A lender's total loans divided by its total deposits, which shows how much of the money customers keep with it is already lent out.
Deposits are the main money a bank lends. The loan-to-deposit ratio divides one by the other. A bank with $400,000,000 of loans and $500,000,000 of deposits is at 80 percent.
For someone seeking a loan, the ratio is a rough read on room. A bank with a low ratio has deposits it has not lent and may be looking for loans. A bank with a high ratio has to raise deposits, borrow or sell loans to fund new ones, so it may be choosier or ask you to move your deposit accounts as part of the deal. It is one reading among several: capital, the lending limit and the mix of loans already held matter as much.
Federal rules use the ratio in one narrow place. After a bank opens or buys a branch in another state, its regulator checks whether its loans to deposits in that state are less than 50 percent of the ratio for banks based there. If so, the regulator makes a separate credit needs determination for the bank.
How it shows up in the data here
Each bank page shows Loans to deposits: total loans divided by total deposits, our calculation from the latest Call Report, next to the same figure for peers. You can filter by it: search for banks at 80 percent or under, with steps at 60, 70, 80, 90 and 100. Credit union pages show loans to assets, not this ratio.
Go further
- Search banks by loans to deposits: Banks with loans at 80 percent of deposits or less.
- Methodology: How the capacity figures are worked out.
- How to pick banks for a deal with public data: Public filings cannot tell you which bank will say yes. They can tell you which banks are large enough, already hold loans like yours and lend where the property is. That is enough to turn four thousand banks into six phone calls.
- How to read a bank call report as a loan searcher: Every bank files a call report each quarter. One schedule in it lists the bank's loans by kind. Read that schedule and you know what the bank holds. You still do not know what it made last quarter.
- What to do after a bank says no to a business loan: One bank's no is one lender's answer, and the reasons are yours to ask for. They usually point to a constraint you can name.
Related terms
- Loans to assets: A lender's total loans divided by its total assets, which shows how much of its balance sheet is in loans and not in cash, securities and other holdings.
- FHLB advance: A loan from a Federal Home Loan Bank to one of its member institutions, made under a written agreement and fully secured by collateral such as mortgage loans.
- Loan sale: A lender's transfer of all or part of a loan to another party, so that the buyer, not the lender that made the loan, holds that share of it.
- Call report: The financial report every bank and savings association files with its federal regulator each quarter, with a balance sheet, an income statement and schedules that break out loans by kind.
- Community bank: A community bank is a smaller bank that takes deposits and lends mostly in the area around its offices, and decides on loans close to home.
Sources
Plain definitions for orientation, not legal, tax or credit advice. A lender's own policy decides what it will do.