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FRB: Press Release -- Joint agency issue loan-to-deposit ratios for comp...
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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 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). Section 109 of 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 onehalf 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.
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
(percent)
Alabama
94
Alaska
73
Arizona
79
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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
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Michigan
98
Minnesota
91
Mississippi
72
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
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South Dakota
91
Tennessee
91
Texas
69
Utah
96
Vermont
86
Virginia
83
Washington
111
West Virginia
82
Wisconsin
93
Wyoming
83
American Samoa
74
Federated States of 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-todeposit 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
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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.
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.
Footnotes
1 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 state-chartered 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.
2 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.
1998 Banking and consumer regulatory policy
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Last update: August 13, 1998, 3:45 PM
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