EQUITY METHOD INVESTMENT

12 Months Ended

Dec. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Note 5 – Equity Method Investment

Any investments where we have the ability to exercise significant influence, but not control over the operating and financial policies of the investee, are accounted for using the equity method of accounting. For investments accounted for under the equity method, we increase or decrease our investment by our proportionate share of the investee’s net income or loss.

ICM

In the third quarter of 2020, we acquired a portion of ICM and recognized our ownership as an equity method investment initially recorded at fair value. In accordance with Rule 8-03(b)(3) of Regulation S-X, we must assess whether our equity method investments are significant equity method investments. In evaluating the significance of the ICM investment, we performed the income, asset and investment tests described in S-X 3-05 and S-X 1-02(w). Rule 8-03(b)(3) of Regulation S-X requires summarized financial information in a quarterly report if any of the three tests exceeds 20%. Under the income test, our proportionate share of ICM's aggregated net income exceeded the applicable threshold of 20%, and accordingly we are required to provide summarized income statement information for this investee for all periods presented.

Our share of net income from our ICM totaled $16.4 million and $24.2 million for the years ended December 31, 2021 and 2020, respectively.

The following table provides summarized income statement information for ICM for the years ended December 31, 2021 and 2020:


	December 31,
(Dollars in thousands)	2021		2020
Total revenues	$	153,549	$	120,323
Net income	41,381		59,761

Gain on sale of loans	150,896		100,402
Volume of loans sold	5,326,757		2,948,724

As of December 31, 2021 and 2020, the locked mortgage pipeline was $1.0 billion and $1.5 billion, respectively.

Interchecks

In September 2021, we increased our equity investment in Interchecks by $4.5 million, for a total investment to $7.7 million. The additional investment increased our ownership percentage to 16.9% and allows us to have significant influence over the operations and decision making at Interchecks; therefore, the investment has now been accounted for as an equity method investment as of December 31, 2021. Interchecks did not have income in 2021. The equity method investment in Interchecks is not considered a significant investment based on the criteria of Rule 8-03(b)(3) of Regulation S-X.

We have multiple business relationships with Interchecks beyond our investment. Interchecks is a banking client of ours and utilizes the Victor platform, which provides revenue to us. Additionally, Interchecks provides management services to MVB Technology, which provides revenue to Interchecks. Such revenues have not been material.

Ayers Socure II

In April 2021, we invested $0.5 million in Ayers Socure II. Ayers Socure II is a limited liability company and our ownership percentage of 10.0% resulted in us having significant influence over the company; therefore, the investment has now been accounted for as an equity method investment as of December 31, 2021.Our share of net income from Ayers Socure II totaled $1.0 million and is primarily related to holding gains on equity securities. The equity method investment in Ayers Socure II is not considered a significant investment based on the criteria of Rule 8-03(b)(3) 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.