BM Technologies Reports First Quarter 2024 Results

Revenues and EBITDA Reflect Significant Improvement Year over Year

Q1 2024 Revenue of $16.2 Million, Net Income of $0.7 Million

Q1 2024 Core EBITDA of $1.4 Million

RADNOR, PA / ACCESSWIRE / May 15, 2024 / BM Technologies, Inc. (NYSE American:BMTX) ("BM Technologies", "BMTX", "we", or the "Company"), one of the largest digital banking platforms and Banking-as-a-Service (BaaS) providers in the country, today reported results for the three months ended March 31, 2024.

Luvleen Sidhu, BMTX's Chair, CEO, and Founder, stated, "The first quarter of 2024 marked an important turning point in our company's evolution. The hard work of 2023 has begun to pay off as we posted positive net income of $0.7 million and Core EBITDA of $1.4 million."

Ms. Sidhu continued, "Following the transfer of higher education deposits to First Carolina Bank in December 2023, the first quarter of 2024 marked the first full quarter of benefits we were able to receive from Durbin-exempt interchange rates. The result of the deposit transfer, coupled with variable rate deposit pricing supported by a stabilized interest rate environment, contributed to our increased revenue and overall profitability. Interchange and card revenue increased 15% in the first quarter of 2024 compared to the same period last year and servicing revenue increased 35% year-over-year. The revenue increase coupled with targeted reductions in expenses contributed to the $5.7 million QoQ improvement in net income compared to last year. The first phase of our technology transformation efforts were completed in April of this year and will continue to position us to show benefits throughout 2024 as we aim to return to consistent profitability, grow our student business and provide best-in-class banking products to our customers."

First Quarter 2024 Financial Highlights

• Operating revenues for the three months ended March 31, 2024 totaled $16.2 million compared to $13.4 million in Q1 2023.
• Q1 2024 net income totaled $0.7 million, or $0.06 per diluted share. Q12023 net loss was $(5.0) million or $(0.43) per diluted share
• Q1 2024 Core EBITDA ¹ totaled $1.4 million compared to Q1 2023 Core EBITDA of $(1.9) million
• Liquidity remained strong at March 31, 2024 with $14.6 million of cash, $4.8 million of working capital, and no debt.

First Quarter 2024 Operating Highlights

• Average serviced deposits totaled $828 million and ending serviced deposits totaled $820 million at March 31, 2024.
• Debit card spend totaled $809 million in Q1 2024.
• There were approximately 100 thousand new account sign-ups in the first quarter 2024.
• Higher Education Organic Deposits (deposits that are not part of a school disbursement and are indicative of primary banking behavior) for the three months ended March 31, 2024 totaled $449 million.

Financial Summary Table

NM - Not meaningful

Business Update

Higher Education Vertical

During the first quarter ended March 31, 2024, the Company retained 99% of its Higher Education institutional clients. The Company signed 3 new colleges and universities in Q1 2024, providing approximately 16,000 additional students access to BankMobile Disbursements and the BankMobile Vibe checking account.

During the first quarter of 2024, the Company disbursed over $4.3 billion in refunds to students. Of the $4.3 billion, approximately 12%, or $523 million, was disbursed into BankMobile Vibe checking accounts. We continue to see higher education student enrollment numbers rebound, post pandemic, in the community college segment which is increasing application flow and customer acquisition opportunities.

Higher Education average serviced deposits and ending serviced deposits totaled $537 million and $535 million, respectively, for the three month period ended March 31, 2024. Debit card point of sale spend remained strong increasing by 3% during Q1 2024 as compared to Q1 2023. Deposits and spend per 90-day active account during the first quarter of 2024 were $2,025 and $2,396, respectively.

In the first quarter, we launched a new student identity verification service, BMTX Identity Verification (IDV), a SaaS revenue product that assists universities in mitigating fraud vulnerabilities during the student enrollment process. As part of our improved technology stack and service offering, IDV increases stickiness and lifetime value of our existing higher education relationships.

Additionally, the first quarter marked the completion of our technology transformation with an updated mobile app and web interface, improving user experience and customer feature set.

BaaS Vertical

Annualized debit card spend for highly active BaaS users (those with both direct deposit and a minimum of five customer driven transactions per month) was $20,100, and the average deposit balance per account was $1,668 at March 31, 2024. This very attractive cohort makes up approximately 23% of active accounts at March 31, 2024, as compared to 21% in the year-ago period.

BaaS average serviced deposits and ending serviced deposits totaled $290 million and $284 million, respectively, at March 31, 2024 and debit card point of sale spend during Q1 2024 increased 1% from Q1 2023.

Profit Enhancement Plan (PEP)

The Company continues to actively execute upon its PEP, with initiatives completed during 2023 that reduced Core Operating Expenses ¹ by approximately $9.5 million. We expect further cost savings from this initiative in 2024.

Technology Initiatives and Outlook

Jamie Donahue, President and Chief Technology Officer stated, "Our technology transformation is driven by our vision to modernize our platform architecture and offer innovative products and services to our customers. We are executing on that vision and delivering exciting new features for our clients. Our primary focus over the next few quarters will be to add a rewards engine to allow our students to take advantage of their everyday spending. We will also be enhancing our direct deposit experience and external account linking for funding; all these changes are expected to make the BankMobile Vibe account a feature-rich, lifelong checking and savings account that will grow with our student population."

Growth Initiatives and Outlook

The Company anticipates revenue growth in 2024 driven by investments in the Higher Education vertical and the full year effect of Durbin-exempt interchange rates on the majority of serviced deposit account holder's debit card spend. The Company also expects a positive Core EBITDA¹ in 2024 based on these higher revenues and stricter cost controls implemented as part of the Company's PEP.

Earnings Webcast

The Company will host a conference call and webcast on Thursday, May 16, 2024, at 9:00 am ET to discuss its first quarter 2024 results. The webcast can be accessed via the Company's investor relations site (ir.bmtxinc.com) by clicking on "Events & Presentations", then "Events Calendar," and following the link under "Upcoming Events;" or directly at 1Q24 Webcast Link . A replay will be available following the call.

Contact Information

Investors:
Ajay Asija, Chief Financial Officer
BM Technologies, Inc.
AAsija@bmtx.com

Media Inquiries:
Brigit Hennaman
Rubenstein Public Relations, Inc.
bhennaman@rubensteinpr.com

About BM Technologies, Inc.

BM Technologies, Inc. (NYSE American:BMTX) - formerly known as BankMobile - is among the largest digital banking platforms and Banking-as-a-Service (BaaS) providers in the country, providing access to checking and savings accounts and financial wellness. It is focused on technology, innovation, easy-to-use products, and education with the mission to financially empower millions of Americans by providing a more affordable, transparent, and consumer-friendly banking experience. BM Technologies, Inc. (BMTX) is a technology company and is not a bank, which means it provides banking services through its partner banks. More information can be found at www.bmtx.com.

Forward Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainty. In general, forward-looking statements may be identified through the use of words such as "anticipate," "believe", "estimate," "expect," "intend," "plan," "will," "should," "plan," "continue," "potential" and "project" or the negative of these terms or other similar words and expressions, and in this press release, include the expected margin improvement on Durbin-exempt interchange fees, achievement of the PEP target as a result of the expected cost savings from the PEP, and the expected growth outlook and results from operations during 2024. 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 Management's 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, continuing interest rate volatility, 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 Company's partners, including bank partners, higher education partners, and BaaS partners. Further information regarding additional factors which could affect the forward-looking statements contained in this press release can be found in the cautionary language included under the headings "CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS" and "Risk Factors" in the Company's Annual Report on Form 10-K and other documents filed with the Securities and Exchange Commission ("SEC"). The Company's SEC filings are available publicly on the SEC website at www.sec.gov.

Many of these factors are beyond the Company's ability to control or predict. If one or more events related to these or other risks or uncertainties materialize, or if the underlying assumptions prove to be incorrect, actual results may differ materially from the forward-looking statements. Accordingly, shareholders and investors should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this communication, and BMTX undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law. BMTX qualifies all forward-looking statements by these cautionary statements.

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

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

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 the Company does not consider indicative of its core operating performance, including restructuring, merger and acquisition related expenses, fair value mark to market income or expense associated with certain warrants, impairment of developed software, and non-cash share-based compensation. 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)

Reconciliation - GAAP Net Loss to Core Net (Loss) Income (in thousands, except per share data)

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

Key Performance Metrics

(1) FAR disbursements are Financial Aid Refund disbursements from a higher education institution.

(2) Organic Deposits are all deposits excluding any funds disbursed directly from the school.

¹ Metrics such as Core EBITDA (Loss), Core Earnings (Loss), and Core Operating Expense are non-GAAP measures which exclude certain items from or add certain items to the comparable GAAP measure; a reconciliation appears on pages 8 and 9 of this release.

SOURCE: BM Technologies