Intermediate Small Institutions | Lending Test Performance Criteria | Loan-to-Deposit Analysis

1 – From data contained in Call Reports / TFRs, or UBPRs / UTPRs, calculate the average loan-to-deposit ratio since the last examination by adding the quarterly loan-to-deposit ratios and dividing by the number of quarters.

2 – 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).

3 – If the loan-to-deposit ratio does not appear reasonable in light of the performance context, consider whether the number and the dollar amount of loans sold to the secondary market compensate for a low loan-to-deposit ratio or supplement the institution’s lending performance.

4 – Summarize in work papers conclusions regarding the institution’s loan-to-deposit ratio.
SOURCE:  Intermediate Small Institution CRA Examination Procedures | OCC, FRB, FDIC, and OTS | July 2007

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