Good day and welcome to Walker & Dunlop's Fourth Quarter and Full Year 2017 Earnings Conference Call and Webcast. Hosting the call today from Walker & Dunlop is Willy Walker, Chairman and CEO. He is joined by Steve Theobald, Chief Financial Officer; and Kelsey Montz, Assistant Vice-President of Investor Relations. The archived call is also available via webcast on the company's website. At this time, all participants have been placed in a listen-only mode and the floor will be open for your questions, following the presentation. [Operator Instructions] It’s now my pleasure to turn the floor over to Kelsey Montz. Please go-ahead.

Thank you, Keith. Good morning everyone. Thank you for joining the Walker & Dunlop fourth quarter and full year 2017 earnings call. I have with me this morning, our Chairman and CEO, Willy Walker; and our CFO, Steve Theobald. This call is being webcast live on our website and a recording will be available later this morning. Both our earnings press release and website provide details on accessing the archived webcast. This morning, we posted our earnings release and presentation to the Investor Relations section of our website www.walkerdunlop.com. These slides serve as a reference point for some of what Willy and Steve will touch on this morning. Please also note that we will reference the non-GAAP financial metric, adjusted EBITDA, during the course of the call. Please refer to the earnings release posted on our website for a reconciliation of this non-GAAP financial metric. 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. 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. With that, I will turn the call over to Willy.

Thank you, Kelsey and welcome everyone. Thank you for joining us today. As investors saw on the earnings release we put out this morning, Walker & Dunlop had a fantastic fourth quarter and 2017 like we started it. Explosive growth, continued execution of our strategic initiatives and strong profitability. We expanded our footprint and client base to grow our banking and brokerage [Ph] volumes across all capital sources and we generated record total transaction volume to produce the most profitable year in the company’s history. $211 million in net income up 85% over $114 million last year. The team we have assembled, the brand we have established and the highly profitable business model we have built has allowed us to consistently outperform across all financial and operational metrics. As you can see on slide three, total revenues of $712 million were up 24% over 2016 and put us well on our way to reaching our goal of generating $1 billion in annual revenues by 2020. Four years ago, on this same earnings call; we began telling investors that W&D would grow earnings per share by double digits on an annual basis. Since that time, we have grown EPS year-over-year by 31%, 68%, 38% and 80%, that’s a 442% increase over the past four years. The 80% EPS growth this year is inclusive of $1.80 reimbursement of our deferred tax liability due to the Tax Cut and Jobs Act. Removing this onetime tax benefit we grew EPS by 30% between 2016 and 2017, the fourth straight year of 30% or better EPS growth. Our commercial mortgage servicing portfolio surpassed $75 billion in January putting us well on pace to our goal of building a $100 billion servicing portfolio by 2020. As the servicing portfolio has grown so have the contractually obligated…

Thank you, Willy, and good morning everyone. Fourth quarter was strong finish to an exceptional year Walker & Dunlop. As you can see on slide seven, we earned $3.06 diluted share for the quarter. Following the impact of the Tax Cuts and Jobs Act, which I will explain in detail in a moment, we earned $1.26 per share up from $1.16 in the fourth quarter of last year. Q4 total transaction volume was $8.3 billion and was a record quarter for our HUD, Capital market and investment sales team, as we continue to see benefits from our investments outside of the core GSE business. We generated a record $55 million of adjusted EBITDA during the quarter up 58% from Q4, 2016 and surpassing our previous quarterly record of $51 million. As shown on slide eight, since 2010, we have increased adjusted EBITDA [Indiscernible] to $21 million to $201 million. Over that time in your period, we acquired five companies with the goal of expanding our origination platform and in turn increasing our servicing portfolio, adjusted EBITDA and cash flow, with cycle of reinvesting our cash to grow the business which then generates more cash has allowed us to think somewhat uniquely to significantly scale our platform and increase adjusted EBITDA without relying on large amounts of tax. As has been widely reported to date, the enactment of the Tax Cut and Jobs Act in December but prior companies revalue that the Tax Cut assets and liability at the new Federal tax rate of 21%. During the quarter, Walker & Dunlop recorded a $58 million benefit to income tax expense related to the revaluation of our net deferred tax liability. This benefit results in an additional $1.80 of diluted earnings per share in the quarter. Beginning in the first quarter of…

Thank you, Steve. The 2018 targets that Steve just went through in fact a continuation of our pattern of dramatic growth and profitability. We expect the multifamily financing market to remain very up and going forward, which represents a tremendous opportunity for W&D within our strong market position, exceptional theme and growing client base. As you can see on slide 12, though we have benefited from a growing commercial real estate financing market, we have not been dependant on it. Based on estimates from the Mortgage Bankers Association, the overall commercial real estate financing market grew by 5% last year while Walker & Dunlop’s loan originations grew by 49%. The multifamily financing market increased by 4% last year while W&D increased our multifamily origination by 43%. Those market estimates for market growth in 2018 range from flat to slightly up, but as our track record has shown, we have the team, expertise and client base to grow meaningfully faster than the market. We have a strong dependable market position on a constant multifamily finance, but our mission remains to become the premier commercial real estate finance firm in the United States, and has been the driving force behind our strategy of building out a loan origination platform across the country to grow our client base and access field flow. We have continuously set ambitious objectives and achieved them, all over remaining disciplined in our growth and true to our stated mission. We will continue laying out our plans for growth and delivering on them, building on our track record of financial outperformance and execution. To execute on our strategy, we will continue building our national brokerage footprint to broaden our client reach and gain further access to deal flow. As I have already discussed, we have successfully acquired companies, recruited…

[Operator Instructions]. We’ll take our first question from Jade Rahmani with KBW. Please go ahead.

Thanks very much. In the spirit of no good deed goes unpunished, I was wondering if you expect WD’s 2018 transaction volumes to grow at a similar rate as your double-digit growth expectations for operating income and adjusted EBITDA?

Not exactly sure the context to that question, Jade, in terms of no good deed goes unpunished. If you're asking whether we plan to continue to grow W&D at the same rates that we have in the past. I would say, yes. There is nothing from our past performance that we need to believe that future performance doesn't follow. You got the same team. We continue to add exceptional bankers and broker’s platform and the underlying fundamentals of the market look to us to be extremely positive for 2018. And to be totally honest with you can’t really see 2019 yet, but the general sentiment in the market right now, Jade, is that there is more equity capital and more debt capital than there are deals which I think will continue to drive cap rates down and continue to drive significant amount of deal volume which present a great opportunity for Walker & Dunlop to continue to growing.

And then, to give investors a sense of current market conditions, you did mention you expect a more normal seasonal first quarter, but could you provide any data points either in terms of closings deals in progress or the pipeline so far this year? We did see the $700 million student housing deal which is a positive, seems like your large deals initiatives are working out, but any color you could provide on how things are tracking so far this year?

Jade, just one thing I want to point out that $700 million deal you reference was actually a Q4 [Indiscernible], so that’s in the Q4 number, not – it won’t be in Q1.

Okay.

So with what that clarification by Steve, I would say, but I would reiterate what I just said Jade, is just that -- if you backup two years at the National Multifamily Housing Conference two years ago in Orlando, most multifamily, owner operators, acquirers, developers were willing sellers and reluctant buyers. They were looking forward to the election and wondering where the economy was going to go. And I would say to you, we saw flat to declining NOI growth. And it was generally speaking a wait-and-see attitude. But a year ago at that same conference, the election just happened, everyone was scratching their heads to sort of figure out what a Trump Presidency was going to mean. But the general sentiment was positive. But as you may recall interest rate spike for period of time people were waiting to see how cap rates would adjust. And people were kind of adjusting their attitude from a -- I'm a willing seller and a reluctant buyer too. Hey, I actually might get back into to this market. By year later these two weeks ago down in Florida there was not a single borrower. Buyer, owner or apartment that I met with, we did not say that they are looking for product, but they are net buyers and that the fundamentals of the market look extremely positive to them, not one. And I did 17 meetings on Tuesday and 21 meeting on Wednesday. So ,the overall attitude of the market to specifically to your question is extremely positive right now, that could cause some people to be concern, but there is a certain euphoria that the market is so great, lot of capital chasing deals. I would point out that with that type of dynamic in the market what is unique right…

Jade, if I might add maybe a little more context here for Willy’s comment as well. So if you go back 2016 you remember we had a – at that time we’re really slow at Q1. I think all the volatility that within the market and some of the trepidation that Willy referenced from the Conference two years ago impacted that and then obviously volumes that cost after Q1 of 2016. Last year’s Q1 we did have a large as I mentioned in my remarks, $350 million student portfolio that we locked and closed in the first quarter of last year. We paid last year in combination with the excess tax and as we reported a pretty robust – I’ll pay out of the non-robust Q1.

Make sense. In terms of competitive environment, the press release noted your defensible market position and your commentary about specific plans to grow market share on the service markets. Can you elaborate on those two points which MSA is origin of the country do you feel that your presence could expand?

So, Jade, we talk about this previously in relation to the competitive environment. It couldn't be more competitive. It couldn’t be more active. As you well know, we go up against all the big banks and all of the big commercial real estate services firms on daily basis, and fortunately we’ve been able to continue the scale and grow and win. I think it is interesting if you look at the league tables that were put out last week in commercial mortgage alert as it relates to Fannie and Freddie volumes for 2017 and overall market share. As I noted in my comments not only that W&D grow faster than any of the other large agency lenders, but there really is sort of group of three of us sitting at the very top of the league tables, CBRE, Berkeley and Walker & Dunlop, and then there’s a pretty gap for the next level which is Wells Fargo and a decline, and then it kind of falls off from there. So the commercial mortgage really talked about a big eyeball [ph] support, there’s really a big three [ph] in this space right now and we will continue focusing on and trying to be top of league tables with both, but feel extremely good from a competitive positioning standpoint that we’re right there at the very top. As it relates to your other point beyond competitive positioning was…

On market.

Yes. On market, yes, so without putting up a play book in front of all of our competitors what we had done is gone and looked at major MSAs across the country where W&D is if you will under punching our way in the sense that we are one of the dominant players in this space and there are certain geographies where we just don't have feet on the street and we don’t have the coverage of the client base in those market. And so we’ve gone through and looked across those markets and we’re very focused on expanding market share in those market. So I'll give you one example, we don’t have an office in Houston, Texas and we’ve been very focused on getting in to Houston. It’s a wildly competitive market in the market that’s been recovering quite nicely since the hurricane unfortunately hit that region. But we don’t have an office in [Indiscernible] so what do we’re going to do to get in Houston. We’re going to hire people. We’re going to reallocate people. We got a Dallas office focus whose focus on Houston. So, without going through city-by-city where we plan to invest time and resources there is a tremendous amount of growth that we can achieve by expanding our geographic footprint and by focusing on clients in those markets. As we’ve discussed before and as we noted in our in our earnings call, we only have 145 bankers and brokers at Walker & Dunlop. Their competitors also have that many bankers and brokers in the one office and one city. So as much as we’ve gotten to be a very significant player in this space, we’ve done it with a reasonably small team, and as Steve mentioned we still well over $1 million of revenue per employee which comes incredibly well versus our big competitors who all are generating anywhere between $100,000 and $200,000 of revenue per employee. So lots of people sit there and say, how can W&D growing? It’s not that hard. We continue to add great people to the platform. Continue to expand our client base and continue to grow.

Great. Well, solid quarter and thanks very much for taking the questions.

Thanks, Jade.

Thank you, Jade.

We’ll take our next question from Jason Weaver with Wedbush Securities.

Good morning. Thanks for taking my questions. First, you might have alluded to this little in the last statement there Willy, but the depositories as we saw in the senior loan office survey last few months carrying back in the CRE multifamily lending, is there obviously a positive for companies like yours, but to take advantage of that whole are your more aggressively trying to recruit originators oblique to the banking sector? Or can you make that equator share – can you take advantage of that greater share of your current footprint?

You know, Jason, I’m sure that I will offend somebody at Walker & Dunlop by saying this. But we haven’t been that successful at recruiting people away from commercial bank. There is a – there is just a distinct approach to the market between people who have been large commercial bank and people who are been successful at firms like Walker & Dunlop. Many people, large commercial banks if you will use the client relationships and the deposit to sell the type of financing that we do, whereas we don't have the benefit of that kind of backing up to one of things I said previously. We don’t have a lot of feeder businesses in the W&D like banks and commercial real estate servicing fund to do. And so as a result there people who are here really have to go out to sell their capabilities just to finance the deal. And so, I think at the end of the day, the fact that some of the commercial banks are pairing back up or pulling back on exposure to CRE is as you said a good thing, but as it relates to how do you go and sell into their client base, it’s really taking people who know how to sell W&D’s products and services and getting in front of those clients.

Okay. Thank you. And Steve, I think you mentioned the $58 million tax benefit for the DTI, but where does the DTI actually stand for..?

Yes. Jason, I don’t think it's in our financials yet. Our whole tax will include all that detail when we file our 10-K in couple of weeks.

Okay. Fair enough.

It’s right around somewhere between $100 million and $120 million.

And I couldn’t see you clearly, but I just wanted to confirm your 2018 tax rate expectation is 25 to what?

25% to 28%.

25% to 28%. Okay. Well, congrats on the quarters, guys. Look forward, guys and thank you for taking my question.

Thanks Jason. We’ll take our next question from Steve DeLaney with JMP Securities. Please go ahead.

Thanks. Well congratulation guys on a great quarter and year-end, a $1 billion in revenues looking a little more realistic after we can see where it put you just – but really you were down I guess you bought that multifamily housing conference. I’m just curious it sounded like there was a lot of optimism and people pretty positive on the market. Was anybody talking about the fact that long-term rates are turning on where you want to measure somewhere between 40 and 50 basis points above? Are they were sort of on average in 2017? And I’m curious hearing from clients and also you’re your end bankers about the current rate environment?

Steve, first of all good morning.

Good morning.

You know rates are up plus 30 basis points from the beginning of the year, that sort of 270, so it’s -- of people, so we say now [Indiscernible] relatively speaking that’s still very cheap on our long-term historic basis.

Sure.

Will it cause some issues for a specific deal or someone’s – the margins and doing their return calculations as rates move up and they’re trying to get to a rate lock, so our bankers and our guests [ph] have work extremely hard to manage client expectations in the lighting rate environment. And at the same time you're still going to have the sponsored groups borrowing with floating-rate debt because they want the flexibility and that group has just an unbelievable amount of dry powder. Starwood just raised an $8billion funds. Blackstone has got a private REIT, its generating over $200 million of equity capital a month. And if you go down the list and you look at the way that rates are went and raise their growth and income fund to be able to face monogram. There’s just a huge amount of equity capital that wants to get into this space. And so the thing that I think is most important to see this, the general sentiment is that although rates have moved 30 basis points in the month of January or year to-date, generally speaking rates are going to be in sort of a band and whether that band is 2% to 3% or 2.5% to 3.25%, there are very few people that I've spoken to both in the industry and outside of the industry who believe that rates are headed to 4%. And so as a result of that, I think there are lot of people who are discipline are looking at deals getting the proper financing in place for their fixed rate or floating-rate and moving forward with the deal and not really sitting there day-to-day watching the fix on the tenure. And with that said, I would reiterate, it make certain deals with certain borrowers is very challenging because they’re very rate sensitive. And as a result our bankers and our DUS have to work hard.

Got it. That’s helpful, Willy. And thinking about the MBA or Freddie Mac forecast for 2018, I think you’ve indicated the expectation is flat to slightly higher and I guess, I’m curious, have you ever seen them as a result of any disruption like we had in the first quarter of 2016 with credit spreads? Have they ever come out in robust say, three, four months ended the year and change their full-year forecast?

We are constantly looking – they’re constantly forecasting. I can’t remember and see whether they ever gone in publicly done it. They go into FHFA every quarter and re-forecast what they think volumes are going to be for the rest of the year. And FHFA as you may recall very clearly stated when they put up a scorecard for 2018 that they will look at quarterly volumes and adjust accordingly. And so if the FHFA sees any change in the market dynamic where either other capital sources are backing away, where the market have lost liquidity they will allow the agencies to expand out and they will not as they been very clear in saying restrict the agencies if the market expand. So I think, FHFA has been very clear in saying on a quarterly basis they will check the overall market size and they will if we have adjust Fannie and Freddie’s caps if they need to.

And the MBA typically updates forecast price here somewhat they see.

That’s helpful Steve, okay.

Okay. I just quickly just go back. We put it in this way. The overall commercial real estate market was supposed to grow 5% last year and we grew it well above 46% hence the multifamily market grew at 5%, we grew at 40%. I mean, I think one of the thing that I find to be really interesting here is everyone sort of says, W&D just a pie on the overall market. We’re not a pie on the market. Our past history is nothing but show that we grow faster than the market and faster than our competitors.

Yes. And I think that’s the point is been in [Indiscernible] look at 2018, I mean, we have had a tailwind and it looks like we’ve added $200 million annual market in 2014 has gone to 280. So I'm thinking what you’re saying is you’re at 7%, your goals to move into 8% to 10% range and going forward over the next couple of year it sounds like it’s more of the market share story and gain for W&D to play rather than just an absolute market growth situation. That’s probably what we’re looking at?

If that is continues to expand in other business lines, I mean, we are in the fall and we did over $4 billion in multifamily lending outside of the agency. So people are looking to W&D, I’ve got a multifamily property, I need to finance, where do I go. Call Walker & Dunlop and then we find the appropriate capital to meet that opportunity. So I do believe a number of people have sort of said well, W&D’s growth is restricted on both scorecard, the agencies lending volumes and that sort of the end of the story on W&D, and what we are showing is that we build this trend and become one the very best multifamily lenders in the country. It provides the opportunity to grow our sales business. It provides the opportunity to grow our brokerage business on non-multifamily commercial real estate and it also deposit [ph] to grow our multifamily lending business on non-GSE capital source.

Here you’re loud and clear on that especially the clarity you gave us on investment sales earlier in the call. It’s very helpful. Just one final thing on the dividend, a very good news to see, I think it’s going to be well received and maybe open some new doors, you’ve indicated obviously you’ll be looking to possibly increase it overtime, should we think about the dividend and related to the backup, should we look at that as annual type of decision that you in the quarter will be making?

Yes, Steve, I think we’ve spend a lot of time talking about this internally as you would imagine and I think the dividend is meant to be quarterly ongoing sustainable for the foreseeable future and it gives us an expression of our confidence in the continued growth and cash flow generation of our business. So we’re not really calling it an annual and we’ll revaluate this is going to be ongoing and sustainable The share repurchase obviously that an annual discussion we have at the board about having the capabilities to go into the market when we perceived value to be misalign with our view, again based on what we’re seeing and where we think things are heading when we got to acquire stock option.

Right. But it sounds like that, I mean, you got up to 50, but it’s not a direction to go out buy 50 regardless of where it’s trading, you’re going to be practical, I assume in terms of when and how you use that?

Last year’s authorization was 75 and we use 25.

Okay. All right. Very good. Appreciate the color. Thank you.

Thanks, Steve.

[Operator Instructions] We’ll go next to Fred Small with Compass Point. Please go ahead.

Hey, good morning. Thanks for taking my question. In terms of the margin range in guidance what sort of overall volume growth would you expect in the high-end scenario?

Fred, its Steve. Good morning. I think the margin is not really a growth driven metric, it’s a mix issue. And again I think as you can see we’ve grown our capital market brokerage business pretty significantly, while continuing to also fit up growth numbers on the agency side and that makes that to came out to 177 basis points this past year right in the middle of the range, so our view is the range is still good relative to what we’re looking at or expecting from an overall business mix for second for the year. It’s not really driven by growth per say as much as it has been.

Fred, Steve is not giving direct answer to your question, because as you know we’re not guidance and what we’re doing from a volume standpoint. And so as I said in response to Jade’s question, I think our track record hopefully speaks for itself as it relates to outgrowing industry significantly and we view this as a dynamics of the industry’s fantastic work in 2018, given the amount of capital out there and generally positive outlook for multifamily financing. I think this is a quick opportunity, just talking about one of the things, it is just that you know GDP growth between 2% and 4% is really, really good for the multifamily industry, below 2% GDP growth you’re not getting occupancies where you need on, you’re not getting the wage growth in the overall economy to make to you push rents. And then you get yourself over 4% and most people in America think that they’re rich and they can afford whatever single family mortgage they can get and the single-family industry starts to really get on pace. So right now we’re sorted in the sweet spot of multifamily sitting at about 3% GDP growth. We get over four as well and commercial real estate developers start building buildings where they really aren’t needed. And that’s good in the short term but not too good in the long term. And so fortunately right now we haven't either of those hands of the spectrum if you will. We pulled up from sot of 2% GDP growth where you are going to be able to continue to push rents but you’re not over the 4% GDP growth on a sustained basis which makes a bit single-family industry starts to really zoom, and so multifamily owner operators are feeling from a general macroeconomic standpoint.

The last thing I would add, Fred your question is, as I highlighted in my high remarks. Our focus is really on operating margins not on getting on sale margins and we’ve been steadily growing that operating margin in our overall efficiency and profitability each year.

Great. Thanks. I though we’ll try to attempt another one on kind of volumes growth [ph] so just following up on what you said there. If I look at the slide where you track operating margin sort of gain overtime, how much of that you attribute to the growth of servicing business, I know you don’t break out the segment, but can you sort of give any rough estimate?

I mean, I can’t really give you an estimate, Fred, I think it's fair to say that the growth in our servicing business has had a very positive impact to both adjusted EBITDA and operating margin. It is scale business from a financial standpoint. So as it get larger, the efficiency of how we run it gets better and so the operating margins improve there. The other thing I would point you to as we -- we’ve had a pretty sizable increase in interest income over the course of the year and that’s a direct bottom-line benefit to us because there's no compensation or whatnot going on relative to that revenue stream, so the faster that grows better the operating margin.

Okay. Thanks. One last one on the 2020 goal, $30 billion to $35 billion of the annual origination, how much market share gains do you think is embedded in that, I think those sort of following up on those assets?

I don’t know, because you got a mix assumption there. Fred, it relates overall market growth between here and there, so we haven’t really looked at it. The bottom line is, I mean, look at – I think we’ve gone from $8 billion to $11 billion to 7 billion to 18 billion to 28 billion and we have said pretty consistently over the last four years as we’re adding people and growing the servicing portfolio and create brands we’re going to hit a certain different points where things kind of grow ex-financial. And people have listened to that, other people have not. But I think one of the really exciting things from my standpoint is that we now have the brand, we now have the market positioning and so adding people to the platform and allowing them to benefit from being on the platform is sort of greater and greater. So I don't know what that will back into, but I will say there’s moving from 20 – well, it’s a 25 billion of financing volume last year, but 30 billion to 35 billion over the next three years. We have management team. We have a reputation of a client [ph] great companies and integrating them pretty seamless way. And so it’s a lot of work, but I’m confident we’ll get there.

Okay. And just maybe follow-up on that, in [Indiscernible] environment, I mean assuming we’re flat over the next three years not maybe in the best scenario you laid out before, but its happens maybe probably the low end of the 2020 target?

2020 targets don’t really have a low end. They got 1 billion in revenues. So yes, you’re saying 30 billion on the financing equity, 3 billion of financing activity side, I feel very confident. I will tell you, the 8 billion on the low end of investment sales we go a lot of work to do there. We got a lot of work to continue to build on vessel sales platform and create a real brand, the $8 billion asset management business as we’ve talked about before we will need to do at least a if not a couple of acquisitions there to be able to scale that business and get to that goal, and the $100 billion servicing portfolio if you do get your financing volumes to $30 billion by 2020 then with the little amount of runoff we have in the portfolio today, the $100 billion servicing portfolio is just an output of that continued origination volume feeding into the servicing portfolio. So I can see Steve kind of squirming [ph] in his feet as I talk about $30 billion of financing in 2020 being something that I feel quite confident at, but there’s nothing from our past growth that without some wake up scenario and the one other thing I talked about on the way to fast scenario, people forget Walker & Dunlop is a top of the league table where Fannie, Freddie and HUD which are all countercyclical sources of capital. And that doesn’t mean that volumes don’t come down, but it does mean that as borrowers need capital, one of the first places they look is to Walker & Dunlop who has a strong positioning with Fannie and Freddie and HUD who do not leave the market when other sources of capital do.

Yes, I guess -- just a maybe put a fine point of this and I’m not really squirming. And not to be cheeky Fred, but we don’t really care what market. Right, if there is a wipe-out, obviously you know that’s one scenario frankly if the market grows, 20% a year then we are under shooting based on our relative performance to the market over the last few years. So our 30 to 35 was done and established based on what we think we can do as a company, whether the market’s up, down.

Okay. Thanks a lot.

Thank you.

And next, we’ll go to Jade Rahmani with a follow up. Please go ahead.

Thanks very much. On the dividend, to what extent is this an employee retention and recruitment strategy? Some of your competitors do paste [ph] dividends including HF special dividend and new market is anticipated to pay dividend?

I would just say that is not under consideration at all, Jade. As we said around in our board meeting last week talking about the dividend, I can just tell you that was not a consideration for the board.

Then I think you have to keep focused on. We’ve been named a great place to work five out of last six years. We have grown salaries at Walker & Dunlop, we haven’t disclosed what it is, but at a phenomenal piece. Our employees, I believe feel that they work for a fantastic company with a great culture, and that they get paid extremely well. We are not looking for ways right now to – if you will or always looking I should say. We are not looking for a dividend to try and add to kind of a lot of people. We are constantly looking at ways to attract and retain the very best people, and we feel blessed with the team we have today, but the dividend was no factor in all of that.

Okay, in terms of the recent market volatility, has that had any impact, is there like a direct relationship between stock market volatility and sort of the tone reflected from clients?

I mean just this week, I’ve had three clients say to me, have you seen deals falling out? Has the rate movement sort of impacted the overall market? And when I got back, generally speaking from our investment sales people was no. If we grow our deals that are under contract, and moving forward with them, but as I said if you see previously Jade, the market rate volatility and rate moving up does make certain deals challenging with borrowers who are very rate sensitive on how they’re buying and what they are buying and as a result of that our bankers have to work very hard, come up with data solutions, need to do early rate locks to be able to walk them through why they need to keep their head down and get the deal done. And in some instances it feels to be [Indiscernible] and they say it because it worked for me anymore. But we had not seen anything that I would call a base, a trend or a pattern so far, so far with the movement and rate.

And any changes in mix shift based on the anticipated rate hikes towards fix or on the other hand that the risk covered ratio targets and move toward more floating in the last quarter?

It really depends on how successful we are to continue to penetrate this cost [ph] of goods. If we continue to do large transaction for the big sponsors, floating rate will if you will hold its place as far as our overall business mix. If we end up doing more lending to smaller borrowers, who are typically fixed rate borrowers, and they are going to hold it, and they are not as concerned about the possibility that floating rate financing gives you, you’ll see fixed move up because people do want to walk in. Like if we end up doing mega transaction like we had been shown to do in past years with the big sponsor group that will drive the floating rate number right back up.

And just in terms of cross selling potential with tension with Engler, right now what percentage of Engler deals is WD doing with that priced [Indiscernible].

We stated that in the script [ph] its 36%, 37%.

Okay. Thanks very much for taking the questions.

Thank you Jade.

And it appears we have no further questions. I’ll return the floor to Willy Walker for additional or closing remarks.

Thank you, operator. I would just thank everyone again for joining us this morning and thanks to the W&D team for a fantastic 2017, and on as we go to 2018. Thank you everyone.

And this will conclude today’s program. Thanks for your participation. You may now disconnect. Have a great day.