Atlantic Union Bankshares Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

REVENUE

REVENUE

6 Months Ended

Jun. 30, 2018

Revenue from Contract with Customer [Abstract]

On January 1, 2018, the Company adopted ASU No. 2014-09, “Revenue from Contracts with Customers: Topic 606” (“Topic 606” or the “Standard”), and all subsequent amendments to the ASU. Using Topic 606 guidelines and other authoritative guidance, the Company concluded that the Standard applies to noninterest income excluding out of scope revenue such as mortgage banking income, gains on securities transactions, and trading revenue (i.e., derivatives).

Public entities are required to disclose (1) revenue disaggregated into categories that show how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors; (2) contract balances; (3) a description of when performance obligations are satisfied and (4) significant judgments made in evaluating when a customer obtains control of promised goods or services for performance obligations satisfied at a point in time.

The majority of the Company’s noninterest income comes from short term contracts associated with fees for services provided on deposit accounts, credit cards, and wealth management accounts and is being accounted for in accordance with Topic 606. Typically the duration of a contract does not extend beyond the services performed; therefore the Company concluded that discussion regarding contract balances is immaterial. Additionally, due to the short duration of most customer contracts the revenue from which constitutes noninterest income, the Company will not need to make many judgments that would affect the amount and timing of revenue.

The Company’s performance obligations on revenue from interchange fees and deposit accounts are generally satisfied immediately, when the transaction occurs or by month-end. Performance obligations on revenue from fiduciary and asset management fees are generally satisfied monthly or quarterly. For a majority of fee income on deposit accounts the Company is a principal controlling the promised good or service before transferring it to the customer. However, for income related to most wealth management income, the Company is an agent responsible for arranging for the provision of goods and services by another party.

Noninterest income disaggregated by major source, for the three and six months ended June 30, 2018 and 2017, consisted of the following (dollars in thousands):



	Three Months Ended					Six Months Ended
	June 30, 2018			June 30, 2017		June 30, 2018		June 30, 2017
Noninterest income:
Deposit Service Charges ⁽¹⁾:
Overdraft fees, net	$	5,173		$	3,845	$	9,992	$	7,576
Maintenance fees & other	1,016			768		2,091		1,553
Other service charges and fees ⁽¹⁾	1,278			1,120		2,512		2,259
Interchange fees, net ⁽¹⁾	4,792			3,867		9,280		7,449
Fiduciary and asset management fees ⁽¹⁾:
Trust asset management fees	1,436			1,257		2,781		2,525
Registered advisor management fees, net	1,606			637		2,325		1,307
Brokerage management fees, net	998			831		1,990		1,687
Gains (losses) on securities transactions, net	(88		)	117		125		598
Bank owned life insurance income	1,728			1,335		3,395		3,460
Loan-related interest rate swap fees	898			1,031		1,617		2,211
Gain on Shore Premier sale	20,899			—		20,899		—
Other operating income ⁽²⁾	861			454		3,858		1,450
Total noninterest income⁽³⁾	$	40,597		$	15,262	$	60,865	$	32,075

(1) Income within scope of ASC 606.

(2) Includes income within the scope of ASC 606 of $874,000 and $468,000 for the three months ended June 30, 2018 and 2017, respectively, and $1.6 million and $1.0 million for the six months ended June 30, 2018 and 2017, respectively. The remaining balancing is outside the scope of ASC 606.

(3) Noninterest income for the discontinued mortgage segment is reported in Note 13, "Segment Reporting & Discontinued Operations."