NYCB 2017 Annual Report
61 Deposits Deposits totaled $29.1 billion and $28.9 billion, and represented 59.2% and 59.0% of total assets, at December 31, 2017 and 2016, respectively. On a year-over-year basis, the deposit mix shifted as interest-bearing checking and money market accounts declined 3.4%, savings accounts declined 1.3%, and non-interest-bearing accounts dropped 12.3%. This was offset by growth in our certificates of deposit (“CDs”), which increased 14.1% from year -end 2016. While the vast majority of our deposits are retail in nature (i.e., they are deposits we have gathered through our branches or through business combinations), institutional deposits and municipal deposits are also part of our deposit mix. Retail deposits rose $383.6 million year-over-year to $21.9 billion, while institutional deposits declined $567.2 million to $2.2 billion at year-end. Municipal deposits represented $999.4 million of total deposits at the end of this December, a $361.7 million increase from the balance at December 31, 2016. Depending on their availability and pricing relative to other funding sources, we also include brokered deposits in our deposit mix. Brokered deposits accounted for $4.0 billion of our deposits at the end of this December, as compared to $3.9 billion at December 31, 2016. Brokered money market accounts represented $2.6 billion of total brokered deposits at December 31, 2017 and $2.5 billion at December 31, 2016; brokered interest-bearing checking accounts represented $793.7 million and $1.4 billion, respectively, at the corresponding dates. At December 31, 2017, we had $567.8 million of brokered CDs. We had no brokered CDs at December 31, 2016. Borrowed Funds The majority of our borrowed funds are wholesale borrowings and consist of FHLB-NY advances, repurchase agreements, and federal funds purchased, and, to a far lesser extent, junior subordinated debentures. Reflecting a $760.0 million decline in wholesale borrowings to $12.6 billion, the total balance of borrowed funds were $12.9 billion at December 31, 2017. Wholesale Borrowings Wholesale borrowings totaled $12.6 billion and $13.3 billion, respectively, at December 31, 2017 and 2016, representing 25.6% and 27.2% of total assets at the respective dates. FHLB-NY advances accounted for $12.1 billion of the year-end 2017 balance, as compared to $11.7 billion at the prior year-end. Pursuant to blanket collateral agreements with the Banks, our FHLB-NY advances and overnight advances are secured by pledges of certain eligible collateral in the form of loans and securities. (For more information regarding our FHLB-NY advances, see the discussion that appears earlier in this report regarding our membership and our ownership of stock in the FHLB-NY.) None of our wholesale borrowings had callable features at December 31, 2017 or 2016. Also included in wholesale borrowings were repurchase agreements of $450.0 million at December 31, 2017 compared to $1.5 billion at December 31, 2016. Repurchase agreements are contracts for the sale of securities owned or borrowed by the Banks with an agreement to repurchase those securities at agreed-upon prices and dates. Our repurchase agreements are primarily collateralized by GSE obligations, and may be entered into with the FHLB-NY or certain brokerage firms. The brokerage firms we utilize are subject to an ongoing internal financial review to ensure that we borrow funds only from those dealers whose financial strength will minimize the risk of loss due to default. In addition, a master repurchase agreement must be executed and on file for each of the brokerage firms we use. We had no federal funds purchased at December 31, 2017. Federal funds purchased represented $150.0 million of wholesale borrowings at December 31, 2016. Junior Subordinated Debentures Junior subordinated debentures totaled $359.2 million at December 31, 2017, slightly higher than the balance at the prior year-end. See Note 8, “Borrowed Funds,” in Item 8, “Financial Statements and Supplementary Data” for a further discussion of our wholesale borrowings and our junior subordinated debentures.
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