Answer:
Answer by Randy Carey: There is no magic number, it depends on your institution. The regulators look at it in this context:
Evaluate whether the institution’s average loan-to-deposit ratio is reasonable in light of information from the performance context including, as applicable, the institution’s capacity to lend, the capacity of other similarly situated institutions to lend in the assessment area(s), demographic and economic factors present in the assessment area(s), and the lending opportunities available in the institution’s assessment area(s).
Answer:
Answer by David Dickinson: When I worked for the FDIC, it was an unwritten rule that an institution needed to have a 60% LTD ratio to get a satisfactory and a 70% LTD ratio to get an outstanding. However, there are many other factors to consider such as deposit base and other lenders in the area.
First published on BankersOnline.com 2/23/09
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