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Revenue Recognition
 9 Months Ended
Sep. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue Recognition 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 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 income from bank owned life insurance, 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 mortgage servicing rights.
The following table sets forth the components of noninterest income for the three and nine months ended September 30, 2020 and 2019:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
(in thousands)2020201920202019
Deposit Related Fees and Charges:
Debit card interchange income
$1,472 $1,429 $3,910 $4,059 
Overdraft charges
533 1,047 1,935 3,024 
ATM service charges
138 226 367 626 
Demand deposit fees and charges129 124 394 389 
Savings service charges16 25 57 81 
Total2,288 2,851 6,663 8,179 
Commissions and Fees:
Loan fees
510 303 1,063 1,182 
Wire transfer charges
372 316 1,021 888 
Investment services income
392 474 1,231 1,253 
Merchant fees
184 202 598 586 
Commissions from sales of checks
73 85 216 299 
Safe deposit income
85 94 256 275 
Other income
51 66 138 187 
Total1,667 1,540 4,523 4,670 
Gains on sales of loans1,437 486 2,562 1,285 
Other Income:
Gains on customer swap transactions
624 730 4,234 1,585 
Title insurance income
46 9 126 128 
Other income
200 627 370 755 
Total870 1,366 4,730 2,468 
Revenue not from contracts with customers
511 457 1,787 2,210 
Total Noninterest Income$6,773 $6,700 $20,265 $18,812 
Timing of Revenue Recognition:
Products and services transferred at a point in time
6,243 6,224 18,422 16,546 
Products and services transferred over time
19 19 56 56 
Revenue not from contracts with customers
511 457 1,787 2,210 
Total Noninterest Income$6,773 $6,700 $20,265 $18,812