Business Plan May 2020

CONFIDENTIAL

Contact Information Antoine Grant [email protected] Ryan Mallory [email protected] www.digitalbancshares.com

The Bank of Los Angeles

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Table of Contents

Executive Summary ...... 1

Opportunity ...... 1

Expectations ...... 3

Opportunity ...... 5

Problem & Solution...... 5

Target Market ...... 10

Competition ...... 16

Execution...... 18

Marketing & Sales ...... 18

Operations ...... 18

Milestones & Metrics ...... 19

Company ...... 20

Overview ...... 20

Team ...... 20

Financial Plan ...... 22

Forecast ...... 22

Financing ...... 24

Statements ...... 25

Appendix ...... 28

Profit and Loss Statement ...... 28

Balance Sheet ...... 30

Cash Flow Statement...... 32

iii

Executive Summary Opportunity

Problem Summary

The private banking sector consists of exclusive financial products and services tailored to clients’ specific needs. Each customer is assigned a private banker that determines their financial objectives through in-depth analyses and one-on-one meetings, and develops strategies to enable their achievement. While a number of financial institutions, including commercial banks via their ‘private banking divisions’, offer private banking solutions, such services are only available to high-net-worth individuals (i.e., those with $1 million in investable assets).

For those that do not maintain such wealth, their banking options tend to be: (i) the ‘retail divisions’ of nationwide (i.e., Bank of America) or regional (i.e., BMO Harris Bank) commercial banks, which given their sheer number of customers and focus on appealing to the masses, tend to deliver generic products and services; (ii) community banks and credit unions that may have relationships with their customers and cities/towns, but usually offer products, services and technology that are inferior to their larger competitors; and (iii) neobanks (i.e., Chime) or digital banks (i.e. Marcus by Goldman Sachs), which generally have limited product offerings (i.e., mainly high-yield savings accounts) that are targeted at consumers nationwide. Thus, given the current options, unless customers are high-net-worth individuals, they are unlikely to experience the level of perks, conveniences and personalization offered via private banking. This is particularly an issue for millennials who, given the prevalence of technology in their daily lives (i.e., Uber, Netflix, etc.), have come to expect a high level of service, for reasonable prices, from any brand they support, including the institution in which they bank.

Solution Summary

Digital Bancshares, LLC is a platform dedicated to launching and operating mobile-first digital private banks that deliver real-time, highly personalized, insights and analyses. We achieve this by leveraging our proprietary technology to evaluate each member’s financial situation, and provide tools and recommendations that enable them to achieve their objectives. Facilitated by our ‘digital private banker’, we offer the individualized attention and analysis provided within the traditional private banking sector, but do so for a reasonable annual fee. As a result, we deliver a level of financial products and services that have historically been available to a select few. Furthermore, given our focus on tailoring our digital private banks to specific metropolitan areas, we provide bespoke insights, experiences and events that are unique to each community.

The Bank of Los Angeles (“BofLA”) is the first digital private bank we are launching under our platform. Focused on the Greater Los Angeles community, BofLA will not only deliver private banking solutions that promote financial health, planning and intelligence, but also access to the best Los Angeles has to offer. From reservations at top restaurants to exclusive celebrity events, members of our bank receive preferential treatment. This applies whether in Greater Los Angeles

CONFIDENTIAL - DO NOT DISSEMINATE. This business plan contains confidential, trade-secret information and is shared only with the understanding that you will not share its contents or ideas with third parties without our written consent. The Bank of Los Angeles area or, given our extensive partnerships and network, traveling elsewhere. BofLA is also committed to philanthropy through our collaboration and support of nonprofits dedicated to breaking the cycle of homelessness throughout Los Angeles. Thus, as a member of BofLA, our customers are empowered, both financially and socially, to not only achieve their financial goals and live life their way, but also help others within their community.

Digital Bancshares’ team is comprised of seasoned bankers, strategy consultants, attorneys, marketers, tech engineers, and UX/UI designers dedicated to delivering top-notch digital private banking products and services. With our targeted approach, depth of knowledge, and resources, we are confident in our ability to execute and deliver superior banking solutions. In addition to our core team, we collaborate and/or partner with local individuals and organizations for each new market we enter.

Market

Our primary target audience is millennials (currently ages 24 to 39). This group is: (i) the largest generation in the U.S. labor force (total population of ~75 million); (ii) projected to inherit over $68 trillion by 2030 (the greatest wealth transfer in modern history); and (iii) has maintained a spending power of roughly $600 billion annually. Within this cohort, older millennials (ages 30 to 39), with bachelor’s degrees or higher and household incomes of $100,000+, represent the vast majority of the spending power (~[ _ ] million people).

We chose the Greater Los Angeles area to launch our initial digital private bank as the region: (i) is the second-largest urban region in the United States with (a) a population of ~19 million, and (b) a GDP of ~$1.3 trillion (comparable to Australia); and (ii) is comprised of five (5) counties, including Los Angeles County, which, of all the counties in the United States, has the largest (a) total population (~10 million), (b) concentration of millennials (~3 million), and (c) GDP (~$700 billion, comparable to Switzerland). Moreover, the Greater Los Angeles area maintains $640 billion+ in FDIC insured deposits. Of the aggregate deposits, three (3) banks, Bank of America (~19%), Wells Fargo (~15%), and JPMorgan (~13%), control almost 50%. The remainder of deposits are allocated across ~130 financial institutions, with ~95% of such institutions maintaining market shares of 1% or less. Thus, given the relatively fragmented market, combined with our exemplary products and services, we believe that BofLA has a significant opportunity to acquire a substantial number of customers (and deposits) within the Greater Los Angeles area.

Once we obtain a considerable market share within Los Angeles, we intend to strategically launch community specific private banking brands in other large metropolitan areas nationwide. We will likely enter into the Chicago metropolitan area next, followed by: (i) the New York metropolitan area; (ii) the Dallas–Fort Worth metroplex; (iii) the Washington D.C. metropolitan area; and (iv) Greater Miami. We are focusing on these regions given their large total and millennial populations, as well as GDP. However, prior to launching in any new market, we will conduct significant research and analysis.