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 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, except for significant, one-time tax activities, which are allocated entirely to the segment impacted by the tax activity.

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


	For the three months ended September 30, 2022
Segment Results			Servicing &
(in thousands)	Capital		Asset
	Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net	$	89,752	$	1,106	$	—	$	90,858
Fair value of expected net cash flows from servicing, net		55,291		—		—		55,291
Servicing fees		—		75,975		—		75,975
Property sales broker fees		30,308		—		—		30,308
Investment management fees		—		16,301		—		16,301
Net warehouse interest income		2,178		1,802		—		3,980
Escrow earnings and other interest income		—		17,760		369		18,129
Other revenues		5,845		21,544		(2,620)		24,769
Total revenues	$	183,374	$	134,488	$	(2,251)	$	315,611

Expenses
Personnel	$	125,980	$	21,676	$	9,403	$	157,059
Amortization and depreciation		952		57,239		1,655		59,846
Provision (benefit) for credit losses		—		1,218		—		1,218
Interest expense on corporate debt		—		—		9,306		9,306
Other operating expenses		6,063		6,043		21,885		33,991
Total expenses	$	132,995	$	86,176	$	42,249	$	261,420
Income from operations	$	50,379	$	48,312	$	(44,500)	$	54,191
Income tax expense (benefit)		12,751		12,110		(17,329)		7,532
Net income before noncontrolling interests	$	37,628	$	36,202	$	(27,171)	$	46,659
Less: net income (loss) from noncontrolling interests		—		(174)		—		(174)
Walker & Dunlop net income	$	37,628	$	36,376	$	(27,171)	$	46,833


	For the three months ended September 30, 2021
Segment Results			Servicing &
(in thousands)	Capital		Asset
	Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net	$	121,133	$	2,109	$	—	$	123,242
Fair value of expected net cash flows from servicing, net		89,482		—		—		89,482
Servicing fees		—		70,628		—		70,628
Property sales broker fees		33,677		—		—		33,677
Investment management fees		—		2,564		—		2,564
Net warehouse interest income		3,723		1,860		—		5,583
Escrow earnings and other interest income		—		1,945		87		2,032
Other revenues		3,026		16,724		(668)		19,082
Total revenues	$	251,041	$	95,830	$	(581)	$	346,290

Expenses
Personnel	$	139,890	$	10,446	$	19,845	$	170,181
Amortization and depreciation		17		52,388		1,093		53,498
Provision (benefit) for credit losses		—		1,266		—		1,266
Interest expense on corporate debt		—		—		1,766		1,766
Other operating expenses		4,628		3,199		17,009		24,836
Total expenses	$	144,535	$	67,299	$	39,713	$	251,547
Income from operations	$	106,506	$	28,531	$	(40,294)	$	94,743
Income tax expense (benefit)		25,660		7,040		(9,747)		22,953
Net income before noncontrolling interests	$	80,846	$	21,491	$	(30,547)	$	71,790
Less: net income (loss) from noncontrolling interests		—		69		—		69
Walker & Dunlop net income	$	80,846	$	21,422	$	(30,547)	$	71,721

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


	As of and for the nine months ended September 30, 2022
Segment Results and Total Assets			Servicing &
(in thousands)	Capital		Asset
	Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net	$	273,660	$	2,113	$	—	$	275,773
Fair value of expected net cash flows from servicing, net		159,970		—		—		159,970
Servicing fees		—		222,916		—		222,916
Property sales broker fees		100,092		—		—		100,092
Investment management fees		—		47,345		—		47,345
Net warehouse interest income		9,415		4,606		—		14,021
Escrow earnings and other interest income		—		26,166		517		26,683
Other revenues		12,503		74,959		41,641		129,103
Total revenues	$	555,640	$	378,105	$	42,158	$	975,903

Expenses
Personnel	$	363,619	$	62,195	$	43,794	$	469,608
Amortization and depreciation		1,762		170,930		4,409		177,101
Provision (benefit) for credit losses		—		(13,120)		—		(13,120)
Interest expense on corporate debt		—		—		22,123		22,123
Other operating expenses		16,757		18,721		66,922		102,400
Total expenses	$	382,138	$	238,726	$	137,248	$	758,112
Income from operations	$	173,502	$	139,379	$	(95,090)	$	217,791
Income tax expense (benefit)		42,074		33,799		(29,378)		46,495
Net income before noncontrolling interests	$	131,428	$	105,580	$	(65,712)	$	171,296
Less: net income (loss) from noncontrolling interests		—		(1,032)		—		(1,032)
Walker & Dunlop net income	$	131,428	$	106,612	$	(65,712)	$	172,328

Total assets	$	3,016,153	$	2,621,380	$	365,480	$	6,003,013


	As of and for the nine months ended September 30, 2021
Segment Results and Total Assets			Servicing &
(in thousands)	Capital		Asset
	Markets		Management		Corporate		Consolidated
Revenues
Loan origination and debt brokerage fees, net	$	302,011	$	4,582	$	—	$	306,593
Fair value of expected net cash flows from servicing, net		209,266		—		—		209,266
Servicing fees		—		205,658		—		205,658
Property sales broker fees		65,173		—		—		65,173
Investment management fees		—		9,115		—		9,115
Net warehouse interest income		9,066		5,702		—		14,768
Escrow earnings and other interest income		—		5,712		260		5,972
Other revenues		8,721		28,381		(1,658)		35,444
Total revenues	$	594,237	$	259,150	$	(1,398)	$	851,989

Expenses
Personnel	$	332,519	$	27,004	$	48,294	$	407,817
Amortization and depreciation		556		145,161		3,162		148,879
Provision (benefit) for credit losses		—		(14,380)		—		(14,380)
Interest expense on corporate debt		—		—		5,291		5,291
Other operating expenses		11,628		8,056		42,487		62,171
Total expenses	$	344,703	$	165,841	$	99,234	$	609,778
Income from operations	$	249,534	$	93,309	$	(100,632)	$	242,211
Income tax expense (benefit)		58,014		21,693		(23,396)		56,311
Net income before noncontrolling interests	$	191,520	$	71,616	$	(77,236)	$	185,900
Less: net income (loss) from noncontrolling interests		—		69		—		69
Walker & Dunlop net income	$	191,520	$	71,547	$	(77,236)	$	185,831

Total assets	$	3,229,274	$	1,387,423	$	500,165	$	5,116,862