NON-INTEREST REVENUE AND EXPENSE

On April 1, 2018, the Company adopted ASU No, 2014-09, "Revenue from Contracts with Customers (Topic 606)" and all subsequent ASUs that modified Topic 606. As stated in Note 2. Summary of Significant Accounting Policies - Recent Accounting Standards, the implementation of the new standard did not have a material impact to the Company's consolidated financial statements and as such, management determined that a cumulative effect adjustment to opening retained earnings was not deemed necessary. Results for reporting periods beginning after April 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with the previous accounting guidance under Topic 605.

Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. 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 depository fees, service charges and commission revenues. 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.

Depository fees and charges

Depository fees and charges primarily relate to service fees on deposit accounts and fees earned from debit cards and check cashing transactions. Service fees on deposit accounts consist of ATM fees, NSF fees, account maintenance charges and other deposit related fees. The revenue is recognized monthly when the Bank's performance obligations are complete, or as incurred for transaction-based fees in accordance with the fee schedules for the Bank's deposit products and services.

Loan fees and service charges

Loan fees and service charges primarily relate to program management fees and fees earned in accordance with the Bank's standard lending fees (such as inspection and late charges). These standard lending fees are earned on a monthly basis upon receipt.

Other non-interest income

Other non-interest income primarily relates to an advertising services agreement, covering marketing and use of the Bank's office space with a third party. The revenue is recognized on a monthly basis.

Interchange income

The Company earns interchange fees from debit card holder transactions conducted through various payment networks. Interchangee fees from cardholder transactions are recognized daily, concurrently with the transaction procesing services provided by an outsource technology solution and are presented on a net basis.

The following table presents non-interest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the years ended March 31, 2019 and March 31, 2018:



	Years Ended March 31,
$ in thousands	2019		2018
Non-interest income
In-scope of Topic 606
Depository fees and charges	$	3,337	$	3,372
Loan fees and service charges	303		530
Other non-interest income	61		91
Non-interest income (in-scope of Topic 606)	3,701		3,993
Non-interest income (out-of-scope of Topic 606)	1,157		10,366
Total non-interest income	$	4,858	$	14,359

The following table sets forth other non-interest income and expense totals exceeding 1% of the aggregate of total interest income and non-interest income for any of the years presented:



	Years Ended March 31,
$ in thousands	2019		2018
Other non-interest expense:
Advertising	316		311
Legal expense	413		475
Insurance and surety	660		605
Audit expense	672		1,230
Outsourced service	558		530
Data lines / internet	441		291
Retail expenses	781		829
Operating chargeoffs and other losses	714		48
Regulatory assessment	314		290
Director's fees	313		346
Other	2,292		2,705
Total non-interest expense	$	7,474	$	7,660