Branches continue to shutter, First Carolina onboards new fintech partner

December 8, 2023 2:39 PM

Banks branches continue to shutter through October; First Carolina onboards fintech partner BM Technologies; ICBA announces its 2024 accelerator companies; and more in the weekly banking news roundup.

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Banks continue to shutter branches through October

U.S. banks closed a net 43 branches in October, lowering the total number of active bank branches at the end of the month to 77,690, according to the latest S&P Global Market Intelligence tally. It continues a yearslong trend. In 2009, the last year that physical locations increased, there were nearly 100,000 branches across the U.S. Analysts say banks are eager to trim costs and invest more in their online platforms, necessitating ongoing reductions in real estate holdings. That noted, the net closing figure in October was down from 73 in September and the trailing 12-month average of 117, the S&P Global data shows. — Jim Dobbs

ICBA announces six new fintechs for its 2024 accelerator

The Independent Community Bankers of America has chosen six companies that focus on analytics, automation and compliance out of hundreds of applicants for its sixth annual ThinkTECH Accelerator program. The cohort includes Monit, a cash flow analysis, forecasting and guidance platform provider; Azimuth, which does compliance testing; and Conductiv, which helps banks incorporate additional lending and loan servicing data into their existing processes. The 10-week program will begin in January. It includes one-on-one meetings with bank executives, the opportunity to network with fintech and entrepreneurial experts and more, before culminating in a showcase at ICBA's annual convention. — Miriam Cross

BM Technologies servicing students roundup slide

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First Carolina Bank onboards BM Technologies as fintech partner

First Carolina Bank officially onboarded BM Technologies, and will be the bank sponsor for the fintech's product focused on university students, called BankMobile Vibe. The partnership, slated to last five years, included 286,484 active accounts totaling more than $431 million in deposits across over 750 institutions.

BankMobile Vibe offers bank accounts and debit cards that allow students to receive money directly from their school due to refunds from financial aid, grants and scholarships, along with paychecks. BM Technologies announced in March that it would transition from using Customers Bancorp as its banking provider of deposit accounts for its higher education offering to FCB, which the fintech estimates will result in a 20 basis point increase in interchange fees. — Catherine Leffert

Emburse commits to Mastercard

Los Angeles-based business travel expense management firm Emburse announced that Mastercard is the new payments network for Emburse Cards, according to a press release. Visa previously handled certain Emburse transactions, but Mastercard will now handle issuing for all virtual and physical corporate cards from a centralized platform. Emburse provides expense management services for more than 20,000 organizations in 120 countries, with a mobile-first product approach enabling streamlined processing and payouts for business travelers. — Kate Fitzgerald

Upstate New York’s Adirondack Bank announces leadership transitions

Adirondack Bank's Founder and Chairman H.T. "Tom" Clark Jr. will transition to chairman emeritus effective January 1. His son Robert Clark, vice chairman of the bank since 2018, will become executive chairman of the board.

"Thirty-three years ago, I purchased the Saranac Lake Savings and Loan Association with one goal in mind — to build what was then a small, struggling savings association with limited product offerings into a full-service community bank that served the financial needs of local consumers, businesses and municipalities," Tom Clark said in a press release.

The bank operates 17 full-service and two limited-service branch locations and serves the Mohawk Valley, Adirondack North Country and Central New York regions. — Traci Parks

Citizens Financial explores private credit partnership

Citizens Financial Group has held discussions with potential partners to grow its private credit business, according to a person with knowledge of the matter.

The Providence, Rhode Island-based lender, led by CEO Bruce Van Saun, hasn't yet reached an agreement about a deal, said the person, who requested anonymity because the conversations are confidential.

The $1.6 trillion private credit market has become a key source of funding for leveraged buyouts in recent years, threatening the leveraged loan and high-yield bond business dominated by banks.

Citizens is following in the footsteps of bigger players such as JPMorgan and Citigroup that have been looking to team up with third parties as they build out their private credit strategies.

With a market capitalization of $13.6 billion, Citizens already has a team that caters to private equity firms with debt financing needs ranging from $40 million to over $500 million, according to its website. — Gillian Tan, Bloomberg News

Klarna’s valuation boosted by investor after profitable quarter

A shareholder in Klarna Bank has increased the value of its stake in the European firm by 18%, a small victory for the buy now/pay later platform that saw its valuation cut sevenfold last year.

Shareholder Creades AB, a listed Swedish investment company, increased the value of its stake to 118 million kronor ($11.3 million) as of Nov. 30, according to news agency Direkt.

The rise — which implies an overall $7.85 billion valuation for Klarna — comes after the fintech reported its first quarterly operating profit in four years as it attracted more consumers to buy now/pay later loans.

Last year, Klarna's valuation was slashed to $6.7 billion from about $45.6 billion while it cut jobs, office space and other costs, as investors reconsidered the growth of easy credit at a time of rising interest rates. — Aisha S Gani and Rafaela Lindeberg, Bloomberg News

RBC fined $5.5 million for breaking Canadian money-laundering rules

Royal Bank of Canada was fined CA$7.48 million ($5.5 million) for a series of violations under the country's money-laundering and terrorist-financing law.

The infractions included a number of cases where the bank had "reasonable grounds" to suspect that transactions were related to money laundering or terrorist groups, but failed to report them, according to a statement from the Financial Transactions and Reports Analysis Centre of Canada, which enforces anti-money-laundering rules in the banking sector.

Royal Bank, Canada's largest lender, failed to submit suspicious transaction reports in 16 cases out of 130 reviewed, Fintrac said. The agency also found that the Toronto-based company "lacked appropriate and documented governance for developing, updating and effectively implementing" procedures to stop money laundering and financing of terrorists. — Derek Decloet, Bloomberg News

Banc of California to move headquarters to Los Angeles after PacWest purchase

Banc of California, the lender that just acquired rival PacWest Bancorp in a rescue deal, said it will move its headquarters to Los Angeles from Orange County.

"As a native Angeleno, I know the power and promise of Los Angeles and the entrepreneurs and businesses that make it great," Banc of California Chief Executive Officer Jared Wolff said in an emailed statement Tuesday. "As California's leading business bank, we are designating Los Angeles as our headquarters to further serve this vibrant business community."

Banc of California is based in Santa Ana, about 35 miles southeast of downtown Los Angeles. The company last week completed the takeover of PacWest after the Beverly Hills-based company was stung by deposit outflows in the aftermath of the collapse of Silicon Valley Bank. The combined company, which will operate under the Banc of California brand, has more than 70 branches throughout California as well as in Denver and Durham, North Carolina. — Daniel Taub, Bloomberg News