Home > News & Events > Press Releases




Press Releases

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 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 ratio 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.

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-to-Deposit Ratio

Alabama

95%

Alaska

76%

Arizona

79%

Arkansas

71%

California

87%

Colorado

62%

Connecticut

79%

Delaware

80%

District of Columbia

71%

Florida

95%

Georgia

93%

Hawaii

100%

Idaho

74%

Illinois

84%

Indiana

90%

Iowa

74%

Kansas

71%

Kentucky

92%

Louisiana

79%

Maine

96%

Maryland

82%

Massachusetts

84%

Michigan

97%

Minnesota

101%

Mississippi

73%

Missouri

75%

Montana

84%

Nebraska

78%

Nevada

68%

New Hampshire

85%

New Jersey

70%

New Mexico

68%

New York

88%

North Carolina

100%

North Dakota

90%

Ohio

106%

Oklahoma

68%

Oregon

80%

Pennsylvania

97%

Rhode Island

69%

South Carolina

80%

South Dakota

93%

Tennessee

88%

Texas

66%

Utah

100%

Vermont

83%

Virginia

84%

Washington

115%

West Virginia

83%

Wisconsin

92%

Wyoming

73%

American Samoa

81%

Federated States of Micronesia

52%

Guam

68%

Puerto Rico

93%

Virgin Islands

68%

 

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, 1998. 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.

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.

Last Updated 09/07/1999 communications@fdic.gov