SIERRA BANCORP Revenue Disclosure
24. REVENUE FROM CONTRACTS WITH CUSTOMERS
All of the Company’s revenue from contracts with customers in the scope of ASC 606 is recognized within Noninterest Income. The following table presents the Company’s sources of Noninterest Income for the
twelve months ended December 31, 2025 and 2024. Items outside the scope of ASC 606 are noted as such (dollars in thousands).
Year Ended December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
Noninterest income | |||||||||
Service charges on deposits | |||||||||
Returned item and overdraft fees | $ | 5,232 | $ | 5,513 | $ | 5,261 | |||
Other service charges on deposits | 10,189 | 10,526 | 9,790 | ||||||
Debit card interchange income | 8,067 | 8,134 | 8,052 | ||||||
Dividends on equity investments(1) | 1,335 | 1,337 | 1,076 | ||||||
Unrealized losses recognized on equity investments(1) | — | (311) | (291) | ||||||
Net gains (losses) on sale of securities(1) | 120 | (2,681) | 396 | ||||||
Other(1) | 5,646 | 9,003 | 6,116 | ||||||
Total noninterest income | $ | 30,589 | $ | 31,521 | $ | 30,400 | |||
| (1) | Not within the scope of ASC 606. Revenue streams are not related to contracts with customers and are accounted for on an accrual basis under other provisions of GAAP. |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.