Customers Bancorp, Inc · NYSE:CUBI
Customers Bancorp — SPAC Merger (August 2020)
40 slides from Customers Bancorp's SPAC merger presentation, Aug 6, 2020
Slide 1: BM Technologies created by Business Combination of BankMobile and Megalith
BM Technologies, Inc. created by the Business Combination of BankMobile Technologies & Megalith Financial Acquisition A Banking - as - a - Service pioneer, enabling non - banks to build financial services for their customers August 2020
Slide 2: Disclaimer
2 | Disclaimer This presentation (the “Presentation”) contemplates the purchase by Megalith Financial Acquisition (“MFAC”) of BankMobile Tec hno logies, Inc. (“BankMobile” or the “Company”) from Customers Bank, by which BankMobile will become a subsidiary of MFAC (“the Transaction”). BankMobile is N
Slide 3: Table of Contents
Table of Contents I. Introduction II. Transaction Summary III. BankMobile Overview IV. Financial Information V. Appendix
Slide 4: Management Presenting Today
4 | Management Presenting Today Luvleen Sidhu CEO and Co - Founder Bob Ramsey Chief Financial Officer Industry Experience 20+ Years Industry Experience 9+ Years FinTech Woman of the Year (1) Expertise in Scaling and Building Billion Dollar Companies in Related Industries Total Board Experience of 50
Slide 5: Where Does BankMobile Technologies Stand Today?
5 | Where Does BankMobile Technologies Stand Today? Delivering Full - Featured Digital Banking Platform to Large Scale Non - Bank Partners x Customer - centric approach x Provides an affordable, easy - to - use product x Simplifies banking for the consumer x Creates customers for life with full suit
Slide 6: Consumers Are Recalibrating Their Banking Needs
6 | Consumers Are Recalibrating Their Banking Needs New Digital Options, Remote Necessities and Poor Customer Experiences Are Driving Change 1) Accenture Consumer Retail Banking Survey Summary, July 2017 2) PWC Consumer Banking Survey, 2019 3) Forbes, “Consumers Shelled Out $1B in Monthly Bank Maint
Slide 7: Non-Banks Want to Engage Customers via Financial Services
7 | Non - Banks Want to Engage Customers via Financial Services Higher - Ed, Retailers and Large Employers All Have Untapped Financial Use Cases Higher - Ed Institutions Higher - Ed institutions send tens of billions in payments each year to students, creating administrative complexity and resulting
Slide 8: BankMobile Solves Multiple Parties' Pain Points in One Solution
8 | BankMobile Solves Multiple Parties’ Pain Points in One Solution Resulting in High - Volume, Low - Cost Customer Acquisition B2B2C Approach Examples of BankMobile Solutions within 3 Verticals x Distribute financial aid refunds and other disbursements x Eliminate administrative burden and complexi
Slide 9: BankMobile Evolving into a Premier Brand
9 | BankMobile Evolving into a Premier Brand Fast Growing Digital Banking Technology Platforms 2020+: Rapid Expansion 2015 - 2017: Early Days x BankMobile founded in 2015 to “digitize” the traditional banking experience Product Higher - Ed x Acquired Higher One’s Student Checking and Refund Disburse
Slide 10: Transaction Summary
10 | ▪ Megalith Financial Acquisition Corp ( NYSE: MFAC) has entered into a definitive agreement to acquire BankMobile Technologies ▪ This transaction is subject to customary regulatory approvals Transaction Structure (1) ▪ Transaction valued at an implied post - money enterprise value of $140mm (2)
Slide 11: Transaction Background
11 | Transaction Background Why is BankMobile Technologies (“BMT”) Being Divested? Why is BMT Positioned as an Independent Company? BMT - A standalone subsidiary of Customers Bank Banking - as - a - Service Reasons for Divestment A. BankMobile Technologies (“BMT”), a subsidiary of Customers Bank (“C
Slide 12: Business Overview
Business Overview
Slide 13: Key Investment Highlights
13 | Key Investment Highlights High - Volume, Low - Cost, Customer Acquisition Strategy 2 Our “Bank - as - a - Service” Delivers a Full - Featured Digital Banking Platform to Partners 4 Opportunity to Disrupt Massive U.S. Banking Market 1 Highly - Attractive Business Model 7 Attractive Distribution
Slide 14: Opportunity to Disrupt Massive U.S. Banking Market
14 | Opportunity to Disrupt Massive U.S. Banking Market Banks Have Consolidated, but Fragmentation Remains High 1) Source: USBL “Banks Ranked by Total Assets”, June 2019. Asset Concentration in Banking, June 2019 (1) The BankMobile Solution BankMobile is able to capture deposits for Partner Banks fr
Slide 15: High-Volume, Low-Cost Customer Acquisition Strategy
15 | $250 $350 $250 $1,500 $1,500 $400 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 Credit Cards Retail Checking Accounts Consumer Lending High - Volume, Low - Cost Customer Acquisition Strategy Implemented B2B2C Approach in the Higher - Ed and Telecom Industry 1) ARK Investment Management LLC
Slide 16: White-Label Banking Case Study: T-Mobile MONEY
16 | • BankMobile and T - Mobile partnered to launch T - Mobile MONEY in 2019 • Offers no account fees and 4% interest on balances up to $3k for T - Mobile customers Relationship Overview Win – Win Relationship x Strong customer retention program for T - Mobile x New BankMobile customers (deposits f
Slide 17: Google Pay Collaboration
17 | On August 3 rd 2020, BankMobile announced an execution of an agreement with Google to introduce digital bank accounts Relationship Overview Highlights x Google Pay will provide the front - end user experience x The product will be built upon BankMobile’s existing banking infrastructure x Produc
Slide 18: Full-Service Digital Banking Platform
18 | BankMobile Technologies Delivers a Full - Service Digital Banking Platform Key Capabilities, Products and Technology Platform BankMobile brings the whole bank to partners… … with a tailored signup and branded bank UX… … enabled by tech designed for partner integration Core Banking Systems BaaS
Slide 19: Deliver Full-Service Banking Platform to Partners' Customers
19 | continued - Deliver Full - Service Banking Platform to Partners’ Customers Attracts Customers Through Digital Channels and Provides Back - Office Support in One Solution Deposit Operations BankMobile delivers a full - service, centralized and customer - centric experience while alleviating the
Slide 20: Competitive Differentiation
20 | Representative Firms Competitive Differentiation Traditional Banks “ NeoBanks ” Banking - as - a - Service Full - BaaS Model Complete digital banking platform including back office support (compliance, deposit operations, fraud management, customer care, etc.) 4 0 0 2 Revenue Share / Great Cons
Slide 21: Distribution Through Market Leadership Position in Higher-Ed
21 | Distribution Through Market Leadership Position in Higher - Ed Deeply Embedded Campus Relationships Allow for Customer Acquisition and “Customer for Life” Strategy U.S. Higher - Ed Student Disbursement Market Share (1) Benefit of the Higher - Ed Business x Access to ~1 in every 3 college studen
Slide 22: Income Statement – Historical & Forecasted
22 | Income Statement – Historical & Forecasted Source: BankMobile management projections for 2020E – 2022E Note: 2021 – 2022 forecasted figures incorporate additional public company cost upon consummation of the transaction. Forward looking financial projections assume white label business achieves
Slide 23: Higher-Ed Revenue Opportunities
23 | Federal & Private Colleges & Universities Loan or Grant : $10,000 Refund: $1,500 $260 Billion Total Aid and Non - Federal Loans for 2018 & 2019 (1) Disbursement Tuition : $ 8 ,500 BankMobile Revenue Opportunities Higher - Ed Partners • Subscription Fees from Higher - Ed Clients • Transaction Fe
Slide 24: Higher-Ed Business Unit Value Creation
24 | Higher - Ed Business Unit Value Creation Subscription and Other Fees Low - Cost Consumer Deposits Manage Disbursement Process Card Usage Drives Interchange Fees Paid by Merchant, Customer Pays Some Account and Usage Fees (e.g., ATM, Card Re - Issue, etc.) Account Holder Bank Partners Higher - E
Slide 25: White-Label BaaS Market Opportunity
25 | White - Label BaaS Market Opportunity Key Market Attributes of Target Partners Established Brand Equity Immense, Captive Customer Base Diverse Marketing Channels Numerous Natural Checkout Moments Strong Customer Loyalty Ability to leverage market - trusted image in co - branded marketing materi
Slide 26: Competitive Economics and B2B2C Differentiation
26 | Competitive Economics Deep Experience Launched Partnership with T - Mobile via TMM Proven Service & Delivery Model ~2.0 Million Accounts Competitive Advantage Large Banks Unable to Compete on Interchange Alone Small Banks Unable Invest Adequate $ to Build BaaS Platform Regulators Wary of Allowi
Slide 27: Experienced Management Team
27 | Experienced Management Team Vision and Experience to Execute ~24 Years Average Industry Experience Management Team By the Numbers 309 FTEs (2) 1) 2019 LendIt Fintech Industry Awards 2) As of 6/30/2020 Luvleen Sidhu CEO and Co - Founder Bob Ramsey Chief Financial Officer Industry Experience 20+
Slide 28: Platform Growth Opportunity
CONFIDENTIAL 28 | Tremendous Platform Growth Opportunity Multiple Levers to Accelerate Growth Expand Student Adoption and Create Long - Term Customer Relationships by Expanding Access to Credit Products Add New White - Label Partners Strategic M&A Expand Distribution Channels and Product Offerings x
Slide 29: Financial Information
Financial. Information 29,240.68 ia
Slide 30: Income Statement – Historical & Forecasted
30 | 2019 Pro Forma 2020E 2021E 2022E Total Revenues ($mm) $60.8 $72.4 $104.0 $144.4 Less: OpEx (Excl. Depreciation & Amortization) ($mm) 63.4 67.2 82.6 94.1 EBITDA ($mm) ($2.6) $5.3 $21.5 $50.3 Less: Interest Expense ($mm) 0.5 1.4 0.6 0.3 Less: Depreciation and Amortization ($mm) 9.3 13.0 14.7 16.7
Slide 31: Key Metrics and Revenue
31 | Revenue 21% 2021E (4) • Signed Student Enrollments (“SSEs”) Source: BankMobile management 1) Data as of the period end 6/30/2020 2) Represents one minus the annual SSE attrition over beginning of the year SSE count 3) Reflects last twelve - month data for the period end 6/30/2020 $10.8bn Total
Slide 32: Financial Overview: Significant Growth and Scale
32 | $401 $812 $1,601 $2,632 2019 Pro Forma 2020E 2021E 2022E $60.8 $72.4 $104.0 $144.4 2019 Pro Forma 2020E 2021E 2022E $525 $693 Q2 2019 Q2 2020 Financial Overview Significant Growth and Scale Growth Drivers (1) Forecasted Deposit Growth ($ in millions) $663 Q2 2019 Q2 2020 ($ in millions) 33% CAG
Slide 33: Valuation Overview
33 | $69 $725 $209 $178 $400 $700 $550 $375 BankMobile Chime Varo Stash NuBank N26 Revolut Monzo 1.3x 7.4x 9.2x 6.2x BankMobile Bank Tech Mobile & online B2B Payments & Prepaid 6.5x 18.7x 25.3x 13.0x BankMobile Bank Tech Mobile & online B2B Payments & Prepaid Valuation Overview Public Comparable Com
Slide 34: Investment Thesis
34 | Investment Thesis Unique Opportunity to Invest in a Premier Brand Positioned for Significant Growth Strong Financial Profile ~$72M 2020E Revenue 19% 2020E Revenue Growth Rapid Market Expansion Positioned For Significant Growth New White - Label Partner Additions Distribution Channel and Product
Slide 35: Appendix
Appendix
Slide 36: Higher-Ed Recent Developments
36 | Higher - Ed Recent Developments COVID - 19 and BankMobile’s Higher - Ed Market - Recent Developments ▪ Educational institutions expect classes to continue in the fall, but implementation strategies may range from social - distancing on - campus to full remote learning ▪ BMT believes the medium
Slide 37: Proposed Capitalization and Ownership
37 | Proposed Capitalization and Ownership Note: Analysis assumes the full $33.2 million cash held in the trust account by MFAC related to existing MFAC public stockholders will not b e r edeemed upon Transaction closing, shares will remain outstanding and cash will be available for use in the Trans
Slide 38: Proposed Transaction Structure
38 | Proposed Transaction Structure MFAC Public shareholders have the option to: (a) continue to own, in connection with the closing, MFAC shares or (b) redeem shares for a portion of the $33.2mm in trust Megalith Financial Acquisition Corp. (“Purchaser” or “MFAC”) (NYSE listed company to be renamed
Slide 39: Reconciliation to Non-GAAP Financial Measures
39 | Reconciliation to Non - GAAP Financial Measures Source: BankMobile management projections Note: 2021 – 2022 forecasted figures incorporate additional public company cost upon consummation of the transaction. Forward looking financial projections assume white label business achieves significant
Slide 40: Reconciliation to Non-GAAP Financial Measures (Continued)
40 | Reconciliation to Non - GAAP Financial Measures (Continued) Source: BankMobile management projections 1) Assumes $33.2mm cash held in escrow at MFAC related to existing MFAC investors will not be redeemed upon Transaction closing; Assumes 50% of trust cash in excess of $10.0 mm will serve as pr