BM Technologies, Inc.

Good day and thank you for standing by. Welcome to the BMTX 3Q 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. If you require any further assistance, press star 0. I would now like to hand the conference over to your speaker today, Bob Ramsey, CFO. Thank you. Please go ahead.

Thank you, and good morning, everyone, and thank you for joining us on BM Technologies' third quarter 2021 earnings webcast. Our earnings release, merger announcement, and investor presentation were issued earlier this morning, and all are posted on the investor relations page of the company's website at ir.bmtxinc.com. Our investor presentation includes important details that we will be walking through on this morning's webcast, and I encourage everyone to pull up a copy. Before we begin, I would like to remind you that some of the statements we make today may be considered forward-looking. These forward-looking statements are subject to a number of risks and uncertainties that may cause actual performance results to differ materially from what is currently anticipated. Please note that these forward-looking statements speak only as of the date of this presentation, and we undertake no obligation to update these forward-looking statements in light of new information or future events, except to the extent required by applicable securities laws. Please refer to our SEC filings, including our Form 10-K and 10-Q, for a more detailed description of the risk factors that may affect our results. Copies may be obtained from the SEC or by visiting the Investor Relations section of our website. This morning, I am joined by BM Technologies CEO, Loveline Sadu, Chief Operating Officer, Bob Deagle, and CTO, Jamie Donahue. At this time, it's my pleasure to turn the call over to Loveline.

Thank you, Bob. Good morning, everyone, and thank you for joining BM Technologies' third quarter earnings call. As Bob said, joining us today is also our COO, Bob Deagle, and our CTO, Jamie Donahue. who are on the line and available during the Q&A section. We are thrilled to be sharing with you two great accomplishments this morning, the first being our record Q3 results and the second, our exciting strategic merger with First Sound Bank. Before we get started diving into both of these significant updates, for those joining us for the first time, I wanted to provide a brief overview of who we are. BMTX is one of the largest digital banking platforms in the country today with over 2 million accounts. We are on a mission to make banking better for millions of Americans by providing a more affordable, transparent, and consumer-friendly banking experience. We were one of the first neobanking fintechs to go public earlier this year, are one of the first to have a profitable business model, and are now among the first fintechs embracing a bank charter to create an innovative fintech bank with a sustainable, profitable business model into the future. We pursue a B2B2C and a banking as a service strategy, which allows us to acquire bank customers at low cost and at high volume. Today, we are acquiring customers at less than $10. This provides a tremendous competitive edge for us relative to not only traditional banks, but also to most challenger banks, which are having to spend an exorbitant amount to acquire a bank customer. Today, we are leveraging our B2B2C and banking as a service strategy in three main verticals. The first being higher education vertical, where we have relationships with approximately 745 campuses across the country which allows us to touch one in every three college-bound students and introduce them to BM Technologies and offer to them a choice to open a BankMobile Vibe checking account through our partner bank. It is through this vertical that we disburse $11 to $12 billion a year, of which approximately $2 billion flow into BankMobile Vibe checking accounts. And we are opening several hundred thousand new accounts a year through this channel. The second vertical is our banking as a service business. Through our proprietary API-driven banking as a service platform and our white label interface, we are able to help fintechs and brands launch fully branded financial services products to their customers and to their employees at a fraction of the cost and at a fraction of the time it would take them to roll this out on their own. Our offering provides them with a strong point of differentiation that leads to attracting new customers, building greater customer loyalty, adding new revenue streams, and accessing data to provide an even more personalized experience to their customers. Additionally, our technology can also be used by community banks and credit unions to accelerate their digital strategies with state-of-the-art mobile and web-based banking apps. And we can also provide back office banking operations, compliance, fraud and risk management, and customer service support if needed. Our banking as a service vertical is best exemplified today by our partnership with T-Mobile and with the launch of our checking account product, T-Mobile Money. We continue to expand and significantly grow this relationship. Lastly, our workplace banking vertical, where we distribute the BankMobile suite of banking products to employees across the country as a financial wellness offering. We continue to make solid progress in all three of these verticals. As mentioned, we are a mission-driven company first and foremost and are dedicated to our vision of making financial services more accessible and affordable and to financially empower millions of Americans. From a financial standpoint, our vision continues to be to create a company with a market cap of 500 million to a billion over the next three to five years by executing on the strategy that we've laid out and building upon the strong foundation we already have. So let's get started. Flipping to slide four. I am delighted to report to you record results for the third quarter and first nine months of 2021. we are pleased to report Q3 2021 EBITDA of $7 million, up 91% year-over-year, and Q3 year-to-date EBITDA of $20.9 million. Additionally, given our performance to date, we are excited to raise our 2021 EBITDA guidance to $26 million from $24 million. Q1 revenues improved 20% year-over-year with Q3 revenues of $22 million. Additionally, we continued to add new accounts to our portfolio and added approximately 157,000 new accounts in Q3 and approximately 350,000 new accounts year-to-date. Moving on to slide five. Here we graphically show our strong year-over-year growth in revenue and EBITDA. Revenue for the first nine months of 2021 totaled $69.3 million, a 40% increase from the first nine months of 2020. Core EBITDA for the first nine months of 2021 totaled $20.9 million, an 867% increase from the first nine months of 2020. On slide six, you can see that our average service deposits totaled $1.7 billion in Q3 2021, a 128% increase compared to Q3 2020. I would like to point out that at the end of the quarter, service deposits surpassed $2 billion for the first time. Specifically, average new business service deposits increased 433% compared to Q3 2020. which is a $940 million increase. As a reminder, our new business segment includes our banking as a service and workplace banking verticals. In our student business, organic deposits, also as a reminder, these are deposits that are above and beyond any school disbursement, increased 17% year over year to $1.7 billion for the nine months ending September 30th, 2021, indicating strong primary banking behavior. Additionally, debit card spend was $773 million in Q3 2021, a 4% increase compared to Q3 2020, and new business debit spend increased 44% compared to Q3 2020. Lastly, in the higher education vertical, we disbursed $10.6 billion to students year to date, of which $1.4 billion has been deposited into BankMobile Vibe accounts held at our partner bank. Moving to slide seven. We continue to see strong performance in the overall business. Our revenues per active account increased 31% year-over-year to $47. Again, this is an unannualized third quarter revenue number. The strong revenue per account metric is driven by healthy average balances and spend across the portfolio. Again, we couldn't be more excited about our record financial results, and now I will pass it on to our CFO, Bob Ramsey, for some additional financial details.

Bob Ramsey Thank you, Levleen. I'm going to continue on slide seven. And everyone can see that the average deposit balances per active account in our new business segment increased an impressive 295% year-over-year to approximately $10,000 today. Average balances in the student business increased 23% year-over-year and today are over $1,800. Similarly, on the spend side, our new business active accounts quarterly spend increased by 7% year-over-year to approximately $1,350. And student quarterly spend is even higher at over $1,800, a 13% year-over-year increase. I want to also highlight that on the new business side of our operations, in addition to the strong overall account metrics that I just shared, in the third quarter, highly active users, or those defined as having both direct deposit and a minimum of five customer-driven transactions per month, have annualized spend of nearly $1,600 on their debit cards and average deposit balances of over 4,300. This very attractive cohort makes up approximately 17% of active accounts compared to 12% in the year-ago period. Moving to slide eight. Slide eight illustrates several of our KPIs. You can see here that average service deposits increased 128% year-over-year to $1.7 billion. And I'll remind everyone that on an ending balance basis, we surpassed $2 billion in deposits for the first time. Debit card spend increased 4% year-over-year. Our year-to-date financial aid refund disbursements increased 17% to $4.1 billion. And retention of college and universities remains near 100%. Turning to slide nine, slide nine includes our income statement. Compared to the year-ago period, our revenues increased 20% to $22 million, with the strongest growth in our deposit servicing fees fueled by strong growth in service deposits. Our core operating expenses, excluding depreciation and amortization, increased just 2% to $15 million. This quarter, we recognized a benefit from retroactive pricing on a vendor whose contract we renegotiated, which did benefit expenses. And looking to next quarter, we expect our core OPEX to be somewhere between the second and third quarter amounts. Subtracting our core expenses, excluding depreciation and amortization from revenues, and we earned $7 million in core EBITDA this quarter, which is a 91% increase from $3.7 million in the year-ago period. We also updated our full-year EBITDA guidance to $26 million, which implies approximately $5 million in the fourth quarter. With that, I'll turn it back over to Loveleen to walk you through slide 10.

Thanks, Bob. So on slide 10, I would now like to provide you with a few key business updates. In the higher education vertical, in addition to the positive trend in account-level deposits and spend, which I have already covered, we continue to see additional positive trends. For example, we added 12 new partnerships with colleges and universities across the U.S. year to date. Over 71,000 additional students now have access to BankMobile disbursements and the BankMobile Vibe checking account. Additionally, we retained almost 100% of our higher education institutions this year and disbursed $10.6 billion to students year to date of which $1.4 billion has been deposited into BankMobile Vibe checking accounts. We also continue to expand our product offering and have signed three new colleges and universities up for our new vendor pay offering, which creates more stickiness with the schools we do business with today. We also announced in August our plans to serve banks and credit unions looking to expand their digital presence through our proprietary banking-as-a-service technology stack. We also continue to build out an ecosystem of value-additive services for our higher education account holders to build greater stickiness and engagement. Most recently, we entered into a partnership with TutorGigs, which employs college students as tutors, providing students additional sources of income and driving customer engagement. Lastly, I am proud to share that BMTX and T-Mobile were selected as the best FinTech partnership at Finnovate 2021, one of the leading FinTech organizations for the innovation we together have demonstrated through the launching of the T-Mobile money checking account. Next on slide 11. Now to talk about the most exciting and impactful update of the quarter. This morning, we announced the signing of a definitive agreement to merge with First Sound Bank, a Seattle, Washington-based community bank. This is a thrilling milestone for BM Technologies and is a major step forward in executing our vision to create a disruptive fintech bank. We are joining the likes of a few other innovative fintechs in the marketplace that have taken a similar step of combining a fintech with a charter such as Square, Lending Club, Varo, and SoFi. Similar to these other fintechs, we believe this is a critical step in order to create a sustainable, profitable company with numerous growth opportunities in the future. We believe there are several strategic and financial benefits to this merger. First, we create a fintech bank. that combines the best of financial technology, including our proprietary banking as a service offering, with all that a bank charter has to offer, thus combining both the deposit and asset sides of the balance sheet. Second, we accelerate our earning power by supplementing fee-based income with net interest income. Third, we are now able to offer new products and services over time through the addition of new banking products, which will also help us better attract, engage, and retain customers, and help us fulfill our customer for life strategy. Fourth, this move enables us to become a fintech bank that can support other fintechs to come to market, similar to what CrossRiver, WebBank, MetaBank, and a few other players are doing today. Fifth, This helps us enhance our customer lifetime value by providing access to lending and other banking products which we can cross-sell to our customers. Overall, our vision over time is to create a fintech bank that combines the best of banking as a service, plus a marketplace lender, plus personal investing and robo-advisory services, plus blockchain-based payment system to create an unparalleled customer experience. Flipping to slide 12, I wanted to highlight a few transaction details. BMTX will pay up to $7.22 in cash for each share of FSB or First Sound Bank common stock, or approximately $23 million in aggregate consideration. The combined company to be named BMTX Bank will be led by me as chair and CEO. I will also be directly responsible for our digital banking initiatives. Marty Steele, the current CEO of First Sound Bank and a veteran banker, will serve as COO of BMTX Bank and will lead the combined company's community banking division. The transaction is subject to regulatory approval and other customary closing conditions and is expected to close in the second half of 2022. I am sure you will have some questions for us about this merger over the coming months, but in closing, thankfully for us, we have a competitive edge as we were born within a bank and operated as a bank for six years prior to divesting as an independent fintech company earlier this year, which provides us with a huge competitive advantage relative to other fintechs hoping to become banks. Additionally, we strongly believe a bank is the most profitable way for us to operate our model versus a bank partner model where we need to share in revenues and have less control over our financial future. Lastly, we will be a tech-driven, fee-based fintech bank, which we believe will also drive strong valuations based on EBITDA and earnings. which should provide compelling returns for our shareholders. I am thrilled to share with you this huge step forward in the evolution of our company and believe it will be a trend-setting strategic merger that other fintechs may follow. On slide 13, I want to quickly highlight some of the tremendous growth opportunities in front of us. In our student business, we continue to work on expanding the number of college relationships that we have which gives us access to more students who can potentially convert to bank account customers. We are also investing in marketing to drive more bank account adoption and retention. With regards to existing banking as a service partnerships, we continue to enhance our product offering for T-Mobile money and further expand it to new channels. We also continue to work on our pipeline for new partners. Lastly, we are also open to exploring possible strategic M&A opportunities like the one I shared with you today, where one plus one can equal three or more. On slide 14, we reiterate that we want to continue expanding our product offering so we can have the best-in-class digital banking platform that includes banking, lending, advice, crypto, investing, and insurance. We will keep you posted as we continue to add new products and services over the next 6 to 18 months. On slide 15, I would like to end by summarizing our key investment highlights. We continue to share record results with core EBITDA up 91% year-over-year and revenue up 20% year-over-year. We have an established customer base with over 2 million accounts. We have solid account growth and open 157,000 new accounts in Q3 and 350,000 accounts year to date. We demonstrate deep customer engagement with an unannualized revenue per active account up 31% year over year, driven by higher average balances and spend. We have strong existing partnerships with approximately 745 university partners and T-Mobile. We have developed a proprietary banking as a service platform, which is API driven and ready to roll out quickly and integrate with partners easily. We have a very attractive valuation, which today is at a deep discount relative to both private and public peers. And lastly, we couldn't be more thrilled and excited about our growth prospects once our merger is complete and we become a true FinTech bank. Once again, I want to thank our investors and shareholders for their continued support and also to all the BMTX team members whose passion and dedication make all of this possible. Operator, we would now like to open the line for questions.

At this time, if you would like to ask a question, please press star, then the number one on your telephone keypad. Again, that is star one. We'll pause for just a moment. Your first question comes from the line of Mike Grundahl with Northland Securities.

Hi, Mike. How are you?

Hey, Loveline. I'm well. I'm well. And congrats on a nice quarter, Loveline and Bob. Hey, Mike, my first question, just looking at the trends in new business, maybe especially deposits and to a lesser extent spend, Can you just help us understand what's driving that specifically in new business and kind of how you're thinking about it in terms of kind of an outlook and what kind of growth you think you can generate going forward?

Yeah, so I'll take that one first, Mike. So, yeah, we have seen really nice growth in the new business, particularly on the deposit side of things. I think that the industry has got excess liquidity and there are excess deposits out there. I think that we did implement in partnership with our partner earlier this year some changes in the way that accounts qualify for interest as we're trying to really incentivize growth in usage of these accounts. And I think that what we see is metrics overall were really happy with the traction.

And to show that it's a combination of strong balances and spend, we did talk about how about 17% of the portfolio is what we call active transactors. They are both direct depositors and doing at least five transactions per month. And their annualized spend is at about $16,000. So again, you know, our goal is to have nice strong balances and spend, and we are demonstrating both.

Got it. And is there, do you feel good about projecting Similar growth or or how do you just think about that over the next six months to 12 months?

So I think, you know, the balances per account can't grow to the moon, but I think that what's going to really be the real driver of growth in new business is account growth. And so I think we will continue to see good growth in deposits and spend, and we'll continue to see good growth in spend per account and maybe a little bit more modest in balances per account, but we do expect to see continued growth overall.

Got it, got it. And then, hey, flipping to the merger, which gives you a lot of capabilities, it sounds like it's nicely accretive. Loveleen, if you had to pick two things that that merger or acquisition will help you with, what are the two things that stick out the most for you?

Sure. So I think what is very important to acknowledge is that it will accelerate our earnings power. I think everyone sort of understands that our model in banking as a service, we were able to create a very low cost, high volume acquisition model. But what we essentially provide today are banking products and services, checking, savings, loans, products, et cetera. And that today requires us to work with a partner bank. And obviously when you work with a partner, there is sharing in revenues. But when you have your own charter, you are able to create more control over your financials into the future and create more sustainable, profitable growth by owning that entire revenue. And so that is what, number one, we are able to accomplish by creating this merger with First Sound Bank. Secondly, we are really excited because it is very obvious as we're seeing Square, Lending Club, SoFi, and other very innovative fintech players in the marketplace embrace the charter, that once you have a fintech that also has a charter with it, you're able to add new products, new services, that you're able to attract new customers, and engage with them better, cross-sell to them, and retain them as well. That enhances customer lifetime value over time. So those are two very exciting things that this 100% helps us to accelerate and create into the future through this really trend-setting, what we believe, strategic merger.

Great. Thank you, guys.

Thanks, Mike.

Thanks, Mike.

Your next question comes from Michael Diana with Maxim Group.

Good morning. Hi. Congratulations on the bank acquisition. I follow Lending Club, for example. I think it's a hugely positive thing for you so you can, as you said, capture all the economics. Could you talk for a second about you mentioned the closing It's probably the second half of 2022. I'm sure you're probably building in some conservatism there. But are there any issues you see in getting approved?

We have – sorry, I'll take it, Andy, and then you can follow up. So, yes, we've had preliminary conversations with the regulators. They're aware of our objectives and what we are trying to create. And so we really enjoyed this conversation prior to announcement today, which really puts us on a good path going forward to be in a really great position as we submit our application and go through this process over the coming months. But we are really excited to be in conversations with the FDIC, who is the current primary regulator for First Sound Bank. And as you probably read as well, they are, in my opinion, very innovative in their mindset as they think strategically about how banks and fintechs can work together. And so we feel privileged to be working with them. and conservatively would like to estimate that a closing in the second half of 2022, but given that we've already started the process with them, have had conversations, you know, it could potentially be earlier, but we want to be conservative in our estimates.

Okay, great. Thank you very much.

Thanks, Mike. Thanks, Mike. Your next question is from Chris Sakai with Singular Research. Good morning, Chris.

Hi, good morning. I guess to start, could you talk a little bit about, you know, interchange revenue? And it seems like it's been in a downtrend. I wanted to get your take on, you know, why that is and where you guys see it in the future. Sure.

Yeah, so I'll take that one, Chris. So, no, I would not describe interchange revenue as being in a downtrend. There was a bit of a true-up that did impact this quarter where we had been a little bit over-accrued in recent quarters, and we corrected that this quarter. But if you normalize that out, you really would see the interchange income track with debit card spend. And we provide those measures. Debit card spend is up year over year. There is seasonality, particularly on the student side of the business. But we would expect the card and interchange income to grow on a year-over-year basis, again, to normalize out the seasonality.

Okay. And then to go to your guidance, you know, revenue is what's staying flat, but EBITDA is growing. So what's going on there?

So I'm not sure what you mean by revenue is flat and EBITDA is growing. I mean, as we look at the full year, I think we see very good growth in revenues, and that's driving the growth in EBITDA. Our expenses have been reasonably flat, and the revenue growth has been what's really been driving the EBITDA growth. Maybe do you want to ask it a different way? Maybe I'm not understanding your question.

Oh, okay. Yeah, I was just wondering what was driving the EBITDA growth there.

Yeah, no, our EBITDA growth has come from the top line, as I say, in the third quarter, and you would see similar trends for the year. We've had, you know, third quarter, we had 20% growth in top line revenues, and our expenses were roughly flat. And if you look at full year, we will have a little bit of expense growth, but it's the growth in revenues that's driving EBITDA.

Okay. Great. And then any sort of color on your new agreement with Tudor gigs? How is that going to add to the top line?

Yeah, so I think this is a really exciting partnership because it's so aligned with what we do in that core student business. We're offering our customers the opportunity through a partnership to be tutors and have additional sources of income. So we think this is going to benefit our top line primarily by driving greater engagement with the students of those accounts. They're going to see more value in the accounts themselves. Additionally, as they have more income, we expect that that income will be deposited into a BankMobile Vibe account, so it should benefit our deposit balances and then spend as they spend that money out. And then there also is a small referral fee. So, you know, several ways that we see this benefiting us financially, but even more importantly, I think this is a great strategic alignment for us and our customers.

Okay. All right. Great. Well, thanks.

Thank you.

Your next question is a follow-up from Mike Grundahl with Northland Securities.

A couple more questions. Howdy, howdy. A couple more questions. You know, as you own the bank yourselves, are you able to provide a range of what the savings will be if you don't have to, like, rent those services or profit share those services? with your current partner?

Yeah, I don't think we're going to provide specific earnings guidance, but I think the real benefit here is the ability to earn greater revenues by deploying those deposits into assets where we earn a net interest margin that exceeds the deposit servicing fee. The first benefit is really one to revenues, and it will ultimately depend on, you know, how quickly we deploy those deposits into loans, what the loan mix looks like, et cetera. We're still finalizing as we work through the regulatory process. what exactly that looks like, but I think you can look at the banking industry and make some reasonable assumptions around what that improved profitability looks like. And then as Lovleen, I think, also referred to, this does give us more options and control around additional products and services that we may be able to offer as well. So we'll get broader options of what we can offer, and then the servicing fee, we expect that the margin will do better than what we would otherwise earn.

And I would also like to clarify here that, you know, a traditional bank is net interest income driven. We are a fintech bank. And for us, we have fee-based income, which is a mix of interchange or banking as a service, software fees, et cetera, or university fees that are all fee-based in nature and reflective of a check-driven banking institution. And on top of that, we get benefit, which is supplemented by the net interest income.

Got it. Got it. Anything to call out in the workplace banking segment or other wins, if you will? I know you've been working on a few.

Yeah, we continue to, you know, have a strong pipeline in both workplace banking. We've talked a bit about what that pipeline consists of. a mix of HR brokers and other fintechs that focus on employee-based benefits, direct-to-employer strategy, digital benefit providers, and also our white-label pipeline remains strong. As we've talked about before, these take a very long sales cycle, but we have continued to say that we are hopeful that we can be able to share with you a win here fairly soon. So we will keep you posted on that.

Great. Hey, thanks, guys.

Thanks, Mike. Thanks, Mike. At this time, there are no additional audio questions.

OK. We do have some questions that have come in through the webcast. So I will read through some of those as we have a little bit more time. The first one, and Lovleen, I'll direct this to you, but feel free to bounce it back to me if you want. The first one is, what drove the decision to purchase a bank versus partnering with another bank? Also, will you be moving your deposits from your current partner bank to the combined new company when the deal closes?

Sure, I'll take that. So the decision to partner versus go through a merger, as we have done, it was very simple. So we have a partner relationship today. We've talked to you about having to potentially continue in a partner bank relationship into the future. And as I explained in our prepared remarks, we believe that a partner bank relationship is less accretive to us because we have to share in the revenues with a partner bank. Now, if you merge and you become a fintech that happens to have a charter, those economics remain with you. And you have the opportunity over time to actually expand the economics since you now have the deposit side of the balance sheet as well as the asset side of the balance sheet. So that is to answer number one. And I believe number two is will you be moving over the deposits? Yes. Over time, we will thoughtfully be moving over the deposits onto the balance sheet, which we would then deploy into loans. and that the timing and the size of that move is still being decided, and we will keep you guys posted on that overall timing. But we do continue to believe that this will be significantly accretive on our revenues, on an EBITDA, on an earnings basis over the next one to three years, And we are very excited and confident to be able to share that.

Thanks, Loveline. I'll take another question here. It asks if, given the acquisition, will BMPX continue to look for banking partners now that it's acquiring a bank? You know, I'll take that one. I think that becoming a bank ourselves negates the need for banking partners. And so the goal is, as Loveline has said over time, to bring people deposits onto our balance sheet rather than work through additional partners. Another question here asks, will the acquisition result in any changes to the terms of the existing warrants? I'll take that one as well. You know, the warrant agreements, as they are written, does have provisions for this sort of scenario, but effectively there are no changes in the warrants or the way that they would work. They simply would end up becoming warrants in the new security rather than in the current BPM technology stuff. We have another question here that talks about the process for bringing the deposits over and capital levels at the bank. I think we've said a few times that deposits will migrate over over time, and we are working through that plan with regulators. We do intend to support the balance sheet and those deposits with appropriate levels of capital. We want to have strong capital ratios for an institution that is a tech-driven bank that has good growth, and we will work through what those ratios look like as we finalize plans with our regulators. Let's see. There's a question here, Loveline, I'll let you take, that talks about some of the new opportunities for new products. It says, as we think about things like crypto and investing as pillars of development, are these opportunities that we will explore through partnerships or develop an in-house solution?

Yeah, I think that we've mentioned this on previous calls. Number one is our digital banking platform and continuing to grow build it out with products and services that are most compelling to consumers is of highest priority to us. We will take a build, a buy, and a partner mix of strategic moves to be able to accomplish this. And so, for example, we did talk about a partnership move to help us build out the credit monitoring and credit building through a partnership with Array that we announced in a previous quarter. So that's an example of a partnership You know, example of a merger is what we announced today to help build out and continue to enhance our banking products and our lending products, for example. And so it's really going to be a mix between build, buy, partner, as we continue to build out the digital banking platform, which is of strong and high priority for us.

Great. Thank you, Lovelane. Couple more questions here. We have a question asking, how many schools have adopted the vendor pay solution? We're happy that we signed our first three institutions this quarter, so we are sort of out of the gates, which is great. There is a question here about the company name, and can BMTX go back to the name BankMobile with the deal if it chooses? You know, I would remind everyone that the BankMobile brand still does exist in our higher education business. We are able to use that with our current partner bank, and so the BankMobile Vibe account does still exist. As we look forward with the transaction, the plan right now is to name the company BMTX Bank, but that doesn't mean that we wouldn't use the bank mobile brand in the student banking.

And I would add to that, the reason, you know, BMTX Bank is reflective of really the DNA of what we are trying to create here, and which not just that we're trying to create, but in essence what it is. It is a tech-driven, fintech-first bank. And so having our roots in our technology and making sure that we continue to be technology first in everything that we do is of, you know, greatest priority for us. And BMTX helps us continue to reflect that in our name.

Great. Thank you.

Maybe one more, Ramsey?

Yeah, one more. There's a question here around First Sound. Well, I'll do two more. One asks if First Sound does have any branches. They do have one branch, and we will continue to maintain that one branch. And then there's a question here about what do we plan to invest the deposits in on the asset side of the balance sheet? And I guess to answer that, I'll take that. We are looking to have a diversified balance sheet, one that we feel safe and comfortable about. We certainly will have an element of securities on the balance sheet, which would have very low credit risk and would help support liquidity. Additionally, First Sound has got a really great community commercial lending operation, and we believe that there is opportunity to grow that business where they are as they become part of a larger institution with better capital. And we also will be exploring the opportunity to expand or extend credit to our existing consumer customers, which we have talked about as being a part of our roadmap in the past. and we'll look at other ways to supplement and augment the asset strategy. So we're still finalizing, but there are a lot of things that we're looking at, and we ultimately are striving to generate a diversified asset strategy. Anything you would add on that, Lovlene?

Nope, that sounds good.

Okay. I think that's all we have time for.

Great. Thank you, everyone, again, for your continued support. We were so thrilled to be able to share, you know, strong quarter results, as well as we are so excited to be working with Marty and the rest of his team at First Sound Bank to really create a fintech bank of the future. So thank you so much and look forward to speaking to you next quarter.

Thank you, everyone.

Thank you. This concludes today's conference call. You may now disconnect. Speakers hold the line.