(

)

REVENUE FROM CONTRACTS WITH CUSTOMERS

As of

January 1, 2018,

the Company adopted 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.

Substantially 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 and other income within the scope of FASB ASC

606

for the years ended

December 31, 2018,

2017

and

2016:

(In thousands)	2018		2017			2016

Service charges on deposit accounts	$	2,177	$	2,098		$	1,764
ATM and debit card fees		2,564		2,329			2,197
Investment advisory income		386		416			384
Other		128		123			118
Revenue from contracts with customers		5,255		4,966			4,463

Net gains on loans and investments		528		1,439			1,355
Increase in cash value of life insurance		227		197			184
Other		158		96			167
Other noninterest income		913		1,732			1,706

Total noninterest income	$	6,168	$	6,698		$	6,169

Net gain (loss) on sales of foreclosed real estate	$	23	$	(3	)	$	(30	)

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 stop payment charges and statement rendering, 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.

ATM and Debit Card Fees

: The Company earns ATM usage fees and interchange fees from debit cardholder transactions conducted through a payment network. ATM fees are recognized at the point in time the transaction occurs. 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.

Investment Advisory Income

: The Company earns trust, insurance commissions, brokerage commissions and annuities income from its contracts with 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 services and are generally assessed based on the market value of assets under management. Fees that are transaction based, including trade execution services, are recognized at the point in time that the transaction is executed. Other related fees, which are based on a fixed fee schedule, are recognized when the services are rendered.

Other Income

: Other income from contracts with customers includes safe deposit box fees and ACH origination fees. This revenue is recognized at the time the transaction is executed or over the period the Company satisfies the performance obligation.

Gains and Losses on Sales of Foreclosed Real Estate

: The Company records a gain or loss on the sale of foreclosed real estate when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of foreclosed real estate to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the foreclosed real estate asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. The Company did

not

finance any sales of foreclosed real estate during the year ended

December 31, 2018.