Happy Friday & Happy Memorial Day Weekend!!!
Wishing everyone a very Happy Memorial Day as we honor those servicemen and servicewomen who have paid the ultimate price for our freedom. Here is the Uncle Sean Update for 5/26/23:
👀 Certainly worth noting as Uncle Sean suspects we will see more of this from all regulatory authorities…. This week the OCC published a couple of regulatory updates:The first was the updated “Liquidity” booklet of the Comptroller’s Handbook providing guidance on liquidity risk. Some key area I found to be particularly interesting:Surge Deposits, Reciprocal Deposits (deposit network services), increases in Borrowed Funds (and CoF).Next came updates to the Bank Enforcement Manual to address actions against banks with persistent weaknesses. The newly added Appendix C specifies, “Should a bank fail to correct its persistent weaknesses in response to prior enforcement actions or other measures, including those outlined above, the OCC will consider further action to require the bank to remediate the weaknesses. Such action could require the bank to simplify or reduce its operations, including that the bank reduce its asset size, divest subsidiaries or business lines, or exit from one or more markets of operation.” (bold emphasis added by Uncle Sean)While the target is for banks above $50B in Assets, the OCC reserves the right to apply Appendix C to any bank “with operations that are highly complex or otherwise present a heightened risk.”All of this ties in with Acting Comptroller Michael Hsu’s January comments regarding “too big to manage.”
Pardon me while I geek out for a moment 😊 but Uncle Sean is seeing some good news on bank liquidity stress – Federal Reserve H.4.1 release on 5/25 showed the Bank Term Funding Program (BTFP) is working with $92B loaned out. Meanwhile, primary credit from the discount window has dropped off to a more normalized $4B (down from $152.8B during that tumultuous week of March 15).
More market sensing – JPMorgan Chase had their Investor Day this week. No, I’m not going to cover all of this thankfully – but I do pay attention when they present about their credit reserves and forecasts on credit. Afterall, they have a lot of economists on the payroll there so we might as well all benefit. LOL!!!I really liked the Firm Overview deck and in particular, slide 17 – “Credit remains benign, but we expect continued normalization throughout the year.” Some cool points:Reserved for peak unemployment forecast of 5.8% in late 2024Building reserves as credit outlook has deteriorated; but expecting a return to normal (pre-pandemic) Net Charge-off’s of 0.6% by the end of 2023 after pandemic lows of 0.3%
Venmo (by PayPal) announced the launch of the Venmo Teen Account (beginning June 2023) allowing parents and legal guardians to open a Venmo account for their teenagers between the ages of 13 – 17 with parental controls managed by the parent’s personal Venmo account. The account also comes with a Mastercard debit card.
PacWest Bancorp (Nasdaq: PACW; BHC for Pacific Western Bank) had a couple of asset sale announcements this week – I feel it is important to state that these have been well scripted and publicized by PacWest since the 4th quarter as they focus on their strategy of relationship-based community banking; and NOT a reflection of any recent market driven liquidity paranoia BS… Okay – I’m better now, LOL!PacWest Bancorp 5-19-2023 8K disclosing they are selling 74 RE construction loans with a value of $2.6B to a subsidiary of Kennedy-Wilson Holdings. PacWest is also in the process of selling an additional 6 RE construction loans with a value of about $363M to Kennedy-Wilson pending due diligence.Roc Capital Holdings (Roc360) announced they have purchased the RE origination assets of Civic Financial Services (CIVIC) from PacWest – pricing was not disclosed.
Fifth Third Bancorp (Nasdaq: FITB) announced acquisition of Rize Money (embedded payments platform for fintech and other non-financial institutions) to enhance Fifth Third’s treasury management business.
Daylight (neobank targeting the LGBTQ+ community) announced they are shutting down operations effective June 30.
Marstone (digital wealth tech) partners with Red River Employees FCU (RRCU; Charter 5029; $1.4B Total Assets) to provide RRCU’s 115,000 members with digital wealth management platform.
Good news for my Ag Banker friends – The seven basin states have reached an agreement to cut consumption and protect the Colorado River System. A longer term agreement will need to be made as the current form only applies through 2026, but it is an excellent start with all parties understanding that conservation is critical.Note California’s $50B agricultural industry as a major point of influence.
Airbnb selects Stripe to offer Pay-by-Bank as a payment option for guests with a US bank account.
Plastiq (business payments platform) filed for Chapter 11 Bankruptcy citing a series of events from a failed SPAC merger to the collapse of Silicon Valley Bank and with plans for a stalking horse sale to Priority Technology Holdings Inc.
Notable FinTech funding for the week:Onyx (neo bank targeting affluent younger professionals) raised $4.1M in new capital.Episode Six (payment processing and digital ledger infrastructure) raised $48M in Series C funding round.OpenFin (workspaces and developer platform for FIs) $35M in Series D round.Unlimited (alt investment firm) raised $8M in Series A.Pesto (alternative credit builder) raised $11M in Series A funding and takes on the pawn shop industry by launching the first asset-backed secured Mastercard consumer credit card.Nymbus (FI tech vendor) raised $70M in Series D funding round.
Random Uncle Sean stuff:
It’s Graduation Weekend for many parents including me and Aunt Patty!!! Special shout out to Ms. Claire for graduating with honors today – Mom and Dad are SUPER proud of you!!!!Some quick Dad Jokes and then it’s time to get started with the weekend and graduation festivities:Everyone knows that Alexander Graham Bell invented the telephone – but his brother, Taco, was working on some pretty important stuff too.No matter how much you push the envelope, it’s still stationery… 😝Is bacon grease an essential oil (asking for a friend)?I just paid $3 for a Smartwater… Obviously it’s not working…Aunt Patty and I went to a restaurant and the manager greeted us and asked if I minded waiting a little bit. I said, “no problem at all” and then he said “good – take these drinks to table four.” 😲 LOL!!!!
Have a GREAT Memorial Day 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.
Wishing everyone a very Happy Memorial Day as we honor those servicemen and servicewomen who have paid the ultimate price for our freedom. Here is the Uncle Sean Update for 5/26/23:
👀 Certainly worth noting as Uncle Sean suspects we will see more of this from all regulatory authorities…. This week the OCC published a couple of regulatory updates:The first was the updated “Liquidity” booklet of the Comptroller’s Handbook providing guidance on liquidity risk. Some key area I found to be particularly interesting:Surge Deposits, Reciprocal Deposits (deposit network services), increases in Borrowed Funds (and CoF).Next came updates to the Bank Enforcement Manual to address actions against banks with persistent weaknesses. The newly added Appendix C specifies, “Should a bank fail to correct its persistent weaknesses in response to prior enforcement actions or other measures, including those outlined above, the OCC will consider further action to require the bank to remediate the weaknesses. Such action could require the bank to simplify or reduce its operations, including that the bank reduce its asset size, divest subsidiaries or business lines, or exit from one or more markets of operation.” (bold emphasis added by Uncle Sean)While the target is for banks above $50B in Assets, the OCC reserves the right to apply Appendix C to any bank “with operations that are highly complex or otherwise present a heightened risk.”All of this ties in with Acting Comptroller Michael Hsu’s January comments regarding “too big to manage.”
Pardon me while I geek out for a moment 😊 but Uncle Sean is seeing some good news on bank liquidity stress – Federal Reserve H.4.1 release on 5/25 showed the Bank Term Funding Program (BTFP) is working with $92B loaned out. Meanwhile, primary credit from the discount window has dropped off to a more normalized $4B (down from $152.8B during that tumultuous week of March 15).
More market sensing – JPMorgan Chase had their Investor Day this week. No, I’m not going to cover all of this thankfully – but I do pay attention when they present about their credit reserves and forecasts on credit. Afterall, they have a lot of economists on the payroll there so we might as well all benefit. LOL!!!I really liked the Firm Overview deck and in particular, slide 17 – “Credit remains benign, but we expect continued normalization throughout the year.” Some cool points:Reserved for peak unemployment forecast of 5.8% in late 2024Building reserves as credit outlook has deteriorated; but expecting a return to normal (pre-pandemic) Net Charge-off’s of 0.6% by the end of 2023 after pandemic lows of 0.3%
Venmo (by PayPal) announced the launch of the Venmo Teen Account (beginning June 2023) allowing parents and legal guardians to open a Venmo account for their teenagers between the ages of 13 – 17 with parental controls managed by the parent’s personal Venmo account. The account also comes with a Mastercard debit card.
PacWest Bancorp (Nasdaq: PACW; BHC for Pacific Western Bank) had a couple of asset sale announcements this week – I feel it is important to state that these have been well scripted and publicized by PacWest since the 4th quarter as they focus on their strategy of relationship-based community banking; and NOT a reflection of any recent market driven liquidity paranoia BS… Okay – I’m better now, LOL!PacWest Bancorp 5-19-2023 8K disclosing they are selling 74 RE construction loans with a value of $2.6B to a subsidiary of Kennedy-Wilson Holdings. PacWest is also in the process of selling an additional 6 RE construction loans with a value of about $363M to Kennedy-Wilson pending due diligence.Roc Capital Holdings (Roc360) announced they have purchased the RE origination assets of Civic Financial Services (CIVIC) from PacWest – pricing was not disclosed.
Fifth Third Bancorp (Nasdaq: FITB) announced acquisition of Rize Money (embedded payments platform for fintech and other non-financial institutions) to enhance Fifth Third’s treasury management business.
Daylight (neobank targeting the LGBTQ+ community) announced they are shutting down operations effective June 30.
Marstone (digital wealth tech) partners with Red River Employees FCU (RRCU; Charter 5029; $1.4B Total Assets) to provide RRCU’s 115,000 members with digital wealth management platform.
Good news for my Ag Banker friends – The seven basin states have reached an agreement to cut consumption and protect the Colorado River System. A longer term agreement will need to be made as the current form only applies through 2026, but it is an excellent start with all parties understanding that conservation is critical.Note California’s $50B agricultural industry as a major point of influence.
Airbnb selects Stripe to offer Pay-by-Bank as a payment option for guests with a US bank account.
Plastiq (business payments platform) filed for Chapter 11 Bankruptcy citing a series of events from a failed SPAC merger to the collapse of Silicon Valley Bank and with plans for a stalking horse sale to Priority Technology Holdings Inc.
Notable FinTech funding for the week:Onyx (neo bank targeting affluent younger professionals) raised $4.1M in new capital.Episode Six (payment processing and digital ledger infrastructure) raised $48M in Series C funding round.OpenFin (workspaces and developer platform for FIs) $35M in Series D round.Unlimited (alt investment firm) raised $8M in Series A.Pesto (alternative credit builder) raised $11M in Series A funding and takes on the pawn shop industry by launching the first asset-backed secured Mastercard consumer credit card.Nymbus (FI tech vendor) raised $70M in Series D funding round.
Random Uncle Sean stuff:
It’s Graduation Weekend for many parents including me and Aunt Patty!!! Special shout out to Ms. Claire for graduating with honors today – Mom and Dad are SUPER proud of you!!!!Some quick Dad Jokes and then it’s time to get started with the weekend and graduation festivities:Everyone knows that Alexander Graham Bell invented the telephone – but his brother, Taco, was working on some pretty important stuff too.No matter how much you push the envelope, it’s still stationery… 😝Is bacon grease an essential oil (asking for a friend)?I just paid $3 for a Smartwater… Obviously it’s not working…Aunt Patty and I went to a restaurant and the manager greeted us and asked if I minded waiting a little bit. I said, “no problem at all” and then he said “good – take these drinks to table four.” 😲 LOL!!!!
Have a GREAT Memorial Day 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.
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