NON-INTEREST REVENUES

As provided in NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION, Customers' adoption of ASU 2014-09, Revenue from Contracts with Customers (ASC 606), on January 1, 2018, did not have a significant impact to Customers' consolidated financial statements and, as such, a cumulative effect adjustment to beginning retained earnings was not necessary. Customers determined that its debit and prepaid card interchange income, previously reported on a gross basis for periods prior to adoption, will need to be presented on a net basis under ASC 606. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with the previous accounting guidance under ASC 605. Debit and prepaid card interchange expense for the years ended December 31, 2018, 2017, and 2016 amounted to $5.5 million, $5.9 million, and $1.3 million, respectively.

In addition, as part of the enhanced disclosure requirements under the new guidance, Customers is presenting disaggregated revenue by business segment, nature of the revenue stream, and the pattern or timing of revenue recognition. The accounting treatment for interest-related revenues is covered under ASC 310 and is out of the scope of ASC 606.

The following tables present Customers' non-interest revenues affected by ASC 606 by business segment for the years ended December 31, 2018, 2017, and 2016:



	For the Year Ended December 31, 2018
(amounts in thousands)	Customers Bank Business Banking		BankMobile		Consolidated
Revenue from contracts with customers:
Revenue recognized at point in time:
Interchange and card revenue	$	794	$	29,901	$	30,695
Deposit fees	1,277		6,547		7,824
University fees - card and disbursement fees	—		1,039		1,039
Total revenue recognized at point in time	2,071		37,487		39,558
Revenue recognized over time:
University fees - subscription revenue	—		3,681		3,681
Total revenue recognized over time	—		3,681		3,681

Total revenue from contracts with customers	$	2,071	$	41,168	$	43,239



	For the Year Ended December 31, 2017
(amounts in thousands)	Customers Bank Business Banking		BankMobile		Consolidated
Revenue from contracts with customers:
Revenue recognized at point in time:
Interchange and card revenue	$	782	$	40,727	$	41,509
Deposit fees	1,190		8,849		10,039
University fees - card and disbursement fees	—		1,141		1,141
Total revenue recognized at point in time	1,972		50,717		52,689
Revenue recognized over time:
University fees - subscription revenue	—		3,272		3,272
Total revenue recognized over time	—		3,272		3,272
Total revenue from contracts with customers	$	1,972	$	53,989	$	55,961



	For the Year Ended December 31, 2016
(amounts in thousands)	Customers Bank Business Banking		BankMobile		Consolidated
Revenue from contracts with customers:
Revenue recognized at point in time:
Interchange and card revenue	$	620	$	24,061	$	24,681
Deposit fees	1,140		6,927		8,067
University fees - card and disbursement fees	—		581		581
Total revenue recognized at point in time	1,760		31,569		33,329
Revenue recognized over time:
University fees - subscription revenue	—		1,567		1,567
Total revenue recognized over time	—		1,567		1,567
Total revenue from contracts with customers	$	1,760	$	33,136	$	34,896

The following is a discussion of revenues within the scope of ASC 606:

Card revenue

Card revenue primarily relates to debit and prepaid card fees earned from interchange and ATM fees. Interchange fees are earned whenever Customers' issued debit and prepaid cards are processed through card payment networks. Interchange fees are recognized concurrent with the processing of the debit or prepaid card transaction.

Deposit fees

Deposit fees relate to service charges on deposit accounts for transaction-based, account maintenance and overdraft services. Transaction-based fees, which include services such as stop-payment charges, wire transfer fees, cashier and money order fees are recognized at the time the transaction is executed. Account maintenance fees, which relate primarily to monthly maintenance and account analysis fees, are earned on a monthly basis representing the period over which Customers satisfies its performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposit accounts are withdrawn from the depositor's account balance.

The revenues recognized at a point in time primarily consist of contracts with no specified terms, but which may be terminated at any time by the customer without penalty. Due to the transactional nature and indefinite term of these agreements, there were no related contract balances that were recorded for these revenue streams on Customers' consolidated balance sheets as of December 31, 2018 and 2017.

University fees

University fees represent revenues from higher education institutions and are generated from fees charged for the services provided. For higher education institution clients, Customers, through BankMobile, facilitates the distribution of financial aid and other refunds to students, while simultaneously enhancing the ability of the higher education institutions to comply with the federal regulations applicable to financial aid transactions. For these services, higher education institution clients are charged an annual subscription fee and/or per-transaction fee (e.g., new card, card replacement fees) for certain transactions. The annual subscription fee is recognized ratably over the period of service and the transaction fees are recognized when the transaction is completed. BankMobile also enters into long-term (generally three or five-year initial term) contracts with higher education institutions to provide these refund management disbursement services. Deferred revenue consists of amounts billed to or received from clients prior to the performance of services. The deferred revenues are earned over the service period on a straight-line basis. As of December 31, 2018 and 2017, Customers recorded deferred revenue of $2.2 million and $2.0 million, respectively, related to these university subscription contracts. At December 31, 2018 and 2017, Customers had accounts receivable of $1.4 million and $1.1 million, respectively, related to the university fee arrangements.