Quarterly report pursuant to Section 13 or 15(d)

Goodwill

v3.21.2
Goodwill
9 Months Ended
Sep. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill
13.
Goodwill
Goodwill consisted of the following (in thousands):
 
    
For the three
months ended
September 30,
2021
    
April 1, 2021 to
September 30,
2021
    
January 1, 2021

to

March 31, 2021
    
For the three
months ended
September 30,
2020
    
For the nine
months ended
September 30,
2020
 
    
Successor
    
Predecessor
 
Beginning balance
  
$
1,298,324
    
$
—  
     $ 121,233      $ 121,754      $ 121,137  
Additions from
 
acquisitions
  
 
472
    
 
1,298,796
       7,517        —          617  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
Ending balance
  
$
1,298,796
    
$
1,298,796
     $ 128,750      $ 121,754      $ 121,754  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
For the Successor period, additions include goodwill recognized from the Business Combination and additional acquisitions or adjustments to provisional amounts within the measurement period. Refer to Note 4 -
 
Acquisitions for additional details regarding these acquisitions. The Company did
no
t identify any impairment for the Successor three months ended September 
30
,
2021
, the Successor period from April 
1
,
2021
to September 
30
,
2021
, or the Predecessor period from January 
1
,
2021
to March 
31
,
2021
. There was also
no
impairment identified for the Predecessor periods for the three months ended and nine months ended September 
30
,
2020
. Goodwill is reviewed for impairment utilizing a qualitative assessment or a quantitative goodwill impairment test, and management determined that it was more likely than not that no impairment of goodwill existed as of September 
30
,
2021
.
Significant factors in the consideration of goodwill and intangible assets for impairment include expectations of future cash flows, market capitalization relative to book value, and expected growth rates. The declining share price of the Company’s stock has caused the market capitalization to fall below book value as of September 30, 2021. As a result of the decrease in share price, we performed an analysis to determine if a triggering event occurred that indicated it was more likely than not that the fair value of one or more of our reporting units was less than its carrying value. The analysis resulted in the determination that no triggering event occurred. Management considered the structural and timing factors, including de-SPAC trading activity following the Business Combination, comparatively low stock trading volume, and limited historical operating results that include only one quarter of results that were heavily impacted by nonrecurring merger-related transactions, have put downward pressure on the stock price of our publicly traded shares unrelated to the ongoing operations of the Company.
The Company will perform an annual goodwill impairment test as of October 1, 2021.
The amount of goodwill allocated to each reporting unit consisted of the following (in thousands):
 
    
September 30, 2021
    
December 31, 2020
 
    
Successor
    
Predecessor
 
Reporting units:
                 
Mortgage Originations
  
$
712,524
     $ 44,429  
Reverse Originations
  
 
405,445
       —    
Commercial Originations
  
 
75,768
       43,113  
Lender Services
  
 
102,250
       25,247  
Portfolio Management
  
 
2,809
       8,444  
    
 
 
    
 
 
 
Total goodwill
  
$
1,298,796
    
$
121,233