Uncle Sean's Update - 5/6/22

​Happy Friday!!!
 
Wishing an extra special Happy Mother’s Day to all the Mom’s out there – hope you all have a wonderful day!  Don’t forget to sign up here to have the Uncle Sean Update delivered straight to your inbox each week.  Here is the Uncle Sean Update for 5/6/22:
 

• Check it out!!!!  The newly announced BHB BaaS Association is now open for membership registration for Member (BaaS banks) as well as Affiliate Member (non-BaaS banks, fintechs, and vendors).  For more info, head on over to BHB BaaS Association homepage.  

 

• Speaking of Bankers Helping Bankers, HUGE shout out to Sarah Fankhauser and Data Center Inc. (DCI) for sponsoring the Bankers Helping Bankers platform and supporting community banking across the U.S. – this is how we win in community banking!!!

 

• It’s Fed Week!!!!  Not since the beginning of the pandemic has there been this much anticipation to an FOMC meeting.  Although, I must confess – I’m not sure why….  Chairman Powell has been incredibly transparent (as always) scripting out that a 50 bps hike was probably in order; as well as general consensus surrounding a $95B reduction ($60B in Treasury Securities and $35B in Agency MBS) in the Fed Balance Sheet – i.e. quantitative tightening (QT) per the March FOMC minutes and in many interviews thereafter.  Well guess what, that’s exactly what they did with a three month phase-in of the quantitative tightening.  I know – shocking, right???
  • If you like to get your “Inner Fed freak on” (like me 😊), you can check out the FOMC Statement, the plan for reducing the Fed Balance Sheet (QT), Chairman Powell’s Opening Statement transcript (24 pages), and the Press Conference Video (47 minutes).  Key takeaways include:
    • 50 bps raise in rates plus Initial quantitative tightening (QT) of $30B in Treasury Securities plus $17.5B in Agency MBS beginning June 1; and doubling to $60B in Treasury Securities and $35B in Agency MBS after three months.
    • Russia’s invasion of Ukraine and Covid lockdown in China will continue to pressure energy prices and supply chain constraints respectively.
    • 50 bps increases will be on the table going forward at the next couple of FOMC meetings, assuming economic conditions come in as expected.

 

• Truist (FDIC 9846, Total Assets $530B) acquired Long Game, a pioneer in the mobile savings gamification app space.  Pricing was not disclosed, but Truist did mention that Long Game was complimentary to Truist Momentum, a workplace financial wellness program.

 

• Intercontinental Exchange, Inc. (NYSE: ICE) announced an agreement to acquire Black Knight, Inc. (NYSE: BKI) for $13.1B in a mixed deal of cash and stock.  This is big news in the world of financial institutions and mortgage servicing as Black Knight is arguably the largest Mortgage Servicing Platform (MSP) in the nation.  During a conversation with our own Bobby Button, he reminded me that Ellie Mae was also acquired by ICE back in 2020; and noted that this is a HUGE roll up of both Ellie Mae and Black Knight under ICE.
  • Of course Uncle Sean would not miss an opportunity to dig into the ICE / BKI Investor Presentation by ICE showing +4B TAM expansion, accretive to adjusted EPS in year 1, and synergies of $325M per year – very cool!

 

• First Internet Bank (FDIC 34607; Nasdaq: INBK) announced that First Century Bank, N.A. (FDIC 57123 and FinTech Sponsor Bank) has terminated the merger agreement between the two companies quoting an inability to “arrive at a mutually agreeable increased purchase price in exchange for an extension” by the previously agreed upon consummation date of April 30 despite having received approval from the Federal Reserve on April 29.

 

• We originally covered this lawsuit late last year – now H&R Block wins preliminary injunction against Jack Dorsey's Block.  Judge Nanette K. Laughrey ordered Block Inc., which rebranded from Square last December, not use its new name in connection with its Cash App Taxes services and that app’s green square logo.  Additionally, Block Inc. can’t communicate through advertising, press releases or social media that it is connected to the service, the judge said.

 

• The SEC doubles down….  The SEC announced this week the allocation of 20 additional positions to their Crypto Assets and Cyber Unit bringing the total to 50 dedicated positions focused on investigating securities law violations related to:
  • Crypto asset offerings, crypto asset exchanges, crypto asset lending and staking products, decentralized finance ("DeFi") platforms, non-fungible tokens ("NFTs"), and stablecoins.  Also including additional emphasis on adequate cybersecurity controls and required disclose of cyber-related risks and incidents.

 

• Affirm (BNPL provider, Nasdaq: AFRM) partners with Fiserv to allow Fiserv business customers using the Carat operating system to easily integrate a BNPL option at checkout later this year.

 

• Stripe launches Financial Connections allowing Stripe’s customers a way to connect directly to their customer’s bank accounts utilizing MX and Finicity; and immediately drew the ire of Zach Perret, CEO of Plaid, the market leader in consumer bank account connectivity and former partner to Stripe.  Zach Perret originally tweeted: “Wow! Jay, you took interviews with Plaid & asked probing questions multiple times over the past few years, and your team sent repeated RFP’s (under NDA!) to us asking for tons of detailed data. I wish y’all the best with these products, but surprising to see the methods.”  😲
  • The original tweet by Zach Perret was deleted and replaced with “Deleted tweet. Misunderstanding or different styles perhaps. Presuming positive intent.”  And subsequently tweeted “Next take: Welcome to the fintech party, @stripe”
  • Ahhh… The joys of Twitter….  LOL!

 

• The Independent Community Bankers of America (ICBA) released their legislative and regulatory policy objectives for 2022.

 

• Notable FinTech funding for the week:
  • Point (home equity investment platform) raised $115M in Series C funding round.
  • Concerto (a new and holistic approach to risk for credit card brands) raised $21.2M in Capital to expand co-branded credit card platforms to more brands.
  • Argent (non-custodial Ethereum mobile crypto wallet) raised $40M in Series B to make digital wallets easier to use and more secure.
  • Traceable AI (cybersecurity platform to protect API’s) raised $60M in Series B funding round at a $450M valuation.
  • Line (alt-lending subscription platform for underserved consumer short-term credit availability) raised $25M in Equity and Debt financing with 600,000 people registering since last summer for the interest free, no credit check platform.
  • Possible Finance (alt-lending installment platform) raised $20M in Equity financing with plans to launch the Possible Credit Card - a small dollar limit unsecured CC with no interest and no late fees issued by Coastal Community Bank.  Possible focuses on underserved consumers and “has provided over 1.65 million small-dollar loans to over half a million customers since 2019.”
  • Lev (digital CRE lending platform) raised $170M in Capital consisting of $70M in Series B and $100M in debt financing.  Valuation was not disclosed but the company has closed nearly $1B in CRE mortgages in 2021 and grown 10x year-over-year.
  • Walnut (healthcare POS installment lender) raised $110M in Capital comprised of $10M in Series A and $100M debt financing.

 
 
Random Uncle Sean Stuff:

• HAPPY MOTHER’S DAY – it’s actually Mother’s Weekend according to Aunt Patty (and is very close to evolving into Mother’s WeeK), and Uncle Sean agrees!!!! 😊 

• Happy Cinco De Mayo!!!  Here’s some history on Cinco de Mayo – note that it is NOT Mexican Independence Day; and has grown as a huge celebration of Hispanic heritage particularly here in Texas.  Plus it gives Uncle Sean a great excuse to drink some margarita’s!!!
• I can’t even call these Dad Jokes this week because these are mostly true for me, so enjoy:
  • Am I the only one who gets borderline delusional when they rearrange the grocery store?  It’s like my entire world gets turned upside down and I don’t even know who I am anymore – LOL!!!!
  • I’ve been practicing resistance training by refusing to go to the gym.
  • I was watching this TV show about explosives and motorcycle jumps and they said, “don’t try this at home.”  So I’m going over to my brother’s house – this is gonna’ be great!!!! 😝
  • Aunt Patty always asks me why I get out of bed so early and I told her, the world simply can’t revolve around me until I get up!
  • Hard boiled eggs are just miniature whole boneless skinless chickens….  I know, that got a little bit weird…
  • Do you think Tesla owners are concerned that if they tweet something negative about Elon Musk, their car “magically” will not start???

 
 
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.