ALERUS FINANCIAL CORP Revenue Disclosure

NOTE 19 Noninterest Income

 

The following table presents the Company’s noninterest income for the years ended December 31, 2025, 2024, and 2023:

 

		Year ended
		December 31,
(dollars in thousands)		2025				2024				2023
Retirement and benefit		$	65,885			$	64,365			$	65,294
Wealth			28,265				26,171				21,855
Mortgage banking (1)			11,855				10,073				8,411
Service charges on deposit accounts			2,768				1,976				1,280
Net gains (losses) on investment securities (1)			(68,403	)			—				(24,643	)
Other
Gain (loss) on sale of premises and equipment			530				(3,941	)			(50	)
Client swap fees			1,386				2,135				1,396
Interchange fees			3,365				2,291				2,222
Bank-owned life insurance income (1)			1,063				862				876
Misc. transactional fees			1,881				1,366				1,528
Gain on sale of non-mortgage loans			2,080				—				—
Other noninterest income			1,201				9,632				2,060
Total noninterest income		$	51,876			$	114,930			$	80,229

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(1)	Not within the scope of ASC 606.

 

Contract balances: A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company’s noninterest income streams are largely based on transactional activity, or standard month-end revenue accruals such as asset management fees based on month-end market value. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of December 31, 2025 and 2024, the Company did not have any significant contract balances.

 

Contract acquisition costs: In connection with the adoption of Topic 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset would have resulted from capitalizing these costs would have been amortized in one year or less.