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Revenue from Contracts with Customers
 12 Months Ended
Dec. 31, 2020
Revenue From Contract With Customer [Abstract]  
Revenue from Contracts with Customers

Note 14. Revenue from Contracts with Customers

 

A description of the Company’s significant sources of revenue accounted for under ASC 606 is as follows:

 

Service charges on deposit accounts are fees charged to deposit customers for transaction-based, account maintenance and overdraft services. Transaction-based fees, which are earned based on specific transactions or customer activity within a customer’s deposit account, are recognized at the time the related transaction or activity occurs, as it is at this point when the customer’s request has been fulfilled. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the performance obligation was satisfied. Overdraft fees are recognized when the overdraft occurs. Service fees on deposit accounts are paid through a direct charge to the customer’s account.

 

Bank and purchase card revenue is comprised of interchange revenue and ATM fees. Interchange revenue is earned when bank debit and credit cardholders conduct transactions through VISA, MasterCard, and other payment networks. Interchange fees represent a percentage of the underlying cardholder’s transaction value and are generally recognized daily, concurrent with the transaction processing services provided to the cardholder. ATM fees are earned when a non-Bank cardholder uses a Bank ATM. ATM fees are recognized daily, as the related ATM transactions are settled.  

 

Payroll processing income is comprised of fees charged to customers for payroll services through MoneyWise Payroll Solutions, Inc., of which the Bank owns a controlling interest. Income is recognized when the performance obligation has been met. The performance obligation is the delivery of payroll services, after which services are billed and revenue is recorded.  

 

The following table illustrates total non-interest income segregated by revenues within the scope of ASC 606 and those which are within the scope of other ASC Topics:

 

 

 

Year Ended

December 31,

 

(Dollars in thousands)

 

2020

 

 

2019

 

Service fees on deposit accounts

 

$

905

 

 

$

651

 

Bank and purchase card revenue

 

 

1,297

 

 

 

572

 

Payroll processing income

 

 

974

 

 

 

980

 

Revenue from contracts with customers

 

 

3,176

 

 

 

2,203

 

Non-interest income within scope of other ASC

   topics

 

 

53,648

 

 

 

16,593

 

Total noninterest income

 

$

56,824

 

 

$

18,796

 

 

Contract balances occur 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). 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's non-interest revenue streams are largely based on transactional activity. 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 December 31, 2020 and 2019, the Company did not have any significant contract balances.

Contract acquisition costs are those incurred to acquire a customer. In connection with the adoption of ASC 606, an entity 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. The Company did not capitalize any contract acquisition cost during the years ended December 31, 2020 or 2019.