Description
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, 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 HOST STATE LOAN-TO-DEPOSIT RATIOS
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation, and the Office of the Comptroller of the Currency (the agencies) today are making
public the host state loan-to-deposit ratios
1
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 ratio
2
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 banking 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.
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. The home state of a foreign bank is determined by 12 USC 3103(c) and applicable
agency regulations at 12 CFR 28.11(o) (OCC), 12 CFR 211.22 (Board), and 12 CFR 346.1(j) (FDIC).
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.
2
Section 109 of the Interstate Banking and
Branching Efficiency Act
Host State Loan-to-Deposit Ratios
Using Data as of June 30, 2012
(Excludes wholesale or limited purpose CRA-designated
banks, credit card banks, and special purpose banks)
State or U.S. Territory Host State Loan-to-
Deposit Ratio
Alabama 74%
Alaska 63%
Arizona 82%
Arkansas 73%
California 77%
Colorado 64%
Connecticut 87%
Delaware 47%
District of Columbia 78%
Florida 72%
Georgia 77%
Hawaii 55%
Idaho 69%
Illinois 71%
Indiana 78%
Iowa 77%
Kansas 66%
Kentucky 80%
Louisiana 73%
Maine 98%
Maryland 85%
Massachusetts 84%
Michigan 79%
Minnesota 76%
3
Section 109 of the Interstate Banking and
Branching Efficiency Act
Host State Loan-to-Deposit Ratios
Using Data as of June 30, 2012
(Excludes wholesale or limited purpose CRA-designated
banks, credit card banks, and special purpose banks)
State or U.S. Territory Host State Loan-to-
Deposit Ratio
Mississippi 74%
Missouri 69%
Montana 73%
Nebraska 80%
Nevada 73%
New Hampshire 88%
New Jersey 87%
New Mexico 62%
New York 75%
North Carolina 65%
North Dakota 82%
Ohio
74%
Oklahoma 69%
Oregon 78%
Pennsylvania 77%
Rhode Island 83%
South Carolina 75%
South Dakota 74%
Tennessee 81%
Texas 67%
Utah
108%
Vermont 88%
Virginia 78%
Washington 81%
West Virginia 80%
4
Section 109 of the Interstate Banking and
Branching Efficiency Act
Host State Loan-to-Deposit Ratios
Using Data as of June 30, 2012
(Excludes wholesale or limited purpose CRA-designated
banks, credit card banks, and special purpose banks)
State or U.S. Territory Host State Loan-to-
Deposit Ratio
Wisconsin 85%
Wyoming 60%
Guam 71%
Puerto Rico 87%
Virgin Islands 69%
Due to the legislative intent against imposing regulatory burden, no additional data were
collected from institutions to implement section 109. However, since insufficient lending data
were available on a geographic basis to calculate the host state loan-to-deposit ratios directly, the
agencies used a proxy to estimate the ratios. Accordingly, the agencies calculated the host state
loan-to-deposit ratios using data obtained from the Consolidated Reports of Condition and
Income (call reports) and Summary of Deposits Surveys, as of June 30, 2012. 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 of the Interstate Act directs the agencies to determine, from relevant sources,
the host state loan-to-deposit ratios. As discussed in the preamble to the joint final rule,
5
Prohibition Against Use of Interstate Branches Primarily for Deposit Production (62 FR 47728,
47731, September 10, 1997), implementing section 109, 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. 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.
The estimated host state loan-to-deposit ratios, and any changes in the way the ratios are
calculated, will be publicized on an annual basis.
doc_739765886.pdf
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, 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 HOST STATE LOAN-TO-DEPOSIT RATIOS
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation, and the Office of the Comptroller of the Currency (the agencies) today are making
public the host state loan-to-deposit ratios
1
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 ratio
2
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 banking 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.
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. The home state of a foreign bank is determined by 12 USC 3103(c) and applicable
agency regulations at 12 CFR 28.11(o) (OCC), 12 CFR 211.22 (Board), and 12 CFR 346.1(j) (FDIC).
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.
2
Section 109 of the Interstate Banking and
Branching Efficiency Act
Host State Loan-to-Deposit Ratios
Using Data as of June 30, 2012
(Excludes wholesale or limited purpose CRA-designated
banks, credit card banks, and special purpose banks)
State or U.S. Territory Host State Loan-to-
Deposit Ratio
Alabama 74%
Alaska 63%
Arizona 82%
Arkansas 73%
California 77%
Colorado 64%
Connecticut 87%
Delaware 47%
District of Columbia 78%
Florida 72%
Georgia 77%
Hawaii 55%
Idaho 69%
Illinois 71%
Indiana 78%
Iowa 77%
Kansas 66%
Kentucky 80%
Louisiana 73%
Maine 98%
Maryland 85%
Massachusetts 84%
Michigan 79%
Minnesota 76%
3
Section 109 of the Interstate Banking and
Branching Efficiency Act
Host State Loan-to-Deposit Ratios
Using Data as of June 30, 2012
(Excludes wholesale or limited purpose CRA-designated
banks, credit card banks, and special purpose banks)
State or U.S. Territory Host State Loan-to-
Deposit Ratio
Mississippi 74%
Missouri 69%
Montana 73%
Nebraska 80%
Nevada 73%
New Hampshire 88%
New Jersey 87%
New Mexico 62%
New York 75%
North Carolina 65%
North Dakota 82%
Ohio
74%
Oklahoma 69%
Oregon 78%
Pennsylvania 77%
Rhode Island 83%
South Carolina 75%
South Dakota 74%
Tennessee 81%
Texas 67%
Utah
108%
Vermont 88%
Virginia 78%
Washington 81%
West Virginia 80%
4
Section 109 of the Interstate Banking and
Branching Efficiency Act
Host State Loan-to-Deposit Ratios
Using Data as of June 30, 2012
(Excludes wholesale or limited purpose CRA-designated
banks, credit card banks, and special purpose banks)
State or U.S. Territory Host State Loan-to-
Deposit Ratio
Wisconsin 85%
Wyoming 60%
Guam 71%
Puerto Rico 87%
Virgin Islands 69%
Due to the legislative intent against imposing regulatory burden, no additional data were
collected from institutions to implement section 109. However, since insufficient lending data
were available on a geographic basis to calculate the host state loan-to-deposit ratios directly, the
agencies used a proxy to estimate the ratios. Accordingly, the agencies calculated the host state
loan-to-deposit ratios using data obtained from the Consolidated Reports of Condition and
Income (call reports) and Summary of Deposits Surveys, as of June 30, 2012. 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 of the Interstate Act directs the agencies to determine, from relevant sources,
the host state loan-to-deposit ratios. As discussed in the preamble to the joint final rule,
5
Prohibition Against Use of Interstate Branches Primarily for Deposit Production (62 FR 47728,
47731, September 10, 1997), implementing section 109, 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. 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.
The estimated host state loan-to-deposit ratios, and any changes in the way the ratios are
calculated, will be publicized on an annual basis.
doc_739765886.pdf