Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 15, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-38633 | |
Entity Registrant Name | BM Technologies, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-3410369 | |
Entity Address, Address Line One | 201 King of Prussia Road, Suite 350 | |
Entity Address, City or Town | Wayne | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19087 | |
City Area Code | 877 | |
Local Phone Number | 327-9515 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,206,378 | |
Entity Central Index Key | 0001725872 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Stock | |
Trading Symbol | BMTX | |
Security Exchange Name | NYSEAMER | |
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | |
Trading Symbol | BMTX-WT | |
Security Exchange Name | NYSEAMER |
CONSOLIDATED BALANCE SHEETS - U
CONSOLIDATED BALANCE SHEETS - UNAUDITED - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | |
ASSETS | |||
Cash and cash equivalents | $ 20,407 | $ 2,989 | |
Accounts receivable, net allowance for doubtful accounts of $103 and $0 for the periods ending September 30, 2021 and December 31, 2020, respectively. | 4,498 | 7,384 | |
Prepaid expenses and other assets | 2,046 | 2,348 | |
Total current assets | 26,951 | 12,721 | |
Premises and equipment, net | 305 | 401 | |
Developed software, net | 31,691 | 39,657 | |
Goodwill | 5,259 | 5,259 | |
Other intangibles, net | 4,830 | 5,070 | |
Other assets | 840 | 853 | |
Total assets | 69,876 | 63,961 | |
Liabilities: | |||
Accounts payable and accrued liabilities | 8,225 | 7,346 | |
Taxes payable | 863 | 0 | |
Payable to partner bank | 6,914 | 5,105 | |
Borrowings from partner bank | 0 | 21,000 | |
Current portion of operating lease liabilities | 596 | 701 | |
Deferred revenue, current | 4,306 | 2,588 | |
Total current liabilities | 20,904 | 36,740 | |
Non-current liabilities: | |||
Operating lease liabilities | 0 | 430 | |
Deferred revenue, non-current | 223 | 2,101 | |
Liability for private warrants | 12,850 | 0 | |
Total liabilities | 33,977 | 39,271 | |
Commitments and contingencies (Note 8) | |||
Shareholders’ equity: | |||
Preferred stock: Par value $0.0001 per share; 10,000,000 authorized, none issued or outstanding at both September 30, 2021 and December 31, 2020. | 0 | 0 | |
Common stock: Par value $0.0001 per share; 1 billion shares authorized; 12,206,378 shares issued and outstanding at September 30, 2021; 6,123,432 shares issued and outstanding at December 31, 2020. | 1 | 1 | |
Additional paid-in capital | 49,379 | 64,017 | |
Accumulated deficit | (13,481) | (39,328) | |
Total shareholders’ equity | 35,899 | 24,690 | [1] |
Total liabilities and shareholders’ equity | $ 69,876 | $ 63,961 | |
[1] | Retroactively restated in connection with the merger. |
CONSOLIDATED BALANCE SHEETS -_2
CONSOLIDATED BALANCE SHEETS - UNAUDITED (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 103 | $ 0 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 12,206,378 | 6,123,432 |
Common stock, shares outstanding (in shares) | 12,206,378 | 6,123,432 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (LOSS) - UNAUDITED - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Operating revenues: | ||||
Total operating revenues | $ 21,974 | $ 18,338 | $ 69,250 | $ 49,528 |
Operating expenses: | ||||
Technology, communication, and processing | 4,596 | 6,637 | 22,172 | 20,586 |
Salaries and employee benefits | 6,728 | 5,689 | 19,321 | 19,796 |
Professional services | 3,496 | 2,159 | 7,359 | 7,286 |
Provision for operating losses | 1,067 | 1,419 | 3,797 | 3,326 |
Occupancy | 282 | 435 | 918 | 1,240 |
Customer related supplies | 1,017 | 195 | 1,678 | 717 |
Advertising and promotion | 176 | 266 | 492 | 693 |
Merger and acquisition related expenses | 0 | 377 | 0 | 452 |
Other | 614 | 551 | 1,537 | 2,668 |
Total operating expenses | 17,976 | 17,728 | 57,274 | 56,764 |
Income (loss) from operations | 3,998 | 610 | 11,976 | (7,236) |
Non-operating income and expense: | ||||
Gain on fair value of private warrant liability | 6,042 | 0 | 17,989 | 0 |
Interest expense | 0 | (353) | (96) | (1,146) |
Income (loss) before income tax expense | 10,040 | 257 | 29,869 | (8,382) |
Income tax expense | 1,246 | 7 | 4,022 | 21 |
Net income (loss) | $ 8,794 | $ 250 | $ 25,847 | $ (8,403) |
Basic shares outstanding (in shares) | 11,900 | 6,123 | 11,534 | 6,123 |
Diluted shares outstanding (in shares) | 11,904 | 6,123 | 12,059 | 6,123 |
Basic (loss) earnings per common share (in dollars per share) | $ 0.74 | $ 0.04 | $ 2.24 | $ (1.37) |
Diluted (loss) earnings per common share (in dollars per share) | $ 0.74 | $ 0.04 | $ 0.65 | $ (1.37) |
Interchange and card revenue | ||||
Operating revenues: | ||||
Total operating revenues | $ 5,572 | $ 7,377 | $ 21,109 | $ 20,053 |
Servicing fees from partner bank | ||||
Operating revenues: | ||||
Total operating revenues | 11,823 | 5,814 | 31,774 | 15,604 |
Account fees | ||||
Operating revenues: | ||||
Total operating revenues | 2,628 | 2,789 | 7,955 | 8,517 |
University fees | ||||
Operating revenues: | ||||
Total operating revenues | 1,474 | 1,348 | 4,129 | 4,028 |
Other revenue | ||||
Operating revenues: | ||||
Total operating revenues | $ 477 | $ 1,010 | $ 4,283 | $ 1,326 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - UNAUDITED - USD ($) $ in Thousands | Total | Common Stock | Additional Paid in Capital | Accumulated Deficit | |
Balance, beginning of period (in shares) at Dec. 31, 2019 | [1] | 6,123,432 | |||
Balance, beginning of period at Dec. 31, 2019 | [1] | $ 34,630 | $ 1 | $ 62,164 | $ (27,535) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (4,534) | (4,534) | |||
Capital contribution from Customers Bank | 864 | 864 | |||
Balance, end of period (in shares) at Mar. 31, 2020 | 6,123,432 | ||||
Balance, end of period at Mar. 31, 2020 | 30,960 | $ 1 | 63,028 | (32,069) | |
Balance, beginning of period (in shares) at Dec. 31, 2019 | [1] | 6,123,432 | |||
Balance, beginning of period at Dec. 31, 2019 | [1] | 34,630 | $ 1 | 62,164 | (27,535) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (8,403) | ||||
Balance, end of period (in shares) at Sep. 30, 2020 | 6,123,432 | ||||
Balance, end of period at Sep. 30, 2020 | 26,271 | $ 1 | 62,208 | (35,938) | |
Balance, beginning of period (in shares) at Dec. 31, 2019 | [1] | 6,123,432 | |||
Balance, beginning of period at Dec. 31, 2019 | [1] | 34,630 | $ 1 | 62,164 | (27,535) |
Balance, end of period (in shares) at Dec. 31, 2020 | [1] | 6,123,432 | |||
Balance, end of period at Dec. 31, 2020 | [1] | 24,690 | $ 1 | 64,017 | (39,328) |
Balance, beginning of period (in shares) at Mar. 31, 2020 | 6,123,432 | ||||
Balance, beginning of period at Mar. 31, 2020 | 30,960 | $ 1 | 63,028 | (32,069) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (4,119) | (4,119) | |||
Capital contribution from Customers Bank | 401 | 401 | |||
Balance, end of period (in shares) at Jun. 30, 2020 | 6,123,432 | ||||
Balance, end of period at Jun. 30, 2020 | 27,242 | $ 1 | 63,429 | (36,188) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 250 | 250 | |||
Capital contribution from Customers Bank | (1,221) | (1,221) | |||
Balance, end of period (in shares) at Sep. 30, 2020 | 6,123,432 | ||||
Balance, end of period at Sep. 30, 2020 | 26,271 | $ 1 | 62,208 | (35,938) | |
Balance, beginning of period (in shares) at Dec. 31, 2020 | [1] | 6,123,432 | |||
Balance, beginning of period at Dec. 31, 2020 | [1] | 24,690 | $ 1 | 64,017 | (39,328) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 18,889 | 18,889 | |||
Valuation of private warrants | (30,839) | (30,839) | |||
Recapitalization transaction (in shares) | 6,076,946 | ||||
Recapitalization transaction | 16,148 | 16,148 | |||
Balance, end of period (in shares) at Mar. 31, 2021 | 12,200,378 | ||||
Balance, end of period at Mar. 31, 2021 | 28,888 | $ 1 | 49,326 | (20,439) | |
Balance, beginning of period (in shares) at Dec. 31, 2020 | [1] | 6,123,432 | |||
Balance, beginning of period at Dec. 31, 2020 | [1] | 24,690 | $ 1 | 64,017 | (39,328) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 25,847 | ||||
Balance, end of period (in shares) at Sep. 30, 2021 | 12,206,378 | ||||
Balance, end of period at Sep. 30, 2021 | 35,899 | $ 1 | 49,379 | (13,481) | |
Balance, beginning of period (in shares) at Mar. 31, 2021 | 12,200,378 | ||||
Balance, beginning of period at Mar. 31, 2021 | 28,888 | $ 1 | 49,326 | (20,439) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (1,836) | (1,836) | |||
Balance, end of period (in shares) at Jun. 30, 2021 | 12,200,378 | ||||
Balance, end of period at Jun. 30, 2021 | 27,052 | $ 1 | 49,326 | (22,275) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 8,794 | 8,794 | |||
Issuance of common stock (in shares) | 6,000 | ||||
Issuance of common stock | 53 | 53 | |||
Balance, end of period (in shares) at Sep. 30, 2021 | 12,206,378 | ||||
Balance, end of period at Sep. 30, 2021 | $ 35,899 | $ 1 | $ 49,379 | $ (13,481) | |
[1] | Retroactively restated in connection with the merger. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Cash Flows from Operating Activities: | |||||||
Net income (loss) | $ 8,794 | $ 18,889 | $ 250 | $ (4,534) | $ 25,847 | $ (8,403) | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation of premises and equipment | 100 | 100 | 147 | 252 | |||
Amortization of developed software | 2,800 | 2,700 | 8,467 | 8,229 | |||
Amortization of other intangible assets | 100 | 100 | 240 | 584 | |||
Amortization of leased assets | 644 | 760 | |||||
Share-based compensation expense | 87 | 370 | |||||
Gain on fair value of private warrant liability | (6,042) | 0 | (17,989) | 0 | |||
Changes in operating assets and liabilities: | |||||||
Accounts receivable, net | 2,886 | 2,108 | |||||
Prepaid expenses and other current assets | 302 | 8,451 | |||||
Receivable from partner bank | 0 | (1,189) | |||||
Other assets | (631) | (397) | |||||
Accounts payable and accrued liabilities | 105 | 4,205 | |||||
Taxes payable | 863 | 0 | |||||
Operating lease liabilities | (535) | (815) | |||||
Deferred revenue | (160) | 511 | |||||
Payable to partner bank | 1,809 | 0 | |||||
Other liabilities | 0 | (2,998) | |||||
Net Cash Provided by Operating Activities | 22,082 | 11,668 | |||||
Cash Flows from Investing Activities: | |||||||
Purchase or development of internal use software | (501) | (3,102) | |||||
Purchases of premises and equipment | (51) | (50) | |||||
Net Cash Used in Investing Activities | (552) | (3,152) | |||||
Cash Flows from Financing Activities: | |||||||
Payment of capital distribution to partner bank | 0 | (326) | |||||
Repayment of borrowings from partner bank | (21,000) | 0 | |||||
Recapitalization transaction | 16,888 | 0 | |||||
Net Cash Used in Financing Activities | (4,112) | (326) | |||||
Net Increase in Cash and Cash Equivalents | 17,418 | 8,190 | |||||
Cash and Cash Equivalents – Beginning | $ 2,989 | $ 8,586 | 2,989 | 8,586 | $ 8,586 | ||
Cash and Cash Equivalents – Ending | $ 20,407 | $ 16,776 | 20,407 | 16,776 | $ 2,989 | ||
Supplementary Cash Flow Information: | |||||||
Income taxes paid (received), net of refunds | 3,124 | (704) | |||||
Interest paid | 178 | 0 | |||||
Noncash Operating, Investing and Financing Activities: | |||||||
Share-based compensation expense recorded as capital contribution from partner bank | $ 0 | $ 370 |
DESCRIPTION OF THE BUSINESS AND
DESCRIPTION OF THE BUSINESS AND MERGER TRANSACTION | 9 Months Ended |
Sep. 30, 2021 | |
Business Description And Reverse Recapitalization [Abstract] | |
DESCRIPTION OF THE BUSINESS AND MERGER TRANSACTION | DESCRIPTION OF THE BUSINESS AND MERGER TRANSACTION Description of the Business BM Technologies, Inc. (“BMT” or “the Company”) provides state-of-the-art high-tech digital banking and disbursement services to consumers and students nationwide through a full service fintech banking platform, accessible to customers anywhere and anytime through digital channels. BMT facilitates deposits and banking services between a customer and an FDIC insured partner bank. BMT’s business model leverages partners’ existing customer bases to achieve high volume, low-cost customer acquisition in its Higher Education Disbursement, Banking-as-a-Service (“BaaS”), and Workplace Banking businesses. BMT has four primary revenue sources: interchange and card revenue, servicing fees from our partner bank, account fees, and university fees. The majority of revenues are driven by customer activity (deposits, spend, transactions, etc.) but may be paid or passed through by our partner bank, universities, or paid directly by customers. BMT is a Pennsylvania corporation, incorporated in May 2016, and until January 4, 2021, was a wholly-owned subsidiary of Customers Bank (“Customers Bank”). Customers Bank is a Pennsylvania state-chartered bank and a wholly-owned subsidiary of Customers Bancorp, Inc. (the “Bancorp” or “Customers Bancorp”), a bank holding company. Customers Bank is our current partner bank. Our partner bank holds the FDIC insured deposits that we source and service and is the issuing bank on our debit cards. Our partner bank pays us a deposit servicing fee for the deposits generated and passes through interchange income earned from debit transactions. BMT is not a bank, does not hold a bank charter, and it does not provide banking services, and as a result we are not subject to direct banking regulation, except as a service provider to our partner bank. We are also subject to the regulations of the Department of Education, due to our student Disbursements business, and are periodically examined by them. Our contracts with most of our higher education institutional clients require us to comply with numerous laws and regulations, including, where applicable, regulations promulgated by the Department of Education (“ED”) regarding the handling of student financial aid funds received by institutions on behalf of their students under Title IV; FERPA; the Electronic Fund Transfer Act and Regulation E; the USA PATRIOT Act and related anti-money laundering requirements; and certain federal rules regarding safeguarding personal information, including rules implementing the privacy provisions of GLBA. Other products and services offered by us may also be subject to other federal and state laws and regulations. Seasonality BMT’s higher education serviced deposits fluctuate throughout the year due primarily to the inflow of funds typically disbursed at the start of a semester. Serviced deposit balances typically experience seasonal lows in December and July and experience seasonal highs in September and January when individual account balances are generally at their peak. Debit spend follows a similar seasonal trend, but may slightly lag increases in balances. Impact of COVID-19 & CARES Act In March 2020, the outbreak of COVID-19 was recognized as a pandemic by the World Health Organization. The spread of COVID-19 created a global public health crisis that resulted in unprecedented uncertainty, economic volatility and disruption in financial markets and in governmental, commercial and consumer activity in the United States and globally, including the markets that BMT serves. With the initial outbreak of COVID-19 in 2020, the Company experienced an initial decline in revenues as compared to the pre-COVID-19 period. On March 27, 2020, the “Coronavirus Aid, Relief, and Economic Security (CARES) Act” was signed into law and contained substantial tax and spending provisions intended to address the impact of the COVID-19 pandemic and stimulate the economy, including one-time cash payments to taxpayers, increased unemployment benefits, and to support higher education through the Higher Education Emergency Relief Fund (HEERF). This stimulus resulted in increased serviced deposit balances, debit card spend, and revenues, a trend that has continued through the first nine months of 2021. Merger with Megalith Financial Acquisition Corporation On January 4, 2021, BankMobile Technologies, Inc. (“BankMobile”), Megalith Financial Acquisition Corp. (“Megalith”), and MFAC Merger Sub Inc., consummated the transaction contemplated by the merger agreement entered into on August 6, 2020, as amended. In connection with the closing of the merger, Megalith changed its name to BM Technologies, Inc. Effective January 6, 2021, Megalith’s units ceased trading, and the Company’s common stock and warrants began trading on the NYSE American under the symbols “BMTX” and “BMTX-WT,” respectively. The merger was accounted for as a reverse recapitalization in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). Under this method of accounting, BankMobile was treated as the “acquirer” company for financial reporting purposes and as a result, the transaction was treated as the equivalent of BankMobile issuing stock for the net assets of Megalith, accompanied by a recapitalization. The excess of the fair value of the shares issued over the value of the net monetary assets of Megalith was recognized as an adjustment to shareholders’ equity. There was no goodwill or other intangible assets recorded in the merger. BankMobile was determined to be the accounting acquirer based on the following predominant factors: • Customers Bank stockholders had the largest portion of voting rights in the post-combination company; • The board of directors and senior management of the post-combination company are primarily composed of individuals associated with BankMobile; • BankMobile was the larger entity based on historical operating activity, assets, revenues and employees at the time of the closing of the merger; • The ongoing operating activities of the post-combination company comprise those of BankMobile. As a result of the merger transaction, BankMobile used proceeds from the recapitalization transaction to pay down its outstanding loan of $15.6 million, and received $1.3 million of cash, net of transaction costs, and issued an additional 6,076,946 shares of common stock of the Company. Out of Period Adjustment During the course of preparing its unaudited consolidated financial statements for the three and nine months ended September 30, 2021, the Company identified an adjustment totaling $0.8 million related to activity in the prior periods. The adjustment relates primarily to a true up of certain revenue resulting from a change in the invoicing process with one of the Company’s customers and a difference of interpretation of an agreement with them. The error resulted in the Company’s revenue and net income being overstated by $0.4 million for the years prior to 2021, $0.2 million for the three months ended March 31, 2021, and $0.2 million for the three months ended June 30, 2021. As such, the basic EPS and diluted EPS were overstated for each of the first two quarters of 2021. Basic EPS would have decreased by $0.02 and diluted by $0.01 for the three months ended March 31, 2021 because of this adjustment. The impact would have decreased basic EPS and diluted EPS by $0.02 for the three months ended June 30, 2021. The Company analyzed the potential impact of the error in accordance with the appropriate guidance, from both a qualitative and quantitative perspective, and concluded that the error was not material to any individual interim or annual periods in fiscal years 2019, 2020, the first and second quarters of 2021, or estimated annual period results in fiscal year 2021. Accordingly, during the three months ended September 30, 2021, the Company recorded the $0.8 million as a decrease in interchange and card revenue and a decrease in accounts receivable. |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These interim unaudited financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). These interim unaudited financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the financial position and the results of operations and cash flows of BMT for the interim periods presented. Material estimates that are particularly susceptible to significant change in the near-term relate to the valuation of deferred tax assets, the valuation of the private warrants, and the annual goodwill and intangible asset impairment analysis. Prior periods presented for comparative purposes represent the balances and activity of BankMobile Technologies, Inc. (other than shares which were retroactively restated in connection with the merger). Significant Accounting Policies These interim unaudited financial statements should be read in conjunction with the 2020 audited financial statements of BMT, which describe BMT’s significant accounting policies. There have been no material changes to BMT’s significant accounting policies during the nine months ended September 30, 2021. Certain information and footnote disclosures normally included in the annual financial statements have been omitted from these interim unaudited financial statements as permitted by U.S. GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are applicable to private companies. The Company has elected not to use the extended transition period under the JOBS Act. The Company has both Private and Public Warrants outstanding which are being treated differently for accounting purposes. Note 9 - Shareholders’ Equity and Private Warrant Liability provides additional information. Recently Adopted Accounting Standards On January 1, 2021, the Company adopted Financial Accounting Standards Board (“FASB”) ASU 2019-12: Simplifying the Accounting for Income Taxes (Topic 740) , which removes certain exceptions to the general principles in Topic 740 and improves the application of and simplifies guidance for other areas of Topic 740. The adoption did not have a material impact on the Company’s unaudited consolidated financial statements and related disclosures. Accounting Pronouncements Issued but Not Yet Adopted From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by BMT as of the required effective dates. The following paragraphs related to new pronouncements should be read in conjunction with Significant Accounting Policies of the Notes to the Audited Financial Statements included in our 2020 Form 10-K. Unless otherwise discussed, management believes the impact of any recently issued standards, including those issued but not yet effective, will not have a material impact on its financial statements taken as a whole. ASU 2020-04 - Reference Rate Reform (Topic 848) : Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This guidance provides optional expedients and exceptions for applying US GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. This ASU is effective as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact that ASU 2020-04 may have on its consolidated financial statements and related disclosures. In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20 ) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. As a smaller reporting company, ASU 2020-06 is effective for BMT for fiscal years beginning after December 15, 2023. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact that ASU 2020-06 may have on its consolidated financial statements and related disclosures. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLEAccounts receivable primarily relate to MasterCard incentive income, uncollected university subscription and disbursement services fees, and receivables from a banking-as-a-service partner, and are recorded at face amounts less an allowance for doubtful accounts. Management evaluates accounts receivable and establishes the allowance for doubtful accounts based on historical experience, analysis of past due accounts and other current available information. Accounts receivable deemed to be uncollectible are individually identified and are charged-off against the allowance for doubtful accounts. Charge-offs of uncollectible accounts have historically been immaterial. The allowance for doubtful accounts was $0.1 million at September 30, 2021 and zero at December 31, 2020. |
PREMISES AND EQUIPMENT AND DEVE
PREMISES AND EQUIPMENT AND DEVELOPED SOFTWARE | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PREMISES AND EQUIPMENT AND DEVELOPED SOFTWARE | PREMISES AND EQUIPMENT AND DEVELOPED SOFTWARE Premises and Equipment The components of premises and equipment were as follows: (amounts in thousands) Expected Useful Life September 30, December 31, Leasehold improvements 5 years $ 28 $ 28 Furniture, fixtures and equipment 10 years 243 243 IT equipment 3 to 5 years 1,726 1,675 1,997 1,946 Accumulated depreciation (1,692) (1,545) Total $ 305 $ 401 Depreciation is recorded in Occupancy on the unaudited consolidated statements of income (loss). For the three and nine months ended September 30, 2021, BMT recorded depreciation expense of $0.1 million and $0.1 million, respectively. For the three and nine months ended September 30, 2020, BMT recorded depreciation expense of $0.1 million and $0.3 million, respectively. Developed Software The components of developed software were as follows: (amounts in thousands) Expected Useful Life September 30, December 31, Higher One Disbursement business developed software 10 years $ 27,400 $ 27,400 Internally developed software 3 to 5 years 40,104 40,104 Work-in-process 2,121 1,620 69,625 69,124 Accumulated amortization (37,934) (29,467) Total $ 31,691 $ 39,657 Amortization expense is reported in Technology, communication and processing |
GOODWILL AND INTANGIBLES
GOODWILL AND INTANGIBLES | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLES | GOODWILL AND INTANGIBLES Goodwill represents the excess of the purchase price over the identifiable net assets of businesses acquired through business combinations accounted for under the acquisition method. Other intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. We currently have one intangible asset which is being amortized on a straight-line basis over twenty years. Goodwill and other intangible assets are reviewed for impairment annually as of October 31 and between annual tests when events and circumstances indicate that impairment may have occurred. The goodwill impairment charge represents the amount by which the reporting unit’s carrying amount exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company had $5.3 million of goodwill as of September 30, 2021 and December 31, 2020. The components of other intangibles as of September 30, 2021 and December 31, 2020 were as follows: (amounts in thousands) Expected Useful Life September 30, December 31, Customer relationships – universities 20 years $ 6,402 $ 6,402 Accumulated amortization (1,572) (1,332) Total $ 4,830 $ 5,070 Intangibles amortization expense is reported in Other expenses on the unaudited consolidated statement of income (loss). BMT recorded amortization expense of $0.1 million and $0.2 million for the three and nine months ended September 30, 2021, respectively. For the three and nine months ended September 30, 2020, BMT recorded amortization expense of $0.1 million and $0.6 million, respectively. The university customer relationships will be amortized in future periods as follows: Remainder of 2021 $ 80 2022 320 2023 320 2024 320 2025 320 After 2025 3,470 Total $ 4,830 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
LEASES | LEASES At September 30, 2021, BMT leased two offices under operating leases. The leases consist of 5-year lease terms with options to renew the leases or extend the term annually or with mutual agreement. Leases include variable lease payments that are based on an index or rate, such as an annual increase in operating expenses over the initial lease year’s expenses. Variable lease payments are not included in the liability or right-of-use (“ROU”) asset and are recognized in the period in which the obligations for those payments are incurred. BMT’s operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. As BMT’s operating leases do not provide an implicit rate, BMT utilized the incremental borrowing rate of our former parent when determining the present value of lease payments. The following table summarizes operating lease ROU assets and operating lease liabilities and their corresponding balance sheet classification: (amounts in thousands) Classification September 30, December 31, Assets: Operating lease ROU assets Other assets $ 574 $ 1,218 Liabilities: Operating lease liabilities Operating lease liabilities $ 596 $ 1,131 The following table summarizes operating lease cost and its corresponding income statement location for the periods presented: Three Months Ended Nine Months Ended (amounts in thousands) Classification 2021 2020 2021 2020 Operating lease cost Occupancy $ 225 $ 330 $ 742 $ 881 The maturities of non-cancelable operating lease liabilities were as follows at September 30, 2021: (amounts in thousands) September 30, 2021 $ 181 2022 419 Total minimum payments 600 Less: interest (4) Present value of lease liabilities $ 596 Cash paid pursuant to operating lease liabilities for the nine months ended September 30 was $0.5 million in 2021 and $1.0 million in 2020, and was reported as cash flows used in operating activities in the statement of cash flows. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | DEBTBorrowings from partner bankBMT has a $10.0 million line of credit with its partner bank. The amount that may be borrowed is subject to a borrowing base limit that is based on a percentage of BMT’s accounts receivable balance. The borrowing base limit was $4.3 million as of September 30, 2021. The $10.0 million line of credit carries an interest rate equal to one-month LIBOR plus 375 bps and matures on January 4, 2022. LIBOR means the One Month London Inter-Bank Offered Rate as published in the Money Section of the Wall Street Journal on the last U.S. business day of the month, but in no event shall LIBOR be less than 50 basis points. Interest is paid monthly in arrears with the principal due in its entirety at the maturity date on January 4, 2022. Borrowed funds may be repaid at any time without penalty. There was zero balance outstanding under the line of credit as of September 30, 2021. As of December 31, 2020, there was $21.0 million outstanding under a previous $50.0 million line of credit from the Company’s former parent, which has since been terminated. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIESLoss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are any such matters that will have a material effect on the financial statements that are not currently accrued for. However, in light of the uncertainties inherent in these matters, it is possible that the ultimate resolution may have a material adverse effect on BMT’s results of operations for a particular period, and future changes in circumstances or additional information could result in accruals or resolution in excess of established accruals, which could adversely affect BMT’s results of operations, potentially materially. |
SHAREHOLDERS' EQUITY AND PRIVAT
SHAREHOLDERS' EQUITY AND PRIVATE WARRANT LIABILITY | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY AND PRIVATE WARRANT LIABILITY | SHAREHOLDERS’ EQUITY AND PRIVATE WARRANT LIABILITY The consolidated statements of changes in equity reflect the reverse recapitalization as of January 4, 2021, as discussed in Note 1. Since BankMobile was determined to be the accounting acquirer in the transaction, all periods prior to the consummation of the transaction reflect the balances and activity of BankMobile (other than shares which were retroactively restated in connection with the transaction). Common Stock The Company is authorized to issue 1,000,000,000 shares of common stock, par value $0.0001 per share. At September 30, 2021, there w ere 12,206,378 shares o f common stock issued and outstanding, which includes the 300,000 performance shares discussed below. At December 31, 2020 there were 6,123,432 shares of common stock issued and outstanding as retroactively restated in conjunction with the merger. Each holder of common stock is entitled to one vote for each share of common stock held of record by such holder on all matters on which stockholders generally are entitled to vote. The holders of common stock do not have cumulative voting rights in the election of directors. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all stockholders present in person or represented by proxy, voting together as a single class. During the quarter ended September 30, 2021, the Company awarded 1,000 shares of common stock to each of its directors, the corresponding expense recognized was approximately $53 thousand. Performance Shares The Company has 300,000 common shares, par value $0.0001 per share, issued and outstanding that contain a restrictive legend, subject to release only if the vesting criteria occurs before the seventh anniversary of the closing date of the merger. If the vesting criteria has not occurred prior to the seven Preferred Stock The Company is authorized to issue 10,000,000 shares of preferred stock, par value $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At September 30, 2021 and December 31, 2020, there were no shares of preferred stock issued or outstanding. Warrants At September 30, 2021, there were 23,874,667 warrants to purchase our common stock outstanding, consisting of 16,928,889 public warrants and 6,945,778 private warrants. Each whole warrant entitles the registered holder to purchase one whole share of common stock at a price of $11.50 per share. The warrants will expire five years after the completion of the merger (January 4, 2026) or earlier upon redemption or liquidation and the Company has redemption rights if our common stock trades above $24.00 for 20 out of 30 days. The private warrants are identical to the public warrants except that the private warrants are non-redeemable and exercisable on a cashless basis so long as they are held by the sponsor and certain others. As of September 30, 2021, none of the Company’s outstanding Private or Public Warrants have been exercised. The Private Warrants and the Public Warrants are treated differently for accounting purposes, as follows: Private Warrants In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity, the Private Warrants are accounted for as liabilities and will be marked-to-market each reporting period with the change recognized in earnings. In general, under the mark-to-market accounting model, as our stock price increases, the warrant liability increases, and we recognize additional expense in our income statement – with the opposite when our stock price declines. Accordingly, the periodic revaluation of the Private Warrants could result in significant volatility in our reported earnings. For the three months ended September 30, 2021, we recognized a $6.0 million gain in our income statement due to the revaluation, and for the nine months ended September 30, 2021, we recognized a gain of $18.0 million. The amounts recognized are a mark-to-market accounting determination and are noncash. Additional information regarding the Private Warrants and their impact on our financial statements is provided below: Opening Balance Sheet Impact: As of the date of our merger on January 4, 2021, the $30.8 million fair value of the private warrants was recorded as a warrant liability on our balance sheet in Liability for private warrants with a corresponding offset to Additional paid-in-capital within equity. The fair value of the Private Warrants was estimated using a modified version of the Black-Scholes option pricing formula. We assumed a term for the Private Warrants equal to the contractual term from the merger date and then discounted the resulting value to the valuation date. Among the key inputs and assumptions, we used in the pricing formula at January 4, 2021: a term of 5.0 years; volatility of 20%; a dividend yield of zero; an underlying stock price of $14.76; a risk free interest rate of 0.38%; and a closing price of the Public Warrants of $2.50 per share. Income Statement Impact : Subsequent to the close of the merger, any change in the fair value of the Private Warrants is recognized in our income statement below operating profit as “G ain on fair value of private warrant liability ” with a corresponding amount recognized in the liability account on our balance sheet. The Private Warrant liability is presented in the account Liability for private warrants in the long-term liabilities section of our balance sheet. During the three and nine months ended September 30, 2021, we recorded a gain of $6.0 million and net gain of $18.0 million, respectively, on the revaluation of the Private Warrants. Balance Sheet Impact : As noted above, the change in the balance of the warrant liability on our balance sheet is due to the fair value change of the underlying warrants. When warrants are exercised, the fair value of the liability will be reclassified to Additional paid-in capital within equity. The cash received for the exercise of warrants is reflected in cash and cash equivalents, and the corresponding offset is also in Additional paid-in capital in equity. Cash Flow Impact : The impact of the change in fair value of the Private Warrants has no impact on our cash flows as it is a noncash adjustment. The cash received for any future exercise of warrants will be recorded in cash flows from financing activities. Shareholders’ Equity Impact : The impact to Additional paid-in-capital as of the opening balance sheet is highlighted above. Any future exercises of the Private Warrant warrants will result in a reduction of the Private Warrant liability on the balance sheet with a corresponding increase to Additional paid-in-capital. Public Warrants In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity, for accounting purposes the Public Warrants are treated as equity instruments. Accordingly, the Public Warrants are not marked-to-market each reporting period, thus there is no impact to quarterly earnings. Any future exercises of the Public Warrants will be recorded as cash received and recorded in cash and cash equivalents, with a corresponding offset to Additional paid-in-capital in equity. Dividend Policy We have not paid any cash dividends on our common stock to date and have no present intention to pay cash dividends in the future. The payment of cash dividends by the Company in the future will be dependent upon the Company’s revenues and earnings, if any, capital requirements and general financial condition. The payment of any dividends will be within the discretion of the board of directors of the Company. Further, the Company’s line of credit agreement with our lender prohibits the Company from issuing any dividends or making any distributions to shareholders. Equity Incentive Plan Our 2020 Equity Incentive Plan (the “Equity Incentive Plan”) provides for the grant of incentive stock options, or ISOs, nonstatutory stock options, or NSOs, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, and other forms of equity compensation, or collectively, stock awards, all of which may be granted to employees, including officers, non-employee directors and consultants of us and its affiliates. Additionally, the Equity Incentive Plan provides for the grant of performance cash awards. ISOs may be granted only to employees. All other awards may be granted to employees, including officers, and to non-employee directors and consultants. Initially, the aggregate number of shares of Common Stock that may be issued pursuant to stock awards under the Equity Incentive Plan will not exceed 10% of the issued and outstanding shares of our common stock. Grants were made under the Equity Incentive Plan for the three and nine month periods ended September 30, 2021 and the year ended December 31, 2020, please refer to our Restricted Stock Units discussion below. Restricted Stock Units (“RSUs”) On September 30, 2021, we granted 695,000 restricted stock units (“RSUs”) to certain executives. The RSUs will vest over three For service-based RSUs, we recognize the compensation cost on a straight-line basis for the remaining vesting period. For performance-based RSUs with milestones, each quarter we determine whether it is probable that we will achieve each operational milestone and if so, the period when we expect to achieve that operational milestone. When we first determine that achievement of an operational milestone is probable, we allocate the entire expenses over the period between the grant date and the expected achievement date and recognize a catch-up expense for the periods from the grant date through the period in which the operational milestone is deemed probable. For performance-based RSUs with market condition, we used a Monte Carlo simulation to determine the fair value of the RSUs on the grant date, and recognize the compensation cost over the derived service period. |
REVENUES
REVENUES | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Revenues The table below presents the Company’s revenues broken out by revenue stream and the timing of revenue recognition for the periods indicated. The Company has one reportable segment and all revenues are earned in the U.S. Three Months Ended Nine Months Ended (amounts in thousands) 2021 2020 2021 2020 Revenues: Revenue recognized at point in time: Interchange and card revenue $ 5,572 $ 7,377 $ 21,109 $ 20,053 Servicing fees from partner bank 11,823 5,814 31,774 15,604 Account fees 2,628 2,789 7,955 8,517 University fees - disbursement activity 380 309 918 990 Other 477 1,010 4,283 1,326 Total revenue recognized at point in time 20,880 17,299 66,039 46,490 Revenue recognized over time: University fees - subscriptions 1,094 1,039 3,211 3,038 Total revenue recognized over time 1,094 1,039 3,211 3,038 Total revenues $ 21,974 $ 18,338 $ 69,250 $ 49,528 Deferred revenues Deferred revenue consists of amounts received from clients prior to the performance of services. Deferred revenue is recognized over the service period on a straight-line basis or when the contractual performance obligation has been satisfied. The Company classifies deferred revenue on the balance sheet in Deferred revenue, current and Deferred revenue, non-curren t. The deferred revenue balances were as follows: September 30, (amounts in thousands) 2021 2020 Deferred revenue, beginning of period $ 4,689 $ 1,938 Deferred revenue, end of period $ 4,529 $ 2,449 During the nine months ended September 30, 2021, the Company recognized revenue of approximately $3.5 million included in deferred revenue at the beginning of the period. During the nine months ended September 30, 2020, the Company recognized all of the deferred revenue balance from the beginning of the period. Unbilled receivables The Company had $0.3 million of unbilled receivables as of September 30, 2021, and zero as of December 31, 2020. Unbilled receivables are reported in Accounts receivable |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXESThe Company records tax expense during interim periods using an estimated annual effective tax rate approach. The Company’s effective tax rate was 13.5% for the nine months ended September 30, 2021. The effective tax rate differs from the Company’s marginal tax rate of 27.0% due to the non-taxable fair value adjustments related to the non-compensatory private warrant liability being recorded through earnings, as well as tax expense related to the estimated annual increase of the valuation allowance established against deferred tax assets. The deferred tax asset at September 30, 2021 was $26.6 million and consisted mainly of Section 197 intangibles. These Section 197 intangibles resulted from a step up in tax basis of the assets acquired from BankMobile Technologies, Inc., which for GAAP purposes were not recorded at fair value. The Company has no net operating loss or other carryforward deferred tax assets. A valuation allowance is recognized when it is more likely than not that all or a portion of the deferred tax asset will be realized based on the weight of the available positive and negative evidence. Management determined the verifiable negative evidence from the cumulative losses business of BankMobile Technologies, Inc. outweighed any available positive evidence as of September 30, 2021, but will continue to evaluate this determination each quarterly period going forward. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE The following are the components and results of operations and earnings (loss) per common share calculations for the periods presented: Three Months Ended Nine Months Ended (amounts in thousands, except per share data) 2021 2020 2021 2020 Net (loss) income available to common shareholders - used in calculating basic EPS $ 8,794 $ 250 $ 25,847 $ (8,403) Adjustment for private warrant liability (1) — — 17,989 — Net (loss) income - used in calculating diluted EPS $ 8,794 $ 250 $ 7,858 $ (8,403) Weighted-average common shares outstanding – basic 11,900 6,123 11,534 6,123 Weighted-average common shares outstanding – diluted 11,904 6,123 12,059 6,123 Basic (loss) income per common share $ 0.74 $ 0.04 $ 2.24 $ (1.37) Diluted (loss) income per common share $ 0.74 $ 0.04 $ 0.65 $ (1.37) (1) Diluted earnings per share for the nine months ended September 30, 2021 is calculated based on adjusted net income of $7.9 million due to the elimination of the revaluation gain on the private warrant liability. The following table represents the reconciliation from basic to diluted shares weighted shares outstanding used in the calculation of basic and diluted earnings per share: Three Months Ended Nine Months Ended (amounts in thousands) 2021 2020 2021 2020 Weighted average shares used in computing net income per share of common stock, basic 11,900 6,123 11,534 6,123 Add: Public warrants — — 152 — Private warrants — — 372 — Time-based RSUs 4 — 1 — Weighted average shares used in computing net income per share of common stock, diluted 11,904 6,123 12,059 6,123 For the three months ending September 30, 2021, our public warrants, private warrants, and performance based shares were excluded from the computation of diluted weighted average shares outstanding as the necessary conditions had not been achieved for the performance based shares and the average stock price for the period was below the strike price for the warrants. For the nine months ending September 30, 2021, our performance based shares were excluded from the computation of diluted weighted average shares outstanding as the necessary conditions had not been achieved. For the three and nine months ended September 30, 2021, our performance based and market condition RSUs were excluded because the vesting is contingent upon the satisfaction of certain conditions which had not been achieved as of September 30, 2021. There were no potentially dilutive warrants or performance shares excluded from the calculation of diluted shares in periods presented because the impact would have been anti-dilutive. The following table presents the potentially dilutive shares that were excluded from the computation of diluted net income per share of common stock: Three Months Ended Nine Months Ended (amounts in thousands) 2021 2020 2021 2020 Performance based shares outstanding 300 — 300 — Public warrants 6,946 — — — Private warrants 16,929 — — — Performance based and market-condition RSUs 348 — 348 — Total 24,523 — 648 — |
DISCLOSURES ABOUT FAIR VALUE OF
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS | DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS BMT uses fair value measurements to disclose the fair value of its financial instruments. FASB’s ASC 825, Financial Instruments , requires disclosure of the estimated fair value of an entity’s assets and liabilities considered to be financial instruments. For fair value disclosure purposes, BMT utilized certain fair value measurement criteria under ASC 820, Fair Value Measurements (“ASC 820”), as explained below. In accordance with ASC 820, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for BMT’s financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. The fair value guidance provides a consistent definition of fair value, focusing on an exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. The fair value guidance also establishes a fair value hierarchy and describes the following three levels used to classify fair value measurements: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity). A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The following methods and assumptions were used to estimate the fair values of BMT’s financial instruments as of September 30, 2021 and December 31, 2020: Cash and cash equivalents: The carrying amount reported on the balance sheet for cash and cash equivalents consists of a non-interest bearing deposit, which approximates its fair value. The deposit is classified as a Level 1 fair value, based upon the lowest level of input that is significant to its fair value measurement. Accounts receivable: The carrying amount of accounts receivable approximates fair value because of the short-term nature of these items. Payable to partner bank: The payables to our partner bank represent the amount due resulting from normal operating activities between our partner bank and BMT. The carrying amount approximates its fair value due to the short-term nature of the item. Borrowings from partner bank: BMT has a $10.0 million line of credit with our partner bank, with zero outstanding as of September 30, 2021. The carrying amount of the borrowings from our partner bank approximates its fair value due to its floating interest rate and short-term nature. The liability is classified as a Level 2 fair value based upon the lowest level of input that is significant to the fair value measurement. As of December 31, 2020, there was $21.0 million outstanding under a previous $50.0 million line of credit from the Company’s former parent, which has since been terminated. Liability for Private Warrants: The fair value of the Private Warrants was estimated using a modified version of the Black-Scholes option pricing formula for European calls. We assumed a term for the Private Warrants equal to the contractual term from the merger date and then discounted the resulting value to the valuation date. Among the key inputs and assumptions, we used in the pricing formula at September 30, 2021 were the following: a term of 4.3 years; volatility of 35%; a dividend yield of zero; an underlying stock price of $8.90; a risk free interest rate of 0.81%; and a closing price of the Public Warrants of $1.49 per share. The warrant liability is classified as a Level 3 fair value based upon the lowest level of input that is significant to the fair value measurement. The estimated fair values of BMT’s financial instruments at September 30, 2021 and December 31, 2020 were as follows: Fair Value Measurements at September 30, 2021 (amounts in thousands) Carrying Amount Estimated Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 20,407 $ 20,407 $ 20,407 $ — $ — Liabilities: Liability for private warrants (a) $ 12,850 $ 12,850 $ — $ — $ 12,850 (a) The initial fair value of the warrants was $30.8 million on January 4, 2021, the merger date. The $18.0 million change in fair value during the nine months ended September 30, 2021 was reported in Gain on fair value of private warrant liability on the statements of income (loss). Fair Value Measurements at December 31, 2020 (amounts in thousands) Carrying Amount Estimated Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 2,989 $ 2,989 $ 2,989 $ — $ — Liabilities: Borrowings from partner bank $ 21,000 $ 21,000 $ — $ 21,000 $ — |
RELATIONSHIP WITH OUR PARTNER B
RELATIONSHIP WITH OUR PARTNER BANK | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATIONSHIP WITH OUR PARTNER BANK | RELATIONSHIP WITH OUR PARTNER BANK Our partner bank holds the FDIC insured deposits that we source and service and is the issuing bank on our debit cards. Our partner bank pays us a deposit servicing fee for the deposits generated and passes through interchange income earned from debit transactions. The CEO of our partner bank is an immediate family member of our CEO. Servicing fees and interchange income from partner bank On January 4, 2021, we entered into a Deposit Processing Services Agreement (the “Deposit Servicing Agreement”) with our partner bank, providing that it would establish and maintain deposit accounts and other banking services in connection with customized products and services offered by us, and we would provide certain other related services in connection with the accounts. The initial term continues until December 31, 2022, which shall automatically renew for additional three year terms unless either party gives written notice of non-renewal within 180 days prior to the expiration of the term. As compensation, our partner bank retains any and all revenue generated from the funds held in the deposit accounts and pays us a monthly servicing fee largely based on deposits, and a monthly interchange fee equal to all debit card interchange revenues on demand deposit accounts generated by us for our partner bank plus the difference between Durbin Exempt and Durbin regulated interchange revenue. Payable to partner bank At the end of each month, BMT and its partner bank typically have a cash settlement payment related to on-going operating activities between the entities. At September 30, 2021, BMT had $6.9 million payable to its partner bank, primarily consisting of prepaid fees and for certain services received, compared to $5.1 million at December 31, 2020. Bank Borrowings BMT has a $10.0 million line of credit with our partner bank, with zero outstanding at September 30, 2021. We had $21.0 million of debt outstanding at December 31, 2020 under the prior credit arrangement which has since been terminated. Transition Services Agreement On January 4, 2021, we entered into a Transition Services Agreement with our partner bank, pursuant to which each party agrees for a period of up to twelve months to provide certain transition services listed therein to the other party. In consideration for the services, we pay our partner bank a service fee of $12,500 per month, plus any expenses associated with the services. We may terminate the Transition Services Agreement without penalty with at least 30 days advance written notice if we determine there is no longer a business need for the services. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Merger with First Sound Bank On November 15, 2021, the Company announced the signing of a definitive agreement to merge with First Sound Bank (“FSB”). As part of the agreement, the Company will pay up to $7.22 in cash for each share of FSB common stock or approximately $23.0 million in aggregate consideration, subject to certain closing conditions and adjustments as outlined in the definitive agreement. The transaction is subject to regulatory approvals and other customary closing conditions, and is expected to close in 2022. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These interim unaudited financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). These interim unaudited financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the financial position and the results of operations and cash flows of BMT for the interim periods presented. Material estimates that are particularly susceptible to significant |
Recently Adopted Accounting Standards and Accounting Pronouncements Issued But Not Yet Adopted | Recently Adopted Accounting Standards On January 1, 2021, the Company adopted Financial Accounting Standards Board (“FASB”) ASU 2019-12: Simplifying the Accounting for Income Taxes (Topic 740) , which removes certain exceptions to the general principles in Topic 740 and improves the application of and simplifies guidance for other areas of Topic 740. The adoption did not have a material impact on the Company’s unaudited consolidated financial statements and related disclosures. Accounting Pronouncements Issued but Not Yet Adopted From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by BMT as of the required effective dates. The following paragraphs related to new pronouncements should be read in conjunction with Significant Accounting Policies of the Notes to the Audited Financial Statements included in our 2020 Form 10-K. Unless otherwise discussed, management believes the impact of any recently issued standards, including those issued but not yet effective, will not have a material impact on its financial statements taken as a whole. ASU 2020-04 - Reference Rate Reform (Topic 848) : Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This guidance provides optional expedients and exceptions for applying US GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. This ASU is effective as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact that ASU 2020-04 may have on its consolidated financial statements and related disclosures. In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20 ) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. As a smaller reporting company, ASU 2020-06 is effective for BMT for fiscal years beginning after December 15, 2023. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact that ASU 2020-06 may have on its consolidated financial statements and related disclosures. |
Dividends Policy | Dividend Policy |
PREMISES AND EQUIPMENT AND DE_2
PREMISES AND EQUIPMENT AND DEVELOPED SOFTWARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Components of Premises and Equipment and Developed Software | The components of premises and equipment were as follows: (amounts in thousands) Expected Useful Life September 30, December 31, Leasehold improvements 5 years $ 28 $ 28 Furniture, fixtures and equipment 10 years 243 243 IT equipment 3 to 5 years 1,726 1,675 1,997 1,946 Accumulated depreciation (1,692) (1,545) Total $ 305 $ 401 The components of developed software were as follows: (amounts in thousands) Expected Useful Life September 30, December 31, Higher One Disbursement business developed software 10 years $ 27,400 $ 27,400 Internally developed software 3 to 5 years 40,104 40,104 Work-in-process 2,121 1,620 69,625 69,124 Accumulated amortization (37,934) (29,467) Total $ 31,691 $ 39,657 |
GOODWILL AND INTANGIBLES (Table
GOODWILL AND INTANGIBLES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Components of Other Intangibles | The components of other intangibles as of September 30, 2021 and December 31, 2020 were as follows: (amounts in thousands) Expected Useful Life September 30, December 31, Customer relationships – universities 20 years $ 6,402 $ 6,402 Accumulated amortization (1,572) (1,332) Total $ 4,830 $ 5,070 |
Schedule of Future Amortization | The university customer relationships will be amortized in future periods as follows: Remainder of 2021 $ 80 2022 320 2023 320 2024 320 2025 320 After 2025 3,470 Total $ 4,830 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Summary of Operating Lease ROU assets and Liabilities | The following table summarizes operating lease ROU assets and operating lease liabilities and their corresponding balance sheet classification: (amounts in thousands) Classification September 30, December 31, Assets: Operating lease ROU assets Other assets $ 574 $ 1,218 Liabilities: Operating lease liabilities Operating lease liabilities $ 596 $ 1,131 |
Summary of Operating Lease Cost and Weighted Average Remaining Lease Term and Discount Rate | The following table summarizes operating lease cost and its corresponding income statement location for the periods presented: Three Months Ended Nine Months Ended (amounts in thousands) Classification 2021 2020 2021 2020 Operating lease cost Occupancy $ 225 $ 330 $ 742 $ 881 |
Maturities of Non-Cancelable Operating Lease Liabilities | The maturities of non-cancelable operating lease liabilities were as follows at September 30, 2021: (amounts in thousands) September 30, 2021 $ 181 2022 419 Total minimum payments 600 Less: interest (4) Present value of lease liabilities $ 596 |
REVENUES (Tables)
REVENUES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The table below presents the Company’s revenues broken out by revenue stream and the timing of revenue recognition for the periods indicated. The Company has one reportable segment and all revenues are earned in the U.S. Three Months Ended Nine Months Ended (amounts in thousands) 2021 2020 2021 2020 Revenues: Revenue recognized at point in time: Interchange and card revenue $ 5,572 $ 7,377 $ 21,109 $ 20,053 Servicing fees from partner bank 11,823 5,814 31,774 15,604 Account fees 2,628 2,789 7,955 8,517 University fees - disbursement activity 380 309 918 990 Other 477 1,010 4,283 1,326 Total revenue recognized at point in time 20,880 17,299 66,039 46,490 Revenue recognized over time: University fees - subscriptions 1,094 1,039 3,211 3,038 Total revenue recognized over time 1,094 1,039 3,211 3,038 Total revenues $ 21,974 $ 18,338 $ 69,250 $ 49,528 |
Deferred Revenue Balances | The deferred revenue balances were as follows: September 30, (amounts in thousands) 2021 2020 Deferred revenue, beginning of period $ 4,689 $ 1,938 Deferred revenue, end of period $ 4,529 $ 2,449 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Components and Results of Operations and Earnings (Loss) Per Common Share Calculations | The following are the components and results of operations and earnings (loss) per common share calculations for the periods presented: Three Months Ended Nine Months Ended (amounts in thousands, except per share data) 2021 2020 2021 2020 Net (loss) income available to common shareholders - used in calculating basic EPS $ 8,794 $ 250 $ 25,847 $ (8,403) Adjustment for private warrant liability (1) — — 17,989 — Net (loss) income - used in calculating diluted EPS $ 8,794 $ 250 $ 7,858 $ (8,403) Weighted-average common shares outstanding – basic 11,900 6,123 11,534 6,123 Weighted-average common shares outstanding – diluted 11,904 6,123 12,059 6,123 Basic (loss) income per common share $ 0.74 $ 0.04 $ 2.24 $ (1.37) Diluted (loss) income per common share $ 0.74 $ 0.04 $ 0.65 $ (1.37) |
Schedule of Weighted Average Shares Outstanding | The following table represents the reconciliation from basic to diluted shares weighted shares outstanding used in the calculation of basic and diluted earnings per share: Three Months Ended Nine Months Ended (amounts in thousands) 2021 2020 2021 2020 Weighted average shares used in computing net income per share of common stock, basic 11,900 6,123 11,534 6,123 Add: Public warrants — — 152 — Private warrants — — 372 — Time-based RSUs 4 — 1 — Weighted average shares used in computing net income per share of common stock, diluted 11,904 6,123 12,059 6,123 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents the potentially dilutive shares that were excluded from the computation of diluted net income per share of common stock: Three Months Ended Nine Months Ended (amounts in thousands) 2021 2020 2021 2020 Performance based shares outstanding 300 — 300 — Public warrants 6,946 — — — Private warrants 16,929 — — — Performance based and market-condition RSUs 348 — 348 — Total 24,523 — 648 — |
DISCLOSURES ABOUT FAIR VALUE _2
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Estimated Fair Values of Financial Instruments | The estimated fair values of BMT’s financial instruments at September 30, 2021 and December 31, 2020 were as follows: Fair Value Measurements at September 30, 2021 (amounts in thousands) Carrying Amount Estimated Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 20,407 $ 20,407 $ 20,407 $ — $ — Liabilities: Liability for private warrants (a) $ 12,850 $ 12,850 $ — $ — $ 12,850 (a) The initial fair value of the warrants was $30.8 million on January 4, 2021, the merger date. The $18.0 million change in fair value during the nine months ended September 30, 2021 was reported in Gain on fair value of private warrant liability on the statements of income (loss). Fair Value Measurements at December 31, 2020 (amounts in thousands) Carrying Amount Estimated Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 2,989 $ 2,989 $ 2,989 $ — $ — Liabilities: Borrowings from partner bank $ 21,000 $ 21,000 $ — $ 21,000 $ — |
DESCRIPTION OF THE BUSINESS A_2
DESCRIPTION OF THE BUSINESS AND MERGER TRANSACTION - Narrative (Details) $ / shares in Units, $ in Thousands | Jan. 04, 2021USD ($)shares | Sep. 30, 2021USD ($)$ / shares | Jun. 30, 2021USD ($)$ / shares | Mar. 31, 2021USD ($)$ / shares | Sep. 30, 2020USD ($)$ / shares | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2021USD ($)revenue_source$ / shares | Sep. 30, 2020USD ($)$ / shares | Dec. 31, 2020USD ($) |
Business Description And Reverse Recapitalization [Abstract] | ||||||||||
Number of primary revenue sources | revenue_source | 4 | |||||||||
Proceeds used to pay down outstanding debt | $ 15,600 | |||||||||
Cash received | $ 1,300 | |||||||||
Recapitalization transaction (in shares) | shares | 6,076,946 | |||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||
Decrease to accounts receivable | $ (4,498) | $ (4,498) | $ (7,384) | |||||||
Decrease to revenues | (21,974) | $ (18,338) | (69,250) | $ (49,528) | ||||||
Decrease to net income | $ (8,794) | $ 1,836 | $ (18,889) | $ (250) | $ 4,119 | $ 4,534 | $ (25,847) | $ 8,403 | ||
Decrease to basic EPS (in dollars per share) | $ / shares | $ (0.74) | $ (0.04) | $ (2.24) | $ 1.37 | ||||||
Decrease to diluted EPS (in dollars per share) | $ / shares | $ (0.74) | $ (0.04) | $ (0.65) | $ 1.37 | ||||||
Interchange and card revenue | ||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||
Decrease to revenues | $ (5,572) | $ (7,377) | $ (21,109) | $ (20,053) | ||||||
Out of period adjustment | ||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||
Decrease to accounts receivable | 800 | $ 800 | ||||||||
Decrease to revenues | 200 | 200 | 400 | |||||||
Decrease to net income | $ 200 | $ 200 | $ 400 | |||||||
Decrease to basic EPS (in dollars per share) | $ / shares | $ 0.02 | $ 0.02 | ||||||||
Decrease to diluted EPS (in dollars per share) | $ / shares | $ 0.02 | $ 0.01 | ||||||||
Out of period adjustment | Interchange and card revenue | ||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||
Decrease to revenues | $ 800 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Receivables [Abstract] | ||
Allowance for doubtful accounts | $ 0.1 | $ 0 |
PREMISES AND EQUIPMENT AND DE_3
PREMISES AND EQUIPMENT AND DEVELOPED SOFTWARE - Premises and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||||
Premises and equipment, gross | $ 1,997 | $ 1,997 | $ 1,946 | ||
Accumulated depreciation | (1,692) | (1,692) | (1,545) | ||
Total | 305 | 305 | 401 | ||
Depreciation expense | 100 | $ 100 | $ 147 | $ 252 | |
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Expected useful life (in years) | 5 years | ||||
Premises and equipment, gross | 28 | $ 28 | 28 | ||
Furniture, fixtures and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Expected useful life (in years) | 10 years | ||||
Premises and equipment, gross | 243 | $ 243 | 243 | ||
IT equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Premises and equipment, gross | $ 1,726 | $ 1,726 | $ 1,675 | ||
IT equipment | Minimum | |||||
Property, Plant and Equipment [Line Items] | |||||
Expected useful life (in years) | 3 years | ||||
IT equipment | Maximum | |||||
Property, Plant and Equipment [Line Items] | |||||
Expected useful life (in years) | 5 years |
PREMISES AND EQUIPMENT AND DE_4
PREMISES AND EQUIPMENT AND DEVELOPED SOFTWARE - Developed Software (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||||
Developed software, gross | $ 69,625 | $ 69,625 | $ 69,124 | ||
Accumulated amortization | (37,934) | (37,934) | (29,467) | ||
Total | 31,691 | 31,691 | 39,657 | ||
Amortization of developed software | 2,800 | $ 2,700 | $ 8,467 | $ 8,229 | |
Higher One Disbursement business developed software | |||||
Property, Plant and Equipment [Line Items] | |||||
Expected useful life (in years) | 10 years | ||||
Developed software, gross | 27,400 | $ 27,400 | 27,400 | ||
Internally developed software | |||||
Property, Plant and Equipment [Line Items] | |||||
Developed software, gross | 40,104 | $ 40,104 | 40,104 | ||
Internally developed software | Minimum | |||||
Property, Plant and Equipment [Line Items] | |||||
Expected useful life (in years) | 3 years | ||||
Internally developed software | Maximum | |||||
Property, Plant and Equipment [Line Items] | |||||
Expected useful life (in years) | 5 years | ||||
Work-in-process | |||||
Property, Plant and Equipment [Line Items] | |||||
Developed software, gross | $ 2,121 | $ 2,121 | $ 1,620 |
GOODWILL AND INTANGIBLES - Narr
GOODWILL AND INTANGIBLES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Intangible asset amortization period | 20 years | ||||
Goodwill | $ 5,259 | $ 5,259 | $ 5,259 | ||
Amortization expense | $ 100 | $ 100 | $ 240 | $ 584 |
GOODWILL AND INTANGIBLES - Comp
GOODWILL AND INTANGIBLES - Components of Other Intangibles (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Expected useful life (in years) | 20 years | |
Accumulated amortization | $ (1,572) | $ (1,332) |
Total | $ 4,830 | 5,070 |
Customer relationships – universities | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Expected useful life (in years) | 20 years | |
Other intangibles, gross | $ 6,402 | $ 6,402 |
GOODWILL AND INTANGIBLES - Futu
GOODWILL AND INTANGIBLES - Future Amortization (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2021 | $ 80 | |
2022 | 320 | |
2023 | 320 | |
2024 | 320 | |
2025 | 320 | |
After 2025 | 3,470 | |
Total | $ 4,830 | $ 5,070 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021USD ($)location | Dec. 31, 2020USD ($) | |
Leases [Abstract] | ||
Number of office space locations leased under operating leases | location | 2 | |
Operating lease terms (in years) | 5 years | |
Operating lease cash payments | $ | $ 0.5 | $ 1 |
LEASES - Operating Lease ROU As
LEASES - Operating Lease ROU Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Assets: | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets |
Operating lease ROU assets | $ 574 | $ 1,218 |
Liabilities: | ||
Present value of lease liabilities | $ 596 | $ 1,131 |
LEASES - Operating Lease Cost (
LEASES - Operating Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||||
Operating lease cost | $ 225 | $ 330 | $ 742 | $ 881 |
LEASES - Maturities of Non-Canc
LEASES - Maturities of Non-Cancelable Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2021 | $ 181 | |
2022 | 419 | |
Total minimum payments | 600 | |
Less: interest | (4) | |
Present value of lease liabilities | $ 596 | $ 1,131 |
DEBT (Details)
DEBT (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Line of Credit Facility [Line Items] | ||
Borrowings from partner bank | $ 0 | $ 21,000,000 |
Affiliated Entity | Partner Bank | ||
Line of Credit Facility [Line Items] | ||
Line of credit, maximum borrowing capacity | 10,000,000 | $ 50,000,000 |
Borrowing base limit | 4,300,000 | |
Line of credit, amount outstanding | $ 0 | |
Affiliated Entity | Partner Bank | LIBOR | ||
Line of Credit Facility [Line Items] | ||
Line of credit, basis spread on variable interest rate | 3.75% | |
Affiliated Entity | Partner Bank | LIBOR | Minimum | ||
Line of Credit Facility [Line Items] | ||
Line of credit, basis spread on variable interest rate | 0.50% |
SHAREHOLDERS' EQUITY AND PRIV_2
SHAREHOLDERS' EQUITY AND PRIVATE WARRANT LIABILITY (Details) $ / shares in Units, $ in Thousands | Jan. 04, 2021USD ($)trading_day$ / sharesshares | Sep. 30, 2021USD ($)vote$ / sharesshares | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)trading_dayvote$ / sharesshares | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)$ / sharesshares |
Equity [Abstract] | ||||||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Common stock, shares issued (in shares) | 12,206,378 | 12,206,378 | 6,123,432 | |||
Common stock, shares outstanding (in shares) | 12,206,378 | 12,206,378 | 6,123,432 | |||
Performance shares (in shares) | 300,000 | |||||
Number of votes for each share held | vote | 1 | 1 | ||||
Performance shares, period post closing date of merger after which shares would be forfeited and cancelled if no Release Event has occurred | 7 years | |||||
Performance shares, stock price trigger (in dollars per share) | $ / shares | $ 15 | |||||
Performance shares, threshold trading days | trading_day | 20 | |||||
Performance shares, threshold trading day period | trading_day | 30 | |||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | |||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | |||
Preferred stock, shares issued (in shares) | 0 | 0 | 0 | |||
Class of Warrant or Right [Line Items] | ||||||
Issuance of common stock | $ | $ 53 | |||||
Warrants to purchase common stock outstanding (in shares) | 23,874,667 | 23,874,667 | ||||
Number of whole shares of common stock entitled to purchase upon exercise of each whole warrant ( in shares) | 1 | 1 | ||||
Exercise price (in dollars per share) | $ / shares | $ 11.50 | $ 11.50 | ||||
Maximum expiration period after completion of merger (in years) | 5 years | |||||
Redemption rights, stock price trigger (in dollars per share) | $ / shares | $ 24 | $ 24 | ||||
Redemption rights, threshold trading days | trading_day | 20 | |||||
Redemption rights, threshold trading day period | trading_day | 30 | |||||
Gain on fair value of private warrant liability | $ | $ 6,042 | $ 0 | $ 17,989 | $ 0 | ||
Liability for private warrants | $ | $ 12,850 | $ 12,850 | $ 0 | |||
Maximum number of shares of Common Stock that may be issued pursuant to stock awards under Equity Incentive Plan, percentage of issued and outstanding shares of common stock (as a percent) | 10.00% | |||||
Director | ||||||
Class of Warrant or Right [Line Items] | ||||||
Issuance of common stock (in shares) | 1,000 | |||||
Issuance of common stock | $ | $ 53 | |||||
Restricted Stock Units (RSUs) | ||||||
Class of Warrant or Right [Line Items] | ||||||
RSUs granted (in shares) | 695,000 | |||||
Restricted Stock Units (RSUs) | Minimum | ||||||
Class of Warrant or Right [Line Items] | ||||||
Vesting period | 3 years | |||||
Restricted Stock Units (RSUs) | Maximum | ||||||
Class of Warrant or Right [Line Items] | ||||||
Vesting period | 5 years | |||||
Public Warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants to purchase common stock outstanding (in shares) | 16,928,889 | 16,928,889 | ||||
Outstanding warrants exercised (in shares) | 0 | 0 | ||||
Private Warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants to purchase common stock outstanding (in shares) | 6,945,778 | 6,945,778 | ||||
Outstanding warrants exercised (in shares) | 0 | 0 | ||||
Gain on fair value of private warrant liability | $ | $ 6,000 | $ 18,000 | ||||
Liability for private warrants | $ | $ 30,800 | |||||
Fair value assumptions, expected term (in years) | 5 years | 4 years 3 months 18 days | ||||
Fair value assumptions, volatility rate (as a percent) | 20.00% | 35.00% | ||||
Fair value assumptions, dividend yield | 0.00% | 0.00% | ||||
Fair value assumptions, underlying stock price (in dollars per share) | $ / shares | $ 14.76 | $ 8.90 | $ 8.90 | |||
Fair value assumptions, risk free interest rate (as a percent) | 0.38% | 0.81% | ||||
Fair value assumptions, exercise price, closing price of Public Warrants (in dollars per share) | $ / shares | $ 2.50 | $ 1.49 | $ 1.49 |
REVENUES - Disaggregation of Re
REVENUES - Disaggregation of Revenue (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | |
Revenue from Contract with Customer [Abstract] | ||||
Number of reportable segments | segment | 1 | |||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 21,974 | $ 18,338 | $ 69,250 | $ 49,528 |
Interchange and card revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 5,572 | 7,377 | 21,109 | 20,053 |
Servicing fees from partner bank | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 11,823 | 5,814 | 31,774 | 15,604 |
Account fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 2,628 | 2,789 | 7,955 | 8,517 |
University fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1,474 | 1,348 | 4,129 | 4,028 |
Other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 477 | 1,010 | 4,283 | 1,326 |
Revenue recognized at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 20,880 | 17,299 | 66,039 | 46,490 |
Revenue recognized at a point in time | Interchange and card revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 5,572 | 7,377 | 21,109 | 20,053 |
Revenue recognized at a point in time | Servicing fees from partner bank | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 11,823 | 5,814 | 31,774 | 15,604 |
Revenue recognized at a point in time | Account fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 2,628 | 2,789 | 7,955 | 8,517 |
Revenue recognized at a point in time | University fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 380 | 309 | 918 | 990 |
Revenue recognized at a point in time | Other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 477 | 1,010 | 4,283 | 1,326 |
Revenue recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1,094 | 1,039 | 3,211 | 3,038 |
Revenue recognized over time | University fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 1,094 | $ 1,039 | $ 3,211 | $ 3,038 |
REVENUES - Deferred Revenue Bal
REVENUES - Deferred Revenue Balances (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Change in Contract with Customer, Liability [Abstract] | |||
Deferred revenue, beginning of period | $ 4,689 | $ 2,449 | $ 1,938 |
Deferred revenue, end of period | $ 4,529 | $ 4,689 | $ 2,449 |
REVENUES - Narrative (Details)
REVENUES - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
Amount recognized in the period from amounts included in deferred revenue at beginning of period | $ 3.5 | |
Unbilled receivables | $ 0.3 | $ 0 |
INCOME TAXES (Details)
INCOME TAXES (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Income Tax Disclosure [Abstract] | |
Effective tax rate (as a percent) | 13.50% |
Marginal tax rate (as a percent) | 27.00% |
Deferred tax assets | $ 26.6 |
EARNINGS (LOSS) PER SHARE - Com
EARNINGS (LOSS) PER SHARE - Components and Results of Operations and Earnings (Loss) Per Common Share Calculations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Net (loss) income available to common shareholders - used in calculating basic EPS | $ 8,794 | $ 250 | $ 25,847 | $ (8,403) |
Adjustment for private warrant liability | 0 | 0 | 17,989 | 0 |
Net income (loss) - used in diluted EPS, diluted | $ 8,794 | $ 250 | $ 7,858 | $ (8,403) |
Weighted average common shares outstanding - basic (in shares) | 11,900 | 6,123 | 11,534 | 6,123 |
Weighted average common shares outstanding - diluted (in shares) | 11,904 | 6,123 | 12,059 | 6,123 |
Basic (loss) income per common share (in dollars per share) | $ 0.74 | $ 0.04 | $ 2.24 | $ (1.37) |
Diluted (loss) income per common share (in dollars per share) | $ 0.74 | $ 0.04 | $ 0.65 | $ (1.37) |
EARNINGS (LOSS) PER SHARE - Sum
EARNINGS (LOSS) PER SHARE - Summary of Weighted Average Shares Outstanding (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Class of Warrant or Right [Line Items] | ||||
Basic shares outstanding (in shares) | 11,900,000 | 6,123,000 | 11,534,000 | 6,123,000 |
Time-based RSUs (in shares) | 4,000 | 0 | 1,000 | 0 |
Diluted shares outstanding (in shares) | 11,904,000 | 6,123,000 | 12,059,000 | 6,123,000 |
Public Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants (in shares) | 0 | 0 | 152,000 | 0 |
Private Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants (in shares) | 0 | 0 | 372,000 | 0 |
EARNINGS (LOSS) PER SHARE - Ant
EARNINGS (LOSS) PER SHARE - Antidilutive Securities (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 24,523,000 | 0 | 648,000 | 0 |
Performance based shares outstanding | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 300,000 | 0 | 300,000 | 0 |
Public Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 6,946,000 | 0 | 0 | 0 |
Private Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 16,929,000 | 0 | 0 | 0 |
Performance based and market-condition RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 348,000 | 0 | 348,000 | 0 |
DISCLOSURES ABOUT FAIR VALUE _3
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($) | Jan. 04, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Line of Credit Facility [Line Items] | |||
Borrowings from partner bank | $ 0 | $ 21,000,000 | |
Private Warrants | |||
Line of Credit Facility [Line Items] | |||
Fair value assumptions, expected term (in years) | 5 years | 4 years 3 months 18 days | |
Fair value assumptions, volatility rate (as a percent) | 20.00% | 35.00% | |
Fair value assumptions, dividend yield | 0.00% | 0.00% | |
Fair value assumptions, underlying stock price (in dollars per share) | $ 14.76 | $ 8.90 | |
Fair value assumptions, risk free interest rate (as a percent) | 0.38% | 0.81% | |
Fair value assumptions, exercise price, closing price of Public Warrants (in dollars per share) | $ 2.50 | $ 1.49 | |
Affiliated Entity | Partner Bank | |||
Line of Credit Facility [Line Items] | |||
Line of credit, maximum borrowing capacity | $ 10,000,000 | $ 50,000,000 | |
Line of credit, amount outstanding | $ 0 |
DISCLOSURES ABOUT FAIR VALUE _4
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS - Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jan. 04, 2021 | Dec. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Liability for private warrants | $ 12,850 | $ 12,850 | $ 0 | |||
Gain on fair value of private warrant liability | 6,042 | $ 0 | 17,989 | $ 0 | ||
Carrying Amount | Fair Value, Recurring | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash and cash equivalents | 20,407 | 20,407 | 2,989 | |||
Borrowings from partner bank | 21,000 | |||||
Liability for private warrants | 12,850 | 12,850 | ||||
Estimated Fair Value | Fair Value, Recurring | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash and cash equivalents | 20,407 | 20,407 | 2,989 | |||
Borrowings from partner bank | 21,000 | |||||
Liability for private warrants | 12,850 | 12,850 | $ 30,800 | |||
Estimated Fair Value | Fair Value, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash and cash equivalents | 20,407 | 20,407 | 2,989 | |||
Borrowings from partner bank | 0 | |||||
Liability for private warrants | 0 | 0 | ||||
Estimated Fair Value | Fair Value, Recurring | Significant Other Observable Inputs (Level 2) | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash and cash equivalents | 0 | 0 | 0 | |||
Borrowings from partner bank | 21,000 | |||||
Liability for private warrants | 0 | 0 | ||||
Estimated Fair Value | Fair Value, Recurring | Significant Unobservable Inputs (Level 3) | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash and cash equivalents | 0 | 0 | 0 | |||
Borrowings from partner bank | $ 0 | |||||
Liability for private warrants | $ 12,850 | $ 12,850 |
RELATIONSHIP WITH OUR PARTNER_2
RELATIONSHIP WITH OUR PARTNER BANK (Details) - USD ($) | Jan. 04, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | |||
Payable to partner bank | $ 6,914,000 | $ 5,105,000 | |
Borrowings from partner bank | 0 | 21,000,000 | |
Affiliated Entity | Partner Bank | |||
Related Party Transaction [Line Items] | |||
Payable to partner bank | 6,900,000 | 5,100,000 | |
Line of credit, maximum borrowing capacity | 10,000,000 | $ 50,000,000 | |
Line of credit, amount outstanding | $ 0 | ||
Deposit Servicing Agreement | Affiliated Entity | Partner Bank | |||
Related Party Transaction [Line Items] | |||
Automatic renewal terms (in years) | 3 years | ||
Period of written notice of non-renewal required prior to expiration of the term | 180 days | ||
Transition Services Agreement | Affiliated Entity | Partner Bank | |||
Related Party Transaction [Line Items] | |||
Period each party agreed to provide certain transition services to the other party (up to) | 12 months | ||
Monthly service fee | $ 12,500 | ||
Period of advance written notice required to terminate agreement without penalty | 30 days |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event - First Sound Bank $ / shares in Units, $ in Millions | Nov. 15, 2021USD ($)$ / shares |
Subsequent Event [Line Items] | |
Business Combination, Consideration Transferred | $ | $ 23 |
Payments to Acquire Businesses, Gross, Per Share Of Common Stock | $ / shares | $ 7.22 |