Equity Method Investments

12 Months Ended

Dec. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

Note 5 – Equity Method Investments

In accordance with Rules 3-09 and 4-08(g) of Regulation S-X, we must assess whether our equity method investments are significant. In evaluating the significance of these investments, we performed the income, investment and asset tests described in S-X 1-02(w) for each equity method investment. Rule 3-09 of Regulation S-X requires separate audited financial statements of an equity method investee in an annual report if either the income or investment test exceeds 20%. Rule 4-08(g) of Regulation S-X requires summarized financial information for all equity method investees in an annual report if any of the equity method investees, individually or in the aggregate, result in any of the tests exceeding 10%.

Under the income test, our proportionate share of the revenue from equity method investments in the aggregate exceeded the applicable threshold under Rule 4-08(g) of 10% for the year ended December 31, 2022, accordingly, we are required to provide summarized income statement information for all investees for all periods presented. There were no equity method investments which met any of the applicable thresholds for reporting Rule 3-09 for reporting separate financial statements as of the year ended December 31, 2022.

Our equity method investments are initially recorded at cost, including transaction costs to obtain the equity method investment, and are subsequently adjusted for changes due to our share of the entities' earnings.

ICM

The following table provides summarized income statement information for ICM for the years ended December 31, 2022 and 2021:

	December 31,
(Dollars in thousands)	2022		2021
Total revenues	$	67,207	$	153,549
Net income	343		41,381
Gain on sale of loans	44,921		150,896
Volume of loans sold	2,325,709		5,326,757

Our ownership percentage of 40% of ICM allows us to have significant influence over the operations and decision making at ICM. Accordingly, the investment is accounted for as an equity method investment. Our share of net income from our investment in ICM was not material and $16.4 million for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, the locked mortgage pipeline was $0.7 billion and $1.0 billion, respectively.

Warp Speed

In October 2022, we acquired a 37.5% interest in Warp Speed and accounted for our ownership as an equity method investment, initially recorded at cost including costs incurred to obtain the equity method investment. Please refer to Note 25 – Acquisitions and Divestitures. Our ownership of Warp Speed allows us to have significant influence over its operations and decision making. Accordingly, the investment is accounted for as an equity method investment. At the time of acquisition, we made a policy election to record our proportionate share of net income of the investee on a three month lag. For the year ended December 31, 2022, we recorded no impact on our income from the equity method investment in Warp Speed.

Ayers Socure II

Our ownership percentage of 10% of Ayers Socure II allows us to have significant influence over the company. Accordingly, the investment is accounted for as an equity method investment. Our share of net income from Ayers Socure II for the twelve months ended December 31, 2022 was not significant. The equity method investment in Ayers Socure II is not considered a significant investment based on the criteria of Rule 10-01(b)(1) of Regulation S-X.

Ayers Socure II's sole business is ownership of equity securities in Socure Inc. ("Socure"). In addition to our equity method investment in Ayers Socure II, we also have direct equity security ownership interest in Socure. With the combination of our investments in both Ayers Socure II and Socure directly, we own less than 1% of Socure in total.

Interchecks

Prior to December 2022, our ownership percentage of Interchecks, as well as certain other qualitative factors, allowed us to have significant influence over the operations and decision making at Interchecks. Accordingly, the investment had been accounted for as an equity method investment. As a result of a December 2022 sale of Interchecks shares, our remaining ownership percentage decreased to 9%, which was no longer significant to warrant equity method investment classification, and this investment was reclassified to equity securities as of December 31, 2022. Our share of net loss from Interchecks totaled $0.7 million for the year ended December 31, 2022 and was not significant for the year ended December 31, 2021.