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REVENUE FROM CONTRACTS WITH CUSTOMERS
 6 Months Ended
Jun. 30, 2020
Revenue From Contract With Customer [Abstract]  
REVENUE FROM CONTRACTS WITH CUSTOMERS

8.  REVENUE FROM CONTRACTS WITH CUSTOMERS

All of the Company’s revenue from contracts with customers within the scope of ASC 606 is recognized within noninterest income.

The following tables present the sources of noninterest income for the periods indicated:

 

 

 

For the Three Months Ended June 30,

 

(In thousands)

 

2020

 

 

2019

 

Service charges on deposits

 

 

 

 

 

 

 

 

Overdraft fees

 

$

72

 

 

$

164

 

Interchange income

 

 

270

 

 

 

322

 

Other

 

 

353

 

 

 

411

 

Wealth management fees (a)

 

 

9,996

 

 

 

9,568

 

Other (b)

 

 

1,935

 

 

 

2,561

 

Total noninterest other income

$

12,626

 

 

$

13,026

 

 

 

 

For the Six Months Ended June 30,

 

(In thousands)

 

2020

 

 

2019

 

Service charges on deposits

 

 

 

 

 

 

 

 

Overdraft fees

 

$

219

 

 

$

324

 

Interchange income

 

 

550

 

 

 

586

 

Other

 

 

742

 

 

 

803

 

Wealth management fees (a)

 

 

19,951

 

 

 

18,742

 

Other (b)

 

 

5,681

 

 

 

4,300

 

Total noninterest other income

$

27,143

 

 

$

24,755

 

(a)

Includes investment brokerage fees.

(b)

All of the other category is outside the scope of ASC 606.

The following table presents the sources of noninterest income by operating segment for the periods indicated:

 

 

 

For the Three Months Ended

June 30,

 

 

For the Three Months Ended

June 30,

 

 

 

2020

 

 

2019

 

(In thousands)

 

 

 

 

 

Wealth

 

 

 

 

 

 

 

 

 

 

Wealth

 

 

 

 

 

Revenue by Operating Segment

 

Banking

 

 

Management

 

 

Total

 

 

Banking

 

 

Management

 

 

Total

 

Service charges on deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overdraft fees

 

$

72

 

 

$

—

 

 

$

72

 

 

$

164

 

 

$

—

 

 

$

164

 

Interchange income

 

 

270

 

 

 

—

 

 

 

270

 

 

 

322

 

 

 

—

 

 

 

322

 

Other

 

 

353

 

 

 

—

 

 

 

353

 

 

 

411

 

 

 

—

 

 

 

411

 

Wealth management fees (a)

 

 

—

 

 

 

9,996

 

 

 

9,996

 

 

 

—

 

 

 

9,568

 

 

 

9,568

 

Other (b)

 

 

1,661

 

 

 

274

 

 

 

1,935

 

 

 

2,254

 

 

 

307

 

 

 

2,561

 

Total noninterest income

 

$

2,356

 

 

$

10,270

 

 

$

12,626

 

 

$

3,151

 

 

$

9,875

 

 

$

13,026

 

 

 

 

For the Six Months Ended

June 30,

 

 

For the Six Months Ended

June 30,

 

(In thousands)

 

2020

 

 

2019

 

Revenue by Operating

 

 

 

 

 

Wealth

 

 

 

 

 

 

 

 

 

 

Wealth

 

 

 

 

 

Segment

 

Banking

 

 

Management

 

 

Total

 

 

Banking

 

 

Management

 

 

Total

 

Service charges on deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overdraft fees

 

$

219

 

 

$

—

 

 

$

219

 

 

$

324

 

 

$

—

 

 

$

324

 

Interchange income

 

 

550

 

 

 

—

 

 

 

550

 

 

 

586

 

 

 

—

 

 

 

586

 

Other

 

 

742

 

 

 

—

 

 

 

742

 

 

 

803

 

 

 

—

 

 

 

803

 

Wealth management fees (a)

 

 

—

 

 

 

19,951

 

 

 

19,951

 

 

 

—

 

 

 

18,742

 

 

 

18,742

 

Other (b)

 

 

5,074

 

 

 

607

 

 

 

5,681

 

 

 

3,717

 

 

 

583

 

 

 

4,300

 

Total noninterest income

 

$

6,585

 

 

$

20,558

 

 

$

27,143

 

 

$

5,430

 

 

$

19,325

 

 

$

24,755

 

 

(a)

Includes investment brokerage fees.

(b)

All of the other category is outside the scope of ASC 606.

 

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

Service charges on deposit accounts:  The Company earns fees from its deposits customers for transaction-based, account maintenance, and overdraft fees.  Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer’s request.  Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation.  Overdraft fees are recognized at the point in time that the overdraft occurs.  Service charges on deposits are withdrawn from the customer’s account balance.

Interchange income:  The Company earns interchange fees from debit cardholder transactions conducted through the Visa payment network.  Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder.  Interchange income is presented gross of cardholder rewards.  Cardholder rewards are included in other expenses in the statement of income.  Cardholder rewards reduced interchange income for the second quarter of 2020 by $23,000 compared to $36,000 for same quarter of 2019. Cardholder rewards reduced interchange income by $55,000 and $68,000 for the six months ended June 30, 2020 and 2019, respectively.    

Wealth management fees (gross):  The Company earns wealth management fees from its contracts with wealth management clients to manage assets for investment, and/or to transact on their accounts.  These fees are primarily earned over time as the Company charges its clients on a monthly or quarterly basis in accordance with its investment advisory agreements.  Fees are generally assessed based on a tiered scale of the market value of AUM at month end.  Fees that are transaction based, including trade execution services, are recognized at the point in time that the transaction is executed (i.e. trade date).

Investment brokerage fees (net):  The Company earns fees from investment brokerage services provided to its customers by a third-party service provider.  The Company receives commissions from the third-party service provider twice a month based upon customer activity for the month.  The fees are recognized monthly and a receivable is recorded until commissions are generally paid by the 15th of the following month.  Because the Company (i) acts as an agent in arranging the relationship between the

customer and the third-party service provider and (ii) does not control the services rendered to the customers, investment brokerage fees are presented net of related costs.

Gains/(losses) on sales of OREO:  The Company records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed.  When the Company finances the sale of OREO to the buyer, the Company assesses whether the buyer is committed to perform its 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.  In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain/(loss) on sale if a significant financing component is present.    

Other:  All of the other income items are outside the scope of ASC 606.