LEASES

3 Months Ended

Mar. 31, 2022

At March 31, 2022, BMTX 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. The 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 lease liability or right-of-use (“ROU”) asset and are recognized in the period in which the obligations for those payments are incurred. BMTX’s operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. As BMTX’s operating leases do not provide an implicit rate, BMTX utilized the incremental borrowing rate of Customers Bank, its former parent, based on the information available at either the adoption of FASB ASC 842, Leases or the commencement date of the lease, whichever was later, when determining the present value of lease payments.

The following table summarizes operating lease ROU assets and operating lease liabilities and their corresponding classification on the Company’s Consolidated Balance Sheets:


(amounts in thousands)	Classification	March 31, 2022		December 31, 2021
Assets:
Operating lease ROU assets	Other assets	$	220	$	398
Liabilities:
Operating lease liabilities	Operating lease liabilities	$	236	$	416

Operating lease expenses are recorded in Occupancy on the Consolidated Statements of Income (Loss). BMTX recorded lease expense of $0.2 million and $0.3 million for the three months ended March 31, 2022 and 2021, respectively.

The maturities of non-cancelable operating leases were as follows at March 31, 2022:


(amounts in thousands)	March 31, 2022
2022	$	237
Total minimum payments	237
Less: interest	(1)
Present value of lease liabilities	$	236

Cash paid pursuant to operating lease liabilities for the three months ended March 31 totaled $0.2 million in 2022 and $0.2 million in 2021, and is reported as cash flows used in operating activities in the unaudited Consolidated Statements of Cash Flows.