CAPITAL CITY BANK GROUP INCCCBG
CAPITAL CITY BANK GROUP INC Revenue Disclosure
Revenue Recognition
FASB ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information
about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or
services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to
customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or
services recognized as performance obligations are satisfied.
The majority of the Company’s revenue -generating transactions are not subject to ASC 606, including revenue generated from
financial instruments, such as our loans, letters of credit, and investment securities, and revenue related to the sale of residential
mortgages in the secondary market, as these activities are subject to other GAAP discussed elsewhere within our disclosures. The
Company recognizes revenue from these activities as it is earned based on contractual terms, as transactions occur, or as services
are provided and collectability is reasonably assured. Descriptions of the major revenue-generating activities that are within the
scope of ASC 606, which are presented in the accompanying Consolidated Statements of Income as components of non-interest
income are as follows:
Deposit Fees - these represent general service fees for monthly account maintenance and activity- or transaction-based fees and
consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-
based revenue. Revenue is recognized when the Company’s performance obligation is completed, which is generally monthly for
account maintenance services or when a transaction has been completed. Payment for such performance obligations are generally
received at the time the performance obligations are satisfied.
Wealth Management - trust fees and retail brokerage fees – trust fees represent monthly fees due from wealth management clients
as consideration for managing the client’s assets. Trust services include custody of assets, investment management, fees for trust
services and similar fiduciary activities. Revenue is recognized when the Company’s performance obligation is completed each
month or quarter, which is the time that payment is received. Also, retail brokerage fees are received from a third-party broker-
dealer, for which the Company acts as an agent, as part of a revenue-sharing agreement for fees earned from customers that are
referred to the third party. These fees are for transactional and advisory services and are paid by the third party on a monthly
basis and recognized ratably throughout the quarter as the Company’s performance obligation is satisfied.
Bank Card Fees – bank card related fees primarily includes interchange income from client use of consumer and business debit
cards. Interchange income is a fee paid by a merchant bank to the card-issuing bank through the interchange network.
Interchange fees are set by the credit card associations and are based on cardholder purchase volumes. The Company records
interchange income as transactions occur.
Gains and Losses from the Sale of Bank Owned Property – the performance obligation in the sale of other real estate owned
typically will be the delivery of control over the property to the buyer. If the Company is not providing the financing of the sale,
the transaction price is typically identified in the purchase and sale agreement. However, if the Company provides seller
financing, the Company must determine a transaction price, depending on if the sale contract is at market terms and taking into
account the credit risk inherent in the arrangement.
Insurance Commissions – insurance commissions recorded by the Company are received from various insurance carriers based on
contractual agreements to sell policies to customers on behalf of the carriers. The performance obligation for the Company is to
sell life and health insurance policies to customers. This performance obligation is met when a new policy is sold (effective date)
or when an existing policy renews. New policies and renewals generally have a one -year term. In the agreements with the
insurance carriers, a commission rate is agreed upon. The commission is recognized at the time of the sale of the policy (effective
date) or when a policy renews, which is the time that payment is received. Insurance commissions are recorded within other
noninterest income.
Other non-interest income primarily includes items such as mortgage banking fees (gains from the sale of residential mortgage
loans held for sale), bank-owned life insurance, and safe deposit box fees, none of which are subject to the requirements of ASC
606.
The Company has made no significant judgments in applying the revenue guidance prescribed in ASC 606 that affects the
determination of the amount and timing of revenue from the above-described contracts with clients.
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.