​Happy Friday!!!
 
After digesting a slew of publicly traded earnings announcements, it was a fairly light week in other news with all eyes on the FOMC meeting next week.  Here is the abbreviated Uncle Sean Update for 7/22/22:
 

• Patriot Bank (FDIC 33928) announced the mutual termination of merger agreement with American Challenger (actually a reverse merger where American Challenger was acquiring a charter) stating the merger was terminated because “not all closing conditions of the Merger Agreement can be satisfied under the current structure and agreement.”
  • The American Challenger press release went on to specifically call out the “recapitalization” portion of the merger agreement.  “Patriot would have completed a capital raise of at least $875 million to enable the pro forma company to implement American Challenger’s business plan (the ‘Recapitalization’).”
    • Not too surprising that this was a sticking point in our current funding / economic environment – that’s a lot of additional capital raise for a $975M bank.
  • American Challenger is now “exploring a sale of the company and has hired Citi as its strategic advisor in this process.”  😲

 

• Varo Bank (FDIC 59190) made the difficult decision to lay off 75 employees and reduce marketing spend in an effort to control cash burn (Varo net loss for 1Q2022 was $84M against $264M in remaining equity).  Varo also announced the launch of a new business unit, Varo Tech.
  • Warning – an unsolicited Uncle Sean op-ed ensues:
    • Looking at their call report data (source: FedFis – see what I did there), it doesn’t take long to see that a rising interest rate environment will not help Varo the way it does most banks (i.e. “NIM for the win”) due to the fact that Varo still operates primarily on an interchange model (swipe fee) for non-interest income. 
    • This means that their revenues are actually more at risk when interest rates rise (due to consumers tightening their belt on spending).  Compounding this is their de novo status which hamstrings them at a 10% Tier 1 leverage ratio for the first 3 years – the punchline here is that it will be very difficult for Varo to grow their way out of this by increasing loans while being forced to maintain a 10% Tier 1 ratio when recurring losses are contributing to a declining equity position.  Not to mention it is a different environment now for trying to raise outside capital.
      • I am rooting for Varo (always have), but the road ahead looks tough.

 

• The FBI is warning investors and Financial Institutions about fake crypto apps that defrauded 244 victims out of $42.7M between Oct 2021 and May 2022.

 

• Gemini (crypto exchange) conducts a second round of layoffs less than two months after cutting 10% of staff.

 

• This is worth watching closely…..  The DOJ and the SEC brought fraud and first-ever crypto insider trading charges against three Coinbase employees.  This case has far reaching ramifications because the SEC is alleging that the 9 Coinbase tokens constitute securities offerings (yep - there’s the “s” word).  CNBC has a good write-up covering both sides of this issue.

 

• Truebill (which was acquired by Rocket Companies on 2021) announced that they are changing their name to Rocket Money in August.

 

• Notable FinTech funding for the week:
  • Meow (crypto yield for corporate treasuries) raised $22M in Series A funding round.
  • X1 (smart credit card platform) raised $25M in Series B funding.
  • Mahalo Banking (CUSO) raised $20M in funding to continue growth in mobile and online banking solutions for credit unions.
  • Airbase (corporate spend management platform) landed a $150M Credit Facility from Goldman Sachs to expand their corporate card program.
  • TomoCredit (alt credit builder platform) raised $122M in capital comprised of an undisclosed equity and debt to continue to provide credit card lending to over 40 million credit-invisible immigrants and international students with no credit history in the U.S.
  • Halborn (blockchain security firm) raised $90M in Series A funding round – WOW, that’s a big Series A!!!!
  • FairPlay (AI platform to reduce algorithmic bias in lending) raised $10M in Series A funding.
  • Crunchbase (you know who they are – LOL) picked up an oversubscribed $50M Series D round.  Valuation was not disclosed but it was referred to as a “significant up round” by their CEO, Jager McConnell.
    • Some fun facts here…  This news was covered by TechCrunch -- from which Crunchbase was spun out as a wholly independent company in 2015.
    • Uncle Sean loved this part of the article as it really resonated with me in relation to the work that we do here at FedFis:
      • “In both down times and boom times, businesses across industries are faced with the challenge of building sales pipelines and closing revenue. ‘Account-based’ intelligence — i.e., research into potential customers — can help during the prospecting process. But it requires a thorough, vetted source of information and contacts in departments like business development, sales and recruiting.” 
      • Indeed, sir - very nice!!!!

 
 
Random Uncle Sean Stuff:

• WOOHOOO!!!!  Happy Birthday to Aunt Patty and I this weekend as we celebrate being 21 again (for many, many, many decades)!!!  We share the same birthday, but she is 8 hours and 39 minutes older than me – a fact that gets way overused by me every single year - LOL!!!
• Only 36 more days until College Football season!!!!  Check out Nebraska vs Northwestern opener being played in Dublin, Ireland!!!
• I haven’t tried this yet, but this is definitely on my list – take a look at this recipe for balsamic marinated grilled mushrooms.
• And of course the moment you have all been waiting for - Dad Jokes:
  • Oddly enough, the James Webb telescope appears to have located one of my missing socks…
  • 95% of electric vehicles are still on the road (the other 5% actually made it home).  HAHAHAHAHA!!!!
  • My mechanic told me that he found the problem with my car, but it’s going to be expensive to fix.  Apparently it was out of gas…  😊

 
 
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’s HOT here in Texas!!!  Here is the Uncle Sean Update for 7/15/22:
 

• WOW - there’s a ton of great things coming out of the Bankers Helping Bankers (BHB) ecosystem this week – so let’s jump right into it!!!!
  • Uncle Sean gives a huge shout out to Finzly as the latest to join the BHB BaaS Association!
  • And just in case you missed it, Bankers Helping Bankers announced the launch of the BHB Fund (yep, you read that correctly)!  A fintech venture capital fund managed by Latitude38 Venture Partners to support community bankers’ engagement with emerging technology providers.
    • This gets really cool when you consider the entire BHB ecosystem…  It creates a compounding effect when combining the BHB Platform, the BHB BaaS Association, and now the BHB VC Fund.  At the center of this ecosystem is FedFis data – no surveys and no BS.
    • Hmmm, Uncle Sean can’t help but wonder what comes next out of this BHB ecosystem – a vendor accelerator program maybe???  Who knows what fintech wizardry is being concocted with likes of FedFis, IBAT, and Bankers Helping Bankers….  Stay tuned as we continue to “scare the $hit out of the big 4” and make community banking cool again!

 

• It was a tough week for inflation as BLS pegged CPI at 9.1% over last year – yep, I’m feelin’ it….  The good news is that many are saying this is finally the peak (let’s hope so); and the employment / jobs data remains strong for the US consumer for now.  Fingers crossed…
  • Certainly sets the stage for continued aggressive rate increases at the July 26-27 FOMC meeting.

 

• A handful of BNPL highlights (because it beats the hell out of reading more Elon Musk / Twitter drama - 😊):
  • After weeks of rumors and speculation of a massive down round, it’s official….  Klarna announced $800M funding round at a $6.75B valuation which is down about 85% from their $45.6B valuation last year.  Klarna puts a good spin on it showing pretty much everyone is down 80%+ and valuations were a bit lofty last year (ya think?).  But those expanding credit losses and cash burn remain a concern (see Klarna 1Q2022 financial results – one SEK equals about .095 USD for reference).
  • OpenPay is exiting the US, just a few months after exiting Europe, to focus on Australian operations.
  • Zip and Sezzle mutually agree to terminate their merger agreement citing “current macroeconomic and market conditions” to which Zip will pay Sezzle an $11M termination fee.
  • Synchrony announced Synchrony SetPay in 4 BNPL solution via the Clover® point-of-sale and business management system from Fiserv, Inc.

 

• Kinly (BIPOC focused neobank) selects MX for financial data aggregation via MX’s open finance API’s.

 

• BMO Harris Bank announced an increase in minimum wage pay to $20 beginning August 7,2022.  BMO Harris Bank joins the ranks of Bank of America, Truist, Wells Fargo, and JPMorgan Chase making similar moves recently.

 

• The crypto fallout continues as Celsius (crypto lending) finally filed for Chapter 11 Bankruptcy less than a week after hiring Kirkland & Ellis LLP to replace their existing law firm (Kirkland & Ellis LLP is the same firm that is handling the Voyager bankruptcy).  This comes about a month after they halted all customer withdrawals.

 

• Well now – this is getting interesting….  Seems that the founders of recently bankrupt crypto hedge fund 3AC are missing and presumed “on the run” and have not begun to cooperate with BVI liquidation orders “in any meaningful manner” (insert Mission: Impossible theme song)…  WOW…  😲

 

• Notable FinTech Funding for the week:
  • Uprise (private wealth management tool) raised $1.4M in pre-seed funding.  Although still in beta, Uprise has “tracked $50M in assets so far.”
  • Quiltt (low code fintech platform for embedded finance) $4M in Seed round
  • Capchase (alt lending – business sales financing) raised $400M in debt financing and announced Capchase Analytics dashboard.
  • Apiture (digital banking for FI’s) raised $29M in capital led by Live Oak Bank.
  • Pebble (personalized investments – “build your own ETF”) raised $5M in Seed funding.

 
 
Random Uncle Sean Stuff:

• This week, Elon Musk….  Oh for cryin’ out loud – who cares!!!!  LMAO!!!
• Uncle Sean bought gas this week for $4.09, and I was excited - smh……..
• How hot and dry is it here in Texas???  Well, I was at Tanner Mayo’s ranch and he has two-year old catfish that haven’t learned how to swim yet!!!  I could have sworn that a couple of ‘em had sand ticks and a sunburn as they waddled by...  drinking bottled water…  wearing sunglasses and flipflops (err – “finflops”)…  LOL!!!! 😝
• NASA released the first images from the James Webb Space Telescope.
• Ending on a serious note - take a moment and read this press release by The United States Marine Corps honoring U.S. Marine Corps veteran Hershel Woodrow "Woody" Williams who passed away last month at the age of 98.  He was the last living WWII Medal of Honor recipient.  This week, he lies in honor at the U.S. Capitol.
  • Equally as important as his valor in combat was his lifelong dedication, commitment, and service to veterans.  U.S. Senator Mitch McConnell (KY) recalled meeting "Woody" once in Kentucky, saying, "By that point, he'd been giving back to his beloved country and those who defended it for 77 years."

 
 
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 another super-busy short week.  Here is the Uncle Sean Update for 7/8/22:
 

• Uncle Sean goes “off the rails” with an unsolicited op-ed on the Voyager Chapter 11 Bankruptcy - specifically related to the Voyager Debit Card showcasing “9% rewards” and the impact to those consumers, so please feel free to scroll down for the rest of the normal update 😊.
  • If you want to learn more about the current crypto contagion meltdown and how we got here, Forbes has a good summary of the Crypto Winter.
    • My 2 cents is that this is a process in deleveraging amongst rapid declining collateral – hmmm, any credit lessons learned from the past (yep – that’s sarcasm)???  My more “seasoned” banker friends are shaking their heads with flashbacks of Lehman Brothers.  We’ve seen this before; and ironically is largely why DeFi exists today – LOL!!!  Fortunately, this has just become contagion within the crypto ecosystem; and that market itself (in my opinion) is not big enough or widely dispersed enough to become systemic risk – YET. 😲
  • I am generally not a huge fan of more regulation, but in this instance we certainly need it sooner rather than later – particularly surrounding:
    • transparent stablecoin collateralization
    • investor protections, and
    • strict clarifications surrounding terminology – specifically loan yield versus “rewards” or “savings” (remember when Chime agreed to stop referring to themselves as a "bank")
  • Unfortunately, a direct result of this crypto contagion is the Voyager Bankruptcy; and the FDIC is investigating how Voyager marketed themselves, which is a good start.
  • Here’s the punchline - my biggest problem with Voyager is that even today, their website still says “the card that earns up to 9% rewards“  This is not a rewards platform, it is a USDC yield platform as I described in the Uncle Sean Update for 11/19/21 and again in the Uncle Sean Update for 4/1/22.  We need to do a better job of showcasing the risks associated with being outside of the FDIC and SIPC insured regulatory system especially when targeting retail consumers.
    • Let’s be honest, the crypto ecosystem can be very difficult to understand even amongst educated and experienced financial experts.  Just imaging the confusion to ordinary folks thinking they are getting rewards on debit card spend not fully understanding that they are generating a crypto loan return as an unsecured creditor.  We can do better than this…
  • Whew, I feel better now - back to the rest of the Uncle Sean Update!!!

 

• Truist (NYSE: TFC) announced they are raising their U.S. minimum wage to $22 effective Oct. 1.

 

• Mambu (modern cloud banking platform) announced global partnership with Visa to utilize Visa DPS as payment processor.

 

• Take a minute and read this nicely done commentary by Rob Morgan on Why I'm Joining USDF.  Responsible blockchain innovation is cool!!!

 

• I ran across this while doing some other research this week…  Looks like Farmington State Bank (FDIC 6149; $16M Total Assets; established 1929; no branch network; located in WA) is going through a rebranding / dba to Moonstone Bank – “a bank built by innovators, for innovators.”  Uncle Sean LOVES this new class of FDIC chartered developer banks; and I hope everyone pays attention to their current asset size (BaaS isn’t just for the Big Banks)!
  • Check them out at Moonstonebank.com
  • Also worth noting is their Bank Holding Company, FBH Corp, raised $11.5M in private equity funding in March from Alameda Research Ventures (yep - owned by Sam Bankman-Fried, CEO of FTX).
  • And lastly – take a look at the recent firepower they have brought in (this should be fun to watch):
    • Ronald Oliveira – CEO (former US CEO of Revolut)
    • Praful Mainker, CFA – Chief Risk Officer (former Executive Director of AI, Automation, and Data Science at JPM Chase) – deeply involved in crypto
    • Tim Courtney, CAMS – Head of Financial Crimes (former lead of BSA/AML/OFAC at OpenPay; VP Financial Crimes at LPL Financial)
    • Daniel Ranallo – CTO (former software engineer and CTO)

 

• BMO Harris Bank becomes the latest large FI to eliminate NSF and restructure Overdraft fees for consumer and small business banking account.  Banking Dive has a good summary with other large regional comparisons.

 

• Funding Circle (online small business lending platform) announced an agreement with DreamSpring (CDFI) to expand the DreamSpring small business reach via a co-branded application portal as part of Funding Circle’s lending-as-a-service program.

 

• Notable FinTech funding for the week:
  • Finli (mobile payments app focused on service related microbusinesses) raised $6M in Seed funding round.
  • Tesorio (mid-market AR management platform) raised $17M in Series B round.  Valuation was not disclosed, but the company stated the “funding follows a third consecutive year of triple-digit revenue growth.”
  • Coalition (cyber insurance and active managed cyber security platform) raised $250M in Series F funding round at a valuation of $5B

 
 
Random Uncle Sean Stuff:

• Only 50 more days until College Football season begins!!!!  I know it’s technically “week zero” with the majority of teams starting the season a week later, but it’s a start!!!!!
• And a few quick Dad Jokes to kick off the weekend:
  • Why don’t they refer to dental x-rays as “tooth-pics?”
  • It is actually faster to say “world wide web” than “www”…..
  • WTF is an acronym……. (hehehehe)
  • A mosquito landed on my face and Aunt Patty said it was the easiest decision of her life!!!!  😝

 
 
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 July 4th Weekend!!!
 
Not sure how this happened so fast, but 1H2022 is in the books – welcome to 2H2022.  Wishing everyone a safe and happy Independence Day (and happy Canada Day to our northern neighbors)!  This week is a fairly abbreviated update as I attempt to sneak out early (don’t tell my boss) to jump start a weekend of July 4th shenanigans!!!  Here is the Uncle Sean Update for 7/1/22:
 

• PayPal continues their expansion into the business credit space by launching the PayPal Business Cashback Mastercard featuring unlimited 2% cash back for U.S. SMB’s.
  • A little more detail for you - the PayPal Business Cashback Mastercard® is issued by WebBank and serviced by Austin-based Concerto Card Company.

 

• UMB Bank announced an agreement to acquire the HSA business from Old National Bank consisting of 157,000 accounts across more than 3,000 employer groups with assets totaling $500M (of which about $400M is held in deposit accounts).
  • UMB Healthcare Services existing HSA business supports 4.9 million healthcare spending account cards, and services more than 1.2 million HSAs, totaling more than $2.7 billion in HSA assets and deposits as of March 31, 2022.

 

• Finastra launches embedded consumer lending solution making it easier for banks on Finastra core to offer a consumer financing solution at POS to their business clients and third-party distributors.  Using exposed API’s on Finastra’s FusionFabric open platform, LoanStar Technologies is able to provide access to banks on Finastra Core to create POS consumer loans through the LoanStar merchant network.
  • Check out the Finastra Embedded Consumer Lending pdf doc for more info.

 

• This could get interesting….  The FTC has sued Walmart for allegedly “allowing its money transfer services to be used by fraudsters, who fleeced consumers out of hundreds of millions of dollars.”  The complaint goes on to allege that Walmart “turned a blind eye” while pocketing millions in fees.  Walmart responded by publishing a corporate statement to the complaint with the intent to vigorously defend themselves citing:
  • Factually flawed and legally baseless
  • Refusal of due process of hearing directly from Walmart
  • Unprecedented expansion of FTC authority

 

• Fulton Bank joins the ranks of large FI’s to eliminate NSF and revise overdraft program beginning in the 4th quarter of 2022.

 

• Notable FinTech funding for the week:
  • April (API driven embedded consumer income tax solution for FI’s and developers) raised $30M in Series A funding round with plans to invest in R&D and “increase its operational capacity in preparation for next tax season.”  Check them out at getapril.com
  • Zilch (BNPL) raised an additional $50M extension to their series C bringing the total now to $160M.  Funds will be primarily used to expand growth “with a focus on the US market where Zilch recently opened its Miami office and launched with more than 150,000 pre-registered customers.”
  • Stake (rent rewards platform with cash back debit card) raised $12M in Series A funding round.
  • OppZo (working capital loans for SMB’s in Opportunity Zones with government contracts) raised $260M in capital consisting of $5M in equity and $255M in debt to support SMB’s in distressed communities.

 
 
Random Uncle Sean Stuff:

• Don’t forget – the IRS has increased the standard mileage rate for business from 58.5 cents per mile to 62.5 cents per mile for the remainder of 2022 beginning July 1, 2022.
• OUCH!!!  Big 4 accounting firm Ernst & Young LLP to pay $100M fine to the SEC (the largest penalty ever imposed by the SEC against an audit firm) for cheating by its auditors on ethics exams and for withholding evidence of such.  Cheating on an ethics exam – DANG – C’MON MAN!!!!  LOL 😲
• Happy Birthday ‘Merica!  Uncle Sean has fond memories of the 4th of July – in fact, it is still one of my favorite Holidays behind Christmas.  When I was a young’un about 100+ years ago, we would spend the 4th at the beach every year.  It was always in some remote area because our Dad didn’t really like most people (and conversely, most people didn’t like our Dad either – LOL).  We would spend the day building a beach fire with driftwood, eating hot dogs and bologna sandwiches; and I would spend countless hours shooting off bottle rockets, roman candles, and blowing up sand castles with Black Cat fire crackers!  Ahhh, there is nothing quite like a sea breeze with the smell of hot dogs, gunpowder, and burning driftwood in the air!!! 😊
  • By the way, here is a good quick Dad recipe for the 4th of July:
    • Step 1 – cover beer with ice and let sit until cold
    • Step 2 – drink and repeat
      • Follow me for more exciting summertime recipes!!!

 
 
Have a GREAT 4th of July 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 – it’s what we do!  Here is the Uncle Sean Update for 6/24/22:

• Fiserv gets a BIG salute from Uncle Sean this week as a Premier Sponsor of the Bankers Helping Bankers platform to accelerate support for community banks with technology education, fintech data, and collaborative innovation.  OUTSTANDING!!!!!  I am super proud to be a part of this movement supporting community banking!
  • Don’t forget to check out Fiserv’s new App Market allowing an open platform for banks on Fiserv core (DNA, Cleartouch, Precision, Signature, and Premier) to easily offer and integrate FI FinTech solutions “to address emerging opportunities in crypto finance, gig economy banking, small and mid-size business (SMB) lending and other priorities.”
  • And while you are at it – check out Bankers Helping Bankers launched by IBAT and FedFis.
    • Bankers Helping Bankers is for bankers only, but don’t miss out on the BHB BaaS Association which affiliate membership is open to:
      • FinTech and Bank Vendors
      • And of course, Banks looking to become a Sponsor Bank / BaaS Bank

 

• In a bit of an abrupt move (although not completely surprising – more on that below), Brex announced that they are moving away from SMB's focusing on VC backed and enterprise level customers for growth.
  • The announcement clearly caught many customers off guard as they were told that they had until August 15, 2022 to find an alternate solution.  TechCrunch has a really good follow up clarifying the Brex decision to show that only startups without “professional” funding in place will be impacted.
    • Look – I get it.  This allows Brex to eliminate low growth potential (somewhat discriminatory) “boot-strapped” SMB’s AND mitigate a higher perceived credit risk.  But yeah – the delivery was a little rough.  Especially considering the branding of “Corporate Card for Startups.”  But to be completely fair – Brex had always focused on funding versus credit history. 
    • Also not surprising was the swift competitor response – RelayFI was quick on the draw to capitalize and offer $150 for switching from Brex to Realy with proof that the customer was affected by Brex’s decision.
  • Pedro Franceschi (founder and co-CEO) gave an updated Blog post this week basically stating, yep – we botched that announcement and could have / should have done better.

 

• Tillful (business credit for SMB’s) announced a partnership with Experian to help establish and build “credit profiles for businesses that are new to credit or otherwise credit invisible, and thereby potentially expand the range of credit options that can be made available to them.”  A VERY COOL concept!
  • Recall on the Uncle Sean Update from 6/3/22, we talked about the launch of the Tillful Card (Mastercard issued by Sutton Bank).

 

• Zogo (gamified financial literacy app) announced that they have reached 200 Financial Institutions and 700,000 Users in Less Than 3 Years– WOW!!!!
  • I personally love the fact that the majority of their users are under the age of 24 as Uncle Sean is a HUGE proponent of financial literacy for everyone.  Check them out at Zogo.com. 

 

• “Let the dividends begin!”  Oops - sorry, did I just say that (LOL)???
  • The Federal Reserve Board released results of their annual stress test of the nation’s 33 largest banks. Punchline is that all banks perform well above required CET1 minimum capital levels under severe adverse scenario testing (despite a more rigorous stress scenario than last year).
  • You can check out the  66 page DFAST stress test report here including individual bank results.  BankingDive also has a good summary suggesting that dividends will likely remain flat, but certain banks may pare back buyback plans.

 

• FTX US (crypto exchange) announced the acquisition of Embed Financial Technologies, a white-label brokerage platform, in support of FTX Stocks to provide comprehensive equity and ETF trading across all asset classes – not just crypto.

 

• Truist completes their new Innovation and Technology Center in Charlotte, NC.

 

• Worth keeping an eye on – the CFPB is looking at credit card late fees as a potential area to crack down on as inflation threatens consumers.

 

• Notable FinTech funding for the week:
  • Autobooks (embedded payment and accounting platform for small businesses used by over 800 financial institutions) raised $50M in Series C funding round.  Valuation was not disclosed, but the company did state that they now have over 60,000 businesses on the platform with 840 bank installs – NICE!!!
  • Wahed (Muslim faith-based ethical investing / wealth mgmt app) raised $50M in Series B round and plans to launch a neobank soon.
  • Tapcheck (on-demand / earned wage access platform) raised $20M in Series A funding round.
  • Prime Trust (regulated crypto infrastructure platform) raised $107M in Series B to further enhance new offerings and wealth products such as their API-enabled Crypto IRA.
  • BlockFI (digital asset / crypto platform) signs a $250M credit facility from FTX to provide liquidity and “bolster BlockFI’s balance sheet.”
  • Cleo (PFM App) raised $80M in capital at a $500M valuation to continue to expand in the US.
  • FalconX (digital asset platform for institutional investors) raised $150M in Series D funding at an $8B valuation – WOWZA!
  • Vergo (business banking platform for architectural, engineering, and construction industry) raised $4.1M in Seed funding.

 
 
Random Uncle Sean Stuff:

• In other news this week - Juul gets smoked as the FDA bans their e-cig vaping products in the United States – WOW!!!  Of course, Juul responded defensively and is seeking a stay against the FDA ban and an appeal.
• Happy Birthday to our very own Dan Heilveil – have a good one buddy!!!!
• And of course a few bad Dad Jokes:
  • While at the restaurant, Aunt Patty said, “I’ll have the chef’s salad” and I whispered to her “that’s a little bit rude, just order your own!”
  • I bought new deodorant and the directions said, “remove top, push up bottom” – and I thought to myself…..  I really just wanted it for my armpits…  😲
  • It takes guts to be an organ donor!
  • Okay last one….
    • Good Morning.  Is this the Helpline for Alcoholics?  How do you make a Mojito? 😊

 
 
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 Father’s Day Weekend!!!
 
Quick bragging moment – our weekly newsletter now has 11,250+ subscribers – HOLY COW!!!!  Not bad for only 12 months in full circulation!!!!  Avoid FOMO and sign up here to have the Uncle Sean Update and the FinTech Cowboy interviews delivered straight to your inbox every week.  And now – here is the Uncle Sean Update for 6/17/22:
 

• Shout out to Lineage Bank as the latest community bank to join the BHB Banking-as-a-Service (BaaS) platform!

 

• It’s Fed Week!!!  In a slight pivot from an estimated 50 bps move, although widely expected since the beginning of this week, the FOMC raised interest rates by 75 bps.  The response was, In large part, due to the CPI that came in at 8.6% for May signaling that inflation had not yet peaked.  For the “diehard Fed Superfreaks” like me, you can check out the following:
  • Federal Reserve issues FOMC Statement showing a 75 bps rate increase and quantitative tightening (QT) to remain on track as announced in May (which was $47.5B per month ramping up to $95B per month in Sept).
  • Chairman Powell’s Press Conference Transcript (27 pgs) – note that he mentions the Fed could hike rates by 50 to 75 bps again in July, but will be decided on a meeting by meeting basis.
  • FOMC Summary of Economic Projections (17 pgs) signaling more rate hikes to a median of 3.4% Federal Funds Rate by the end of 2022, 3.8% by the end of 2023, and 3.4% for 2024 (keep in mind that we are now at a benchmark of 1.5% - 1.75% so there is a ways to go). 
    • As always, even though it makes for good press - please remember that the Summary of Economic Projections (SEP) / “dot plot” is not policy or a plan of action, but simply a median of current assumptions based on current economic data as it stands today.  Meaning, the FOMC will pivot as they see necessary based on new data as it comes in.
  • It is worth noting that a 75 bps rate increase is the largest since 1994 (more on that in the Random Uncle Sean Stuff below)…

 

• I watched the stock market this week…  and…  well…  I threw up…  LOL!!!

 

• Frost Bank and Citizens Financial Group (Citizens Bank, N.A.) join the ranks of large FI’s eliminating NSF and overhauling overdraft programs.
  • Frost Bank expands overdraft grace & eliminates NSF fees for consumer banking customers.
  • Citizens announces Citizens Paid Early (early access to direct deposit) and commits to eliminating NSF fees by the end of 2022.

 

• Celsius (crypto lender) freezes withdrawals after a brutal crypto market downturn forced liquidity problems. 
  • Question - How do you stop a Bank Run???  Just tell people “no, you can’t withdraw your funds”…..   Yeah, that should work just fine (sarcasm)….  😲
  • To make matters worse, WSJ is reporting that Celsius has hired restructuring attorneys – yep, this is about to get ugly…  And you can bet the regulators and lawmakers are taking plenty of notes.

 

• C2FO launches CashFlow+ Card allowing businesses to get their receivables paid faster without typical discount fees via direct funding to a Sutton Bank issued Visa card - PLUS a 1% cash back reward on all purchases.
  • I really like this product concept; and those folks over at Sutton Bank continue to do cool things in the business embedded finance / BaaS sponsor arena.

 

• American Express announced the Abra Crypto Card – the first crypto rewards credit card on the American Express network.  

 

• Of course it wouldn’t be a full week without another BNPL mention…..  PayPal extends their BNPL offering by announcing “PayPal Pay Monthly” to give customers a more flexible way to pay instead of having to pay off purchases over six weeks as before – now they can make payments over a 6 - 24 month period….. 
  • Uhh - doesn’t this smell like just a regular credit card to anyone else?  Up to $10K limit, rates up to 29.99% (depending on credit), monthly payment schedule, what am I missing???  Have we gone too far in calling everything a BNPL solution?

 

• VyStar CU and Heritage Bancorporation mutually agree to terminate their merger agreement citing difficulties in obtaining the necessary regulatory approvals in a timely manner.  Per the announcement, “each company will bear its own costs and expenses in connection with the terminated transaction, and that neither party will pay any termination fee as a result of the mutual decision to terminate the purchase agreement.”

 

• Canadian owned VersaBank announced an agreement to acquire Stearns Bank Holdingford, N.A. (FDIC 10160) for USD $13.5M in a bid to obtain a US OCC charter.  The deal provides VersaBank access to US deposits to fund the growth of their Receivable Purchase Program recently launched in the US.  Upon closing, Stearns Bank Holdingford will be renamed VersaBank USA, N.A..
  • Here is a little more about VersaBank’s POS Financing model via Receivables Purchase Program that just entered the US market in March.
  • Note that the BHC, Stearns Financial Services Inc. and the two related banks, Stearns Bank of Upsala, NA (FDIC 9336) and Stearns Bank, NA (FDIC 10988) are NOT part of the merger agreement.

 

• Notable FinTech funding for the week:
  • Kinly (fintech banking app focusing on BIPOC – fka First Boulevard) raised $15M in Series A funding according to Axios (sorry about the paywall).
  • Narmi (digital banking and NAO solution for FI’s) raised $35M in Series B round.
  • Able (AI platform to streamline the commercial loan process for FI’s) exits stealth an announced a $20M Series A funding raise.  Check them out at able.ai.
  • HomeLight (proptech platform) raised $115M in capital consisting of a $60M equity extension of their recent $100M Series D plus $55M in debt financing.  HomeLight also announced the all stock acquisition of Accept.inc in the still red-hot “all-cash offer” arena.

 
 
Random Uncle Sean Stuff:

• HAPPY FATHER’S DAY to all the Dad’s out there getting’ it done!  Now quit loafing around and mow the yard, wash the cars, and grill up some food for everyone!
• I must admit, when I read about 75 bps interest rate hike being the largest since 1994, Uncle Sean immediately took a trip down memory lane:
  • In 1994, I had recently left Sheshunoff and was working at NorthCorp Realty Advisors (actually Crown NorthCorp) as their Cash Accountant in the Contract Department recording cash sweeps and reconciling to financial statements from third-party property management firms.  We were a SAMDA contractor with the RTC and would buy bulk performing asset blocks that had been repossessed (mainly multifamily and CRE).
  • Aunt Patty and I got married that year!  We lived in a tiny rent house near Princeton, TX for $400 per month (had two window units for AC and a propane space heater on the wall for heat).  We had a dog named Cutter.  I had a beat up 1987 GMC S15 pickup with way too many hard miles on it; and Aunt Patty had her infamous navy blue 1982 Pontiac Phoenix LJ hatchback (affectionately named “the turtle”) – a car that we still laugh about today.  LOL  😊

• Shout out to my niece, Laurel Mayo who had a birthday this week – Happy Birthday!!!!  21 again, eh??  Me too Lalo, me too!

• And it would not be a proper sendoff to Father’s Day Weekend without some Dad Jokes:
  • Reaching into a pair of pants and finding money is always a good thing….  Until the person wearing them makes eye contact!!!
  • The #1 surefire way to avoid stress at work is…  Don’t go!
  • One big difference between Mom’s and Dad’s is that if Mom says “smell this” it usually smells nice. 

 
 
Have a GREAT Father’s 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!!!
 
It’s HOT outside!!!!  Here is the Uncle Sean Update for 6/10/22:
 

• This week we get a double fist bump for the BaaS Association as great things continue to happen in Bankers Helping Bankers:
  • Five Star Bank joins the BHB Banking-as-a-Service (BaaS) platform as a founding member!!! 
  • Doubling down, is Coastal Community Bank announcing that they have also joined the newly launched BaaS Association as a founding member!!!

 

• I’m sure you saw this everywhere this week like I did, so I’ll keep this short and on point…  At their Worldwide Developers Conference, Apple announced the launch of their Apple Pay Later BNPL product.  CNBC has a really good summary.  No real surprise as we have been tracking this since last July.  However, there are a couple of new developments worth noting:
  • This is a function of Mastercard Installments and Goldman Sachs is the BIN sponsor; although Apple Financing, LLC will do the underwriting, approval, and hold the receivables.
  • Apple Pay Later is merchant agnostic meaning there is no need for ANY integrations as long as the merchant accepts Apple Pay (already accepted at over 90% of US retailers; and it is estimated that there are well over 100M iPhones in the US).
  • Could this be the “Klarna Killer” from a merchant agnostic perspective?  Will this dilute Square’s (Block) $29B acquisition of AfterPay as an ecosystem play?  Time will tell, but Apple certainly has the reach…

 

• Locality Bank announces a partnership with Hurdlr, an API based solution for Locality Bank’s business customers to seamlessly and “automatically track expenses, income streams, and tax deductions for accounting purposes.” 

 

• More banks announce changes to overdraft / NSF:
  • Flagstar Bank (FDIC 32541, NYSE: FBC, Total Assets $23B) revamps overdraft program to eliminate NSF and other OD changes beginning Aug 1, 2022.
  • New York Community Bank (FDIC 16022, NYSE: NYCB, Total Assets $61B) announced plans to eliminate NSF and restructure OD beginning Aug 1, 2022.  NYCB will also launch Early Pay in 3Q to allow customers to access their direct deposit up to two days early.

 

• Custodia Bank (fka Avanti), a Wyoming SPDI for digital assets / crypto, is suing the Federal Reserve for delays (19 months) in processing their master account request.

 

• PayPal announced that their users can now transfer, send, and receive crypto between PayPal and other wallets and exchanges.  Basically, this allows PayPal customers to:
  • Transfer supported coins into PayPal.
  • Move crypto from PayPal to external crypto addresses including exchanges and hardware wallets.
  • Send crypto to family and friends on PayPal in seconds, with no fees or network charges to send or receive.

 

• The FTC released a Data Spotlight on crypto fraud losses to consumers based on scams totaling $1B since the beginning of 2021 through March 2022; and is accelerating rapidly:
  • $680M total for all 2021 plus another $329M in 1Q2022….  That’s not good…

 

• So, this got interesting rather quickly….  Edge announced the launch of the Edge Crypto Mastercard allegedly without any identification or KYC (wait, what???)…  However, there seemed to be little bit of confusion and a Blog update on the Edge website states that the Edge Card has been temporarily removed “and the use of the card inside of our app has been temporarily disabled.”
  • In my best Ace Ventura voice, Alrighty Then!!!!  😲

 

• Railsbank changes their name to Railsr.

 

• SEC Chairman, Gary Gensler, is looking to overhaul Payment For Order Flow (PFOF).  While many firms have been quietly looking for alternatives, Robinhood looks as if they may be positioning for a fight.  “It is a really good climate for retail. To go in and muck with it right now, to me, is a little worrisome,” said Dan Gallagher (Robinhood Chief Legal Counsel) at the same industry conference Wednesday.

 

• Shout out to Michigan as they will soon be the 14th state to mandate personal finance education at the high school level as a graduation requirement – a concept that Uncle Sean is greatly in favor of!!!!

 

• Notable FinTech funding for the week:
  • Middesk (B2B Identity-as-a-Service API in the smoking red hot identity verification / KYC / KYB space) raised $57M in Series B funding round.
  • Branch (insurtech platform) raised $147M in Series C funding at a $1.05B valuation.
  • Ivella (banking app for couples) raised $3.5M in capital.
  • Finch (API platform for connecting to corporate payroll, HR, and benefits systems) raised $15M in Series A funding round - connects to corporate payroll, HR, and benefits systems $15M in Series A funding round.
  • Proper (fintech sub-ledgering platform) raised $4.3M in Seed round.
  • SecureSave (workplace emergency savings account ESA platform) raised $11M in capital.  If this sounds familiar, it is – a few weeks back we highlighted Transamerica Workplace Emergency Savings Account to which SecureSave was one of the providers.
  • Summer (second home ownership platform featuring financing, rent while you are away, and property management) raised $13.4M in Seed funding $13.4M in Seed funding.
  • Fruitful (financial wellness membership platform) emerges from stealth with raised $33M in equity financing consisting of Seed plus Series A.

 
 
Random Uncle Sean Stuff:

• It’s a little warm here in Austin – expecting 104 today, 107 on Saturday, and 106 on Sunday – WHEW!!!
• I am cooking this recipe in my slow cooker right now for me and Aunt Patty today (if it tastes as good as it smells, this will be a hit) - slow cooker shrimp boil.  Couple of quick notes:
  • I added a small bag of Louisiana brand shrimp / crab boil (boil in bag).  I upped the water from 2 cups to 5 (needed more to cover everything).  I added fresh green beans for a twist.  Also used an extra ½ lb of shrimp and doubled up on the red potatoes and onion.
  • I think the above proves that Uncle Sean has a very difficult time following basic instructions  – LOL!!!!
• Okay – here are a couple of quick Dad Jokes to get you into the weekend vibe:
  • So I was at the store trying on some new shoes and I told the guy helping me that they were a little too tight.  He said, “try loosening the tongue up.”  And so I said, “It’th nho ghood, it’th thtill thoo thight.”  😊  
  • What do sprinters eat before a race? Nothing, they fast!  Hehehehehe!!!!

 
 
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!!!
 
Welcome to June – I know, I can’t believe it either!!!  Short holiday weeks are always crazy as we try to cram our ordinary full hectic work week into 4 days while also wondering how it is possible for a three day weekend to go by at the speed of light, so let’s get to it.  Here is the Uncle Sean Update for 6/3/22:
 

• Okay – Uncle Sean goes “off the rails” here on FinTech valuation metrics and the market downturn.  As an old gray-haired finance superfreak, I feel marginally qualified to expand on this (insert the Farmers Insurance mantra – “we know a thing or two, because we’ve seen a thing or two” LOL)…
  • Plenty of folks saw the a16z chart being passed around recently showing in graphic form (pun intended because it is a train wreck) FinTech multiples getting crushed from a high of 25X just last October to about 4X in May ’22 - that’ll make anyone squirm!  However, there is so much more to that story.  Please do yourself a favor (especially if you are dependent on additional outside funding for cash flow) and read the a16z article, A Framework for Navigating Down Markets (and yes, it’s the one with the terrifying FinTech multiples graph).  It gives solid advice on managing to your cash flow; knowing your valuations; and gentle reminders about timing including the cautionary tale of keeping plenty of dry powder on hand - “raising capital with less than 12 months of runway sends a negative signal to the market and makes it harder to have a good fundraise.” 
    • Massively important for everyone, not just FinTech, as we navigate somewhat turbulent waters going forward with continuing pressures surrounding the “R” word (rhymes with “procession”).  😊
  • Now on to the rest of the Uncle Sean Update:

 

• Affirm (BNPL platform, Nasdaq: AFRM) announced a strategic partnership with Stripe enabling Affirm’s Adaptive Checkout™ to be available to Stripe users in the U.S. for BNPL option at checkout.
  • Pretty cool, but you already knew that if you were checking out Stripe Sessions 2022 last week that highlighted global BNPL agreements with Afterpay, Klarna, and Affirm (listed as coming soon) – including how to choose a BNPL provider.

 

• And as the BNPL wars continue to heat up, Klarna announced the official launch of the Klarna Card in the U.S. (touting an existing waitlist of 1M U.S. customers) enabling consumers to “Pay in 4” for any store or online purchase without the need for merchant signup.  The Klarna Card is a Visa card issued by WebBank and powered by Marqeta's modern card issuing platform.
  • A little more digging…  Free for the first year, then $3.99 per month to keep your card active.  Interest free payments are made every other Friday with nothing up front.  Soft credit pull with one of the requirements being you must have purchased through Klarna at least once and paid on time.  Attach your debit card as a funding source and enroll in Autopay or make payments manually every 2nd Friday.  Late fees apply in the event of missed payments (think consumer charge / payment card with 60 day terms).

 

• Webster Bank makes headlines again this week as the exclusive bank partner for Save's Market Savings Program.

 

• Some very exciting personnel movements this week:
  • Former PayPal Ventures exec, Peggy Mangot joins JPMorgan Chase as Head of FinTech Partnerships, Commercial Banking.
  • Former Visa Payments exec, Shawn Sinner joins MOCA Financial as President and Chief Revenue Officer.

 

• Couple of CU acquisitions of banks this week (and both were in Illinois):
  • NuMark Credit Union (Charter 61447; $624M Total Assets) announced an agreement to acquire Pioneer State Bank (FDIC 11726; $135M Total Assets).
  • Credit Union 1 (Charter 68727; $1.2B Total Assets) also announced an agreement this week to acquire NorthSide Community Bank (FDIC 34416; $312M Total Assets).
    • This marks 9 such 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).

 

• Fundbox (working capital platform for small businesses) announced the launch of the Fundbox Flex Visa Debit Card issued by Pathward, N.A. (fka MetaBank who recently sold their naming rights to Facebook – err, I mean Meta, for a cool $60M).  Fundbox and Visa are also working on a BNPL option; and a push-to-card capability for instant funding via Visa Direct.

 

• Tillful announced the launch of the Tillful Card for small businesses to build credit via a secured card that reports to Experian (with plans to add Dun & Bradstreet and Equifax soon).  The card is a Mastercard issued by Sutton Bank and powered by Highnote.

 

• Notable FinTech funding for the week:
  • Onramp Funds (SMB e-commerce sales-based financing platform) raised $42M in capital.
  • Binance Labs announced a $500M Fund to invest in Web3 and blockchain.
  • Clear Street (modern infrastructure for capital markets) raised $165M in Series B funding round at a $1.7B valuation.  Since 2021, “Clear Street experienced a 220% increase in financing balances, and 510% growth in equity transactional volume. Today, Clear Street’s architecture processes more than $3 billion in daily trading volume.”
  • Setpoint (modern embedded RE proptech platform) emerges from stealth with $615M in debt capital to enable other proptech firms to offer their customers a frictionless home buying and selling options by powering “the ‘Buy with Cash’ and ‘Buy Before You Sell’ purchasing options that are trademarks of alternative real estate models, including ‘Power Buying’, ‘iBuying’, ‘Fractional Ownership’, and others.”
  • Tandym (private label card platform for smaller e-commerce retailers) launches with $60M in Seed funding.
  • Constrafor (construction finance and management platform for contractors) raised $106.3M in capital consisting of $100M in credit and $6.3M add-on from a June equity round that wasn’t previously disclosed.  Their main finance product is the Early Pay Program, which is akin to invoice financing, but this TechCrunch article references the company is “working on a beta program to provide a virtual bank account for contractors, via Stripe, that would include credit cards.”  Check them out at Constrafor.

 
 
Random Uncle Sean Stuff:

• Memorial Day Weekend at Tanner’s house was an absolute blast!  After several years of quarantine, lockdowns, and isolation, it was very nice to spend time with family and friends; and the fish fry was stellar.  On Monday, we went to the movie theater and watched, “Top Gun: Maverick” – definitely on the must see list!!!
• Queen Elizabeth’s Platinum Jubilee celebrations commence this week and tributes pour in from leaders all over the world.  The New York Times has some great pics.
• And here it is, the moment you have been waiting for – DAD JOKES:
  • I enjoy bacon so much that sometimes I eat it several times per day.  It helps me take my mind off of these terrible chest pains I keep having.  LOL
  • I once worked at a scaffolding company, but they couldn’t put up with me……
  • If life gives you melons, you might be dyslexic….
  • I prefer to die peacefully in my sleep like my Grandpa…  Not screaming and yelling like the passengers in his car.  😝

 
 
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!!!
 
Wishing everyone a very Happy Memorial Day!  Trying to keep this one short and quick as we are cooking up some hamburgers and homemade onion rings this afternoon (don’t tell my boss I’m playing hooky - LOL)!  Here is the Uncle Sean Update for 5/27/22:
 

• Very excited to share that Webster Bank has joined the BHB Banking-as-a-Service (BaaS) Association as a founding member!!!  Great things continue to pour out of the Bankers Helping Bankers (BHB) platform every week!

 

• Stipe expands their middleware / open API functionality by launching Stripe App Marketplace - “now in beta testing (and is free), is launching with more than 50 apps from leading providers like DocuSign, Dropbox, Intercom, Mailchimp, Ramp and Xero.  The apps span everything from accounting, analytics, CRM, eSignature to marketing” with more being added over time.

 

• M1 has selected Thought Machine's Vault Core product with real-time ledger to power M1’s banking products and accounts. 
  • I’m interested to see how this plays into M1’s overall strategy with First National Bank of Buhl as the potential / eventual sponsor bank (reference - So... I bought a bank by Brian Barnes, CEO and Founder of M1).

 

• Synapse launched Global Cash - a BaaS service enabling FinTech companies abroad to quickly and easily implement a U.S. banking solution in over 35 countries consisting of “debit cards, bank-to-bank transfers, virtual account numbers for direct debit and direct credit, bill-pay, ATM access, and domestic and international transfers.”
  • Early customers include Nomad and Utoppia.  Worth noting that Synapse primary sponsor bank is Evolve Bank & Trust.

 

• Bank of America announced they are raising their US minimum wage to $22 per hour by the end of June as part of their existing commitment made last year to pay at least $25 per hour by 2025.

 

• Acting Comptroller of the OCC, Michael Hsu, gave some straight forward and rather harsh comments this week during his speech at the DC Blockchain Summit 2022 titled, “Crypto: A Call to Reset and Recalibrate.”  Not completely surprising as he has been a vocal crypto skeptic.  Here are a few key points from his speech providing a regulator’s perspective:
  • The crypto economy is dependent upon “hype” and unsustainably high yields – leading to bubbles.  Hsu went on to add, “There seems to be growing acknowledgement that yield farming today may have more in common with Ponzi schemes than with productive innovation.”  OUCH!!!  😲
  • The “crypto ecosystem is “highly fragmented and prone to hacks” with new blockchains being added daily (and the vulnerability of cross-chain bridges required for interoperability).
  • “Contagion risks are real” as was evident in the recent collapse of TerraUSD spreading contagion to the largest stablecoin, Tether, and to the broader crypto ecosystem.
  • “Custody and ownership rights are still underdeveloped” citing Coinbase’s recent regulatory filing stating that in a bankruptcy event, its users would be at risk of becoming unsecured creditors.
    • Still chuckling a little from the “Ponzi scheme” reference, Uncle Sean can’t help but wonder – do you think he’ll be invited back to speak at the DC Blockchain Summit again next year???  LOL!!!!

 

• Meanwhile, per the Federal Reserve request for comment, multiple industry associations weigh in opposing a U.S. Central Bank Digital Currency (CBDC).
  • ICBA opposes CBDC
  • ABA says No Compelling Case for US CBDC Today
  • CUNA and NAFCU also express their reservations
  • And don’t get in a hurry even if congress does act to pass legislation to issue a CBDC…  Federal Reserve Vice Chair Lael Brainard stated that a Fed issued CBDC “could take five years to put in place the requisite security features…”

 

• The FDIC released March 2022 Quarterly Banking Profile report.  Key points include:
  • Net Income declined YoY – mostly due to large credit reserve releases last year and current increases in noninterest expense (G&A).  Allowance for Credit Losses as a percentage of total loans and leases is down 44 bps from last year to 1.54%, but the big banks are starting to increase reserves again amongst macroeconomic concerns.
  • Net Interest Margin (NIM) remained flat despite an increase in Net Interest Income due to loan growth of 4.9% over last year (the increase in average earning assets offset the rise in rate spread).
  • Credit Card receivables are up 11.8% YoY.
  • Only 40 banks on the “Problem Bank List” which is down from 44 last quarter.  This is the lowest number of problem banks since QBP data collection began in 1984.

 

• Klarna (BNPL) plans to lay off about 10% of their employees.  This news comes after The Wall Street Journal (paywall blocked – sorry) reported that Klarna was seeking to raise up to $1B in a down round lowering their valuation from $46B last year to approximately $30B.
  • Also announced last week - Klarna hits 150M users and 400,000 merchants.  If this is a game of scale, Uncle Sean is curious - just exactly how many customers do you need to become profitable???

 

• Bolt (online checkout OS) also just laid off 1/3rd of their workforce.

 

• Notable FinTech funding for the week:
  • Andreesen Horowitz closed on their latest crypto fund (as expected) and it’s a doozy!  The new $4.5B Fund is their fourth and largest such fund for crypto and blockchain investments bringing the total raised in the asset class to $7.6B.
  • equipifi (white label BNPL solution for banks and CUs) raised $12M in Series A funding round.
  • Belong (RE proptech platform) $80M in Capital consisting of $50M equity funding and $30M debt.
  • Caribou (automobile lending and insurance solution) raised $115M in Series C funding round at a $1.1B valuation
  • Stable (commodity hedging platform with a focus on agri-food) raised $60M in Series B round.

 
 
Random Uncle Sean Stuff:

• Don’t forget that the reason for our Memorial Day holiday is to remember and honor our veterans that paid the ultimate price.  So please spend extra time with family, friends, and loved ones this holiday weekend as we are continually reminded that life can be fleeting – live, love, smile, and laugh often!!!!  😊
• Aunt Patty and I are headed over to Tanner’s this weekend to enjoy some much needed family time and Memorial Day shenanigans - woohoo!!!!

 
 
Have a GREAT Memorial 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!!!
 
Fintech, Banking, Data – it’s in our DNA.  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 5/20/22:
 

• Tons of great things happening in Bankers Helping Bankers this week; and I am very excited to give some virtual high fives to these great firms (with tremendous employees):
  • Unifimoney, a turn-key multi-asset digital wealth management platform for community banks and credit unions, shows their dedication to community banking by partnering with the Banking Helping Bankers platform.  Special thank you to Ben Soppitt and the entire Unifimoney Team for supporting BHB!!!
  • Travillian, a nationally focused executive search, strategy and talent advisory boutique dedicated to the financial services industry, becomes the latest to join the BHB BaaS Association as the go-to talent advisory partner with the Association.  High five to Brian Love, Keith Daly and the Travillian Team!!!

 

• Congratulations to Agility Bank as the nation’s latest de novo digital bank!!!!  Agility Bank announced that they have received all approvals to open as an OCC Minority Depository Institution (MDI) charter.  Agility Bank opens on Monday, May 23rd – GREAT job to Lauren Sparks (100% legit Rock Star) and the entire Agility Bank Team!

 

• Curt Queyrouze joins Coastal Community Bank as President.  Coastal Community Bank is a leading sponsor bank in the U.S. through Coastal’s CCBX BaaS / FinTech division.
  • Uncle Sean is very excited to see what Eric Sprink and Curt Queyrouze accomplish together!!!

 

• Ponce Bank (NASDAQ: PDLB) disclosed a $6.3M write-off and $1.7M in additional reserves in their 1Q2022 Earnings Announcement “relating to the Bank’s lending relationship with Grain Technologies, Inc. (‘Grain’)” fintech sponsorship…..  OUCH!!!!  😲
  • In a May 5th 8-K filing, Ponce stated that Grain "has been victimized by cyber fraud using synthetic and other forms of fraudulent identifications, a phenomenon that has become prevalent with FinTechs."  The filing also states that “Grain originates and services these microloans and is responsible for maintaining compliance with the Bank's origination and servicing standards, as well as applicable regulatory and legal requirements.”
    • Also disclosed in the 8-K is a pending lawsuit where Grain has sued a third party vendor for the fraudulent loan originations due to “synthetic identifications that Grain’s vendor failed to identify.”  Oops!!!
  • In total, 24,719 microloans amounting to $17M have been deemed to be fraudulent.  $11.8M remain outstanding as of March 31, but Ponce write off roughly $6.3M and provided additional reserves of $1.7M after applying a $1.6 million security deposit set-off, leaving a net balance of $2.2 million at March 31.  Ponce also maintains a $1M equity investment in Grain.
  • As stated in the 8-K, Grain intends to make Ponce whole upon completion of a Series A (yeah – just what a VC wants to hear), but Ponce also acknowledges that Grain “remains a pre-profit startup” and that further capital raises “may not materialize.”

 

• Transamerica launches Workplace Emergency Savings Accounts (ESA) for employers as an employee benefit.  It’s a savings DDA that can be funded via paycheck deductions as well as employer contributions via Millennium Trust Company and / or SecureSave (custodial savings account held at Wells Fargo).

 

• Greenlight (teen and family banking app) is launching their Family Cash Card a Mastercard credit card issued by First National Bank of Omaha (FNBO).  A little more digging shows us that the Greenlight Family Cash Card was a product of Marqeta’s modern credit card platform in partnership with FNBO – very cool!
  • Rewards on the Family Cash Card credit card range from 1% - 3% based on spend and can be returned in cash or auto-invested in a range of stocks and/or ETF’s in the app (Greenlight is partnered with DriveWealth on the RIA / SIPC side).

 

• Speaking of….  Marqeta (Nasdaq: MQ) announced this week the addition of Evolve Bank & Trust as Bank Partner to expand Marqeta’s program management capabilities.  As one of the premier sponsor banks and BaaS provider in the U.S., Evolve Bank & Trust will “support the full range of Marqeta’s program management capabilities, including BIN management, on-demand fulfillment, compliance reporting, and settlement services.”
  • However, if you were looking closely, you saw this mentioned last week as part of Marqeta’s 1Q2022 earnings announcement showing strong continued growth and impressive 2Q2022 guidance.

 

• Plaid had a busy week announcing the launch of Data Connectivity solutions (Core Exchange and Plaid Exchange) as well as Identity Verification (IDV) KYC and Monitor for AML and PEP.  Plaid Identity Verification and Plaid Monitor combined allows for a full-stack customer onboarding experience.
  • TechCrunch has a good summary here focusing on Plaid’s move towards identity and income verification, fraud prevention, and account funding – with specific reference to their recent $250M acquisition of Cognito.

 

• FTX (crypto exchange) has been busy as well lately.  FTX US announced an expansion beyond crypto to allow customers trade and invest in hundreds of US stocks and ETF’s by launching FTX Stocks - a free, no-fee, no payment for order flow (PFOF) platform.  Just last week, FTX US applied for New York State trust charter; and don’t forget about FTX CEO, Sam Bankman-Fried, recently acquired 7.6% of Robinhood outstanding shares which certainly raised a lot of eyebrows.
  • By the way, have you seen the FTX US Debit Card (Visa debit card issued by Evolve Bank & Trust)?

 

• The Federal Reserve finalized a rule that will allow banks to delay FedNow instant payments to prevent fraud. 
  • As Tanner Mayo consistently points out, real-time settlements introduce real-time fraud risks.  Let’s hope that over time, the FedNow service enhances fraud prevention tools.

 

• CNBC announced their 10th annual Disrupter 50 list with many familiar names.

 

• Notable FinTech funding for the week:
  • Unit (fintech BaaS) raised $100M in Series C funding round at a $1.2B valuation.  “Unit has seen its transaction volume grow by 7x over the last six months. The startup has crossed an annualized transaction volume of $2.6 billion, issued over 430,000 cards to over 330,000 customers and saw a 10x increase in deposit volumes.”
  • Thought Machine (core banking technology) $160M in Series D round at a $2.7B valuation less than six months after their $200M Series C at a $1B+ valuation.
  • GravyStack (Teen banking and financial literacy app) raised $5.2M in Seed funding.
  • CertifID (wire fraud prevention and recovery) raised $12.5M in Series A funding round.  This company is exciting to me as they target law firms and title companies to protect them from wire fraud during mortgage payoffs, CRE transactions; as well as a fraud recovery service.  Check them out at certifid.com.
  • Keep Financial (employee retention platform) emerged from stealth and announced $9M Seed Round to accelerate their vesting cash plan as an employer retention benefit.  Think of this as 0% employee loans that are forgiven over a period of time / vesting schedule – thus the retention benefit.
  • SpotOn (POS software and payments solution for restaurants, retail, and enterprise venues) raised $300M in Series F funding round at a $3.6B valuation just 8 months after their Series E.
  • Velocity Global (global employment solution to simplify how companies onboard, pay, and manage talent) raised a whopping $400M in Series B increasing their valuation 7x over last year.

 
 
Random Uncle Sean Stuff:

• Now we have Monkeypox…???  Seriously, can we not catch a break???  Somehow, my mind immediately references The Wizard of Oz and those creepy flying monkeys…  😲  Ahhh yes, the classic movie musical that has been traumatizing children for over 80 years – LOL!!!!
• Okay – time for some Dad Jokes to kick off the weekend!!!!
  • If anyone knows Phillip, tell him I have a bunch of his screwdrivers.
  • While at the Optometrist, the doctor came in and said my results were ready.  I asked, “can I see them?”  He replied, “probably not.”  😃
  • Turns out that a monkey cannot in fact do my job.  Long story short, he got us both fired!!!
  • After receiving my blood work results, I texted Aunt Patty and told her “I’m at risk for diabetes type 1”….  And she texted back “1”…..  Touché Aunt Patty!!!  😊
  • The fear of giants is called feefiphobia.

 
 
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.