Revenue from Contracts with Customers

6 Months Ended

Jun. 30, 2021

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Note 10. Revenue from Contracts with Customers

Revenue from contracts with customers in the scope of ASC Topic 606 is measured based on the consideration specified in the contract with a customer, and excludes amounts collected on behalf of third parties. The Company recognizes revenue from contracts with customers when it satisfies its performance obligations.

The Company’s performance obligations are typically satisfied as services are rendered, and our contracts do not include multiple performance obligations. Payment is generally collected at the time services are rendered, or monthly. Unsatisfied performance obligations at the report date are not material to our consolidated financial statements.

The Company pays sales commissions to its employees in accordance with certain incentive plans. The Company expenses sales commissions when incurred if we do not expect to recover these costs from the terms of the contract with the customer. Sales commissions are included in compensation expense.

In certain cases, other parties are involved with providing products and services to our customers. If the Company is a principal in the transaction (providing goods or services itself), revenues are reported based on the gross consideration received from the customer and any related expenses are reported gross in noninterest expense. If the Company is an agent in the transaction (arranging for another party to provide goods or services), the Company reports its net fee or commission retained as revenue.

Waivers and reversals are recorded as a reduction of revenue either when the revenue is recognized by the Company or at the time the waiver or reversal is earned by the customer.

A. Nature of goods and services

The vast majority of the Company’s revenue is specifically out-of-scope of Topic 606. For the revenue in-scope, the following is a description of principal activities, separated by the timing of revenue recognition, from which the Company generates its revenue from contracts with customers.

a. Revenue earned at a point in time – Examples of revenue earned at a point in time are ATM transaction fees, wire transfer fees, “non-sufficient funds” fees, credit and debit card interchange fees and foreign exchange transaction fees. Revenue is generally derived from transactional information accumulated by our systems and is recognized as revenue immediately as the transactions occur or upon providing the service to complete the customer’s transaction. The Company is the principal in each of these contracts, with the exception of credit and debit card interchange fees, in which case we are acting as the agent and record revenue net of expenses paid to the principal.

b. Revenue earned over time – The Company earns revenue from contracts with customers in a variety of ways in which the revenue is earned over a period of time – generally monthly or quarterly. Examples of this type of revenue are deposit account service fees, lockbox fees, investment management fees, merchant referral services, and safe deposit box fees. Account service charges, management fees and referral fees are recognized on a monthly basis while any transaction based income is recorded as the activity occurs. Revenue is primarily based on the number and type of transactions or assets managed and is generally derived from transactional information accumulated by our systems. Revenue is recorded in the same period as the related transactions occur or services are rendered to the customer.

B. Disaggregation of revenue

The following table presents total revenues as presented in the Consolidated Statements of Income and the related amounts which are from contracts with customers within the scope of Topic 606. As illustrated here, the vast majority of our revenues are specifically excluded from the scope of Topic 606.

	Six Months Ended 6/30/2021		Revenue from Contracts in Scope of Topic 606		Six Months Ended 6/30/2020		Revenue from Contracts in Scope of Topic 606
	(dollars in thousands)
Net interest income	$	58,558	$	—	$	51,019	$	—
Noninterest income:
Service charges on deposit accounts		4,389		4,389		4,319		4,319
Lockbox fees		1,962		1,962		1,854		1,854
Other income		1,958		1,366		2,178		1,158
Total noninterest income		8,309		7,717		8,351		7,331
Total revenues	$	66,867	$	7,717	$	59,370	$	7,331

	Three Months Ended 6/30/2021		Revenue from Contracts in Scope of Topic 606		Three Months Ended 6/30/2020		Revenue from Contracts in Scope of Topic 606
	(dollars in thousands)
Net interest income	$	29,991	$	—	$	25,818	$	—
Noninterest income:
Service charges on deposit accounts		2,171		2,171		2,023		2,023
Lockbox fees		966		966		924		924
Other income		969		671		1,094		559
Total noninterest income		4,106		3,808		4,041		3,506
Total revenues	$	34,097	$	3,808	$	29,859	$	3,506

The following table provides information about receivables with customers.

	June 30, 2021		December 31, 2020
(dollars in thousands)
Receivables, which are included in “Other assets”	$	1,486	$	1,397