In the first quarter of 2022, as a result of the Company’s growth and recent acquisitions, the Company’s executive leadership team, which functions as the Company’s chief operating decision making body, began making decisions and assessing performance based on the following three operating segments. The operating segments are determined based on the product or service provided and reflect the manner in which management is currently evaluating the Company’s financial information.

As part of Agency lending, CM temporarily funds the loans it originates (loans held for sale) before selling them to the Agencies and earns net interest income on the spread between the interest income on the loans and the warehouse interest expense. For Agency loans, CM recognizes the fair value of expected net cash flows from servicing, which represents the right to receive future servicing fees. CM also earns fees for origination of loans for both Agency lending and debt brokerage and fees for property sales and appraisals. Direct internal, including compensation, and external costs that are specific to CM are included within the results of this operating segment.

(ii)

Servicing & Asset Management (“SAM”)—SAM’s activities include: (i) servicing and asset-managing the portfolio of loans the Company (a) originates and sells to the Agencies, (b) brokers to certain life insurance companies, and (c) originates through its principal lending and investing activities, (ii) managing third-party capital invested in tax credit equity funds focused on the affordable housing sector and other commercial real estate, and (iii) real estate-related investment banking and advisory services, including housing market research.

SAM earns revenue through (i) fees for servicing the loans in the Company’s servicing portfolio, (ii) asset management fees for managing third-party capital invested in funds, primarily LIHTC tax credit funds, (iii) subscription revenue for its housing market research, and (iv) net interest income on the spread between the interest income on the loans and the warehouse interest expense for loans held for investment. Direct internal, including compensation, and external costs that are specific to SAM are included within the results of this operating segment.

(iii)

Corporate—The Corporate segment consists primarily of the Company’s treasury operations and other corporate-level activities. The Company’s treasury activities include monitoring and managing liquidity and funding requirements, including corporate debt. Other corporate-level activities include strategic equity-method investments, accounting, information technology, legal, human resources, marketing, internal audit, and various other corporate groups (“support functions”). The Company does not allocate costs from these support functions to the CM or SAM segments in presenting segment operating results, other than income tax expense, which is allocated proportionally based on income from operations at each segment.

The following tables provide a summary and reconciliation of each segment’s results for the three months ended June 30, 2022 and 2021.


	For the three months ended June 30, 2022
Segment Results					Servicing &
(in thousands)			Capital		Asset
			Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net		$	102,085	$	520	$	—	$	102,605
Fair value of expected net cash flows from servicing, net			51,949		—		—		51,949
Servicing fees			—		74,260		—		74,260
Property sales broker fees			46,386		—		—		46,386
Investment management fees			—		10,282		—		10,282
Net warehouse interest income			3,707		1,561		—		5,268
Escrow earnings and other interest income			—		6,648		103		6,751
Other revenues			3,895		39,280		172		43,347
Total revenues		$	208,022	$	132,551	$	275	$	340,848

Expenses
Personnel		$	138,913	$	21,881	$	7,574	$	168,368
Amortization and depreciation			810		58,760		1,533		61,103
Provision (benefit) for credit losses			—		(4,840)		—		(4,840)
Interest expense on corporate debt			—		—		6,412		6,412
Other operating expenses			4,583		6,559		25,053		36,195
Total expenses		$	144,306	$	82,360	$	40,572	$	267,238
Income from operations		$	63,716	$	50,191	$	(40,297)	$	73,610
Income tax expense			16,476		12,850		(9,823)		19,503
Net income before noncontrolling interests		$	47,240	$	37,341	$	(30,474)	$	54,107
Less: net income (loss) from noncontrolling interests			—		(179)		—		(179)
Walker & Dunlop net income		$	47,240	$	37,520	$	(30,474)	$	54,286


	For the three months ended June 30, 2021
Segment Results					Servicing &
(in thousands)			Capital		Asset
			Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net		$	105,583	$	1,889	$	—	$	107,472
Fair value of expected net cash flows from servicing, net			61,849		—		—		61,849
Servicing fees			—		69,052		—		69,052
Property sales broker fees			22,454		—		—		22,454
Investment management fees			—		3,815		—		3,815
Net warehouse interest income			2,884		1,746		—		4,630
Escrow earnings and other interest income			—		1,768		55		1,823
Other revenues			3,135		6,885		296		10,316
Total revenues		$	195,905	$	85,155	$	351	$	281,411

Expenses
Personnel		$	119,994	$	9,447	$	11,980	$	141,421
Amortization and depreciation			18		47,395		1,097		48,510
Provision (benefit) for credit losses			—		(4,326)		—		(4,326)
Interest expense on corporate debt			—		—		1,760		1,760
Other operating expenses			3,598		2,604		13,546		19,748
Total expenses		$	123,610	$	55,120	$	28,383	$	207,113
Income from operations		$	72,295	$	30,035	$	(28,032)	$	74,298
Income tax expense			17,739		7,475		(6,974)		18,240
Net income before noncontrolling interests		$	54,556	$	22,560	$	(21,058)	$	56,058
Less: net income (loss) from noncontrolling interests			—		—		—		—
Walker & Dunlop net income		$	54,556	$	22,560	$	(21,058)	$	56,058

The following tables provide a summary and reconciliation of each segment’s results for the six months ended June 30, 2022 and 2021 and total assets as of June 30, 2022 and 2021.


	As of and for the six months ended June 30, 2022
Segment Results and Total Assets					Servicing &
(in thousands)			Capital		Asset
			Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net		$	183,908	$	1,007	$	—	$	184,915
Fair value of expected net cash flows from servicing, net			104,679		—		—		104,679
Servicing fees			—		146,941		—		146,941
Property sales broker fees			69,784		—		—		69,784
Investment management fees			—		22,930		—		22,930
Net warehouse interest income			7,237		2,804		—		10,041
Escrow earnings and other interest income			—		8,406		148		8,554
Other revenues			6,658		61,529		44,261		112,448
Total revenues		$	372,266	$	243,617	$	44,409	$	660,292

Expenses
Personnel		$	237,639	$	40,519	$	34,391	$	312,549
Amortization and depreciation			810		113,691		2,754		117,255
Provision (benefit) for credit losses			—		(14,338)		—		(14,338)
Interest expense on corporate debt			—		—		12,817		12,817
Other operating expenses			10,694		12,678		45,037		68,409
Total expenses		$	249,143	$	152,550	$	94,999	$	496,692
Income from operations		$	123,123	$	91,067	$	(50,590)	$	163,600
Income tax expense			29,323		21,689		(12,049)		38,963
Net income before noncontrolling interests		$	93,800	$	69,378	$	(38,541)	$	124,637
Less: net income (loss) from noncontrolling interests			—		(858)		—		(858)
Walker & Dunlop net income		$	93,800	$	70,236	$	(38,541)	$	125,495

Total assets		$	1,611,951	$	2,607,990	$	314,831	$	4,534,772


	As of and for the six months ended June 30, 2021
Segment Results and Total Assets					Servicing &
(in thousands)			Capital		Asset
			Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net		$	180,878	$	2,473	$	—	$	183,351
Fair value of expected net cash flows from servicing, net			119,784		—		—		119,784
Servicing fees			—		135,030		—		135,030
Property sales broker fees			31,496		—		—		31,496
Investment management fees			—		6,551		—		6,551
Net warehouse interest income			5,343		3,842		—		9,185
Escrow earnings and other interest income			—		3,767		173		3,940
Other revenues			5,695		11,657		(990)		16,362
Total revenues		$	343,196	$	163,320	$	(817)	$	505,699

Expenses
Personnel		$	192,629	$	16,558	$	28,449	$	237,636
Amortization and depreciation			539		92,773		2,069		95,381
Provision (benefit) for credit losses			—		(15,646)		—		(15,646)
Interest expense on corporate debt			—		—		3,525		3,525
Other operating expenses			7,000		4,857		25,478		37,335
Total expenses		$	200,168	$	98,542	$	59,521	$	358,231
Income from operations		$	143,028	$	64,778	$	(60,338)	$	147,468
Income tax expense			32,354		14,653		(13,649)		33,358
Net income before noncontrolling interests		$	110,674	$	50,125	$	(46,689)	$	114,110
Less: net income (loss) from noncontrolling interests			—		—		—		—
Walker & Dunlop net income		$	110,674	$	50,125	$	(46,689)	$	114,110

Total assets		$	2,070,549	$	1,404,895	$	467,677	$	3,943,121