Uncle Sean's Update - 2/25/22

Happy Friday!!!
 
Sign up here to have the Uncle Sean Update sent straight to your inbox each week.  Here is the Uncle Sean Update for 2/25/22:
 

• Other than Ukraine, the big news of the week goes to SoFi and their acquisition of Technisys in an all-stock deal valued at $1.1B.  Let’s dig into this one a little bit deeper….
  • SoFi of course is now a bank after the completion of the acquisition of Golden Pacific Bancorp earlier this year (a bank charter ties all of the below bullet points together).
  • Who is Technisys?  To be brief, Technisys is a cloud-based core-processing technology platform for fintech companies and non-US banks.
  • Don’t forget about SoFi’s acquisition of Galileo (the leading card issuer and payment processor for fintech companies in the US) in 2020 for $1.2B…
  • In conclusion, this is a new sponsor bank trifecta with a complete ecosystem…..  SoFi is now 1. The only nationally chartered bank that evolved from a challenger bank / fintech that also  2. Owns their own card issuing and global payments platform AND  3. Now owns a core / system of record (i.e. a “sidecar” core concept as defined by FedFis) geared towards onboarding fintech companies.
    • Think of it this way – if you wanted an embedded finance solution, this would be an easy one-stop shop to go to.
    • It will be VERY interesting to see how this evolves as each of these segments can run independently from a fintech / sponsor bank perspective – and you can bet your bottom dollar that Uncle Sean will be following this like a catfish chasing shad!!!!

 

• Citi is now the latest bank to eliminate overdraft fees (yawn – oops, sorry!).

 

• Atris Technology announced an agreement to acquire Hogan Financial Systems.

 

• TransUnion (NYSE: TRU) agreed to acquire Versik Financial for $515M in cash.  Argus Information & Advisory Services (which is Versik Financial’s leading business representing about 65% of Versik’s revenue) provides consumer data sourced by banks and card issuers and strengthens TransUnion’s core consumer credit business by incorporating a “full wallet view” of consumer spend. 
  • More info can be found on the TRU 4Q21 Earnings Presentation – pages 7, 8, and 9.

 

• Self Financial (credit building fintech) announced an agreement to acquire RentTrack (rent reporting to all three credit bureaus) including the LevelTrack platform (a division of RentTrack) that allows consumers to report rent, cell phone, and utility payments to the credit bureaus on a subscription basis.

 

• Rumor mill - Chime is reportedly delaying potential IPO to 2H2022 amongst a challenging market where many publicly traded fintech shares have dropped by 40% or more.
  • Ooohhh - Uncle Sean can’t hardly wait to dig into the financials once that S-1 drops!!!!!

 

• Crypto lender Nexo becomes the latest digital-asset firm to stop paying interest on crypto accounts stating they have "voluntarily implemented changes to its Earn Interest Product in the U.S. to comply with newly-announced guidance."  Recall last week where we talked about the BlockFI $100M settlement and the SEC’s focus on interest-earning crypto accounts.

 

• Another credit union acquires a bank - Georgia’s Own Credit Union (Charter #67390; Total Assets $3.4B) announced a definitive agreement to acquire Vinings Bank (FDIC #58533; $686M Total Assets).  This is the first CU acquisition of a bank in 2022; and I am hearing that there are more to be announced very soon.
  • Just FYI – there were 13 such deals of CU’s announcing acquisitions of banks in 2021, 7 in 2020, and 16 in 2019

 

• Shout out to Municipal Credit Union (Charter #60153; $4.2B Total Assets per 12/31/21 call report) for being released from conservatorship.  Previously conserved in May 2019 (FedFis Rating of 4.27 as of 6/30/19 placing them in the bottom 3% at the time), “Municipal’s leadership and staff diligently worked to fix identified problems, guide Municipal through this conservatorship, and restore the credit union’s health” to reflect an improved FedFis Rating of 2.66 as of 12/31/21.
  • This is pretty cool as it is rare for a CU to emerge from conservatorship; and must have taken a considerable amount of hard work to right the ship.  Looking back, the last time a CU was “released” from conservatorship was Texans CU back in 2016 (was first conserved in 2011).

 

• Webster Financial Corporation (NYSE: WBS), the BHC for Webster Bank, NA (FDIC #18221) announced an agreement to acquire Bend Financial, a cloud-based platform solution provider for health savings accounts (HSA).  This is a nice compliment and expansion of HSA Bank (a division of Webster Bank).

 

• Visa announced the launch of the Visa Minority Depository Institutions Accelerate program to assist MDIs by 1. Investing up to $100M via deposits in MDIs to spur lending activity, 2. Delivering tailored insights to MDIs on consumer spending, and 3. Equip MDI customers with digital tools and training for SMBs and consumers.

 

• Hanover Bancorp (PCO FR #5010134; BHC for Hanover Community Bank FDIC #58675) announces proposed IPO under Nasdaq symbol HNVR.  Their S-1 Registration Statement has been filed with the SEC but the number of shares and the proposed share price offering has not yet been determined.

 

• PNC Bank launches an on-demand pay solution (aka earned wage access) called PNC Earnedit and powered by DailyPay.

 

• Notable FinTech funding for the week:
  • Plinqit (savings platform that pays users to learn personal finances) raised $5M in capital to continue to drive higher user engagement at financial institutions.
  • Weavr (EU based embedded finance platform) raised $40M $40M in Series A and plans US market launch.
  • Secureframe (automated security and privacy compliance platform for HIPAA, SOC 2, PCI DSS, and ISO 27001) raised $56M in Series B round.
  • Anecdotes (compliance OS platform for HIPAA, SOC 2, PCI DSS, ISO 27001, and SOX ITGC) raised $25M in Series A funding round.
  • BlueVoyant (cybersecurity) raised $250M in Series D funding round after a “record-setting 2021 that included triple-digit growth momentum, key acquisitions, and an 80% increase in customer count. In addition, in 2021, the company increased its existing global footprint by expanding into more than 10 countries. Since 2018, BlueVoyant has grown annual recurring revenues at 117% on average.”
  • OCR Labs (digital ID verification) raised $30M in Series B to expand operations in North America and EMEA.  “OCR Labs’ solution supports anti-money laundering (AML) and know your customer (KYC) regulations, improves customer identity verification, and reduces fraud.”
  • Promise (consumer focused flexible payments platform for government debts) raised $25M in Series B round.
  • Savvy (next-gen wealth mgmt) raised $7.3M in Seed round.

 
 
Random Uncle Sean Stuff:

• Well, it was a pretty crappy week with geo-political and humanitarian concerns in Ukraine, the stock market made me sea-sick, enhanced concerns of cyberattacks on US companies and critical infrastructure - and I’m glad I don’t have Chairman Jerome Powell’s job of trying to mitigate inflation in the middle of all this….  So let’s continue to work hard, share some Dad Jokes, and slap a smile on your face!!!
  • They should do a sequel to the movie Groundhog Day and just re-release the original….  😊
  • I see people my age out there climbing mountains and zip lining and here I am feeling pretty good about myself because I got my leg through my underwear without losing my balance!  Yay ME!!!!
  • When snails fight it’s called a slugfest.
  • Nachos are really just tacos that don’t have their life together.

 
 
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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