Customers Bancorp, Inc. (CUBI) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Customers Bancorp, Inc. Special Investor Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would like to hand the conference over to your speaker today, David Patti, Communications Director. Thank you. Please go ahead.

Thank you, Lindsay, and good morning, everyone. Thank you for joining us for the Customers Bancorp's special investor webcast for presentation regarding mid-quarter financial trends, the BankMobile Technologies and Megalith Financial Acquisition Corporation transaction. The presentation deck you will see today has been posted on the Investor Relations page of the bank's website at www.customersbank.com. You will access the deck by clicking a red button marked Special Investor Meeting, BMT Divestiture. Our investor presentation includes important details that we will walk through on this morning's webcast, and I encourage everyone to pull up a copy. Before we begin, we would like to remind you that some of the statements we make today may be considered forward looking. These forward-looking statements are subject to a number of risks and uncertainties that may cause actual performance results to differ materially from what is currently anticipated. Please note that these forward-looking statements speak only as of the date of this presentation. And we undertake no obligation to update these forward-looking statements in light of new information or future events, except to the extent required by applicable security laws. Please refer to our SEC filings, including our Form 10-K, and 10-Q for a more detailed description of the risk factors that may result -- that may affect our results. Copies may be obtained from the SEC or by visiting the Investor Relations section of our website. At this time, it is my pleasure to introduce Customers Bancorp Chair, Jay Sidhu. Jay, the floor is yours.

Okay. Thank you very much, David, and good morning, ladies and gentlemen. Thank you for taking the time to join us for the call this morning. Joining me is Carla Leibold, our Chief Financial Officer of Customers Bank and Customers Bancorp; Dick Ehst, the CEO of the Customers Bank; Luvleen Sidhu, the Chief Executive Officer of our BankMobile division; as well as Bob Ramsey, the Chief Financial Officer of our BankMobile division. As you know, we announced on, I believe, Tuesday or Wednesday, that the Board of Directors of Customers Bank and Customers Bancorp has set December 18 as the record date for the previously announced conditional special distribution to be made to Customers Bancorp shareholders in connection with the pending transaction between Customers and Megalith Financial Acquisition Corp. We are extremely pleased to be able to, hopefully, very soon, reward our shareholders as of the record date with shares of this new independent company called BankMobile Technologies through a special distribution. This distribution is contingent on the closing of the merger, and Customers Bancorp shareholders will only receive shares in the distribution if the merger is completed. Closing of the merger is subject to a number of conditions, including approval of Megalith stockholders of the merger and certain related matters and receipt of regulatory approval. And Megalith has, as you know, scheduled a special meeting of its stockholders on December 21, 2020, to consider and hopefully approve the merger and overcome some of the other related matters. As Dave mentioned to you, we would like to have the management team of our BankMobile division update you on where they stand and BankMobile stands today. And following that, I would like to have -- to update you on some of the mid-quarter financial highlights for Customers Bancorp. So at this time, it's my pleasure to pass it on to Luvleen to discuss BankMobile with you. Luvleen?

Thanks, Jay. Good morning, everyone. Thanks so much for taking the time to be here today. We're truly passionate about our business and love being able to share the business that we've built. So thank you again for taking the time. Before we get started, I just wanted to introduce myself for those of you that I haven't had a chance to get to know. I am the Co-Founder and CEO of BankMobile. We launched BankMobile, as many of you know, back in Jan 2015. And prior to launching BankMobile, I graduated from Harvard Undergrad and then joined Lehman Brothers post graduation in their hedge fund to funds group on the investing side. My first day on the job was actually the Lehman bankruptcy. So quite an interesting start to my career for sure. After that, I actually joined forces with Customers Bank, heading up corporate development, really with a focus on exploring new digital banking models. And honestly, that was our first foray into what we'd really co-created today. After the time at Customers Bank, then went to Wharton where I got my MBA and then joined Booz & Company in their financial services practice where I helped other financial institutions really strategize and think about, and even launch their own digital banking models. And it was after that experience where we've joined forces with Customers Bank, really with the vision and the mission of BankMobile, and that's really brought us to where we are today and, I guess, the rest is history. So joining me today as well is Bob Ramsey, our CFO. And I hope that in follow-up conversations, you'll get a chance to meet our broader C-suite. Very privileged to be working with our team that has deep expertise across the board in banking operations, risk management, compliance, fintech innovation, higher education, all the important pillars of our company. And so truly privileged again to work with that team and hope you get a chance to meet them at some point. Wanted to flip over to Slide 6 to introduce a little bit about our business. So we are one of the largest digital banking platforms in the country with over 2 million accounts today. We're opening several hundred thousand accounts annually. We've generated tremendous scale to date with about $944 million in deposits as of the end of September. We're generating $65-plus million on an annualized basis in revenue. And we are EBITDA positive in Q3 and will be EBITDA positive for the full year and going forward. And for those of you that might be familiar with the neobank digital banking models, being EBITDA positive is not really what a lot of them have been able to achieve. So we are very fortunate and believe that we have a very strong strategy that has allowed us to gain this strong foundation and tremendous foundation for growth going forward. And the strategy that has allowed us to do this is a B2B2C banking strategy or banking-as-a-service. The fundamental principle of banking-as-a-service is that it allows us to be able to acquire bank customers at very low cost and at high volumes. So today, we are acquiring customers at less than $10. And for many of you that are traditional sort of bank investors, you know that typically, this is $300 to $1,500 to really acquire a typical checking account customer. And so this has become a really great competitive edge for us in our strategy. We, at the same time, are allowing our partners to be able to offer competitive financial services products to their customers, to their employees, and we help them do this so that they can better attract, engage and retain their customers and their employees. And today, we're doing this in 3 main verticals. We're doing it in, number one, higher education; two, White Label, which is best exemplified by a partnership with T-Mobile; and three, our most recently launched vertical, Workplace Banking, all of which I will talk a little bit more about. Before going there, I just wanted to highlight that we've always been, and will continue to be, a very mission-driven company. And we truly believe that we came into existence to solve a pain point, that to help millions of Americans to have a better banking experience that is more affordable, that's more transparent, more consumer friendly, and we really remain committed to that mission. We've been recognized for the foundation of the company that we've built to date. Most recently, we were awarded the most innovative bank by LendIt in 2019, which we are really grateful and proud of. And from a vision standpoint, our vision, especially from a financial standpoint is that over the next 3 to 5 years, we can create a company with a market cap of $500 million to $1 billion by executing on the strategy that we've laid out and the foundation that we already had in place. So with that, can we move to Slide 9, to talk a little bit about these 3 verticals. So the first vertical is higher education. What we're doing here is that we're helping colleges and universities around the country distribute about $11 billion to $12 billion in payments each year. Majority of these payments are financial aid refunds, but it is myriad of different types of payments in that bucket. We help colleges and universities save about $100,000 to $200,000 a year by taking over the service for them, by streamlining it, by taking care of the compliance, obligations, et cetera. And in return, we've actually created an extraordinary customer acquisition funnel for us. Today, with the approximately 725 campus relationships that we have, we are touching 1 in every 3 college-bound students in this country and we have the opportunity to then ask them, would you like to receive these payments from your school ACH in existing bank account or open a very competitively positioned BankMobile account. And in this segment today, we're opening several hundred thousand accounts a year. And our goal is to really continue to offer a really strong product that helps students and that we can continue to expand the number of students that choose to bank with us today and create customers for life. Our second lean strategy is White Label banking. Again, this is really to help nonbanks to be able to roll out and be able to provide banking products so that they can better attract, engage and retain their customers. Now many industries are becoming quite commoditized and are looking at ways to be able to differentiate. We help them differentiate. It's just one of the broader -- one of many things that they can do in terms of a broader strategy to really engage and retain these customers. And we really help them roll out these banking products really at a fraction of the cost and a fraction of the time it would take them to do this on their own. Again, our most notable White Label partner is T-Mobile. This partnership has really shown tremendous growth to date since we've launched it in April 2019. And we believe that we are really just at the beginning stages of the growth opportunity in the White Label segment and with T-Mobile. The third vertical that we most recently launched is Workplace Banking. And this was now that we've built our digital banking platform, it is finding new distribution channels for us to be able to roll out banking products and acquire new customers. And so really our thesis here, and that we've seen it as well, is that there is broad demand across HR departments around the country to be able to offer financial wellness, voluntary benefits to employees. And so our strategy here is to be able to provide employees across the country with the financial wellness benefit that includes very competitively positioned financial services products, financial education, financial coaching, and in return, this becomes a beautiful funnel for us to be able to acquire great bank customers through a trusted channel of employers and really getting the direct deposit coming into the account from day 1. We most recently announced this vertical with the rollout of our first partner, which is BenefitHub, which is one of the largest digital benefit platforms in the country today. And so we look forward to growing this vertical over 2021 and beyond, and we're very excited about the opportunity here. Going to Slide 22. Wanted to dig a little bit deeper into the higher education strategy here. Now as I said before, we have contractual relationships with approximately 725 campuses across the country, which provides us access to 1 in every 3 college-bound students in this country where today, we're distributing about $11 billion to $12 billion in disbursements to these students each year. Our main focus in this segment is, number one, to continue to increase the market share in terms of the number of college and universities relationships that we have. Today, you can see on the pie chart to the left that we are the market leaders with about 1/3 of the market. But we also have strong strategy to be able to continue to grow into the second largest bucket, which is in-house capabilities, schools and universities that are still doing all of this on their own, and the value proposition that we offer really resonates with this group. And so we have a strong organic pipeline of about 1 million SSEs or students that we can tap into in this in-house capabilities bucket. We're even looking at how we can partner with some players in the software provider bucket to continue to be able to grow college relationships in that bucket as well. Our second main focus is to make sure that we are competitively positioned enough and providing enough value that more and more students are choosing to open our bank account to receive their disbursement and to really create a customer-for-life bank account relationship with them. We're focused on doing so through a multitude of different ways. One is continuing to enhance our products and services. For example, we launched 2-day advance paycheck this year, and we've launched a savings account as well. And we want to also continue to strengthen our top-of-the-funnel marketing with on-campus marketing, partnering better with schools, providing a digital marketing strategy and the ZIP codes of where we have college relationships. We're working on a parent strategy as well as we know for the younger students, parents are very influential in the bank account opening decision. We have also most recently partnered with Google. So go to Slide 18. So Google's partnership with BankMobile was announced back in July. It is a very exciting partnership for us where Google had heard about our unique customer acquisition funnel and the student demographic. And we joined forces because we believe that together, we could help millions of students have an even better banking experience, feel more financially empowered and get greater value. And it's really about being able to help these students. And so what we're doing here is that we're joining forces and having Google with Google's front-end experience of the Google Plex account. For those of you that know that they have recently rolled out the fact that they will be offering a digital banking experience called Google Plex. And so we will create a co-branded BankMobile Google Plex experience for our students to be able to have that digital bank account experience. And so the whole strategy here is that with Google's brand equity, with the fact that the Google Plex BankMobile account is within the broader ecosystem of Google Pay that has tremendous value, rewards, discounts being able to order food ahead, to be able to pay on the go, financial management tools, et cetera, that we could potentially be able to get twice as many, maybe even 3x as many students to choose our account than what are currently choosing our account, and we also will be able to service them and provide broader value to them, which really is important to our vision and mission. So the plan is that we are working really hard with Google to be able to launch by the end of 2021 and that we can continue to see the growth benefits of this partnership in 2022 and beyond. With that, I wanted to go to Slide 17 to talk a little bit about our White Label strategy and more specifically, our example there is T-Mobile. So today, we partnered, in April 2019, to launch T-Mobile MONEY. It is a very attractive checking account with 4% interest on balances up to $3,000. There's absolutely no fees, there's a $50 monthly fee-free overdraft protection that is also provided, there's access to a multitude of fee-free ATMs as well. This partnership has really shown tremendous growth to date, which we have captured in a new business growth slide that Bob Ramsey will touch upon soon. We believe that we are just in the beginning stages and have really just scratched the surface in terms of the growth opportunity with T-Mobile MONEY. And we want to highlight that we have a very deep partnership with T-Mobile, where we're sharing the development costs, the operational costs, we're sharing the revenue, and majority of the marketing strategy and the cost is on T-Mobile. Most recently, we expanded T-Mobile MONEY to the Sprint base. We recently extended our contract into 2023 with the option to renew for additional 2-year periods. So overall, we are very excited about this partnership and really believe it will be an important driver for growth in our future. Now going to Slide 28. Just wanted to touch upon the broader sort of White Label pipeline as well. So our main focus is obviously to continue to grow in the T-Mobile market that now includes Sprint as well. Our strategy is really to have 1 large partner that we announced in a year because our strategy is really to have a customized, tailored, integrated solution that we provide which is different from other BaaS, or banking-as-a-service providers out there. We are typically looking at large partners that have strong brand equity, that have access to millions of customers and hopefully, have some sort of transactional relationship between the customer and the company where interjecting the bank account makes sense and helps create a more seamless experience for the customer. And so today, we have multiple RFPs and we're in multiple conversations with large potential partners. 2019, we announced T-Mobile; 2020, we announced Google; and as I said, with 1 partner a year, we feel confident that we will have another partner to be able to announce in 2021. With that, I wanted to hand it over to Bob Ramsey to talk about our financials and our growth to date.

Thank you, Luvleen, and good morning, everyone. If we could move to Slide 23. I wanted to touch base on how BankMobile makes money. This slide provides a breakout of our income statement on the right and our sources of revenue on the left. These are presented in order of importance. And right at the top, we've got card revenue, which is our most significant source of revenues, makes up approximately 41% of the year-to-date revenues and this is primarily interchange income. This is what BankMobile earns that is paid by merchants. Every time a checking account customer swipes their debit card, there's fees, a small percentage of spend is paid to us through the Mastercard network. Also included in card revenue are foreign ATM fees if a customer goes outside of our fee-free ATM network of 55,000 ATMs nationwide, but the majority of card revenue is driven by that interchange spend, which is why the Durbin amendment has such an impact on the business. The second source of revenues that we have are deposit servicing fees. This income makes up approximately 31% of year-to-date revenues. Deposit servicing fees are the fees that are paid to us by our partner bank in exchange for the sourcing, onboarding and servicing of the deposit accounts that, that bank is able to leverage into higher-yielding loans. As many of you customers, investors may recognize from our segment reporting in the past, this income statement does differ from what we've had there. There are no deposits at BankMobile Technologies. There is no net interest income or loans or provision. But instead, we are paid a fee by our partner bank to do all of the back-office work to originate source, replicate the branch network, take care of ATMs, et cetera, for those deposits. The third source of revenues that we have are account fees. These fees make up approximately 17% of our year-to-date revenues. These are fees paid by the account holder. The biggest account fee that we have is a monthly fee for any account that doesn't meet a minimum monthly deposit requirement of $200. But we think that's pretty competitive. Any account holder that deposits $200 into the account has that fee waived. We don't have any insufficient funds or overdraft fees. There are a couple other nominal fees in here. If a customer initiates a wire transfer or needs a debit card reissued, we would charge something for that, but the fees are very competitive. The fourth bucket of revenues we have are university fees. These are the fees that are paid to us by our college and university partners in exchange for the disbursement services that we provide to them. These fees are highly stable and recurring. 80% are subscription-based, the other 20% are based on transaction volume, most notably, wire transfers or ACH transfers that we would initiate for the college or university. So very highly predictable even outside of the subscription piece. Finally, there are other fees. These are a little bit of a catch-all. It's only 3% of year-to-date revenue. So nothing notable in that bucket. With that understanding of revenues, I'd like to go to Slide 27, and we can talk a little bit about the contribution and performance that we're seeing from our new business verticals. So this slide looks at new business verticals. This is everything outside of the legacy student business. And what you see here, in a nutshell, is really strong growth, really good trends. This is something that really excites us about the business. We start at the top left, the number of open accounts in new business verticals is up 21% quarter-over-quarter in the third quarter. I would just emphasize, that's not an annualized number, that really is June to September, we have grown the number of open accounts by 21%. Service deposits, we've seen even stronger growth. The service deposits in new business verticals are up 84% in the third quarter alone unannualized. Debit card spend is up 23% in the third quarter unannualized. So again, if you remember the last slide, we talked about key drivers of revenues are interchange income and deposit servicing fees. Those deposit balances and card spend are what are driving those revenues and this is why we're so excited about the lift from the new business. I also wanted to highlight at the bottom of this slide, we've got -- we took out the new accounts and looked at per account growth in deposit balances and spend. One, we wanted to look at, it takes time for customers to begin to migrate business over. Are we seeing increased usage, are we seeing seasoning and just more activity being driven through the accounts as they season, and we are. Our deposits per account are up 148% over the last year, and debit card spend per account is up 60% over the last year in the new business verticals. Also of note on this chart, the dark blue line is new business. The light gray line is the legacy student business. And it's important to note how much higher the level of deposits per account are in the new business versus the legacy student. And the same with the debit card spend. And I think that, that really is attributable to the differences in demographics and usage of the account. So the new business is not only growing rapidly, but the economics are also better than in the legacy student business. So with that understanding, I would like to go to Slide 24, and we can look at some of the key performance indicators in the third quarter across all of our business consolidated. So this encompasses both student as well as the newer business verticals. What you see here on the left is that year-to-date, our debit card spend is up 24% -- sorry, third quarter, our debit card spend is up 24% year-over-year. Year-to-date, is that second chart, we're up a little bit slower than that really because when COVID initially took place, we saw a pullback in debit card-related activity, although that seems to have normalized back out. I would actually jump to the far right of this slide, there is an interchange rate, which this is the amount of income that we earn as a percent of debit card spend. We have a lot less control over this metric. We are down about 10 basis points, but we attribute much of that to COVID. With COVID, we have seen a shift in merchant mix and merchant spend category. Most notably, we have seen a drop in bar- and restaurant-related spend, and that tends to be a higher interchange rate category. On the flip side of that, we've actually seen a pickup in a lot of large online retailers, merchants like Amazon, we've seen an increase in activity, and that tends to be a merchant where we are in a very low rate of interchange. Similarly, we've seen a shift in our average ticket size of debit card purchase that has increased post-COVID or with the onset of COVID. We really think that's because customers are not out buying a cup of coffee. Instead, they are at home and making more concentrated larger purchases and we do earn a lower rate of interchange on larger transactions. So that has also had a bit of a compressive impact. I would just note that as the world normalizes and spending patterns return to a more historical normal mix, we do anticipate an increase in that interchange rate as it will normalize back to a higher level. Jumping back to the middle of the slide, service deposits, again, key driver of revenues are up 42% year-over-year on a consolidated basis at the end of the third quarter. And organic deposits, which is measuring the flow into accounts rather than the balance and excludes the money that we get directly from the colleges and universities, those are up 32% in the student business, which we think shows real improvement in traction and engagement with that student demographic. Finally, the higher ed retention rate we've highlighted on this slide, we can ask a lot with the pressure on schools related to COVID. Are we losing customers? Are we losing schools? We're really not. Our retention this year has been 99.7% of our higher ed customers. That actually compares favorably to our 3-year trailing average of 98.5%. But all these numbers are really very strong, 98%, 99-plus percent retention of college and university partners, we think that really demonstrates the value proposition that we offer to our college and university partners. We're really happy with that metric. Next, I'd like to go to Slide 38. And just quickly wanted to touch on some valuation metrics. So this takes a look at how we compare to various peer groups. Obviously, our business model is a little bit unique, we don't fit neatly in any bucket. We actually -- I'm not going to go through Slide 42, but it does compare us to some of these groups. We are closest to that bottom group of private neobanks and that's how we make money. We're making money off of monetizing the accounts the same way that they do, primarily through debit card spend. While those companies are private and don't have public market valuations, if you look at the private market valuations on a per account basis, they are many, many multiples of where BankMobile Technologies is coming to market. They average $458 versus $64 for us. Moving back to the top half of the slide, we have compared ourselves to some publicly traded peer groups. And then when you look at those peer groups, we share some aspects of each. But our valuation is substantially below any of those groups at 1.3x EV to 2021 revenue and 6.5x EV to EBITDA. So just wanted to highlight what we think is real value in the valuation of this transaction. With that said, I would like to turn the floor back over to Luvleen to make some closing comments related to BankMobile. Thank you.

Thanks, Bob. Yes. So thanks, everyone, for the time today. I just wanted to reiterate our 3- to 5-year vision for the company, again, from a financial standpoint, is really that we could grow this company into a market cap of $500 million to $1 billion really by executing on the foundation and the strategy that we have. Our goal again is to acquire close to 1 million accounts a year eventually over the next 3 to 5 years, which would really make us a top 10 acquirer of checking accounts in the country. And how would we get there? We're going to continue to grow and invest in the student business. We're going to focus on rolling out Google, we're going to continue to grow our relationship with T-Mobile and the T-Mobile MONEY product and hopefully add, as I said, 1 new partner a year. And throughout this whole growth, we're very committed to maintaining and focusing on our mission and vision, which has always been to be able to create a better experience for millions of Americans when it comes to their banking experience. And that's something that we're proud of, we're committed to during this process of growth as we build this company. So thank you, again. I really appreciate the time, and I'm going to hand it back over to Jay.

Okay. Thanks so much, Luvleen and Bob. Thanks for a very good presentation. We do not have a policy of updating our investors and shareholders about any mid-quarter type of trends. But considering the pandemic and these kinds of financial stress, we thought it might be appropriate to give you a mid-quarter update of what's happening at Customers Bancorp. And we are very pleased to report that our credit quality has remained very solid to date. Our nonperforming assets were only about $69 million or 38 basis points of total assets at November 30. And the pace of net charge-offs has really slowed down, totaling only about a little over $5 million in October and November. And a slower run rate of net charge-offs on a linked-quarter basis positions us very well to potentially have a lower provision for loan losses in the fourth quarter as well as in the future quarters compared to what you've seen from us in the last 2 quarters. It's worth noting that nearly all the charge-offs that we've taken this quarter have -- we've experienced them from our consumer installment loan portfolio, and we had expected these. And in fact, our consumer installment loan portfolio continues to perform significantly better than even our assumptions and very little deviation from the way we've experienced the performance of this portfolio over the last several -- the last 12 months. And in the commercial loan portfolio, there have been very little charge-offs at all this quarter. One, we still hope to be able to resolve this quarter or early part of next quarter, like we updated you on Q3 call, a fairly significant nonperforming loan that we have on our books that we don't believe there'll be any incremental charge-offs of any material number on that, and we hope to be able to put that behind us over the next several days, hopefully this year. I would also like to highlight that our loan deferrals have really declined, and they are now 2.2% of our total loans. And majority of these deferrals are where we are working with pretty strong borrowers who have happened to own hotels or who happen to be in other related businesses, which have been very significantly impacted by COVID. But they are very strong borrowers with good relationships. And this 2.2% number is down from about 2.6% number 2 months earlier. And our expectation is that these deferrals will moderate further over the next few months and that we do not expect any credit deterioration from these. And at this moment, we do not expect any charge-offs resulting from these deferrals. So overall, we feel good about our asset quality, and we will continue to mitigate our credit risk through highly active loan portfolio management. Among other mid-quarter financial highlights, you know about our success with PPP originations. And we've indicated to you earlier this year that we expect to earn approximately $100 million in PPP deferred origination fees over the life of the loans. We think by the deferrals and by the delays on the forgiveness and whatnot, we think that our total revenues from the PPP business that we executed this year should be considerably above $100 million when you add the net interest income on top of it. In October and November of this year, the company recognized about $11 million, $11.5 million or so in PPP deferred origination fees, including approximately $4 million from loan forgiveness. And we anticipate a further acceleration in recognition of that income over the next few months, dramatically improving our core earnings. And then finally, we forecast our net interest margin, excluding the impact of PPP, to be approximately 3% for the fourth quarter. And that would be up from about 2.86% in the third quarter. This is principally achieved by our planned reduction in cost of funds. And this outcome would place our net interest margin, excluding PPP, comfortably within our previously issued guidance to you of 2.9% to 3% for 2020. So overall, we are very pleased. And obviously, as a result of this, the consensus is only $1.05 for us, and you can come to your own conclusion of what you should expect from Customers Bancorp compared to the consensus number. So at this time, we do have about 5 minutes or so for questions. I'm sorry that our presentation was a little bit longer. And so Lindsay, if you can help us open it up for Q&A, please.

[Operator Instructions] Our first question comes from Michael Perito with KBW.

I have a question for Luvleen and Bob on BankMobile. I was wondering if you guys can maybe just spend a minute digging deeper into kind of the technology providing in these partnerships. Just curious, you guys mentioned kind of some of the stuff that you're providing, but I was wondering if you could break it out a little bit more, like who -- are you guys -- correct me if I'm wrong, but I don't believe you have your own core -- you're utilizing the Bancorp processor still, is that correct? And then you're providing the interface for your partner brands to integrate into. Is that the right way to think about it? I was wondering if you could expand on that a little bit.

Yes. The technology and the differentiation that we provide is way beyond a core. So yes, we are using a core today that we have built a proprietary hub on top of so that we could create real-time customer-centric experiences no matter what core we're on. So we have a core-agnostic approach. To us, the core is really a ledger and an important one. But for us to really control the customer experience and make sure that it is real-time and very customer-centric is the proprietary technology that we have built and it is core-agnostic. On a more broader basis, in terms of just the banking-as-a-service landscape, there are players out there -- a couple of players out there that have an API-based solution, which is partners can come in, they can consume these APIs to be able to open a checking account or a savings account or even a lending product. But the onus is really on the partner to consume these APIs to create their own banking experience. And for some players, that makes a lot of sense, like a fintech player that would want to really own that entire experience. But we provide technology end-to-end that is truly on a White Label basis, which you can see with the T-Mobile MONEY app to our partner without having them take on any of the technology burden. We're also providing them access to our bank partner and the bank charter, and to be able to share in the revenue of the interchange and being able to find banks that are under $10 billion to really even increase that pie of being able to share. We're providing our partners with the whole back-end infrastructure to support a bank. From a regulatory standpoint, we have our own depository operations team, our own operations and lending team. We are running our own core, as you talked about already. We're focused on our own compliance team. We have our own fraud team. And so we're truly not just sourcing deposits that are low cost in nature for our partner banks but really doing all the heavy lifting in terms of being able to service these deposits in a completely compliant way as well. So -- and lastly, we provide a very tailored experience. And that's why we're looking at 1 large partner a year, not those that are looking for sort of a plain vanilla experience but really deeply integrated into their various channels and really creating a unique customer-centric experience based on the relationship those customers have with that institution and combining that with the banking experience, et cetera. So those are some of the aspects and pillars of our differentiation from technology.

That was really helpful rundown. And then I guess my follow-up would be, I think, Bob, you mentioned just how you guys kind of view yourself more relative to some of the private neobanks. And I guess the one difference is just when I think of the Varo, for example, I mean they have 2 million kind of similar amount of accounts, right? But those account -- it seems like it's a bit more granular, just in a sense that each individual account is not necessarily tied to the others, whereas when you go to the corporate partnership route that you guys are going, you're a little bit more reliant on the sustainability of those partnerships. I was just wondering if you could comment on how you guys kind of structure those I imagine -- I remember with T-Mobile, it was kind of a multiyear partnership. I was wondering if you could just provide a brief update, how you think about some of that concentration and how you kind of work that into the structuring of your partnerships to kind of protect the business going forward?

Yes. I'm glad you brought that up. I think that is a real key differentiator for our business. That's what we actually see as an advantage. What we like about our business is the low-cost customer acquisition and what is not the same about our business and the Varos and Chimes and Revoluts is that they have got a very high cost of customer acquisition because they're going direct to market. And they seem able to fund that because they're private equity backed, and they've got very deep pockets. As Luvleen said early on, we are EBITDA-positive today, and that's another differentiator from us versus those other businesses. But with that support and our ability to leverage our partners' distribution networks and to share in the customer acquisition costs, our cost of customer acquisition today is under $10 per active account. So we think that's a really important differentiator. Now you raised some other questions there. We do look to have some tenure and some support in these arrangements, right? So with the T-Mobile, the original contract was put out there in a redacted format. We had a 3-year contract with renewals, that is how we're thinking about structuring these agreements with future White Label partners as well. We're going to want to have a significant initial term and some renewal provisions that buy us a little bit more time on mutually agreeable basis.

I also want to add to that, Mike. I mean we're diversified. We have 3 verticals even today. So we're not completely dependent on any one of them. So higher ed has tremendous scale on its own today and a growth opportunity. Then we have T-Mobile, and now we've launched Workplace Banking. So we truly believe in a diversified revenue stream, and we'll continue to build upon that. And secondly, to the point that Bob Ramsey was making is we have the partnerships. These are extensive in the sense that we're deeply aligned, we both take on the development costs, the operating cost of the business and they're long-term in nature these relationships. And so we make sure that our incentives are aligned from day 1 to scale and grow these businesses together.

Our next question is from Steve Moss with B. Riley Securities.

Just following up on T-Mobile here. With regard to your projections for pretty substantial growth, wondering if you could give a little color as to who or which partners you see the most upside into 2021 and '22 -- 2022 from a revenue perspective?

So I'll take that question first here. So as we look into our projections for 2021 and 2022, what we are envisioning is slow and steady growth in the student business. The student business is the core of what we are, it's the majority of revenues today, it's the solid foundation of the rest of our business. And that is growing, but it's a slightly more mature business. It's not growing at an exponential rate. The White Label partners, T-Mobile is certainly one that has now been live since commercial launch, we're about 1.5 years in, it is reaching scale where it is contributing. It is meaningful and it is growing, and we are looking for that growth to continue to grow and accelerate. I think we talked about on that new business slide, how we've seen increases in per account metrics in addition to growth in accounts in the new business verticals. And so I think that is going to give us a significant amount of growth in '21 and '22. And new White Label partners are part of what we expect to do. We do anticipate adding one White Label partner per year. And so that will not have a big impact in 2021 but it will have more impact in 2022 and more impact as we go forward. So I think that all of it will contribute, as well as the Workplace Banking, which was recently launched and will be still very small in 2021, but will grow in 2022, and we'll have much more impact over time.

Okay, that's helpful. And then just as we think as you add new partners here, what's kind of the upfront investment from the BankMobile side, whether it's in systems or people? Just kind of curious as to how you guys are thinking about that investment there.

Yes, we really create a business...

Yes -- go ahead.

We really create a business that's ready to scale. We've built our foundational proprietary digital banking platform. And for us, now that we have that foundation, it's really about working with partners and what level of customization integration are they looking for and working closely with them. And obviously, as we said, we share in the cost. And so it really depends on what each of these partners is looking for, and we're flexible and we're agile. But in terms of the heavy lifting and the investment to date, we've got a lot of that under our belt in terms of the platform that we now have to work off of going forward.

[Operator Instructions] Our next question comes from Frank Schiraldi with Piper Sandler.

I know you're running short on time. So I'll just ask if I could, just one question on BankMobile. Obviously, tremendous deposit growth here in the back half of 2020. Could you talk about -- you mentioned that stimulus -- recent federal stimulus has boosted those balances. If you could just talk about, is it just as simple as consumers having more money? Is there something more complex there? And do you think -- is there some pullback in the more near term as that kind of dries up?

We definitely had -- sorry, go ahead, Bob. Go ahead.

Okay. Let's see what I can share and then chime in with thoughts. I was going to say, Frank, I think it's similar to trends that you have seen at other banks. I think deposits, in general, have benefited from the federal stimulus and balances are seeing a lift. I mean initially, you absolutely saw that there was extra money coming from the government directly into account. So there was an immediate lift. The stimulus now is largely in the accounts and balances just remain elevated, maybe people are sitting on more liquidity. I'm not exactly sure, but it has provided some benefit. But it's not the only source of growth that we're seeing. We certainly are seeing growth outside of that. As I say, those funds coming in took place earlier this year, and we've held on to some of it, but I think that we're going to have growth that more than offsets any sort of normalization of that factor. I don't know Luvleen what you would add.

I agree with you. We've seen -- just looking at our student population, over 30% year-over-year growth in organic deposits, as Bob Ramsey talked about. That is deposits coming in above and beyond any refund being deposited from the school. And there was only a small portion of about the $1.6 billion in organic deposits that we have today that are from stimulus payments. And so as Bob said, there's obviously some benefit from that, but it goes way beyond that.

I think we'll take one more -- sorry. Sorry, Frank go ahead.

No. Thank you. That's all I have.

We'll take one more question, and we're sorry, we're running out of time. Otherwise, you would -- you can always make a call. Is there anybody else who has a question?

We have 2 online questions, Jay.

Okay. We'll take those 2.

Okay. First question, what is the approximate number of new company shares for each 100 shares of CUBI?

Carla, do you want to take that?

Sure. It would be somewhere between 11 and 14 shares. The per share ratio was between 0.11 and 0.14.

I think that is that. That's it.

And the second question, how does the deposit servicing fee that BankMobile will pay CUBI after the deal closes compared to CUBI's traditional cost of funds?

I'll take that. There is no deposit servicing fee that BankMobile is paying to CUBI. CUBI's cost of funds right now are running in the 50 basis points range. And the deposits that we are getting through BankMobile Technologies is costing us about 30 basis points at September 30. Carla, do you want to add anything else to that?

No, Jay, nothing further.

Okay. Well, thank...

Jay, that concludes our questions.

Okay. Well, thank you so much, everybody, for really taking the time, and we are -- if you have any other questions for us, please give us a call. And for those of you we may not have a chance to speak during the holiday season, wish you happy holidays, Merry Christmas, Happy Hanukkah, and we really look forward to working with you over a long period of time by creating shareholder value. Thank you.

This concludes today's conference call. You may now disconnect.