Our Estimate of Total Brokered CDs Less Than $250K For Each Bank and Credit Union

A few weeks ago, we highlighted our estimates for DTC brokered CDs outstanding. We have revised our forecast, to an increase of 43% from the $400 billion balance at the end of November 2019, to reach $570 billion by year-end 2022, an average increase of $14 billion per quarter.

As a broker, would you be interested to learn about new banks or credit unions as potential issuers of brokered CDs in order to capitalize on this forecast? Would it be helpful to see the characteristics of these institutions, such as loan to deposit ratio or loan growth, that could be applied to similar institutions?

IDC Financial Publishing, Inc. (IDCFP) has developed a method to estimate brokered CDs less than $250,000, issued by banks or credit unions, using our Banks and Credit Unions Databases. In the following article, we describe this process and how this information can be used to discover new prospects.

In the third quarter of 2019, IDCFP analyzed all 5,303 banks in our Deposit Database and determined which institutions reported brokered deposits, reciprocal deposits and brokered CDs $250K or greater. Subtracting reciprocal deposits and large brokered CDs from total brokered deposits yields brokered deposits, which are either brokered CDs less than $250K or sweep accounts. In reviewing the quarterly changes in these remaining brokered deposits and comparing that to the change in total time deposits, IDCFP can isolate brokered CDs less than $250K and the value of sweep accounts for each bank.

Using only banks identified with brokered CDs that have a CUSIP number, IDCFP can estimate the value of eligible bank brokered CDs. Additionally, credit union brokered CDs with a CUSIP number provide an estimate of their brokered CDs from reported non-member deposits. The total of the two (lines 4 & 5 in Table I) nearly matched the amount of DTC brokered CDs outstanding**.

Table I

IDCFP’s estimate of individual bank and credit union brokered CDs less than $250K was $423 billion, as of September 30th, 2019. This estimate nearly matched the Depository Trust Company’s eligible bank, credit union and other brokered CDs valued at $414 billion at the end of the third quarter.

From IDCFP’s deposit database, you can determine:

  • The total amount of estimated bank brokered CDs less than $250K (Table II & III, Column 8) and the dollar and percentage change over the last year (Table II & III, Columns 9 and 10) in each domestic bank with or without CUSIPs.
  • The estimated sweep accounts and reported reciprocals and brokered CDs $250K or greater for each bank.
  • Characteristics of domestic banks that issue brokered time deposits with CUSIP IDs can be used to determine other domestic banks as potential issuers. Characteristics for all domestic banks include the loan to deposit ratio, loan growth in dollars and percentages, and other pertinent ratios.
  • See below samples of this data. For access to all deposit data, please send inquiries to info@idcfp.com or visit www.idcfp.com.

Table II

Largest Total of Brokered Time Deposits Less Than $250K

Table III

Largest Dollar Increase in Brokered Time Deposits Less Than $250K Over the Past Year

IDCFP has been helping CD brokers and investors, insurance companies, federal agencies, numerous state governments and a host of other institutions make better decisions using our database and proprietary CAMEL rating methodology since 1985.

To view all our products and services please visit our website www.idcfp.com.

For more information about our Deposit Database, or for a copy of this article, please contact us at 800-525-5457 or info@idcfp.com.

John E Rickmeier, CFA, President, jer@idcfp.com

Robin Rickmeier, Marketing Director