Revenue from Contracts with Customers

On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers - Topic 606 and all subsequent ASUs that modified ASC 606, Revenue from Contracts with Customers. The Company adopted ASC 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. The new standard did not materially impact the timing or measurement of the Company’s revenue recognition as it is consistent with the Company’s existing accounting for contracts within the scope of the new standard. There was no cumulative effect adjustment to retained earnings as a result of adopting this new standard.

The following table presents revenue from contracts with customers within the scope of ASC 606 and other noninterest income, segregated by operating segments for the three months ended March 31, 2018 and 2017:




($ in thousands)	Three Months Ended March 31, 2018
($ in thousands)	Retail Banking		Commercial Banking		Other		Total
Noninterest income:
Revenue from contracts with customers ⁽¹⁾:
Branch fees:
Deposit service charges and related fee income	$	6,014	$	3,014	$	158	$	9,186
Card income	1,070		174		—		1,244
Wealth management fees	2,796		157		—		2,953
Total revenue from contracts with customers	$	9,880	$	3,345	$	158	$	13,383
Other sources of noninterest income ⁽²⁾	34,568		24,093		2,400		61,061
Total noninterest income	$	44,448	$	27,438	$	2,558	$	74,444




($ in thousands)	Three Months Ended March 31, 2017
($ in thousands)	Retail Banking		Commercial Banking		Other		Total
Noninterest income:
Revenue from contracts with customers ⁽¹⁾:
Branch fees:
Deposit service charges and related fee income	$	5,837	$	2,742	$	105	$	8,684
Card income	1,027		213		—		1,240
Wealth management fees	3,246		1,089		—		4,335
Total revenue from contracts with customers	$	10,110	$	4,044	$	105	$	14,259
Other sources of noninterest income ⁽²⁾	3,454		21,690		76,425		101,569
Total noninterest income	$	13,564	$	25,734	$	76,530	$	115,828


(1)	There were no adjustments to the Company’s financial statements recorded as a result of the adoption of ASC 606. For comparability, the Company has adjusted prior period amounts to conform to the current period’s presentation.


(2)	Primarily represents revenue from contracts with customers that are out of the scope of ASC 606.

Generally, the Company recognizes revenue from contracts with customers when it satisfies its performance obligations. The Company’s performance obligations are typically satisfied as services are rendered. The Company generally records contract liabilities, or deferred revenue, when payments from customers are received or due in advance of providing services to customers and records contract assets when services are provided to customers before payment is received or before payment is due. Since the Company receives payments for its services during the period or at the time services are provided, there are no contract asset or receivable balances as of March 31, 2018 and December 31, 2017.

The major revenue streams by fee type that are within the scope of ASC 606 presented in the above tables are described in additional detail below:

Branch Fees — Deposit Service Charges and Related Fee Income

The Company offers a range of deposit products to individuals and businesses, which includes savings, money market, checking and time deposit accounts. The deposit account services include ongoing account maintenance, certain optional services, including banking services (e.g., automated teller machines, wire transfer services, and check orders), as well as treasury management and business account analysis services that are offered to business deposit customers. The Company may charge a fixed monthly account maintenance fee if certain average balances are not maintained, therefore making the fee variable. Additionally, each time a deposit customer selects an optional service, the Company may earn transactional fees. For arrangements where the Company charges ongoing account maintenance fees, it recognizes those fees each month the customer maintains its deposit account. When the customer selects an optional service, the Company generally recognizes the fee at the point in time when the transaction occurs. For business analysis accounts, business deposit customers receive an earnings credit based on their account balance which can be used to offset the cost of banking and treasury management services. Business analysis accounts that are assessed fees in excess of earnings credits received are typically charged at the end of each month after all transactions are known and the credits are calculated.

Branch Fees — Card Income

Card income is comprised of merchant referral fees and interchange income. For merchant referral fees, the Company provides marketing and referral services to acquiring banks for merchant card processing services and earns variable referral fees based on transaction activity. The Company satisfies its performance obligation over time as the Company identifies, solicits, and refers business customers who are provided such services. The Company receives monthly fees net of consideration it pays to the acquiring bank performing the merchant card processing services. The Company recognizes revenue on a monthly basis when the uncertainty associated with the variable referral fees is resolved at the time the Company receives monthly statements from the acquiring bank. For interchange income, the Company as a card issuer, has a stand ready performance obligation to authorize, clear, and settle card transactions. The Company earns, or pays, interchange fees which is a percentage-based fee on each transaction based on rates published by the corresponding payment network rates for transactions on their network. The Company measures its progress toward the satisfaction of its performance obligation over time, as services are rendered, and the Company provides continuous access to this service and settles transactions as its customer, the payment network, requires. Interchange income is presented net of direct costs paid to the customer and entities in their distribution chain, which are transaction based expenses such as rewards program expenses and certain network costs. Revenue is recognized when the net profit is determined by the payment networks at the end of each day.

Wealth Management Fees

The Company employs financial consultants to provide investment planning services for customers including wealth management services, asset allocation strategies, portfolio analysis and monitoring, investment strategies, and risk management strategies. The fees the Company earns are variable and are generally received monthly. The Company recognizes revenue for the services performed at quarter end based on actual transaction details received from the broker dealer the Company engages.

Practical Expedients and Exemptions

The Company applies the practical expedient in ASC 606-10-50-14 and does not disclose the value of unsatisfied performance obligations as the Company’s contracts with customers generally have a term that is less than one year, are open-ended with a cancellation period that is less than one year, or allow the Company to recognize revenue in the amount to which the Company has the right to invoice.

In addition, given the short term nature of the contracts, the Company also applies the practical expedient in ASC 606-10-32-18 and does not adjust the consideration from customers for the effects of a significant financing component, if at contract inception the period between when the entity transfers the goods or services and when the customer pays for that good or service is one year or less.