Uncle Sean's Update - 8/16/24

Happy Friday!!!
 
Remember last week when the stock market completely threw up – yeah, me neither! 🤷‍♂️🤠  Here is the Uncle Sean Update for 8/16/24:
 

• Cracking the 3% psychological barrier - 👍 July CPI came in pretty much as expected with headline YoY at 2.9% (estimate was 3.0%; last month was 3.0%) which is the smallest 12-month increase since March 2021.  The monthly read came in at 0.2% exactly matching expectations.  Core CPI was 3.2% (also the lowest reading in three years) versus 3.3% in June. 
  • CNBC has a good summary emphasizing that shelter overweight increases are still a drag (and a lagging drag due to their slow pace of change) on CPI.  Excluding shelter, CPI only rose 1.7%.
    • Looking ahead on the calendar…  Next week brings the Jackson Hole Economic Policy Symposium from August 22-24.  The week after that brings Personal Consumption Expenditures Price Index (PCE is the Fed’s preferred measure of inflation) on August 30th.  Then comes the monthly jobs report and unemployment summary on September 6.  And then we wrap up “rate cut watch 2024” (LOL) with the next FOMC meeting on September 17-18 which will include Summary of Economic Projections (SEP – “dot plot” for us old folks).
      • Oh yeah – don’t forget that Labor Day is in there somewhere too! 😊

 

• 👀 FIS (NYCE: FIS) teams up with Neural Payments to simplify peer-to-peer (P2P) payments via a white-labeled open-loop solution allowing for seamless P2P transactions (regardless of whether the recipient’s institution utilizes Neural Payments and without the need to download a third-party app or register a new card) embedded within the institutions mobile banking app.
  • An Uncle Sean fist-bump 👊 to the Neural Payments Team – well done!!!

 

• Mastercard debuts enhancements to its Open Banking for Lending program powered by employment / income verifier Argyle (credentialed payroll service); making it easier for financial institutions to digitally verify an applicant’s income and employment via user permissions. 

 

• Klarna (BNPL) announced everyday spending and saving features launching in 12 countries across Europe and the US.
  • Klarna balance allows consumers to store money in a Klarna ‘account’, adding money directly from their bank account, receiving cashback rewards for shopping in the Klarna app, or receiving refunds from returned items.
  • Cashback rewards consumers who shop in the Klarna app. Shoppers earn a percentage of purchases at participating retailers, and the money is stored in their Klarna ‘balance’ account.
    • However, per this Banking Dive article, it looks like the Klarna Account will not be FDIC insured (similar to Venmo) – at least not at first.  Really more designed as “a vehicle for consumers to receive cashback and get their refunds faster” and not anticipating US customers to hold large amounts.

 

• Zip (BNPL) announces partnership with Stripe in the US where eligible merchants can easily enable Zip as a payment method with a single click at checkout (point-of-sale credit).

 

• More BNPL as Affirm (Nasdaq: AFRM) expands its partnership with Tekmetric (automotive repair shop management solution with payments powered by Stripe Connect) to bring flexible payment options at checkout to the thousands of auto repair shops that use Tekmetric’s platform.

 

• LendingPoint partners with FairPlay to utilize FairPlay’s Fairness-as-a-Service solution to enhance LendingPoint’s algorithmic qualification and automated funding decisions.

 

• Finzly announced an agreement with Corpay (NYSE: CPAY) to collaborate on a joint offering that brings together Finzly’s FX payment platform and Corpay’s real-time FX rates for financial institutions and their business clients.

 

• Pibank (direct digital bank solution for Intercredit Bank) launches in the US with a high-yield savings account sporting 5.5% - WOWZA! 😲
  • This is an interesting structure as Pibank already operates as a direct bank in Spain and Columbia via Banco Pichincha Holding Group.  Dr. Fidel Egas Grijalva is the majority owner of Banco Pichincha Holding Group; and he purchased (as an individual) Intercredit Bank (FDIC 25258) in 2020 per the Intercredit website; “Intercredit Bank is not part of the Banco Pichincha Holding Group and is separately managed and regulated.”
    • Thinking out loud here (“over-thinking” actually – LOL)…  I could be dead wrong, but since Pibank already exists internationally – It looks like Intercredit Bank simply purchased the brand rights to operate Pibank in the US….  My weird brain keeps thinking of this as the first example of a franchised direct digital bank specific to the US.  Very interesting! 😊

 

• Modern Treasury flexes this week by announced it has expanded instant payments support for mutual customers of six leading banks - Bank of America, Cross River, JPMorgan Chase, PNC Financial Services, U.S. Bank and Wells Fargo.

 

• Centime (holistic cash management platform for SMB’s) introduced a new AP solution that pays you to automate your business AP process by providing a high-yield account currently at 4.25% APY.  The press release states that on average, clients earn enough to cover the cost of automation and more.  Cha-Ching!!!

 

• All kinds of M&A going on this week:
  • Experian acquires behavioral analytics platform NeuroID.
  • Chang in Control – KeyCorp (NYSE: KEY) announced an agreement where The Bank of Nova Scotia will make a strategic minority investment in KeyCorp of approximately $2.8B representing 14.9% pro forma common stock ownership (upon approval by the Federal Reserve).
  • UFS to acquire Safe Systems.  “UFS’ acquisition of Safe Systems is a game-changer for community banks across the country,” said Dave Mayo, Founder of Bankers Helping Bankers and CEO and Founder of FedFis. “This is a strategic move that will both elevate and broaden the quality of solutions and services available. Talk about perfect timing, this enables Bankers to better serve their customers. By combining their expertise and resources, these two companies are positioned to deliver unmatched support to the industry.” 
    • Hey – I know that guy!!!! 🤠
  • Ceto acquires VPCtech strengthening their position in the area of Fiserv/DNA platform transformations.
  • 👀 And lastly – another CU acquiring a bank.  This week it is Spokane Teacher’s Credit Union (Charter 68203; Total Assets $5.9B) announced an agreement to acquire Community Bank (FDIC 17445; Total Assets $549M) in Joseph, OR.
    • If you are keeping score, the count is now up to 13 announced acquisitions of a bank by a credit union thus far in 2024 compared to 11 in 2023, 16 in 2022, 13 in 2021, 7 in 2020, and 16 in 2019 (source: FedFis).

 

• A couple of more CU headlines:
  • Forum Credit Union (Charter 68248; Total Assets $2.1B) selects Apiture Business Banking Solution to deliver online and mobile banking to its commercial members.  
    • Somewhat unique to see a CU highlight a specific digital business banking solution.
  • North Bay Credit Union (Charter 63373; Total Assets $121M) selects Sharetec’s web-based core, Sharetec Velocity for its innovation and Open API platform.

 

• Tally (cc debt refinancing) is unfortunately shutting down.  Tough blow – Despite raising more than $172M (most recent $80M Series D was in Oct 2022) with a peak valuation of $855M and 183 employees, they were not able to secure further funding to continue operations.

 

• Some personnel moves:
  • Robinhood announced Jeff Pinner as Chief Technology Officer.
  • LendingPoint names Shawn Stone as Chief Executive Officer.
  • Plinqit promotes Kirsten Longnecker to Chief Marketing Officer.

 

• FinTech funding for the week:
  • PayZen (healthcare financing) raised $232M in Capital consisting of $32M in Series B plus a new $200M credit warehouse.
  • Setpoint (infrastructure for the credit industry) raised $31B in Series B funding round.
  • Amount (small business digital loan origination and decisioning platform for banks and CUs) raised $30M in Equity Capital.

 
 
Random Uncle Sean stuff:

• Well, 💩…  Odds are your personal data has probably been leaked according to this Los Angeles Times article stating the hacking group USDoD claimed in April to have stolen personal records of 2.9 billion people from National Public Data, which offers personal information to employers, private investigators, staffing agencies and others doing background checks.  The breach, which includes Social Security numbers and other sensitive data, could power a raft of identity theft, fraud and other crimes, said Teresa Murray, consumer watchdog director for the U.S. Public Interest Research Group.
• Okay – on to more happy news!!!  🏈 It’s here – College Football is here (almost anyway)!!!!! 😀  Take a peak at the AP Top 25 that has Georgia, Ohio State, Oregon, Texas, and Alabama rounding up the top 5 with some wild matchups as season openers including:
  • #1 Georgia vs #14 Clemson on 8/31
  • #7 Notre Dame vs #20 Texas A&M on 8/31
  • #13 LSU vs #23 USC on 9/1
• And of course some Dad / Bad Jokes to kick off the weekend right:
  • Do people who run marathons know they don’t have to??? 🏃‍♂️
  • I graduated first in my class…  The fact that I was homeschooled is not important. 👨‍🎓🙃
  • The thing about having a teenager in the house is…  Hey – what happened to all of our silverware and bowls??? 🤔
  • I asked Aunt Patty how they make Holy Water…  She said you just boil the hell out of it… 😬😂

 
 
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.