Revised SPAC deal ups Circle's valuation; US banks face writing off M&A premiums

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TOP NEWS IN BANKING & FINANCIAL SERVICES

* Circle Internet Financial Inc.'s enterprise value rose to $9 billion after the global financial technology company terminated its business combination deal and agreed to new transaction terms with blank-check company Concord Acquisition Corp., the former announced in a press release. The original merger deal, announced July 2021, gave Circle an enterprise value of $4.5 billion, according to the release.

* U.S. banks face potential earnings hits as standard-setters debate whether to compel the industry to write off at least $259 billion in goodwill stemming from acquisitions. All U.S. companies, including banks, will have to write off M&A premiums, known as goodwill, over perhaps 10 years under a proposal that is a 2022 priority for the Financial Accounting Standards Board. Currently, companies can keep goodwill on their balance sheets indefinitely, unless there is an impairment caused by a deal going wrong.

➤ Pandemic prompts dip in Q4'21 restaurant loans

U.S. banks had fewer restaurant-related loans at the end of 2021 compared with 2020, according to an S&P Global Market Intelligence analysis of select institutions with outstanding exposure of at least $100 million.

➤ EJF Capital loads up on consumer lenders in Q4'21

Arlington, Va.-based EJF Capital LLC increased its shares in consumer lender OneMain Holdings Inc. by 1,000.7% in the 2021 fourth quarter, pushing its investment in the company to $75.5 million and making OneMain its second-largest common stock position at year-end 2021.

➤ Maltese Capital ups stakes in Wells Fargo, Citigroup, Goldman Sachs in Q4'21

Maltese Capital Management LLC increased its stakes in Wells Fargo & Co., Citigroup Inc. and Goldman Sachs Group Inc. in the fourth quarter of 2021, according to the company's most recent Form 13F filing.

BANKING

* JPMorgan Chase & Co. is buying family-owned corporate and luxury travel agency Frosch, entering a new "business line" for the bank, travel industry news site Skift reported, citing an internal memo from Frosch President and CEO Bryan Leibman.

* The Bank of New York Mellon Corp. is open to making more large technology company acquisitions, but the bar for such transactions is "really high," CFO Emily Portney said in response to an analyst question during a company presentation Feb. 17. BNY Mellon would rather pursue deals that add capabilities, markets and client base to diversify its revenue stream, given that the company already has scale, Portney said.

* JPMorgan formed a research team with Japanese industrial conglomerate Toshiba Corp. and communication equipment company Ciena Corp. and built the first quantum key distribution network for metropolitan areas that could secure mission-critical blockchain applications by resisting quantum computing attacks, according to a press release.

* Loans across Bank of America Corp.'s core businesses are growing at a mid-single- to upper-single-digit annualized percentage rate so far in the first quarter, Chairman, CEO and President Brian Moynihan said.

* Birmingham, Ala.-based Regions Financial Corp. is eager to bolster its new home improvement lending line of business with bolt-on deals after entering the point-of-sale lending space with the acquisition of home improvement lender EnerBank USA in 2021, executives said at an industry conference Feb. 17.

* Royal Bank of Canada shareholders are set to vote April 7 on a proposal from a shareholder advocacy group, Investors for Paris Compliance, to tighten the company's standards for sustainable finance, Matt Price, the advocacy group's director for corporate engagement for the finance sector, wrote on the group's website.

FINANCIAL SERVICES

* Managed account services provider Innocap Investment Management Inc. agreed to acquire BNY Mellon's HedgeMark business to establish a single technology-enabled alternative investment platform. The deal is expected to close in the first half of 2022.

* The Goldman Sachs Group Inc. expects to exceed the financial targets it pegged two years ago, CEO David Solomon said at the company's conference presentation Feb. 17. Instead of a return on equity of more than 13%, the company is now eyeing a return on equity of 14% to 16% for the next three years, Solomon said.

* The U.S. Securities and Exchange Commission charged James Velissaris, the founder and former chief investment officer of Infinity Q Capital Management LLC, with overvaluing assets by more than $1 billion while pocketing tens of millions of dollars in fees. Velissaris faces similar charges from the Commodity Futures Trading Commission and the U.S. Attorney's Office of the Southern District of New York.

* Menlo Park, Calif.-based Sequoia Capital Operations LLC is setting aside between $500 million and $600 million to invest in digital assets on third-party exchanges, the Financial Times reported, citing Shaun Maguire, a partner at Sequoia.

POLICY AND REGULATION

* The National Credit Union Administration board proposes to raise the asset threshold for assigning federally insured credit unions to the Office of National Examinations and Supervision to $15 billion from $10 billion, according to an agency release. Those with total assets of $10 billion to $15 billion would remain under the concerned regional offices' watch.

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