Now an exercise in extinguishing multiple fires

Fed's Hope of A Soft Landing Dashed

Banks everywhere are ratcheting up their credit card marketing activities greatly increasing marketing expenses. Credit-card issuers are staying aggressive and shrugging off potential liquidity issues from consumers, despite rising interest rates and potential recession.  

Big Banks Keep Pushing Credit Cards to Consumers

BankerAdvisor's Ongoing Series of How Fintech is Making Lives Better

Remitting it Forward

Firm to combine asset, wealth and consumer banking into one unit

Goldman Sachs Reorganization 

Rising interest rates should ostensibly benefit all banks taking deposits. But, while large consumer institutions benefit, higher-risk banks have been hammered down

Lending Profits Differ Greatly by Bank

Coinbase, Google Cloud, MinePlex among deals

Crypto Still Has Fans...And Deals

Germany, Europe’s New ‘Problem Child,’ Has a Series of Self-Inflicted Issues

Is German Deindustrialization Underway?

Bank stocks are often perceived to be a harbinger of broader economic trends so BankerAdvisor wheeled around some of the big banks’ reported second quarter earnings to spot broad movements

Tea Leaves and Emerging Economic Trends

Run on digital assets leads platforms to freeze user accounts, including withdrawals. Bankruptcy looms. 

The Big Chill in Crypto

A new monster has emerged to compete with inflation: broad banking instability, particularly for smaller and regional banks

Pick Your Poison: More Banks in Peril or Prolonged Inflation

Provident Bancorp, Inc. is the parent company The Provident Bank based in Amesbury, Massachusetts, founded in 1828 and operates under the name BankProv.  BankProv offers a suite of personal and business banking services, lending, cryptocurrency banking services.   

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Younger banking customers are making a decided move away from megabanks like Bank of America, JPMorgan Chase, and Wells Fargo for digital banks and fintech like Chime, PayPal, and Square, according to research done by Cornerstone Advisors.

Market Share is Moving to FinTechs and Digital Banks

CrossFirst Bankshares in Leawood, Kansas, has agreed to pay $75 million in cash to acquire the $567.5 million-asset Farmers and Stockmens Bank in Clayton, New Mexico.

CrossFirst Acquires Farmers and Stockmens Bank

The Canadian online loan provider VersaBank has agreed to pay Stearns Financial Services $13.5 million for a single-branch bank in Holdingford, Minnesota.

The acquisition of the St. Cloud, Minnesota, company's Stearns Bank Holdingford, which has a federal charter from the Office of the Comptroller of the Currency, would mark VersaBank’s official entrance into the U.S. market, according to a spokesperson for the digital-only bank.

VersaBank Enters US Market 

Crypto lender Voyager filed for Chapter 11 bankruptcy protection a week after halting withdrawals and two weeks after getting a $485 million bailout from FTX founder Sam Bankman-Fried’s firm Alameda Research.

Alameda Research now stands as Voyager’s biggest creditor with an outstanding loan of $75 million, according to multiple reports on Wednesday (July 6).

Voyager and its two affiliates, Voyager Digital LLC and Voyager Digital Holdings, filed Chapter 11 voluntarily in the U.S. Bankruptcy Court of the Southern District of New York to restructure and “create a path” to resume operations and “return value to customers,” according to a press release. 

Crypto Lender Voyager Seeks Chapter 11 Protection

The co-founders of failed crypto hedge fund Three Arrows Capital appear to be on the run from creditors, according to court documents recently filed in New York.

Founders of Bankrupt Crypto Hedge Fund Three Arrows Capital Go Missing

Celsius Network, a large cryptocurrency lender filed for bankruptcy after freezing customer assets that led to increased customer redemptions following a decline in cryptocurrency values.

Crypto Lender Celsius Files for Bankruptcy 

Forsage claimed to be a decentralized smart contract platform built on the Ethereum, Tron, and Binance blockchains allowing retail investors to earn profits by recruiting other investors.

SEC charges 11 people in alleged $300 million crypto Ponzi scheme

Global Payments announced plans to acquire EVO Payments today. EVO Payments provides payment technology and acquiring services solutions. 

Global Payments to buy EVO Payments for $4 billion 

TD Bank Group  and Cowen Inc. today announced a definitive agreement for TD to acquire Cowen in an all-cash transaction valued at US$1.3 billion.

TD to Expand its U.S. Investment Banking Business and Capabilities with Acquisition of Cowen Inc.

Protego Trust Bank named Ron Totaro chief executive officer as the bank continues its push to serve institutional clients in crypto and digital assets. Totaro’s most recent role was CEO at Tassat Group, a blockchain-based tech firm focused on digital payments. In 2021, Protego raised $70 million in a Series A with investors including crypto exchanges Coinbase (COIN) and FTX as well as Digital Currency Group, the parent company of CoinDesk.

Digital Asset-Focused Bank Protego Trust Names Ron Totaro as CEO

Fintechs like Chime, Current, N26, Level, Step, Varo and Moven are partnering with banks in an effort to make younger consumers comfortable doing all their banking online

Most Fintechs Partner with Banks

Last week, 1,668 retailers and more than 200 trade organizations urged the US Congress to pass the The Credit Card Competition Act, which gives merchants a choice in the routing of credit card transactions to networks other than Visa or Mastercard.

Breaking Visa and Mastercard Dominance in US

Nasdaq Digital Assets will begin by developing a cryptocurrency custody solution that will bring together the “best attributes of hot and cold crypto wallets”

Nasdaq to Launch Crypto Custody Service

But how far will the industry consolidate, and how many banks will the U.S. ultimately end up with? Is there something that will prevent America's financial system from shrinking until it resembles something like the Canadian banking system (about 80 banks operate in that country) or the airline industry (roughly 60 providers)?



Are there too many banks?

According to Crunchbase data, M&A activity targeting VC-backed crypto startups hit an all-time high in the first quarter of the year when 16 were announced. However, deal pace has reverted to barely a trickle, with just seven deals in the last nearly two full quarters.

Crypto M&A Slows to a Crawl

JPMorgan is piloting a platform it created for property owners and managers that automates the invoicing and receipt of online rent payments.  The majority of rent payments are still paid with checks.  JPMorgan sees the opportunity to leverage data and analytics for customers with rent rates, investments, and tenant screening.

JPMorgan Chase wants to disrupt the rent check with its payments platform for landlords and tenants

Banks looking to boost their digital capabilities reportedly may be taking a closer look at acquisitions of FinTechs as the valuations of FinTechs have fallen 70% this year.  The decline in FinTech valuations has been driven by the economic downturn, rising interest rates, and lower investor confidence after the collapse of the cryptocurrency exchange FTX. In addition, banks earnings have increased as their lending business benefits from rising interest rates, and it’s easier for banks to buy FinTechs than to merge with other banks because the latter involves more regulatory scrutiny.

FinTech Winter May Lead Banks to Increase Acquisitions 

Small to midsized businesses (SMBs) are investing in new tools, including payment solutions to explore the size and scale of the opportunity for SMB retail and how merchants can drive growth with new payment technologies. Retailers are chasing of seamless payment experiences including buy now, pay later and considering new payment options for payment technologies that can streamline payment experience and help achieve scale for their businesses.  

Small Business Survival May Hinge on Digital Payment Features

Shares of Silvergate declined 42.7% on Thursday after the crypto-focused bank released preliminary fourth-quarter results that showed massive customer withdrawals. Total deposits from digital asset customers declined to $3.8 billion from $11.9 billion at the end of the third quarter, a decline of roughly 68% as crypto exchange FTX, a Silvergate customer, collapsed in scandal, raising questions about the stability of the digital asset industry. At the end of December, $150 million of the bank’s deposits were held by customers who had filed bankruptcy, Silvergate said.

Silvergate Capital tanks more than 40% after crypto bank discloses massive fourth-quarter withdrawals

Moneyhub, founded in 2014, creates software for open banking, open finance, and open data applications announced it received an additional $18.2 million (£15 million) investment from savings and retirement business Phoenix Group. The funding round is a follow-on to the recent $48.6 million (£40 million) Moneyhub received in October 2022 which was led by Legal & General and Lloyds Banking Group led that round, contributing $42.4 million (£35 million), and Shawbrook Bank. Moneyhub’s total funding now adds up to $81.6 million.. 

Moneyhub Raises $18.2 Million, Completing $66.8 Million Funding Round

The Consumer Financial Protection Bureau has proposed a new rule to ban excessive credit card late fees. Congress banned excessive fees in 2009, but the Federal Reserve Board of Governors issued actions to circumvent the law, the CFPB said.  The CFPB rule proposed Wednesday would lower the amount consumers can owe for late fees under the immunity provision to $8 from as much as $41, end the automatic annual inflation adjustment for the provision and cap late fees at 25% of the minimum payment owed by the cardholder. The new rule could potentially reduce excessive late fees by as much as $9 billion per year.

Consumer Financial Protection Bureau targets excessive credit card fees in new rule proposal

Payment process Fidelity National Information Services, known as FIS, said Monday that it will spin off its merchant services business to create two separate publicly-traded companies with the new entity reclaiming its former name, Worldpay.  FIS is making the major moves to break apart the company and squeeze savings out of the operations after two activist shareholders, D.E. Shaw and Jana Partners, made investments in the company last year. Worldpay will be more likely to pursue acquisitions as a result of the plan to spin off the company. 

FIS plans to spin off merchant unit

Nomura's digital assets subsidiary, Laser Digital, has invested in Infinity, a decentralized finance (DeFi) protocol for institutional lending and borrowing. Infinity offers an interest rate protocol that forms the basis for benchmark rates and institutional-grade lending, borrowing, and risk management in DeFi. Infinity’s wholesale exchange provides inter-exchange clearing, fixed and floating rate markets, as well as enterprise-grade risk management utilising hybrid on-chain/off-chain infrastructures.

Nomura invests in 'Hybrid Finance' startup Infinity

Cryptocurrency prices fell on Friday as investors weighed the latest financial woes at Silvergate Capital and assessed what a potential bankruptcy at the crypto bank could mean for the broader crypto industry.The drop came late Thursday night, hours after several crypto companies said they’d stopped accepting or initiating payments to or from Silvergate – including Coinbase, Galaxy Digital, Circle, Paxos and Bitstamp. Silvergate, which has become the go-to bank for cryptocurrency businesses, gave notice Wednesday that it won’t meet an extended deadline to file its annual report and warned it may not be able to operate for another 12 months. 

Bitcoin, ether slide on Friday as investors weigh potential fallout from Silvergate woes

Shares of Silicon Valley Bank, tumbled for a second day Friday and weighed on the entire banking sector again on concern that more banks would incur heavy losses on their bond portfolios.  Concern among founders and venture capital investors spiked earlier this week after Silicon Valley Bank surprised the market by announcing late Wednesday it needed to raise $2.25 billion in stock. The shares were down another 61% in premarket trading Friday.

Silicon Valley Bank drops another 60%, weighing on the bank sector again

Bill Ackman mentioned in a Twitter thread that the government could “guarantee deposits in exchange for a dilutive warrant issuance and other covenants and protections.” Additionally, if the bank is solvent, he said the intervention would then give the bank some time to raise new capital and restore itself.  Ackman added that he didn’t see another bank “stepping in” after what the “Feds did to JPMorgan,” in reference to the banking giant’s 2008 purchase of Bear Stearns and Washington Mutual at the government’s request, and its subsequent inheritance of $13 billion in penalties from the mis-sale of bad mortgages.

‘I don’t see another bank stepping in to help.’ Bill Ackman suggests government intervention to save Silicon Valley Bank parent. 

Major stock indexes fell on Thursday as shares of banks across the nation collapsed following a stark warning from one of Silicon Valley's biggest lenders, which said it hopes to raise billions of dollars to help shore up cash during the challenging economy—adding to industry concerns stoked by the collapse of crypto bank Silvergate and the threat of rising interest rates.

Dow Plunges Over 500 Points As Bank Stocks Collapse

The U.S. cryptocurrency firm Circle’s USD Coin lost its dollar peg and fell to a record low Saturday morning. The company revealed it has nearly 8% of its $40 billion in reserves tied up at the collapsed lender Silicon Valley Bank. USDC is designed to trade at $1, but it fell below 87 cents on Saturday, according to data from CoinDesk. In a tweet Friday, Circle said it has $3.3 billion in remaining reserves at SVB. The company called for the continuity of the bank and said it will follow guidance from regulators.

Stablecoin USDC breaks dollar peg after firm reveals it has $3.3 billion in SVB exposure

SVB Financial Group, decades-long focused on the venture capital industry, faced a perfect storm, but there are plenty of other banks that would face big losses if they were forced to dump securities to raise cash.  Silicon Valley Bank has failed following a run on deposits after its parent company’s share price crashed a record 60% on Thursday. The bank announced a $21 billion dollars in securities sales on Thursday, SVB said it had taken the action not only to lower its interest-rate risk but because “client cash burn has remained elevated and increased further in February, resulting in lower deposits than forecasted.” 

20 banks that are sitting on huge potential securities losses—as was SVB 

Billionaire investor Bill Ackman posted a lengthy tweet about the Silicon Valley Bank collapse Saturday. Ackman criticized the federal government's response and its lack of monitoring SVB for risk. He said the government has "about 48 hours to fix a-soon-to-be-irreversible mistake" with its handling of SVB.

Billionaire investor Bill Ackman says feds 'screwed up' handling of Silicon Valley Bank collapse, warns they have '48 hours to fix a soon-to-be-irreversible mistake'

U.S. regulators said Sunday it shut down New York-based Signature Bank, a second financial institution they shuttered after Silicon Valley Bank’s collapse. “We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer,” Treasury, Federal Reserve, and FDIC said in a joined statement.

Regulators close New York’s Signature Bank, citing systemic risk

Asian equities curbed yesterday’s enthusiasm driven by China’s positive policies following the National People's Congress as SVB’s collapse crushed Asian investor sentiment on financial contagion fears.

SVB Financial Contagion Fears Go Global

n a harsh blow to an already-reeling sector, Moody’s Investors Service on Monday cut its view on the entire banking system to negative from stable. The firm, part of the big three rating services, said it was making the move in light of three key failures that prompted regulators to step in Sunday with a dramatic rescue plan for depositors and other institutions impacted by the crisis.

Moody’s cuts outlook on U.S. banking system to negative, citing ‘rapidly deteriorating operating environment’

Signature Bank was reportedly the target of a criminal investigation prior to its downfall. Federal authorities were examining the bank's relationships with its crypto clients. The news comes as regulators are considering tougher rules for mid-sized banks following the recent collapse of Signature and two other banks. According to the Bloomberg report, the U.S. Justice Department (DOJ) is investigating whether Signature took proper measures to sniff out money laundering by its clients. The Securities and Exchange Commission (SEC) is reportedly also involved.

Report: Feds Probed Signature Bank Money Laundering Controls

‘Based on my understanding of this dynamic and what is now happening (which line up), this bank failure is a “canary in the coal mine” early-sign dynamic that will have knock-on effects in the venture world and well beyond it.’ Dalio argued that SVB’s failure was a “very classic event” in what he termed the “very classic bubble-bursting part of the short-term debt cycle.” That phase occurs when tight money aimed at curtailing credit growth and inflation leads to a “self-reinforcing” contraction in debt and credit. That means a “contagion process” that sees dominoes fall until central banks relent and create “easy money,” which then sets the stage for the next big debt problem.

Why Ray Dalio says SVB collapse is a ‘canary in the coal mine’ 

Hedge fund manager Bill Ackman is not happy that the systemically important banks (SIBs) have been chivvied into recycling the deposits they received from First Republic Bank (FRB) back into the struggling lender. “The result is that FRB default risk is now being spread to our largest banks. Spreading the risk of financial contagion to achieve a false sense of confidence in FRB is bad policy. The SIBs would never have made this low return investment in deposits unless they were pressured to do so and without assurances that FRB deposits would be backstopped if it failed,” Ackman wrote in a tweet late Thursday. 

‘We need to stop this now.’ First Republic support is spreading financial contagion, says Ackman. 

A group of creditors for Silicon Valley Bank's parent are reportedly pushing the company to file for bankruptcy. The group, most of which bought SVB Financial Group’s bonds ahead of last weekend, now want the company to declare bankruptcy and sell off its non-bank businesses. According to the report — which cites sources familiar with the matter — the creditor group holds a substantial piece of SVB Financial's $3.4 billion face value of bonds. While regulators say the company's stock is worthless, it also owns some potentially high-value assets: its investment manager SVB Capital, which oversees $9.5 billion, and the investment bank SVB Securities and wealth-management firm SVB Private.

Creditors Want SVB Parent to File for Bankruptcy

Swiss banking giant Credit Suisse on Wednesday saw its shares fall to a new record low, pressuring the broader market and the rest of the European banking sector days after two lenders collapsed in the U.S.  Credit Suisse shares fell as much as 23%, extending the declines that seen its shares drop 75% over the last 52 weeks. On Tuesday, Credit Suisse said in its annual report that it had material weaknesses in financial controls. Credit Suisse has lost money for five straight quarters, and its wealthy clients in the fourth quarter withdrew about $100 billion from the bank.

Credit Suisse shares tumble to new record low as European banking sector reels 

The Swiss regulator FINMA announced Sunday that the so-called additional tier-one bonds, which are widely regarded as relatively risky investments, will be written to zero as part of the deal.  The move has angered Credit Suisse AT1 bondholders as their investments have seemingly been lost. Credit Suisse’s takeover deal, worth $3.2 billion, by rival Swiss bank UBS was agreed Sunday with the help of Swiss authorities.

The $17 billion wipeout of Credit Suisse bondholders has not gone down well in Europe

The New Jersey-based regional bank has a higher profile after a trio of recent bank collapses – and will likely face added regulatory scrutiny. Cross River Bank – a venture capital-backed, FDIC-insured regional bank in New Jersey that’s part financial institution and part fintech – has an increased profile in crypto circles thanks to the collapses of crypto-friendly Silvergate Bank, Silicon Valley Bank and Signature Bank in under a week. 

What Is Cross River Bank, USDC Stablecoin Issuer Circle’s New Partner?

Struggling banks kept alive by government guarantees can cause havoc. As a resutl of concerns over more bank runs like the one on Silicon Valley Bank, commentators and government officials are discussing expanding the current $250,000 cap on deposit insurance or even insuring all bank deposits. When other countries like Japan tried insuring all bank deposits, it didn’t help weak banks attract more deposits. That forced the weak banks to double down on risky investments to make money.

The dark side of insuring all bank deposits: zombie banks 

 Pacific Western Bank has raised $1.4 billion from investment firm Atlas SP Partners, the lender said on Wednesday, as the crisis-hit sector scrambles to limit the damage from the recent collapse of two mid-sized lenders.

Pacific Western Bank raises $1.4 bln, says deposits have stabilized

eToro recently completed a $250 million funding round at a valuation of $3.5 billion. Investors include ION Group, SoftBank Vision Fund 2, Velvet Sea Ventures, and a number of existing investors. This funding stems from an Advance Investment Agreement (AIA) which eToro entered into in February 2021 as part of its proposed SPAC transaction.

eToro raises $250 million at $3.5 billion valuation

The deal will see First Citizens Bank purchase around $72 billion of Silicon Valley Bank assets at a discount of $16.5 billion.  A further $90 billion in securities and other assets will remain “in receivership for disposition by the FDIC.”  The U.S. Federal Deposit Insurance Corporation transferred all SVB deposits and assets into a new “bridge bank” earlier this month in an effort to protect depositors of the failed lender.

First Citizens to buy large chunk of failed Silicon Valley Bank

Raleigh-based First Citizens and the Holding family have kept a low profile for decades, but the family-owned bank has been on a mission to expand nationwide via opportunistic acquisitions. Its growth has accelerated since the 2008 financial crisis thanks in part to a series of more than 20 FDIC-assisted acquisitions of small failed banks, including California’s $1.8 billion (assets) First Regional Bank, $1.1 billion Temecula Valley Bank, also based in Southern California, and $1.8-billion Denver-based United Western Bank. At the end of 2008, First Citizens had assets of $16.7 billion. Prior to this weekend’s SVB deal, the bank’s assets stood at $109 billion.

SVB’s New Owners, The Billionaire North Carolina Family Behind First Citizens, Are Quietly Building A Banking Empire

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