XML 37 R27.htm IDEA: XBRL DOCUMENT v3.22.2.2
Revenue Recognition
 9 Months Ended
Sep. 30, 2022
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
With the adoption of ASU 2014-09 (Topic 606), the Company recognizes revenue when obligations under the terms of a contract with customers are satisfied. Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also out of scope of the new guidance. Topic 606 is applicable to noninterest revenue streams such as deposit related fees, wire transfer fees, and certain OREO related net gains or expenses. However, the recognition of these revenue streams for the Company did not change significantly upon adoption of Topic 606. Noninterest revenue streams within the scope of Topic 606 are discussed below.
Service Charges on Deposit Accounts and Wire Transfer Fees
Service charges on noninterest and interest bearing deposit accounts consist of monthly service charges, customer analysis charges, non-sufficient funds (“NSF”) charges, and other deposit account related charges. The Company’s performance obligation for account analysis charges and monthly service charges is generally satisfied, and the related revenue is recognized over the period in which the service is provided. NSF charges, other deposit account related charges, and wire transfer fees are transaction based, and therefore the Company’s performance obligation is satisfied at the point of the transaction, and related revenue recognized at that point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts.
Service charges on deposit accounts and wire transfers are summarized below:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(Dollars in thousands)
Noninterest bearing deposit account income:
Monthly service charges$250 $259 $751 $808 
Customer analysis charges1,426 847 3,541 2,332 
NSF charges749 606 2,149 1,921 
Other service charges87 81 268 252 
Total noninterest bearing deposit account income2,512 1,793 6,709 5,313 
Interest bearing deposit account income:
Monthly service charges23 21 70 68 
Total service fees on deposit accounts$2,535 $1,814 $6,779 $5,381 
Wire transfer fee income:
Wire transfer fees$765 $766 $2,254 $2,256 
Foreign exchange fees91 70 360 347 
Total wire transfer fees$856 $836 $2,614 $2,603 
OREO Income (Expense)OREO are often sold in transactions that, under ASC 606, may not be considered a contract with a customer because the sale of the asset may not be an output of the Company’s ordinary activities. However, sales of nonfinancial assets, including in-substance nonfinancial assets, should be accounted for in accordance with ASC 610-20, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets”, which requires the Company to apply certain measurement and recognition concepts of ASC 606. Accordingly, the Company recognizes the sale of a real estate property, along with any associated gain or loss, when control of the property transfers to the buyer. For sales of existing real estate properties, this generally will occur at the point of sale. When the Company finances the sale of OREO to the buyer, the Company must assess whether the buyer is committed to perform their 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. Application of the new revenue recognition standard does not materially change the amount and the timing of the gain/loss on sale of OREO and other nonfinancial assets. Further, there were no open OREO/nonfinancial assets sale contracts at the adoption date that required an evaluation under Topic 606. For the three and nine months ended September 30, 2022, the Company had recognized net losses on sales of OREO totaling $198 thousand and $178 thousand, respectively. For the three and nine months ended September 30, 2021, the Company recognized net losses on sale of OREO in the amount of $12 thousand and recognized net gains on sales of OREO totaling $1 thousand, respectively.