Note 19 - Revenue From Contracts With Customers

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

NOTE 19 – REVENUE FROM CONTRACTS WITH CUSTOMERS

The following is a summary of revenue from contracts with customers that are in-scope and not in-scope under ASC Topic 606 for the periods indicated:

	For the Three Months Ended						For the Nine Months Ended September 30,
	September 30, 2024		June 30, 2024		September 30, 2023		2024		2023
Noninterest income, in scope	(dollars in thousands)
Fees and service charges on deposit accounts	$	475	$	490	$	500	$	1,421	$	1,534
Other fees (1)		198		221		202		607		682
Other income (2)		597		574		558		1,706		1,667
Gain on sale of OREO and fixed assets		—		292		222		456		222
Total in-scope noninterest income		1,270		1,577		1,482		4,190		4,105
Noninterest income, not in scope (3)		4,476		1,911		1,288		8,416		3,520
Total noninterest income	$	5,746	$	3,488	$	2,770	$	12,606	$	7,625

(1) Other fees consist of wealth management fees, miscellaneous loan fees and postage/courier fees.

(2) Other income consists of safe deposit box rental income, wire transfer fees, security brokerage fees, annuity sales, insurance activity, and OREO income.

(3) Represents revenue that is out of scope of ASC 606 including net loan servicing income, letter of credit commissions, import/export commissions, BOLI income, gains (losses) on sales of loans, income from equity investments, gain on transfer to OREO, and $2.8 million recognized in the third quarter of 2024 for a recovery of a fully charged off loan acquired in a bank acquisition.

The major revenue streams by fee type that are within the scope of ASC 606 presented in the above tables are described in additional detail below:

Fees and Services Charges on Deposit Accounts

Fees and service charges on deposit accounts include charges for analysis, overdraft, cash checking, ATM, and safe deposit activities executed by our deposit clients, as well as interchange income earned through card payment networks for the acceptance of card based transactions. Fees earned from our deposit clients are governed by contracts that provide for overall custody and access to deposited funds and other related services and can be terminated at will by either party; this includes fees from money service businesses. Fees received from deposit clients for the various deposit activities are recognized as revenue once the performance obligations are met.

Wealth Management Fees

We employ financial consultants to provide investment planning services for customers including wealth management services, asset allocation strategies, portfolio analysis and monitoring, investment strategies, and risk management strategies. The fees we earn are variable and are generally received monthly. We recognize revenue for the services performed at quarter-end based on actual transaction details received from the broker dealer we engage.

In our wealth management division, revenue is primarily generated from (1) securities brokerage accounts, (2) investment advisor accounts, (3) full service brokerage implementation fees, and (4) life insurance and annuity products.

Gain/(loss) on Sales of Other Real Estate Owned

We record a gain or loss from the sale of OREO, when control of the property or asset transfers to the buyer, which generally occurs at the time of an executed deed or sales agreement.