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Texas, Mississippi in-state deals; S&P sees 3rd rate cut; KeyCorp CEO to retire

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Texas, Mississippi in-state deals; S&P sees 3rd rate cut; KeyCorp CEO to retire

In Texas, First Financial Bankshares Inc. agreed to acquire TB&T Bancshares Inc. and unit Bank and Trust of Bryan/College Station in a deal expected to be finalized in the first quarter of 2020. The purchase price was established based on a $30.28 price per share of First Financial Bankshares common stock and totaled $190 million as of the close of business on the day both parties agreed to pricing.

In Mississippi, BancPlus Corp. is acquiring State Capital Corp. for about $136.5 million in total, or $38.75 per State Capital share. The deal is expected to close in the first quarter of 2020.

The U.S. Federal Reserve might lower banks' benchmark interest rates again by the end of the year, then keep these steady in 2020, according to S&P Global Ratings. The ratings agency said its forecast is contingent upon incoming economic data and assumes a further global growth slowdown due to increased geopolitical and trade tensions. In a divided decision at their Sept. 18 meeting, Fed officials reduced for the second time this year benchmark interest rates by 25 basis points.

Susan Schroeder, executive vice president and head the Department of Enforcement of the Financial Industry Regulatory Authority since 2017, is leaving the agency later this year, FINRA announced Sept. 19. Schroeder led the consolidation of FINRA's enforcement functions. Jessica Hopper, deputy head of enforcement, has been named acting head of enforcement while the agency searches for a new department head from among both internal and external candidates.

JPMorgan Chase & Co. has breached the $500 billion mark in hedge fund balances this year and now hopes to hit $1 trillion, Bloomberg News reports, citing an internal memo. Next to Morgan Stanley, JPMorgan made the second highest prime brokerage revenues among banks in 2018, the news outlet notes, citing data from Coalition.

KeyCorp Chairman and CEO Beth Mooney will retire May 1, 2020. Christopher Gorman, who has been named president and COO and a member of the board of directors, effective immediately, will succeed Mooney as chairman and CEO when Mooney steps down. Gorman has been president of banking for KeyCorp since 2017.

In a 2-1 vote, the National Credit Union Administration adopted a final rule that allows federal credit unions to make short-term loans of up to $2,000 as an alternative to payday loans with high interests. The final rule, called PALs II, does not replace the existing payday alternatives loan option.

After the success of its low-fee SPDR ETF Suite in 2017 amid a cost-conscious market, State Street Global Advisors Inc. is converting seven ETFs and will be adding them into the suite, InvestmentNews reports. The ETFs have been given new names, new ticker symbols and even lower fees.

Former Wedbush Securities Inc. investment bankers Joey Warmenhoven and Tom Thiel recently formed and opened their own firm, JWTT, and their sights are set on community banks that other investment banks have tended to leave out, American Banker reports.

Exchanges and custodians are finding it hard to adhere to stricter regulations and additional risk management requirements because of a type of digital assets called privacy coins, Bloomberg News reports. Able to conceal transactions, privacy coins face delisting due to new guidelines to prevent illicit financing.

The current expected credit loss accounting standard, or CECL, may have a more significant impact on larger bank M&A deals because of a "double-count" issue related to credit risks for non-purchase credit deteriorated, or non-PCD, assets. While the matter is still being debated, larger deals are likely to be affected more. Bankers and investors have expressed concerns that CECL's treatment of acquired loans will complicate M&A modeling and could change how much banks are willing to pay in deals.

In other parts of the world

Asia-Pacific: MUFG to cut HK, Singapore staff in half; key rate decisions across Asia

Europe: RBS names Rose CEO; SNB, Norges Bank rate moves; low demand for cheap ECB loans

Middle East & Africa: Qatar cuts rate; Lebanese bank self-liquidates; Attijariwafa Bank H1 profit up

Now featured on S&P Global Market Intelligence

Analysts expect Fed to begin regrowing balance sheet after October: Although temporary spikes in short-term borrowing rates seem to be subsiding, the Federal Reserve may announce at its October meeting that it will address liquidity shortages by growing its balance sheet again, analysts say.

Hostile interest rate picture sets off flurry of cuts to bank revenue forecasts: A punishing shift in interest rates has touched off a wave of downward revisions to revenue guidance just two months after banks set projections in second quarter earnings reports. Yields fell across the maturity spectrum, led by a drop of 55 basis points in 10-year Treasurys from the end of July to a low in late August. The moves deepened an ominous inversion in the curve.

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.
In Asia, the Hang Seng declined 0.13% to 26,435.67, while the Nikkei 225 rose 0.16% to 22,079.09.
In Europe, around midday, the FTSE 100 was up 0.20% to 7,371.36, and the Euronext 100 was up 0.47% to 1,099.32.

On the macro front

The Baker-Hughes Rig Count report is 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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