Walker & Dunlop posts 38% drop in Q1 profits
Commercial real estate lender Walker & Dunlop (NYSE:WD) reported a 38% decline in first quarter earnings attributed to lower lending volumes and higher taxes, the company said Thursday.
For the first three months of 2011, The Bethesda-based company posted net income of US$6.6 million, or 31 cents per share, compared to US$10.7 million, or 73 cents per share, a year ago.
Revenue was down 12% at $29.9 million, compared to $32.9 million, in the first quarter of 2010, driven by low loan origination volumes.
Loan originations were $507 million during the quarter, compared to $986 million for the same period last year. However, the company accredits this to high loan volume a year ago, due to three big portfolios being originated that quarter.
As a result, gains from mortgage banking activities totaled $16.8 million, a 33% decrease from a year earlier.
The company said it believes it is still on target to originate between $750 million to $1.25 billion of new loans in the second quarter, and between $3.5 to $4.25 billion of commercial loans in 2011.
Walker retains servicing rights on most of the loans it originates, and generates revenues from the fees it receives for servicing the loans. Servicing fees were $7.7 million for the first quarter, a 24% year-over-year increase.
Total expenses dropped 18% to $18.1 million, due to a decrease in personal expenses based on lower commissions.
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