FDIC on Deposit Outflows in '23
A publication titled, "FDIC Quarterly: 2023 Summary of Deposits Highlights" reviews last year's decline in deposits. The FDIC states, "Total domestic deposits of FDIC-insured institutions decreased 4.8 percent in the year ending June 2023, the first annual decline in deposits since 1995, while the number of banks decreased 2.6 percent.... Deposit outflows largely subsided by second quarter 2023, declining slightly from $18.7 trillion to $18.6 trillion between March 31, 2023, and June 30, 2023." The brief tells us, "Between June 2022 and June 2023, deposits decreased $874.1 billion to $17.2 trillion (4.8 percent)." It explains, "Lower yields on deposit rates lagged other market interest rates, such as those paid by money market funds, contributing to the decline in deposits. The rate of deposit decline increased following three bank failures in the first half of 2023, causing the largest quarterly decline in deposits since Consolidated Reports of Condition and Income (Call Report) data collection began in 1984. Most of the quarterly deposit decline was in uninsured deposits." The FDIC adds, "Banks with assets greater than $10 billion reported deposit declines in 2023, while banks with less than $10 billion in assets reported slight growth or no growth.... Banks with total assets greater than $250 billion reported the largest decline in deposits, $675 billion or 6.8 percent. These 14 institutions represented about 77.5 percent of the total decline in the industry's deposits in the year ending June 30, 2023. Banks with assets between $1 billion and $10 billion reported 1.2 percent deposit growth, and the smallest banks reported slight deposit declines of 0.1 percent."
