Happy Friday!!!!
It was a short week due to the Labor Day Holiday, but still a very productive week!!! Here is the Uncle Sean Update for 9/8/23:
👀 Some good data this week from 2nd quarter performance of financial institutions… Punchline is that Banks AND Credit Unions are continuing to lend, asset quality remains good, and reserves for credit losses are strong – despite what mainstream media would like for all of us to believe (in fact, the sky is NOT falling – not today anyway)… I am reminded of what Tanner Mayo is fond of saying – facts and hard data beat surveys and anecdotal media coverage every single time! 🤠SO….. Pardon me while I COMPLETELY geek out on the macro numbers here: 🤣 🤓The FDIC released their Quarterly Banking Profile report for second quarter 2023. Key points include:Loan balances are up 4.5% YoY driven in large part by 1-4 family residential and credit cardsDeposit balances are down 4.7% YoY and 0.5% from 1Q2023Net Interest Margin declined slightly by 3 bps to 3.28% for the quarter driven by Cost of Funds increase of 43 bps over 1Q to 2.05%. NIM is actually up 48 bps YoY (recent pre-pandemic avg from 2015 – 2019 is 3.25% per the report)Other borrowed funds is down 8.5% from 1Q23, but still up 52% YoY (BTFP for the win – LOL)Asset Quality is modestly stable with Net Charge-offs at 0.45% which is up considerably YoY, but is now basically back to pre-pandemic levels of 0.48% – 0.52%Noncurrent loans are roughly flat over last year at 0.76% and is still well below pre-pandemic averages of 1.28%Total allowance for credit losses on the balance sheet increased 16.6% YoY placing the reserve coverage ratio (the ratio of the allowance for credit losses to noncurrent loans) at a whopping 224.8% which is the highest since the QBP began data collection in 1984!!!! 😮The FDIC Problem Bank List remained at 43 (same as prior quarter). This coincides closely with 52 banks in the FedFis database with a FedFis Rating of 3.75 or worse (1.00 – 5.00 scale) representing the bottom one percentile of all banks for 2Q2023. Nice plug, right???!!! 😊
And in case you are wondering how our Credit Union brethren faired, the NCUA released their Quarterly Credit Union Data Summary for 2023Q2. Some key points:Loan balances are up 12.6% YoY and double digits in almost all loan categories (exception was Non-federally Guaranteed Student Loans which were only up 2.8%)Loan to Share (deposits) ratio of 83.2% which is up from 74.8% YoY (and this is not because insured share deposits dried up – they actually grew 1.8% YoY)Delinquencies are starting to increase with larger jumps in delinquency rates in Auto and Credit Card loans (as expected), but only slightly higher than pre-pandemic rates. Net Charge-offs as a percent of average loans of 0.53% is up considerably YoY, but is still 3 bps below pre-pandemic levels.Nonetheless, CU’s provision expense for loan and lease losses increased a whopping 170% YoY to $9.2B (but is running consistent to pre-pandemic levels when considering provision expense to average assets of 0.42%)
The Clearing House announced that the RTP® network hit “one million payments in a single day” milestone as more financial institutions and their customers embrace real-time payments.
More pay-by-bank announcements… BNY Mellon announced the launch of Bankify via strategic alliance with Trustly to help organizations accept consumer payments direct from their bank account as an alternative to credit/debit cards and third-party payment platforms.
Alkami (Nasdaq: ALKT) partners with Atomic by integrating Atomic’s direct deposit switch solution into Alkami’s Digital Banking Platform to make it easier for financial institutions to offer their account holders a quick and convenient way to set up and switch direct deposits.
It was a crazy busy week with many high-profile personnel announcements:R&T Deposit Solutions announces strategic investment from GTCR and the appointment of Susan Cosgrove as Executive Chairperson effective October 1.Discover announced the appointment of Kathy “Moe” Lonowski to the company’s board of directors. Lonowski most recently served as the regional director of the FDIC’s San Francisco region.Dime Community Bancshares, Inc. (NASDAQ: DCOM) announced that Daniel Shaya Csillag will join the company as Group Head of a newly created Healthcare vertical.Sutton Bank announced the appointment of Darryl Clukey as SVP, Chief Payments Officer.BM Technologies (BMTX f/k/a Bank Mobile) announced the resignation of Rajinder Singh as Co-CEO for personal reasons (“not the result of any dispute or disagreement”) just five months after accepting the job.Toast CEO, Chris Comparato to step down and Aman Narang, Co-Founder and COO, to become CEO effective January 1, 2024.
Central Payments announced the launch of PayCP, a white-label, turnkey payment distribution platform. Early use cases include “companies wanting a quicker, digital way to send rebate, loyalty, incentive, or rewards funds to their customers.”
Curql (CUSO) plans second investment fund, Curql II to offer larger, growth-stage investment opportunities “further advancing Curql’s mission to bring fintech to credit unions.”
Visa expands cross-border stablecoin settlement capabilities with Circle’s USDC on the Solana blockchain by adding new pilot programs with merchant acquirers Worldpay and Nuvei.
Hallmark and Venmo (yes, you read that correct) have partnered together to launch Hallmark + Venmo greeting cards featuring a unique QR code inside the card to which only the gift giver’s intended recipient can access. Per the FAQs, If the recipient does not accept the gift within 180 days of the funds being added, the money is refunded back to the sender.
Solid launches Banking-as-a-Service partnership with Lewis & Clark Bank to “strengthen the onboarding and monitoring of its fintech clients, in full compliance with Lewis & Clark Bank’s rigorous risk and compliance standards.”
Notable FinTech funding for the week:Momnt (embedded lending / point-of-sale financing) raised $15M in capital.Firstcard (fintech banking app for college students) raised $4.7M in Seed funding.Lumen Energy (solar energy platform for commercial buildings) $11M in Series A and the launch of AutoPPA™ financing platform for ESG focused CRE owners.
Random Uncle Sean stuff:
What a wild first week in college football! 🏈 Congrats to Texas State University for marching into McClane Stadium and defeating Baylor at home; and to the University of Colorado for taking the victory against TCU at home. Kudos to Duke for taking down mighty Clemson and Florida State University for shocking LSU!!!Chalk this one up as “kind of creepy / kind of cool” with a ton of real world applications – Apptronik announced the unveiling of Apollo, a 5’8”, 160lbs humanoid robot that can carry a 55lb payload with a 4 hour battery runtime; and plans to redefine the nature of work. Check it out Apollo at apptronik.com…. Anyone else immediately think of Will Smith and the movie “I, Robot” with Sonny the NS-5 robot and the Three Laws??? 😬This is interesting to me as we continue to move towards a mobile centric society… Take a look at Whataburger’s new digital kitchen… It is completely cashless and centers around guests placing their orders through the Whataburger Rewards app or online.And here we go – Dad / bad jokes!!!Aunt Patty tried to surprise me with a car today, but luckily I was able to get out of the way!!! 😂🤣My favorite part of grilling is asking everyone how they like their burger before cooking them all exactly the same. That is some next-level Dad flex right there – LOL!!! 🍔What did the Buddhist say to the Hot Dog vendor? “Make me one with everything…..” Oh come on – that was funny!!!!I saved $345.00 by not going to Costco to buy deodorant… 🙄
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.
It was a short week due to the Labor Day Holiday, but still a very productive week!!! Here is the Uncle Sean Update for 9/8/23:
👀 Some good data this week from 2nd quarter performance of financial institutions… Punchline is that Banks AND Credit Unions are continuing to lend, asset quality remains good, and reserves for credit losses are strong – despite what mainstream media would like for all of us to believe (in fact, the sky is NOT falling – not today anyway)… I am reminded of what Tanner Mayo is fond of saying – facts and hard data beat surveys and anecdotal media coverage every single time! 🤠SO….. Pardon me while I COMPLETELY geek out on the macro numbers here: 🤣 🤓The FDIC released their Quarterly Banking Profile report for second quarter 2023. Key points include:Loan balances are up 4.5% YoY driven in large part by 1-4 family residential and credit cardsDeposit balances are down 4.7% YoY and 0.5% from 1Q2023Net Interest Margin declined slightly by 3 bps to 3.28% for the quarter driven by Cost of Funds increase of 43 bps over 1Q to 2.05%. NIM is actually up 48 bps YoY (recent pre-pandemic avg from 2015 – 2019 is 3.25% per the report)Other borrowed funds is down 8.5% from 1Q23, but still up 52% YoY (BTFP for the win – LOL)Asset Quality is modestly stable with Net Charge-offs at 0.45% which is up considerably YoY, but is now basically back to pre-pandemic levels of 0.48% – 0.52%Noncurrent loans are roughly flat over last year at 0.76% and is still well below pre-pandemic averages of 1.28%Total allowance for credit losses on the balance sheet increased 16.6% YoY placing the reserve coverage ratio (the ratio of the allowance for credit losses to noncurrent loans) at a whopping 224.8% which is the highest since the QBP began data collection in 1984!!!! 😮The FDIC Problem Bank List remained at 43 (same as prior quarter). This coincides closely with 52 banks in the FedFis database with a FedFis Rating of 3.75 or worse (1.00 – 5.00 scale) representing the bottom one percentile of all banks for 2Q2023. Nice plug, right???!!! 😊
And in case you are wondering how our Credit Union brethren faired, the NCUA released their Quarterly Credit Union Data Summary for 2023Q2. Some key points:Loan balances are up 12.6% YoY and double digits in almost all loan categories (exception was Non-federally Guaranteed Student Loans which were only up 2.8%)Loan to Share (deposits) ratio of 83.2% which is up from 74.8% YoY (and this is not because insured share deposits dried up – they actually grew 1.8% YoY)Delinquencies are starting to increase with larger jumps in delinquency rates in Auto and Credit Card loans (as expected), but only slightly higher than pre-pandemic rates. Net Charge-offs as a percent of average loans of 0.53% is up considerably YoY, but is still 3 bps below pre-pandemic levels.Nonetheless, CU’s provision expense for loan and lease losses increased a whopping 170% YoY to $9.2B (but is running consistent to pre-pandemic levels when considering provision expense to average assets of 0.42%)
The Clearing House announced that the RTP® network hit “one million payments in a single day” milestone as more financial institutions and their customers embrace real-time payments.
More pay-by-bank announcements… BNY Mellon announced the launch of Bankify via strategic alliance with Trustly to help organizations accept consumer payments direct from their bank account as an alternative to credit/debit cards and third-party payment platforms.
Alkami (Nasdaq: ALKT) partners with Atomic by integrating Atomic’s direct deposit switch solution into Alkami’s Digital Banking Platform to make it easier for financial institutions to offer their account holders a quick and convenient way to set up and switch direct deposits.
It was a crazy busy week with many high-profile personnel announcements:R&T Deposit Solutions announces strategic investment from GTCR and the appointment of Susan Cosgrove as Executive Chairperson effective October 1.Discover announced the appointment of Kathy “Moe” Lonowski to the company’s board of directors. Lonowski most recently served as the regional director of the FDIC’s San Francisco region.Dime Community Bancshares, Inc. (NASDAQ: DCOM) announced that Daniel Shaya Csillag will join the company as Group Head of a newly created Healthcare vertical.Sutton Bank announced the appointment of Darryl Clukey as SVP, Chief Payments Officer.BM Technologies (BMTX f/k/a Bank Mobile) announced the resignation of Rajinder Singh as Co-CEO for personal reasons (“not the result of any dispute or disagreement”) just five months after accepting the job.Toast CEO, Chris Comparato to step down and Aman Narang, Co-Founder and COO, to become CEO effective January 1, 2024.
Central Payments announced the launch of PayCP, a white-label, turnkey payment distribution platform. Early use cases include “companies wanting a quicker, digital way to send rebate, loyalty, incentive, or rewards funds to their customers.”
Curql (CUSO) plans second investment fund, Curql II to offer larger, growth-stage investment opportunities “further advancing Curql’s mission to bring fintech to credit unions.”
Visa expands cross-border stablecoin settlement capabilities with Circle’s USDC on the Solana blockchain by adding new pilot programs with merchant acquirers Worldpay and Nuvei.
Hallmark and Venmo (yes, you read that correct) have partnered together to launch Hallmark + Venmo greeting cards featuring a unique QR code inside the card to which only the gift giver’s intended recipient can access. Per the FAQs, If the recipient does not accept the gift within 180 days of the funds being added, the money is refunded back to the sender.
Solid launches Banking-as-a-Service partnership with Lewis & Clark Bank to “strengthen the onboarding and monitoring of its fintech clients, in full compliance with Lewis & Clark Bank’s rigorous risk and compliance standards.”
Notable FinTech funding for the week:Momnt (embedded lending / point-of-sale financing) raised $15M in capital.Firstcard (fintech banking app for college students) raised $4.7M in Seed funding.Lumen Energy (solar energy platform for commercial buildings) $11M in Series A and the launch of AutoPPA™ financing platform for ESG focused CRE owners.
Random Uncle Sean stuff:
What a wild first week in college football! 🏈 Congrats to Texas State University for marching into McClane Stadium and defeating Baylor at home; and to the University of Colorado for taking the victory against TCU at home. Kudos to Duke for taking down mighty Clemson and Florida State University for shocking LSU!!!Chalk this one up as “kind of creepy / kind of cool” with a ton of real world applications – Apptronik announced the unveiling of Apollo, a 5’8”, 160lbs humanoid robot that can carry a 55lb payload with a 4 hour battery runtime; and plans to redefine the nature of work. Check it out Apollo at apptronik.com…. Anyone else immediately think of Will Smith and the movie “I, Robot” with Sonny the NS-5 robot and the Three Laws??? 😬This is interesting to me as we continue to move towards a mobile centric society… Take a look at Whataburger’s new digital kitchen… It is completely cashless and centers around guests placing their orders through the Whataburger Rewards app or online.And here we go – Dad / bad jokes!!!Aunt Patty tried to surprise me with a car today, but luckily I was able to get out of the way!!! 😂🤣My favorite part of grilling is asking everyone how they like their burger before cooking them all exactly the same. That is some next-level Dad flex right there – LOL!!! 🍔What did the Buddhist say to the Hot Dog vendor? “Make me one with everything…..” Oh come on – that was funny!!!!I saved $345.00 by not going to Costco to buy deodorant… 🙄
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.
Recent Comments