Revenue from Contracts with Customers

As of

January 1, 2018,

the Company adopted Accounting Standards Update (“ASU”)

No.

2014

09,

Revenue from Contracts with Customers (Topic

606

using the modified retrospective approach. The adoption of the ASU had

material impact on the measurement or recognition of revenue; however, additional disclosures have been added in accordance with the ASU. See Note

for additional information on this new accounting standard.

All of the Company’s revenue from contracts with customers in the scope of FASB ASC

606

is recognized within noninterest income. The following table presents the Company’s sources of noninterest income for the

three

and

six

months ended

June 30, 2018

and

2017:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
	(In thousands)

Service charges on deposit accounts	$	1,188	$	1,132	$	2,297	$	2,133
Investment advisory income		130		131		218		245
Revenue from contracts with customers		1,318		1,263		2,515		2,378

Gain on sale of loans and securities		194		415		435		672
Increase in cash value of life insurance		85		72		128		113
Other		139		106		184		146
Other noninterest income		418		593		747		931

Total noninterest income	$	1,736	$	1,856	$	3,262	$	3,309

A description of the Company’s revenue streams accounted for under FASB ASC

606

follows:

Service Charges on Deposit Accounts

: The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer's request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer's account balance.

Interchange Income

: The Company earns interchange fees from debit cardholder transactions conducted through a payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. Interchange income is included in service charges on deposit accounts.

Investment Advisory Income

: The Company earns trust, insurance commissions, brokerage commissions and annuities income from its contracts with trust customers to manage assets for investment, and/or to transact on their accounts. These fees are primarily earned over time as the Company provides the contracted monthly or quarterly services and are generally assessed based on a tiered scale of the market value of assets under management (AUM) at month-end. Fees that are transaction based, including trade execution services, are recognized at the point in time that the transaction is executed (i.e., the trade date). Other related fees, which are based on a fixed fee schedule, are recognized when the services are rendered.