Understanding Brokered Deposits

An indicator of bank health that investors need to be aware of is the amount of a bank's brokered deposits compared with asset growth. This issue is most germane for banks that are smaller than the "big four" money centers as measured by assets under management. Most of the banks in this group are publicly traded. They are known as national, super-regional and regional banks, and they include 138 U.S. banks that have assets of between $5 billion and $100 billion.

This group relies on brokered deposits to a far greater extent than the money centers or the smaller banks. The money centers average about 3% of deposits from brokers, and banks that have less than $5 billion average about 4%. For banks in the range of $5 billion to $100 billion, the average is about 14%.   ...430 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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