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Bank deals in Georgia, NY; Singapore reviewing JPMorgan metals trading unit


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Bank deals in Georgia, NY; Singapore reviewing JPMorgan metals trading unit

In Georgia, Pinnacle Financial Corp. has agreed to acquire SBT Bancorp Inc. and unit Southern Bank & Trust in a cash-and-stock transaction worth about $36.0 million, or roughly $27.37 per outstanding share of SBT common stock. The deal is expected to close in the first half of 2020.

Elsewhere in New York, Evans Bancorp Inc. is buying in-state peer FSB Bancorp Inc. for about $34.7 million. Per the deal terms, FSB Bancorp stockholders can elect to receive either 0.4394 of an Evans Bancorp common share or $17.80 in cash for each FSB Bancorp common share, subject to possible adjustment and 50/50 proration.

A December survey by the Federal Reserve showed that those banks who opted to stay on the sidelines despite increased demand for overnight lending in mid-September were constrained by regulatory restrictions, such as on the so-called supplementary leverage and liquidity coverage ratios. Other commonly cited reasons were reduced risk appetite and a higher degree of uncertainty. Short-term borrowing rates spiked on Sept. 16 amid a liquidity crunch, compelling the Federal Reserve of New York to conduct $53.15 billion in repo purchases the day after to help quell the market.

Cannabis banking proponents are standing pat even as Senate Banking Committee Chairman Mike Crapo, R-Idaho, raised concerns over the House-passed Secure and Fair Enforcement Banking Act, or SAFE Banking Act, American Banker reports. The bill's lead sponsor, Rep. Ed Perlmutter, D-Colo., said the SAFE Banking Act, which permits banks to serve the marijuana market, "responsibly" addresses the conflict between state marijuana laws and federal banking laws, thereby resolving "urgent" public safety risk now facing most Americans. James Ballentine, executive vice president of congressional relations at the American Bankers Association, said his group has already provided relevant information on several issues identified by Crapo and urges Crapo's committee to gather such information in a timely manner to "help protect communities across the country from an increasing public safety threat."

The Federal Reserve is looking into a second glitch this year in the central bank's automated clearinghouse system that delayed some bank transactions on Dec. 18, Bloomberg News reports. Jean Tate, a spokeswoman at the Atlanta Fed, said the central bank's technical staff is trying to identify the root cause of the problem. Earlier in April, the FedWire interbank funds transfer service had gone down for about three hours, which the Fed said was due to an internal technical issue.

The U.S. Securities and Exchange Commission charged Springer Investment Management Inc., doing business as Springer Financial Advisors, and owner Keith Springer with defrauding retail clients, mostly in or close to retirement. In a complaint filed in a federal court in Sacramento, Calif., the SEC said Springer and Springer Financial Advisors received millions of dollars in undisclosed compensation and other benefits for recommending certain investment products while claiming that there were no conflicts of interest.

The SEC also charged Edward Espinal, of Wayne, N.J., and his company, Cash Flow Partners LLC over an alleged $5 million Ponzi scheme that defrauded at least 90 investors, many of whom were members of the Hispanic community. The SEC complained that from at least July 2016, Espinal and Cash Flow Partners deceived investors into believing that they were investing in a pooled fund that would purchase and renovate houses, and then flip the houses for profit.

The Financial Industry Regulatory Authority has fined Robinhood Markets Inc. unit Robinhood Financial LLC $1.3 million for best execution violations related to its customers' equity orders and related supervisory failures between October 2016 and November 2017. Robinhood also agreed to retain an independent consultant to do a comprehensive review of the firm's best execution procedures and systems as part of the settlement.

U.S. House Financial Services Committee Chair Maxine Waters, D-Calif., said lawmakers will summon the board members of Wells Fargo & Co. and press them to explain their roles in managing the San Francisco-based bank over a sales scandal that erupted in 2016, Reuters reports. Wells Fargo should be broken up in order to be properly managed, Waters reportedly said. The bank's former CEOs, John Stumpf and Tim Sloan, had resigned shortly after facing the lawmakers in 2016 and 2019, respectively. Charles Scharf is the third Wells Fargo CEO since 2016.

After the U.S. and the U.K. governments, the Monetary Authority of Singapore, too, is putting JPMorgan Chase & Co.'s precious metals trading unit under scrutiny and two more employees of the bank have been added to the probe into the bank's alleged spoofing activities, Reuters reports, citing sources. The bank's global precious metals trading staff has shrunk to just about six people, the sources told the news outlet.

Five Democratic senators have called on JPMorgan CEO Jamie Dimon to demonstrate commitment through action over complaints of racial discrimination in the company. The New York Times had previously reported documented accounts of JPMorgan's alleged racist treatment of African American employees and customers. The five senators were Bob Menendez, D-N.J.; Senate Banking Committee member Sherrod Brown, D-Ohio; Catherine Cortez-Masto, D-Nev.; Elizabeth Warren, D-Mass.; and Chris Van Hollen, D-Md.

FleetCor Technologies Inc. reached an impasse in its discussions with the Federal Trade Commission regarding claims relating to the company's advertising and marketing practices, mainly in its U.S. direct fuel card business within its North American fuel card business.

In other parts of the world

Asia-Pacific: Bank Indonesia keeps rates unchanged; Indian asset manager files for IPO

Europe: BoE holds rate, gets new boss; BBVA sees $1.5B charge; Intesa, Nexi reach deal

Middle East & Africa: MSCI Kuwait status upgrade; PrivatBank sues Israeli bank; Nigeria outlook change

Now featured on S&P Global Market Intelligence

US community banks struggle to lower deposit costs; investors taking notice: Despite rate cuts by the Federal Reserve, deposit costs have not declined as many bankers had hoped. Investors have taken notice, rewarding U.S. community banks with stronger deposit franchises.

Delinquencies, charge-offs mixed at US card issuers in November: The average delinquency ratio among master trust portfolios at six major U.S. credit card issuers increased 1 basis point month over month to 1.51% in November. Meanwhile, the average net charge-off ratio rose 17 basis points month over month to 2.22%.

New Jersey's largest community banks keep buying: New Jersey's largest community banks remain active on the M&A front as financial results continue to underwhelm.

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng was up 0.25% to 27,871.35, and the Nikkei 225 slid 0.20% to 23,816.63.

In Europe, around midday, the FTSE 100 inched up 0.19% to 7,588.55, and the Euronext 100 gained 0.61%% to 1,149.96.

On the macro front

The GDP report, the corporate profits report, the personal income and outlays report, the consumer sentiment report, the Kansas City Fed manufacturing index and the Baker-Hughes Rig Count due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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