Kentucky banks ink cash-and-stock deal; M&T Bank top PPP lender in latest round

TOP NEWS IN BANKING & FINANCIAL SERVICES

* Stock Yards Bancorp Inc. agreed to acquire Kentucky Bancshares Inc. in a cash-and-stock deal with an aggregate transaction value of approximately $190 million. The deal is expected to close during the second quarter of 2021.

* M&T Bank Corp. ranked as the top lender in the latest round of the Small Business Administration's Paycheck Protection Program based on approvals through Jan. 24, 2021, with about $718.1 million in approved loans. M&T is followed by Fifth Third Bancorp with $539.7 million and Bank of America Corp. with $527.7 million.

➤ Fed's Powell to stick with dovish tone as new coronavirus strains emerge

The Federal Reserve will be happy to end its two-day policy meeting by making little news, other than promising to continue providing accommodative monetary policy for some time despite a brighter economic outlook.

➤ Another private acquirer emerges to buy a regional bank's insurance agency

In Fifth Third Bancorp's divestiture of Fifth Third Insurance Agency to Foundation Risk Partners, as confirmed by S&P Global Market Intelligence, a rapidly growing, private equity-backed broker expanded its footprint and capabilities by taking on the former property and casualty insurance distribution business of a regional bank.

EARNINGS SPOTLIGHT

* MarketAxess Holdings Inc. reported net income of $72.9 million, or $1.91 per share, for the fourth quarter of 2020, up from $50.3 million, or $1.32 per share, in the year-ago period.

* Nasdaq Inc. fourth-quarter 2020 EPS was $1.60, compared to $1.29 in the year-ago quarter.

* New York Community Bancorp Inc. also released its most recent financial results.

BANKING

* JPMorgan Chase & Co., Bank of America, Wells Fargo & Co., PNC Financial Services Group Inc., Toronto-Dominion Bank, Truist Financial Corp., U.S. Bancorp, Finicity Corp. and Plaid Inc. piloted the Streamlined Data Sharing Risk Assessment service offered by The Clearing House Payments Company LLC with TruSight and KY3P by IHS Markit. The service makes it more efficient for financial apps and data aggregators to provide assessment information to financial institutions, and for each institution to conduct its own risk assessment.

* Bank of America disclosed that it will invest about $150 million in 40 funds based in 21 markets across the U.S. that focus on minority entrepreneurs. The investment is part of the company's $1 billion, four-year commitment to advance racial equality and economic opportunity.

* Big U.S. banks like JPMorgan, Bank of America, Citigroup Inc., Wells Fargo and U.S. Bancorp have publicly committed to adjust their hiring policies or disclose existing ones in an effort to add a layer of accountability in their goal of diversifying their workforce, mirroring a practice called the "Rooney Rule" that first emerged in the National Football League that served the same purpose for coaching jobs, The Wall Street Journal reported.

* Analysts project that competition from banks would pressure the biggest credit unions to consolidate, with those crossing the $1 billion-asset threshold finding more opportunities by teaming up with larger institutions, American Banker reported.

FINANCIAL SERVICES

* Goldman Sachs Group Inc. CEO David Solomon's 2020 annual compensation was reduced by $10 million from what he received in 2019 to $17.5 million as a result of the board's decision to slash the pays of certain former and current members of senior management in light of the settlement the company had to shoulder related to the 1MDB scandal.

* The Financial Industry Regulatory Authority fined Goldman Sachs about $1.3 million for failing to timely fingerprint and screen more than 1,061 non-registered associated employees between January 2015 and January 2018 under federal securities laws. The company agreed to review its systems and procedures regarding the identification, fingerprinting and screening of non-registered associated persons.

* Goldman Sachs is on the hunt for the next technology unicorns in Europe that could fetch a valuation of $1 billion or more as it looks to unlock a $200 billion client base, Bloomberg News reported, citing Anthony Gutman and Gonzalo Garcia, the company's investment banking co-heads for Europe, the Middle East and Africa region. Goldman is also on the lookout for opportunities in other sectors such as clean energy, healthcare and financial services, Bloomberg noted.

* Bonus hikes for Morgan Stanley and Goldman Sachs investment bankers in Asia jumped by 20% and 15%, respectively, outstripping their peers in the region as investment banking revenues increased, Bloomberg News reported, citing people familiar with the matter. Individual bankers can expect to see varying bonuses, with more given to those focusing on equity capital markets, healthcare and technology deals, according to the report.

* Mastercard Inc. has pledged to reach net zero emissions by 2050 as the first in the payments sector to gain a Science Based Targets initiative approval for its greenhouse gases goals. The company said it is working to reduce its total Scope 1 and Scope 2 emissions by 38% and Scope 3 emissions by 20% by 2025 from a 2016 baseline.

* Cleveland, Ohio-based independent registered investment adviser MAI Capital Management LLC agreed to acquire HW Financial Advisors in a deal expected to close by the end of the first quarter. Financial and legal terms of the transaction were not disclosed.

POLICY AND REGULATION

* The SBA announced that it is in the process of improving its PPP first-draw loan review to give small businesses as much time as possible to access the funds. In its review, the agency identified anomalies in around 4.7% of the lender-submitted data, which will require "follow-up" between lenders and borrowers so that borrowers can secure second loans.

MARKETS

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