Uncle Sean's Update - 12/9/22

​Happy Friday!!!
 
All eyes are on the FOMC meeting next week which also will include the Summary of Economic Projections.  In the interim, there is still a ton of market events going on!  Here is the Uncle Sean Update for 12/9/22:
 

• The Bankers Helping Bankers platform continues to put in the overtime hours supporting community banking!  Here is the latest:
  • Shout out to the Louisiana Bankers Association as the latest community bank association to offer the Bankers Helping Bankers platform for their members in Louisiana!!!
  • Also this week, take a look at this BHB BaaS Association announcement regarding the release of their whitepaper - Why Build a BaaS Bank – nicely done! 😊

 

• The OCC released their Semiannual Risk Perspective - Fall 2022.  Key takeaways include (begging your pardon while Uncle Sean completely geeks out here – LOL):
  • Bank performance remains strong, well capitalized, and with ample liquidity in case of a recession.
    • Loan demand is strong and rising rates are good for NIM, but can pose potential challenges in AOCI due to fair market value of Securities (especially for those institutions that may need to sell securities for funding).  Keeping in mind that wholesale funding remains low for now as banks have been able to manage deposit costs well so far. 
  • Uncertainties remain surrounding the economy, heightened CRE concerns, and other macro-economic drivers (US drought, war in Ukraine, OPEC production).
  • Third party risks and compliance concerns remain elevated.  This includes crypto-assets (and related contagion), cybersecurity, and compliance surrounding fintech partnerships.     

 

• First Fidelity Bank announced the launch of digital wealth management services with Unifimoney allowing customers to invest in traditional or alternative assets via the banks existing online banking channel.

 

• Intuit continues to invest and expand into the financial services world by announcing an agreement to acquire SeedFi, a credit builder platform that is currently behind Credit Karma’s Credit Builder program.  Once the acquisition is complete, SeedFi will be integrated into the Credit Karma platform.

 

• Another CU buys a bank - Veridian Credit Union (Charter 64418; Waterloo, IA; $6.7B Total Assets) announced an agreement to acquire American Investors Bank and Mortgage (FDIC 57695; Eden prairie, MN; $112M Total Assets).
  • If you’re keeping score, this makes 12 announced acquisitions of a bank by a CU so far for the year.  This compares to 13 in 2021, 7 in 2020, and 16 in 2019 (Source: FedFis).

 

• USDC issuer Circle and Concord Acquisition Corp have agreed to mutually terminate their proposed merger that was originally valued at $4.5B and amended in February 2022 which doubled the valuation to $9B.  Reuters also has a good summary with a little more detail.

 

• The SEC advised public companies this week to examine whether they need to further disclose any potential impacts from turmoil in the crypto industry amid continued contagion surrounding the FTX meltdown.
  • Meanwhile, crypto lender Genesis has notified its customers that their withdrawal freeze is likely to last "additional weeks".  Genesis withdrawals have been halted since Nov. 16th citing “unprecedented market turmoil” related to the implosion of FTX.

 

• Mortgage rates continued to retreat this week to an avg of 6.33% for 30yr - the lowest levels since September after peaking just north of 7% in October (while still in a rising Fed Funds rate environment - interesting).

 

• Webster Bank announced an agreement to acquire StoneCastle Insured Sweep, LLC (d/b/a interLINK), a deposit management platform with over $9B in deposits.

 

• Wells Fargo announced the launch of Vantage, their new commercial banking platform for clients ranging from early-stage startups to global corporations.

 

• Robinhood is launching Robinhood Retirement – described as the “first and only” individual retirement account (both IRA and Roth IRA) with a 1% match on every dollar contributed.  Clearly targeting gig / contract workers without the benefit of an employer-sponsored plan, but is available to anyone.

 

• Galileo launches BNPL solution for banks and fintechs.  Essentially, customers can access Galileo through their participating bank that will underwrite the BNPL loan.  A real-time offer is then sent to the customer via the bank or fintech’s mobile app.  “If the consumer accepts the loan offer, a prefunded, single-use virtual card will be added to their mobile wallet and presented in-store or online at most retailers. Galileo then manages and services the loan, which includes overseeing the repayment schedule, disbursement to the virtual cards, assessment of interest and fees, payment processing, charge off and optional credit reporting.”

 

• A quick correction…  So last week we talked about “Stilt and related credit infrastructure provider Onbo appear to have been shut down” – now we see that Stilt has actually been  acquired by JG Wentworth.

 

• Notable FinTech funding for the week - notice the emphasis on credit / asset side funding this week (I know 1 week doesn’t make a trend, but Uncle Sean found this to be interesting):
  • Curve (alt lending / card app) announced a $1B credit facility to support their installment offering called Curve Flex with plans to expand across markets in the EU and the US.
  • Pylon (embedded mortgage infrastructure platform) raised $8.5M Seed Round to enable FinTechs, PropTechs, banks, and retail brands to build mortgage lending into products in weeks instead of years.
  • Carputty (auto financing platform) raised $12.3M in Series A funding round
  • Sunbit (embedded lending) announced $250M revolving debt facility.
  • Avant (alt lending – CC and personal loan platform) secured a $250M facility comprised of corporate debt and undisclosed redeemable preferred equity.
  • Setpoint (software infrastructure that helps mortgage originators close loan transactions faster) raised $43M in Series A funding.

 
 
Random Uncle Sean Stuff:

• Time Magazine named Volodymyr Zelensky and the Spirit of Ukraine as the 2022 Person of the Year adding that “this year’s choice was the most clear-cut in memory.”  Do yourself a favor and spend a few minutes to read this editorial regarding President Zelensky from Time author, Simon Shuster.
• Last weekend was exciting in the world of college football; and the New Year’s Eve College Football Playoff schedule is now set:
  • #2 Michigan versus # 3 Texas Christian University (TCU) in the VRBO Fiesta Bowl
  • #1 Georgia versus #4 Ohio State in the Chick-fil-A Peach Bowl
• Just in case you were wondering…..  I did get the Holiday lights put up last week – YAY!!!!  Aunt Patty was not overly impressed with my faltering ability to hang on to a single tree limb while dangling a leg off of the side of the ladder for balance with a strand of lights in my other hand and teeth!  LOL!!!!  Hey – at least I wasn’t using a chainsaw this time!!!  Fortunately no accidents ensued!  However, I’m certain that at least one of my neighbors was recording that event as it unfolded.  😝
• Okay – a couple of quick Dad jokes for ya:
  • Aunt Patty asked me what I thought the weather was going to be like on Christmas Eve – I said 100% chance of reindeer (rein-deer, rain dear…  oh c’mon – you know that was funny)!
  • Is it just me or does every teenager’s bathroom look like their toothpaste comes out of a fire extinguisher?  HAHAHAHAHA!!!!!
  • Everyone loves Frosty the Snowman because he’s “cool”…..  But he did get kicked out of the grocery store for picking his nose. 😲

 
 
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.