Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Note 13 – Revenue from Contracts with Customers

On January 1, 2018, the Company adopted FASB ASC 606, “Revenue from Contracts with Customers” (“FASB ASC 606”) and selected the modified retrospective transition method. The adoption of this new standard did not impact the Company’s results of operations or balance sheet and there was no cumulative effect of initially applying this new revenue standard to the opening balance of retained earnings. Since interest income on loans and securities are both excluded from this topic, a significant portion of the Company’s revenues are not subject to the new guidance. The services that fall within the scope of FASB ASC 606 are presented within fee revenue and other income in the Consolidated Statements of Income and are recognized as revenue as the obligation to the customer is satisfied. Services within the scope of FASB ASC 606 include invoice processing and payment fees, bank service fees, and other real estate owned (“OREO”).

Invoice processing fees – The Company earns fees on a per-item or monthly basis for the invoice processing services rendered on behalf of customers. Per-item fees are recognized at the point in time when the performance obligation is satisfied. Monthly fees are earned over the course of a month, representing the period over which the performance obligation is satisfied. The contracts have no significant impact of variable consideration and no significant financing components.

Invoice payment fees – The Company earns fees on a transaction level basis for invoice payment services when making customer payments. Fees are recognized at the point in time when the payment transactions are made, which is when the performance obligation is satisfied. The contracts have no significant impact of variable consideration and no significant financing components.

Bank service fees – Revenue from service fees consists of service charges and fees on deposit accounts under depository agreements with customers to provide access to deposited funds. Service charges on deposit accounts are transaction based fees that are recognized at the point in time when the performance obligation is satisfied. Service charges are recognized on a monthly basis representing the period over which the performance obligation is satisfied. The contracts have no significant impact of variable consideration and no significant financing components.

OREO – The Company currently does not have any OREO and has not in recent years. Net gains or losses would be recorded when other real estate is sold to a third party and substantially all of the consideration for the transfer of property is received.

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In thousands)	2019		2018		2019		2018
Fee revenue and other income
In-scope of FASB ASC 606
Invoice processing fees	$	20,408	$	19,876	$	61,397	$	58,492
Invoice payment fees		7,333		6,144		19,653		17,576
Information services payment and processing revenue		27,741		26,020		81,050		76,068
Bank service fees		307		300		984		994
Fee revenue (in-scope of FASB ASC 606)		28,048		26,320		82,034		77,062
Other income (out-of-scope of FASB ASC 606)		214		115		613		387
Total fee revenue and other income		28,262		26,435		82,647		77,449
Net interest income after provision for loan losses (out-of-scope of  FASB ASC 606)1		12,274		11,186		35,653		32,514
Total net revenue	$	40,536	$	37,621	$	118,300	$	109,963

¹ The Company earns interest income from the balances generated during the invoice processing and payment cycle and on deposit accounts, which is an integral component of the Company’s compensation for services provided, but is out-of-scope of FASB ASC 606.