Revenue Recognition

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Note 12 – 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.

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 noninterest expense. The following table presents the Company’s sources of noninterest income for the three and nine-month periods ended September 30, 2022 and 2021. Items outside the scope of ASC 606 are noted as such (dollars in thousands, unaudited).

	For the three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Noninterest income
Service charges on deposits
Returned item and overdraft fees	$	1,273	$	1,307	$	3,973	$	3,561
Other service charges on deposits		1,943		1,879		5,487		5,116
Debit card interchange income		2,241		2,192		6,458		6,321
Gain (loss) on limited partnerships(1)		64		(144)		(162)		(391)
Dividends on equity investments(1)		189		187		619		543
Unrealized (losses) gains recognized on equity investments(1)		—		—		(332)		857
Net gains on sale of securities(1)		—		11		1,032		11
Other(1)		902		2,103		6,039		4,959
Total noninterest income	$	6,612	$	7,535	$	23,114	$	20,977
Noninterest expense
Salaries and employee benefits (1)	$	11,521	$	10,618	$	35,070	$	32,194
Occupancy expense (1)		2,470		2,359		7,170		7,472
Gain on sale of OREO		(3)		(26)		(8)		(141)
Other (1)		7,008		7,924		21,050		21,856
Total noninterest expense	$	20,996	$	20,875	$	63,282	$	61,381
Percentage of noninterest income not within scope of ASC 606.		17.47%		28.63%		31.13%		28.50%

(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.