Uncle Sean's Update - 9/23/22

​Happy Friday!!!
 
Happy Fall Y’all – which means it only got to 100 degrees this week in Austin, Texas!  Here is the Uncle Sean Update for 9/23/22:
 

• Shout out to MOCA Financial for being the latest to join the BHB BaaS Association!!!!   The BHB BaaS Association was created with the purpose of promoting, creating, and supporting Banking-as-a-Service (BaaS) and is aimed at serving the unique needs of BaaS sponsor banks in a responsible compliant way – furthering the cause of Bankers Helping Bankers.  I love it!!!! 😊

 

• It’s Fed Week!!!  As widely expected (except by the stock market apparently – YIKES), the FOMC unanimously voted to raise rates by 75 bps again with a new target range of 3.00% - 3.25%.  Additionally, the Fed will continue to reduce the Balance Sheet by $95B per month in Treasuries and agency backed MBS as detailed in May.  CNBC has a good summary as always.
  • The FOMC also released their Summary of Economic Projections (SEP) / “dot plot” (first since June) – just a reminder from Uncle Sean that although media outlets are fascinated by this, it is not policy or a plan of action, but simply a median of current assumptions based on current economic data as it stands today.  Key points:
    • Fed Funds rate projection of 4.4% by end of this year; and 4.6% for 2023
    • Median Unemployment forecasted to hit 4.4% for 2023 - 2024
  • Some quick Uncle Sean ‘Off the Rails’ commentary:
    • Finally exiting about a 15 year period of highly compressed NIM (basically if you are under 40 you probably haven’t seen this before as a working adult).  It will be interesting to see if we begin to see an uptick in De Novo applications as rate spread become attractive.  Conversely, as interest rates and unemployment start to heat up, Uncle Sean will be watching to see if credit issues begin to enter the picture as corporations will be looking closely at profits and potentially curtailing capex / expansion plans.  We are already seeing a slow-down in the housing sector.  But the good news here is that bankers are AWESOME at this.
      • For my Portfolio / Credit Manager / Chief Credit Officer friends…  Regarding exposures for your customers - I am still reading about potential exposure gaps in business inventory insurance (both cargo/transit and in-house) as supply chain issues continue to lead into inventory buildup.  Also commercial and residential property insurance limits as RE valuations have swelled over the last few years.

 

• The Bancorp Bank, N.A. (leading BaaS Sponsor Bank; FDIC 35444; BHC is public under the symbol TBBK) has completed their charter conversion with the OCC and is now a nationally chartered financial institution.

 

• Chipper Cash (cross-border payments app) partners with Highnote to launch US-based card program.

 

• Stash (investing and fintech banking app) announced an upgrade to their fintech banking platform including infrastructure and ledgering dubbed Stash Core (more on that below); and a shift in their patented Stock-Back® Debit Mastercard® which is now issued by Stride Bank (previously a Visa card issued by Green Dot).
  • American Banker (behind a paywall so I’m not providing the link) stated that Stash previously relied on Green Dot for core / ledgering.  Now that Stash has transitioned to Stride, the Stash Core platform is based on:
    • Mambu is powering the ledger
    • Alloy is providing identity decisioning
    • Marqeta for card processing

 

• Nymbus and Citizens Bank of Edmond partner together to launch a new direct digital bank focused on newly enlisted military members and their families with an anticipated launch date of early 2023 – very cool!!!
  • Hmm….  A little bit of backstory maybe???  I seem to recall a press release about a year ago where Moven and Q2 Core Pro were originally set to provide a direct digital banking solution…  I wonder what happened???  😲

 

• Atomic (suite of payroll connectivity API’s) announced a partnership with Aise (financial wellness app with bill pay via payroll deductions for employees).

 

• Banc of California (FDIC 35495; BHC is public under the symbol BANC) acquires Deepstack Technologies for $24M in cash and stock allowing the bank to expand payment processing services.

 

• Treasury Prime (BaaS enabled platform / BaaS Connector) announced that they have been accepted into the Jack Henry Vendor Integration Program further stating that “all banks on the Jack Henry core are able to adopt Treasury Prime’s BaaS technology and immediately offer embedded finance to their fintechs and enterprise clients.”
  • Additionally, Treasury Prime announced a partnership with FB Financial Corp (FirstBank; FDIC 8663; $12B Total Assets) to bring embedded finance offerings to FirstBank’s clients.

 

• Synctera (BaaS enabled platform / BaaS Connector) launched Synctera Line of Credit to enable “both FinTech developers and established companies to quickly create innovative lending products or embed lending services.”  The article goes on to state that “Synctera provides the required financial technology - including ledger and KYC/KYB services - as well as servicing and optional operational and compliance support. A Synctera partner bank will serve as the lender of record.”

 

• Notable FinTech funding for the week:
  • Portabl (identity verification mgmt. / “financial digital passport”) raised $2.5M in Seed funding.
  • Sardine (fraud detection in crypto and fintech) raised $51.5M in Series B funding round.
  • Higlobe (international payments) raised $14M in capital.  Using a monthly subscription fee (as opposed to a per transaction rate), Higlobe utilizes asset-backed stablecoins to provide a means of making cross-border payments between bank accounts.
  • Scratchpay (financing for veterinary and human healthcare) $35M in Series C funding round.
  • DoorLoop (rental property mgmt. software) raised $20M in Series A funding.
  • Future (green / ESG rewards platform including Visa debit card) raised $5.3M Seed Funding.

 
 
Random Uncle Sean Stuff:

• NOOOO!!!!!  Apparently, a truck full of cases of Coors Light beer crashed in Florida.  Fortunately no one was seriously injured, but the pictures immediately made me think of Tanner’s upcoming bachelor party!!!!  YEEE-HAW - LOL!!!
• Seriously???  Do we really need an FDA Warning not to use NyQuil as a chicken marinade???  Thanks TikTok….
• Some quick Dad Jokes to get us into the weekend!!!!
  • If you think about it, cereal is really just breakfast soup….
  • My daughter, Claire, asked if she could go to a 50 Cent concert.  I gave her a dollar and said take your Mom with you.
  • Aunt Patty told me that she read where it takes three sheep to make a wool sweater.  Heck, I didn’t even know they could sew!!!

 
 
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 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.