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Revenue Recognition
 6 Months Ended
Jun. 30, 2025
Revenue from Contract with Customer [Abstract]  
Revenue Recognition

NOTE 13. Revenue Recognition

 

Substantially all of the Company's revenue from contracts with customers that is within the scope of ASC 606, "Revenue from Contracts with Customers" is reported within noninterest income. A limited amount of other in-scope items such as gains and losses on other real estate owned are recorded in noninterest expense. The recognition of interest income and certain sources of noninterest income (e.g. gains on securities transactions, bank owned life insurance income, etc.) are governed by other areas of U.S. GAAP. Significant revenue streams that are within the scope of ASC 606 and included in noninterest income are discussed in the following paragraphs.

Income from Fiduciary Activities

Trust asset management fee 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 customers’ accounts. 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.

Service Charges on Deposit Accounts

Service charges on deposit accounts are principally comprised of overdrawn account fees, account maintenance charges and other activity based fees. The Company’s performance obligations on revenue generated from deposit accounts are generally satisfied immediately, when the transaction occurs, or by month-end. Typically, the duration of a contract does not extend beyond the services performed. Due to the short duration of most customer contracts which generate these sources of noninterest income, no significant judgments must be made in the determination of the amount and timing of revenue recognized.

Other Service Charges and Fees

The majority of the Company’s noninterest income is derived from short term contracts associated with services provided for other ancillary services such as ATM fees, brokerage commissions and loan servicing fees. The Company’s performance obligations on revenue generated from these ancillary services are generally satisfied immediately, when the transaction occurs, or by month-end. Typically, the duration of a contract does not extend beyond the services performed. Due to the short duration of most customer contracts which generate these sources of noninterest income, no significant judgments must be made in the determination of the amount and timing of revenue recognized.

The Company earns interchange fees from credit cardholder transactions conducted through the Visa payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized no less than monthly.

Noninterest income (loss) disaggregated by major source, for the three and six months ended June 30, 2025 and 2024 consisted of the following:

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

(in thousands)

 

Noninterest income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Wealth management fees (1):

 

 

 

 

 

 

 

 

 

 

 

 

Trust asset management fees

 

$

1,320

 

 

$

1,041

 

 

$

2,629

 

 

$

2,064

 

Brokerage commissions

 

 

330

 

 

 

232

 

 

 

702

 

 

 

665

 

Service charges on deposit accounts (1):

 

 

 

 

 

 

 

 

 

 

 

 

Overdrawn account fees

 

 

390

 

 

 

348

 

 

 

764

 

 

 

703

 

Monthly and other service charges

 

 

127

 

 

 

108

 

 

 

245

 

 

 

207

 

Other service charges and fees:

 

 

 

 

 

 

 

 

 

 

 

 

Interchange fees (1)

 

 

920

 

 

 

882

 

 

 

1,765

 

 

 

1,707

 

ATM fees (1)

 

 

101

 

 

 

94

 

 

 

183

 

 

 

173

 

Other charges and fees (2)

 

 

39

 

 

 

188

 

 

 

84

 

 

 

253

 

(Loss) on the sale and disposal of bank premises and equipment (1)

 

 

—

 

 

 

(11

)

 

 

(16

)

 

 

(11

)

(Loss) on sale of securities

 

 

—

 

 

 

—

 

 

 

(12,425

)

 

 

—

 

Gain on sale of loans

 

 

1,104

 

 

 

492

 

 

 

1,533

 

 

 

653

 

Small business investment company income

 

 

133

 

 

 

259

 

 

 

153

 

 

 

385

 

Bank owned life insurance income

 

 

278

 

 

 

269

 

 

 

551

 

 

 

537

 

Other operating income (3)

 

 

175

 

 

 

403

 

 

 

195

 

 

 

449

 

Total noninterest income (loss)

 

$

4,917

 

 

$

4,305

 

 

$

(3,637

)

 

$

7,785

 

 

(1)
Income within the scope of Topic 606.
(2)
Includes income within the scope of Topic 606 of $61 thousand and $196 thousand for the three months ended June 30, 2025 and 2024, respectively, and $94 thousand and $231 thousand for the six months ended June 30, 2025 and 2024, respectively. The remaining balances are outside the scope of Topic 606.
(3)
Includes income within the scope of Topic 606 of $142 thousand and $392 thousand for the three months ended June 30, 2025 and 2024, respectively and $171 thousand and $429 thousand for the six months ended June 30, 2025 and 2024, respectively. The remaining balances are outside the scope of Topic 606.

Contract Balances

The Company’s noninterest revenue streams 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 June 30, 2025 and December 31, 2024, the Company did not have any significant contract balances.