Banking news roundup, March 31, 2023

Banking news roundup

M&T Bank joins a Massachusetts fintech-focused hub; Republic Bancorp in Louisville, Kentucky, once again expands in the Cincinnati market; ChatGPT suffers a security lapse and more in this week's banking news roundup.

M&T Bank joins Massachusetts fintech-focused network

M&T Bank is part of a new crop of eight members joining Mass Fintech Hub, a public-private partnership that unites fintechs, academics, public sector leaders and more to support startups and encourage regulatory innovation. The Buffalo, New York, bank's 2022 acquisition of People's United Financial expanded its footprint into New England.

"Massachusetts offers a rich ecosystem of peers, startups and academic institutions to engage in key trends, technological developments, and market forces that are likely to impact banking in the future," Claire Verville, ventures development manager at M&T Bank, said in a press release on Thursday. "We also see great potential to have access to talent and new technologies that are helping to shape the future of banking." —Miriam Cross

CommunityAmerica to bolster St. Louis presence

CommunityAmerica Credit Union will bulk up its operations in St. Louis.

The Lenexa, Kansas-based credit union plans to secure commercial real estate for three new branches in St. Louis County in 2023, with intentions to build additional branches soon thereafter.

The $4.7 billion-asset institution has 29 branches in the Kansas City market but only one in St. Louis. That branch, at Lambert International Airport, will be relocated in 2024, the company said in a press release on Wednesday.

"We have long admired the St. Louis region given our history in this market," Lisa Ginter, CEO of CommunityAmerica Credit Union, said in the press release. "We want St. Louisans to know they have a financial partner in their corner who is backed by more than 80 years of proven strength and stability — and is wholeheartedly dedicated to the financial well-being of people, businesses and our shared community."

CommunityAmerica earned $16 million in 2022, a 64% decrease compared with a year earlier, according to call report data from the National Credit Union Administration. —Ken McCarthy

Republic in Louisville continues Cincinnati expansion

Republic Bancorp in Louisville, Kentucky, is opening a branch in Bellevue, Kentucky, a Cincinnati suburb. The announcement came less than two weeks after Republic closed a $51 million deal to buy the $257 million-asset Cincinnati-based CBank.

The Bellevue location had a soft opening on March 14. The $6.1 billion-asset Republic, parent to the 40-year-old Republic Bank & Trust, closed the deal for CBank a day later. The acquisition, paired with the new Bellevue branch, gives Republic seven locations and about $627 million of assets in the Cincinnati region — including four branches in Northern Kentucky.

"Our planned growth in Northern Kentucky and the greater Cincinnati area allows us to better serve businesses of all sizes and individual customers who need broader financial support," Tom Saelinger, Republic's market president for Cincinnati and Northern Kentucky, said Monday in a press release.

The Cincinnati metropolitan area grew by 5.7% between 2010 and 2021 to 2.26 million people. —John Reosti

Susser Bank adds to Texas presence with a branch in Houston

The Arlington, Texas-based Susser Bank announced the opening of its first Houston branch last week. The location is situated in the tony Post Oak Central development in Houston's uptown business and entertainment district.

The move into Houston gives the $1.9 billion-asset Susser a presence in each of Texas's five biggest markets. The company already had branches in the San Antonio, Dallas, Austin and Forth Worth regions.

"The opening of the Houston branch is another step in Susser Bank's long-term plan," William Griffin, Susser's Houston market president said Monday in a statement to American Banker. "We now have a physical presence in Texas's largest markets supported by a robust online platform so our clients can bank with us from anywhere."

Susser reported net income of $9.1 million in 2022. Chairman and CEO Sam Susser led a group that acquired Susser, formerly known as Affiliated Bank, in 2018. —John Reosti

Amazon adds financial services via fintech partner

Amazon has enabled sellers to integrate their online stores with Juni, a Swedish financial platform that focuses on digital commerce. Businesses that sell on Amazon will have the option of accessing a dashboard view of multi-currency business accounts, obtaining virtual payment cards and applying for merchant credit. Other data will also be available, including total gross and net sales volume, average order value, total orders, their mix of recurring and first-time buyers and best-selling products by number of units, orders containing those products and overall sales amount. Juni also has integrations with PayPal, Wise and Stripe.

"It's time to close the tabs. The days of manually pulling storefront data are officially over," Samir El-Sabini, CEO and co-founder of Juni, said in a press release. —John Adams

Moelis hires SVB Securities’ co-head of investment banking

Moelis hired Jason Auerbach, global co-head of investment banking at SVB Securities, according to people with knowledge of the matter.

Auerbach's resignation was communicated to SVB staff on Monday by SVB Securities CEO Jeff Leerink, said one of the people, all of whom asked not to be identified discussing confidential information.

Representatives for SVB Securities and New York-based Moelis declined to comment.

Auerbach was also global head of technology investment banking at SVB, which he joined in 2021 from UBS Group. At the Swiss bank, he was co-head of technology, media and telecommunications investment banking.

Departures from SVB Securities are likely to prove a blow to an effort by its parent, SVB Financial Group, which is exploring options for the unit following the failure of its Silicon Valley Bank unit, which was taken into Federal Deposit Insurance Corp. receivership on March 10. SVB Financial filed for Chapter 11 bankruptcy protection a week later.

The FDIC announced late Sunday that First Citizens BancShares agreed to buy Silicon Valley Bank. That deal doesn't include SVB Securities. —Gillian Tan, Bloomberg News

ChatGPT outage exposed payment card data

OpenAI said on March 24 that it had detected a bug in its ChatGPT chatbot four days earlier that may have briefly exposed users' chat histories to others on the platform. The data exposed included their payment-related information, the company said in a blog post. During a nine-hour window early on March 20, up to 1.2% of subscribers using ChatGPT Plus may have seen other users' details, including their names, email, addresses, the last four digits of their credit cards and credit card expiration dates, the company said. OpenAI said it has fixed the underlying bug and added tools to prevent its recurrence and notified affected users. ChatGPT is estimated to have more than 100 million users. —Kate Fitzgerald

BofA names new co-head of global financial sponsors

Bank of America named Jill Schwartz as co-head of global financial sponsors, replacing Kevin Sherlock.

Schwartz will also keep her role as executive vice chair of global corporate and investment banking, according to a memo to staff from Thomas Sheehan, the lender's head of global investment banking.

New York-based Schwartz will co-head the group, which advises on private equity deals such as leveraged buyouts and initial public offerings, alongside Saba Nazar. A Bank of America spokesman confirmed the memo's contents and declined to comment further.

"Financial sponsors represent a core component of our investment banking franchise across sectors and products," Sheehan wrote. "Jill replaces Kevin Sherlock, who has informed me of his decision to pursue an opportunity outside the firm."

Sherlock is set to join Bank of Montreal's investment bank as head of leveraged finance and private capital, Bloomberg News reported last week. —Gillian Tan, Bloomberg News