REVENUE FROM CONTRACTS WITH CUSTOMERS

9 Months Ended

Sep. 30, 2021

Revenue From Contract With Customer [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

8.  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 September 30,
(In thousands)	2021		2020
Service charges on deposits
Overdraft fees	$	117	$	88
Interchange income		374		319
Other		468		378
Wealth management fees (a)		13,860		10,119
Other (b)		2,962		9,307
Total noninterest other income	$	17,781	$	20,211

	For the Nine Months Ended September 30,
(In thousands)	2021		2020
Service charges on deposits
Overdraft fees	$	297	$	307
Interchange income		1,061		869
Other		1,343		1,120
Wealth management fees (a)		39,025		30,070
Gains on sales of OREO		51		—
Other (b)		11,502		14,988
Total noninterest other income	$	53,279	$	47,354

(a) Includes investment brokerage fees.

(b) 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 September 30,						For the Three Months Ended September 30,
	2021						2020
(In thousands)			Wealth						Wealth
Revenue by Operating Segment	Banking		Management		Total		Banking		Management		Total
Service charges on deposits
Overdraft fees	$	117	$	—	$	117	$	88	$	—	$	88
Interchange income		374		—		374		319		—		319
Other		468		—		468		378		—		378
Wealth management fees (a)		—		13,860		13,860		—		10,119		10,119
Other (b)		2,517		445		2,962		8,666		641		9,307
Total noninterest income	$	3,476	$	14,305	$	17,781	$	9,451	$	10,760	$	20,211

	For the Nine Months Ended September 30,						For the Nine Months Ended September 30,
(In thousands)	2021						2020
Revenue by Operating			Wealth						Wealth
Segment	Banking		Management		Total		Banking		Management		Total
Service charges on deposits
Overdraft fees	$	297	$	—	$	297	$	307	$	—	$	307
Interchange income		1,061		—		1,061		869		—		869
Other		1,343		—		1,343		1,120		—		1,120
Wealth management fees (a)		—		39,025		39,025		—		30,070		30,070
Gains on sales of OREO		51		—		51		—		—		—
Other (b)		10,058		1,444		11,502		13,740		1,248		14,988
Total noninterest income	$	12,810	$	40,469	$	53,279	$	16,036	$	31,318	$	47,354

(a) Includes investment brokerage fees.

(b) 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 transaction-based, 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 third quarter of 2021 by $34,000 compared to $31,000 for the same quarter in 2020. Cardholder rewards reduced interchange income by $95,000 and $86,000 for the nine months ended September 30, 2021 and 2020, 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 15^th 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.

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 nine months ended September 30, 2021.

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