Note 12 - Revenue From Contracts With Customers

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

12.         Revenue from Contracts with Customers

Substantially all of the Company’s revenue from contracts with customers in the scope of FASB ASC 606 is recognized within noninterest income.  The following table presents the Company’s sources of noninterest income for the three and six months ended June 30, 2024 and 2023:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
(In thousands)	2024		2023			2024		2023
In Scope for ASC 606
Service charges on deposit accounts	$	564	$	578		$	1,157	$	1,140
ATM and debit card fees		1,150		1,141			2,210		2,228
Investment advisory income		12		19			25		31
Other		33		31			68		64
Revenue from contracts with customers		1,759		1,769			3,460		3,463
Out of Scope for ASC 606
Net gains (losses) on loans and investments		163		(2	)		228		221
Increase in cash value of life insurance		66		66			114		111
Other		35		30			120		59
Other noninterest income		264		94			462		391
Total noninterest income	$	2,023	$	1,863		$	3,922	$	3,854

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(12 – continued)

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

Service Charges on Deposit Accounts:  The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services.  Transaction-based fees, which include services such as stop payment charges and statement rendering, 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. 

ATM and Debit Card Fees:  The Company earns ATM usage fees and interchange fees from debit cardholder transactions conducted through a payment network.  ATM fees are recognized at the point in time the transaction occurs.  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.

Investment Advisory Income:  The Company earns trust, insurance commissions, brokerage commissions and annuities income from its contracts with customers to manage assets for investment, and/or to transact on their accounts.  These fees are primarily earned over time as the Company provides the contracted services and are generally assessed based on the market value of assets under management.  Fees that are transaction based, including trade execution services, are recognized at the point in time that the transaction is executed.  Other related fees, which are based on a fixed fee schedule, are recognized when the services are rendered.

Other Income:  Other income from contracts with customers includes safe deposit box fees and ACH origination fees.  This revenue is recognized at the time the transaction is executed or over the period the Company satisfies the performance obligation.