Note 2 - Revenue Recognition

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

NOTE 2 – REVENUE RECOGNITION

Following ASC Topic 606, Revenue from Contracts with Customers (Topic 606), management determined that the primary sources of revenue, which emanate from interest income on loans and investments, along with noninterest revenue resulting from equity security gains (losses), gains on the sale of loans, rental income, and BOLI income, are not within the scope of ASC 606. For the nine months ended September 30, 2024, these revenue sources cumulatively comprise 94.5% of the total revenue of the Company.

The main types of noninterest income within the scope of the standard are as follows:

Service charges on deposit accounts – The Company has contracts with its deposit customers whereby fees are charged if the account balance falls below predetermined levels defined as compensating balances. These agreements can be canceled at any time by either the Company or the deposit customer. Revenue from these transactions is recognized monthly as the Company has an unconditional right to the fee consideration. The Company also has transaction fees related to specific customer requests or activities that include overdraft fees, online banking fees, and other transaction fees. All of these fees are attributable to specific performance obligations of the Company where the revenue is recognized at a defined point in time, which is the completion of the requested service/transaction.

Revenue from investment services – The Company earns investment services revenue through its referral agreement with LPL Financial. The performance obligation to investment management customers is satisfied over time, and therefore, revenue is recognized over time. The Company generally receives trailing investment services revenue in arrears and recognizes the revenue when the monthly statement with referral revenue is received.

Miscellaneous fee income – Fees earned on other services, such as ATM surcharge fees, money order fees, and check fees, are recognized at the time of the event or the applicable billing cycle.

The following table depicts the disaggregation of revenue derived from contracts with customers to depict the nature, amount, timing, and uncertainty of revenue and cash flows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
Noninterest Income	2024		2023		2024			2023
(Dollar amounts in thousands)
Service charges on deposit accounts:
Overdraft fees	$	249	$	258	$	748		$	734
ATM banking fees		489		484		1,419			1,447
Service charges and other fees		221		212		672			699
Gain (loss) on equity securities ⁽ª⁾		14		48		(65	)		(157	)
Gain on sale of other real estate owned ⁽ª⁾		-		-		-			2
Earnings on bank-owned life insurance ⁽ª⁾		246		207		700			627
Gain on sale of loans ⁽ª⁾		56		45		135			74
Revenue from investment services		206		190		679			550
Miscellaneous fee income		106		98		301			285
Gross rental income ⁽ª⁾		-		110		67			290
Other income		156		165		643			537
Total noninterest income	$	1,743	$	1,817	$	5,299		$	5,088

(a) Not within scope of ASC 606