Uncle Sean's Update - 2/2/24

​Happy Friday!!!
 
Happy Groundhog Day as the notorious “Prophet of Punxsutawney” gives us his weather guidance; and has indeed predicted an early spring – but don’t pack away those sweaters and furry coats just yet as our Nation’s most revered meteorological rodent (respectfully of course) does not have a meritorious track record 🤠.  Here is the Uncle Sean Update for 2/2/24:
 

• It’s Fed Week – and as expected, nothing happened 😊.  The FOMC voted to hold rates steady at the current rate of 5.25% - 5.5% where they have been since last July.  However, QT remains on track at $95B per month as the Fed continues to allow maturing Treasuries and MBS to roll off the books and shrink the Fed Balance Sheet. 
  • Fun Fact – the Fed has now been reducing the Balance sheet (aka QT2) since June 2022.
  • Chairman Powell tempered expectations of a March rate cut by stating, “that’s probably not the most likely case or what we would call the base case.”  Here is the full transcript of Chair Powell’s press conference (25 pages).

 

• 👀 Well, if you thought the December Jobs report was a surprise to the upside – hang on to your hat…..  The January Jobs Report came out at a SMOKING HOT 353,000 jobs added 🔥🔥🔥 versus an estimate of 185,000.  Unemployment remained at 3.7%; and average hourly earnings also jumped a MASSIVE 0.6% for the month (2X estimate) and 4.5% year over year (CHA-CHING) – which shows wage growth is now outpacing inflation.  Here is the actual BLS nonfarm payroll employment report for January if you want to dig deeper.
  • But wait, there’s more….  Prior month actuals were also revised up.  December was revised up by 177,000 job gains to 333,000; and November was revise up by 9,000 jobs to a total of 182,000.
    • Yeah – doesn’t really feel like cause to cut rates anytime soon….  Definitely a “Powell vindication” report.

 

• Apple posted an Apple Card Update (really a pretty strong marketing flex as GS has been vocal about getting out of the partnership) on their credit card highlighting:
  • 12 million users
  • Last year, users earned over $1 billion in Daily Cash rewards from spending on Apple Card
  • Apple Card users capitalized on the Savings Account feature reaching over $10B in deposits in a few short months

 

• i2c, Inc. announced a 5 year agreement with The Bank of Missouri to enable the bank to swiftly onboard fintech clients and enable those companies to create digital banking solutions for their customers — including checking and savings accounts, consumer and small business loans, credit card, reward programs, and virtual cards — among other customizable banking services.

 

• FairPlay (Fairness-as-a-Service™ company) has partnered with Upgrade to help Upgrade test, monitor, and improve on underwriting fairness when adjusting credit strategy.
  • Very interesting since this has been a big emphasis lately from regulators and law-makers looking at AI and ways to mitigate unintentional bias within underwriting.  Check them out at FairPlay.ai.

 

• Uncle Sean loves seeing this ♥️ - A special shout out to LoanPro for supporting the next generation of fintech via the LoanPro Fintech Scholarship through the Stena Center for Financial Technology at the University of Utah.  Nice work; and Thank You LoanPro for making a difference!!! #Utah

 

• College Ave announced the launch of the Ambition Mastercard®, a secured charge card for college students to help them build a positive credit history with no credit check to qualify, no interest, no late fees, cash back rewards, and no monthly fees for the first six months (afterwards, $2 will be charged to the student's account each month).

 

• SellersFi announced a financing solution with Amazon to provide eligible Amazon sellers with access to credit lines of up to $10 million through the Amazon Lending platform.

 

• Ramp announced they have acquired Venue, an AI-powered procurement platform, further expanding Ramp’s footprint beyond corporate cards.

 

• First Bank (FDIC 12229; Total Assets $6.6B) selects CorServ to implement their modern credit card program.
  • Erin Erhart, Director of Product of First Bank stated, "CorServ's account issuer program gives us the ability to own the credit card profits and losses and participate in the credit decisions for our customers since we know them best."

 

• FIS (NYSE: FIS) completes the 55% majority sale of Worldpay to GTCR for roughly $18.5B valuation (previously announced back in July).  For prosperity sake, back in 2019 FIS acquired Worldpay for a whopping $43 billion, including debt, but ended up writing down the value of the business by a $17.6 billion non-cash goodwill-impairment charge early last year.

 

• Mastercard announced the launch of Decision Intelligence Pro, a new generative AI model to allow banks to better assess suspicious transactions on its network.  Mastercard claims the tech “can help financial institutions improve their fraud detection rates by 20%, on average. In some cases, though, the model has led to improvements in fraud detection rates of as much as 300%.”  (bold emphasis added by Uncle Sean) - WHOA!!! 🚀

 

• Finally, (I missed this last week 😲) – Another credit union buying a bank (yes, that makes 2 last week)…  Beacon Credit Union (charter #82791; $1.51B Total Assets) to acquire Mid-Southern Savings Bank, FSB (FDIC #30133, $265M Total Assets).  So, the updated count for the year is now:
  • 4 CU acquisitions of a bank thus far in 2024 (strong start for January) compared to 11 in 2023, 16 in 2022, 13 in 2021, 7 in 2020, and 16 in 2019 (source: FedFis M&A database).

 

• Notable FinTech funding for the week:
  • LoanStar Technologies (embedded lending) raised $28M in Growth Equity funding.
  • Crux (platform to transact and manage transferable tax credits) raised $18.2M in Series A round
  • Kafene (point-of-sale lease-to-own) raised $15M in Growth Equity funding.
  • Sunbit (BNPL + card) picks up a $310M debt facility stating 2.6 million loan customers and around $1 billion in merchant transactions it accommodates per year; plus 110,000 customers on their card platform (invite only) that launched in 2022.
  • Incognia (digital identity and fraud prevention platform) raised $31M in Series B funding round.

 
 
Random Uncle Sean stuff:

• It’s set - 🏈 Super Bowl LVIII (aka “Swifty-eight” hahahahaha) will feature San Francisco 49ers vs Kansas City Chiefs at Allegiant Stadium in Las Vegas, Nevada on February 11, 2024 at 5:30 CST with Usher (cool video) to headline the Apple Music Super Bowl LVIII Halftime Show.
  • Dang….  That means there is no football this weekend…. Ugh….
• Okay – I have to cut this short as I need to start drinking beer.  OOPS, I mean – get back to work.  Hehehehe!!!! 🍺 So here are some Dad / Bad Jokes to get us into the weekend vibe:
  • If I refuse to exercise, shouldn’t that count as “resistance training”??? 😆
  • My brain at night when I can’t sleep - Can dragons blow out candles? 🤔🤣
  • If the Earth really was flat, cats would have pushed everything off the edge by now… LOL 🐈
  • And a couple of obligatory Chuck Norris jokes:
    • Chuck Norris played rock, paper, scissors in front of a mirror – and won!
    • Bigfoot has blurry photos of Chuck Norris…
    • Chuck Norris can slam a revolving door.

 
 
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 [email protected] | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | [email protected] #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.