Revenue From Contracts With Customers

The Company records revenue from contracts with customers in accordance with ASC Topic

606,

“

Revenue from Contracts with Customers

” ASC Topic

606

requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized when, or as, the Company satisfies a performance obligation. Primarily all of the Company’s revenue from contracts with customers in the scope of ASC Topic

606

is recognized within noninterest income. Net gains or losses on the sale of other real estate owned (“OREO”) are included in net other real estate expenses. The following table presents the Company’s sources of noninterest income for the

three

months ended

March 31, 2018

and

2017.

Amounts in the table are within the scope of ASC Topic

606

unless otherwise noted.

Three Months Ended March 31, (In thousands)	2018		2017
Service charges and fees on deposits
Overdraft fees	$	956	$	927
Dormant account fees		593		665
Service charges on checking and savings accounts		314		310
Other		49		56
Allotment processing fees		720		715
Other service charges, commissions, and fees
Interchange fees		827		781
Other 1		545		591
Trust income		789		704
Investment securities (losses) gains, net 2		-		(9	)
Gain on sale of mortgage loans, net 2		95		154
Income from company-owned life insurance 2		293		235
Other		20		122
Total noninterest income	$	5,201	$	5,251

Includes broker, ATM, and other fees totaling

$402

thousand and

$457

thousand for the

three

months ended

March 31, 2018

and

2017,

respectively, which is within the scope of ASC Topic

606.

Not

within the scope of ASC Topic

606.

Net other real estate expenses include a net loss on the sale of OREO of

$43

thousand and a net gain of

$115

thousand for the

three

months ended

March 31, 2018

and

2017,

respectively.

A description of the Company’s revenue-generating activities accounted for under Topic

606

follows.

Service charges and fees on deposits consist primarily of overdraft fees, dormant account fees, and service charges on checking and savings accounts. Overdraft fees are recognized at the time an account is overdrawn. Dormant account fees are recognized when an account is inactive for

365

days. The majority of service charges on checking and savings accounts are for account maintenance services performed and recognized in the same calendar month. Other fees are primarily for transaction-based services completed at the request of the customer and recognized at the time the transaction is executed. These transaction-based services include foreign ATM usage and stop payments services. All service charges and fees on deposits are withdrawn from the customer’s account balance.

Allotment processing fees relate to the Company’s bill payment and electronic funds transfer (“EFT”) services provided under the name of FirstNet. The Company processes payments by individual customers to unaffiliated

third

party lenders on bi-weekly and monthly schedules. Other EFT services are available to customers upon request. The Company does

not

provide credit to individuals under the program. Fees are primarily withdrawn from the customer’s account and recognized at the time the transaction is executed.

Other service charges, commissions, and fees include interchange fees earned primarily from debit card holder transactions conducted through the VISA payment network and other networks. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are received and recognized daily, concurrent with the transaction processing services provided to the cardholder.

Trust income is earned from living trusts and investment management agency accounts, estate planning and estate settlement, custody accounts, individual retirement accounts, and other related services. These fees are primarily earned and accrued over the period of time the Company provides the contracted services and are generally assessed based on tiered scale of the market value of the assets of the accounts. Fees for other services, including the preparation of fiduciary income tax returns, are recognized when the services are rendered. Fees are generally paid out of the assets held in the customer’s account.