​Happy Friday!!!
 
Crazy to think that we are closing out the third quarter and starting 4Q2023 already – time certainly goes by fast!!!  Here is the Uncle Sean Update for 9/29/23:
 

• BIG news from our friends at Atomic this week as they announced the launch of PayLink that streamlines payment switching, making it easier for consumers to switch their primary banking relationship.  Atomic's website does a great job of highlighting PayLink’s multiple use cases for Financial Institutions (“accelerate the path to primary customer status” – of HUGE importance to Direct Digital Banks), NeoBanks and FinTech companies, Credit Card Issuers (another huge win), and other industry partners as we move towards more of an open banking environment in the US; and empowering consumers with their own user-permissioned control.  Love it!!!!

 

• Another interesting product launch this week – Experian has joined the fintech brand space by launching Experian Smart Money™ mobile banking app with Mastercard debit card.  The cool feature of this app is that the bank account is automatically connected to Experian Boost® which searches certain debit transactions for automatic reporting to credit bureaus (such as rent, utilities, etc.) to help increase the customers credit score without the need to incur debt.  Very nice!!! 

 

• 👀 For my really wild finance and treasury freaks (you know who you are 😊 – as I look in the mirror and wink at myself - LOL)….  Increases at the longer end is beginning to flatten the yield curve.  The 10 Year Treasury yield has increased a whopping 17.7% YTD from a 12/29/22 closing of 3.879% to 4.567% at the close on 9/28/23….  Even more crazy than that is the realization that all of that has been over the last 60+ days (7/21 close was 3.837%) 😬 - source: cnbc.com/quotes/US10Y

 

• Biz2X (subsidiary of Biz2Credit) announced a new partnership with TAB Bank to streamline the banks SMB loan decisioning and operations.

 

• Credibly (SMB financing) announced the launch of Credibly Business Checking® via partnership with Green Dot Bank to add small business banking to complement Credibly’s existing lending solutions.

 

• Veem (global provider of business payable and receivable solutions) announced the launch of Visa virtual cards for small businesses in the US issued by Pathward and powered by Marqeta.

 

• Our friends at the OCC released their bank supervision operating plan for fiscal year (FY) 2024.  Pretty easy read at only 5 pages - Couple of key items that jumped out at me:
  • No real surprise that asset and liability management takes center stage with an emphasis on managing interest rate and liquidity risks.
  • From an operations standpoint, third-party relationships are a hot topic “particularly those with financial technology (fintech) companies” - and also specifically mentioning “banking-as-a-service arrangements” (bold emphasis added by Uncle Sean).

 

• FDIC Chair Martin Gruenberg stated that changes to deposit insurance amounts unlikely at a conference this week.  “While there was considerable interest in the immediate aftermath of the bank failures earlier this year, that has dissipated with time. At this point, there does not seem to be any imminent likelihood of changes to deposit insurance coverage in the U.S.,” Gruenberg said.

 

• Monit announced the integration with Narmi’s Business Digital Banking platform as a white-labeled solution to offer modern cash flow tools and insights to SMB clients.

 

• Deluxe partners with Aliaswire, Inc. to integrate Aliaswire’s DirectBiller bill payment technology across the extensive Deluxe network of banks, partners, and direct clients.

 

• Camino Financial (CDFI) and Fundation announced they are merging to create a new, full spectrum SMB lender providing credit solutions to fund the growth of small businesses.

 

• As a government shutdown appears inevitable, it certainly comes at an awkward time (I guess there isn’t really a “good” time) as the next FOMC meeting to discuss interest rates is Oct 31 – Nov 1 considering much of the economic data that the FOMC uses to set interest rate policy comes from government entities…  This includes:
  • The Bureau of Labor Statistics (BLS) is the hub of much of the government's data and will “completely cease operations” in the event of a shutdown, sending all 2,350 employees home.
  • The Commerce Department's Bureau of Economic Analysis (BEA) will also shut down.
    • Means no CPI, Jobs Report, weekly jobless claims, PCE, GDP, etc….
  • Aside from the above government programs, perhaps the most concerning is the furlough 80% of staff from the Cybersecurity and Infrastructure Security Agency degrading its ability to provide timely and actionable information to help partner organizations defend their computer networks per this Department of Homeland Security FACT SHEET.  YIKES!!!!

 

• Notable FinTech funding for the week:
  • Bright Money raised $62M in funding consisting of $50M in debt financing and a $12M Series B equity round.
  • PortX (financial services infrastructure) raised $16.5M in Series B round and forms a CUSO subsidiary for Credit Unions.
  • Slope (B2B payments) raised $30M in equity round $30M in equity round adding that “both volume and company revenue have increased 17x since last year.”

 
 
Random Uncle Sean stuff:

• Usher to headline the 2024 Super Bowl halftime show.
• Have you heard about the saltwater wedge in the Mississippi River?  Pretty wild, and another impact from our historic drought conditions in the upper Mississippi River Valley.
• Okay – some quick Dad / bad jokes to kick off the weekend:
  • There is nothing more magical than hearing a child’s laugh….  Unless you are home alone! 😲
  • Never yell into a colander….  You’ll strain your voice…
  • I don’t know why the chicken crossed the road…  But the rooster joined a band because he had drumsticks…. 🐓
  • Not to brag too much, but the credit card company told me that my balance was outstanding….  Well, thank you! 😝

 
 
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!!!
 
Ahhh – welcoming the first day of fall this Saturday (autumnal equinox) – but it’s still 100 degrees here in Texas!!! 🥵  Here is the Uncle Sean Update for 9/22/23:
 

• High-fives all around as the BHB Fund welcomes Legend Bank, Texas First Bank, and National Bank and Trust as community bank investors in the BHB Fund independently managed by Latitude38 Venture Partners!!!!

 

• Very important especially for my friends (both bankers AND fintech companies) working on 2024 budgets right now….  It’s Fed Week!!!  As the market expected, the FOMC voted to hold rates steady at the current 5.25% – 5.5% Fed Funds rate..  I admit it, I was among the 1% that thought they would go ahead and raise rates 25 bps – but I broke my crystal ball years ago…. LOL!!!  Hugely important (IMO) - keep in mind that the current quantitative tightening continues (QT – a/k/a “shrinking the Fed Balance Sheet”) related to reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities at the current rate of $60B in Treasuries and $35B in MBS per month per the policy Implementation Note.  Couple of key points:
  • Here is the transcript of Chair Powell's Press Conference (27 pages); and here is the video (55 minutes).
    • Worth noting the phrase “proceed carefully” was the theme and specifically mentioned multiple times – I don’t think this was unintentional…. 😊
  • And here is the infamous FOMC Summary of Economic Projections (dot plot) that shows the majority of participants believe it will be appropriate to raise rates one more time before YE; and does not show core PCE inflation subsiding to the targeted 2.0% until 2025-2026.
    • Chair Powell has been reiterating “higher for longer” for about a year now…  Pretty sure we should start to believe him now – LOL!!!

 

• Some solid macroeconomic analysis coming out of Fannie Mae's Economic & Strategic Research (ESR) Group.  Key points:
  • Mild recessionary contraction in 1H2024 remains likely forecast outcome as inflation and labor markets cool.
    • Housing faces mortgage rate headwinds (shocking, right!!!  LOL) but downside appears limited; and personal consumption is outpacing income growth.

 

• 👀 All of the above economic updates come during the same week that the U.S. national debt hits $33 trillion for the first time ever….. 😬

 

• DCI partners with Array to offer Array’s credit management and financial progress tools to DCI’s community banks in order to help the bank’s retail customers “monitor their credit, benefit from anti-fraud identity monitoring, and access actionable credit-based offers.”

 

• DCI gets a two-fer this week by also announcing a new interface with Hawthorn River to DCI's iCore360 core platform enabling DCI bankers “to look up customer information in real-time when originating a loan, eliminating the need to rekey information. To further support an integral part of the lending process, when a loan is ready to be boarded on iCore360, the banker can automatically book the loan details with the click of a button. Additionally, a rules engine enables transactions to be automatically coded so that regulatory reports are more accurate.”

 

• Cha-ching!!!  Bank of America increases US minimum hourly wage to $23 on its stated path to $25 by 2025.

 

• BMO is partnering with DailyPay to provide EWA to employees of BMO’s commercial clients allowing for real-time access to wages earned.

 

• Varo Bank (FDIC 59190) announced the launch of Varo to Anyone, an instant fully FDIC insured P2P function at no cost “to anyone with a U.S. bank account, no matter where they bank, by allowing access to phone contacts or inputting the recipient's U.S. phone number or email manually. After sending the money, the recipient will get a text or email notification about the payment with instructions on receiving their funds by entering their debit card information in Varo Bank's portal.” 
  • Based on my very limited research here, this looks like a “push to card” or “push to debit” application (think of this like a typical debit card transaction – but in reverse) that effectively creates an open-loop P2P transaction.  Many other P2P applications requires both the sender and the receiver to download and use the same app (thus being a closed-loop solution).
  • I’ve been waiting to see broader acceptance of this for a while (many other institutions offer push to card solutions, I just haven’t seen widespread adoption yet).
    • Both Mastercard (via Mastercard Send) and Visa (through Visa Direct) support push to card.

 

• Dwolla makes senior leadership changes as current President and COO Dave Glasser replaces Brady Harris in the CEO role; and Skyler Nesheim, previously Dwolla’s SVP of Technology, was named Chief Technology Officer.

 

• Square CEO Alyssa Henry is stepping down according to an SEC filing late Monday by Square’s parent company (Block), with co-founder Jack Dorsey to step into the role.

 

• Brex announced the launch of Brex Assistant utilizing AI to automate expense information, answer certain questions, and respond to commands with simple prompts.

 

• Black Knight Origination rebrands as Dark Matter Technologies after being acquired into the Perseus Operating Group of Constellation Software Inc.

 

• Finli announces integration with Q2's Digital Banking Platform via the Q2 Partner Accelerator Program.

 

• The FDIC released SOD data for branch office deposits as of June 2023 for each of the 77,000+ branches in the U.S.

 

• Stearns Bank (FDIC 10988) partners with Synctera (BaaS infrastructure platform) to expand their existing BaaS line of business.

 

• Notable FinTech funding for the week:
  • Vero Technologies (wholesale financing i.e. “floor plan” and loan servicing platform) raised $8.5M in Series A funding round to accelerate the growth of its lending-as-a-service offering for banks.
  • Flex (f/k/a Flexbase – banking and treasury management for SMBs) raised $120M in new capital consisting of a $20M equity round and $100M in debt financing; and announced the launch of its Flex Credit Card.
  • ZayZoon (EWA platform) raised $34.5M in Series B round.

 
 
Random Uncle Sean stuff:

• Dumb Uncle Sean story - these are always entertaining (and apparently there is no shortage of these moments - HaHaHa)…. Earlier this week, I had the honor and privilege of attending and presenting at DCI’s Annual Conference (which was amazing) in Overland Park, Kansas.  After an uneventful plane ride from Austin, TX that included an “open-mouth nap” to which I did in fact wake myself up snoring (yep – I was “that guy” – LOL), I landed in Kansas City.  Hopped in my Uber and made my way to the Convention Center to check in to my hotel.  The very nice lady at the desk asked for my ID to check in and that’s when it happened….  I opened my wallet and my drivers license was not there…  After about a second of staring unbelievingly at the empty plastic that once held my license, I remembered that I had taken it out in Austin and put it in my pocket.  Whew…  Now slightly amused with my newfound confidence that I remembered where my ID was, I placed my hand into my pocket and…..  Oh crap….  It’s not there…. Quick check the other pocket (as my pulse begins to increase and I feel a warm sensation in the back of my neck – this is the panic starting to set in)…  Nope not there either.  Check the wallet again just in case it somehow magically reincarnated back to where it was supposed to be….  Nope….  Oh lord….  Yep, my palms are starting to sweat and my mouth is getting dry - LOL…  Now I am frantically digging through my laptop bag to no avail…  Brief moment of reassurance as the nice lady at the hotel desk said I could just show my debit card with my name on it (fortunately I hadn’t lost that too).  She recommended that I call the Uber driver as this happens a lot….  Come to think of it, I remember taking my phone out of my pocket in the Uber and I bet that is when it fell out…  I hope…  Because if not, I’m dead.  So I frantically try to figure out how to contact the Uber driver - you have to go through the app, you cant just call them direct.  Now I am fumbling around trying to figure out how to use the app to tell them I may have left my identification in the car (you have to leave your phone number with permission for the driver to contact you)….  Now we wait….  And now my mind begins to go into anxiety overdrive (overthinking is what I do on a normal day – so you know this just got really special - LOL!!!)…  What if I lost it at the airport?  What if it is on the airplane?  How do I get home?  You can’t get on a plane without an ID.  Heck, you cant rent a car without a drivers license…  Do I pay someone to fly to Kansas to pick me up and drive me home?  Oh lord, how much will Uber charge me to drive me from Kansas to Austin, TX????  (if you can’t tell by this point, I am rather stressed out – heart rate is running about 175 right now).  Wait – my phone is buzzing….  Oh thank God it’s the Uber driver and he has my Drivers License….  WHEW!!!!  Yes, I tipped him very graciously and thanked him to the point that I think I was freaking him out a little…  LOL!!!!  The rest of the trip was fantastic…  Hopefully this true story brightened your day and made you laugh!  😊 😂
• Rough week in cybercrime….  Caesars paid millions in ransomware…  Hotel and casino giant MGM Resorts has confirmed a “cybersecurity issue” is to blame for an ongoing outage…  Clorox reported that a cybersecurity act causing “widescale disruption” of operations and product availability resulting “material” to the company’s first-quarter financial results.
  • Meanwhile, Cisco announced the acquisition of Splunk, a leading cybersecurity firm, for a cool $28 Billion in cash (Cisco’s largest acquisition ever).
• Yep – it’s that time….  Time for some Dad / bad jokes:
  • Inflation and interest rates are so high, I’m putting a vending machine in my front yard for Halloween….  Sorry little Johnny – I got bills to pay! 😝
  • If we’re not supposed to have midnight snacks, then why is there a light in the fridge?
  • Pro tip on how to keep cookies fresh – eat them all at once.  🤓
  • I’d give my right arm to be ambidextrous…. 
  • I have a question about raising teenagers – and that question is….  WTF???  😂🤣

 
 
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!!!
 
Don’t forget to sign up here to have the Uncle Sean Update and the Fintech Cowboys delivered straight to your inbox every week!  Here is the Uncle Sean Update for 9/15/23:
 

• With all eyes on the FOMC meeting next week, the BLS August CPI Report came in hotter than expected at 3.7% (expectation was 3.6% and July was 3.2%) due largely to increases in gasoline prices and shelter costs.  Core CPI actually slowed to 4.3% (spot on with expectation of 4.3% and July was 4.7%).
  • Worth noting in the BLS report that shelter costs have increased for 40 consecutive months.  CNBC has a good summary.

 

• Check out the activity going on in the direct digital bank space this week (Uncle Sean is a big fan of this business model):
  • ZYNLO Bank, the direct digital bank division of PeoplesBank (FDIC 90213), selects Digital Onboarding to “ensure that the accounts acquired via digital channels turn into deep and profitable relationships” which is of huge importance to direct digital banks.  Very NICE!!!!
  • Owners Bank, the direct digital bank division of Liberty Bank (FDIC 17943), who had previously announced the launch of small business loans and lines of credit offerings in support of small businesses, now announces the launch of a business credit card designed specifically for small businesses.
  • Panacea Financial, the direct digital bank division of Primis Bank (FDIC 57968), has partnered with Bankjoy for their digital banking platform and integration “with Panacea’s core system via Fiserv Communicator Open.”

 

• jaris (fintech offering turnkey embedded finance solution for small business lending) partners with First Internet Bank to increase business financing capacity to $1B and drive additional product offerings.

 

• Xbox is launching their first-ever credit card in the U.S..  The Xbox Mastercard (issued by Barclays Bank Delaware) will be available to qualified Xbox Insiders on Sept 25 with availability open to the general public in 2024.

 

• Alza emerges from stealth to offer neo / immigrant banking app targeting Latin and Central Americans in the U.S. with an emphasis on cross-border transfers.
  • But hey – if you are subscribed to the FedFis Fintech Analytics© database – you would have known this a couple of months ago (YES – that is an absolutely shameless plug – LOL)…  Contact our very own Mr. Bobby Button for more info on this innovative FedFis product! 😊

 

• Colony Bank (FDIC 22257) selects Prelim for digital new account opening and integration for both consumer and commercial accounts.  

 

• Unit (BaaS platform) announced a new integration with Knot allowing fintech brands to streamline the process of updating payment information.  “Knot’s Card on File Switcher makes it simple for your customers to update their card information, with only a login to the merchant required.”  Currently available only to Unit clients on Blue Ridge Bank and Piermont Bank, per the article, with more banks coming soon.

 

• Citi sells its "Bridge built by Citi®" platform to Foro.

 

• And the big boys are taking note….  JPMorgan Chase to offer online payroll processing via partnership with Gusto as the nation’s largest bank tries to target small business customers and compete more directly with fintech companies (Square and PayPal specifically mentioned in the article).

 

• Episode Six (E6) launches Business Now, Pay Later™ enabling financial institutions to offer a turnkey and customizable B2B installment loan solution to SMEs at any point in their purchasing process (with no disruption to the bank tech stack).

 

• The FDIC released their review of failed First Republic Bank.  Of course we all know it was a bank run, but the agency also highlighted some internal missteps including a Liquidity Rating of 1 despite vulnerability to interest rate risk and reliance on a high level of uninsured deposits (funding concentration) that should have had a stronger negative impact on ratings (as well as the bank’s Management component).

 

• Notable FinTech funding for the week:
  • Ampla (working capital) picks up a $258M credit facility from Goldman Sachs to build out Ampla Growth Capital.
  • CertifID (wire fraud prevention platform for RE transactions) $20M in Series B funding round.

 
 
Random Uncle Sean stuff:

• That high pressure heat dome over Texas finally moved and we went from 107 degrees to upper 80’s/low 90’s in a week – we even saw some rain!!!!  I felt like a little kid watching the first snowfall of the season.
• HOLY SMOKES – check out this record setting Alligator Gar caught in Texas!!!!  The fish measured 8 feet, 4 inches long, with a 48-inch girth and weighed in at 283 pounds.  The most remarkable part is that it was caught on a rod & reel with 6-pound test and took almost three hours to land it!!!! 😮  The fish was photographed and released.

• First flown in 1959 (yep – 64 years ago), the North American X-15 hypersonic aircraft hit Mach 6.72 (4,534 mph) at an altitude of 354,200 feet withstanding aerodynamic temperatures (friction) in excess of 1,200 degrees F….  Reminds me of Aunt Patty’s driving!  LOL!!!!! 😝
• Here they are…. Dad / bad jokes!!! 😊
  • Bought some fly spray and sprayed it all over myself…  I still can’t fly…
    • Bought some thin mints…  Yeah – that didn’t work either.
    • Don’t even get me started on smartwater….

 
 
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!!!!
 
It was a short week due to the Labor Day Holiday, but still a very productive week!!!  Here is the Uncle Sean Update for 9/8/23:
 

• 👀 Some good data this week from 2nd quarter performance of financial institutions…  Punchline is that Banks AND Credit Unions are continuing to lend, asset quality remains good, and reserves for credit losses are strong – despite what mainstream media would like for all of us to believe (in fact, the sky is NOT falling – not today anyway)…  I am reminded of what Tanner Mayo is fond of saying - facts and hard data beat surveys and anecdotal media coverage every single time! 🤠
• SO…..  Pardon me while I COMPLETELY geek out on the macro numbers here: 🤣 🤓
  • The FDIC released their Quarterly Banking Profile report for second quarter 2023.  Key points include:
    • Loan balances are up 4.5% YoY driven in large part by 1-4 family residential and credit cards
    • Deposit balances are down 4.7% YoY and 0.5% from 1Q2023
    • Net Interest Margin declined slightly by 3 bps to 3.28% for the quarter driven by Cost of Funds increase of 43 bps over 1Q to 2.05%.  NIM is actually up 48 bps YoY (recent pre-pandemic avg from 2015 – 2019 is 3.25% per the report)
      • Other borrowed funds is down 8.5% from 1Q23, but still up 52% YoY (BTFP for the win – LOL)
    • Asset Quality is modestly stable with Net Charge-offs at 0.45% which is up considerably YoY, but is now basically back to pre-pandemic levels of 0.48% - 0.52%
      • Noncurrent loans are roughly flat over last year at 0.76% and is still well below pre-pandemic averages of 1.28%
      • Total allowance for credit losses on the balance sheet increased 16.6% YoY placing the reserve coverage ratio (the ratio of the allowance for credit losses to noncurrent loans) at a whopping 224.8% which is the highest since the QBP began data collection in 1984!!!!  😮
    • The FDIC Problem Bank List remained at 43 (same as prior quarter).  This coincides closely with 52 banks in the FedFis database with a FedFis Rating of 3.75 or worse (1.00 – 5.00 scale) representing the bottom one percentile of all banks for 2Q2023.  Nice plug, right???!!! 😊

 

• And in case you are wondering how our Credit Union brethren faired, the NCUA released their Quarterly Credit Union Data Summary for 2023Q2.  Some key points:
  • Loan balances are up 12.6% YoY and double digits in almost all loan categories (exception was Non-federally Guaranteed Student Loans which were only up 2.8%)
  • Loan to Share (deposits) ratio of 83.2% which is up from 74.8% YoY (and this is not because insured share deposits dried up – they actually grew 1.8% YoY)
  • Delinquencies are starting to increase with larger jumps in delinquency rates in Auto and Credit Card loans (as expected), but only slightly higher than pre-pandemic rates.  Net Charge-offs as a percent of average loans of 0.53% is up considerably YoY, but is still 3 bps below pre-pandemic levels.
    • Nonetheless, CU’s provision expense for loan and lease losses increased a whopping 170% YoY to $9.2B (but is running consistent to pre-pandemic levels when considering provision expense to average assets of 0.42%)

 

• The Clearing House announced that the RTP® network hit “one million payments in a single day” milestone as more financial institutions and their customers embrace real-time payments.

 

• More pay-by-bank announcements…  BNY Mellon announced the launch of Bankify via strategic alliance with Trustly to help organizations accept consumer payments direct from their bank account as an alternative to credit/debit cards and third-party payment platforms.

 

• Alkami (Nasdaq: ALKT) partners with Atomic by integrating Atomic’s direct deposit switch solution into Alkami’s Digital Banking Platform to make it easier for financial institutions to offer their account holders a quick and convenient way to set up and switch direct deposits.

 

• It was a crazy busy week with many high-profile personnel announcements:
  • R&T Deposit Solutions announces strategic investment from GTCR and the appointment of Susan Cosgrove as Executive Chairperson effective October 1.
  • Discover announced the appointment of Kathy “Moe” Lonowski to the company’s board of directors.  Lonowski most recently served as the regional director of the FDIC’s San Francisco region.
  • Dime Community Bancshares, Inc. (NASDAQ: DCOM) announced that  Daniel Shaya Csillag will join the company as Group Head of a newly created Healthcare vertical.
  • Sutton Bank announced the appointment of Darryl Clukey as SVP, Chief Payments Officer.
  • BM Technologies (BMTX f/k/a Bank Mobile) announced the resignation of Rajinder Singh as Co-CEO for personal reasons (“not the result of any dispute or disagreement”) just five months after accepting the job.
  • Toast CEO, Chris Comparato to step down and Aman Narang, Co-Founder and COO, to become CEO effective January 1, 2024.

 

• Central Payments announced the launch of PayCP, a white-label, turnkey payment distribution platform.  Early use cases include “companies wanting a quicker, digital way to send rebate, loyalty, incentive, or rewards funds to their customers.”

 

• Curql (CUSO) plans second investment fund, Curql II to offer larger, growth-stage investment opportunities “further advancing Curql’s mission to bring fintech to credit unions.”

 

• Visa expands cross-border stablecoin settlement capabilities with Circle’s USDC on the Solana blockchain by adding new pilot programs with merchant acquirers Worldpay and Nuvei.

 

• Hallmark and Venmo (yes, you read that correct) have partnered together to launch Hallmark + Venmo greeting cards featuring a unique QR code inside the card to which only the gift giver’s intended recipient can access.  Per the FAQs, If the recipient does not accept the gift within 180 days of the funds being added, the money is refunded back to the sender.

 

• Solid launches Banking-as-a-Service partnership with Lewis & Clark Bank to “strengthen the onboarding and monitoring of its fintech clients, in full compliance with Lewis & Clark Bank's rigorous risk and compliance standards.”

 

• Notable FinTech funding for the week:
  • Momnt (embedded lending / point-of-sale financing) raised $15M in capital.
  • Firstcard (fintech banking app for college students) raised $4.7M in Seed funding.
  • Lumen Energy (solar energy platform for commercial buildings)  $11M in Series A and the launch of AutoPPA™ financing platform for ESG focused CRE owners.

 
 
Random Uncle Sean stuff:

• What a wild first week in college football! 🏈 Congrats to Texas State University for marching into McClane Stadium and defeating Baylor at home; and to the University of Colorado for taking the victory against TCU at home.  Kudos to Duke for taking down mighty Clemson and Florida State University for shocking LSU!!!
• Chalk this one up as “kind of creepy / kind of cool” with a ton of real world applications – Apptronik announced the unveiling of Apollo, a 5’8”, 160lbs humanoid robot that can carry a 55lb payload with a 4 hour battery runtime; and plans to redefine the nature of work.  Check it out Apollo at apptronik.com…. 
  • Anyone else immediately think of Will Smith and the movie “I, Robot” with Sonny the NS-5 robot and the Three Laws???  😬
• This is interesting to me as we continue to move towards a mobile centric society…  Take a look at Whataburger's new digital kitchen…  It is completely cashless and centers around guests placing their orders through the Whataburger Rewards app or online.
• And here we go – Dad / bad jokes!!!
  • Aunt Patty tried to surprise me with a car today, but luckily I was able to get out of the way!!!  😂🤣
  • My favorite part of grilling is asking everyone how they like their burger before cooking them all exactly the same.  That is some next-level Dad flex right there - LOL!!! 🍔
  • What did the Buddhist say to the Hot Dog vendor?  “Make me one with everything…..”   Oh come on – that was funny!!!!
  • I saved $345.00 by not going to Costco to buy deodorant…  🙄

 
 
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 and Happy Labor Day Weekend!!!
 
Hard to believe we are already in September (although the 100+ degree heat is still sticking with us for now here in Texas)…  Here is the Uncle Sean Update for 9/1/23: 
 

• Huge shout-out and THANK YOU to COCC for their recently announced sponsorship of the Bankers Helping Bankers platform!!!!
  • Love this from Susan - “As a core banking technology provider committed to the growth of community banks, we are pleased to support BHB. Being able to support the wider adaption of new technology solutions sets up community banks for long term success and that aligns with our operating philosophy” said Susan Salecky, Senior Vice President & Chief Marketing Officer at COCC. 😊

 

• And more coming out of the broader BHB Ecosystem…  MCBank joins as a strategic investor to the Bankers Helping Bankers (BHB) Fund. 
  • “As an investor in the BHB Fund, MCBank has the opportunity to directly support the adoption of technology within community banks and contribute its century-spanning expertise to a collaborative ecosystem of like-minded bankers who are driving innovation within the industry,” says Robert Hemsath, CEO of MCBank.

 

• Check out my friends over at Fintegrate Technology (leaders in Dispute Management and Collections and Recovery solutions for financial institutions) as they surpass sales and operational growth projections for 1H23 with 28 new client engagements, 3 reseller partnerships and released 3 new Dispute Management products; serving a diverse range of financial institutions, ranging from $120M to almost $160B in assets.  Nice Work!!! 🚀

 
 
Okay - it was kind of a light news week headed into the Holiday Weekend, so here is a quick “off the rails” unsolicited M&A commentary from Uncle Sean….

• This week I was asked a couple of times about the slow down in bank M&A activity, to which I explained the following (seemed legit at the time - LOL):
  • Depressed stock performance….  Many bank acquisitions are done as a stock purchase or a mix of stock & cash.  Regardless of what index you look at (KBW, BKX, etc.), bank stocks are still considerably depressed.
    • As a result, acquiring banks are not really enthused about issuing more stock (dilution) to finance an acquisition; and target banks are not thrilled about accepting stock that is significantly underperforming the market.
    • Additionally, due to deposit competition and prior liquidity tremors, acquiring banks don’t want to do all cash deals right now.
  • Unrealized losses in bank securities portfolios….  We are still seeing fluctuations in treasuries (particularly in the 10yr) and other bonds that are impacting bank securities portfolios resulting on AOCI losses.  As rates continue to rise, we will likely see more of this until the yield curve flattens / normalizes.
    • M&A accounting requires an adjustment to market value on securities forcing a negative impact to Retained Earnings and Regulatory Capital (not to mention effecting the pricing nature of deals) that is causing acquiring banks to pause right now.
  • Lastly, some uncertainty in where the economy is headed also very likely plays a role here as many banks are playing a “wait and see” type of approach before committing to deals.
    • Much of this appears temporary (my opinion) with pent up demand likely to result in accelerated M&A activity next year; although it could be later next year before we see a material rebound in activity.

 
👀  Well, somehow Credit Unions didn’t get my memo above on M&A slowdown…. 😬 LOL!!!

• This week brought a handful (5 to be exact) of CU acquisitions of a Bank including a pair of “double doubles”… 😮
  • Five Star Credit Union (Charter #68302; $773M) to acquire OneSouth Bank (FDIC 15813; Total Assets $212M).
  • “But wait, there’s more” – Five Star Credit Union also announced an agreement to acquire Wilcox County State Bank (FDIC 17126; Total Assets $178M).
    • This marks the third and fourth time that Five Star CU has acquired a bank (previous acquisitions include Farmers State Bank in 2015 and Flint River National Bank in 2013 – Source FedFis).
  • Michigan State University FCU (Charter 23279; Total Assets $7.7B) to acquire McHenry Savings Bank (FDIC 30864; Total Assets $322M).
  • Hold on – they’re not done…  Michigan State University FCU also announced an agreement to acquire Algonquin State Bank (FDIC 13080; Total Assets $145M).
    • Michigan State University FCU is an intriguing and innovative CU with two separate direct-digital brands (AlumniFi and Collegiate).  Now they can add the moniker of “serial bank acquirer” to the list.
      • Shameless plug 😊 - reach out to our own Bobby Button if you want more info on direct-digital bank / CU brands.
  • Innovations Financial Credit Union (Charter 68732; Total Assets $400M) has agreed to acquire First National Bank Northwest Florida (FDIC 25122; Total Assets $169M).
    • If you are keeping score, this brings the total to 10 announced CU acquisition of a bank so far for 2023.  That compares to 16 in 2022, 13 in 2021, 7 in 2020, and 16 in 2019 (Source FedFis).

 
So – I don’t know if this was coincidence or if there is a strong trend forming (I broke my crystal ball years ago; and sometimes it’s okay to say “I don’t know” LOL).  But the punchline from what I see is that these are all very small banks (add all 5 together and you barely get to $1B in total assets) – pretty much the M.O. of CU acquisition of BK targets.  Almost all have loan concentrations in RE (both Res and CRE) which make sense from a CU perspective as well as local deposit market / limited branch footprint.  Worth noting that several of these small banks had yields on average earning assets north of 5% which is pretty good comparatively speaking right now; and only two had larger emphasis on securities with only one that had material unrealized losses on securities.  Also of interest is the significant cash position for First National Bank Northwest Florida of $95M (total assets are only $169M with a Cost of Funds of only 1.1% and pushing 5.24% Yield on Avg Earning Assets - and a roughly 50% CRE emphasis drawing 6.8% Yield – WOW).
 
 

• Fortuna Bank (in organization) gets conditional approval from the Ohio Department of Financial Institutions (ODFI) and is now initiating capital raise.

 

• Some other M&A news:
  • Guild Mortgage (NYSE: GHLD) acquires First Centennial Mortgage
  • ICE & Black Knight merger deal gets the nod from the FTC and is expected to close on Sept 5 following divestitures of the Empower LOS and Optimal Blue businesses to subsidiaries of Constellation Software Inc.

 

• Sallie Mae announces Pete Graham as next CFO.

 

• IBT Apps (core and digital banking software provider) launches mobile banking app for community banks.  Check it out at i2Mobile page.

 

• Zelle announced 2Q23 results with 10% quarter-over-quarter growth stating “over 2,100 bank and credit union brands offer Zelle® to their customers—consumers and small businesses—representing more than 80% of U.S. deposit accounts.”

 

• Well, well, well….  The Office of Financial Research (OFR) announced the launch of their LinkedIn page – check it out at Office of Financial Research where their first post highlights specific contributions made to promote financial stability over the past 12 years.
  • Welcome to the show!!!!  😊

 
 
Random Uncle Sean stuff:

• So happy that college football is back again!!!!! 🏈 😊
  • Did anyone else see that Nebraska vs Minnesota game at Huntington Bank Stadium in Minneapolis?  WOW that was a crazy 4th quarter!!!  I felt bad for the Cornhusker faithful, but what an exciting game!
• Okay – a couple of quick Dad / bad jokes and then it’s off for some Labor Day shenanigans!!! 🍺🍷
  • I heard that David Hasselhoff changed his name to David Hoff….  It’s less “hassle” that way….
  • The doctor asked if any members of my family suffer from insanity.  I said, no – we all seem to enjoy it!!! 😵🤘
  • One tectonic plate bumped into another and said – sorry, my fault!
  • There once was a time where “a new hip joint” meant someplace I would go on the weekends…. 🙄🤣

 
 
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!!!
 
GREAT news!!!!  We welcomed Tanner and Bre’s baby girl into the world this week!!!!!!  She is precious and absolutely perfect.  Both Mom and Baby are doing great (and Dad is pretty much okay too – LOL)!!!  💗🍼  Here is the Uncle Sean Update for 8/25/23:
 

• Hey, hey – shout out to Third Coast Bank as the latest innovative bank to join The BaaS Association!!!!

 

• ICYMI….  Here are Federal Reserve Chairman Powell’s comments from the Jackson Hole Economic Symposium related to Fed Policy on inflation.   Some key takeaways from a relatively hawkish presentation:
  • (stop me if you’ve heard this narrative before – LOL) Inflation has come down, but is still running too hot.  “We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”
  • Strong labor market remains a point of emphasis…  “rebalancing of the labor market has continued over the past year but remains incomplete.”
  • Housing services inflation is beginning to ease, but watching cautiously…  “market rent slowdown has only recently begun to show through to that measure…  Going forward, if market rent growth settles near pre-pandemic levels, housing services inflation should decline toward its pre-pandemic level as well.”
  • CNBC also has a good summary.

 

• Meanwhile…..  Keep an eye on that 10-year Treasury yield as mortgage rates hit the highest level in over two decades….  😮

 

• Five Star Bank announced a partnership with Autobooks to launch contactless payments (tap-to-pay) acceptance for its small business customers using only an iPhone and the Five Star Bank Digital Banking mobile app (no extra terminals or hardware needed).  Cool!!!! 😎

 

• Treasury Prime (embedded BaaS platform) announced a partnership with Liberty Bank, National Association (FDIC 35331; Total Assets $599M) to provide sponsor bank services to customers in the fintech space.

 

• Edward Jones become the latest nationally recognized brand to jump into embedded finance by offering checking and savings accounts via embedded finance partnership with Citi beginning in 2024.

 

• PayNearMe significantly expands their national footprint via partnership with Dollar General allowing “billers, such as auto lenders – to enable their customers to pay their bill at the register at Dollar General’s 19,000 stores nationwide. Customers simply present a scannable barcode on their smartphone to a cashier, pay in cash and receive a receipt verifying the transaction is complete.”
  • Could also be viewed as an interesting enhancement to Dollar General’s fintech / embedded finance strategy to bring in more foot traffic (reference Dollar General Spendwell consumer banking platform).  😊

 

• 👀 While we watch CC debt totals in the US surpass $1T (yep, Trillion with a T), Changed (known for their debt repayment solutions) has launched a new credit card debt payoff feature within the app to automate accelerated debt payoff.  Check them out at gochanged.com. 

 

• Current jumps into the credit side by launching a credit builder product with Cross River Bank to help Current’s 4+ million members to build their credit histories via secured charge card.

 

• Savi Financial obtains FDIC approval for Washington state chartered de novo named Orca Bank – congrats!!!!!

 

• The CFPB has sued lending conglomerate, CURO Group citing the illegal churning of loans to harvest hundreds of millions in loan costs and fees.  The CFPB alleges that “the company – which operates under a variety of trade names, including Covington Credit, Southern Finance, and Quick Credit – identifies borrowers who are struggling to repay their existing loans, and then aggressively pushes them to refinance.”
  • CURO posted a response to the CFPB complaint clarifying that the allegations related to “certain small loans originated by Heights Finance’s subsidiaries prior to its acquisition in 2021.”  They went on to state that “CURO denies the allegations and will vigorously defend its business practices.”

 

• Better had a tough SPAC IPO as shares plunged more than 90% in first day trading….  😬

 

• FIS (NYSE: FIS) announced the hiring of James Kehoe as Chief Financial Officer succeeding Erik Hoag who is leaving the company to pursue other opportunities.

 

• Notable FinTech funding for the week:
  • Ramp (corporate spend platform) raised a massive $300M in Series D round at a reduced valuation of $5.8B.
  • Koverly (B2B international payments) raised $7.6M in Seed funding.
  • LemFi (neo-immigrant banking app for African immigrants) raised $33M in Series A funding round.

 
 
Random Uncle Sean stuff:

• WOW - Sha’Carri Richardson (USA) pulls in a blistering 10.65 personal best to win her first 100M World Championship!  Watch it here as she destroys the field in the last 40 meters in lane 9 for a come-from-behind win.  Amazing!!!!
• Not sure how I feel about the arrival of Pumpkin Spice Latte while it’s still 108 degrees outside!!!  🤢
• We made it!!!!  College football starts tomorrow!!!!!  🏈  Check out the schedule here.
• Alright, you can stop scrolling down now… 😝
  • Teenagers sure do have expensive taste for someone who can’t afford to buy their own toothpaste!!!
  • If I die and come back as a hillbilly, is that reintarnation???  I love that one!!!!  😂🤣
  • The spelling bee was cansell… cansi… cansca…  It was called off - LOL!!!
  • Pasteurize = too far to see…

 
 
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!!!
 
Don’t forget to sign up here to have the Uncle Sean Update delivered straight to your inbox every week along with the FinTech Cowboy’s interviews and Bobby’s Data Timeout (12,000 subscribers and growing).  Here is the Uncle Sean Update for 8/18/23:
 

• Shout-out to R&T Deposit Solutions as the latest innovative institution to join The BaaS Association!!!  Check them out at rnt.com.

 

• This is pretty awesome – look at all the Direct Digital Bank (a digital division of a chartered institution) headlines this week:
  • Green Check Verified has partnered with TASI Bank, a division of Bank of Guam (FDIC 20884; $2.7B Total Assets, and an MDI), to expand the banks cannabis banking offering for communities across nine Bay Area counties.
  • Ivy Bank, division of Cambridge Savings Bank (FDIC 17870; $6.7B Total Assets) announced it has exceeded $530 million in deposits and added over 6,600 customers nationally in only two years after launch.  WOW!!!!  😮
  • Citizens Bank of Edmond (FDIC 4084; $375M Total Assets) announced the launch of Roger, the only digital-first bank tailored to our U.S. service members, via a partnership with Nymbus.  Check it out at Roger.bank – very cool niche offering that definitely solves a serious banking need (particularly at enlistment). 

 

• 👀 FDIC Chairman, Martin J. Gruenberg, speech at the Brookings Institution Center on The Resolution of Large Regional Banks — Lessons Learned.  No surprise that more regs are being proposed.  Key points:
  • Capital Treatment of Unrealized Losses – allowing for unrealized losses on AFS securities to impact regulatory capital (Basel III - banks over $100B).  Would have forced banks to raise capital as unrealized losses occur (but Uncle Sean worries a little bit about the reciprocal event).
  • Long-Term Debt Requirement (again for banks over $100B) – shifting much of the liquidity burden from short-term deposits; and coinciding enhancements to Resolution / IDI Plans.
  • Supervision and Deposit Insurance Pricing related to risks of Uninsured Deposits as a significant source of funding – this is described a matter “of priority attention for the FDIC” as well as risk-based deposit insurance pricing.

 

• Yep – Uncle Sean goes completely “off the rails” here on Farmington State Bank so feel free to scroll down if you want… Deep breath – here we go: 😊
  • What a long strange trip it’s been (or maybe more appropriately “what a tangled web we weave”)….  Farmington State Bank (FDIC 6149; $16M Total Assets) announced it is voluntarily selling its loans and deposits to Bank of Eastern Oregon (FDIC 16243; $820M Total Assets) as they wind down operations.  As a result, Farmington received a C&D enforcement action by the Federal Reserve instructing for an orderly dissolution to which Farmington consents to the Order.….  If this bank sounds familiar to you, it’s because they were formerly known as Moonstone Bank….  Let’s dig into this post mortem mess (much of which is fully detailed in the actual Cease and Desist Order):
    • Sept 4, 2020 – Federal Reserve Bank of San Francisco approved FBH’s application to become a bank holding company via acquisition of Farmington Bancorp to which Jean Jacques Pierre Chalopin (resident of The Bahamas and owner of Deltec International Group / Deltec Bank – one of the primary banks for Tether and Alameda Research) is the principal shareholder of FBH as well as President and Chairman. 
    • June 30, 2021 – FSB becomes member of the Federal Reserve (what could possibly go wrong now – LOL)…
    • Mar 7, 2022 – Farmington State Bank rebrands as Moonstone Bank and announces $11.5M in private equity funding from Alameda Research Ventures (yes, that Alameda owned by FTX and Sam Bankman-Fried).  Later disclosed as a 9.9% minority investment.
      • The 9.9% minority interest is key here because 10% constitutes “change in control” from a regulatory perspective and a much more diligent review.
      • Anyone with any M&A experience here finds this 9.9% ownership for $11.5M to be completely laughable by any standard.  Here is some Uncle Sean M&A math per Farmington State Bank’s 12/31/21 call report:
        • Total common equity is $6,195 minus $1,164 for intangible assets gives us a Tangible Common Equity value of $5,031.
        • $11.5M cash consideration plus $5.03M tangible common equity = $16.53M total tangible pro forma capital consideration.
        • “roughly” 10% ownership applied gives us a multiplier of 1.653
        • So, $11.5M cash consideration divided by 1.653 equals about a 6.96x pro forma tangible book valuation for comp purposes is ridiculous…  Or, a total valuation of $115M (6.96 x $16.53M) for a bank with $18M in Total Assets and $11.8M in deposits…
    • Nov 11, 2022 – FTX files for bankruptcy…
    • Nov 29, 2022 – Moonstone issues statement clarifying that Alameda has no controlling interest in Moonstone, no board membership, and no involvement with management of the bank; and even tried to explain that Alameda’s investment valuation of Moonstone Bank “was consistent with other similar technology Banks and Trust Banks startups at the time.”  Yeah – right!!!!  😝😵💀
    • Dec 24, 2022 - Farmington State Bank, d/b/a Moonstone Bank (FDIC 6149) announced they have more than sufficient liquidity to cover the material FTX deposit exposure held at the bank that was recently made public.  Moonstone is awaiting guidance from the Delaware Bankruptcy Court on where to transfer these funds.
      • A quick look at their call report data (source: FedFis) shows a huge jump in deposits from $12.5M to $84M from Jun 2022 to Sept 2022 and a corresponding leap in Fed Funds Sold to cover the liquidity exposure (in layman’s terms, they took the FTX money and parked it at the Fed for safe keeping awaiting a BK court order).
    • Jan 16, 2023 – More related info as Deltec discloses the receipt of a loan from an FTX affiliate – hmmm…
    • Jan 19, 2023 – Moonstone announced they are exiting the crypto space and “returning to its original mission as a community bank.”  They also stated that they will be dropping the Moonstone Bank name.
    • Jun 13, 2023 - U.S. Secret Service seizes $58M in funds from Deltec Bank in custodial accounts held in the U.S. “amid an investigation into international money laundering, wire and bank fraud.”
      • For me, the key point in all of this is the Federal Reserve Consent Order.  They felt it necessary to go into (what seemed to me anyway) a lot of detail regarding deviance from the business plan and full detail of the engagement in digital assets without prior written notice of non-objection.  Feels to me like a blatant warning to other FI’s…
        • “WHEREAS, in the most recent examination of the Bank, the Reserve Bank and the WSDFI found that Farmington violated the Bank Commitments by engaging in activities which changed the Bank’s business plan and general character without receiving prior written approval from the Board of Governors, the Reserve Bank, or the WSDFI, including the Bank’s entering into a non-binding memorandum of understanding with a third party whereby the Bank committed to “work with” the third party “to design the necessary IT infrastructure” to facilitate the third party’s issuance of stablecoins to the public in exchange for receipt of 50 percent of mint and burn fees on certain stablecoins, and took material steps to implement that memorandum of understanding…” 

 

• After many challenges over the last two years, Better.com is set to go public via SPAC with Aurora Acquisition Corp. “on or about August 23, 2023.”

 

• Capital One sells roughly $1B of Office CRE Loans to Fortress Investment Group.

 

• Prime Trust has filed for Chapter 11 Bankruptcy protection…  A look back at recent events:
  • June 8 – BitGo signs LOI to acquire Prime Trust
  • June 21 – Nevada regulator issues Cease and Desist order stating their financial condition was “critically deficient” and unable to honor customer withdrawals
  • June 22 – BitGo terminates Prime Trust acquisition agreement
  • July 18 – Prime Trust placed into receivership by Nevada Regulator

 

• UBS AG and several of its U.S. based affiliates agreed to pay $1.435B to settle civil action alleging that it made misrepresentations related to underwriting and issuance of residential mortgage-backed securities (RMBS) issued back in 2006 and 2007.

 

• For my Ag-Banking friends – Keep an eye on Hurricane Hilary as it is expected to hit Southern California as a tropical storm early next week bringing the potential for record flooding.  Could result in agricultural and supply chain disruptions.
  • This event is being labeled as “exceedingly rare” and is the first ever tropical storm watch issued for Southern California by The National Hurricane Center.
  • The last (and only) tropical storm to make an “official landfall” in California was Sept. 24, 1939 per this FOX Weather article.

 

• Personnel moves:
  • PayPal (NASDAQ: PYPL) names Alex Chriss as President and CEO effective Sept 27, 2023.
  • Discover CEO Roger C. Hochschild has resigned per this SEC filing.  Board member John Owen has been appointed Interim CEO and President and the Board has engaged a global executive search firm to identify a permanent CEO and President.

 

• Notable FinTech funding for the week:
  • BitGo (qualified digital asset custodian) raised $100M in Series C funding round at a $1.75B valuation.
  • Treasure Financial raised $7.5M in funding and announced the launch of Treasure API.
  • ClassWallet (digital wallet-based purchasing and reimbursement platform for public funds) raised $95M in Capital funding round.
  • Splitit (BNPL) raised $60M in Capital and will delist from the Australian Securities Exchange (ASX) in an effort to shore up their balance sheet to target larger merchants.

 
 
Random Uncle Sean stuff:

• It’s been a very happy and exciting week in the Mayo Family – definitely blessed to report:
  • CONGRATS to Laurel Mayo - she can now introduce Brandon as her “ex-boyfriend” as they are now ENGAGED!!!!!  WOO-HOOO!!!! 🎉🥂🎈🎊💍♥️
  • We are officially on Baby Watch as Tanner & Bre are expecting the arrival of their baby girl any day now!!!! ⌚⌛💗🍼🚼
• Aunt Patty and I dropped our youngest baby (Claire) off at college this week – there may have been a few tears shed. 🥹
  • Especially after I got home and looked at my bank account - LOL!!! 😮🤣😂
• Okay, okay, here they are – Uncle Sean Dad/Bad Jokes:
  • I’m not saying I’m getting old, but I’ve reached the age where I appreciate a nice handrail!  😆
  • What do you call a man with a rubber toe?  Roberto….  (ugh – that was so weak it was actually funny)
  • I was going to surprise Aunt Patty by making dinner, but the recipe said to turn oven to 180 degrees – and now I can’t open the door….
  • Spelunking is beneath me.
  • And of course an obligatory Chuck Norris joke….  Chuck Norris can ride a wheelie on a unicycle.  😊

 
 
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!!!
 
The forecast in Austin today is for 108 degrees with wind gusts of 25+ MPH…. 😬🥵  Here is the Uncle Sean Update for 8/11/23:
 

• The BLS July CPI Report came in at 3.2% YoY (expectation was 3.3% and June was 3.0%) – Core CPI remains a little more sticky but also improved to 4.7% (expectation was 4.8% and June was 4.8%).
  • While still above the Fed’s 2% target, we continue to see improvements in the inflation data.    Expect smaller movements in the YoY data due to base effect from here. 
  • Monthly CPI came in at 0.2% which was almost entirely driven by shelter costs (0.4% for the month and 7.7% YoY).
    • If you really want to get technically weird like me 😊, monthly CPI was rounded up from 0.1669% - but I digress...  CNBC has a good summary as always.

 

• 👀 CSI making some moves as they announced 12 new core deals over June and July – NICE!!!!!

 

• AMEX certainly appears to be leaning into the BaaS & embedded finance space – check out American Express Sync™ Commercial Partner Program offering B2B API’s for fintechs to embed Amex virtual cards into their own spend management / payment platforms.

 

• A HUGE congratulations to Mr. Stacey Zuniga for his promotion to Chief Revenue Officer at ENACOMM – great job, buddy!!!

 

• And more personnel updates:
  • Cable announced they have hired Candace Sjogren as Chief Revenue Officer.
  • Early Warning Services (Zelle and Paze) hired Cameron Fowler as Chief Executive Officer.
  • Cloudcase announced the hiring of Emily Bogan as Chief Product Officer USA.

 

• Greenlight launched a credit builder for teens by allowing parents to add teenagers as authorized users to the Greenlight Family Cash Card credit card.

 

• Did everyone see this – it’s actually pretty cool…  The FDIC recently updated the Technical Assistance Video Program as part of the Bankers Resource Center.  Could be used for internal training / education purposes for varying levels of employees (both bankers and non-bankers).  Updated video topics include:
  • Overview of the FDIC and the Examination Process (30:10)
  • Information for New Board Members (14:10)
  • Corporate Governance (32:01)
  • Interest Rate Risk (29:00)
  • Current Expected Credit Losses (15:18)

 

• PayPal pushes ahead into crypto and launched their own U.S. dollar-denominated stablecoin (PayPal USD – PYUSD) issued by Paxos Trust Company. 
  • Note that PayPal started allowing customers to transfer, send, and receive crypto including bitcoin and ether back in Nov. 2020.
    • Maybe slightly ironic to Uncle Sean that this announcement occurs in the same week that the Federal Reserve announced the establishment of a Novel Activities Supervision Program focused on crypto-assets, distributed ledger technology, and complex tech-driven partnerships with nonbanks to deliver financial services to customers….

 

• InComm Payments enters into the employer health benefits arena by acquiring Zenda, a developer of AI-powered HSA and FSA solutions for employee benefit programs.

 

• Dwolla announced the launch of Dwolla Connect payments platform designed for mid- to enterprise-sized businesses. 

 

• Marqeta disclosed in their second quarter 10-Q earnings release that they extended their partnership with Block through 2027 (page 27, Item 15 of the 10-Q), which is a good thing as Block accounts for 78% of Marqeta’s revenue (page 36, Customer Concentration).  The bad news is the contract extension comes at a cost with expected lower net revenue and lower gross profit (page 52).

 

• Well, ICYMI….  Moody’s downgraded the credit rating of 10 banks by one notch, placed 6 more regional lenders on review for potential downgrade, and revised the outlook for 11 more.
  • I was going to write about this….  Something along the lines of “well thank you, Captain Obvious”…  but…  nah…  😝
    • HOWEVER (see what I did there – I just can’t help myself)…  I will reiterate what we discussed in our BHB - Inside the Numbers review (specifically at the 58 minute mark if you want to just hear the punchline), Uncle Sean actually expects a positive tailwind over the next few quarters of Net Interest Income for banks that are continuing to lend as the loan portfolios reprice to the higher rate structure – provided Asset Quality and employment remains intact. 
      • In that , I source a really good Fitch article from April of last year that you can find here stating, “The OCC’s recent estimates indicate that a 200-bp parallel rate shock would result in a median increase of 7% to net interest income for banks over the following 12 months.”

 

• Notable FinTech funding for the week:
  • Parcha (AI powered compliance and operations automation platform) raised $5M in Seed round.
  • Chargeflow (AI powered platform for preventing fraudulent chargebacks) raised an additional $11M in Seed round bringing total funding to $14M.
  • Doc2doc Lending (alt lending platform for physicians and dentists) raised $35M in Debt and Equity capital.

 
 
Random Uncle Sean stuff:

• The college athletics world is buzzing right now with gargantuan (did I spell that right – LOL) conference movements….  The Big Ten now has a stunning 18 teams, the Pac-12 has dwindled to 4 teams and may likely take a knee and bow out….  What happened???  In short, TV…  CBS Sports has a good summary.
• Wow – if you thought it’s been crazy in the college athletics world….  Check out the transportation logistics space - Yellow files for bankruptcy and publicly blasts the union for the demise of the 100 year old company.  Meanwhile, UPS Teamsters Union successfully negotiates $170K average in pay and benefits for their drivers – HOLY MOLY!!!! 
  • $170,000??? 😮 I think Aunt Patty would look great in brown…  LOL!!!! 🤣😂
• Okay, okay – on to the good stuff….  Dad Jokes!!!!
  • I’ve been cutting carbs…  with a pizza cutter, but hey!!! 🍕😉
  • I bet Barn Owls were relieved when humans finally started building barns.
  • What were Electric Eels called before we invented electricity??? 🤷‍♂️
  • (thinking I’m funny) “Hey Aunt Patty, what’s another word for synonym…???” 😜
    • And she replies, “No it’s not!!!!”  Dang – she’s getting good… 

 
 
Have a GREAT weekend, stay hydrated, 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!!!
 
Don’t forget to sign up here to have the FinTech Cowboys and The Uncle Sean Update delivered straight to your inbox every week (powered by FedFis data).  Here is the Uncle Sean Update for 8/4/23:
 

• Special shout out to Core Bank as the latest innovative financial institution to join The BaaS Association!!!

 

• Uncle Sean is very happy to see this launch this week - MOCA Financial and The Association of Military Banks of America announce the official launch of the PATRIOT Card for active-duty military members, veterans, and those who support our military.  Equipped with card controls through the MOCA mobile app, real-time transaction monitoring, P2P, virtual card issuance and much more – check it out at PATRIOT Card presented by AMBA.  Very cool!!!! 😎

 

• The BLS Jobs Report for July came in at 187,000 (estimate was 200,000 and June downward revision of 185,000 actual – down from 209,000 as originally reported) reflecting a gradual deceleration in new job creation, but still a strong employment market.  Unemployment trended down to 3.5% from 3.6% in June.  CNBC has a good summary and digs into average hourly earnings and labor force participation rates.

 

• Heartland Tri-State Bank (FDIC 25851; Total Assets $139M) was closed last week after being deemed “insolvent due to an isolated event” by the Kansas Office of the State Bank Commissioner; and is being reported by certain media outlets as a victim of an alleged scam.

 

• Another CU buying a bank…  Harborstone Credit Union (Charter #66399; Total Assets $1.9B) to acquire First Sound Bank (Cert #57799; Total Assets $159M) in Seattle, WA.
  • If First Sound Bank sounds familiar, this is the same bank that BMTX (f/k/a BankMobile) tried to acquire back in 2021 that subsequently fell apart last December.
  • This is the 5th CU acquisition of a bank so far for 2023.  That compares to 16 in 2022, 13 in 2021, 7 in 2020, and 16 in 2019 (Source: FedFis).

 

• WOWZA – Apple is reporting that their high-yield savings account (by Goldman Sachs) has reached over $10 billion in deposits since the launch in April… CHA-CHING!!!! 😊
  • The hook here is you have to be an Apple Credit Card holder to participate in the high-yield savings account….  Ah the power of a major brand…

 

• NCR Corporation (NYSE: NCR) and Autobooks have partnered together to enable financial institutions “to offer a comprehensive suite of integrated payments and cash management solutions built specifically for small businesses.”  The PR also states that later this summer, NCR and Autobooks will also “enable Tap to Pay capabilities, allowing financial institutions to offer their small business customers the ability to use smartphones to accept in-person, contactless payments — without the need for additional hardware.”

 

• Treasury Prime (embedded BaaS platform) announced a partnership with Academy Bank (Cert #19600; Total Assets $2.9B) to provide sponsor bank services to fintech clients of the bank.

 

• Finzly announced a strategic partnership with Metropolitan Commercial Bank to enhance the banks payment operations, covering ACH, Fedwire, and FedNow for its customers and industry partners via Finzly’s payment core.

 

• Unbanked (f/k/a Ternio) is the latest fintech to get a cease and desist order from the FDIC for making “false and misleading statements about FDIC deposit insurance and to immediately correct these statements.”
  • Maybe more of a warning to others as Unbanked is in the process of winding down operations per their website.

 

• Interesting personnel updates this week:
  • The Federal Reserve Bank of Kansas City has appointed Jeffrey R. Schmid as President and CEO of the Kansas City Fed effective August 21, 2023.
  • Rocket Companies appoints Varun Krishna as CEO effective September 5, 2023
  • Stripe announced that Steffan Tomlinson will join the company as CFO.  Payments Dive has a pretty good article pointing towards Stripe’s potential IPO.

 

• Figure Technologies (blockchain) has withdrawn their application for a bank charter with the OCC; and has a planned IPO for its lending arm, LendCo.

 

• 👀 The Credit Union National Association (CUNA) and the National Association of Federally-Insured Credit Unions (NAFCU) have announced plans to merge and form a new organization to be called America's Credit Unions.

 

• Notable FinTech funding for the week:
  • Knot (API-enabled ‘card on file’ management platform) raised $10M in Series A funding round.
  • Novo launches Novo Funding (small business working capital) after raising a $125M facility.
  • Petal (card platform) raised $240M in Capital comprised of $220M in debt and $20M in equity financing.

 
 
Random Uncle Sean stuff:

• Oh well… 🤷‍♂️  Fitch downgrades US credit rating from AAA to AA+ citing “a steady deterioration in standards of governance.”
• Georgia Power Co. announced Monday that a new nuclear power generator (Unit 3 at Plant Vogtle, southeast of Augusta) has completed testing and is now in commercial operation and delivering energy to utilities in the Southeast US.  It is the first of its kind in 30+ years, albeit seven years late and $17B over budget.  😲
• Only three more weeks until the start of college football!!!!!  🏈
• Some extremely random Dad thoughts to ponder going into the weekend (must be the heat making me slightly delirious – slightly more than usual anyway 😝)….
  • Why is there a ‘D’ in fridge, but not refrigerator…???
  • A hen that counts her own eggs is a mathemachicken…  🐔
  • In the word scent, is the ‘S’ silent or the ‘C’…???
  • Chuck Norris can dribble a bowling ball…
  • Beware of that seatbelt buckle in the Texas heat in August – pretty much doubles as a branding iron!!!! 🔥😬  Also, it is perfectly acceptable to hold on to the steering wheel using oven mitts….  😂

 
 
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!!!
 
WHEW – there is a lot to unpack this week, so let’s jump right in!  Here is the Uncle Sean Update for 7/28/23:
 

• Absolutely LOVE this♥️!!!  DCI announced a partnership with RiskScout, a leading BSA/AML tech company.  “Partnering with RiskScout will give our banks the opportunity to bring on new customers in higher-risk markets,” said Sarah Fankhauser, DCI President and CEO. “RiskScout brings a proven track record of helping financial institutions serve those customers and navigate the surrounding regulatory landscape effectively.”  NICE!!!!  🤘👏
  • By the way….  Congratulations to DCI President and CEO Sarah Fankhauser as she recently celebrated 30 years at DCI of dedicated leadership and support of community banking!  WOW – that is impressive!!!! 😎

 

• It’s Fed Week!  It was pretty much written in stone so no big surprise that the FOMC unanimously voted to raise the Fed Funds Rate by 25 bps bringing the target range to 5.25% - 5.5%, which is the highest in 22 years.  CNBC has a pretty good summary.  Additional detail if you want to dig in:
  • Chairman Powell Press Conference transcript (23 pages)
  • Chairman Powell Press Conference video (44 minutes)
    • Worth noting, the next FOMC meeting is in Sept (and will accompany a Summary of Economic Projections), so the Fed will have a couple of months worth of economic date to digest before the next interest rate decision.

 

• Meanwhile, second quarter GDP came in at a strong  2.4% annualized rate for the April – June time period (+2.0% consensus estimate from Dow Jones, +2.0% previously).

 

• Cable gets the double whammy in news this week: 
  • Shout out to Cable as the latest innovative institution to join the BaaS Association!!!!!
  • Grasshopper Bank (leading sponsor bank) has partnered with Cable to leverage Cable’s next-level automation and technology for financial crime assurance, testing, and oversight for Grasshopper Bank’s direct customers as well as their industry-leading BaaS platform.

 

• Merger Mania (not lost on me is the fact that this comes on the heels of the proposed draft merger guidelines by the FTC and DOJ last week….):
  • Banc of California, Inc. (NYSE: BANC) and PacWest Bancorp (Nasdaq: PACW) announced a merger of equals.  After the deal closes, the combined bank is expected to have about $36.1 billion in assets, $25.3 billion in total loans, $30.5 billion in total deposits and over 70 branches in California (which includes paydown of approx. $13B in wholesale borrowings funded by assets sales and excess cash).  Check out the Investor Deck.
    • Warburg Pincus and Centerbridge are also investing $400 million into the combined business for about a 19% stake.
    • Banking Dive is reporting that JPMorgan is the buyer of about $1.8B of single-family residential loans from Banc of California at a discount.
  • Atlantic Union Bankshares Corporation (NYSE: AUB) entered into an agreement to acquire American National Bankshares Inc. (Nasdaq: AMNB).  The combined company will have total assets of $23.7 billion, total deposits of $19.1 billion and gross loans of $17.3 billion, based on financial data as of June 30, 2023.
  • Upgrade is acquiring Uplift for $100M.
  • LPL Financial LLC to acquire the wealth management business of Crown Capital Securities, L.P..

 

• A lot going on in the Payments Space:
  • Visa Direct transactions soar 20% to 1.8B for the quarter on a global basis driven by P2P and B2B cross-border payments.
  • NACHA reported same-day ACH transactions up 7.7% to 199.4M transactions for the quarter.  The value of those payments was $612.6 billion, an increase of 26.1%.
  • Mastercard announced the launch of Mastercard Receivables Manager, a safe and cost-effective automated solution for businesses to accept and process virtual card payments.
  • Cross River expands their partnership with Plaid to allow instant payments across multiple payment rail options including ACH, RTP®, and soon the FedNowSM Service.  For more info – check out Instant Payouts on Plaid Transfer.

 

• Finastra partners with MX to integrate MX PFM, Insights, and Account Aggregation solutions with Finastra’s Fusion Digital Banking solution in order to enable financial institutions to better guide consumers toward financial wellness.

 

• 👀 The regulatory bodies released their anticipated interagency Basel III Endgame for banks with $100B in assets.  Quick note that this is a 5 year phase in by July 1 2028; and the comment period is now open through November 30, 2023.  A quick link to supporting docs (fact sheets, overview, etc.) if you want to get into the weeds:
  • Federal Reserve proposed rules to strengthen capital requirements for large banks
  • FDIC Basel III proposed capital rules
  • OCC proposed rules to strengthen capital requirements for large banks

 

• The OCC fined American Express National Bank $15 million for failing to oversee a third-party affiliate's call monitoring and process for tracking customer complaints, an announcement that comes as regulators have zeroed in on banks' efforts to supervise third-party relationships.

 

• BM Technologies (BMTX – fka BankMobile) disclosed delays on the regulatory review process in the transfer of their Higher Education business to their new sponsor bank, First Carolina Bank.

 

• The NCUA has conserved Yonkers Postal Employees Credit Union (charter 63918; Total Assets of $6M; 458 members).

 

• Notable FinTech funding for the week:
  • Immediate (EWA platform) raised $16M in Growth Capital.
  • Mercury Financial (credit card platform) closed a $200M Debt Facility to expand their credit card business.
  • Effectiv (real-time fraud and risk management platform for Fis and FinTech companies) raised an additional $4.5M in Seed funding bringing the total seed round to $9M; as well as the launch of DeviceAI.

 
 
Random Uncle Sean stuff:

• The IRS has halted the decades long practice of showing up unannounced at your doorstep…  Am I the only person who did not know that they still did that???  I thought that was one of those urban myths!!!  😮😬
• UPS reached a tentative labor deal with the 340k-worker union that includes $30B in new pay and benefits, potentially preventing a strike that could have been brutal for, well, pretty much everybody.
• Here they are – Dad Jokes!!!
  • The heat down here in Texas has everyone looking like those gas station hot dogs!!!
  • Aging is best represented as the inevitable reduction of time between dinner and bed time….
  • Frogs have more lives than cats because they croak every day! 🐸
  • This one was sent in to me by Mr. Cal Roberson over at Integris Financial Institution Division (great people doing great work over there):
    • I learned there is a medical term for when you can’t sleep and eat instead. It’s called insomnomnomnia!!! 🍕🤣😂  Thanks Cal!!!! 😊

 
 
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.