REVENUE FROM CONTRACTS WITH CUSTOMERS

6 Months Ended

Jun. 30, 2022

Revenue From Contract With Customer [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

9. REVENUE FROM CONTRACTS WITH CUSTOMERS

All of the Company’s revenue from contracts with customers within the scope of ASC 606 is recognized within noninterest income.

The following tables present the sources of noninterest income for the periods indicated:

	For the Three Months Ended June 30,
(In thousands)	2022		2021
Service charges on deposits
Overdraft fees	$	118	$	87
Interchange income		379		370
Other		566		439
Wealth management fees (1)		13,891		13,034
Corporate advisory fee income		33		121
Gains/(losses) on sales of OREO		—		51
Other (2)		3,521		3,576
Total noninterest other income	$	18,508	$	17,678

	For the Six Months Ended June 30,
(In thousands)	2022		2021
Service charges on deposits
Overdraft fees	$	231	$	180
Interchange income		721		687
Other		1,063		875
Wealth management fees (1)		28,725		25,165
Corporate advisory fee income		1,594		1,219
Gains/(losses) on sales of OREO		—		51
Other (2)		888		7,321
Total noninterest other income	$	33,222	$	35,498

(1)Includes investment brokerage fees.

(2)All of the other category is outside the scope of ASC 606.

The following table presents the sources of noninterest income by operating segment for the periods indicated:

	For the Three Months Ended  June 30,						For the Three Months Ended  June 30,
	2022						2021
(In thousands)			Wealth						Wealth
Revenue by Operating Segment	Banking		Management		Total		Banking		Management		Total
Service charges on deposits
Overdraft fees	$	118	$	—	$	118	$	87	$	—	$	87
Interchange income		379		—		379		370		—		370
Other		566		—		566		439		—		439
Wealth management fees (1)		—		13,891		13,891		—		13,034		13,034
Corporate advisory fee income		33		—		33		121		—		121
Gains/(losses) on sales of OREO		—		—		—		51		—		51
Other (2)		3,023		498		3,521		3,126		450		3,576
Total noninterest income	$	4,119	$	14,389	$	18,508	$	4,194	$	13,484	$	17,678

	For the Six Months Ended June 30,						For the Six Months Ended June 30,
(In thousands)	2022						2021
Revenue by Operating			Wealth						Wealth
Segment	Banking		Management		Total		Banking		Management		Total
Service charges on deposits
Overdraft fees	$	231	$	—	$	231	$	180	$	—	$	180
Interchange income		721		—		721		687		—		687
Other		1,063		—		1,063		875		—		875
Wealth management fees (1)		—		28,725		28,725		—		25,165		25,165
Corporate advisory fee income		1,594		—		1,594		1,219		—		1,219
Gains/(losses) on sales of OREO		—		—		—		51		—		51
Other (2)		81		807		888		6,322		999		7,321
Total noninterest income	$	3,690	$	29,532	$	33,222	$	9,334	$	26,164	$	35,498

(1)Includes investment brokerage fees.

(2)All of the other category is outside the scope of ASC 606.

A description of the Company’s revenue streams accounted for under ASC 606 follows:

Service charges on deposit accounts: The Company earns fees from its deposit customers for certain transaction account maintenance, and overdraft fees. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer’s account balance.

Interchange income: The Company earns interchange fees from debit cardholder transactions conducted through the Visa payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. Interchange income is presented gross of cardholder rewards. Cardholder rewards are included in other expenses in the statement of income. Cardholder rewards reduced interchange income for the second quarter of 2022 by $34,000 compared to $32,000 for the same quarter in 2021. Cardholder rewards reduced interchange income by $64,000 and $61,000 for the six months ended June 30, 2022 and 2021, respectively.

Wealth management fees (gross): The Company earns wealth management fees from its contracts with wealth management clients to manage assets for investment, and/or to transact on their accounts. These fees are primarily earned over time as the Company charges its clients on a monthly or quarterly basis in accordance with its investment advisory agreements. Fees are generally assessed based on a tiered scale of the market value of AUM at month end. Fees that are transaction based, including trade execution services, are recognized at the point in time that the transaction is executed (i.e. trade date).

Investment brokerage fees (net): The Company earns fees from investment brokerage services provided to its customers by a third-party service provider. The Company receives commissions from the third-party service provider twice a month based upon customer activity for the month. The fees are recognized monthly, and a receivable is recorded until commissions are generally paid by the 15th of the following month. Because the Company (i) acts as an agent in arranging the relationship between the customer and the third-party service provider and (ii) does not control the services rendered to the customers, investment brokerage fees are presented net of related costs.

Corporate advisory fee income: The Company provides our clients with financial advisory and underwriting services. Investment banking revenues, which includes mergers and acquisition advisory fees and private placement fees, are recorded when the performance obligation for the transaction is satisfied under the terms of each engagement. Reimbursed expenses are reported in other revenue on the statement of operations. Expenses related to investment banking are recognized as non-compensation expenses on the statement of operations. Amounts received and unearned are included on the statement of financial condition. Expenses related to investment banking deals not completed are recognized in non-compensation expenses on the statement of operations.

The Company’s mergers and acquisition advisory fees generally consist of a nonrefundable up-front fee and success fee. The nonrefundable fee is recorded as deferred revenue upon receipt and recognized at a point in time when the performance obligation is satisfied, or when the transaction is deemed by management to be terminated. Management’s judgement is required in determining when a transaction is considered to be terminated.

Gains/(losses) on sales of OREO: The Company records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of OREO to the buyer, the Company assesses whether the buyer is committed to perform its obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain/(loss) on sale if a significant financing component is present. The company recorded a gain on the sale of OREO of $51,000 for the three and six months ended June 30, 2021.

Other: All of the other income items are outside the scope of ASC 606.