Host State Loan-to-Deposit Ratios Updated

Joint agencies issued host state loan-to-deposit ratios that they will use to determine compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. These ratios replace the prior year’s ratios, which were released on June 29, 2015.

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, and
• branches of banks controlled by out-of-state bank holding companies from operating primarily for the purpose of deposit production.

Section 109 also provides a process to test compliance with the statutory requirements. A bank that fails both steps is in violation of section 109 and is subject to sanctions by the appropriate agency.

The updated host state loan-to-deposit ratios may be found here.