View PDF

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

Federal Reserve Bank
of

Dallas

ROBERT D. McTEER, JR.
DALLAS, TEXAS

PRESIDENT
AND CHIEF EXECUTIVE OFFICER

752 6 5 -59 0 6

September 11, 1998
Notice 98-83

TO: The Chief Executive Officer of each
financial institution and others concerned
in the Eleventh Federal Reserve District
SUBJECT
Host State Loan-to-Deposit Ratios
DETAILS
The Board of Governors, along with the Office of the Comptroller of the Currency
and the Federal Deposit Insurance Corporation, has issued the host state loan-to-deposit ratios.
The ratios will be used by the banking agencies to determine compliance with section 109 of the
Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994.
ATTACHMENT
The host state ratios are attached.
MORE INFORMATION
For more information, please contact Dean Pankonien at (214) 922-6154. For
additional copies of this Bank’s notice, please contact the Public Affairs Department at (214)
922-5254.
Sincerely yours,

For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal
Reserve Bank of Dallas: Dallas Office (800) 333-4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012;
Houston Branch Intrastate (800) 392-4162, Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

SECTION 109 HOST STATE LOAN-TO-DEPOSIT RATIOS
The Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board,
and the Office of the Comptroller of the Currency (“the agencies”) today are making
public the host state loan-to-deposit ratios' 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). Section 109 o f the Interstate Act prohibits a bank
from establishing or acquiring a branch or branches outside of its home state under the
Interstate Act primarily for the purpose of deposit production.
Section 109 provides a two-step process to test compliance with the statutory
requirements. The first step involves a loan-to-deposit ratio screen that compares a
bank’s statewide loan-to-deposit ratio2 to the host state loan-to-deposit ratio for a
particular state. If the bank’s statewide loan-to-deposit ratio in a state is at least one-half
of the published host state loan-to-deposit ratio for that state, the bank has complied with
section 109. If the bank’s ratio is less than one-half, the second step in section 109
requires the agencies to determine if the bank is reasonably helping to meet the credit
needs of the communities served by the bank. A bank that fails both steps is in violation
of section 109 and subject to sanctions by the agencies.
The agencies will update the host state loan-to-deposit ratios on an annual basis.

' The host state loan-to-deposit ratio is the ratio of total loans in a state to total
deposits from the state for all banks that have that state as their home state. For statechartered banks and FDIC-supervised savings banks, the home state is the state where the
bank was chartered. For national banks, the home state is the state where the bank’s main
office is located.
2The 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.
I of 5

Section 109 of the Interstate Banking and
Branching Efficiency Act
Host State Loan-to-Deposit Ratios
(Excludes wholesale or limited purpose CRA-designated
banks and credit card banks.)
Host State Loan-toDeposit Ratio

State

Alabama

94%

Alaska

73%

Arizona

79%

Arkansas

69%

California

88%

Colorado

66%

Connecticut

88%

Delaware

78%

District of Columbia

43%

Florida

85%

Georgia

91%

Hawaii

104%

Idaho

74%

Illinois

86%

Indiana

90%

Iowa

74%

Kansas

68%

Kentucky

92%

Louisiana

76%

Maine

95%

Maryland

81%

Massachusetts

86%

Michigan

98%

Minnesota

91%

Mississippi

72%

2 of 5

Section 109 of the Interstate Banking and
Branching Efficiency Act
Host State Loan-to-Deposit Ratios
(Excludes wholesale or limited purpose CRA-designated
banks and credit card banks.)

State

Host State Loan-toDeposit Ratio

Missouri

75%

Montana

84%

Nebraska

75%

Nevada

67%

New Hampshire

81%

New Jersey

70%

New Mexico

63%

New York

84%

North Carolina

100%

North Dakota

73%

Ohio

105%

Oklahoma

69%

Oregon

97%

Pennsylvania

92%

Rhode Island

67%

South Carolina

82%

South Dakota

91%

Tennessee

91%

Texas

69%

Utah

96%

Vermont

86%

Virginia

83%

Washington

111%

West Virginia

82%

Wisconsin

93%

Wyoming

83%

3 of 5

Section 109 of the Interstate Banking and
Branching Efficiency Act
Host State Loan-to-Deposit Ratios
(Excludes wholesale or limited purpose CRA-designated
banks and credit card banks.)
'

Host State Loan-toDeposit Ratio

State

American Samoa

74%

Federated States o f Micronesia

56%

Guam

71%

Puerto Rico

93%

Virgin Islands

64%

Due to the legislative intent against imposing regulatory burden, no additional
data were collected from the institutions to implement section 109. However, since
insufficient lending data were available on a geographic basis to calculate the statewide
ratios directly, the agencies used a proxy to estimate the host state loan-to-deposit ratio.
The agencies calculated the host state loan-to-deposit ratios using data obtained from the
Call Reports and Summary of Deposits reports, as of June 30, 1997. 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
Report) 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.
Banks designated as limited purpose or wholesale 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. Credit card banks, which typically have large loan portfolios but few deposits,
were also excluded, regardless of whether they had a limited purpose CRA-designation.

4 of 5

The host state loan-to-deposit ratios, and any changes in the way the ratio is
calculated, will be made publicly available on an annual basis.

5 of 5


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102