CHOICEONE FINANCIAL SERVICES INC Revenue Disclosure
NOTE 23 – REVENUE FROM CONTRACTS WITH CUSTOMERS
ChoiceOne has a variety of sources of revenue, which include interest and fees from customers as well as revenue from non-customers. ASC Topic 606, Revenue from Contracts with Customers, covers certain sources of revenue that are classified within noninterest income in the Consolidated Statements of Income. Sources of revenue that are included in the scope of ASC Topic 606 include service charges and fees on deposit accounts, interchange income, investment asset management income and transaction-based revenue, and other charges and fees for customer services.
Customer service charges
Revenue includes charges and fees to provide account maintenance, overdraft services, wire transfers, funds transfer, and other deposit-related services. Account maintenance fees such as monthly service charges are recognized over the period of time that the service is provided. Transaction fees such as wire transfer charges are recognized when the service is provided to the customer.
Interchange income
Revenue includes debit card interchange and network revenues. This revenue is earned on debit card transactions that are conducted through payment networks. The revenue is recorded as services are delivered.
Insurance and investment commission income
Revenue includes fees from the investment management advisory services and revenue is recognized when services are rendered. Revenue also includes commissions received from the placement of brokerage transactions for purchase or sale of stocks or other investments. Commission income is recognized when the transaction has been completed. Insurance commission income is recognized when the company has satisfied its performance obligation under the terms of the agreement.
Trust fee income
Revenue includes fees from the management of trust assets and from other related advisory services. Revenue is recognized when services are rendered.
Following is noninterest income separated by revenue within the scope of ASC 606 and revenue within the scope of other GAAP topics:
(Dollars in thousands) |
2025 |
|
2024 |
|
||
|
|
|
|
|
||
Customer service charges |
$ |
5,994 |
|
$ |
4,774 |
|
Interchange income |
|
7,811 |
|
|
5,797 |
|
Insurance and investment commission income |
|
1,912 |
|
|
742 |
|
Trust fee income |
|
2,525 |
|
|
906 |
|
Other charges and fees for customer services |
|
751 |
|
|
562 |
|
Noninterest income from contracts with customers within the scope of ASC 606 |
|
18,993 |
|
|
12,781 |
|
Noninterest income within the scope of other GAAP topics |
|
5,673 |
|
|
5,214 |
|
Total noninterest income |
$ |
24,666 |
|
$ |
17,995 |
|
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.