Happy Friday once again! It’s been a crazy week even if you ignore the political stuff and global pandemic.
So let’s get to it – here is the Uncle Sean Update for 1/15/21: Money, money, money, money ("For The Love of Money" by The O'Jays - you’ll be singing it the rest of the day)! From capital raises to smoking hot IPO markets, there is no shortage of investors or liquidity. Here are a few of the honorable mentions this week:
Affirm (BNPL platform) IPO priced at $49 per share debut (Nasdaq: AFRM) for a whopping $12B valuation; opened up 90% at $90.90; and closed their initial day of trading at $97.01. But wait – there’s more… They closed the week out at a stunning $117 per share – CHA-CHING!!! Check them out on yahoo finance - AFRM. You can read up on their S-1 here - SEC - Affirm S-1 And even more BNPL (told ya all the cool kids were doing it) – I’m certain that this is more than just coincidental timing - LOL, but Citizens Bank issued a press release this week (2 days prior to the Affirm IPO) touting the success of their Citizens Pay BNPL platform – specifically stating more than “$6.4 billion in loans have been originated and the company has served more than 5 million accounts” Walmart launches FinTech although they were notably vague on any specifics. Check out their IR press release here - Walmart creates new fintech startup. “White hair moment” Anyone else old enough to recall the Walmart Bank / ILC debates of the past? Here is an old but very good 2007 write-up from the Saint Louis Fed detailing the history behind Walmart’s banking plans beginning in 1999 with a proposed acquisition of Federal BankCentre through their 2005 ILC application with Utah DFI. Makes me wonder if Walmart will again attempt an ILC; or if Arvest Bank (common Walton family ownership) or even Woodforest may provide BaaS for the Walmart FinTech??? SoFi valuation - I know we covered this last week, but I am focusing more specifically on the fact that they quantified the value of a bank charter to be between $200M - $300M per year – WOW!!!!. See slide 35 in their investor deck - SoFi Investor Deck FinTech alt lender Upgrade is “upgrading” (yes – I know how cheesy that was, but I just couldn’t help myself) to full Neo / FI Challenger bank status by launching a mobile banking app and debit card with 2% cash back (actually it is rewards checking) – here is the Upgrade Debit Card Press Release Visa and Plaid mutually terminate merger agreement due to the fact that it has already been a year, and Visa did not believe the DOJ would move in a timely manner towards a reasonable conclusion and was not interested in a protracted and complex litigation. Crypto custodian Anchorage becomes the first national “digital asset bank” in the U.S. by securing conditional approved for national trust charter from the U.S. Office of the Comptroller of the Currency (OCC) – Not to minimize this because it is a very big deal and the first of its’ kind, but keep in mind that this is not a new institution. It is a charter conversion from State chartered Trust to a Nationally chartered Trust. BitPay and Paxos have also applied for OCC charters as crypto-native banks. Speaking of the OCC, the very active and crypto friendly Brian Brooks stepped down (as was widely expected) as the head of the OCC this week - Brian Brooks resigns. Even though he was only on the job for a few months (started as Deputy on April 1, 2020 and was named Acting Comptroller on May 29, 2020), he accomplished a great deal including becoming a thorn in the side of the CSBS and drawing the ire of a few in Congress – all in the middle of a global pandemic. Here are a few notable achievements under his watch: On Jul 22, 2020, the OCC published Interpretive Letter #1170, allowing national banks to custody crypto assets; on Sep 21, 2020, the OCC published Interpretive Letter #1172, on holding stablecoin reserves - National banks can hold stablecoin reserves for customers; on Jan 4, 2021, the OCC published the OCC Chief Counsel’s view on the use of independent node verification networks and stablecoins for payment activities. National banks can run blockchain nodes and use stablecoins for payments; and as mentioned above, on Jan 13, 2021, the OCC grants the first ever national charter for digital asset (crypto) bank. Big Bank Earnings – 3 of the 4 mega banks (JPM, Citi, and Wells Fargo) reported earnings this morning. The key takeaway is that while credit reserves are still sky high, they are all starting to lower the reserve levels ever so slightly. Have you seen Stockpile? Pretty neat little app for beginners that encourages responsible investing. https://www.stockpile.com/ The NCUA placed Indianapolis' Newspaper FCU into Conservatorship (not a failure) because of unsafe and unsound practices at the credit union. Member services will continue uninterrupted while the NCUA works to resolve issues affecting the credit union’s operations. Indianapolis’ Newspaper Federal Credit Union is a federally insured, federally chartered credit union with 1,155 members and assets of $6,604,355 according to the credit union’s most recent Call Report. Shout out to the FedFis FI Analysis Team as the FedFis Rating© for Indianapolis’ Newspaper FCU was 4.56 at 9/30/2020 (the most recent call report available) placing them in the lowest possible percentile. Random Uncle Sean Stuff: We ended up getting almost 3” of snow last Sunday out here in the Hill Country just Southwest of Austin. I had forgotten just how amazing it is to build a fire outside in the snow!!!! As an added benefit – it was all gone by the next day and we are back to wearing shorts! Getting ready to walk outside and fire up the grill for some chicken fajitas with grilled onions and bell peppers on a beautiful Texas Friday evening…. Mmmmmmm…. Wish you were here! Have a GREAT weekend and stay safe!!!! Uncle Sean Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at smayo@fedfis.com | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | info@fedfis.com #FedFisHasTheData FedFis FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him. Happy Friday and welcome to the Uncle Sean Update for WK 2 of 2021!!!! SoFi goes public via SPAC merger with Social Capital Hedosophia Holdings V (NYSE:IPOE). The deal values SoFi at a whopping $8.65B. (CNBC) In case you are wondering what the heck a SPAC is (don’t worry – if you don’t know what it is, that just means your normal), here is a good definition from Investopedia - FinTech IPO Pipeline For 2021 should be exciting – scratch SoFi off the list now, but we are still looking forward to Affirm, Coinbase, Robinhood, Marqeta, AvidXchange, Stripe (maybe), and even Instacart. Okay – I admit that Instacart may be a stretch to include as a FinTech…. But all they have to do is issue a Business Debit Card to pay their contractors and they could even offer EWA as an added benefit… Stride Bank, are you listening???? Stride Bank is the sponsor behind Chime, Lyft, One VIP, and most recently DoorDash DasherDirect program. Customers Bank completes the sale of BankMobile to Megalith. (Link) In connection with the closing of the Merger, Megalith changed its name to “BM Technologies, Inc.” (“BMT”) and is now trading under the symbol BMTX as of January 6, 2021 (NYSE: BMTX). BBVA is shutting down Simple and Azlo as part of the acquisition by PNC. (NerdWallet) Personally, I am not shocked by the closing of Simple. BBVA took a lot of write-downs on that business over the years. But I was a little surprised by Azlo as this unit was growing. I guess this clarifies PNC’s position of remaining a BaaS sponsor bank through partnerships, but not wanting to own a fintech or direct bank (i.e. digital branch). Recall the PNC earnings transcript from 3Q2020. Bill Carcache -- Wolfe Research – Analyst – “…If I may squeeze in one last one. Bill, can you share your thoughts around the direct neo-banks, sort of the Chimes and others out there that operate exclusively online without traditional branch networks and, in this sort of post-COVID environment, how you see their presence impacting the competitive environment over, say, the next three to five years? And is there any potential benefit to deploying some of the BlackRock proceeds on a neo-bank? Or are those sort of capabilities things that you think you can build on your own?” Bill Demchak -- Chairman, President, and Chief Executive Officer – “I'm trying to contain myself. I wish we had the opportunity to basically not have to make any money and grow customers by giving stuff away and running our back office on a third-party bank system that's written in COBOL from 50 years ago. But we don't have that luxury, yes. The tech capability of these guys, there's nothing that they have that we don't have, nothing that they have that we can't produce if we wanted to have.” Ouch! LOL PPP Round 2 to open up on Monday, January 11. The first two days are restricted to first time borrowers; and only financial institutions with less than $1B in total assets will have exclusive access to the portal. (SBA Link) OCC announced that Nationally chartered banks can use stablecoins and blockchains to facilitate payments and other activities Specifically, “a national bank or federal savings association may validate, store, and record payments transactions" by serving as a node on an independent node verification network (INVN). BankingDive has a good write-up on this. The OCC News Release can be found here (this includes a link to the 10 page interpretive letter) CFPB wants to issue and regulate FinTech charter (Link) A task force created by the Consumer Financial Protection Bureau is recommending that Congress consider authorizing the bureau, and not the Office of the Comptroller of the Currency, to issue federal charters to fintech companies engaged in lending, payments or remittances. "There is an opportunity for the CFPB to be an even more powerful force to promote consumer protection and welfare, to be a chartering entity for fintechs," says Todd Zywicki, chair of a CFPB-appointed task force on consumer regulatory reform. - Of course the OCC was quick to respond saying they should be the one to issue and regulate the FinTech charter - Hmm, just a few weeks ago we discussed the CSBS suing the OCC over the same issue – “CSBS asserts that the OCC is overstepping their bounds” In the old days, we called this irony….. HaHaHa!!! Just in case you are having trouble falling asleep, here is the CFPB press release that includes links to the Taskforce Report (2 volumes totaling 898 pages) - CO Federal Credit Union placed into conservatorship (not a failure) by NCUA Warning – what comes next is a shameless plug for our FedFis FI Analysis Team because, well…. they are awesome!!!) In case this comes up in any of your discussions with regulators, customers, or prospects, our FedFis Rating© for C O FCU was 4.15 and 4.21 in 3Q20 and 2Q20 respectively placing them in the bottom 4% of all credit unions each quarter. This is the first conservatorship of 2021; and the latest by the NCUA since Southern Pine (6/11/20) which is still in conservatorship. Random Uncle Sean Stuff: We made it to 2021 – and the hits just keep on coming…. Keep an eye out for flying monkeys as I am certain that should be any day now– LOL!!!! I finally got my winter/early spring garden completed last weekend. 75 onion sets, 15 spinach transplants, and my carrots and radishes are doing great. HOWEVER, my damn cat thinks it is funny to dig the onions up every few days; and apparently he likes to eat the spinach leaves too (I’ve caught him in the act several times)…. Beginning to think he is just pure evil! They are calling for 50% chance of snow here in Austin late Sunday night and I am 100% stoked about it!!! By the way, if you are working remotely, can you still get a snow day off (asking for a friend)??? Have a GREAT weekend and stay safe!!! Uncle Sean FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him. Because we're just doing what we do every year. If ya don't know us, here's who we are.
FedFis builds data solutions for the U.S. Banking and FinTech industry. How do we do it: Blending public datasets (Call Report Financials, Branch, Demographics, M&A, Contact Data, etc.) with proprietary FedFis datasets (FinTegration Ecosystem©, FinTech Analytics©, FinTographics©). By blending public and proprietary datasets, then applying advanced data science techniques, FedFis is able to deliver intelligent insights that represent Financial Institution and FinTech data in its most intelligent form. Industry Impact: In short, we move market share. FedFis has redefined what tactics are possible in the banking industry, allowing our customers to predominate competition. We build Executive-Level data strategies that weaponize data tactics throughout the organization. Resulting in faster growth with greatly reduced customer acquisition cost, and making the right partnerships. Who uses FedFis Data: FedFis customers include nine of the top ten banking core processors, nine of the top ten payments firms, and countless Banks, Regulators, VC’s, FinTechs and other large financial services firms. FedFis.com or follow on LinkedIn for the latest company news & industry insights. Or just give us a call. Happy New Year’s Eve!!!!
Wow – and we thought last week was a light week! I think everyone is just laying low trying to exit 2020 as quietly as possible (there is no need to poke the bear). Anyhoo – here is the last Uncle Sean Update of 2020: Stimulus Package (stop me if you’ve heard this one before - LOL) was signed into law late Sunday evening despite President Trump’s push for higher direct payments. There was a subsequent attempt to increase the direct payments to individuals from $600 to $2,000 early this week that passed with majority through the House but has stalled out at the Senate as other items were tied into the bill. Fintech firm Current has been distributing stimulus payments all week. JP Morgan Chase makes a bet on post-pandemic travel through the acquisition of cxLoyalty Group’s rewards platform that serves 70 million customers and 3,000 client and marketing partnerships. Synchrony and PayActiv join CFPB’s compliance assistance sandbox. This basically protects them for two years while developing their product provided they comply with terms of the approval. Synchrony is seeking to develop a “dual-feature credit card” that is designed for consumers with a limited or damaged credit history as a tool that can be used to establish or reestablish a favorable credit history. Basically it is a lower rate on secured card with the opportunity for eligible accountholders to graduate to unsecured use after 12 months. PayActiv received “CFPB’s sandbox approval” which states that PayActiv’s program is not credit under the Truth in Lending Act. Recall a few weeks ago where we discussed Earned Wage Access (EWA) and the clarification from the CFPB. Basically if you are dealing with the payroll provider with no recourse to the employee then you are not establishing credit (and not susceptible to Reg Z Truth in Lending requirements) – this includes companies such as PayActiv, DailyPay, Immediate, and Even. However, if you are dealing directly with the employee, then you are establishing credit. This points more towards the dreaded term “payday lender”, and includes companies such as Brigit, Dave, and Earnin. Here is the more lengthy description. OCC grants approval for LendingClub to acquire Radius Bank (Link) LendingClub still needs Federal Reserve approval to become a Bank Holding Company, but this gets them one step closer. This deal was announced in February and was expected to take 12 – 15 months to complete, so there is optimism that the process is moving along nicely and may even close ahead of original projections. Random Uncle Sean Stuff: This morning we had a thunderstorm with gusty wind, heavy rain, and 35 degree temps…. It immediately took me back to the time me, Dave, Tanner, and my son went on a guided catfishing with Tex Elliot. I guess that was almost 10 years ago now. It was so cold, wet, and ugly out; but we caught a lot of good catfish and my son pulled in a nice 20lb Blue Cat at the end of the trip for his personal best (at the time). Just in case you need this info - Blue Catfish prefer fresh shad over all other baits. However, in a pinch (shad can be difficult to find during cold weather), I have had pretty good success using boneless skinless chicken breast. PLEASE – don’t forget to eat black eyed peas tomorrow!!!! I like mine with Rotel and bacon. Cook it down some and it tastes a lot like Bean Dip – you’re welcome!!!! LOL Have a great weekend and please stay safe! Happy New Year everyone!!!!! Uncle Sean FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him. Happy Holidays Everyone!!!!!
It has been a very light week as expected, but there are a few big items worth noting – below is the WK52 General Update from Uncle Sean:
Random Uncle Sean Stuff:
Have a GREAT weekend and please stay safe! Happy Holidays!!!! Uncle Sean smayo@fedfis.com Happy Friday once again!!!!
Here is the WK51 General Update from Uncle Sean:
Random Uncle Sean Stuff:
Have a GREAT weekend and stay safe!!! ppy Friday!!!
Here it is – The Infamous Week 50 General Update from Uncle Sean: In case you were too busy working, drinking, or hiding under a rock (or even all of the aforementioned activities at the same time) – the number one greatest thing this week is the advisory panel approval of the Covid-19 vaccine developed by Pfizer – looks like vaccines in the US can begin Monday or Tuesday!!!! Read up on it here - https://www.wsj.com/articles/fda-advisory-panel-takes-up-pfizer-biontech-covid-19-vaccine-11607596201. As a result, FedEx, UPS, and DHL are gearing up for what is being described as “the biggest global logistics effort since WWII” - https://www.cnbc.com/video/2020/12/08/shipping-companies-prepare-for-covid-19-vaccine-distribution-challenges-ahead.html?&qsearchterm=vaccine%20distribution Other headlines for the week:
… … … … And…… Here is the part that everyone has been waiting for (you can stop scrolling down now)…. Random Uncle Sean Stuff:
Have a GREAT WEEKEND and stay safe!!! Uncle Sean smayo@fedfis.com Happy Friday!
I kind of enjoy this knowledge sharing thing, so I think I’m going to keep doing it for awhile. Without further ado - here is another “General Update from Uncle Sean” for everyone. The purpose of this is high level FYI items to keep in mind in case they come up in discussions with customers / prospects or other meetings (“in case you missed it” kind of stuff). Or you can just delete it – LOL!!!
Random Uncle Sean stuff:
Have a great weekend everyone!!!! Stay safe and practice social distancing whenever possible. Uncle Sean smayo@fedfis.com |