BM Technologies, Inc.

Good afternoon, everyone, and welcome to the BM Technologies first quarter 2023 earnings call. Please note that this event is being recorded. Following management's prepared remarks, we will hold a question and answer session. For those joining on the webcast, you can submit your questions online. At this time, I'd like to turn the conference over to Brian Franovo, Investor Relations for BM Technologies. Please go ahead, Brian.

Thank you, Operator, and good afternoon, everyone. Thank you for joining us for BM Technology's first quarter earnings call. Our earnings release and investor presentation were filed earlier this afternoon, and both are posted on the investor relations page of the company's website at ir.bmtxinc.com. Before we begin, we 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 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 law. Please refer to our SEC filings, including our Form 10-K and 10-Qs, 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 the website. At this time, it is my pleasure to turn the call over to Lavleen Sidhu, BM Technologies CEO. Lavleen?

Thank you, Brian, and good afternoon, everyone. On today's call, we'll discuss our first quarter financial results and provide updates on various initiatives. Additionally, we want to introduce you to our co-CEO, Raj Singh. To begin, it is clear that the last six to nine months have been quite volatile for the broader market. and specifically for FinTech companies. The effects of unprecedented interest rate increases, changes in the regulatory landscape, pressure on FinTech valuations, and the end of unprecedented stimulus into the system, just to name a few, have all impacted our business. These changes have forced us to closely examine and in some ways reposition our business to adapt to the realities of today. As we look back on the last few months, We are grateful for this change, as we believe it is helping us build a stronger foundation for growth and increase shareholder value into the future. We will talk more about some of these changes throughout our call today. Before getting into that, I would like to briefly mention some financial highlights from the quarter. Operating revenues totaled $13.5 million, average service deposits totaled $1.2 billion, and debit card spend totaled 0.8 billion, a 16% increase from fourth quarter 2022. As mentioned in our earnings release, first quarter 2023 tracked very closely to our expectations. Our first quarter results were temporarily negatively impacted by the loss of Durban exempt interchange until we transition our higher education business to a new sponsor bank. Our spend and deposit metrics for this business have improved quarter over quarter, and these positive fundamentals will drive revenue growth once we transition to our new partner bank. Regulatory review of our partnership with First Carolina Bank is underway, and we continue to receive positive progress to date. I would now like to recap some of the significant steps we took in the first quarter to help strengthen our business. At the top of the year, we focused on establishing key agreements and renewals with Customers Bank, First Carolina Bank, and our largest FAS partnership to position our company for continued growth and margin expansion in today's high rate environment. Beginning in the second quarter, we expect servicing fee margins to improve by over 150 basis points at the current fed funds rate due to our new variable rate deposit servicing agreements. Additionally, significant work has been done to advance our profit enhancement plan to ensure profitability positive cash flow, and reinforce our commitment to being a lean and efficient fintech. We are on track to realize the benefits of our profit enhancement plan with a goal of cutting core operating costs by $15 million in 2023. Initiatives completed during the first quarter collectively comprise nearly 50% of our targeted $15 million cost savings goal that will be realized throughout the remainder of 2023. Lastly, Adding Raj as our co-CEO has helped strengthen our team and we see significant new opportunities on the horizon for our company. In addition to investing in product upgrades to increase customer adoption and retention, we are also focusing on improving productivity and operational effectiveness throughout the business. We are accomplishing this through better leverage of technology and automation to streamline operations and the expanded use of data-driven decisioning. We believe these investments will lead to financial improvements, enhanced customer experiences, and continued value creation for our shareholders. I will now turn the call over to our CFO, Jim Dellinger, to review our financial performance during the quarter.