Non-interest Revenue and Expense

9 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

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 12, Impact of 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.

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


	Three Months Ended December 31,						Nine Months Ended December 31,
$ in thousands	2019		2018		2019		2018
Non-interest income
In-scope of Topic 606
Depository fees and charges	$	846	$	862	$	2,461	$	2,549
Loan fees and service charges	70		102		216		223
Other non-interest income	14		15		41		48
Non-interest income (in-scope of Topic 606)	930		979		2,718		2,820
Non-interest income (out-of-scope of Topic 606)	35		348		405		890
Total non-interest income	$	965	$	1,327	$	3,123	$	3,710

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 periods presented:


	Three Months Ended December 31,						Nine Months Ended December 31,
$ in thousands	2019		2018		2019		2018
Other non-interest income:
Gain on sale of real estate owned	$	—	$	115	$	208	$	194

Other	37		82		186		272
Total non-interest income	$	37	$	197	$	394	$	466

Other non-interest expense:
Advertising	$	32	$	66	$	234	$	242
Legal expense	316		95		489		338
Insurance and surety	158		146		463		514
Audit expense	136		125		398		456
Outsourced service	33		143		277		451
Data lines / internet	105		139		315		311

Retail expenses	175		195		551		609

Regulatory assessment	53		86		161		259
Investor relations	—		75		16		112
Director's fees	77		86		232		259
Other	528		504		1,447		1,666
Total non-interest expense	$	1,613	$	1,660	$	4,583	$	5,217