2025, Fannie Mae and Freddie Mac were in the process of transitioning to a new administration and had a slow start to the year. This year, they are both out of the gates quickly, with a combined lending cap that was increased by over 20% to $176 billion, which will make them the dominant provider of capital to the multifamily market in 2026.

Finally, there's an abundance of capital looking to be lent and invested into commercial real estate from commercial banks, life insurance companies, and debt funds. Our Q1 pipeline includes a number of large transactions by our institutional advisory practice, led by Aaron Appel. This team completed the largest single building office to multifamily conversion loan ever done, ever, in Q4 of last year, an $867 million financing for 111 Wall Street, and also just funded the largest land acquisition loan for $464 million ever done in Miami. This team has the people, brand, and capital to continue growing W&D's debt brokerage business across all commercial real estate asset classes in 2026 and beyond.

The Journey to '30 includes continued growth in brokered loan originations and agency lending, adding talented bankers and brokers in the United States and Europe, expanding our client base, and adding investment sales capabilities across commercial real estate asset classes to broaden our service offering to existing and new clients. I mentioned earlier the growth and market presence of our multifamily investment sales team. They had a phenomenal 2025. As you can see on slide 13, by originating $13.3 billion in property sales, they moved up in the league tables to number four, jumping over competitor firms Eastdil Secured, Meridian Capital Group, Marcus & Millichap, and Cushman & Wakefield. This type of growth and market presence is exciting and will drive top-line growth in both investment sales and financing. We are currently working on financing a large credit facility for one of our largest clients.

When they called me to award us that financing, the first thing they said was, quote, "We love your debt team, but we are awarding you this financing due to the incredible work done for us by your multifamily investment sales teams in Houston, Miami, and Boston," unquote. We constantly talk at Walker & Dunlop about the power of the platform, the breadth of our offerings, and making sure we are selling our entire suite of services. As this client call demonstrates, it is generating deal flow and value to W&D. It is this collaboration across our capital markets team that we are focused on increasing globally as we expand our capital markets team and product offerings over the next five years. W&D's market insights, data analytics, and research differentiate us with clients every day.

Zelman, our housing research business, continues to expand its reach and client base while providing W&D bankers and brokers with extremely valuable market insights. Apprise, our appraisal company, performed almost 4,000 appraisals in 2025, up 20% from the previous year. All Zelman research and Apprise valuations get pulled together by Walker & Dunlop's market intelligence team to make our bankers and brokers more informed and insightful to their customers. As AI makes data analysis and compilation faster and more insightful, we feel extremely well-positioned to use our data and insights to add value to our clients and win more business. Our average financing transaction in 2025 was $29 million, and our average sales transaction in 2025 was $46 million. These are large, complex transactions that require human interaction and trust. Our data, insights, and people give our clients just that.

Finally, with regard to our market insights and research, the Walker Webcast continues to be the number one commercial real estate webcast by a wide margin, being watched by an average 267,000 viewers each week so far in 2026. What started as simply a way to communicate directly with our customers at the advent of the pandemic, has turned into an exceedingly valuable marketing channel. It is unique to W&D, and we will continue to invest in the Walker Webcast to inform our clients and drive our brand. I just talked about our top-line growth and how 2026 is setting up to be a fantastic year for W&D. Now let me focus on margins. The following graph shows W&D's GSE loan origination volumes for the past five years.

As this graph shows, while volumes came down dramatically as interest rates rose, we maintained or grew market share throughout that period. Now, look at what happened to our capitalized Mortgage Servicing Rights during that period of time. As you can see, MSRs fell dramatically more than loan origination volumes for two reasons: borrowers shifted from borrowing for 10 years to borrowing for five years, and the average servicing fee fell dramatically due to higher interest rates and spread compression. While Greg just said that our expectation is that MSR margins will remain flat between 2025 and 2026, we are beginning to see an opportunity to sell longer duration loans as spreads between five and 10-year paper tighten and increase servicing fees as rates and spreads stabilize.

Longer duration loans and increased servicing fees will have a dramatic impact on our non-cash revenues and earnings when they materialize, and we are focused on achieving both over the coming quarters and years. We are also focused on increasing the average transaction volume per banker broker from $248 million at the end of 2025 to $300 million at the end of 2026. We achieve this several ways. First, we simply cover our existing and prospective clients better using technology, research, and bringing the weight of the Walker & Dunlop platform to every client engagement. That sounds obvious, but it is not easy. Second, I mentioned previously that 42% of the multifamily properties we sold in 2025 had Walker & Dunlop finance the acquisition for the buyer. We can do better than that in 2026.

Third, we are segmenting our sales team by customer size to better cover existing and prospective clients. We now have teams focused on institutional, middle market, and private client customers and supplying them with research, technology, and go-to-market support to meet the distinct needs of these three market segments. Penetrating each of these client segments better will drive increased sales, productivity, economies of scale, and margin. To enhance our service offering to W&D clients, we launched W&D Suite in 2025, which allows our clients to manage every aspect of their relationship with Walker & Dunlop, from making loan payments to accessing loan documents, to running loan analytics, to valuing properties, to researching investment opportunities, to not only get information and do analytics on their loans, but also provide them with direct access to our financing, appraisal, research, and investment sales teams.

WDSuite integrates the full weight of our commercial real estate services platform into one digital experience. While our data and technology remove a ton of the friction around finding, acquiring, and financing an asset, we firmly believe that the people of Walker & Dunlop will provide our clients with the ability to invest and transact, and we will continue investing in our people, technology, and brand going forward. Our $144 billion servicing portfolio is a powerful cash-generating machine and the second-largest GSE servicing portfolio in the nation, generating fantastic returns today and significant embedded refinancing opportunity ahead. Importantly, over 50% of our agency portfolio matures over the next 5 years. In 2025, we recaptured 34%, or $3.4 billion, of the $10 billion of loans that either matured or paid off early.

Holding that recapture rate steady at 34% will generate $23 billion of loan origination volume over the next 5 years. Increasing that recapture rate to 50% through enhanced engagement with WDSuite, delivering more of the platform to each client, and expanding the capital market solutions tailored to each customer segment, will drive an incremental $10 billion of financing activity on top of the $23 billion. The strategy is straightforward: stay closer to our clients, better understand their evolving needs, and engage earlier in the decision process. If a client elects to refinance, we should win that deal as it sits in our portfolio today. If they choose to sell, we need to be ahead of that decision, valuing the asset and demonstrating our sales capabilities. If they select to sell the property, we are well-positioned to provide financing for the new buyer.

By integrating technology with the breadth of our capital markets platform, we should increase portfolio recapture, expand client relationships, and grow revenues over the coming years as our portfolio matures. Greg spoke previously about our 2026 guidance and what we are focused on achieving this year. In two weeks, we will hold an investor day in New York to walk through the Journey to '30 in more detail. We will show investors where we plan to invest and how we plan to grow earnings per share from $3.50-$4 a share in 2026 to $9 per share in 2030. We have the people, brand, and technology to continue growing and generate these earnings. When I look at how the commercial real estate capital markets and W&D have rebounded following past downturns, I get really excited.

I get excited about the team we have built at W&D. I get excited about the brand we have built. I get excited about the technology we have created. Most importantly, I get overjoyed about the amazing clients who have put their trust and confidence in the people and platform of Walker & Dunlop. We are entering the next cycle at W&D. I am exceedingly excited about what it has in store for our clients, our team, and our investors. It is an honor to lead this great company. I'm thankful for the trust and confidence our shareholders have placed in the W&D team. Thank you for joining us this morning. I'd like to ask the operator to open the call for any questions. Thank you.

Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure the mute function is turned off to allow the signal to reach our equipment. Again, press star one to ask a question. We'll pause for just a moment to allow everyone the opportunity to signal for questions. We will take our first question from Jade Rahmani with KBW.

Thank you very much. To start off with, just on credit, it sounds to me like you took an approach to be proactive and comprehensive with respect to the Freddie Mac potential fraudulent loans. While there are no guarantees, you know, the body language suggests that you feel pretty good about the overall portfolio. Could you just comment on the credit trends you're seeing and, you know, provide any additional color?

Morning, Jade. Thanks for joining us. We obviously gave as much specificity and color to the credit portfolio in both Greg's remarks and my remarks as we could. I would reiterate what you just said is, we feel extremely good about the credit portfolio, the scale it has. While, as we both said, the buybacks and loan losses associated with those, this quarter, were disappointing, we have acted very proactively on this with full transparency. While we can never guarantee that we won't have further loan losses or fraudulent borrowers, who we lend to, we feel like we are extremely well-positioned and a better company today, having gone through all this, than we were before.

Thank you for that. Secondly, just looking at the Adjusted EBITDA outlook for 2026 of $300 million-$350 million and comparing it to the $316 million, excluding charges, could you just quantify the amount of, you know, non-recurring operating cost headwinds in 2026 relative to that ex charges number so that we can, you know, ascertain how much of an overhang that component is?

Sure. Jade, I'll take that one. Look, our guidance this year certainly does include continued carry costs for those repurchased assets and unaffordable assets. We're not going to exit them immediately. We will continue to incur those costs for that I mentioned on the call, about $4 million-$5 million a quarter, at least in the near term, because we're not expecting that immediate resolution. There is going to be a gradual reduction over the course of the year, but it'll be heavier in the first half and obviously lighter in the second half and should fully realize most of those quarterly costs by late this year.

Thanks very much. I'll get back in the queue.

We will take our next question from Steve Delaney with Citizens Capital Markets.

Thank you. Good morning, everyone. Willy, I heard loud and clear, I think, when you were going through the impairments and the losses, generally, you were intentionally trying to communicate to us that you and Greg feel that you looked deep into all the corners and closets, and that you feel that you're presenting to us as of year-end of 2025, as clean of a balance sheet in terms of write-downs and fair value marks, litigation, whatever. Is it accurate for me to view that you have accomplished that as you sit there today and you look in the rearview mirror and the problems you have, that we can look at those as being in the rearview mirror? Thank you.

Sure, Steve. Thank you for joining us this morning. The challenge is that sort of you don't know what you don't know. We have an extremely scaled portfolio that we feel extremely good about how we underwrote those loans and the performance of those loans. As I mentioned in my comments, the proactive work that we did on the portfolio of loans that we looked into at our own initiative and presented to Freddie Mac, that we would indemnify them on one other portfolio. Freddie Mac is doing their own analysis of that one portfolio of loans. As I said, we believe that we'll hear back from Freddie Mac in the next 90 days as it relates to whether they concur with us that there's nothing else in that portfolio of loans.

We scrubbed that portfolio of loans as deeply as we possibly could, and we feel very good about what we presented to Freddie Mac and our findings on it. And at the same time, you can never sort of say, we're done, because of the size and scale of what we do. We're a lender. We take credit risk every single day. While these incidences as it relates to borrower fraud are, both, we believe, isolated, and also isolated from both a origination team as well as a time standpoint. And we have significantly enhanced, we and other actors in the market, our competitor firms as well as the agencies, have all stepped up our underwriting processes, procedures, and protocols.

I would just say that, we are diligent, we're on it every single day, and we feel extremely good about both the loans that we are originating every day, as well as our historic portfolio.

Yeah, that's great. I mean, I think what we all want to get a handle on is what is the upside going forward. Obviously, it's, you know, you have to make sure you're starting with that rock-solid foundation, and it sounds like that was certainly what you intended to do. I'm looking at the, I guess page five in your deck. You know, you held on with Fannie Mae as number one in 2025, down at number three, and Freddie. Looking forward in 2026 and beyond, should this be kind of static? How far are you ahead of Wells Fargo with Fannie, and do you have the possibility to move up from number three at Freddie to a higher level there?

Sure. As you saw, we had over 50% growth in loan origination volumes in 2025 with Freddie Mac from 2024. We grew our originations with Fannie Mae as well in 2025. We take our position on the lead tables very seriously, as do our competitive firms. It is an honor and a privilege for everyone at Walker & Dunlop to be able to sell our exceptional track record and growth and market position with both Fannie Mae and Freddie Mac to our client base. I do believe that there is the opportunity for us to continue to gain market share.

I think one of the reasons that we walked you through in such detail, the strength of our financing platform and our sales platform, combined with our research platform and our appraisal platform, that all add a tremendous amount of value to our client engagement and our ability to win future financing work as well as sales work. The growth in our investment sales group in 2025, as I said, was spectacular. Jumping over the four competitor firms that I mentioned in my prepared remarks, is quite honestly, when we started and entered that business in 2015, if you told me that we would leapfrog over those four firms in 2025, I would have said that will be quite an accomplishment, because those are fantastic firms with fantastic people.

It is the combination of investment sales and debt financing and research and appraisals, along with a fantastic underwriting team and servicing portfolio, that allow us to be positioned in the market where we are today. We plan to continue to work extremely hard to both maintain our number one positioning with Fannie Mae and continue to grow with Freddie Mac. It's a expanding market. As I said, we all know that the regulator, Director Pulte, increased the 2025 lending caps for Fannie Mae and Freddie Mac by over 20%, and that presents us as well as our competition, with a huge opportunity in 2026 and beyond to continue to grow both market share with the GSEs and overall multifamily financing.

Willy, thank you for the comments this morning.

Thanks, Steve.

We will take our next question from Matthew Hurwit with Jefferies.

Morning, everyone. Can you walk us through the key market assumptions embedded in the 2026 guidance, specifically volume growth, margins, and capital markets activity? What needs to go right to land at the midpoint of the guidance?

Greg, you want to jump in there?

Sure. I think this is your first official one. That's welcome to the call. Thanks for joining us. I think as I said in my remarks, we're expecting the market to be up similarly outside of particularly I'll put the GSEs off to the side, but the market in general to be up similarly in 26 compared to 25. We also have the GSEs caps. Multifamily caps were expanded close to 20% for 2026. It looks like at least in January, Fannie's already off to a very strong start from a delivery perspective, and Freddie's kind of on top of where they were a year ago. They're certainly, you know, pricing deals and starting the year off very competitively.

You heard our pipeline expectations for the first quarter, just our pipeline outlook. I think the expectation for us is that we're going to continue to hold the market leadership position that, you know, Willy and Steve were just talking about on slide five. If not, you know, continue to advance forward where we can and certainly continue to capture market share wherever possible, whether that's through investment sales opportunities or, you know, more GSE originations with both Fannie and Freddie or non-multifamily transactions. We've got a lot of different bankers and brokers across the platform going to market every single day to do just that. Look, our expectation is to beat or exceed our performance in 2025 and 2026 with the continued growth in the market.

I think if we can do that, we'll put ourselves around that midpoint, just like you asked.

Great. Okay, thanks very much, Greg. With the dividend increase, how should we think about the dividend sustainability and payout policy within the 2026 framework?

Yeah, look, I think, again, same thing mentioned, you know, almost $300 million of cash at the end of the year. The board certainly looked at, not only the capital position at the end of the year, but our outlook throughout 2026. You know, our recommendation and their decision was grounded in, you know, a strong, a strong foundation and fundamental ability to continue to generate cash. You know, I think the EBITDA expectations and EBITDA outlook for 2026 are a good reflection of that. Importantly, we are beyond some of the earn-out periods that we had for a couple of our transactions in 2021.

Those will fall away from a capital use perspective, and then we feel very good about our ability to not only sustain but grow the dividend in the years ahead. I think, very positive throughout this year.

Okay, great. Thanks for all the detail, everyone. Appreciate it.

We will take a follow-up question from Jade Rahmani with KBW.

Thank you very much. I wanted to ask you about AI, which has taken the market by storm this year, but maybe not in the way many anticipated. The so-called AI scare trade has played out in the commercial real estate services sector, yesterday, FHFA Director Pulte posted that he wants Fannie, Freddie, and their providers to lean in to AI. The question is: What potential impact, positive and negative, you think AI presents to W&D's business?

Jade, we put in a number of places in our prepared remarks where we see technology and our people coming together to provide our clients with more insight and streamline loan origination, property sales, and valuation work. I think that one of the reasons we put the competitive graph up with where Walker & Dunlop believes it sits as it relates to our competitive set on commercial real estate capital markets on the Y-axis and commercial real estate services on the X-axis is to underscore that we're moving towards more engagement with our clients on very large transactions where the people and the technology and the processes and the capital of Walker & Dunlop differentiate.

There are plenty of commercial real estate services out the X-axis that we believe technology can have a big impact on and potentially, in some instances, do what some of those firms today do, in a much, much more streamlined and potentially just a technology interface. Our strategy going up the Y-axis, going deeper into real estate capital markets, given the size of our average transaction and the type of customers that we work with, we believe that that is an extremely good space for us to be in as it relates to the additional use of AI, how AI can both, enable us as well as make us, more relevant to our customers.

I guess the final piece to it is just that we acquired GeoPhy back in 2021, when AI was not anything that you would have asked on this earnings call, and quite honestly, back when AI was called machine learning. We have had GeoPhy inside of Walker & Dunlop for the past four years, using their technology to streamline our processes, to be able to digest information and do analytics on that information. We feel extremely good that we are. I wouldn't say ahead of the curve, because this is moving so fast that I think it's exceedingly hard for anyone other than the largest and most capable technology firms to truly be ahead of the curve.

We feel very well positioned in our industry, that we are using the technology, and its implications and applications to make Walker & Dunlop a better firm every day.

Are there practical ways in which you think the GSEs will use AI, or W&D will use an AI and how it interacts with them?

First of all, I take what Director Poole said yesterday, with the full seriousness of everything that comes out of FHFA. If his intention is to get Fannie and Freddie focused on it, they are very much going to get focused on it. The question comes into play, at what level of their involvement in the secondary market. The other question that I would have, would be: How much of that's going to be on the single-family side, where the size of the loans is much smaller, where the underwriting is algorithmic, and where the single-family business of Fannie and Freddie today is really a algorithm business. You have conforming loans.

They come from originators across the country, and as long as that loan fits their underwriting box, if you will, that loan is taken by Fannie and Freddie and securitized and pooled and insured. The multifamily business is a wildly different business. The multifamily business is a client relationship business. It is dealing with some of the largest, both real estate developers, owners, and private equity firms on the face of the planet. Every asset is underwritten uniquely. The loan size and sale size of those assets, as I said in my prepared remarks, is dramatically larger. I would look at AI and the application of AI and think that the first place that that would be really focused on inside the agencies would be in their single-family business.

That is not to say that there is an opportunity for its use in the multifamily business, but given the deal size, given the bespoke nature of every single loan, it is a different business, and it is able to use technology as it has ever since we started working with Fannie and Freddie. Every year there's new technological innovation, new technological applications. I would think that the original or first place that they focus inside of the agencies is on the single-family business.

Thank you very much.

Thank you.

There are no further questions at this time. I will turn the conference back to Mr. Walker for any additional or closing remarks.

I'd like to thank Greg and Kelsey and their teams for all the work that they have done to close out 2025 and get us focused on 2026. I'd like to thank the W&D team for all you do every day to make this firm so great. I want to thank everyone who joined us on the call this morning for your time and your focus on Walker & Dunlop. I hope everyone has a great day, and thanks for joining us.

This concludes today's call. Thank you for your participation. You may now disconnect.