15. Revenue from Contracts with Customers

We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. We derive the majority of our revenue from financial instruments and their related contractual rights and obligations which for the most part are excluded from the scope of this topic. These sources of revenue that are excluded from the scope of this topic include interest income, net gains on mortgage loans, net gains (losses) on securities, mortgage loan servicing, net and bank owned life insurance and were approximately 84.9% and 82.2% of total revenues at March 31, 2019 and 2018, respectively.

Material sources of revenue that are included in the scope of this topic include service charges on deposits, other deposit related income, interchange income and investment and insurance commissions and are discussed in the following paragraphs. Generally these sources of revenue are earned at the time the service is delivered or over the course of a monthly period and do not result in any contract asset or liability balance at any given period end. As a result, there were no contract assets or liabilities recorded as of March 31, 2019 and December 31, 2018.

Service charges on deposit accounts and other deposit related income: Revenues are earned on depository accounts for commercial and retail customers and include fees for transaction-based, account maintenance and overdraft services. Transaction-based fees, which includes services such as ATM use fees, stop payment charges and ACH fees are recognized at the time the transaction is executed as that is the time we fulfill our customer’s request. Account maintenance fees, which includes monthly maintenance services are earned over the course of a month representing the period over which the performance obligation is satisfied. Our obligation for overdraft services is satisfied at the time of the overdraft.

Interchange income: Interchange income primarily includes debit card interchange and network revenues. Debit card interchange and network revenues are earned on debit card transactions conducted through payment networks such as MasterCard and NYCE. Interchange income is recognized concurrently with the delivery of services on a daily basis. Interchange and network revenues are presented gross of interchange expenses, which are presented separately as a component of non-interest expense.

Investment and insurance commissions: Investment and insurance commissions include fees and commissions from asset management, custody, recordkeeping, investment advisory and other services provided to our customers. Revenue is recognized on an accrual basis at the time the services are performed and are generally based on either the market value of the assets managed or the services provided. We have an agent relationship with a third party provider of these services and net certain direct costs charged by the third party provider associated with providing these services to our customers.

Net (gains) losses on other real estate and repossessed assets: We record a gain or loss from the sale of other real estate when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. If we were to finance the sale of other real estate to the buyer, we would assess whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction is probable. Once these criteria are met, the other real estate asset would be derecognized and the gain or loss on sale would be recorded upon the transfer of control of the property to the buyer. There were no other real estate properties sold during the three month periods ending March 31, 2019 and 2018 that were financed by us.

Disaggregation of our revenue sources by attribute follows:

Three months ending March 31, 2019

	Service Charges on Deposits		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	1,730		-		-		-	$	1,730
Account service charges		516		-		-		-		516
ATM fees		-	$	322		-		-		322
Other		-		251		-		-		251
Business
Overdraft fees		385		-		-		-		385
Account service charges		9		-		-		-		9
ATM fees		-		8		-		-		8
Other		-		129		-		-		129
Interchange income		-		-	$	2,355		-		2,355
Asset management revenue		-		-		-	$	254		254
Transaction based revenue		-		-		-		43		43

Total	$	2,640	$	710	$	2,355	$	297	$	6,002

Reconciliation to Condensed Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	710
Investment and insurance commissions										297
Bank owned life insurance										242
Other										1,015
Total									$	2,264

Three months ending March 31, 2018

	Service Charges on Deposits		Other Deposit Related Income		Interchange Income		Investment and Insurance Commissions		Total
	(In thousands)
Retail
Overdraft fees	$	1,972		-		-		-	$	1,972
Account service charges		500		-		-		-		500
ATM fees		-	$	345		-		-		345
Other		-		207		-		-		207
Business
Overdraft fees		365		-		-		-		365
Account service charges		68		-		-		-		68
ATM fees		-		8		-		-		8
Other		-		129		-		-		129
Interchange income		-		-	$	2,246		-		2,246
Asset management revenue		-		-		-	$	271		271
Transaction based revenue		-		-		-		167		167

Total	$	2,905	$	689	$	2,246	$	438	$	6,278

Reconciliation to Condensed Consolidated Statement of Operations:
Non-interest income - other:
Other deposit related income									$	689
Investment and insurance commissions										438
Bank owned life insurance										256
Other										560
Total									$	1,943