Core deposits: Core deposits are the stable, relationship based balances a bank can count on staying put.
Where it comes from
There is no single regulatory definition. The common one is total deposits less brokered deposits and time deposits above the insurance limit. The UBPR uses its own variation, so the figure differs by source and the definition has to travel with the number.
How to read it
Core is the opposite of hot money, and the test is behavioral rather than accounting: would this balance still be here if the bank across the street offered 40 basis points more? Operating accounts, payroll and small retail balances usually would. A jumbo CD bought through a listing service would not.
The common mistake. Treating the label as a fact rather than a judgment. Every bank’s definition of its own core deposits is a little flattering, so compare the pieces you can verify, which are the brokered share and the noninterest bearing share.
Go deeper
- What is a good cost of funds for a bank?
- BankingLens pricing and what a subscription adds: percentile rank against the bank’s own FFIEC peer group, fourteen quarters of trend, and the flags an examiner reaches for first.
See also. Brokered deposits, Noninterest-bearing deposits, Uninsured deposits, Deposit beta.
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