Liquidity & Balance Sheet
Brokered Deposits Ratio
Also known as Brokered %
The Brokered Deposits Ratio measures deposits placed through deposit brokers as a percentage of total deposits. Heavy reliance on brokered deposits is a regulatory red flag because of their rate-sensitivity and association with the 1989 thrift crisis.
Formula
Brokered deposits are deposits placed with the bank by an intermediary (the broker) on behalf of multiple depositors. They are typically time deposits, rate-sensitive, and short-duration. The definition was tightened in 2020 to focus on deposits where the broker has the primary depositor relationship.
Why it matters
Banks below the 'well capitalized' regulatory threshold face FDIC restrictions on accepting brokered deposits — the same wholesale funding source they're most tempted to use when core deposits flee. Heavy brokered deposit reliance also implies rate-sensitive funding that compresses NIM as rates rise.
How to interpret
Most US community banks report brokered deposit ratios between 0% and 15%. Above 20% indicates meaningful wholesale funding reliance. Above 30% historically associates with elevated failure risk — the 1989-1991 thrift crisis featured many institutions with brokered deposit ratios above 50%.
Thresholds
| Range | Label | Interpretation |
|---|---|---|
| < 5% | Low | Minimal wholesale funding. |
| 5–15% | Moderate | Typical community bank use. |
| 15–30% | Elevated | Substantial wholesale reliance. |
| > 30% | High | Historically associated with failure risk. |
Worked example
Frequently asked
Why are brokered deposits restricted for less-than-well-capitalized banks?
Brokered deposits were a major accelerant of the 1989-1991 thrift crisis — failing thrifts replaced fleeing core deposits with hot brokered money, doubling down on bad credit while paying high rates. FDICIA (1991) restricted brokered deposit access for less-than-well-capitalized banks to prevent the same pattern.
Has the FDIC's brokered deposit rule changed recently?
Yes — the 2020 rule clarified which deposits count as 'brokered' (focusing on those where the broker is the primary depositor relationship) and excluded several categories that had been over-classified. The change reduced reported brokered deposits across the industry.
Sources
- FFIEC Call Report Schedule RC-E (Deposit Liabilities)
- FDIC Rules and Regulations Part 337.6 (Brokered Deposits)
See Brokered % across 4,394 US banks
BankRegReports ranks every FDIC-insured institution by Brokered %, refreshed quarterly within 48 hours of FFIEC release.