GlobeNewswire Inc | Nov 15, 2021 07:00AM EST

November 15, 2021

Q3 2021 Core EBITDA increased 91% year over year to $7.0 million 2021 EBITDA Guidance Increased to $26 MillionEnding Serviced Deposits increased 118% year over year to $2 billion

RADNOR, Pa., Nov. 15, 2021 (GLOBE NEWSWIRE) -- BM Technologies Inc. (NYSE American: BMTX) (BM Technologies, BMTX, we, or the Company) one of the largest digital banking platforms in the country, today reported record results for the three and nine months ended September30, 2021.

THIRD QUARTER FINANCIAL HIGHLIGHTS

-- Q3 2021 revenues increased 20% to $22.0 million from $18.3 million in Q3 2020. -- Q3 2021 net income increased to $8.8 million from $250,000 in Q3 2020. Q3 2021 net income includes a $6.0 million noncash gain on the revaluation of the private warrant liability. -- Q3 2021 core earnings1 were $2.8 million in Q3 2021, or $0.23 per diluted share, compared to earnings of $0.5 million, or $0.09 per diluted share in Q3 2020. -- Q3 2021 core EBITDA increased 91% to $7.0 million from $3.7 million. Core EBITDA1 margin increased 200 basis points to 32%. -- The Company had a cash balance of $20.4 million at September30, 2021 and zero balance on its $10.0million line of credit.

BUSINESS HIGHLIGHTS

-- Average serviced deposits totaled $1.7 billion in Q3 2021; a 128% increase compared to Q3 2020. Average new business serviced deposits increased $0.9 billion over the last year to $1.2 billion from $0.2 billion in Q3 2020. -- Debit card spend was $773.0 million in Q3 2021, a 4% increase compared to Q3 2020. New business debit spend increased 44% compared to Q3 2020. -- Un-annualized revenue per 90-day active account increased 31% year over year to $47 in Q3 2021. -- Approximately 157 thousand new accounts opened in the third quarter 2021 bringing the year to date new account total to approximately 350 thousand new accounts opened. -- Higher Education Organic Deposits (deposits that are not part of a school disbursement and indicative of primary banking behavior) for the nine months ended September30, 2021 increased 17% year over year to $1.7 billion. -- Newly active accounts in the Higher Education business increased 11% year over year in the month of September, an indication of a year-over-year improvement in account openings during the fall peak season. -- BMTX signed agreements with 12 new colleges and universities through October 31, providing over 71,000 additional students access to BankMobile Disbursements and the BankMobile Vibe checking account, and has signed three colleges and universities up for its new Vendor Pay offering. -- The Company recently executed an agreement with TutorGigs, which employs college students as tutors, providing students additional sources of income and driving customer engagement.

Luvleen Sidhu, BMTXs Chair and Chief Executive Officer commented, "We are very pleased to report continued profitable growth in all areas of our business. At the end of the quarter, serviced deposits surpassed $2 billion for the first time. Continued growth in revenue per account, average serviced deposits, and organic deposits are strong indicators of improving engagement and primary banking behavior. Our low-cost, high volume, customer acquisition strategy continues to yield a customer acquisition cost (CAC)2 below $10 per active account. Given our performance to date, we raise our 2021 EBITDA guidance to $26 million (from $24 million) and reiterate our 2021 revenue guidance of $92 million.

_____________________1 Core metrics are Non-GAAP measures which adjust revenues to exclude certain items; a reconciliation appearsat the end of this release.

BUSINESS UPDATE

BMTX a financial technology company, is in the business of providing state of the art technologies to attract and serve millions of Americans and provide them access to superior banking experiences. It continues to invest in its low-cost acquisition model and proprietary API driven platform to offer a full suite of financial services products. The company operates in three verticals: 1) higher education and student banking, 2) Banking-as-a-service ("white label banking"), and 3) workplace banking.

Higher Education & Student Banking

In the month of September, newly active accounts in the Higher Education business increased 11% year over year, an indication of a year-over-year improvement during the fall peak season. During the third quarter of 2021 the company retained more than 99.3% of higher education institutions and disbursed $4.1 billion in refunds to students, an increase of 22% from the year ago period. Year-to-date, $1.4 billion of these disbursements have been deposited into BankMobile Vibe Accounts held at its partner bank. Organic deposits (deposits that are not part of a school disbursement) for the nine months ended September30, 2021 increased 17% to $1.7 billion, compared to the year ago period, indicating strong primary banking behavior. The average balance per active account increased 23% year over year to approximately $1,859 and the spend per active account increased 13% year over year to approximately $1,994. The number of positive balance savings accounts increased approximately 30% year over year. We have found that savings account customers are more engaged and loyal customers.

The Company recently executed an agreement with TutorGigs, which engages college students as tutors to provide tutoring services. This partnership is aligned with the Company's goals to support Higher Education customers by creating opportunities for them to generate supplemental income, which the company expects will benefit customer engagement and account usage. Additionally, BMTX signed agreements with 12 new colleges and universities through October 31, providing over 71,000 additional students access to BankMobile Disbursements and the BankMobile Vibe checking account, and has signed three colleges and universities up for its new Vendor Pay offering.

New Business (includes Banking-as-a-service/"white label banking" and Workplace Banking)

In our banking-as-a-service vertical, our API-first platform design allows our clients to consult and collaborate with BMTX as they create, implement, and execute their embedded finance vision. Our proprietary and flexible platform enables BMTX to go to market quickly, integrate with partners easily, and add features well ahead of our competition.

New Business average serviced deposits increased 433% in Q3 2021 and debit card spend increased 44%. Of note is the significant primary account usage patterns of the most active banking-as-a-service account holders. In Q3 2021, annualized debit card spend for highly active users (those with both direct deposit and a minimum of five customer driven transactions per month) was nearly $16,000 annually and average deposit balance per account was over $4,300. This very attractive cohort makes up approximately 17% of active accounts, compared to 12% in the third quarter of 2020. The company continues to actively work a pipeline of prospective new banking-as-a-service ("white label") and workplace banking customers to offer a suite of financial services products through its proprietary technology stack.

2021 OUTLOOK

We are investing heavily in our products and marketing and are confident in our ability to acquire more customers and retain them as customers for life by continuing to solve their most pressing pain points. Our New Businesses which include our Banking-as-a-Service and Workplace Banking verticals continue to experience growth. We are actively working our pipeline of prospective new banking-as-a-Service clients to offer a suite of financial services products through our proprietary API driven platform, said Sidhu.

As one of the largest digital banking platforms in the country with approximately 2 million account holders, we remain focused on expanding our profitable, high-growth business model. We look forward to working on our strategic merger with First Sound Bank and are excited about the prospects of future growth, concluded Sidhu.

_____________________2 CAC is calculated based on trailing twelve month (TTM) total Marketing and Client Operations expense, net of subscription fees paid to BMTX for higher education clients, divided by TTM newly active accounts.

FINANCIAL HIGHLIGHTS

Q3 Q2 Q1 Q4 Q3 YTD Q3 YOY Change(dollars in 2021 2021 2021 2020 2020 2021 2020 $ %thousands)Interchange& card $ 5,572 $ 7,186 $ 8,351 $ 6,232 $ 7,377 $ 21,109 $ 20,053 $ (1,805 ) (24 ) %revenueDepositservicing 11,823 10,579 9,372 6,861 5,814 31,774 15,604 6,009 103 %feesAccount fees 2,628 2,641 2,686 2,791 2,789 7,955 8,517 (161 ) (6 ) %University 1,474 1,331 1,324 1,292 1,348 4,129 4,028 126 9 %feesOther 477 1,156 2,650 154 1,010 4,283 1,326 (533 ) (53 ) %Total GAAPoper. $ 21,974 $ 22,893 $ 24,383 $ 17,330 $ 18,338 $ 69,250 $ 49,528 $ 3,636 20 %revenues Core OpEx(Excl. Dep/ $ 14,956 $ 17,722 $ 15,653 $ 15,795 $ 14,657 $ 48,331 $ 47,115 $ 299 2 %Amor)^3Merger ? ? ? 287 377 ? 452 (377 ) (100 ) %expenseNon-cashequity 74 10 3 98 93 87 370 (19 ) (20 ) %compensationNon-cashsoftware ? ? ? 1,248 ? ? ? ? ? %write-downDepreciationand 2,946 2,950 2,960 3,042 2,601 8,856 8,826 345 13 %amortizationTotal GAAPoper. $ 17,976 $ 20,682 $ 18,616 $ 20,470 $ 17,728 $ 57,274 $ 56,763 $ 248 1 %expenses Core EBITDA^ $ 7,018 $ 5,171 $ 8,730 $ 1,535 $ 3,681 $ 20,919 $ 2,413 $ 3,337 91 %3Core EBITDA 32 % 23 % 36 % 9 % 20 % 30 % 4 % Margin^3

Q3 2021 total revenues increased $3.6 million, or 20%, compared to the year ago period. This increase is primarily attributable to a $6.0 million increase in servicing fees from our partner bank. The increase in servicing fees is directly related to the increase in average serviced deposit balances which increased 129% to $1.7 billion in Q3 2021 compared to approximately $0.8 billion in the year-ago period.

Total GAAP operating expenses increased $0.2 million, or 1%, compared to the year-ago period. This increase is primarily attributable to a $1.3 million increase in professional services, a $1.0 million increase in salaries and employee benefits, and a $0.8 million increase in customer related supplies. The increase in professional services is primarily driven by increases to legal, audit, and insurance costs associated with becoming a public company.

Core EBITDA3 totaled increased to $7.0 million in Q3 2021 compared to $3.7 million in Q3 2020 given increased revenues coupled with expense discipline.

___________________3 Core metrics are Non-GAAP measures which adjust revenues to exclude certain items; a reconciliation appears at the end of this release.

EARNINGS WEBCAST

The company will host a live webcast to discuss its third quarter results at 9:00 am ET on Monday, November15, 2021. The webcast can be accessed via its investor relations site (ir.bmtxinc.com) by clicking on "Events & Presentations," then "Events Calendar," and following the link under "Upcoming Events;" or directly at Q3 2021 Earnings Webcast.

An updated version of BMTs investor presentation will be posted on the Companys Investor Relations website at ir.bmtxinc.com.

Contact InformationInvestors:Bob Ramsey, CFAChief Financial Officer571-236-8851rramsey@bmtx.com

Media Inquiries:Julie StricklandRubenstein Public Relations, Inc.212-805-3062sklein@rubensteinpr.com

ABOUT BM TECHNOLOGIES, INC.

BM Technologies, Inc. (NYSE American: BMTX)formerly known as BankMobileis among the largest digital banking platforms in the U.S., providing access to checking and savings accounts, personal loans, credit cards, and financial wellness. It is focused on technology, innovation, easy-to-use products, and education with the mission of being customer-obsessed and creating customers for life. The BM Technologies (BMTX) digital banking platform employs a multi-partner distribution model, known as Banking-as-a-Service (BaaS), that enables the acquisition of customers at higher volumes and substantially lower expense than traditional banks, while providing significant benefits to its customers, partners and business. BM Technologies (BMTX) currently has approximately two million accounts and provides disbursement services at approximately 745 college and university campuses (covering one out of every three college students in the U.S.). BM Technologies, Inc. (BMTX) is a technology company and is not a bank, which means it provides banking services through its partner bank. More information can also be found at www.bmtx.com.

FORWARD LOOKING STATEMENTS

This release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainty. Words such as anticipate, estimate, expect, intend, plan, and project and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. Such statements are based on managements current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Investors are cautioned that there can be no assurance actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. These risks and uncertainties include, but are not limited to, general economic conditions, consumer adoption, technology and competition, the ability to enter into new partnerships, regulatory risks, risks associated with the higher education industry and financing, and the operations and performance of the Companys partners, including white-label partners, and other factors described in the section entitled Risk Factors and in the Companys periodic filings with the Securities and Exchange Commission (SEC). The Companys SEC filings are available publicly on the SEC website at www.sec.gov. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law.

UNAUDITED FINANCIAL STATEMENTS

BM TECHNOLOGIES, INC.CONSOLIDATED STATEMENTS OF INCOME (LOSS) - UNAUDITED(amounts in thousands, except earnings per share)

Q3 Q2 Q1 Q4 Q3 Nine Months Ended September 30, 2021 2021 2021 2020 2020 2021 2020Operating revenues:Interchangeand card $ 5,572 $ 7,186 $ 8,351 $ 6,232 $ 7,377 $ 21,109 $ 20,053 revenueServicing feesfrom partner 11,823 10,579 9,372 6,861 5,814 31,774 15,604 bankAccount fees 2,628 2,641 2,686 2,791 2,789 7,955 8,517 University 1,474 1,331 1,324 1,292 1,348 4,129 4,028 feesOther 477 1,156 2,650 154 1,010 4,283 1,326 Totaloperating 21,974 22,893 24,383 17,330 18,338 69,250 49,528 revenuesOperating expenses:Tech.,communication, 4,596 8,924 8,652 6,818 6,637 22,172 20,586 & processingSalaries andemployee 6,728 7,170 5,423 6,280 5,689 19,321 19,796 benefitsProfessional 3,496 2,126 1,737 2,018 2,159 7,359 7,286 servicesProvision foroperating 1,067 1,401 1,329 1,844 1,419 3,797 3,326 lossesOccupancy 282 284 352 188 435 918 1,240 Customerrelated 1,017 186 475 108 195 1,678 717 suppliesAdvertising 176 125 191 248 266 492 693 and promotionMerger related ? ? ? 287 377 ? 452 expensesOther 614 466 457 2,678 551 1,537 2,668 Totaloperating 17,976 20,682 18,616 20,469 17,728 57,274 56,764 expensesIncome (loss)from 3,998 2,211 5,767 (3,139 ) 610 11,976 (7,236 )operationsNon-operating expenses:(Loss) gain onfair value ofprivate 6,042 (3,056 ) 15,003 ? ? 17,989 ? warrantliabilityInterest ? (42 ) 54 2,541 (353 ) (96 ) (1,146 )expense(Loss) incomebefore income 10,040 (887 ) 20,716 (3,388 ) 257 29,869 (8,382 )tax expenseIncome tax 1,246 949 1,827 2 7 4,022 21 expenseNet (loss) $ 8,794 $ (1,836 ) $ 18,889 $ (3,390 ) $ 250 $ 25,847 $ (8,403 )income Basic shares 11,900 11,900 11,900 6,123 6,123 11,534 6,123 outstandingDiluted shares 11,904 11,900 15,512 6,123 6,123 12,059 6,123 outstanding Basic earnings(loss) per $ 0.74 $ (0.15 ) $ 1.59 $ (0.55 ) $ 0.04 $ 2.24 $ (1.37 )common shareDilutedearnings $ 0.74 $ (0.15 ) $ 0.25 $ (0.55 ) $ 0.04 $ 0.65 $ (1.37 )(loss) percommon share

BM TECHNOLOGIES, INC.CONSOLIDATED BALANCE SHEETS UNAUDITED(amounts in thousands)

September June 30, March 31, December September 30, 31, 30, 2021 2021 2021 2020 2020ASSETS Cash and cash $ 20,407 $ 19,589 $ 17,379 $ 2,989 $ 16,776 equivalentsReceivable from ? ? ? ? 2,038 partner bankAccounts 4,498 8,257 5,616 7,384 8,382 receivable, netPrepaid expenses 2,046 1,786 5,032 2,348 353 and other assetsTotal current 26,951 29,632 28,027 12,721 27,549 assetsPremises and 305 349 345 401 436 equipment, netDeveloped 31,691 34,155 36,952 39,657 45,351 software, netGoodwill 5,259 5,259 5,259 5,259 5,259 Other 4,830 4,910 4,990 5,070 5,150 intangibles, netOther assets 840 740 942 853 1,690 Total assets $ 69,876 $ 75,045 $ 76,515 $ 63,961 $ 85,435 LIABILITIES ANDSHAREHOLDERS' EQUITYLiabilities: Accounts payableand accrued $ 8,225 $ 13,617 $ 9,998 $ 7,346 $ 15,298 liabilitiesTaxes payable 863 1,317 1,793 ? ? Payable to 6,914 7,117 9,000 5,105 ? partner bankBorrowings from ? ? 5,427 21,000 40,000 partner bankCurrent portionof operating 596 719 714 701 701 leaseliabilitiesDeferred 4,306 4,763 3,134 2,588 2,449 revenue, currentTotal current 20,904 27,533 30,066 36,740 58,448 liabilitiesNon-current liabilities:Operating lease ? 55 235 430 596 liabilitiesDeferredrevenue, 223 1,512 1,490 2,101 ? non-currentLiability for 12,850 18,893 15,836 ? ? private warrantsOther ? ? ? ? 120 liabilitiesTotal $ 33,977 $ 47,993 $ 47,627 $ 39,271 $ 59,164 liabilitiesCommitments and contingenciesShareholders? equity:Preferred stock ? ? ? ? ? Common stock 1 1 1 1 1 Additional 49,379 49,326 49,326 64,017 62,208 paid-in capitalAccumulated (13,481 ) (22,275 ) (20,439 ) (39,328 ) (35,938 )deficitTotalshareholders? 35,899 27,052 28,888 24,690 26,271 equityTotalliabilities and $ 69,876 $ 75,045 $ 76,515 $ 63,961 $ 85,435 shareholders'equity

NON-GAAP FINANCIAL RECONCILIATIONS - UNAUDITED

Certain financial measures used in this Press Release are not defined by U.S. generally accepted accounting principles (GAAP) and as such are considered non-GAAP financial measures. Core expenses and EBITDA exclude the effects of items we do not consider indicative of our core operating performance, including fair value mark to market income or expense associated with certain warrants. Management believes the use of core revenues, expenses, and EBITDA are appropriate to provide investors with an additional tool to evaluate the Company's ongoing business performance. Investors are cautioned that these non-GAAP financial measures may not be defined in the same manner by other companies and, as a result, may not be comparable to other similarly titled measures used by other companies. Also, these non-GAAP financial measures should not be construed as alternatives, or superior, to other measures determined in accordance with GAAP.

Reconciliation - GAAP Operating Expenses to Core Operating Expenses (in thousands):

Q3 Q2 Q1 Q4 Q3 Nine Months Ended September 30, 2021 2021 2021 2020 2020 2021 2020GAAP total $ 17,976 $ 20,682 $ 18,616 $ 20,470 $ 17,728 $ 57,274 $ 56,763 expensesMerger ? ? ? (287 ) (377 ) ? (452 ) expensesNon-cashsoftware ? ? ? (1,248 ) ? ? ? write-downNon-cashequity (74 ) (10 ) (3 ) (98 ) (93 ) (87 ) (370 ) compensationCoreOperating $ 17,902 $ 20,672 $ 18,613 $ 18,837 $ 17,258 $ 57,187 $ 55,941 Expenses incDep and AmorLess:Depreciation 2,946 2,950 2,960 3,042 2,601 8,856 8,278 andamortizationCoreOperating $ 14,956 $ 17,722 $ 15,653 $ 15,795 $ 14,657 $ 48,331 $ 47,662 Expenses ex.Dep and Amor

Reconciliation - GAAP Net Income (Loss) to Core Net Income (Loss) (in thousands)

Q3 Q2 Q1 Q4 Q3 Nine Months Ended September 30, 2021 2021 2021 2020 2020 2021 2020GAAP netincome $ 8,794 $ (1,836 ) $ 18,889 $ (3,390 ) $ 250 $ 25,847 $ (8,404 ) (loss)Add: loss(gain) onFV of (6,042 ) 3,056 (15,003 ) ? ? (17,989 ) ? privatewarrantliabilityAdd:non-cashloss on ? ? ? 1,248 ? ? ? softwarewrite-downAdd:merger ? ? ? 287 377 ? 452 expensesLess: tax(@27%) on ? ? ? (414 ) (102 ) ? (122 ) non-coreitemsCore netincome $ 2,752 $ 1,220 $ 3,886 $ (2,269 ) $ 525 $ 7,858 $ (8,074 ) (loss)Corediluted 11,904 11,976 15,512 6,123 6,123 12,059 6,123 sharesCoredilutedearnings $ 0.23 $ 0.10 $ 0.25 $ (0.37 ) $ 0.09 $ 0.65 $ (1.32 ) (loss) pershare

Reconciliation - GAAP Net Income to Core EBITDA (in thousands)

Q3 Q2 Q1 Q4 Q3 Nine Months Ended September 30, 2021 2021 2021 2020 2020 2021 2020GAAP netincome $ 8,794 $ (1,836 ) $ 18,889 $ (3,390 ) $ 250 $ 25,847 $ (8,404 ) (loss)Add: loss(gain) on FVof private (6,042 ) 3,056 (15,003 ) ? ? (17,989 ) ? warrantliabilityAdd:depreciation 2,946 2,950 2,960 3,042 2,601 8,856 8,278 andamortizationAdd: ? 42 54 248 353 96 1,146 interestAdd: taxes 1,246 949 1,827 2 7 4,022 21 Add:non-cash 74 10 3 98 93 87 370 equitycompensationAdd:non-cashloss on ? ? ? 1,248 ? ? ? softwarewrite-downAdd: merger ? ? ? 287 377 ? 452 expensesCore EBITDA $ 7,018 $ 5,171 $ 8,730 $ 1,535 $ 3,681 $ 20,919 $ 1,864

Key Performance Metrics - 5 Quarters

Q3 Q2 Q1 Q4 Q3 Q3 YoY Change 2021 2021 2021 2020 2020 $ %Debit cardPOS spend ($ millions)Higher $ 617 $ 661 $ 735 $ 567 $ 633 $ (16 ) (3 ) %educationNew business 156 167 145 114 108 48 44 %Debit cardPOS spend - $ 773 $ 828 $ 880 $ 681 $ 741 $ 32 4 %total Serviceddeposits ($ millions)Higher $ 808 $ 506 $ 665 $ 405 $ 645 $ 163 25 %educationNew business 1,253 1,063 892 555 299 954 NMEndingservice $ 2,061 $ 1,569 $ 1,557 $ 960 $ 944 $ 1,117 118 %deposits -total Higher $ 575 $ 573 $ 600 $ 511 $ 541 $ 34 6 %educationNew business 1,157 986 717 418 217 940 NMAverageservice $ 1,732 $ 1,559 $ 1,317 $ 929 $ 758 $ 974 128 %deposits -total HigherEducation MetricsHighereducation 99.3 % 99.5 % 99.5 % 99.4 % 99.7 % (0.4 ) % retentionFAR(1)disbursement $ 4.1 $ 2.3 $ 4.2 $ 1.9 $ 3.3 $ 0.7 22 %amount ($billions)Organicdeposits(2) $ 468 $ 566 $ 651 $ 438 $ 501 $ (33 ) (7 ) %- highereducation

NM refers to changes greater than 150%

(1) FAR disbursements are Financial Aid Refund disbursements from a higher education institution. (2) Organic Deposits are all higher education deposits excluding any funds disbursed directly from the school.