Federal Agencies Release State Loan-to-Deposit Ratios; New Mexico Among Lower-Tier States

Regulators use the ratio as part of a two-step process to determine whether banks operating across state lines are complying with federal law.

Source: Federal Deposit Insurance Corporation

Federal banking regulators have released updated host state loan-to-deposit ratios used to evaluate compliance with interstate banking laws, with New Mexico listed at 61%. 

The data, published by the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency, reflects conditions as of June 30, 2025 and is used to enforce provisions of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. 

What the Ratio Measures

The host state loan-to-deposit ratio represents the relationship between:

• total loans attributed to a state
• and total deposits collected from that state

for banks headquartered in that state. 

Regulators use the ratio as part of a two-step process to determine whether banks operating across state lines are complying with federal law. Specifically, the law prohibits banks from establishing or acquiring branches in another state primarily to gather deposits without reasonably serving the credit needs of that community. 

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How the Data Is Used

To evaluate compliance:

• A bank’s own loan-to-deposit ratio in a state is compared to that state’s published ratio
• If the bank’s ratio is at least one-half of the host state ratio, it is considered compliant
• If not, regulators conduct a second review to determine whether the bank is helping meet local credit needs

Banks that fail both steps may be subject to regulatory sanctions. 

Where New Mexico Stands

New Mexico’s ratio of 61% places it among the lower reported values nationally, alongside states such as Delaware (61%) and South Dakota (61%). 

By comparison, several states reported significantly higher ratios, including:

• Massachusetts (96%)
• New Hampshire (96%)
• New Jersey (96%)
• Wisconsin (90%)

The District of Columbia reported a ratio of 93%. 

How the Ratios Are Calculated

Because direct geographic lending data is limited, regulators use a proxy method:

• Deposit data is drawn from Summary of Deposits surveys
• Loan data is drawn from Consolidated Reports of Condition and Income (call reports)
• Loans are proportionally assigned to states based on deposit share

Certain institutions—such as credit card banks, wholesale banks, and special-purpose banks—are excluded from the calculations due to their atypical lending and deposit structures. 

Annual Reporting Requirement

Federal law requires that these ratios be updated and published annually. The agencies stated that no additional reporting burden was placed on banks to produce the data, relying instead on existing regulatory filings.