Uncle Sean's Update - 5/16/25

​Happy Friday!!!
 
Just a heads-up that there won’t be an Uncle Sean Update next week as we take some time off to celebrate and honor our Memorial Day heroes that paid the ultimate price. 🎖️   Here is the Uncle Sean Update for 5/16/25:
 
Kicking this week off with some really cool economic updates (scroll on down if this isn’t your cup of tea – but you know how much Uncle Sean loves to geek out on macroeconomic data - 🤓):
 

• The BLS April CPI Report came in at 2.3% which is the lowest since Feb 2021 when inflation skyrocketed from Covid (March was 2.4% which was the lowest reading since March 2021).  Core CPI was 2.8% (same as March).  CNBC has a pretty good summary.

 

• The FDIC published their 2025 Risk Review (which is a review of market and credit risks to banks as of the end of 2024) with some very cool graphs…  TLDR Punchline:
  • Economic conditions remained solid and the banking industry was resilient in 2024 despite an inverted yield curve and higher interest rates.
  • Unrealized losses on securities remain elevated due to longer-term interest rates (30yr mortgage and 10yr Treasury) being higher than they were in 2023 (more on this in a minute from the Office of Financial Research)…
    • Although there was no mention of this (scope was 2024), Student Loan performance is something Uncle Sean is keeping an eye on as collections on student debt resumed on May 5th for the first time since March 2020 (but credit reporting has already started)….  Could potentially have a broader impact on overall consumer credit quality going forward.

 

• The New York Fed published their Q1 2025 Quarterly Report on Household Debt and Credit (more really cool charts – you know I love it 😊)…  TLDR Punchline:
  • Aggregate household debt continues to increase…  Up to $18.2T as of 1Q2025…  A 0.9% increase from 4Q2024 (and up about 28.7%, or $4.06T from 4Q2019 before the pandemic).
  • 👀 And here are those pesky Student Loans…  Outstanding student debt stood at $1.63T at 1Q2025 (for comparison, all CC balances are $1.18T).  Missed federal student loan payments that were not previously reported to credit bureaus between 2Q2020 and 4Q2024 are now appearing in credit reports (as Scooby-Doo would say, “Ruh Roh!!!”). Consequently, 7.7% of aggregate student debt was reported 90+ days delinquent in 1Q2025 compared to less than 1% reported in 4Q2024. 😬😲

 

• An last but not least, the Office of Financial Research published a really good (and short) blog on The State of Banks' Unrealized Securities Losses (yep, you guessed it – more cool graphs and great analysis! 😊)…  TLDR Punchline:
  • It’s not just unrealized losses on securities; it’s the composition (mix) of those securities that are proving to be “sticky” related to negative performance in conjunction with longer term rates (i.e. 10yr + Treasury rates).  Unrealized securities losses could persist for some time even if/when the Fed lowers rates.
    • 👉 Residential mortgage-backed securities (RMBS) followed closely by Treasuries make up a substantial portion of banks’ securities portfolios.  Most RMBS have maturities greater than 15 years coupled with negative convexity (yes, I had to look that up - LOL) making their price less sensitive to decreasing rates. The longer average maturity of RMBS coupled with higher 10-year Treasury yields may account in part for why unrealized securities losses persist.
      • In summary - “While the Federal Reserve can influence short-term interest rates by adjusting the federal funds rate, long-term interest rates reflect financial market participants’ expectations of inflation and willingness to accept the risk of lending long term. The magnitude of future unrealized securities gains or losses will depend on the trajectory of long-term interest rates, related hedging, and the duration of banks’ securities portfolios. Market supply and demand can also affect the value of the securities, independent of the direction of interest rates.”
        • 😉 Of course this is all assuming the Federal Reserve doesn’t go on another QE bond buying spree targeting the longer end of the yield curve (artificial demand to push rates down)… 🤷‍♂️

 
 
Now, back to the rest of the update!!! 😊
 

• Finally….  Chime has filed to go public on NASDAQ under the ticker symbol “CHYM” – Banking Dive has a good article; and you can check out their full S-1 filing here.  I’ll let you be the judge on the financial stability of a (primarily) interchange based revenue model; and subsequent valuation 🤐...  However, here are a few cool BaaS updates in the S-1:
  • “The Bancorp Bank MSA has an initial 60-month term ending in July 2028, while the Stride Agreements each have initial 36-month terms ending in November 2025. Our bank partner agreements automatically renew for successive one-year periods unless either party provides written notice of non-renewal, which can be provided without cause to the other party at least 365 days, in the case of the Bancorp MSA, and at least 180 days, in the case of the Stride Agreements, prior to the end of any such term, or unless earlier terminated for cause.”
  • “…transactions have historically been processed by Galileo Financial Technologies, LLC (“Galileo”), a third-party payment processor, though we are in the process of transitioning our members’ transactions to being processed by ChimeCore; as of the end of 2024, we had transitioned all credit card transactions to being processed by ChimeCore, while all debit card transactions were still processed by Galileo.”
    • ChimeCore is their proprietary payment processor and ledger – also has proprietary AI and ML model helping to reduce fraud loss.

 

• Acorns (savings and investing app) has acquired EarlyBird, an investment gifting platform for families…
  • 🤔 IMO (even though nobody asked me 😊) - This appears to be an acquihire (acquisition based on the HR talent, not so much the tech or product platform) as “EarlyBird will shut down, and all customer accounts will officially close on June 23. Customers’ funds will be returned to the bank account connected to their account.”  The PR goes on to state that EarlyBird users will not be able transfer their funds directly to Acorns, but will need to withdraw their funds from EarlyBird and open a new account with Acorns if they want to join.
    • EarlyBird CEO and co-founder Jordan Wexler and co-founder Caleb Frankel will join the Acorns team to help build out Acorns Early (which was part of the GoHenry acquisition announced back in April 2023).

 

• SavvyMoney acquires CreditSnap strengthening its ability to work alongside existing LOS and account opening systems.  Per the PR – “Financial institutions can now offer a seamless, end-to-end experience by leveraging SavvyMoney’s demand-generation capabilities in conjunction with CreditSnap’s flexible integration process. From personalized credit insights to frictionless application and booking, allowing every integration to work with one unified platform.”

 

• More developments in the SMB space…  Square debuted Square Releases, a bi-annual product launch summary; and also revealed Square Handheld – a pocket-sized portable POS device equipped with integrated barcode scanner and camera. 💥

 

• First Business Bank (FDIC 15229; total assets $3.9B) partners with CorServ to issue commercial, business and consumer credit cards.  By utilizing CorServ’s hybrid issuing model (opposed to an Agent Bank referral mode), the bank is able to “gain more control over their credit card program, participate in credit decisioning and strengthen relationships with their customers.”

 

• Clearview Federal Credit Union (charter 9007; total assets $2B) partners with MANTL to enhance its business and consumer account opening experience “across all banking channels, including online, mobile app, in-field, and across its branch network.”
  • “By integrating MANTL with its Jack Henry Symitar core, Clearview will now be able to automate over 85% of deposit application decisions, including KYC, AML, BSA, product service ordering, funding, and core booking, to create efficiencies and keep manual processes to a minimum.”

 

• Speaking of Jack Henry…  SouthTrust Bank, N.A. (FDIC 13919; total assets $552M) selects Jack Henry for core and digital to fuel the banks growth and innovation efforts – targeting $2B in assets over the next decade.
  • 👉 Perhaps more importantly, the incumbent core processor had a strategic position within the bank (same vendor for core, online, and mobile), so displacing this vendor was no easy task.  PLUG TIME!!!! 😊 For more info here – contact our very own Mr. Bobby Button and ask about our Fintegration Ecosystem© covering the full vendor tech stack for every bank and credit union in the U.S.

 

• Costco (NASDAQ: COST) and Affirm (NASDAQ: AFRM) partner together to launch buy now pay later option for online orders – allowing Costco members shopping online to use Affirm at checkout to pay over time without any late or hidden fees.

 

• Byline Bank (FDIC 20624; total assets $9.6B) announced the expansion of its Payments and Fintech Banking group, “including several key new hires and leadership appointments, which underscore the bank’s significant investment in embedded finance and modern digital payment solutions.”  🚀

 

• Greenlight (family banking app) announced the launch of Family Shield, “its newest subscription plan designed to help caregivers protect seniors from financial fraud and ensure their physical safety. This first-of-its-kind product streamlines financial account monitoring and alerts, provides protections against fraud (including deceptive transfer fraud), identity theft, and money management errors, and offers remote features to help ensure senior safety.”  Nice!!!! 👏

 

• Zoho (business platform for CRM, payroll, workflows, and more) launched Zoho Payments, “a unified payment solution that helps businesses collect payments online using multiple payment methods like cards and ACH. The solution offers native payments capabilities within Zoho, enabling businesses to manage payments directly within their existing financial workflows.”

 

• 😬 Coinbase hack…  In a company blog, Coinbase said criminals targeted its own overseas customer support agents with cash offers and was able to obtain limited customer data; and then tried to extort Coinbase for $20 million to cover this up.  Instead, Coinbase is offering a $20M reward for the arrest and conviction of the criminals. 👍              
  • Per this 8-k filing, while Coinbase “has preliminarily estimated expenses to be within the range of approximately $180 million to $400 million relating to remediation costs and voluntary customer reimbursements relating to this Incident, prior to further review of potential losses, indemnification claims, and potential recoveries, which could meaningfully increase or decrease this estimate.”

 

• Notable FinTech funding for the week:
  • Stash (personal finance app including banking, investing, and advice) raised $146M in Series H funding round to expand its AI capabilities to further boost product development as the company looks to "drive subscriber growth".
  • FlexPoint (payments platform for managed service providers) raised $12M in Series A round citing “revenue growth of nearly 4x year over year, FlexPoint is trusted by over 40,000 businesses with their payments.”

 
 
Random Uncle Sean stuff:

• WOW – this update really wore me out!  But I thoroughly enjoyed that RMBS securities analysis from the OFR if you couldn’t tell (nerd alert!!!). 😂  So let’s just jump right into the good stuff and close this week out (I see a cold beer 🍺 in my immediate future)!!!
  • And here is the good stuff!!!  Everyone’s favorite part of the Update - the Dad / Bad Jokes:
    • Never play tennis with a cymbal…  It makes a terrible racket! 😏
    • When I want to feel cultured, I eat yogurt! 🤠
    • Olive’s really should have been called “Greece’s Pieces”… 🤔😜
    • Dogs aren’t the only animal you can train.  I had a goldfish that could breakdance on the carpet…  But only for like 20 seconds. 🐟🕺🤣
    • Remember when we used to laugh at the commercial “I’ve fallen and I can’t get up!”?  Yeah, not so funny anymore… 😬😅

 
 
Have a GREAT weekend and an even greater Memorial Day weekend since I won’t be posting next week.  Oh – 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.