Revenue

9 Months Ended

Sep. 30, 2023

Revenue

Revenue

Note 12— Revenue

Certain of the Company’s non-interest revenue streams are derived from short-term contacts associated with services provided to deposit account holders as well as other ancillary services, which are accounted for in accordance with ASC 606 – Revenue Recognition. For most of these revenue streams, the duration of the contract does not extend beyond the services performed. Due to the short duration of most customer contracts that generate non-interest income, no significant judgments must be made in the determination of the amount and timing of revenue recognized.

The following table shows the components of non-interest income for the three and nine months ended September 30, 2023 and September 30, 2022.

	Three months ended				Nine months ended
	September 30,				September 30,
(Dollars in thousands)	2023		2022		2023		2022
Service charges on deposit accounts (1)
Overdrawn account fees	$	20	$	19	$	55	$	60
Account service fees		65		60		184		180
Other service charges and fees (1)
Interchange income		101		108		304		306
Other charges and fees		59		67		373		163
Bank owned life insurance		23		255		224		445
Losses on sale of available-for-sale securities		(17,114)		—		(17,316)		—
Net gains (losses) on premises and equipment (1)		—		—		16		(1)
Insurance commissions (1)		54		47		310		312
Gain on sale of government guaranteed loans		27		—		50		—
Non-qualified deferred compensation plan asset gains (losses), net		(60)		(107)		112		(498)
Other operating income (2)		10		1		124		6
Total non-interest income	$	(16,815)	$	450	$	(15,564)	$	973

(1) Income within the scope of ASC 606.

(2) Includes other operating income within the scope of ASC 606 amounting to $10 thousand and $33 thousand for the three and nine months ended September 30, 2023, respectively. Includes other operating income of $91 thousand related to swap fee income on a back-to-back loan swaps for the nine months ended September 30, 2023, which is outside the scope of ASC 606. There was no swap fee income on back-to-back loan swaps for the three months ended September 30, 2023. Includes other operating income within the scope of ASC 606 amounting to $1 thousand and $6 thousand for the three and nine months ended September 30, 2022, respectively.

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

Service charges on deposit accounts

Service charges on deposit accounts consist of overdrawn account fees and account service fees. Overdrawn account fees are recognized at the point in time that the overdraft occurs. Account service fees consist primarily of account analysis and other maintenance fees and are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Payment for service charges on deposit accounts is received immediately or in the following month through a direct charge to customers’ accounts.

Other service charges and fees

Other service charges and fees are primarily comprised of interchange income and other charges and fees. Interchange income is earned whenever the Company’s debit and credit cards are processed through card payment networks such as Visa. Other charges and fees include revenue from processing wire transfers, cashier’s checks, and other transaction based services. The Company’s performance obligation for these charges and fees are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month.

Net gains (losses) on premises and equipment

The Company records a gain or loss on the disposition of premises and equipment when control of the property transfers or is involuntarily converted to a monetary asset (e.g., insurance proceeds). This income is reflected in other operating income on the Company’s Consolidated Statements of Income.

Insurance commissions

The Company performs the function of an insurance intermediary by introducing the policyholder and insurer and is compensated in the form of a commission for placement of an insurance policy based on a percentage of premiums issued and maintained during the period. Revenue is recognized when received.