Revenue Recognition

January 1, 2018,

the Company adopted ASU

2014

“

Revenue from Contracts with Customers

”

(Topic

606

)

and all subsequent ASUs that modified Topic

606.

As stated in Note

Summary of Significant Accounting Policies,

the implementation of the new standard did

not

have a material impact on the measurement of recognition of revenue. Management determined that a cumulative effect adjustment to opening retained earnings was

not

deemed necessary. Results for reporting periods beginning

January 1, 2018

are presented under Topic

606,

while prior period amounts were

not

adjusted and continue to be reported in accordance with our historic accounting under Topic

605.

Topic

606

does

not

apply to revenue associated with financial instruments, including revenue from loans and investments. In addition, certain non-interest income streams such as gains on sales of residential mortgage and SBA loans, income associated with servicing assets, and loan fees, including residential mortgage originations to be sold and prepayment and late fees charged across all loan categories are also

not

in scope of the new guidance. Topic

606

is applicable to non-interest revenue streams such as service charges on deposit accounts. However, the recognition of these revenue streams did

not

change significantly upon adoption of Topic

606.

Non-interest revenue streams in-scope of Topic

606

are discussed below.

Service Charges on Deposit Accounts

Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), ATM fees, NSF fees, and other deposit related fees.

The Company’s performance obligation for account analysis fees and monthly services fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided, which is typically

one

month. Revenue is recognized at month end after the completion of the service period and payment for these service charges on deposit accounts is primarily received through a direct charge to customers’ accounts.

ATM fees, NSF fees, and other deposit related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied, and the related revenue recognized, at a point in time. Payment for these service charges are received immediately through a direct charge to customers’ accounts.

For the Company, there are

other material revenue streams within the scope of Topic

606.

The following tables present non-interest income, segregated by revenue streams in-scope and out-of-scope of Topic

606,

for the

twelve

months ended

December 31, 2019,

2018,

and

2017.

	Twelve Months Ended December 31,
(dollars in thousands)	201 9		201 8		201 7
Non-interest income
In-scope of Topic 606
Service charges on deposit accounts	$	7,541	$	5,476	$	3,904
Other non-interest income		214		174		177
Non-interest income (in-scope of Topic 606)		7,755		5,650		4,081
Non-interest income (out-of-scope of Topic 606)		15,983		14,672		16,016
Total non-interest income	$	23,738	$	20,322	$	20,097

Contract Balances

A contract assets balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company’s non-interest revenue streams are largely based on transaction activity, or standard month-end revenue accruals. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does

not

typically enter into long-term contracts with customers, and therefore, does

not

experience significant contract balances. As of

December 31, 2019,

2018,

and

2017,

the Company did

not

have any significant contract balances.

Contract Acquisition Costs

In connection with the adoption of Topic

606,

an entity is required to capitalize, and subsequently amortize as an expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would

not

have incurred if the contract had

not

been obtained (for example, sales commission). The company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the assets that would have resulted from capitalizing these costs would have been amortized in

one

year or less. Upon adoption of Topic

606,

the Company did

not

capitalize any contract acquisition cost.