Uncle Sean's Update - 1/7/22

 Happy Friday!!!
 
Hey, hey, hey – we are officially underway for 2022!  Here is the Uncle Sean Update for 1/7/22:

• Special shout out to Independent Community Bankers of South Dakota for becoming the most recent association of community bankers offering access to the Bankers Helping Bankers platform this week for their member banks in South Dakota.  THIS is how we improve upon and save community banking – by participating as a community together and helping each other!!!!

 

• FDIC Chairman, Jelena McWilliams announced her resignation effective 2/4/22.  Current FDIC Board member, Martin Gruenberg (no stranger to the FDIC) is set to become the interim acting chair.  This sets up a number of potential appointments of very high profile bank regulatory leadership positions by the current presidential administration – which could get very interesting (to say the least) from a future policy setting perspective.  Vacancies include:
  • Vice Chairman for Supervision at the Federal Reserve
  • Comptroller of the Currency (OCC) – current Acting Comptroller is Michael Hsu
  • And of course, now, FDIC Chairman

 

• Chainalysis posted a blog this week stating that cryptocurrency-linked crime surged 79% over 2020 with illegal addresses receiving a record $14B in digital currencies.  However, in that same blog, Chainalysis stated that the increase in illicit activity was far less when considering the overall adoption rate and increase in transaction volume of cryptocurrency usage.  When analyzing in that light, illicit activity represented 0.15% of all transaction volume in 2021 versus 0.62% in 2020 showing a significant decline.
  • Digging into the data shows that DeFi scams (mainly rug pulls) and theft from hackers accounted for the majority of the $ increase.
  • Uncle Sean speculates that the rapid rise of unaccredited and uninformed retail investors seeking quick returns (meme coins anyone?) as well as easy mobile access has played a large part in this.  There is absolutely nothing new about people being attracted to the potential for quadruple digit returns with little to no effort – which is a fraudsters dream.  However, society has a tendency to learn painful financial lessons pretty dang quick (Nigerian Prince?). 

 

• FinTech challenger bank Dave (Nasdaq: DAVE) commenced trading this week after completing their SPAC merger.  Shares opened at $8.27 reflecting a market cap of $3.1B, but took an absolute beating on Friday with shares trading down as much as 36% intraday (at the time of this write-up).  OUCH!!!!

 

• The NCUA stayed busy over the New Year’s holiday cleaning up some very small CUs….
  • NCUA liquidated Portsmouth Schools FCU (charter #483; $2.2M assets; 870 members).  Assuming the liquidated CUs assets, member shares, and loans is Newport News Shipbuilding Employees Credit Union (charter #61330; dba BayPort Credit Union).  Bayport has 147,109 members and assets of $2.2B.
  • Pomona Postal FCU (charter #16196; total assets of $4M; 717 members; formerly placed into conservatorship on Nov. 5, 2021) was merged into Credit Union of Southern California (charter #68456; total assets $2.2B) effective Jan. 1, 2022 per the NCUA.

 

• Unifimoney announced that they have integrated with Q2 digital banking platform to offer digital wealth management solution to FI’s via Q2’s Innovation Studio.

 

• Customers Bank announced a couple of key initiatives this week:
  • Launched national Technology and Venture Banking Group employing a “stage-based approach” in assessing opportunities and risks offering “growth capital term loans, MRR credit facilities, ARR credit facilities, unitranche and FOLO credit facilities, revolving lines of credit – formula and non-formula, and traditional term loans.”
  • Deepens their crypto bench by adding seven key industry experts to their Digital Asset Banking Team and continues to expand their Customers Bank Instant Token (CBIT) enabling real-time payments for digital asset institutions.

 

• Computer Services, Inc. (CSI) announced a partnership with NYDIG to enable banking customers to buy, sell, and hold bitcoin directly within CSI’s digital banking platform.

 

• Chalk this one up to “hmmmm, this is getting interesting…”  Welcome to a new era of correspondent banking for real-time international payments via blockchain…  Probably because “SWIFT” just might be the biggest oxymoron ever (oops, did I just say that???) - LOL!!!!
  • This week the Central Bank of Bahrain said that they completed a successful test of international real-time payments to the U.S. with J.P. Morgan’s Onyx via the permissioned JPM Coin system that function as both payment rail and deposit account ledger.
  • If some of this sounds familiar, it is….  Recall just before the Holidays where we talked about JPM building out a blockchain payments system for Siemens via JPM’s Onyx blockchain unit.
  • I suspect that we will hear much more from JPM Onyx this year as the future of real-time international payments via blockchain is here.

 

• FinTech funding kicks off the new year in high gear:
  • Andreessen Horowitz (tech focused VC firm) announced a massive $9B raise to further invest in their Venture, Growth, and Bio Funds.  WOWZA!!!!!
    • “With these new funds, including a $1.5B Bio fund, $5B Growth fund, and $2.5B Venture fund, coupled with the $2.2B Crypto Fund and $400M Seed Fund we raised in 2021, we will continue to invest across the entire spectrum of stages, writing checks as small as $25,000 and up to hundreds of millions of dollars.”
  • Ribbit Capital (fintech focused VC firm) has $1.155B in capital for their seventh fund, Ribbit Capital VII, L.P.
  • Monzo (UK digital challenger – Monzo USA is still in “waitlist” mode) raised an additional $100M top-up funding to their latest round previously announced in early December – now totaling $600M
  • HUMAN Security (cybersecurity firm focused on sophisticated bot attacks and fraud) raised $100M in growth funding round.  Valuation was not disclosed but the firm stated 2021 revenue growth doubled year over year citing that “77% of all cyberattacks are bot-based. Cybercriminals with millions of sophisticated bots at their disposal can send billions of fake requests to create fake accounts, take over accounts and commit credit card fraud, manipulate popularity and consensus, contaminate user data, defraud digital advertising and marketing campaigns, and snipe or hoard online goods and services.”
  • Cion Digital (enterprise SaaS blockchain platform) raised $12M in Seed funding “to expand R&D resources and accelerate the rollout of crypto financing and payment solutions tailored for Financial Services companies (Lenders, RIA’s, Banks and Neobanks) and Big Ticket Retailers (Auto, RV/Marine, Jewelry and Luxury Goods) and to expand the capabilities of the firm’s proprietary Blockchain Orchestration Platform for other industries.”
  • OpenSea (NFT-marketplace) raised $300M in Series C funding round at a massive $13.3B valuation
  • Petal (credit card fintech) raised $140M in Series D round at an $800M valuation.  Petal uses an alternative cash flow based underwriting model to help consumers build credit resulting in strong customer growth of 3X and monthly revenue growth of 4X over 2020. 
  • Xage (zero trust cybersecurity) raised $30M in Series B funding round.  Valuation was not disclosed, but the firm cited 5X customer growth and 10X revenue growth year over year.
  • Alto (self-directed alternative investment IRA platform) raised $40M in Series B funding.  According to the article, Alto hosts nearly 20,000 funded accounts with almost $1B in assets even though the firm is not a registered investment advisor or broker-dealer – and 40% of the accounts are dedicated to holding cryptocurrency via Alto CryptoIRA.  Check them out at altoira.com for more info.
  • Tribal Credit (SME payment and corporate card platform for emerging markets) raised a combined $34.3M in Series A and debt rounds.  The Tribal Visa card is a business charge card issued by Sutton Bank.
  • Goldfinch (DeFi credit platform) raised $25M Series A extension bringing the total series A to $36M.  Loan volume has grown from $250K last year to $38M serving 200,000 borrowers in 18 countries.  Take a look at their whitepaper for more detail on the Goldfinch crypto lending architecture.

 
 
Random Uncle Sean Stuff:

• Corpus Christi’s Cole Park Pier re-opens!  Originally built in the 1930’s, the pier has been closed since 2018 after Hurricane Harvey caused structural damage.  Now completely rebuilt with fishing chairs, cleaning stations, shade cover, ample lighting, and security cameras.  Pretty sure I’m gonna’ have to make a weekend trip soon!!!!
• Of course we can’t kick off the new year without a few Dad Jokes:
  • What do you call electricians that are best friends?  Ohm-ies!  LOL!!!!!!
  • Aunt Patty caught me standing on the bathroom scale and sucking in my stomach.  She laughed and said, “You know that’s not going to help!”  I replied, “Sure it does.  It’s the only way I can see the numbers!”
  • This one definitely personifies Uncle Sean….  It’s probably my age that tricks people into thinking I’m an adult!!!  😊

 
 
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.