Uncle Sean’s Update 12/13/24

Happy Friday the 13th 😬!!!
Oh, and Happy Birthday to Taylor Swift 🎶🎵!!!  So be sure to spread the word to all the Swifties out there (now that the Eras Tour is over) they can sign up here to have the Uncle Sean Update delivered straight to their inbox every week 🤠.  Here is the Uncle Sean Update for 12/13/24. 

• 💥 Bankers Helping Bankers (BHB) is at it again!!!  I am super excited to report another powerhouse in the industry supporting and empowering community banks as LoanPro joins the BHB family!!!  I love this as the folks over at LoanPro are 100% genuinely good people (and they’re smart too)!!!  Definitely check out their scalable API-first lending and credit platform at loanpro.io – and tell them Uncle Sean sent you! 😊
• With plenty of eyes focused on the FOMC meeting next week, the latest inflation data is still sticky, but not surprising…  The BLS Nov CPI report ticked up slightly to 2.7% YoY after increasing 0.3% for the month, but in line with expectations.  Core CPI remained at 3.3% where it’s been for the last three months.  CNBC has a pretty good summary.
• The FDIC released their Quarterly Banking Profile – Third Quarter 2024 along with Chairman Gruenberg’s presentation remarks.  Spoiler alert 😲 – if you’ve been following the “BHB Inside the Numbers” quarterly banking review, you already know this (and you knew it earlier than anyone else by 6 weeks)…  But here are the highlights anyway:
  • Positive increases in Net Interest Income and Net Interest Margin as loan yields exceeded the increase in cost of deposits.
  • Meager loan and deposit growth, but growth nonetheless.
  • Overall Asset Quality remains favorable with past due and nonaccrual rates at 1.54%, well below the pre-pandemic rate of 1.94%.  However – continuing to see some weakness in credit card, auto, CRE, and multifamily housing portfolios.
  • The number of Problem Banks (defined by the FDIC as banks that have a CAMELS composite rating of “4” or “5”) increased by two banks to 68. Keeping in mind that the number of problem banks is well within the normal range for non-crisis periods of 1% – 2% of all banks.
    • 💪 Bragging time!!!!  Shout out to our FedFis Analyst Team as we are showing 68 banks with a FedFis Rating© of 3.80 or worse (on the same “1.00 is good and 5.00 is bad” scale) representing the bottom 1% of all banks.  Nice job if I do say so myself!!! 😊

• Upbound (Nasdaq: UPBD) to acquire Brigit (EWA, credit builder, and financial wellness platform) for $460M in a mixed deal of cash and stock comprised of $325 million payable at closing (75% in cash and 25% in Upbound shares); plus $75 million in deferred cash consideration over two years; and a potential earnout of up to $60 million in cash based on achievement of certain financial performance metrics.

• 👀 Gen Digital Inc. (NASDAQ: GEN) announced a definitive agreement to acquire MoneyLion Inc. (NYSE: ML) in a total transaction valued at approximately $105 per share, composed of $82 per share in cash payable at closing (about $1B) and additional potential of $23 per share in Contingent Value Rights (CVRs).  Here is the GEN Investor Deck presentation for more detail
• Patriot National Bancorp, Inc. (Nasdaq: PNBK), lead bank subsidiary is Patriot Bank, National Association (FDIC 3928; total assets $998M) filed an 8-K this week stating they have “…launched an evaluation process to explore capital markets and strategic initiatives with the goal of maximizing shareholder value. This effort, conducted through Performance Trust Capital Partners, LLC (“Performance Trust”), a leading investment banking firm, will evaluate potential opportunities including capital raise, strategic partnership, sale, and/or merger and acquisition interest.” (bold emphasis added by Uncle Sean)
• Triumph Financial, Inc. (Nasdaq: TFIN) lead bank subsidiary is TBK Bank, SSB (FDIC 23498; total assets $5.9B), a financial holding company focused on payments, factoring, and banking particularly in the transportation industry, has acquired the assets of Isometric Technologies Inc. – a supply chain performance platform for shippers and transportation providers, further bolstering the banks presence and support In the transportation industry.  I like it!!! 👍
• And BofA gives a digital treasury flex 💪 this week…  Bank of America’s CashPro® App to surpass $1 Trillion in payment approvals this year as companies continue to use the mobile application to manage their treasury operations.
  • The article goes on to state that payment transaction have increased 25% over last year; and they have approximately 550,000 users at 40,000 companies around the world.  WOW!!!

• 👉 Lumin Digital partners with FinGoal to allow Lumin’s FI users to “leverage FinGoal’s data-driven insights to create personalized offers for their end-users and create higher conversion rates for their offers and campaigns.”  Congrats all around as this looks to be a very nice partnership!!!!
• And a couple of MANTL announcements this week:
  • TruMark Financial Credit Union (Charter 66158; total assets $3.4B) announced a partnership with MANTL to enhance its in-branch and online business and consumer account opening.  Integrated with TruMark’s Jack Henry Symitar allows for automation of “over 90% of application decisions, including KYC, AML, BSA, product service ordering, funding, and core booking, to create efficiencies and keep manual processes to a minimum.”
  • 👀 Meanwhile…  MANTL announced the expansion of their deposit origination platform to now support business and consumer loan originations as well.  “By creating one seamless platform for loan and deposit origination, MANTL will help banks and credit unions supercharge growth, create real-time cross-sell opportunities, improve customer and employee experience, and benefit from underwriting automation and enhanced back-office efficiency.”

• Synergent announced a new partnership with equipifi to easily launch BNPL for credit unions using Synergent to access Jack Henry’s Symitar core processing.
• Energy Capital CU (charter 61936; total assets $251M) selects Velera (fka PSCU / Co-Op Solutions) as their new debit card processor.
• Ibanera (fintech enablement platform) is partnering with FIS to launch their new comprehensive Visa prepaid card program tailored for both business and consumers in the U.S.
• Slope launched a commercial buy now, pay later (BNPL) card solution powered by Marqeta that enables brands and marketplaces to allow their B2B customers to pay in-store or online with 30- or 60-day loan options.
• TD Bank (FDIC 18409; total assets $400B and a major CC issuer) has teamed up with Backbase to evolve its retail card business starting with +2 million customers of a (unnamed) “large strategic card partnership program.”
• ICYMI…  The CFPB issued a final rule on overdraft credit offered by very large financial institutions (assets more than $10B).  In short, the rule states that large FI’s can 1) charge $5 for overdrafts, or 2) limit the fee to an amount that covers the lenders’ costs, or 3) charge any fee while disclosing the interest rate of the loan.
  • As expected, the ruling was almost immediately met with a lawsuit from industry trade groups against the CFPB’s final overdraft rule.
    • Not that anyone asked Uncle Sean’s opinion 😉, but the CFPB ruling scheduled to take effect Oct 1, 2025 sure feels a little ill-timed given the new political administration’s expectation to appoint a new head of CFPB in January. 🤷‍♂️  Recall where the CFPB rule regarding CC late fee cap of $8 is still stuck in court.

• Notable FinTech funding for the week:
  • Jiko raised $29M in Series C round and strengthens its Board and Advisory Committee.
    • Personal note – Uncle Sean is happy to see this 🤠 as the Jiko story is one of my favorites and I share their story often (one of the earliest examples of a fintech acquiring their sponsor bank).  This also undoubtedly helps solidify Jiko Group, Inc. (the bank holding company for Mid-Central National Bank) position as a “source of strength” for the bank per the Federal Reserve public enforcement action last July.  Nice work! 🚀  Oh – and be sure to check them out at Jiko.com as it is a very cool platform.
  • Atlas Card (modern charge card issued by Lead Bank) raised $27M in Series B funding and announced a “breakout year, surpassing $200 million in annualized spend volume and achieving double-digit monthly growth, without any paid marketing spend.”
  • Current (consumer fintech banking platform) raised $200M in new capital with a 90% increase in revenue for 2024 and plans of “reaching profitability in 2025.”

Random Uncle Sean stuff:

• Cleanup on aisle four as this is starting to turn a little bit ugly!!! 😬  Albertsons has terminated the approximately $25B merger with Kroger after a judge blocked it; and is now suing Kroger seeking billions of dollars in damages along with a $600M termination fee alleging they did not do enough to get the deal approved.
• 🦋 The U.S. Fish and Wildlife seeking public comment on a proposed rule to list the monarch butterfly as a threatened species under the Endangered Species Act.  Time to kick those pollinator gardens into high gear!!!
• Here we go – the Dad / Bad Jokes for the week:
  • I figured it out…  The reason why grilled cheese and tomato soup go so well together is because it’s basically pizza split into two foods… 🍕😋
  • What does a house wear?  Address…. 😏
  • “As one door closes, another one opens…”  – as I’m eating the entire Advent calendar! 😅
  • Salons always have hair on the floor…  Bakeries always have flour on the floor…  Garages always have oil on the floor…  C’mon Bankers, it’s like you’re not even trying!!!! 😂🤣

Have a GREAT weekend and please stay safe!!!

Uncle Sean