​Happy Friday!!!
 
WOW – I can’t believe we are heading into the 4th quarter of the year already!  Also, can someone PLEASE tell the stock market to quit day drinking during the week???  Don’t forget to sign up here to have the Uncle Sean Update delivered straight to your inbox.  Here is the Uncle Sean Update for 9/30/22:
 

• A BIG HIGH FIVE to our friends at Fitech by Deluxe as a Premier Sponsor to the Bankers Helping Bankers platform (BHB) furthering BHB’s mission of empowering community banks through data and facts!!!  These quotes say it all:
  • “The accessibility of data and connectivity made possible by Bankers Helping Bankers underscores Fitech’s efforts to identify products that drive earnings and diversify sources of income to help insulate FIs from emerging fintechs,” said Rian Clinton, Director of Sales at Fitech by Deluxe.
  • “We are proud to be a trusted partner of financial institutions across Texas and the country, and we are proud to support Bankers Helping Bankers as they connect FIs with access to industry opportunities,” said Matt Mingenback, President of Fitech by Deluxe. “Together, we will help financial institutions compete and thrive as they adapt to evolving industry trends.”
  • BOOYAH!!!!!  😊

 

• Treasury Prime (BaaS enabled platform / BaaS Connector) continues to make headlines – this week they announce a partnership with Bangor Savings Bank (FDIC 18408; Total Assets $7B) to enable embedded finance / BaaS offerings to the bank and the companies it partners with in the financial services industry.

 

• Battle Bank (proposed de novo digital first bank in organization) has selected Savana (financial software for banks and fintech companies) “to automate processes between the core products and customer channels.”  Battle Bank will also be using Savana’s newly launched online and mobile digital banking experience for consumer banking, business banking and account opening.
  • This comes on the heels of a $45M Capital Raise last month to accelerate Savana’s core agnostic, customer-centric banking operations through their Digital Delivery Platform.  Check them out at savanainc.com – pretty cool!

 

• Quaint Oak Bank (FDIC 35497; Total Assets $752M) selects Teslar Software to enhance the banks commercial lending strategy by digitizing the entire end-to-end lending process.
  • Uncle Sean is keeping an eye on Quaint Oak Bank as I am hearing great things to come…!!!!

 

• The PNC Financial Services Group, Inc. (NYSE: PNC; BHC for PNC Bank, NA – FDIC 6384; Total Assets $534B) acquired Linga, a cloud-based restaurant operating system providing POS and payments solutions and more.

 

• Additionally, PNC Bank announced a partnership with Blend to digitally optimize the company's end-to-end online mortgage application process.  Basically making it easier for a customer to apply for a mortgage and import bank and payroll information directly into the application portal.

 

• Chase and DoorDash announced plans to launch the DoorDash Rewards Mastercard credit card.  Also worth noting, Goldman Sachs is reportedly (although no official announcement yet) launching a T-Mobile credit card.
  • This comes just a few weeks after a JPMorgan note to investors showing Goldman Sachs loss rate on cc loans of 2.93% for 2Q being the worst among big US card issuers and “well above subprime lenders.”
    • Hmmm - bad blood brewing….???  😲

 

• And this is interesting…  Nexo (crypto lender) has reportedly acquired an undisclosed stake in Hulett Bancorp, the bank holding company that owns Summit National Bank (FDIC 25054; Total Assets $96M), an OCC chartered bank.  The press release states that Nexo intends to offer “bank accounts, asset-backed loans, card programs, as well as escrow and custodial solutions through Summit National Bank.”
  • Also announced this week, eight states file cease-and-desist orders against Nexo for allegedly offering interest-earning accounts without registering them as securities by “allowing investors to deposit assets with Nexo in exchange for earning yields as high as 36% on their deposits.”  Sound familiar, anyone….???
  • Something tells me we haven’t heard the last of this story from the SEC, the OCC, and States.  Mhmm…..

 

• FTX US wins the auction to acquire Voyager Digital, the bankrupt crypto brokerage, subject to approval by the U.S. bankruptcy court on October 19th.  FTX US’s winning $1.422B bid was comprised of approximately $1.311B worth of fair market value of Voyager’s current crypto holdings plus $111M in incremental valuation. 

 

• IBAT joins the U.S. Chamber of Commerce and many other co-plaintiffs in suing the CFPB for overreach of authority.

 

• More CFPB news as they sue MoneyLion for allegedly violating the Military Lending Act by charging in excess of the 36% cap on loans to servicemembers and their dependents “through a combination of stated interest rates and monthly membership fees.”

 

• Rho (neo business bank) announced the development of Prime Treasury – a tailored treasury management platform targeting businesses with over $5M in liquid assets (they have other treasury solutions available for those with less than $5M).  Uncle Sean gives a nod to great timing as the bond market and treasury rates have made a screaming comeback recently.  Good stuff!!!

 

• FinTech funding news did slow down a little this week.  We shall see if this is an anomaly or the beginning of a trend.  Notable FinTech funding for the week:
  • Tactic (crypto accounting software for businesses) raised $11M in capital
  • Strike (bitcoin payment app for consumers and merchants) raised $80M in Series B funding round.
  • Noble (embedded no-code credit solutions) emerged from stealth and announced $15M in Series A funding – check them out at benoble.io.
  • Inclined (digitized platform for loans against existing whole life insurance) $15M in Series A funding round.
  • Bridge Money (mobile app offering supplemental income via cashback, surveys, ad viewing, etc.) raised $5.8M in Seed to continue development including more in-app money making opportunities.

 
 
Random Uncle Sean Stuff:

• I am cutting out a early today (don’t tell my boss) for some weekend shenanigans, so I am keeping this short – but I would be neglecting my duty if I didn’t lay some Dad Joke wisdom down:
  • I hate it when you try to leave work a little early on Friday and the Boss reminds you it’s actually Monday and only 9AM - DANG!!!
  • Shout out to the folks that can’t find their reading glasses because they are on top of your head – y’all are my people!!!
  • Self-reflection time….  Sometimes Uncle Sean gets road rage walking behind people at the grocery store.  LOL!!!!
  • And lastly…  What did the buffalo say to his boy when he sent him off to college?  Bison…. 😝

 
 
Have a GREAT weekend and please 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!!!
 
Happy Fall Y’all – which means it only got to 100 degrees this week in Austin, Texas!  Here is the Uncle Sean Update for 9/23/22:
 

• Shout out to MOCA Financial for being the latest to join the BHB BaaS Association!!!!   The BHB BaaS Association was created with the purpose of promoting, creating, and supporting Banking-as-a-Service (BaaS) and is aimed at serving the unique needs of BaaS sponsor banks in a responsible compliant way – furthering the cause of Bankers Helping Bankers.  I love it!!!! 😊

 

• It’s Fed Week!!!  As widely expected (except by the stock market apparently – YIKES), the FOMC unanimously voted to raise rates by 75 bps again with a new target range of 3.00% - 3.25%.  Additionally, the Fed will continue to reduce the Balance Sheet by $95B per month in Treasuries and agency backed MBS as detailed in May.  CNBC has a good summary as always.
  • The FOMC also released their Summary of Economic Projections (SEP) / “dot plot” (first since June) – just a reminder from Uncle Sean that although media outlets are fascinated by this, it is not policy or a plan of action, but simply a median of current assumptions based on current economic data as it stands today.  Key points:
    • Fed Funds rate projection of 4.4% by end of this year; and 4.6% for 2023
    • Median Unemployment forecasted to hit 4.4% for 2023 - 2024
  • Some quick Uncle Sean ‘Off the Rails’ commentary:
    • Finally exiting about a 15 year period of highly compressed NIM (basically if you are under 40 you probably haven’t seen this before as a working adult).  It will be interesting to see if we begin to see an uptick in De Novo applications as rate spread become attractive.  Conversely, as interest rates and unemployment start to heat up, Uncle Sean will be watching to see if credit issues begin to enter the picture as corporations will be looking closely at profits and potentially curtailing capex / expansion plans.  We are already seeing a slow-down in the housing sector.  But the good news here is that bankers are AWESOME at this.
      • For my Portfolio / Credit Manager / Chief Credit Officer friends…  Regarding exposures for your customers - I am still reading about potential exposure gaps in business inventory insurance (both cargo/transit and in-house) as supply chain issues continue to lead into inventory buildup.  Also commercial and residential property insurance limits as RE valuations have swelled over the last few years.

 

• The Bancorp Bank, N.A. (leading BaaS Sponsor Bank; FDIC 35444; BHC is public under the symbol TBBK) has completed their charter conversion with the OCC and is now a nationally chartered financial institution.

 

• Chipper Cash (cross-border payments app) partners with Highnote to launch US-based card program.

 

• Stash (investing and fintech banking app) announced an upgrade to their fintech banking platform including infrastructure and ledgering dubbed Stash Core (more on that below); and a shift in their patented Stock-Back® Debit Mastercard® which is now issued by Stride Bank (previously a Visa card issued by Green Dot).
  • American Banker (behind a paywall so I’m not providing the link) stated that Stash previously relied on Green Dot for core / ledgering.  Now that Stash has transitioned to Stride, the Stash Core platform is based on:
    • Mambu is powering the ledger
    • Alloy is providing identity decisioning
    • Marqeta for card processing

 

• Nymbus and Citizens Bank of Edmond partner together to launch a new direct digital bank focused on newly enlisted military members and their families with an anticipated launch date of early 2023 – very cool!!!
  • Hmm….  A little bit of backstory maybe???  I seem to recall a press release about a year ago where Moven and Q2 Core Pro were originally set to provide a direct digital banking solution…  I wonder what happened???  😲

 

• Atomic (suite of payroll connectivity API’s) announced a partnership with Aise (financial wellness app with bill pay via payroll deductions for employees).

 

• Banc of California (FDIC 35495; BHC is public under the symbol BANC) acquires Deepstack Technologies for $24M in cash and stock allowing the bank to expand payment processing services.

 

• Treasury Prime (BaaS enabled platform / BaaS Connector) announced that they have been accepted into the Jack Henry Vendor Integration Program further stating that “all banks on the Jack Henry core are able to adopt Treasury Prime’s BaaS technology and immediately offer embedded finance to their fintechs and enterprise clients.”
  • Additionally, Treasury Prime announced a partnership with FB Financial Corp (FirstBank; FDIC 8663; $12B Total Assets) to bring embedded finance offerings to FirstBank’s clients.

 

• Synctera (BaaS enabled platform / BaaS Connector) launched Synctera Line of Credit to enable “both FinTech developers and established companies to quickly create innovative lending products or embed lending services.”  The article goes on to state that “Synctera provides the required financial technology - including ledger and KYC/KYB services - as well as servicing and optional operational and compliance support. A Synctera partner bank will serve as the lender of record.”

 

• Notable FinTech funding for the week:
  • Portabl (identity verification mgmt. / “financial digital passport”) raised $2.5M in Seed funding.
  • Sardine (fraud detection in crypto and fintech) raised $51.5M in Series B funding round.
  • Higlobe (international payments) raised $14M in capital.  Using a monthly subscription fee (as opposed to a per transaction rate), Higlobe utilizes asset-backed stablecoins to provide a means of making cross-border payments between bank accounts.
  • Scratchpay (financing for veterinary and human healthcare) $35M in Series C funding round.
  • DoorLoop (rental property mgmt. software) raised $20M in Series A funding.
  • Future (green / ESG rewards platform including Visa debit card) raised $5.3M Seed Funding.

 
 
Random Uncle Sean Stuff:

• NOOOO!!!!!  Apparently, a truck full of cases of Coors Light beer crashed in Florida.  Fortunately no one was seriously injured, but the pictures immediately made me think of Tanner’s upcoming bachelor party!!!!  YEEE-HAW - LOL!!!
• Seriously???  Do we really need an FDA Warning not to use NyQuil as a chicken marinade???  Thanks TikTok….
• Some quick Dad Jokes to get us into the weekend!!!!
  • If you think about it, cereal is really just breakfast soup….
  • My daughter, Claire, asked if she could go to a 50 Cent concert.  I gave her a dollar and said take your Mom with you.
  • Aunt Patty told me that she read where it takes three sheep to make a wool sweater.  Heck, I didn’t even know they could sew!!!

 
 
Have a GREAT weekend and please 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!!!
 
WHOA NELLIE (in my best Keith Jackson voice) – what a busy week!  Here is the Uncle Sean Update for 9/16/22:
 

• With all eyes on ‘Powell & Co.’ for the FOMC meeting next week, August CPI came in hotter than expected at an annual rate of 8.3% with Core CPI at 6.3% (estimate was 8.1% and 6.1% respectively) with increases in shelter, food, and medical care - even as gas prices fell 10.6% from the prior month.  Yep, Uncle Sean is feeling it too; and it sucks!!!!  ☹

 

• Meanwhile, Goldman Sachs credit card business, anchored by the Apple Card and the GM card to a lesser extent, showed loss rate on credit card loans of 2.93% for 2Q.  “That’s the worst among big U.S. card issuers and ‘well above subprime lenders,’ according to a Sept. 6 note from JPMorgan.”  YIKES!!!

 

• No real surprise that the CFPB is looking into Reg E, but American Banker (behind a paywall so I won’t post the actual link) is reporting that CFPB Director Rohit Chopra said in a speech Wednesday that the level of PTP fraud is “frightening” and specifically called out providers such as Zelle, PayPal Venmo, and others – again…  😲

 

• Speaking of….  The CFPB released their comprehensive report on BNPL financing (83 pages) from information obtained by Klarna, Affirm, Afterpay (Block), PayPal, and Zip.
  • Key points – the five biggest BNPL firms issued 180M loans totaling $24B in financing last year.  This is up more than 10x from 16.8M loans in 2019 worth $2B.
  • Look for more regs to come as the agency is considering interpretative guidance and supervisory examinations of BNPL programs.

 

• The White House released the expected Comprehensive Framework for Responsible Development of Digital Assets with an emphasis on risk / regulation, crime, and enforcement actions to protect consumers.

 

• One (Walmart fintech with banking services provided by Coastal Community Bank) will be introducing checking accounts as a beta to thousands of Walmart employees and a small percentage of its online customers in the coming weeks; with plans to make the accounts available to Walmart’s 1.6M employees (WOWZA) within a year before making the services available more broadly.

 

• Adyen becomes the first financial technology platform to launch Cash App Pay outside of the Block ecosystem.  This allows Adyen’s business customers be able to begin accessing Cash App Pay as an integrated payment method for their U.S. customers online shortly and in-store next year. 

 

• Modern Treasury (business payments operations software) partners with Goldman Sachs Transaction Banking (TxB) to provide embedded payments to corporate customers.

 

• JPMorgan Chase to acquire payments fintech Renovite to enhance merchant acquiring revenue.

 

• Grasshopper Bank announced that it has received Preferred Lender Program (PLP) delegated authority status with the U.S. Small Business Administration.

 

• Bolt (one-click online checkout firm) announced the mutual termination of the merger agreement to acquire Wyre (crypto infrastructure payments firm) for $1.5B.  The merger would have produced the industry’s first one-click crypto checkout platform.

 

• ModusBox spins off PortX Inc. as an independent entity with an additional $10M in Series A extension.
  • PortX is “a technology company focused on financial services integration software that unlocks access to banking core data, eliminates vendor dependencies, and enables embedded banking-as-a-service solutions.”

 

• NCR Corporation (NYSE: NCR; enterprise technology provider to banks, retailers and restaurants) announced it will split two independent, publicly traded companies - one focused on digital commerce, the other on ATMs.  Expected to be completed by the end of 2023.  Check out the investor deck detailing:
  • CommerceCo as a leading digital commerce business at the forefront of secular evolution in retail, hospitality, and digital banking industries.
  • ATMCo as the leading global ATM-as-a-Service and ATM network business.

 

• Bottomline acquires Nexus Systems further deepening Bottomline’s business payments reach in the real estate and property management industries.

 

• Citizens Financial Group (NYSE: CFG) announced an agreement to acquire College Raptor, an online college planning platform, to supplement Citizens existing student lending and refinance business.

 

• Wow, here’s some big news in the Investment Banking world - ProBank Austin is being acquired by Forvis (top 10 accounting and advisory firm created by the recent merger between BKD and DHG) effective Oct 1, with the exception of the ProBank Austin Investment Banking Group (led by FI industry veterans Craig Mancinotti and Rick Maroney) which will be joining Hovde Group – also effective Oct 1. 
  • Congratulations are in order for Craig Mancinotti and Rick Maroney who will be Senior Managing Directors in Hovde’s Depository practice.  The additions to the Hovde investment banking team also include Mike Moran, Managing Director, and four additional investment banking professionals.

 

• Marqeta (modern card issuing platform) teams up with Bread Financial (NYSE: BFH) to launch an in-store and online, one-time use virtual card at participating retailers for a frictionless checkout experience.

 

• Mercury launches corporate credit card called IO (Mastercard CC issued by Patriot Bank) to help start-ups scale their business.

 

• KlariVis (enterprise dashboard and analytics solution for financial institutions) continues to see rapid growth and announced a new customer agreement with First Farmers Bank & Trust Co., a $2.5B community bank headquartered in Indiana with additional branch footprint in Illinois.  Check out the KlariVis platform here – looks cool!

 

• Abrigo and Encapture partner together to help financial institutions manage and streamline the commercial loan underwriting process.

 

• Atomic (payroll connectivity) partners with Hydrogen (embeddable fintech infrastructure) to allow Hydrogen customers to integrate Atomic’s feature set for employers, employees, gig-economy workers, and payroll providers.

 

• Notable FinTech funding for the week:
  • Power (fintech infrastructure; a full-stack next-gen credit card issuance platform), led by fintech veterans Randy Fernando (Azlo, Acorns, Vault) and  Andrew Dust (Amount, Acorns) emerged from stealth after raising $316M in capital consisting of a $16.1M Series A and a $300M credit facility. 
    • Power CEO, Randy Fernando told TechCriunch, “My belief is that over the next several years, consumers will go from banking with fintechs to banking with their favorite brands.  That is the vision we are building at Power — building modern fintech to power commerce.”
  • Cledara (SaaS subscription mgmt. platform – includes virtual business credit card as embedded finance solution) raised $20M in Series A funding round to further US expansion.
  • Ratio (embedded BNPL and sales financing for SaaS companies) emerged from stealth and announced $411M in capital consisting of an $11M in venture funding and a $400M credit facility for customer financing.
  • Kafene (point-of-sale lease to own financing option) raised $18M in Series B finding round.
  • Majority (neo immigrant bank) raised $37.5M in capital consisting of $30M in Series B plus another $7.5M in debt financing just nine months from their Series A round.  Valuation was not disclosed but the company stated 5x revenue growth over the past year.
  • SavvyFI (employee benefit program for college savings and student loan payments) raised $4.9M in Series A round.
  • Denim (fka Axle Payments – payment platform for freight and logistics) raised $126M in capital consisting of $26M in Series B and $100M in debt financing.
  • Payall (bank processor for cross-border payments) raised $10M in Seed round led by a16z to enable banks to “compete and win against fintechs.”

 
 
Random Uncle Sean Stuff:

• Special HAPPY BIRTHDAY wishes go out to our very own Mr. Tanner Mayo!!!!  It has been claimed that Tanner was actually born with a full beard…  And rumor has it that if you were to somehow succeed in shaving his beard off, it would spontaneously regenerate overnight!  Chuck Norris told me that he wishes he had ‘beard game’ like Tanner.  Santa Claus has Tanner beard envy.  The real reason Sasquatch hasn’t been photographed is because he is too embarrassed and intimidated to show his face since he saw Tanner’s beard.  HAHAHAHAHA – Happy Birthday buddy – we love you!!!! 😊
• And more Dad Jokes!!!!
  • If newly appointed King Charles III learns to play the guitar, wouldn’t he be the artist formerly known as Prince????
  • Do ranchers buy cows from a cattle log?  Also, if you are dressed like a cowboy you are, in fact, ranch dressing….
  • Why did the chicken join the gym?  To work on his pecks!!! 😝

 
 
Have a GREAT weekend and please 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!!!
 
Hmmm - for a short week, it sure felt like there was a lot of policy and regulatory speeches…  Here is the Uncle Sean Update for 9/9/22:
 
Let’s get the reg stuff out of the way first -

• Acting Comptroller of the OCC Michael Hsu gave a speech at the TCH + BPI Annual Conference titled “Safeguarding Trust in Banking: An Update” – with a segment emphasizing “Developing a more sophisticated understanding of bank-fintech arrangements.”
  • Specifically stating, “bank-fintech partnerships have been growing at exponential rates and have gotten more complicated.  Banks and tech firms, in an effort to provide a ‘seamless’ customer experience, are teaming up in ways that make it more difficult for customers, regulators, and the industry to distinguish between where the bank stops and where the tech firm starts.”  Also noting that this is likely to “accelerate and expand until there is a severe problem or even a crisis.”
    • Keeping in mind that this comes one week after the written OCC agreement with Blue Ridge Bank related to third-party fintech partnerships.
  • The BHB BaaS Association responded by issuing a statement, “Acting Comptroller Hsu’s comments at the TCH+BPI Annual Conference shine light on issues which have concerned the members of the Banking as a Service Association for some time.  We believe that BaaS relationships can carry mutual benefit for financial technology companies and financial institutions alike.  However, the only winning scenario for partnership is one in which the end-user is served in a safe, sound and compliant manner” also encouraging collaboration towards clear and consistent regulatory guidelines.

 

• Regarding inflation and monetary policy, the Fed continues its hawkish tone.  Federal Reserve Chair Jerome Powell reiterated this week in a Q&A presented by the Cato Institute that he is “strongly committed” to fighting inflation and will continue “until the job is done.”  And again highlighting, “the longer inflation remains well above target, the greater the risk the public does begin to see higher inflation as the norm, and that has the capacity to raise the costs of getting inflation down” longer term.  Worth noting that this was Chairman Powell’s last scheduled public event before the FOMC meeting on Sep 20-21.
  • Fed Vice Chair Lael Brainard echoed similar resolve during a speech at TCH and BPI 2022 Annual Conference stating, “we are in this for as long as it takes to get inflation down.  So far, we have expeditiously raised the policy rate to the peak of the previous cycle, and the policy rate will need to rise further.”

 

• SEC Chairman Gary Gensler continues to continues to forcefully reiterate the case for SEC’s broad authority over crypto stating the “vast majority” of the nearly 10,000 tokens in the crypto market meet the definition of a security and are therefore subject to securities laws. 

 

• Fed Vice Chair of Supervision Michael Barr gave his first policy speech this week pushing for action on stablecoins, climate change preparations and both the safety and fairness of the finance industry.  You can find the full speech here.

 

• And just in case you missed it, the OCC released their five year Strategic Plan for 2023 - 2027 with a focus on:
  • The ability to be agile and learn quickly
  • Highly credible and consistently trusted
  • Leading on bank supervision as the banking system evolves

 
Now on to the rest of the update -

• Zelle® adoption continues to explode with 2Q 2022 results showcasing:
  • 1,700 banks and CU’s including 100+ MDIs offering Zelle in their apps
  • 2Q 2022 payments totaled $155 billion with 554 million transactions.  YoY $ amount increased by 29% with # of transactions increasing by 27%.
    • Highlighting an increase of 87% quarter-over-quarter for business disbursement transactions to nearly 8 million employees, contractors, and small business customers.
  • 5 year milestone includes 5 billion transactions totaling $1.5 trillion in value have moved across the network since 2017.

 

• WOW - Apple Pay has now moved into the #2 spot edging out Mastercard by processing more than $6 trillion in annual transaction volume behind only Visa at the top spot globally.

 

• DailyPay (on-demand wage platform) announced the launch of Friday a Visa prepaid GPR debit card and mobile app allowing for “no-fee instant on-demand pay transfers” to the debit card.  Users can track the card balance and transaction history on the mobile app, along with the available amount of on-demand earned pay they could draw upon.  More details about Friday by DailyPay:
  • Existing bank account is not required, no minimum balance, no maintenance fees.
  • Currently, the no-fee, instant on-demand pay requires employer participation in DailyPay, and election to deposit early transfers and set direct deposit to the Friday Card.
  • Allows for multiple funding options including:
    • Direct deposit, transfer of available on-demand pay balance, other linked bank account, and cash loading via 90,000+ Green Dot retail locations across the country.

 

• The FDIC released the Second Quarter 2022 Quarterly Banking Profile.  Key takeaway is “generally positive results this quarter, amid continued economic uncertainty.  Loan growth strengthened, net interest income grew, and most asset quality measures improved.  Further, the industry remains well-capitalized and highly liquid.”  More specifics:
  • Net Income declined $6B compared to 2Q 2021 due to increase in provision expense of $21.9B.
  • NIM expanded to 2.80% - YAY!!!!
  • Loan growth is wide and consistent – DOUBLE YAY!!!
  • Credit quality remains in check, but some growth in early past due (30-89) is showing up in consumer loans (also note increase in provision mentioned above).
  • Deposits declined for the first time since 2018 (but still way above pre-pandemic levels).
  • # of problem banks remain unchanged at 40.

 

• Ramp (corporate card and expense management platform) reportedly to launch cross-border B2B payments in the next 60 days per this Payments Dive article.

 

• UBS announced the mutual termination of Wealthfront merger agreement ($1.4B cash acquisition price) and instead has invested $69.7M via a convertible note at approximately the same total valuation.

 

• Bond (BaaS middleware / connector) launched white label commercial charge card solution enabling “B2B SaaS platform providers to launch their own commercial charge cards without writing a single line of code.”

 

• Notable FinTech funding for the week:
  • Bitwarden (open source password manager) announced $100M in capital in an undisclosed round referencing a growth investment.
  • Mesh Payments (corporate spend automation platform) raised $60M in new financing.
  • Chargezoom (B2B invoicing integrated payments) raised $10M in Series A.
  • Boopos (M&A alternative lending platform based on revenue financing model) raised $58M in capital consisting of $8M in Series A plus $50M in debt financing.
  • Stack (crypto education and trading app for teens and their parents) raised $2.7M in new funding and launched this week with over 6,000 users on the waitlist.

 
 
Random Uncle Sean Stuff:

• Remembering Queen Elizabeth II who passed away peacefully at her summer residence, Balmoral Castle in Scotland, this week at the age of 96 after 70 years of service to the United Kingdom.  This collage from Town & Country has 108 photos of Queen Elizabeth life in pictures.  NPR also has a great collection of pictures as well.
  • This statistic really jumped out at me – when Queen Elizabeth first took the throne at the age of 25, the UK prime minister was Winston Churchill who was born in 1874.  At the time of her death, the current prime minister is Liz Truss who was born 101 years later in 1975.
  • Maybe the best reflection I read was a simple LinkedIn post from Agility Bank, “Our deepest sympathy goes to the #RoyalFamily and citizens of the #UnitedKingdom in the loss of Her Majesty Queen Elizabeth II.  Her actions over a 70-year reign speak louder than any words.  Her quiet leadership, her dignity, and her steadfast service to her people will always be remembered by those of the countries she watched over and by those of us who admired her from afar.  You will be missed, Your Majesty, by everyone.”

 
 
Have a GREAT weekend and please 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 & Happy Labor Day Weekend!!!
 
It was a busy week with a lot of updates leading into the Holiday weekend, so let’s get right to it - Here is the Uncle Sean Update for 9/2/22:
 

• Congratulations to Mr. Robert Keil, Chief Payments Officer at Sutton Bank, for being nominated by his peers as the inaugural Chairman of the Board of Directors for the BHB BaaS Association!!!!

 

• Hmmm – this will be interesting to watch….  Block (fka Square) Cash App users (80 million strong by the way) can now make payments on e-commerce sites outside the Square network via Cash App Pay.
  • Previously this was a closed loop network meaning that users could only make payments using Cash App Pay on Square terminals or online Square merchant partners.
  • For now, Block has “partnered with American Eagle, Aerie, Tommy Hilfiger, Finish Line and JD Sports for the launch with more merchants like Romwe, Savage x Fenty, SHEIN, thredUP and Wish coming to follow in the coming months.”  Block is automatically offering a 10% discount to users when they make their first purchases with these merchants using Cash App Pay.

 

• For my compliance folks out there…  Per an 8-K filed on 8/29, Blue Ridge Bank has entered into a written agreement with the OCC after the regulator found “unsafe or unsound practice(s), including those relating to third-party risk management, Bank Secrecy Act (“BSA”) /Anti Money Laundering (“AML”) risk management, suspicious activity reporting, and information technology control and risk governance.”  😲
  • The main emphasis being to “adopt, implement and adhere to a written program to effectively assess and manage the risks posed by the Bank’s third-party fintech relationships” as well as “obtain an OCC non-objection prior to onboarding or signing a contract with a new third-party fintech partner, or offering new products or services or conducting new activities with or through existing third-party fintech partners.”  Additionally, the agreement requires Blue Ridge Bank to:
    • Adopt, implement and adhere to an effective written Bank Secrecy Act (“BSA”) risk assessment program to ensure BSA compliance risk assessments provide a comprehensive and accurate assessment of the Bank’s BSA compliance risk across all products, services, customers, entities, and geographies, including all activities provided by or through the Bank’s third-party fintech partners;
    • Adopt a revised independent BSA audit program that includes an expanded scope and risk-based review of activities conducted through the Bank’s third-party fintech partners.
    • Agreement will remain effective until it is amended by the Bank and the OCC, or the OCC modifies, waives or terminates the Agreement.

 

• Aeldra announced they shutting down operations and Blue Ridge Bank will be issuing final checks to consumers on Sept 9 for any remaining funds in their Aeldra account.

 

• LevelField Financial (financial services firm) announced the acquisition of Netshares Financial Services (an SEC registered broker-dealer) as part of their overall strategy to bring “traditional banking and digital asset products and services in one trusted platform.”  LevelField has also hired PNC Bank as an advisor to acquire a U.S. chartered bank and is reportedly seeking a $50M VC round.

 

• Jack Henry announced that they teamed up with Google Cloud to accelerate JKHY’s multi-year modernization strategy by bringing cloud-first technology to banks and credit unions.  Also this week, JKHY announced the completion of the Payrailz acquisition.

 

• First National Bank of Omaha announced the launch of launch of Bend by FNBO as a new credit card-as-a-service (CaaS) solution to allow digital brands / fintech companies to launch an embedded credit card solution.  Check it out at bendbyfnbo.com.

 

• Highnote expands their partnership with Visa as an issuer processor on Visa Cloud Connect.  Highnote also announced they are working with GiveCard to launch a new prepaid debit card (issued by Sutton Bank) to enable shelters, non-profits, and governments to scale cash transfer programs and quickly serve the needs of their target community.

 

• U.S. Bank announced they are raising their minimum pay to $20 per hour starting in early November.  This is the second minimum wage increase announced by U.S. Bank this year. 

 

• The Federal Reserve narrowed the FedNow Service launch to mid-2023 specifically targeting May – June timeframe; and marks the beginning of full-scale pilot testing in mid-September with more than 120 organizations participating.  Additionally, Fed Vice Chair Lael Brainard requested industry stakeholders to devote the resources necessary to support instant payments including “upgrading back-office processes, evaluating accounting procedures to accommodate a seven-business-day week, arranging liquidity providers, deploying a new customer-facing application, and promoting instant payments for key use cases to customers” to facilitate the shift to real-time payment infrastructure.
  • For more on FedNow, go to explore.fednow.org.

 

• The United States Federal Bureau of Investigation (FBI) issued a new warning for investors regarding DeFi hacks warning that cybercriminals are increasingly exploiting vulnerabilities in decentralized finance (DeFi) platforms to steal cryptocurrency.  The FBI PSA stated, “between January and March 2022, cybercriminals stole $1.3 billion in cryptocurrencies, almost 97 percent of which was stolen from DeFi platforms according to blockchain analysis firm Chainalysis”.

 

• Klarna (BNPL) losses quadruple as revenue increases on 24% for the 1H2022.  OUCH!

 

• Notable FinTech funding for the week:
  • RentSpree (end to end rental management software for renters, agents, and landlords) raised $17.3M in Series B funding round.
  • Solid (fka Wise, a fintech infrastructure / middleware / BaaS connector) raised $63M in Series B round.
  • Alloy (fraud / identity decisioning platform for banks and fintech companies) raised $52M in Series C extension.
  • VRGL (institutional wealth management analytics) raised $15M in Series A.
  • Willow Servicing (cloud-based mortgage servicing) picked up a $6M Seed round.
  • Landa (fractional RE investing) emerged from stealth mode with $33M in capital funding including a recent $25M Series A and a previous $8M Seed round.

 
 
Random Uncle Sean Stuff:

• Labor Day Weekend is here and with it comes the end of the dog days of summer and early hints of fall!!!!  Ahhhh, all feels right with the world again.  In Texas it means football, slightly cooler temperatures, much needed rain, Dove season, Hatch chile pepper season, holiday scheduling / planning with family, and yes – pumpkin spice flavored everything.  😃
  • Uncle Sean expects the stores to be packed with Christmas decorations any day now (SMH)….
  • Also - don’t forget to renew those Texas hunting and fishing licenses as of Sept 1!!!
• Check out the 110 year old Battleship Texas move through the Houston Ship Channel as she left La Porte, TX for some much needed repairs at a shipyard in Galveston, TX.  
• Dad Jokes are back:
  • I went by the house that I grew up in and asked if I could go in and look around.  They said NO and slammed the door…..  Geez, my parents can be so rude sometimes!!!
  • I don’t think the therapist is supposed to say “WOW” that many times in your first session, but here we are…   😝
  • Carrots can be good for your eyes, but alcohol can double your vision - LOL!!!
  • You ever take one of those naps that is so good that you abruptly wake up gasping thinking you missed the school bus….  But it’s Sunday….  And you’re 52… 
    • Yeah – hoping I get one of those this weekend!!! 😊

 
 
Have a GREAT LABOR DAY weekend and please 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!!!
 
Hard to believe this is the last Friday in August already!  Here is the Uncle Sean Update for 8/26/22:
 

• Bankers Helping Bankers is at it again!!!!  This week highlights a partnership with BankLabs to add a white label loan participation marketplace to the BHB Platform allowing for automated loan trading for banks within BHB.
  • Powered by the BankLabs Participate product, it allows originators and participants to digitize and share loan info, documents, and automate workflow – potentially cutting weeks off the traditionally slow origination process.  Automating loan trading helps banks efficiently sell and manage loans (think concentration risk) to other banks that need quality loans.
  • The BHB loan marketplace will launch in late 2022.  This is truly “Bankers Helping Bankers.”  BOOYAH!!!!!

 

• Many eyes this week were on the Fed at the annual Jackson Hole policy symposium.  As expected, Fed Chairman Jerome Powell warned of some pain ahead to households and businesses as the Fed works to bring down inflation by a “forceful and rapid approach.”  Although the economy is showing signs of slowing from the record growth rates of 2021, Chairman Powell cautioned that higher rates may persist for a while.  
  • Chairman Powell stated, “Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy.” 
  • Here is Chair Powell’s short and focused speech (a fairly quick 3+ minute read).
  • Meanwhile, St. Louis Fed President James Bullard spoke about the timing of fed funds rate increases and favors “front-loading,” or getting rate increases in earlier with his target of 3.75% to 4% by the end of the year per this very good CNBC interview (4 minute video).

 

• Computer Services, Inc. (CSI) (OTCQX: CSVI) announced a definitive agreement to be Acquired by Centerbridge and Bridgeport for $1.6 billion (cha-ching).  The cash transaction represents $58 per share purchase price which is about a 53% premium to CSI’s closing stock price on Aug. 19, 2022.
  • Upon completion of the transaction, CSI will become a privately held company, and its common stock will no longer be listed on any public market.

 

• DailyPay (on demand / earned wage access platform) has partnered with Visa to launch a Prepaid GPR Debit Card and a mobile banking app.

 

• Mortgage focused fintechs continue to feel the pian (along with other banks and residential RE originators in the space):
  • Better.com is conducting their 4th round of layoffs since Dec 2021 this week in response to a challenging mortgage environment as increasing mortgage rates, declining origination and refinancing, and general economic uncertainty hits the housing market and the broader mortgage industry.
  • Reali (RE proptech), a pioneer in 'buy before you sell' and 'cash offer' programs, announced they are closing operations by the end of the year; and will be laying off most of the workforce on Sep. 9, 2022 - also citing market conditions and unfavorable capital-raising environment.

 

• The Depository Trust & Clearing Corporation announced that their blockchain settlement platform is now live and processing on average over 100,000 transactions per day in a parallel production environment.
  • DTCC’s distributed ledger technology-based (DLT) alternative settlement platform (Project Ion) was built on R3’s Corda technology and developed in a collaboration of a host of market participants including Apex Clearing Corp., Barclays, BNY Mellon, Charles Schwab Corp., Citadel Securities, Citi, Credit Suisse Securities USA LLC, Fidelity Investments, Fnality International, Goldman Sachs & Co., J.P. Morgan, Morgan Stanley & Co, Raymond James Financial Inc., Robinhood Securities LLC, State Street Corporation, and Virtu Financial Inc.
  • How’s that for some name dropping!  😲

 

• A new Direct Digital Bank is launching – say hello to Jenius Bank which will operate as a division of Manufacturers Bank (FDIC 18618; $4.9B total assets), a California state-chartered bank that is a wholly-owned subsidiary of Japan based Sumitomo Mitsui Financial Group, Inc. (NYSE: SFMG).
  • John Rosenfeld is President of Jenius Bank. He has over 20 years of experience in the financial services industry; and was the founder and President of Citizens Access (an online direct bank of Citizens Bank).

 

• MX pulls in Wes Hummel as their new Chief Technology Officer.  Hummel was previously with PayPal for 14 years and most recently served as VP Site Reliability and Cloud Engineering.

 

• Okay, Uncle Sean doesn’t typically post other folks blogs – but the title of this one had me rolling (and the content is really good too)!!!!!!  Check out this article in Lawfare by Nicholas Weaver titled, OFAC around and find out – LMAO!!!

 

• Notable FinTech funding for the week:
  • Kasisto (AI virtual assistant / chatbot for financial services) raised $15.5M in Series C Extension for a total Series C round of $31M.  The extension was led by FIS and Westpac Banking Corporation with participation from BankSouth (worth noting that both Westpac and BankSouth are customers of Kasisto).
  • Highline Technologies (payroll linked loan payment automation platform) raised $13M in Series A funding round.
  • Nitra (healthcare fintech) raised $62M in capital consisting of $16M Seed Round plus a $46M debt facility; and launched a Visa Business Debit card for physicians.
  • Deposits (FI and FinTech middleware / connector startup) raised $5M Seed Round.

 
 
Random Uncle Sean Stuff:

• We should all take a moment to recognize that our very own FedFis CRO, Mr. Bobby Button no longer has a girlfriend……….  LOL!!!  SHE SAID YES - CONGRATULATIONS on your new marriage engagement!!!!!!!  😃

• Some odd things I stumbled across while surfing the internet (oops I mean working – you know doing “research” and other important stuff).  No, I did not fact check any of these but they are amusing, so - enjoy!!!
  • Apples wake you up more than coffee in the morning.  This is because of the high amounts of sugar that is found in apples. The vitamins from the apples also have similar effects to caffeine, thus making you feel more awake.
    • Ahhh, but what if you eat an apple with your coffee????  Now we are on to something!
  • Cat jaws cannot be moved sideways.  They are mainly built for killing prey and can open very wide to ensure their kill.  Cats also cannot easily chew their food.
    • Yep – likely explains why mine always seems to throw up after over-indulging on cat food (yuck).
  • A person will sleep an average of 25 years in their lifetime.  The average time a person sleeps at night is around 8 hours.  People also spend an average of 7 years trying to go to sleep.
    • Gee thanks….  Now I have something else to stress out about while trying to fall asleep – LOL!!!
  • Grapes explode in the microwave.  The water found in grapes interacts with the wavelengths of energy from the microwave.  After a few seconds, the radiation from the microwave and the plasma in the grape react together which causes the grapes to explode.
    • Hmmm…  I have a distinct feeling that Aunt Patty is not going to be very impressed with the mess I am about to make!!!  😉

 
 
Have a GREAT weekend and please 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!!!
 
FinTech | Banking | Data is what we do and who we are.  Don’t forget to sign up here to have the Uncle Sean Update delivered straight to your inbox each week.  Here is the Uncle Sean Update for 8/19/22:
 

• Huge shout out to Choice Bank and Tim Heilman as the latest leading institution to join the BHB Banking-as-a-Service (BaaS) Association as a founding member!!! 

 

• Another CU acquiring a bank – Harvesters Credit Union (Charter 68726; total assets $275M) to acquire First National Bank Northwest Florida (FDIC 25122; total assets $239M).
  • This marks 10 announced acquisitions of a bank by a CU so far for the year.  This compares to 13 in 2021, 7 in 2020, and 16 in 2019 (Source: FedFis).

 

• Meanwhile, GreenState Credit Union announced the termination of the merger agreement with Premier Bank after a state judge sided with and affirmed the decision of the Nebraska Department of Banking and Finance (NDBF) to deny the merger application.

 

• eToro (social investing platform) to acquire Gatsby (a commission-free options and stock-trading app aimed at younger traders via payment for order flow) for $50M and scales eToro’s US business – clearly taking aim at Robinhood.
  • If you get a chance, check out that eToro demo account that allows you learn and trade via a $100K fake account in real-time.

 

• Synapse (BaaS connector) announces partnership with Lineage Bank to expand BaaS services for fintech companies. 

 

• Bond (BaaS connector) launched a Credit Builder Card to make it fast and easy for fintech companies to offer a secured credit card to their customers. 
  • Per the Bond.tech Blog, the secured credit card is a Mastercard issued by Evolve Bank & Trust; and in partnership with Bloom Credit who reports the payments to the credit agencies just like a regular CC to “help consumers establish and improve their FICO Score.”

 

• WebBank announced an agreement with America Express to become a card issuer and participant in the American Express network.  “American Express selected WebBank as one of its key issuing banks focused on the fintech industry…  WebBank plans to begin issuing Amex cards through fintechs later this year.”

 

• Hello Alice (free platform to help small business owners in the US start and grow) launched the Hello Alice Small Business Mastercard credit card issued by First National Bank of Omaha.  The card is part of Hello Alice’s larger Equitable Access to Capital program that “provides all of the financial products, tools, and education for owners to scale their businesses, including its own grant fund providing security deposits for high-potential but credit-challenged small business owners.”  Very cool!!!  😊

 

• Bankjoy (online and mobile digital banking provider) announced they have joined the Jack Henry™ Vendor Integration Program (VIP); and will now integrate with JH Symitar via jXchange™.
  • Basically allows JKHY customers on Symitar core an easy integration to Bankjoy’s digital platform.

 

• First Internet Bank takes aim at some of the fintech challenger / neo business banks by launching Do More Business Checking allowing small business customers to link personal and business accounts (including those at other institutions) for an aggregated 360 view of their finances that also includes credit cards, savings, and investments.
  • Ahhh – the ability to track all of your finances in one place….  NICE!!!  Check it out here.

 

• BankProv (NASDAQ: PVBC; The Provident Bank, FDIC 90141) announced strategic integration with Republic (alt investment platform and crowdfunding marketplace) to provide escrow accounts through BankProv’s BaaS offering via Treasury Prime.

 

• The FDIC continues their public campaign on deposit insurance clarification this week by issuing Cease and Desist letters to five companies for making crypto-related false or misleading representations about deposit insurance.  YIKES!!!  Here are the respective letters by name:
  • Cryptonews.com
  • Cryptosec.info
  • SmartAsset.com
  • FTX US
  • fdiccrypto.com

 

• Notable FinTech funding for the week:
  • Arc (SaaS revenue financing platform) raised $20M in Series A funding round to continue to help software startups grow and more efficiently deploy capital.
  • BankiFi (embedded banking platform for SMB’s) raised $4.8M in capital to fund their expansion to the US.
  • Pomelo (consumer focused international money transfer solution via credit) raised $70M in Capital consisting of a $50M credit facility and a $20M Seed round to provide instant international consumer access to cash via credit sponsored by Mastercard.
  • Bluetape (payments and financing for the construction industry) raised $55M in capital consisting of $50M in debt financing and a $5M Seed round.
  • Highbeam (ecommerce business banking) raised $7M in Seed funding.

 
 
Random Uncle Sean Stuff:

• NOOOO – say it isn’t so!!!  Looks like Dodge will be discontinuing the Challenger and Charger muscle car lines next year in favor of more fuel efficient vehicle production.
• I think we are finally starting to exit the dog days of summer – WHEW!!!
  • We had a reprieve of the 100+ degree days and actually saw a little bit of rain this week – it didn’t last long and it wasn’t nearly enough, but I’ll take it! 
  • College Football kicks off next week on 8/27 (check out the ESPN Schedule and the AP Top 25 College Football Poll).  Labor Day weekend is only two weeks away, and Dove season arrives in Central Texas.  Good times!!!
• And some Dad Jokes to get us into the weekend vibe:
  • Little known fact - Many pirates purchase their hooks from “second-hand” stores….  Ohhh, I know – that was awful..  LOL!!!  😝
  • The adjective for metal is metallic, but not so for iron, which is ironic…
  • The secret to enjoying a good wine:
    • First, open the bottle and allow it to breathe.
    • If it doesn’t appear to be breathing, immediately give it mouth-to-mouth – and don’t be afraid to use both hands!
      • Be sure to follow Uncle Sean for more tips on how to be elegant, classy, and sophisticated!!!  BWAHAHAHAHA!!!!  😊

 
 
Have a GREAT weekend and please 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!!!
 
WOW – what an exciting week!!!  There is so much to cover with a ton of partnering and acquisitions going on, so let’s get to it!  Here is the Uncle Sean Update for 8/12/22:
 

• Check out this cool article regarding Bank Born Products - featuring Brad Womack with FINTX, LLC, Marco Perez with BANCreach, and Mike Fernandez with Bankers Lender.  Some AWESOME things happening these days with Bankers Helping Bankers, FedFis, and IBAT.

 

• Seacoast National Bank announced a definitive agreement to acquire Professional Holding Corp. (NASDAQ: PFHD, bank sub is Professional Bank).
  • Seacoast has been busy as this is their third deal this year!  Apollo Bank on 3/29 and Drummond Community Bank on 5/4, but Professional Bank is the largest ($2.6B total assets) expanding Seacoast’s Florida footprint, especially in Miami.

 

• Jack Henry is acquiring Payrailz enhancing JKHY’s payments-as-a-service strategy including real-time P2P.

 

• FDIC to focus on CRE transaction testing for banks with significant exposures in the upcoming examination cycle as CRE loans are peaking at all-time highs “given the uncertain long-term impacts of changes in work and commerce in the wake of the pandemic, the effects of rising interest rates, inflationary pressures, and supply chain issues.”  Banking Dive has a good summary.
  • Meanwhile, the FDIC continues their consumer marketing blitz regarding The Importance of Deposit Insurance and Understanding Your Coverage amongst fintech bankruptcies (Voyager).

 

• Unit (fintech BaaS connector) partners with Thread Bank (fka Civis Bank) to expand Banking-as-a-Service ecosystem for both companies and accelerate onboarding / embedded finance offerings to “a matter of weeks” under a single platform.

 

• Check out the Open Platforms from the Core Processors making announcements this week:
  • Fourth Capital Bank ($446M total assets) selects Rocket Mortgage as their Mortgage LOS due to the newly announced partnership of Q2 and Rocket Mortgage as part of the Q2 open platform Innovation Studio / Partner Marketplace Program.
  • Timberland Bank ($1.9B total assets) selects Plinqit for financial wellness and savings tools thanks to Plinqit’s integration with Jack Henry’s Banno Digital Toolkit open platform.
  • Great Southern Bank in MO ($5.5B total assets) selects Fiserv DNA core processing in large part to the AppMarket from Fiserv to easily enable the integration of new offerings from fintechs.
  • Array announced they are integrating with Q2 open platform Innovation Studio / Partner Marketplace Program.

 

• Figure Pay (BaaS payments connector on blockchain rails) partners with Visa DPS to add issuing processing services to its “Banking in a Box” platform on the Provenance blockchain.

 

• “Buh-Bye” - Tornado Cash (Ethereum mixer) gets the death knell as the U.S. Treasury puts them on the OFAC sanctioned list for laundering over $7B since 2019 and affiliation with known North Korea hacking organizations (Lazarus Group).  Also this week, a Dutch government agency has arrested the suspected developer of Tornado Cash with more arrests not being ruled out.

 

• Movements in the C-Suite at Marqeta as Jason Gardner (Founder and CEO) plans to search for a new CEO to lead the company in its next phase of growth.  Once a new CEO is named, Gardner will transition to Executive Chairman.  Protocol has a good summary including:
  • Marqeta’s Chief Operating Officer, Vidya Peters is leaving the company.  Chief Product Officer, Simon Khalaf, will temporarily assume Vidya’s responsibilities.
  • Marqeta is also looking to hire a Chief Revenue Officer.

 

• Green Dot disclosed an Uber contract dispute (also here on pg 46 of the Green Dot 10Q) and is looking to fine tune some of their BaaS Sponsorship roles.  CEO, Dan Henry stated, “I don’t want to be out there opening up our [bank] charter for every Joe fintech that wants to do something in payments,” Henry said on the call with analysts. “We really want to be focused on partners that can be of scale, and partners that are focused on solving the problems that we’re focused on solving, which is really serving consumers and small businesses that aren’t very well served by traditional financial institutions for various litany of reasons.”
  • Meanwhile, Uber seems to be moving in a different direction as they announced a new Uber Pro Card Mastercard powered by Branch and Marqeta.

 

• Five Star Bank (premier lender and BaaS Sponsor Bank) partners with Tata Consultancy Services (TCS) to drive AI/ML insights in order to strengthen lending risk assessment and deliver hyper-personalized customer experiences using the TCS Customer Intelligence & Insights™ (CI&I) analytics platform.

 

• Guild Financial (investing and financial literacy app) connects with MX via the MXapi to help the military community build personal wealth.

 

• Notable FinTech funding for the week:
  • Forage (third-party payment processor for EBT) raised $22M in Series A funding round to make it easier for grocers to accept SNAP EBT (formerly known as “food stamps”) payments online – a $200B market representing approximately 42M Americans.
  • Truework (income and employment verification platform for lenders AND payroll providers / HR departments) raised $50M in Series C funding.
  • Finix (API-driven payments processing platform) raised $30M in capital
  • Founderpath (alt lending / recurring revenue financing) raised $145M in debt and equity.
  • Central Payments (BaaS subsidiary of Central Bank of Kansas City) raised $30M in capital.

 
 
Random Uncle Sean Stuff:

• Ahhhh – FRIDAY!!!!  We are grilling hamburgers this evening with some Ro-Tel and Velveeta cheese queso (goes great on hot dogs too)– WOOOHOOO!!!!!
• Hmmm…  Do you ever wonder if plants are secretly farming us, by giving us oxygen daily, until we all eventually decompose so they can consume us????  😝 LMAO!!!!
• Just in time for school 😲 - The CDC updated guidance to loosen Covid isolation protocols including “recommending that instead of quarantining if you were exposed to COVID-19, you wear a high-quality mask for 10 days and get tested on day 5” and reminding everyone to continue to “isolate if you are sick and suspect that you have COVID-19 but do not yet have test results.”  Here is the full CDC Press Release and another regarding operational guidance for Schools, Early Care, and Education Programs.
• Oh Sandy….  The ever so graceful Olivia Newton-John passed away at the age of 73 earlier this week.  Don’t tell Aunt Patty (wink, wink), but ONJ was definitely Uncle Sean’s first crush (yeah - me and about 2 billion other men on this planet).  So turn it up - https://www.youtube.com/watch?v=7oKPYe53h78!!!

 
 
Have a GREAT weekend, DON’T FORGET TO LAUGH, and please 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!!!
 
You can sign up here to have the Uncle Sean Update delivered to your inbox each week!  Here is the Uncle Sean Update for 8/5/22:
 

• Holy Cow – July jobs report came in at a jaw-dropping increase of 528,000 (expectation was 250K) with unemployment at 3.5%; but the labor participation rate remains low at 62%.  Jobs tend to be a lagging indicator, so we will see what happens to the data over the next month or so before the September FOMC meeting on Sept 21 (August jobs report is scheduled for Sept 2).
  • In a somewhat conflicting report from the jobs data - the New York Fed released their Q2 2022 Household Debt and Credit Report survey showing rapid increases in credit card debt at 13% year-over-year (the largest increase in more than 20 years).  Not too overly surprising to me considering the 40 year high in inflation, but certainly worth keeping an eye on as American consumers leverage high-cost debt to make ends meet. 
    • The warning sign is that CC delinquency rates are starting to tick up, but for now remain below pre-pandemic levels.

 

• Voyager bankruptcy update – Good news for consumers as the Bankruptcy Judge approved Voyager’s motion to give customers back their $270M in cash held at Metropolitan Commercial Bank (MCB) FBO accounts citing the “funds are property of such customers and not of the Debtors’ estates.”  Although these cash accounts have been frozen since July 1; and it took a Bankruptcy Judge Approval Order to lift the stay. 
  • This should prove to be an informative moment going forward for FinTech companies and BaaS Sponsor Banks as well.
  • Here is the actual Approval Order; and here is a link to track the Voyager Court Docket filings.

 

• Synctera (fintech connector) launches Ground Control to have key compliance tasks managed by Synctera on behalf of fintech clients such as KYC, BSA, AML, fraud, and customer disputes…..
  • Not too surprising if you had a chance to see the most recent Data timeout with Bobby Button LI post showing only 27% of FinTech companies have a dedicated in-house Compliance Officer.

 

• MVB Bank becomes the first live user of the Real-time Payments (RTP) Send functionality offered by MVB’s BaaS subsidiary, Victor Technologies.

 

• Global Payments (NYSE: GPN) announced an agreement to acquire EVO Payments (NASDAQ: EVOP) in an all-cash transaction at $34 per share ($4B).
  • Global Payments is also selling the Netspend consumer business to Rêv Worldwide, Inc. in an all-cash transaction valued at $1B reuniting Netspend’s original “founders, Roy and Bertrand Sosa, who also founded Rêv.”  Global Payments acquired the Netspend business in 2019 through its $21.5 billion acquisition of Total System Services, which had purchased the debit card company for $1.4 billion in 2013.

 

• A congratulatory shout out to long-time FedFis friend, Mr. Tom Shen as the newly appointed Chairman of BankiFi's Board of Directors .

 

• It’s been a tough run for Robinhood this week announcing layoffs of 23% of staff (following 9% in April); and receiving a $30M fine for allegedly failing to maintain and certify anti-money laundering (AML) and cybersecurity compliance programs.

 

• Oops – An Equifax glitch sent millions of incorrect credit scores to lenders during a three-week period from the middle of March to early April. 

 

• GloriFi to become publicly traded SPAC merger with DHC acquisition Corp placing GloriFi’s valuation at $1.7B, and providing the firm with around $279M in cash. Pending a full product launch this fall, GloriFi aims to provide a whole range of financial services including credit cards, insurance, mortgages, brokerage, and banking products, and hopes to tackle some of the country’s economic disparity by prioritizing people living in middle America.

 

• Nomad becomes the latest victim in a nearly $200M crypto hack.  This subsequent Chainalysis report estimates approximately $2B in crypto has been stolen from cross-chain bridges so far this year.

 

• Notable FinTech funding for the week:
  • Grasshopper Bank (BaaS Sponsor Bank and Direct Digital Bank) raised $30.4M in capital
  • Kompliant (credit and compliance platform for acquirer processors and FI’s) raised $14M in Seed funding
  • ZayZoon (EWA platform) raised $25.5M in Capital consisting of $12.5M in equity and $13M in a new credit facility to expand on-demand wage access (EWA) in the U.S. including a Visa prepaid GPR (coming soon) and financial wellness app.
  • Savana (API-driven digital delivery platform) raised $45M in Series A round.
  • Parafin (white-label embedded growth capital platform for SMB’s) raised $60M in Series B funding round to expand their embedded financial services.  Check them out at parafin.com.
  • ZSuite (digital escrow/sub-ledgering solution for FI commercial customers) raised $11M in Series A round.

 
 
Random Uncle Sean Stuff:

• WOW – what a crazy week…  Monkeypox is now a public health emergency – wonderful (sarcasm).  Brittney Griner gets nine years in Russian prison for ½ ounce of cannabis oil charged with “drug smuggling”….???  And a “furious China” fires missiles near Taiwan in outrage over Pelosi visit….  “Alrighty then!”
• Well, at least it is Friday – so how ’bout some Dad Jokes!  😲
  • I told the barista at Starbucks that I would like a medium roast, and he said, “Okay, you’re a little bit ugly and kind of fat.”  Well played…
  • When cows kiss do they call it “smooooching?”
  • I accidentally took my cats meds….  Don’t ask meow…
  • Not to brag too much, but I finished my 30 day diet challenge in about 4 hours….  LOL!!!
  • “Tacpocalypse” – the act of eating tacos like it’s the end of the World (tock-POCK-a-lips) 😊

 
 
Have a GREAT weekend, laugh often, and please 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!!!
 
Here is the Uncle Sean Update for 7/29/22:
 

• High five to our friends at Computer Services, Inc. (CSI) (OTCQX: CSVI) as a Premier Sponsor to the Bankers Helping Bankers platform (BHB) furthering BHB’s mission of empowering community banks!!!  It is an awesome feeling partnering with great people representing A+ firms such as CSI and IBAT as we collectively help community banks across the US thrive as the backbone of our nation’s economy.

 

• It’s Fed Week!!!  As widely expected, the FOMC unanimously voted to raise rates by 75 bps bringing the Fed Funds target range to 2.25% - 2.50%, and anticipates that ongoing increases will be appropriate.  Significant quantitative tightening also continues as previously advertised. 
  • Key points - This marks total increases of 225 bps over the last 5 months.  Chairman Powell went on to state that the  “labor market has remained extremely tight with unemployment rates near 50 year low, job vacancies near historical highs, and wage growth elevated”…  While another “unusually large” rate increase may be appropriate at the next meeting in September, it will be dependent upon the data received.  As the current interest rate increases are absorbed into the economy, It likely will become appropriate to slow the increases.  More info below in case you want to get your inner “Fed geek on” like me (I completely “dork out” even more in the Random Uncle Sean comments at the bottom with a water hammer reference)!
    • FOMC Statement
    • FOMC Implementation Note
    • Transcript of Chairman Powell's Press Conference (26 pages)
    • Press Conference Video (54 minutes)

 

• Treasure Financial (B2B fintech) partners with Grasshopper Bank as their BaaS sponsor to help businesses optimize yield on idle cash balances.  A quick look into the FedFis FinTech Analytics© database shows us that this marks Grasshopper Bank’s entrance into the realm of BaaS Sponsor Bank (by internal FedFis definition) just a few short months after FIS partnership with Treasury Prime embedded finance offering.
  • More on Grasshopper 2.0 and their “re-launch”
  • More on Treasure Financial (SOC2 certified by the way – NICE!!!)

 

• Congrats to Jim Magats, former Plaid exec of nearly two decades, is now the new CEO of MX beginning August 17.

 

• Rakuten appears to be discontinuing the Rakuten Cash Back Visa® Credit Card program (issued by Synchrony) effective September 17.

 

• Pretty sure everyone saw this one coming….  The FDIC and Federal Reserve Board issued a letter demanding Voyager Digital cease and desist from making false or misleading representations of deposit insurance status.
  • However – I was a little bit surprised to see that the FDIC issued an Advisory today to FDIC insured institutions on FDIC deposit insurance and the risks of dealing with crypto-asset companies specifically.
  • And the FDIC didn’t stop there…  They ALSO issued a Fact Sheet: What the Public Needs to Know About FDIC Deposit Insurance and Crypto Companies today to help consumers understand FDIC deposit insurance coverage and address some misconceptions from crypto companies (further extended to “any non-bank entity, including crypto custodians, exchanges, brokers, wallet providers, and neobanks”). 
    • Punchline to BaaS Sponsor Banks – make sure you know what / how your fintech partner is marketing that juicy FDIC logo and deposit insurance.

 

• Speaking of Voyager (if you listen closely you can literally hear my boss rolling his eyes as I continue to geek out a little too much and too often over this Voyager Bankruptcy case study)….  Just in case you were wondering (and in direct reference to the FDIC statements above ↑)……  It is my understanding that Voyager customers that have CASH balances at Metropolitan Commercial Bank (MCB) still can’t access their cash.  Yep I’m talking about cash held at MCB via the prepaid debit card, not the rehypothecated (I hate that word by the way – and yes, I had to triple check to make sure I spelled it right - LOL) crypto assets. 
  • Voyager froze all accounts (includes the cash held at MCB) effective July 1 and then filed Ch 11 BK on July 6.
  • Now those funds are temporarily part of the bankruptcy stay, but will likely be released after a court hearing on August 4th.  Uncle Sean is not an attorney, but my research likens this to titled property held on behalf of a third party that will be excluded from the remaining bankruptcy estate and returned to the owners.  That’s the good news.  The bad news is that these consumer cash funds have been frozen since July 1…..  Sure hope those consumers didn’t need to pay any bills or buy any food…..
    • Point is that we have an organized process when a bank fails that protects consumers and mitigates any delayed access to funds.  Not so much when a fintech fails – and FBO accounts have the potential to make the matter even messier if not managed properly. 

 

• FTX US (crypto exchange) opens up stock trading in the US as a clear competitor to Robinhood – but without the “p-word” [payment for order flow (PFOF)].  I actually downloaded the FTX.US Pro mobile app and found it to be very user friendly although I admit that I did not make any trades.

 

• Notable FinTech funding for the week:
  • Finexio (B2B Accounts Payable platform ) raised an initial raise of $14M which is part of a total $30M in Series B round at a $100M valuation.
  • Balance (e-commerce payments) raised $56M in Series B funding round.
  • Guava (fintech banking solution targeting Black SMB entrepreneurs) raised $2.4M in pre-seed funding.
  • Aptos Labs (blockchain) raised $150M in Series A round led by FTX Ventures just four months after raising $200M.
  • Nada (RE fintech platform including a home equity accessing debit card) raised $8.1M in Seed round.
  • Retool (low code app dev platform) raised $45M in C2 funding round with a $3.2B valuation.

 
 
Random Uncle Sean Stuff:

• Thinking out loud…..  In about 9-18 months, I wonder if we will end up looking back at our current macroeconomic / inflationary environment and re-confirm the term “transitory” in relation to: 1) the greater long-term impact of a pandemic induced global shutdown; 2) free money stimulus effect; 3) subsequent re-opening; and 3) the “recovery waves” that may continue to ensue for years.  Like when you drop a pebble into a pond – the closer to the epicenter, the higher the peak to trough effect.  I find myself looking at this in aggregate with what I have been referring to as the monetary policy equivalent to trying to soften a “water hammer effect” to the economy. 
  • DANG – I really need to get a hobby!!!! 😊  See what happens when they leave me unsupervised for too long!!!!  LMAO!!!!
• When Tanner Mayo and Bre Berich get married this fall, what are the odds that Tanner will refer to Bre as his ex-girlfriend after that; or maybe it’s Bre that refers to Tanner as her ex-boyfriend forevermore???  😝
• Okay – I know I used these last year, but they are even more relevant now with about a gazillion days over 100 degrees this summer and no rain to speak of….  How hot is it here in Texas???
  • It’s so hot I saw a bird pull a worm out of the ground with an oven mitt!
  • It’s so hot that Siri asked me to dip her in a glass of ice water (while Alexa watched – now it got weird)!
  • It’s so hot my chicken just laid an omelet!
  • It’s so hot that the catfish are already fried when you catch ‘em!   
  • It’s so hot that the seatbelt buckle makes a legit branding iron!
  • It’s so hot, the frozen pizza I bought was ready to eat by the time I got home!
  • Finally, you know your from Texas when you have to wear gloves in the middle of summer so you can grab the steering wheel without blistering your hands!!!!

 
 
Have a GREAT weekend and please 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.