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Revenue Recognition | 3 Months Ended
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Mar. 31, 2020
Revenue from Contract with Customer [Abstract] |
Revenue Recognition | Revenue Recognition In addition to revenue from loans and securities, the Company also generates revenues from other services provided as described below. Insurance Commissions and Fees Fees are earned upon the effective date of bound coverage, as no significant performance obligation remains after coverage is bound. The Company has historically recognized revenue in this manner, with the noted exception related to installment billing discussed below. Installment Billing - Agency Bill Revenue associated with the issuance of policies is recognized upon the effective date of the associated policy regardless of the billing method. Revenue is accrued based upon the completion of the performance obligation creating a current asset for the unbilled revenue until such time as an invoice is generated, typically not to exceed twelve months. Contingent Commissions Contingent commissions represent a form of variable consideration associated with the same performance obligation, which is the placement of coverage, for which we earn core commissions. Contingent commissions are estimated with an appropriate constraint applied and accrued relative to the recognition of the corresponding core commissions. The resulting effect on the timing of recognition of contingent commissions will more closely follow a similar pattern as our core commissions with true-ups recognized when payments are received or as additional information that affects the estimate becomes available. Refund of Commissions The contract with the insurance carrier dictates the level of commissions paid to the Company that will be refunded to the carrier upon cancellation by the policyholder. As a result, the Company has established a liability for the estimated amount of commission to which the Company does not expect to be entitled, and a corresponding reduction to the gross commission received or receivable. This is updated at the end of each reporting period for changes in circumstances. Trust & Asset Management Trust and asset management income is primarily comprised of fees earned from the management and administration of trusts and other customer assets. The Company’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days after month end through a direct charge to the customer's account. The Company does not earn performance-based incentives. Optional services such as real estate sales and tax return preparation services are also available to existing trust and asset management customers. The Company’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered. Mutual Fund & Investment Income Mutual fund and investment income consists of other recurring revenue streams such as commissions from sales of mutual funds and other investments, investment advisory fees from the Company’s Strategic Asset Management Services (SAM) wealth management product. Commissions from the sale of mutual funds and other investments are recognized on trade date, which is when the Company has satisfied its performance obligation. The Company also receives periodic service fees (i.e., trailers) from mutual fund companies typically based on a percentage of net asset value. Trailer revenue is recorded over time, usually monthly or quarterly, as net asset value is determined. Investment advisor fees from the wealth management product is earned over time and based on an annual percentage rate of the net asset value. The investment advisor fees are charged to the customer’s account in advance on the first month of the quarter, and the revenue is recognized over the following three-month period. The Company does engage a third party, LPL Financial, LLC (LPL), to satisfy part of this performance obligation, and therefore this income is reported net of any corresponding expenses paid to LPL. Service Charges on Deposit Accounts Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a 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. Card Services Income Fees, exchange, and other service charges are primarily comprised of debit and credit card income, ATM fees, merchant services income, and other service charges. Debit and credit card income is primarily comprised of interchange fees earned whenever the Company’s debit and credit cards are processed through card payment networks such as Mastercard. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. The Company’s performance obligation for fees and exchange 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. Other Other service charges include revenue from processing wire and ACH transfers, lock box service and safe deposit box rental. Both wire transfer fees and lock box services are charged on per item basis. Wire and ACH transfer fees are charged at the time of transfer and charged directly to the customer account. Lock box customers are billed monthly and payments are received in the following month through a direct charge to customers’ accounts. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. The Company determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation. The following presents noninterest income, segregated by revenue streams, for the three months ended March 31, 2020 and 2019.
| Three Months Ended
(In thousands) | 03/31/2020 | 03/31/2019
Noninterest Income |  |
In-scope of Topic 606: |  |
Commissions and Fees | $ | 7,385 |  | $ | 7,099 |
Installment Billing |  | (30 | ) |  | (71 | )
Refund of Commissions |  | (127 | ) |  | (12 | )
Contract Liabilities/Deferred Revenue |  | (4 | ) |  | 0 |
Contingent Commissions |  | 821 |  |  | 1,029 |
Subtotal Insurance Revenues |  | 8,045 |  |  | 8,045 |
Trust and Asset Management |  | 2,943 |  |  | 2,850 |
Mutual Fund & Investment Income |  | 1,259 |  |  | 1,234 |
Subtotal Investment Service Income |  | 4,202 |  |  | 4,084 |
Service Charges on Deposit Accounts |  | 1,983 |  |  | 1,998 |
Card Services Income |  | 2,183 |  |  | 2,790 |
Other |  | 314 |  |  | 307 |
Noninterest Income (in-scope of ASC 606) |  | 16,727 |  |  | 17,224 |
Noninterest Income (out-of-scope of ASC 606)1 |  | 2,233 |  |  | 2,183 |
Total Noninterest Income | $ | 18,960 |  | $ | 19,407 |
Contract Balances Receivables primarily consist of amounts due for insurance and wealth management services performed for which the Company's performance obligations have been fully satisfied. Receivables amounted to $3.9 million and $1.8 million, respectively, at March 31, 2020, compared to $4.7 million and $2.0 million, respectively, at December 31, 2019 and were included in other assets in the Condensed Consolidated Statements of Condition. A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). The Company’s noninterest revenue streams, excluding some insurance commissions and fees, are largely based on transactional activity, or standard month-end revenue accruals such as asset management fees based on month-end market values. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of March 31, 2020 and December 31, 2019, the Company did not have any significant contract balances. A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company often receives cash payments from customers in advance of the Company’s performance resulting in contract liabilities. These contract liabilities are classified current or long-term in the Condensed Consolidated Statements of Condition based on the timing of when the Company expects to recognize revenue. As of March 31, 2020 and December 31, 2019, contract liabilities were $629,000 and $2,000,000, respectively, and are included within accrued expenses in the accompanying Condensed Consolidated Statements of Condition. The liabilities include premiums due to insurance carriers in addition to unearned commission revenue. The decrease in the contract liability balance during the three-month period ended March 31, 2020 is primarily as a result of billings and cash payments received in advance of satisfying performance obligations, offset by insurance premiums and revenue recognized during the period that was included in the contract liability balance at the date of adoption. Contract Acquisition Costs The Company is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
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