(

)

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 with items outside the scope of ASC

606

noted as such:

	Three months ended March 31, 2019

(Dollars in thousands)	Commercial		WM&T		Consolidated
Wealth management and trust services	$	-	$	5,439	$	5,439
Deposit service charges		1,247				1,247
Debit and credit card income		1,744				1,744
Treasury management fees		1,157				1,157
Mortgage banking income (1)		482				482
Net investment product sales commissions and fees		356				356
Bank owned life insurance (1)		178				178
Other (2)		459				459
Total non-interest income	$	5,623	$	5,439	$	11,062

	Three months ended March 31, 2018

(Dollars in thousands)	Commercial		WM&T		Consolidated
Wealth management and trust services	$	-	$	5,500	$	5,500
Deposit service charges		1,411				1,411
Debit and credit card income		1,508				1,508
Treasury management fees		1,047				1,047
Mortgage banking income (1)		576				576
Net investment product sales commissions and fees		404				404
Bank owned life insurance (1)		187				187
Other (2)		276				276
Total non-interest income	$	5,409	$	5,500	$	10,909

(

) Outside of scope of ASC

606

(

) Outside of scope of ASC

606

with the exception of safe deposit fee which were nominal.

Revenue sources within the scope of ASC

606

are discussed below.

Bancorp earns fees from its deposit customers for transactions-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. Overdraft fees are recognized at the point in time that the overdraft occurs. Deposit service charges are withdrawn from customer’s account balances.

Treasury management transaction 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. Treasury management fees are withdrawn from customer’s account balances.

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 clients do

not

permit performance based fees and accordingly,

none

of the fees earned by WM&T are performance based. Trust fees receivable as of

March 31, 2019

were

$2.0

million compared with

$1.9

million as of

December 31, 2018.

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 value 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 incentive compensation expense of

thousand and

thousand, and trading activity charges of

$133

and

$137

thousand, for the

three

month periods ended

March 31, 2019,

and

2018

respectively.

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.

Bancorp did

not

establish any contract assets or liabilities as a result of adopting ASC

606,

nor

were any recognized during the

first

quarter of

2019.

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.