Uncle Sean's Update - 5/7/21

Happy Friday!!!
 
Wishing everyone a very Happy Mother’s Day Weekend!!!!  Here is the Uncle Sean Update for 5/7/21:
 

• Although not completely unexpected, it certainly grabbed a ton of press this week - Chime forced to remove the term “Bank” from their name; and to clarify / distance themselves from the term “banking” and its derivatives as part of a settlement agreement with California DFPI.  TechCrunch has a good write-up on the Chime settlement.  I suspect we will see more of this type of enforcement going forward – both at a State and Federal level.

 

• Michael Hsu gets the nod from Janet Yellen to be the next interim acting head of the OCC effective May 10.  Michael Hsu is currently associate director of bank supervision at the Federal Reserve.  Blake Paulson, the current interim Acting Comptroller since January, will return to his previous role as Senior Deputy Comptroller and Chief Operating Officer of the OCC.  According to this BankingDive article, Hsu will be the third consecutive acting comptroller to lead the OCC since Joseph Otting left last year on May 29, 2020.

 

• Congratulations to Maun Federal Credit Union for being the first federal charter granted by the NCUA in 2021.  The NCUA granted a federal charter and National Credit Union Share Insurance Fund coverage to Maun Federal Credit Union, in Kendall Park, New Jersey to serve a local Islamic community.  The charter became effective April 26, and maunfcu.org expects to open in June.

 

• Five Star Bancorp announced pricing of IPO at $20 per share, opened trading (Nasdaq: FSBC) at $24, and raised about $100M.  Proceeds are to be used for cash dividend of $27M and the rest to be used for regulatory capital and general corporate purposes.  A quick look at the FedFis Bank database platform (yep – that’s a plug) shows Five Star Bank with a CET1 ratio of 10.69% and Leverage ratio of 7.66% as of 3/31/21 (very well capitalized), it sure smells to me like someone may be on the acquisition trail soon….

 

• PPP is out of money approximately 3 weeks before its planned end on May 31 according to this CNBC article.  Keep in mind that the SBA still has about $8B available through PPP but is restricted to new applications form Community Financial Institutions that typically serve minority borrowers.  The SBA also has a few weapons left under the CARES Act such as the Restaurant Revitalization Fund ($28.6B in funding available) and the Shuttered Venue Operators Grant ($16B in funding).

 

• NYDIG and FIS have partnered up to enable banks to offer bitcoin to their customers through the FIS Digital One Mobile technology.  NYDIG will provide the custodial and trading platform, and in this CNBC interview states that bitcoin is coming to hundreds of US banks this year.  According to Yan Zhao (President of NYDIG), “this is not just the banks thinking that their clients want bitcoin, they’re saying `We need to do this, because we see the data,’” Zhao said. “They’re seeing deposits going to the Coinbases and Galaxies and Krakens of the world.”

 

• Mastercard adds 6 new startups to their fintech accelerator program, Mastercard Start Path.  Check them out - Asante Financial Services, Cledara, Jifiti, Moeda Seeds, Spendebt, and Tippy.

 

• Early Warning Services, the network operator behind Zelle, announced a record 1Q2021 transactions including 392 million transactions worth $106B that resulted in 74% YOY growth spurred by a 180% increase YOY in small business transactions – DANG!!!  That’s going to add up to some real money pretty soon – LOL!!!

 

• PayPal also announced record 1Q2021 results that included $285B in payment volume that resulted in 50% YOY growth.  Do you think PayPal is looking over their shoulder yet at Zelle’s trajectory?

 

• Galaxy Digital announced an agreement to acquire BitGo in a mixed stock and cash transaction totaling approximately $1.2B.  This is reportedly the first merger in the crypto world in excess of $1B.  And of course you know that I can’t move past this without sharing their nicely done Investor Deck (I love investor presentation decks waaaayy too much – man, I sure need a hobby!!!).

 

• Bill.com (NYSE: BILL) announce that they are acquiring Divvy in a stock and cash transaction valued at approximately $2.5B.  This is another merger that makes perfect logical sense to me.  Per the press release, the combination will expand the market opportunity for both companies.  “Bill.com can offer expense management and budgeting software combined with smart corporate cards to its more-than 115,000 customer base and its network of 2.5 million members.  Divvy will be able to offer automated payable, receivables, and workflow capabilities to the more-than 7,500 monthly active SMBs that it serves.”
  • Yep – you guessed it….  Here is the Investor Deck – LOL!!!!!

 

• Marqeta will reportedly publish their IPO plans next Friday (5/14).  Recall a few months back where we talked about Marqeta’s proposed IPO and how they were originally eyeing a valuation of around $10B; but now it seems like they may be pushing a valuation of up to $15B.  Makes sense considering they moved into the credit card space shortly after the confidential filing back in Feb.  We will certainly be watching this closely.

 

• Remitly (international transfers) has reportedly hired investment banks to prepare for an IPO later this year.

 

• Identity infrastructure startup Persona raises $50M in Series B funding.

 

• Check this out – Green Dot is relocating to Austin, TX from Pasadena, CA and plans to have the Austin headquarters up and running by the end of the year.  Cool!!!!

 
 
Random Uncle Sean Stuff:

• Random thought…..  Does fractional ownership via investing apps mean that stock splits are a thing of the past?

• Happy Mother’s Day to all the Mom’s!!!!!  This TJ Maxx Mother’s Day commercial music video “Put it in Your Cart” made me laugh way too hard (spin on the 80’s hit “Listen to Your Heart” by Roxette)!!!

 
 
Have a GREAT weekend, a SUPER Mother’s Day, 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.