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Bulletin

Uncle Sean's Update - 12/30/21

12/30/2021

 
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Happy Thursday and Happy New Year!!!
 
We are publishing early again this week as we will be closed Friday, Dec. 31st in observance of New Year’s Day.  So if you are reading this – congratulations, you made it through 2021!!!!  😊  All kidding aside, wishing you and yours a healthy, happy, and prosperous new year.  Don’t forget to eat those black eyed peas for good luck!  Speaking of luck – that all starts by signing up here to have the Uncle Sean Update sent straight to your inbox each week! 
 
It was super light this week in the terms of breaking news headlines…  Seems about right as it is that week between Christmas Eve and New Year’s Day where time appears to be in an apocalyptic trance - your on the 9th day of a carb bender, been wearing PJ’s for well over 6 days straight, probably started drinking before 10AM at least twice (okay – maybe that was just me), and you’re not sure what day it is…  Yep – that’s where we are right now!  Here is the very limited Uncle Sean Update for 12/30/21:
 
  • Check out the Community Bankers Association of Ohio as the latest association of community bankers offering access to Bankers Helping Bankers platform for their member banks in Ohio.  Welcome to the show!!!!  We are making a difference together!
 
  • For my 2021 tribute - Uncle Sean goes “off the rails” and expands upon my previous “so you want to be a bank” op-ed and further proclaims “Community Banking Ain’t for Sissies!”  Seriously though, just consider a few of the current counterparty concerns that have the ability to significantly impact our industry (not just for the bank itself, but the evolving risk profile of their customers which has a HUGE impact on bank strategy and balance sheet management).  Although it looks a little scary, it is really a “tip of the hat” to Chief Credit Officers (my personal favorite) and bank leadership across the country for being the ultimate front-line finance, risk management, and economic forecasting bad-asses!  Just take a look at the waters bankers are successfully navigating for themselves as well as assessing counterparty exposure of their customers – not out of fear, but of a desire to help:
    • Paycheck arbitrage
      • Do full-time remote workers continue to make the same wages as workers that are required to be in person; or even partial work from home / hybrid model?  What about remote workers (work from anywhere) that relocate to lower cost locales (not to mention does this create nexus for other state tax liabilities)? 
      • Does all of this contribute to legal problems / labor disputes?  How do you treat cost of living increases / promotions (and not create bias) going forward especially for remote workers in different locations with varying local inflationary pressures?
    • Continued Covid risks
      • Impact to credit risk related to continued supply chain disruptions, labor shortages (including the great resignation), CRE concerns, and the end of eviction moratoriums
    • Cybersecurity
      • Ransomware attacks on critical infrastructure (doesn’t just impact ag lenders)
      • Cyberthreat trends and security concerns for remote workers
      • Ongoing cyber-insurance disputes on coverage
    • Rising Interest Rates and Inflation
      • Okay, this should be relatively straightforward.  Bankers are VERY good at managing interest rate risk – at the basic level, that’s what they do; and they do it well.  It only gets complicated when all of the above scenarios come into play all at once - LOL.
      • With any luck, we will see NIM expand (finally) next year – and fingers crossed, credit risk remains in check as the overall economy continues to do well.  And therein lies the importance of community banking as they know their local economies better than anyone (very similar to how flower beds around your house have differing micro-climates).
    • And we didn’t even talk about the banks own issues of tech stack, direct / digital bank strategy, compliance risk (and cost of compliance), capital levels, cryptocurrency, covid influenced population migration patterns, and fintech challenger banks.  Hats off to community bankers everywhere for digging in and kicking ass in 2021!!!!
 
  • Also topping the list this week for me (unless something terrible happens later today) is the fact that there have been no bank failures for 2021 (source: FedFis) and only 3 involuntary liquidations of some very small CU’s.  This compares to:
    • 2020 – 4 failed banks and 1 liquidated CU
    • 2019 – 4 failed banks and 1 liquidated CU
    • 2018 – no failed banks and 7 liquidated CUs (plus 1 more merged with NCUA assistance)
    • 2017 – 8 failed banks and 5 liquidated CUs (plus 5 more merged with NCUA assistance)
 
  • Status Money (PFM app) is launching a Visa Credit Card (issued by Evolve Bank & Trust) with either 2% cash back or crypto rewards on every purchase.  The crypto comes into play if the customer selects to invest the cash back rewards (where Gemini Trust Company, LLC is the regulated custodian).
 
  • Upgrade (alt lender) is launching Rewards Checking for their Visa Debit Card (sponsor is Cross River Bank) touting up to 2% cash back on common everyday expenses (up to $500 per year, then reverts to 1%) and 1% on all other debit card charges.
 
  • Keep an eye on this as it does have the potential to impact the gig economy (i.e. instant payouts) - the National Labor Relations Board launched an invitation to the public this week to assess whether the agency should reconsider the “independent-contractor standard” in determining whether individuals should be treated as employees as opposed to contractors.
 
  • Notable FinTech funding for the week:
    • Privoro (mobile device security) raised $30M in Series B funding round
    • Almond Finance (blockchain based cross-border payments infrastructure) raised $2M Seed funding to enable real-time international transfers
    • Ready Player Me (avatar platform for the metaverse) raised $13M in Series A to build out developer friendly API’s and SDK’s to make it easy for people to travel between metaverse worlds with their own individual avatars.  Within Ready Player Me, you can create an avatar from a photo of yourself; and you can own your avatar (coming soon) as an NFT.   Now that’s pretty cool!
 
  • We lost legendary Coach John Madden this week who passed away at the age of 85.  While testimonies and articles roll out from the likes of ESPN, Reuters, the NFL, the Raiders, and many, many more it feels appropriate to mention a few of his historical accolades:
    • As Head Coach for the Raiders:
      • Holds the #1 highest regular-season win percentage of any coach (minimum of 100 games) at .759 and slightly ahead of the legendary Vince Lombardy
      • Led the Raiders to a championship in Super Bowl XI following the 1976 season
      • Inducted into the NFL Hall of Fame in 2006
    • Second Career as a Broadcaster:
      • A 16-time Emmy Award winner as a sports broadcaster alongside Pat Summerall and Al Michaels
      • Inducted into the Sports Broadcasting Hall of Fame in 2010
      • And of course, many of us cannot make it through a Thanksgiving Holiday without thoughts of Madden NFL broadcasts and the infamous turducken as the official “All-Madden Team” food.
    • As a video game legend:
      • Madden NFL Football by EA Sports is one of the most successful video games ever with over 130 million copies sold worldwide and still growing since the launch in 1988 (yes, 1988).
 
 
Random Uncle Sean Stuff:
  • And here it is – the moment you have all been waiting for!  The final 6 of the Top 21 of 2021 Countdown of Dad Jokes and crazy Uncle Sean moments (according to me) that I posted this year:
    • #6.  On March 10, 1876 Alexander Graham Bell makes the first phone call ever….  And moments later he was notified that his car’s extended warranty had expired.
    • #5.  Aunt Patty asked me if I could clear the dining room table.  I had to get a pretty good running start but I made it!
    • #4.  I got laser eye surgery about a month ago but I still can’t shoot lasers out of my eyes.  Am I doing it wrong or should I ask for a refund?
    • #3.  How does Moses make his coffee?  Hebrews…          
    • #2.  I stopped at a roadside stand that said lobster tails for $2.  I happily paid my $2 and the guy looked at me and said, “once upon a time there was this lobster….”
    • And the #1 for 2021 goes to:
      • 100% true story - Did you know that ‘Catfish: The TV Show’ has nothing to do with actual catfishing?  Uncle Sean wasted half an hour waiting to see what lake they were going to, what bait they were using, how deep were they fishing, etc…  One could say I was “catfished.”  HEHEHEHE!  And if you listen closely right now, you can literally hear my teenage daughter’s embarrassment – LOL!!! 😊
 
 
HAPPY NEW YEAR!!!!!!  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.

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