Revenue from Contracts with Customers

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Revenue from Contracts with Customers

The following tables summarize revenues recognized in accordance with ASC Topic 606, Revenue from Contracts with Customers. These disaggregated amounts, together with sources of other non-interest income that are subject to other GAAP topics, have been reconciled to non-interest income by reportable segment as presented within Note 14: Segment Reporting.

	Three months ended March 31, 2024
(In thousands)	Commercial Banking		Healthcare Financial Services		Consumer Banking		Corporate and Reconciling		Consolidated Total
Non-interest Income:
Deposit service fees	$	5,842	$	22,052	$	14,796	$	(101)	$	42,589
Loan and lease related fees (1)	3,622		—		—		—		3,622
Wealth and investment services	3,178		—		4,751		(5)		7,924
Other income	—		9,009		(183)		1,044		9,870
Revenue from contracts with customers	12,642		31,061		19,364		938		64,005
Other sources of non-interest income	21,638		—		14,614		(904)		35,348
Total non-interest income	$	34,280	$	31,061	$	33,978	$	34	$	99,353

	Three months ended March 31, 2023
(In thousands)	Commercial Banking		Healthcare Financial Services		Consumer Banking		Corporate and Reconciling		Consolidated Total
Non-interest Income:
Deposit service fees	$	4,236	$	22,092	$	19,178	$	(70)	$	45,436
Loan and lease related fees (1)	4,427		—		—		—		4,427
Wealth and investment services	2,767		—		3,828		(8)		6,587
Other income	—		1,975		358		932		3,265
Revenue from contracts with customers	11,430		24,067		23,364		854		59,715
Other sources of non-interest income	22,290		—		4,272		(15,511)		11,051
Total non-interest income	$	33,720	$	24,067	$	27,636	$	(14,657)	$	70,766

(1)A portion of Loan and lease related fees on the Condensed Consolidated Statements of Income comprises income generated from factored receivables and payroll financing activities that is within the scope of ASC Topic 606.

Major Revenue Streams

Deposit service fees consist of fees earned from commercial and consumer customer deposit accounts, such as account maintenance and cash management/analysis fees, as well as other transactional service charges (i.e., insufficient funds, wire transfers, stop payment fees, etc.). Performance obligations for account maintenance services and cash management/analysis fees are satisfied on a monthly basis at a fixed transaction price, whereas performance obligations for other deposit service charges that result from various customer-initiated transactions are satisfied at a point-in-time when the service is rendered. Payment for deposit service fees is generally received immediately or in the following month through a direct charge to the customers’ accounts. Certain commercial customer contracts include credit clauses, whereby the Company will grant credit upon the customer meeting pre-determined conditions, which can be used to offset fees. On occasion, the Company may also waive certain fees. Fee waivers are recognized as a reduction to revenue in the period the waiver is granted to the customer.

The deposit service fees revenue stream also includes interchange fees earned from debit and credit card transactions. The transaction price for interchange services is based on the transaction value and the interchange rate set by the card network. Performance obligations for interchange fees are satisfied at a point-in-time when the cardholder’s transaction is authorized and settled. Payment for interchange fees is generally received immediately or in the following month.

Factored receivables non-interest income consists of fees earned from accounts receivable management services. The Company factors accounts receivable, with and without recourse, for customers whereby the Company purchases their accounts receivable at a discount and assumes the risk, as applicable, and ownership of the assets through direct cash receipt from the end consumer. Factoring services are performed in exchange for a non-refundable fee at a transaction price based on a percentage of the gross invoice amount of each receivable purchased, subject to a minimum required amount. The performance obligation for factoring services is generally satisfied at a point-in-time when the receivable is assigned to the Company. However, should the commission earned not meet or exceed the minimum required annual amount, the difference between that and the actual amount is recognized at the end of the contract term. Other fees associated with factoring receivables may include wire transfer and technology fees, field examination fees, and Uniform Commercial Code fees, where the performance obligations are satisfied at a point-in-time when the services are rendered. Payment from the customer for factoring services is generally received immediately or within the following month.

Payroll finance non-interest income consists of fees earned from performing payroll financing and business process outsourcing services, including full back-office technology and tax accounting services, along with payroll preparation, making payroll tax payments, invoice billings, and collections for independently-owned temporary staffing companies nationwide. Performance obligations for payroll finance and business processing activities are either satisfied upon completion of the support services or as payroll remittances are made on behalf of customers to fund their employee payroll, which generally occurs on a weekly basis. The agreed-upon transaction price is based on a fixed-percentage per the terms of the contract, which could be subject to a hold-back reserve to provide for any balances that are assessed to be at risk of collection. When the Company collects on amounts due from end consumers on behalf of its customers and at the time of financing payroll, the Company retains the agreed-upon transaction price payable for the performance of its services and remits an amount to the customer net of any advances and payroll tax withholdings, as applicable.

Wealth and investment services consist of fees earned from asset management, trust administration, and investment advisory services, and through facilitating securities transactions. Performance obligations for asset management and trust administration services are satisfied on a monthly or quarterly basis at a transaction price based on a percentage of the period-end market value of the assets under administration. Payment for asset management and trust administration services is generally received a few days after period-end through a direct charge to the customers’ accounts. Performance obligations for investment advisory services are satisfied over the period in which the services are provided through a time-based measurement of progress, and the agreed-upon transaction price with the customer varies depending on the nature of the services performed. Performance obligations for facilitating securities transactions are satisfied at a point-in-time when the securities are sold at a transaction price that is based on a percentage of the contract value. Payment for both investment advisory services and facilitating securities transactions may be received in advance of the service, but generally is received immediately or in the following period, in arrears.

Contracts with customers generated accounts receivable and deferred revenue of $2.3 million and $20.8 million, respectively,
at March 31, 2024. Both of these balances were recorded in connection with contracts with customers from the acquired Ametros business. Ametros’ contracts with customers include a fixed, non-refundable fee that represents an advance payment for access to future discounted medical products and services. This up-front fee is initially deferred and subsequently recognized into Other income ratably over the estimated life expectancy of the member. An insignificant amount of such fee revenue was recognized during the three months ended March 31, 2024. Contracts with customers did not generate significant contract assets or contract liabilities at December 31, 2023.