Happy Friday!!!
The forecast in Austin today is for 108 degrees with wind gusts of 25+ MPH…. 😬🥵 Here is the Uncle Sean Update for 8/11/23
- The BLS July CPI Report came in at 3.2% YoY (expectation was 3.3% and June was 3.0%) – Core CPI remains a little more sticky but also improved to 4.7% (expectation was 4.8% and June was 4.8%).
- While still above the Fed’s 2% target, we continue to see improvements in the inflation data. Expect smaller movements in the YoY data due to base effect from here.
- Monthly CPI came in at 0.2% which was almost entirely driven by shelter costs (0.4% for the month and 7.7% YoY).
- If you really want to get technically weird like me 😊, monthly CPI was rounded up from 0.1669% – but I digress… CNBC has a good summary as always.
- 👀 CSI making some moves as they announced 12 new core deals over June and July – NICE!!!!!
- AMEX certainly appears to be leaning into the BaaS & embedded finance space – check out American Express Sync™ Commercial Partner Program offering B2B API’s for fintechs to embed Amex virtual cards into their own spend management / payment platforms.
- A HUGE congratulations to Mr. Stacey Zuniga for his promotion to Chief Revenue Officer at ENACOMM – great job, buddy!!!
- And more personnel updates:
- Cable announced they have hired Candace Sjogren as Chief Revenue Officer.
- Early Warning Services (Zelle and Paze) hired Cameron Fowler as Chief Executive Officer.
- Cloudcase announced the hiring of Emily Bogan as Chief Product Officer USA.
- Greenlight launched a credit builder for teens by allowing parents to add teenagers as authorized users to the Greenlight Family Cash Card credit card.
- Did everyone see this – it’s actually pretty cool… The FDIC recently updated the Technical Assistance Video Program as part of the Bankers Resource Center. Could be used for internal training / education purposes for varying levels of employees (both bankers and non-bankers). Updated video topics include:
- Overview of the FDIC and the Examination Process (30:10)
- Information for New Board Members (14:10)
- Corporate Governance (32:01)
- Interest Rate Risk (29:00)
- Current Expected Credit Losses (15:18)
- PayPal pushes ahead into crypto and launched their own U.S. dollar-denominated stablecoin (PayPal USD – PYUSD) issued by Paxos Trust Company.
- Note that PayPal started allowing customers to transfer, send, and receive crypto including bitcoin and ether back in Nov. 2020.
- Maybe slightly ironic to Uncle Sean that this announcement occurs in the same week that the Federal Reserve announced the establishment of a Novel Activities Supervision Program focused on crypto-assets, distributed ledger technology, and complex tech-driven partnerships with nonbanks to deliver financial services to customers….
- Note that PayPal started allowing customers to transfer, send, and receive crypto including bitcoin and ether back in Nov. 2020.
- InComm Payments enters into the employer health benefits arena by acquiring Zenda, a developer of AI-powered HSA and FSA solutions for employee benefit programs.
- Dwolla announced the launch of Dwolla Connect payments platform designed for mid- to enterprise-sized businesses.
- Marqeta disclosed in their second quarter 10-Q earnings release that they extended their partnership with Block through 2027 (page 27, Item 15 of the 10-Q), which is a good thing as Block accounts for 78% of Marqeta’s revenue (page 36, Customer Concentration). The bad news is the contract extension comes at a cost with expected lower net revenue and lower gross profit (page 52).
- Well, ICYMI…. Moody’s downgraded the credit rating of 10 banks by one notch, placed 6 more regional lenders on review for potential downgrade, and revised the outlook for 11 more.
- I was going to write about this…. Something along the lines of “well thank you, Captain Obvious”… but… nah… 😝
- HOWEVER (see what I did there – I just can’t help myself)… I will reiterate what we discussed in our BHB – Inside the Numbers review (specifically at the 58 minute mark if you want to just hear the punchline), Uncle Sean actually expects a positive tailwind over the next few quarters of Net Interest Income for banks that are continuing to lend as the loan portfolios reprice to the higher rate structure – provided Asset Quality and employment remains intact.
- In that , I source a really good Fitch article from April of last year that you can find here stating, “The OCC’s recent estimates indicate that a 200-bp parallel rate shock would result in a median increase of 7% to net interest income for banks over the following 12 months.”
- HOWEVER (see what I did there – I just can’t help myself)… I will reiterate what we discussed in our BHB – Inside the Numbers review (specifically at the 58 minute mark if you want to just hear the punchline), Uncle Sean actually expects a positive tailwind over the next few quarters of Net Interest Income for banks that are continuing to lend as the loan portfolios reprice to the higher rate structure – provided Asset Quality and employment remains intact.
- I was going to write about this…. Something along the lines of “well thank you, Captain Obvious”… but… nah… 😝
- Notable FinTech funding for the week:
- Parcha (AI powered compliance and operations automation platform) raised $5M in Seed round.
- Chargeflow (AI powered platform for preventing fraudulent chargebacks) raised an additional $11M in Seed round bringing total funding to $14M.
- Doc2doc Lending (alt lending platform for physicians and dentists) raised $35M in Debt and Equity capital.
Random Uncle Sean stuff:
- The college athletics world is buzzing right now with gargantuan (did I spell that right – LOL) conference movements…. The Big Ten now has a stunning 18 teams, the Pac-12 has dwindled to 4 teams and may likely take a knee and bow out…. What happened??? In short, TV… CBS Sports has a good summary.
- Wow – if you thought it’s been crazy in the college athletics world…. Check out the transportation logistics space – Yellow files for bankruptcy and publicly blasts the union for the demise of the 100 year old company. Meanwhile, UPS Teamsters Union successfully negotiates $170K average in pay and benefits for their drivers – HOLY MOLY!!!!
- $170,000??? 😮 I think Aunt Patty would look great in brown… LOL!!!! 🤣😂
- Okay, okay – on to the good stuff…. Dad Jokes!!!!
- I’ve been cutting carbs… with a pizza cutter, but hey!!! 🍕😉
- I bet Barn Owls were relieved when humans finally started building barns.
- What were Electric Eels called before we invented electricity??? 🤷♂️
- (thinking I’m funny) “Hey Aunt Patty, what’s another word for synonym…???” 😜
- And she replies, “No it’s not!!!!” Dang – she’s getting good…
Have a GREAT weekend, stay hydrated, and please stay safe!!!
Uncle Sean
