Do Brokered Deposits Predict US Bank Failures? Share of Brokered Deposits in 2007, Failures in 2008-2013, and the Distribution in June 2026

Brokered deposits are widely viewed as flighty funding. In FDIC Call Reports for year-end 2007, 8,531 banks show a mean brokered-to-deposit ratio of 0.043; 61.2% report zero brokered deposits and fail in 2008-2013 at a 2.22% rate, while banks with positive brokered deposits fail at 11.6%. Among those with positive ratios, failure rates rise from 3.9% in the bottom quartile of BRO/DEP to 23.0% in the top quartile (mean BRO/DEP 0.30). A logit for failure on BRO/DEP, equity/assets and loans/assets has average marginal effect 0.192 per unit of the brokered share (coefficient 3.79, HC1 SE 0.34); adding real-estate loan share raises the AME to 0.227. AUC is 0.759 for the brokered share alone and 0.819 for the full model. Excess failures relative to the zero-brokered rate account for 62.2% of all failures in the sample (311 of 501). In June 2026 the mean brokered share is 0.042 and only 5.1% of banks exceed 0.20.