Happy Friday once again! It’s been a crazy week even if you ignore the political stuff and global pandemic.
So let’s get to it – here is the Uncle Sean Update for 1/15/21:
Money, money, money, money ("For The Love of Money" by The O'Jays - you’ll be singing it the rest of the day)! From capital raises to smoking hot IPO markets, there is no shortage of investors or liquidity.
Here are a few of the honorable mentions this week:
Affirm (BNPL platform) IPO priced at $49 per share debut (Nasdaq: AFRM) for a whopping $12B valuation; opened up 90% at $90.90; and closed their initial day of trading at $97.01. But wait – there’s more… They closed the week out at a stunning $117 per share – CHA-CHING!!! Check them out on yahoo finance - AFRM. You can read up on their S-1 here - SEC - Affirm S-1
And even more BNPL (told ya all the cool kids were doing it) – I’m certain that this is more than just coincidental timing - LOL, but Citizens Bank issued a press release this week (2 days prior to the Affirm IPO) touting the success of their Citizens Pay BNPL platform – specifically stating more than “$6.4 billion in loans have been originated and the company has served more than 5 million accounts”
Walmart launches FinTech although they were notably vague on any specifics. Check out their IR press release here - Walmart creates new fintech startup. “White hair moment” Anyone else old enough to recall the Walmart Bank / ILC debates of the past? Here is an old but very good 2007 write-up from the Saint Louis Fed detailing the history behind Walmart’s banking plans beginning in 1999 with a proposed acquisition of Federal BankCentre through their 2005 ILC application with Utah DFI.
Makes me wonder if Walmart will again attempt an ILC; or if Arvest Bank (common Walton family ownership) or even Woodforest may provide BaaS for the Walmart FinTech???
SoFi valuation - I know we covered this last week, but I am focusing more specifically on the fact that they quantified the value of a bank charter to be between $200M - $300M per year – WOW!!!!. See slide 35 in their investor deck - SoFi Investor Deck
FinTech alt lender Upgrade is “upgrading” (yes – I know how cheesy that was, but I just couldn’t help myself) to full Neo / FI Challenger bank status by launching a mobile banking app and debit card with 2% cash back (actually it is rewards checking) – here is the Upgrade Debit Card Press Release
Visa and Plaid mutually terminate merger agreement due to the fact that it has already been a year, and Visa did not believe the DOJ would move in a timely manner towards a reasonable conclusion and was not interested in a protracted and complex litigation.
Crypto custodian Anchorage becomes the first national “digital asset bank” in the U.S. by securing conditional approved for national trust charter from the U.S. Office of the Comptroller of the Currency (OCC) – Not to minimize this because it is a very big deal and the first of its’ kind, but keep in mind that this is not a new institution. It is a charter conversion from State chartered Trust to a Nationally chartered Trust. BitPay and Paxos have also applied for OCC charters as crypto-native banks.
Speaking of the OCC, the very active and crypto friendly Brian Brooks stepped down (as was widely expected) as the head of the OCC this week - Brian Brooks resigns. Even though he was only on the job for a few months (started as Deputy on April 1, 2020 and was named Acting Comptroller on May 29, 2020), he accomplished a great deal including becoming a thorn in the side of the CSBS and drawing the ire of a few in Congress – all in the middle of a global pandemic. Here are a few notable achievements under his watch: On Jul 22, 2020, the OCC published Interpretive Letter #1170, allowing national banks to custody crypto assets; on Sep 21, 2020, the OCC published Interpretive Letter #1172, on holding stablecoin reserves - National banks can hold stablecoin reserves for customers; on Jan 4, 2021, the OCC published the OCC Chief Counsel’s view on the use of independent node verification networks and stablecoins for payment activities. National banks can run blockchain nodes and use stablecoins for payments; and as mentioned above, on Jan 13, 2021, the OCC grants the first ever national charter for digital asset (crypto) bank.
Big Bank Earnings – 3 of the 4 mega banks (JPM, Citi, and Wells Fargo) reported earnings this morning. The key takeaway is that while credit reserves are still sky high, they are all starting to lower the reserve levels ever so slightly.
Have you seen Stockpile? Pretty neat little app for beginners that encourages responsible investing. https://www.stockpile.com/
The NCUA placed Indianapolis' Newspaper FCU into Conservatorship (not a failure) because of unsafe and unsound practices at the credit union. Member services will continue uninterrupted while the NCUA works to resolve issues affecting the credit union’s operations. Indianapolis’ Newspaper Federal Credit Union is a federally insured, federally chartered credit union with 1,155 members and assets of $6,604,355 according to the credit union’s most recent Call Report. Shout out to the FedFis FI Analysis Team as the FedFis Rating© for Indianapolis’ Newspaper FCU was 4.56 at 9/30/2020 (the most recent call report available) placing them in the lowest possible percentile.
Random Uncle Sean Stuff:
We ended up getting almost 3” of snow last Sunday out here in the Hill Country just Southwest of Austin. I had forgotten just how amazing it is to build a fire outside in the snow!!!! As an added benefit – it was all gone by the next day and we are back to wearing shorts!
Getting ready to walk outside and fire up the grill for some chicken fajitas with grilled onions and bell peppers on a beautiful Texas Friday evening…. Mmmmmmm…. Wish you were here!
Have a GREAT weekend and stay safe!!!!
Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at firstname.lastname@example.org | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | email@example.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.