Revenue Recognition

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Note 13 – Revenue Recognition.

The Company utilizes the guidance found in ASU 2014-09, Revenue from Contracts with Customers (ASC 606), when accounting for certain noninterest income. The core principle of this guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Sufficient information should be provided to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company’s revenue streams that are within the scope of and accounted for under Topic 606 include service charges on deposit accounts, debit card interchange fees, and fees levied for other services the Company provides its customers. The guidance does not apply to revenue associated with financial instruments such as loans and investments, and other noninterest income such as loan servicing fees and earnings on bank-owned life insurance, which are accounted for on an accrual basis under other provisions of GAAP. In total, approximately 37.1% and 29.6% of the Company’s noninterest revenue was outside of the scope of the ASC 606 for the three- and six-month periods ended June 30, 2020, respectively.

All of the company’s revenue from contracts within the scope of ASC 606 is recognized as noninterest income, except for gains on the sale of OREO which is classified as non-interest expense. The following table presents the Company’s

sources of noninterest income for the three- and six-month periods ended June 30, 2020 and 2019. Items outside the scope of ASC 606 are noted as such (dollars in thousands, unaudited).

	For the three months ended June 30,				For the six months ended June 30,
	2020		2019		2020		2019
Non-interest income
Service charges on deposits
Returned item and overdraft fees	$	962	$	1,657	$	2,626	$	3,223
Other service charges on deposits		1,656		1,494		3,176		2,871
Debit card interchange income		1,723		1,687		3,355		3,200
Loss on limited partnerships(1)		(158)		(450)		(315)		(900)
Dividends on equity investments(1)		139		175		333		406
Unrealized gains recognized on equity investments(1)		—		232		447		232
Net gains on sale of securities(1)		390		22		390		28
Other(1)		2,188		1,038		2,995		2,702
Total non-interest income	$	6,900	$	5,855	$	13,007	$	11,762
Non-interest expense
Salaries and employee benefits (1)	$	9,266	$	8,994	$	19,438	$	18,237
Occupancy expense (1)		2,504		2,450		4,832		4,811
Gain on sale of OREO		—		(21)		2		(37)
Other (1)		6,263		6,233		11,579		12,498
Total non-interest expense	$	18,033	$	17,656	$	35,851	$	35,509

(1) Not within scope of ASC 606. Revenue streams are not related to contract with customers and are accounted for on an accrual basis under other provisions of GAAP.

With regard to noninterest income associated with customer contracts, the Company has determined that transaction prices are fixed, and performance obligations are satisfied as services are rendered, thus there is little or no judgment involved in the timing of revenue recognition under contracts that are within the scope of ASC 606.