LEASES

9 Months Ended

Sep. 30, 2022

At September 30, 2022, BMTX leased one office under an operating lease with an original 5-year lease term with options to renew the lease or extend the term annually or with mutual agreement. The original lease included 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 were not included in the lease liability or right-of-use (“ROU”) asset and were recognized in the period in which the obligations for those payments were incurred. BMTX’s operating lease agreement did not contain any material residual value guarantees or material restrictive covenants. As BMTX’s operating lease did not provide an implicit rate, BMTX utilized the incremental borrowing rate of Customers Bank, its former parent, based on the information available at the adoption of FASB ASC 842, Leases when determining the present value of lease payments.

The original lease matured on September 30, 2022. Effective October 1, 2022, the Company entered into a 3-month short-term lease extension for this office under substantially identical terms and conditions as the original lease.

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	September 30, 2022		December 31, 2021
Assets:
Operating lease ROU assets	Other assets	$	—	$	398
Liabilities:
Operating lease liabilities	Operating lease liabilities	$	—	$	416

Operating lease expenses are recorded in Occupancy on the Consolidated Statements of Income (Loss). BMTX recorded lease expense of less than $0.1 million and $0.4 million for the three and nine months ended September 30, 2022, respectively. BMTX recorded lease expense of $0.2 million and $0.5 million for the three and nine months ended September 30, 2021, respectively.

Cash paid pursuant to operating lease liabilities totaled $0.1 million and $0.4 million for the three and nine months ended September 30, 2022, respectively. Cash paid pursuant to operating lease liabilities totaled $0.2 million and $0.5 million for the three and nine months ended September 30, 2021, respectively. These cash payments are reported as cash flows used in operating activities in the unaudited Consolidated Statements of Cash Flows.