​Happy Friday!!!
WOWZA – short weeks always seem to be the busiest; and this week is certainly no exception!  Don’t forget to sign up here to have the Uncle Sean Update delivered straight to your inbox each week!  Here is the Uncle Sean Update for 6/2/23:
Congratulations to Marco Perez and our friends at BANCreach for the official launch of their app-based lead generation platform and commercial loan marketplace.  Check them out at bancreach.com
Bankers Helping Bankers is at it again!  This week we give a high-five to Agent IQ as the recipient of a strategic investment from the Bankers Helping Bankers Fund (BHB Fund). 
ICYMI – the debt ceiling crisis has been averted.  As part of the deal, it looks like student loan payments to resume 60 days after June 30. 
It’s here!!! The FDIC released their Quarterly Banking Profile report for 1Q2023.  Pardon me while I completely geek out here (it’s what I do) – LOL!!!  😊  Some key points:Net Income was largely flat over last quarter if you exclude the FDIC receivership effect of the two failed banks.  YoY NI grew 33.6% and ROA was 1.36% versus 1.01% in March of last year.NIM compression is beginning (as expected) – NIM declined 7 bps to 3.31% as Cost of Funds increased due to borrowings and deposit competition (“rate lag”).For my non-banker friends, this means that deposit costs (interest that the bank pays on deposits) is increasing faster than the increased yield on loans (interest that the bank earns on loans).Compounding this is the continued decline in deposits forcing banks to offset that liquidity draw by more costlier wholesale funding.Unrealized losses (the marquee headline as a trigger for 1Q liquidity issues) declined by 16.5% to $515B – but to be fair, there were plenty of securities sales at a loss resulting in an accounting classification to recognized losses.Of the $515B in unrealized losses, approximately $231B is attributable to AFS Securities and $284B for HTM gap from amortized cost versus fair value.Worth noting is that the balance of $93.6B in borrowings related to the Bank Term Funding Program (BTFP) is remaining fairly consistent.Deposits were down a substantial $472.1B or 2.5% over last quarter and 6% YoY.This is the 4th straight quarterly decline and the largest single quarter decline on record since data collection began in 1984.  Primarily attributed to a decrease in Estimated Uninsured Deposits (the other marquee headline as a trigger for 1Q liquidity issues) by $663.3B or 8.3%.  Insured deposits actually increased 2.5%.Asset Quality remains good despite some small signs of deterioration – early delinquencies and net charge-offs are increasing, but still below pre-pandemic levels.The FDIC Problem Bank List grew from 39 banks with assets totaling $47B in 4Q2022 to 43 banks with assets totaling $58B in 1Q2023.Uncle Sean’s completely unsolicited punchline – look for higher funding costs to continue to compress NIM as we hope for a soft landing for the consumer and remain in a “wait and see” mode on CRE specifically related to office space.  Full disclosure – I had WAY too much fun going through all of this…  I need a hobby!  😝 
Meanwhile, the Federal Reserve issued their Beige Book showing little change in overall economic activity in April and early May.  Commercial construction and real estate activity decreased overall with office segment continuing to be a weak spot. 
BLS Jobs Report this week added a jaw-dropping 339K jobs in May 😮 (+190K expected, +253K in April); and unemployment increased to 3.7% (3.5% expected, 3.4% in April which was the lowest since 1969).CNBC noted that his is the 29th straight month of positive job growth.  Uncle Sean can’t help but wonder what the FOMC will think about that…. 😬 
Unbanked (crypto banking platform) announced they will be winding down operations and encouraged existing customer to begin withdrawing funds. 
Credit Union of America (charter #60062; Total Assets $1.4B) launched Narmi’s digital account opening.  Narmi also collaborated with Clutch to integrate loan services as part of the account opening process.  “This integration will allow Credit Union of America’s members to apply for both loan services and deposit accounts in one unified digital experience.” 
All In FCU (Charter #17642; Total Assets $2.8B) to acquire SunSouth Bank (Cert #18600; Total Assets $114M).Scorecard – this is the third CU acquisition of a bank so far for 2023.  That compares to 16 in 2022, 13 in 2021, 7 in 2020, and 16 in 2019 (Source: FedFis). 
Worldpay (recently spun off from FIS) and Affirm announced a multi-year partnership to make Affirm’s Adaptive Checkout™ (with BNPL installment options) available to all eligible Worldpay merchants. 
Dwolla announced Lawrence Herman as new CFO as well as Alka Gupta and Millicent Tracey as new board members. 
Cross River announced a strategic partnership with paymints.io to provide stakeholders involved in RE transactions to “track funds in real-time, verify transactions, and enjoy a heightened sense of security and trust throughout the entire real estate transaction journey.” 
Yeah, probably a good time for a reminder considering the buzz surrounding insured deposits – especially for younger adults…..  The CFPB issued a Consumer Advisory this week reminding consumers that money stored in many popular non-bank payment apps (PayPal, Venmo, Cash App) is at greater risk of loss as it is often not protected by federal deposit insurance.“Popular digital payment apps are increasingly used as substitutes for a traditional bank or credit union account but lack the same protections to ensure that funds are safe,” CFPB Director Rohit Chopra said. 
Notable FinTech funding for the week:Mobility Capital Finance, Inc. (MoCaFi – fintech platform focused on underserved communities) raised $23.5M in Series B funding round.Boom (rent credit reporting platform) raised $4.5M Seed roundVartana (CRM-embedded, B2B sales checkout platform with integrated trade credit financing) raised $20M in Series B funding following 600% YoY growth.PayNearMe (omnichannel payments platform) raised $45M in Series D funding round. 
Random Uncle Sean stuff:
Hard to believe we are already in June!!!  I’m sneaking out a little early today (don’t tell the Boss), so let’s get straight to the important stuff…  Dad Jokes!!!What is a Ninja’s favorite drink?  WATAH!!! 🥷Now I am running around the house with my best fake karate moves yelling, “WATAH!!!”  Aunt Patty is clearly impressed with my skillset – LOL!!!!If you put your left shoe on the wrong foot, it is on the right foot….Uncle Sean’s deep thought of the week – A pizza is literally a real-time pie chart of how much pizza pie is remaining….. 🤓🍕Every year on June 1, I feel dismayed…  Hehehehehe!!!!!And finally, a classic Uncle Sean truism – “nothing makes a fish bigger than almost being caught!!!” 😆 
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.