Revenue Recognition

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

The Company’s primary source of revenue is interest income generated from loans and investment securities. Interest income is recognized according to the terms of the financial instrument agreement over the life of the loan or investment security unless it is determined that the counterparty is unable to continue making interest payments. Interest income also includes prepaid interest fees from commercial customers, which approximates the interest foregone on the balance of the loan prepaid.

The Company’s additional source of income, also referred to as noninterest income, is generated from deposit related fees, interchange fees, loan fees, merchant fees, loan sales, investment services and other miscellaneous income and is largely based on contracts with customers. In these cases, the Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The Company considers a customer to be any party to which the Company will provide goods or services that are an output of the Company’s ordinary activities in exchange for consideration. There is little seasonality with regards to revenue from contracts with customers and all inter-company revenue is eliminated when the Company’s financial statements are consolidated.

Generally, the Company enters into contracts with customers that are short-term in nature where the performance obligations are fulfilled and payment is processed at the same time. Such examples include revenue related to merchant fees, interchange fees and investment services income. In addition, revenue generated from existing customer relationships such as deposit accounts are also considered short-term in nature, because the relationship may be terminated at any time and payment is processed at the time performance obligations are fulfilled. As a result, the Company does not have contract assets, contract liabilities or related receivable accounts for contracts with customers. In cases where collectability is a concern, the Company does not record revenue.

Generally, the pricing of transactions between the Company and each customer is either (i) established within a legally enforceable contract between the two parties, as is the case with the loan sales, or (ii) disclosed to the customer at a specific point in time, as is the case when a deposit account is opened or before a new loan is underwritten. Fees are usually fixed at a specific amount or as a percentage of a transaction amount. No judgment or estimates by management are required to record revenue related to these transactions and pricing is clearly identified within these contracts.

The Company primarily operates in one geographic region, Northern and Central New Jersey and contiguous areas. Therefore, all significant operating decisions are based upon analysis of the Company as one operating segment or unit.

We disaggregate our revenue from contracts with customers by contract-type and timing of revenue recognition, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Noninterest income not generated from customers during the Company’s ordinary activities primarily relates to mortgage servicing rights, gains/losses on the sale of investment securities, gains/losses on the sale of other real estate owned, gains/losses on the sale of property, plant and equipment, and income from bank owned life insurance.

The following table sets forth the components of noninterest income for the three and nine months ended September 30, 2019 and 2018:



	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(in thousands)	2019		2018		2019		2018

Deposit Related Fees and Charges:
Debit card interchange income	$	1,429	$	1,280	$	4,059	$	3,675
Overdraft charges	1,047		966		3,024		2,975
ATM service charges	226		220		626		627
Demand deposit fees and charges	124		119		389		398
Savings service charges	25		29		81		95
Total	2,851		2,614		8,179		7,770
Commissions and Fees:
Loan fees	303		267		1,182		952
Wire transfer charges	316		291		888		813
Investment services income	474		378		1,253		917
Merchant fees	202		199		586		589
Commissions from sales of checks	85		106		299		326
Safe deposit income	94		92		275		280
Other income	66		77		187		205
Total	1,540		1,410		4,670		4,082
Gains on Sales of Loans	486		484		1,285		1,030
Other Income:
Gains on customer swap transactions	730		319		1,585		1,178
Title insurance income	9		27		128		149
Other income	627		48		755		203
Total	1,366		394		2,468		1,530
Revenue not from contracts with customers	457		737		2,210		2,270
Total Noninterest Income	$	6,700	$	5,639	$	18,812	$	16,682
Timing of Revenue Recognition:
Products and services transferred at a point in time	6,224		4,883		16,546		14,356
Products and services transferred over time	19		19		56		56
Revenue not from contracts with customers	457		737		2,210		2,270
Total Noninterest Income	$	6,700	$	5,639	$	18,812	$	16,682