Fair Value of Financial Assets and Liabilities (Tables)
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12 Months Ended |
Dec. 31, 2021 |
Fair Value Disclosures [Abstract] |
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Summary of Fair Value Hierarchy of Financial Assets and Liabilities under U.S. GAAP Guidance |
The following table sets forth by level within the fair value hierarchy financial assets and liabilities accounted for at fair value under U.S. GAAP guidance (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | As of December 31, 2021 | | Level 1 | | Level 2 | | Level 3 | | Total | Assets: | | | | | | | | Marketable securities | $ | 524,569 | | | $ | — | | | $ | — | | | $ | 524,569 | | Loans held for sale, at fair value | — | | | 1,072,479 | | | — | | | 1,072,479 | | | | | | | | | | Rate lock commitments | — | | | — | | | 3,957 | | | 3,957 | | Nasdaq Forwards | — | | | — | | | — | | | — | | Forward sale contracts | — | | | — | | | 4,544 | | | 4,544 | | Total | $ | 524,569 | | | $ | 1,072,479 | | | $ | 8,501 | | | $ | 1,605,549 | | Liabilities: | | | | | | | | | | | | | | | | Contingent consideration | — | | | — | | | 12,338 | | | 12,338 | | Rate lock commitments | — | | | — | | | 2,836 | | | 2,836 | | Forward sale contracts | — | | | — | | | 2,180 | | | 2,180 | | Total | $ | — | | | $ | — | | | $ | 17,354 | | | $ | 17,354 | |
| | | | | | | | | | | | | | | | | | | | | | | | | As of December 31, 2020 | | Level 1 | | Level 2 | | Level 3 | | Total | Assets: | | | | | | | | Marketable securities | $ | 33,283 | | | $ | — | | | $ | — | | | $ | 33,283 | | Loans held for sale, at fair value | — | | | 1,086,805 | | | — | | | 1,086,805 | | Debt securities | — | | | 12,754 | | | — | | | 12,754 | | Rate lock commitments | — | | | — | | | 21,034 | | | 21,034 | | Nasdaq Forwards | — | | | — | | | 12,822 | | | 12,822 | | Forward sale contracts | — | | | — | | | 7,632 | | | 7,632 | | Total | $ | 33,283 | | | $ | 1,099,559 | | | $ | 41,488 | | | $ | 1,174,330 | | Liabilities: | | | | | | | | Contingent consideration | $ | — | | | $ | — | | | $ | 31,481 | | | $ | 31,481 | | Rate lock commitments | — | | | — | | | 2,977 | | | 2,977 | | Forwards sale contracts | — | | | — | | | 14,971 | | | 14,971 | | Total | $ | — | | | $ | — | | | $ | 49,429 | | | $ | 49,429 | |
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Schedule of Changes in Level 3 RBC Forwards, Rate Lock Commitments, Forwards and Contingent Consideration Measured at Fair Value on Recurring Basis |
Changes in Level 3 Nasdaq Forwards, rate lock commitments, forward sale contracts and contingent consideration measured at fair value on recurring basis were as follows (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of December 31, 2021 | | Opening Balance | | Total realized and unrealized gains (losses) included in Net income | | Issuances | | Settlements | | Closing Balance | | Unrealized gains (losses) outstanding | Assets: | | | | | | | | | | | | Rate lock commitments | $ | 21,034 | | | $ | 3,957 | | | $ | — | | | $ | (21,034) | | | $ | 3,957 | | | $ | 3,957 | | Forward sale contracts | 7,632 | | | 4,544 | | | — | | | (7,632) | | | 4,544 | | | 4,544 | | Nasdaq Forwards | 12,822 | | | (12,822) | | | — | | | — | | | — | | | — | | Total | $ | 41,488 | | | $ | (4,321) | | | $ | — | | | $ | (28,666) | | | $ | 8,501 | | | $ | 8,501 | | | | | | | | | | | | | | | Opening Balance | | Total realized and unrealized gains (losses) included in Net income | | Issuances | | Settlements | | Closing Balance | | Unrealized gains (losses) outstanding | Liabilities: | | | | | | | | | | | | Contingent consideration | $ | 31,481 | | | $ | (1,351) | | | $ | — | | | $ | (17,792) | | | $ | 12,338 | | | $ | 12,338 | | Rate lock commitments | 2,977 | | | 2,836 | | | — | | | (2,977) | | | 2,836 | | | 2,836 | | Forward sale contracts | 14,971 | | | 2,180 | | | — | | | (14,971) | | | 2,180 | | | 2,180 | | Total | $ | 49,429 | | | $ | 3,665 | | | $ | — | | | $ | (35,740) | | | $ | 17,354 | | | $ | 17,354 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of December 31, 2020 | | Opening Balance | | Total realized and unrealized gains (losses) included in Net income | | Issuances | | Settlements | | Closing Balance | | Unrealized gains (losses) outstanding | Assets: | | | | | | | | | | | | Rate lock commitments | $ | 32,035 | | | $ | 21,034 | | | $ | — | | | $ | (32,035) | | | $ | 21,034 | | | $ | 21,034 | | Forward sale contracts | 14,389 | | | 7,632 | | | — | | | (14,389) | | | 7,632 | | | 7,632 | | Nasdaq Forwards | 26,502 | | | (13,680) | | | — | | | — | | | 12,822 | | | 12,822 | | Total | $ | 72,926 | | | $ | 14,986 | | | $ | — | | | $ | (46,424) | | | $ | 41,488 | | | $ | 41,488 | | | | | | | | | | | | | | | Opening Balance | | Total realized and unrealized gains (losses) included in Net income | | Issuances | | Settlements | | Closing Balance | | Unrealized gains (losses) outstanding | Liabilities: | | | | | | | | | | | | Contingent consideration | $ | 45,172 | | | $ | (11,063) | | | $ | 2,221 | | | $ | (4,849) | | | $ | 31,481 | | | $ | (408) | | Rate lock commitments | 12,124 | | | 2,977 | | | | | (12,124) | | | 2,977 | | | 2,977 | | Forward sale contracts | 13,537 | | | 14,971 | | | | | (13,537) | | | 14,971 | | | 14,971 | | Total | $ | 70,833 | | | $ | 6,885 | | | $ | 2,221 | | | $ | (30,510) | | | $ | 49,429 | | | $ | 17,540 | |
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Summary of Quantitative Information about Level 3 Fair Value Measurements |
The following tables present quantitative information about the significant unobservable inputs utilized by Newmark in the fair value measurement of Level 3 assets and liabilities measured at fair value on a recurring basis: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2021 | Level 3 assets and liabilities | | Assets | | Liabilities | | Significant Unobservable Inputs | | Range | | Weighted Average | Accounts payable, accrued expenses and other liabilities: | | | | | | | | | | | Contingent consideration | | $ | — | | | $ | 12,338 | | | Discount rate | | 4.0% - 10.2% | (1) | 8.1% | | | | | | | Probability of meeting earnout and contingencies | | 0.0%- 99.0% | (1) | 91.6% | | | | | | | Financial forecast information | | | | | Derivative assets and liabilities: | | | | | | | | | | | Nasdaq Forwards | | $ | — | | | $ | — | | | Implied volatility | | N/A | | N/A | Forward sale contracts | | $ | 4,544 | | | $ | 2,180 | | | Counterparty credit risk | | N/A | | N/A | Rate lock commitments | | $ | 3,957 | | | $ | 2,836 | | | Counterparty credit risk | | N/A | | N/A |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2020 | Level 3 assets and liabilities | | Assets | | Liabilities | | Significant Unobservable Inputs | | Range | | Weighted Average | Accounts payable, accrued expenses and other liabilities: | | | | | | | | | | | Contingent consideration | | $ | — | | | $ | 31,481 | | | Discount rate | | 0.3% - 10.4% | | 7.1% | | | | | | | Probability of meeting earnout and contingencies | | 0% - 100% | (1) | 93.9% | | | | | | | Financial forecast information | | | | | Derivative assets and liabilities: | | | | | | | | | | | Nasdaq Forwards | | $ | 12,822 | | | $ | — | | | Implied volatility | | 42.4% - 42.6% | (2) | 42.5% | Forward sale contracts | | $ | 7,632 | | | $ | 14,971 | | | Counterparty credit risk | | N/A | | N/A | Rate lock commitments | | $ | 21,034 | | | $ | 2,977 | | | Counterparty credit risk | | N/A | | N/A |
(1)Newmark’s estimate of contingent consideration as of December 31, 2021 and 2020 was based on the acquired business’ projected future financial performance, including revenues. (2)The volatility of Newmark’s Nasdaq Forwards is primarily based on the volatility of the underlying Nasdaq stock price.
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