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US Banks Brokered Deposits Fell in Q1 for Fifth Consecutive Quarter

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Key Takeaways

  • U.S. banks' brokered deposits dropped to $1.22T in the first quarter of 2025 from $1.24T in the prior quarter.
  • WFC, BAC, and FLG all reduced brokered balances, reflecting a shift toward core and lower-cost deposits.
  • GS and JPM increased brokered deposits, though JPM remains down $45.1B year over year.

U.S. banks' brokered deposits fell in the first quarter of 2025, marking the fifth consecutive quarterly decline, as several banks minimize reliance on expensive sources of funding amid the growth of low-cost deposits.

According to S&P Global Market Intelligence data, the sector ended the first quarter with $1.22 trillion, down from $1.24 trillion in the fourth quarter of 2024 and $1.34 trillion a year ago. Brokered deposits now make up 5.5% of total liabilities compared with 5.7% in the previous quarter.

Details of Banks' Q1 Brokered Deposits

Wells Fargo & Company's (WFC - Free Report) brokered deposits were $90.46 billion in the first quarter of 2025, $8.93 billion lower than the previous quarter and $48.97 billion less than the year-ago quarter. Its brokered deposits edged down to 5.9% from 6.5% in the previous quarter. This reduction aligns with WFC's broader balance sheet optimization strategy and its aim to reduce reliance on short-term funding amid a relatively higher interest rate environment.

Bank of America's (BAC - Free Report) brokered deposits fell to $89.5 billion in the first quarter of 2025 from $91.7 billion in the previous quarter. Its brokered deposits-to-total liabilities ratio also edged down sequentially to 3.8% from 3.9%.

Banking-as-a-Service institutions with assets under $10 billion also saw a sequential decline in brokered deposits in the first quarter, collectively dropping to $19.71 billion from $20.41 billion in the last quarter.

This trend reflects a strategic shift among banks to reduce reliance on higher-cost funding sources. In sync with this, Flagstar Financial (FLG - Free Report) paid off approximately $1.9 billion in brokered deposits during the first quarter of 2025 as part of its strategy to decrease wholesale funding dependency.

On the contrary, Goldman Sachs (GS - Free Report) and JPMorgan (JPM - Free Report) were among the banks that reported sequential increases in brokered deposits during the first quarter. GS' brokered deposits increased by $6.57 billion from the end of 2024 to $76.8 billion in the first quarter of 2025. Its brokered deposits-to-total liabilities ratio also ticked up sequentially to 14.4% from 14.2%, indicating a slight increase in reliance on brokered funding.

JPM's brokered deposits rose $4.67 billion over the previous quarter to $67.8 billion in the first quarter of 2025. However, its brokered deposits were down by $45.1 billion year over year, compared to the same quarter in the previous year.

Our Take on Banks Reducing Reliance on Brokered Deposits

The continued decline in brokered deposits highlights a strategic pivot within the U.S. banking industry toward long-term financial resilience. This trend reflects banks' efforts to strengthen their funding profiles by reducing exposure in higher-cost and more volatile brokered deposits. Instead, banks are increasingly favoring more stable funding sources, such as core deposits. This reallocation supports broader goals of market stability and sustainable balance sheet management.

At present, Wells Fargo, Bank of America, Goldman Sachs, JPMorgan and Flagstar Financial carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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