Federal Reserve Alert! Federal bank regulatory agencies today issued the host state loan-to-deposit ratios that are used to evaluate compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994.

Source (pdf)

The statewide loan-to-deposit ratio relates to an individual bank and is the ratio of a bank’s loans to its deposits in a particular state where the bank has interstate branches.


The Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) (collectively, the agencies) today are making public the host state loan-to-deposit ratios1 that the agencies will use to determine compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (Interstate Act). In general, section 109 prohibits a bank from establishing or acquiring a branch or branches outside of its home state primarily for the purpose of deposit production. Section 106 of the Gramm-Leach-Bliley Act of 1999 amended coverage of section 109 of the Interstate Act to include any branch of a bank controlled by an out-of-state bank holding company. To determine compliance with section 109, the appropriate agency first compares a bank’s estimated statewide loan-to-deposit ratio2 to the estimated host state loan-to-deposit ratio for a particular state.

If the bank’s statewide loan-to-deposit ratio is at least one-half of the published host state loan-to-deposit ratio, the bank has complied with section 109. A second step is conducted if a bank’s estimated statewide loan-to-deposit ratio is less than one-half of the published ratio for that state or if data are not available at the bank to conduct the first step. The second step requires the appropriate agency to determine whether the bank is reasonably helping to meet the credit needs of the communities served by the bank’s interstate branches. A bank that fails both steps is in violation of section 109 and subject to sanctions by the appropriate agency.

Host State Loan-to-Deposit Ratios Using Data as of June 30, 2021 (Excludes wholesale or limited purpose Community Reinvestment Act-designated banks, credit card banks, and special purpose banks)
State Host State Loan-to-Deposit Ratio
Alabama 67%
Alaska 60%
Arizona 78%
Arkansas 73%
California 68%
Colorado 63%
Connecticut 77%
Delaware 44%
District of Columbia 77%
Florida 79%
Georgia 75%
Hawaii 66%
Idaho 66%
Illinois 71%
Indiana 79%
Iowa 73%
Kansas 72%
Kentucky 74%
Louisiana 74%
Maine 83%
Maryland 85%
Massachusetts 81%
Michigan 87%
Minnesota 66%
Mississippi 69%
Missouri 71%
Montana 66%
Nebraska 77%
Nevada 68%
New Hampshire 87%
New Jersey 99%
New Mexico 56%
New York 80%
North Carolina 55%
North Dakota 76%
Ohio 69%
Oklahoma 78%
Oregon 78%
Pennsylvania 84%
Rhode Island 84%
South Carolina 67%
South Dakota 57%
Tennessee 77%
Texas 62%
Utah 79%
Vermont 78%
Virginia 71%
Washington 73%
West Virginia 76%
Wisconsin 81%
Wyoming 57%

For each home state bank, the agencies calculated the percentage of the bank’s total deposits attributable to branches located in its home state (determined from the summary of deposits), and applied this percentage to the bank’s total domestic loans (determined from the call reports) to estimate the amount of loans attributable to the home state. The host state loan-to-deposit ratio was then calculated by separately totaling the loans and deposits for the home state banks, and then dividing the sum of the loans by the sum of the deposits.

Section 109 directs the agencies to determine, from relevant sources, the host state loanto-deposit ratios. As discussed in the preamble to the joint final rule, Prohibition Against Use of Interstate Branches Primarily for Deposit Production (62 FR 47728, 47731, September 10, 1997), implementing section 109, banks designated as wholesale or limited purpose banks under the Community Reinvestment Act (CRA) were excluded from the host state loan-to-deposit calculation, recognizing that these banks could have very large loan portfolios, but few, if any, deposits. Likewise, credit card banks, which typically have large loan portfolios but few deposits, were also excluded, regardless of whether they had a limited purpose designation for CRA purposes. Beginning in 2001, special purpose banks, including bankers’ banks, were excluded because these banks do not engage in traditional deposit taking or lending.

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