Uncle Sean's Update - 3/22/24

​Happy Friday!!!
 
🏃‍♂️Running a little late this week, so let’s jump right in!  Here is the Uncle Sean Update for 3/22/24:
 

• It’s Fed Week!!! 🤠  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 (err I mean QT2 😊) remains on track at $95B per month (since June 2022) as the Fed continues to allow maturing Treasuries and MBS to roll off the books and shrink the Fed Balance Sheet. 
  • Some key points as I get my inner “Fed-freak” on 🤓:
    • When asked about Jan and Feb inflation data coming in a little hotter than expected, Powell stated, “I think they haven’t really changed the overall story, which is that of inflation moving down gradually on a sometimes bumpy road toward 2%.”  Source: Charman Powell’s press conference transcript (24 pages).
    • Taper of the QT program (current asset runoff is at $95B per month) could begin “fairly soon” while keeping an eye on liquidity buffers as demand on reserves can be very volatile (i.e. recall 2019 repo rates 😬).
      • Meanwhile, the 2Y10Y yield inversion (since July 2022) is now the longest inverted yield curve in history per Reuters report. 🤷‍♂️
    • The Summary of Economic Projections (SEP or “dot plot”) remained largely unchanged from Dec.  Tells me the committee is comfortable maintaining a steady approach while maintaining current restrictive policy.  The median assumption is still three rate cuts by the end of the year assuming no new hiccups in the data that comes in.
      • I feel like I always need to remind folks that the SEP is not a plan of action or policy.  But rather a median of assumptions, based on current data, on where the committee members think things are headed.  😊

 

• nCino, Inc. (NASDAQ: NCNO) announced an agreement to acquire DocFox.  By integrating DocFox into nCino, “the combined offering will help enable financial institutions to unify and intelligently manage the entire client lifecycle across information intake, document collection and due-diligence on a single platform, regardless of the entity’s complexity.”  Nice!!!! 🚀

 

• 👀 And another CU acquisition of a bank…  This week it is Harborstone Credit Union (Charter #66399; Total Assets $1.9B) announced an agreement to acquire SAVIBANK (FDIC 57978; Total Assets $593M).  Per this Banking Dive interview, this acquisition effectively kills the Orca Bank de novo project per Savi Financial Chair, Michal Cann.
  • We are now up to 7 CU acquisitions of a bank thus far for 2024 compared to 11 in 2023, 16 in 2022, 13 in 2021, 7 in 2020, and 16 in 2019 (source: FedFis M&A database).

 

• PublicSquare (NYSE: PSQH) announced an agreement to acquire Credova, a POS BNPL platform.

 

• Galileo expands their BNPL solution to include post-purchase options that “allows banks and fintechs to offer cardholders new post-purchase installment payment options via their existing debit or credit card account.”
  • Uncle Sean is starting to see this (post-purchase option opposed to merchant-based POS selection) more and more.  A few bank plans come to mind such as American Express Plan It (credit), My Chase Plan (credit), Chase Pay in 4 (debit), and Citi Flex Pay (credit).

 

• C2 Systems (loan origination + credit decisioning platform) announced a partnership with Vouched (the smoking red-hot AI identity verification space) to integrate Vouched’s “cutting-edge identity verification technology into C2’s Covalent workflow, offering banks and other financial institutions a seamless and frictionless process for verifying applicant identities across various channels, including online applications, phone, or in-branch services.”

 

• FIS (NYSE: FIS) also leans into the AI-driven fraud prevention arena for its SecurLOCK™ card fraud management solution by partnering with Stratyfy to optimize fraud detection.  Stratyfy also happens to be an alumni of the FIS Fintech Accelerator Program.

 

• Bolt and Checkout.com announced mutual partnership agreement where Bolt will become Checkout.com's exclusive one-click checkout provider and Checkout.com will become Bolt's preferred payment partner.

 

• Here come the machines 🤖!!!!  BNY Mellon becomes the first global bank to deploy AI Supercomputer powered by NVIDIA.

 

• Another fintech shifts from “challenger model” to “vendor model” – or B2C to B2B / B2B2C distribution…  Onyx to stop offering consumer direct banking services and pivot to B2B white-label offering for banks and credit unions.

 

• Thredd (international payment processor) enters the U.S. debit and prepaid card issuing market via an extension of its partnership with B4B Payments.

 

• Finally a few regulatory orders 👀:
  • State regulators from 39 states, Puerto Rico, and the District of Columbia have ordered Sigue Corp. to cease engaging in any further money transmission activities as the company can no longer responsibly serve customers due to its declining financial position.
  • The FDIC issued letters demanding three companies (PrizePool, AmeriStar, and HighLine Gold) cease and desist from making false and misleading statements about FDIC deposit insurance.
    • BaaS / Embedded Finance folks – this is your weekly reminder to continually monitor your fintech clients.  Protecting the consumer is priority one.
  • Two fintechs, Biz2Credit and Womply, agreed to pay a combined $59M to the Federal Trade Commission in order to settle allegations they deceived small businesses seeking Paycheck Protection Program loans during the Pandemic.

 

• Personnel moves:
  • Varo Bank welcomes Allen Parker as CFO and promotes Raktim Mitra to CLO
  • R&T Deposit Solutions appointed Steve Spino as SVP, Deposit Funding Specialist
  • Ncontracts announced that Brian Lapidus has joined the company as its Chief Revenue Officer

 

• FinTech funding for the week:
  • Ascent (financial portability / open banking solution for banks and CUs) raised $5.3M in capital
  • Coast (expense management platform for fleet operators and their employees) raised $92M in capital consisting of $68M in debt financing plus $25M equity round described as “not a Series B or a Series A extension” but more of an insider round (Coast $27.5M Series A was raised in Feb 2022).

 
 
Random Uncle Sean stuff:

• Is anyone else’s March Madness bracket already dead??? 🏀
• Now that spring is here, I can’t help but wonder how long it will take for all the stores to completely run out of allergy medicine – UGH, the struggle is REAL!!!! 😩  But I’ll take allergies over ice storms any day!!!!
• They’re B-a-a-a-ck – Bad / Dad Jokes:
  • Fun Fact – Ancient records indicate that Julius Caeser never once said “thank you” in his life.  This is due to the fact that he did not speak English…  😆
  • My life coach just informed me that I did not make the team…  And pretty sure my Guardian Angel has taken up drinking…  LOL!!!! 🙃🤪
  • Do you think Boeing will offer discount flights to anyone willing to hold the door in place for the duration of the flight (asking for a friend)? 😲✈️
  • And lastly, one of my favorite Betty White quotes.  “Get at least eight hours of beauty sleep.  Nine if you’re ugly.” 😂🤣 

 
 
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.