Stock Yards Bancorp, Inc. Revenue Disclosure

(28) Revenue from Contracts with Customers

 

All of Bancorp’s revenue from contracts with customers in the scope of ASC 606 is recognized within non-interest income. The table below presents Bancorp’s sources of non-interest income by business segment with items outside the scope of ASC 606 noted as such:

 

		Year Ended December 31, 2025
(in thousands)		Commercial				WM&T				Total
Wealth management and trust services		$	—			$	42,808			$	42,808
Deposit service charges			8,732				—				8,732
Debit and credit card income			19,873				—				19,873
Treasury management fees			11,679				—				11,679
Mortgage banking income (1)			4,123				—				4,123
Net investment product sales commissions and fees			4,221				—				4,221
Bank owned life insurance (1)			2,515				—				2,515
Gain (loss) on sale of premises and equipment (1)			72				—				72
Other (2)			2,925				—				2,925
Total non-interest income		$	54,140			$	42,808			$	96,948

 

		Year Ended December 31, 2024
(in thousands)		Commercial				WM&T				Total
Wealth management and trust services		$	—			$	42,843			$	42,843
Deposit service charges			8,906				—				8,906
Debit and credit card income			20,082				—				20,082
Treasury management fees			11,064				—				11,064
Mortgage banking income (1)			3,858				—				3,858
Gain (loss) on sale of securities (1)			—				—				—
Net investment product sales commissions and fees			3,571				—				3,571
Bank owned life insurance (1)			2,443				—				2,443
Gain (loss) on sale of premises and equipment (1)			(100	)			—				(100	)
Other (2)			2,563				—				2,563
Total non-interest income		$	52,387			$	42,843			$	95,230

 

		Year Ended December 31, 2023
(in thousands)		Commercial				WM&T				Total
Wealth management and trust services		$	—			$	39,802			$	39,802
Deposit service charges			8,866				—				8,866
Debit and credit card income			19,438				—				19,438
Treasury management fees			10,033				—				10,033
Mortgage banking income (1)			3,705				—				3,705
Gain (loss) on sale of securities (1)			(44	)			—				(44	)
Net investment product sales commissions and fees			3,205				—				3,205
Bank owned life insurance (1)			2,253				—				2,253
Gain (loss) on sale of premises and equipment (1)			(30	)			—				(30	)
Other (2)			4,992				—				4,992
Total non-interest income		$	52,418			$	39,802			$	92,220

 

(1) Outside of the scope of ASC 606.

(2) Outside of the scope of ASC 606, with the exception of safe deposit fees which were nominal for all periods.

 

Bancorp’s revenue on the consolidated statement of income is categorized by product type, which effectively depicts how the nature, timing and extent of cash flows are affected by economic factors. Revenue sources within the scope of ASC 606 are discussed below:

 

WM&T provides customers fiduciary and investment management services as agreed upon in asset management contracts. The contracts require WM&T to provide a series of distinct services for which fees are earned over time. The contracts are cancellable upon demand with fees typically based upon the asset value of investments. Revenue is accrued and recognized monthly based upon month-end asset values and collected from the customer predominately in the following month except for a small percentage of fees collected quarterly. Incentive compensation related to WM&T activities is considered a cost of obtaining the contract. Contracts between WM&T and customers do not permit performance-based fees and accordingly, none of the fee income earned by WM&T is performance-based. Trust fees receivable totaled $5.3 million and $4.5 million at December 31, 2025 and December 31, 2024, respectively.

 

Bancorp earns fees from its deposit customers for transaction-based, account management and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payments fees and ACH fees, are recognized at the time the transaction is executed, as that is when the company fulfills the performance obligation. Account management fees are earned over the course of a month and charged in the month in which the services are provided.

 

Debit and credit card revenue primarily consists of debit and credit card interchange income. Interchange income represents fees assessed within the payment card system for acceptance of card-based transactions. Interchange fees are assessed as the performance obligation is satisfied, which is at the point in time the card transaction is authorized. Revenue is collected and recognized daily through the payment network settlement process.

 

Treasury management transaction fees are recognized at the time the transaction is executed, as that is when the company fulfills the performance obligation. Account analysis fees are earned over the course of a month and charged in the month in which the services are provided. Treasury management fees are withdrawn from customers’ account balances.

 

Net investment products sales commissions and fees represent the Bank’s share of transaction fees and wrap fees resulting from investment services and programs provided through an agent relationship with a third party broker-dealer. Transaction fees are assessed at the time of the transaction. Those fees are collected and recognized on a monthly basis. Trailing fees are based upon market values and are assessed, collected and recognized on a quarterly basis. Because the Bank acts as an agent in arranging the relationship between the customer and third party provider, and does not control the services rendered, investment product sales commissions and fees are reported net of related costs, including nominal incentive compensation, and trading activity charges of $1.2 million and $968,000 for the years ended December 31, 2025 and 2024.

 

Bancorp did not establish any contract assets or liabilities as a result of adopting ASC 606, nor were any recognized during the year ended December 31, 2025.