Blog · Finance metrics and formulas · Commercial banking
The loan-to-deposit ratio divides a bank's loans by its deposits. This page gives the formula as US regulators report it, compares five banks, shows why the aggregate is not the average of the ratios, follows one bank through four quarters of deposit outflows, and sets the ratio against FDIC data by bank size and the US liquidity rules.
The loan-to-deposit ratio (LDR) is a bank's total loans divided by its total deposits. A bank with $820 million of loans and $1,000 million of deposits has an LDR of 82%: deposits fund the whole loan book, and 18% of them are held in cash and securities. Above 100%, the bank is borrowing elsewhere to lend; well below, it may be leaving deposits idle.
Loan-to-deposit ratio = Total loans / Total deposits
As US bank statistics report it: Net loans and leases / Total deposits
The FDIC Quarterly Banking Profile reports the ratio as "net loans and leases to deposits": loans and leases net of the allowance for credit losses, over total deposits. The inputs come from Schedule RC of the call report (FFIEC 031, 041 and 051), which every insured bank files quarterly.
Two choices change the figure:
In Excel, with loans in B2 and deposits in C2, =B2/C2 formatted as a percentage.
Five US banks at one quarter-end, in USD millions:
| Bank | Net loans (USD m) | Deposits (USD m) | LDR |
|---|---|---|---|
| Bank A | 820 | 1,000 | 82.0% |
| Bank B | 1,450 | 1,600 | 90.6% |
| Bank C | 610 | 900 | 67.8% |
| Bank D | 2,100 | 1,950 | 107.7% |
| Bank E | 390 | 520 | 75.0% |
| All five | 5,370 | 5,970 | 89.9% |
Bank A and Bank B are deposit-funded lenders in the range analysts usually call balanced. Bank C lends two thirds of its deposits: plenty of liquidity, but a lot of funding earning securities yields rather than loan yields. Bank D lends more than it takes in, so $150 million of its loans are funded by borrowings, such as Federal Home Loan Bank advances or brokered funding. Bank E sits between.
The ratio for the group is total loans over total deposits:
=SUM(B2:B6)/SUM(C2:C6)
5,370 / 5,970 = 89.9%. The simple average of the five ratios is 84.6%, five points too low, because it gives Bank E's $520 million of deposits the same weight as Bank D's $1,950 million.
The proof: weight each bank's LDR by its deposits and the result must equal the aggregate. (1,000 × 82.0% + 1,600 × 90.6% + 900 × 67.8% + 1,950 × 107.7% + 520 × 75.0%) / 5,970 = 89.9%, which is the same as 5,370 / 5,970 because each term is just that bank's loans. In Excel:
=SUMPRODUCT(C2:C6,D2:D6)/SUM(C2:C6)
The same rule holds for a bank's own relationships, branches or business lines: the bank's LDR is total loans over total deposits, never an average of segment ratios.
Bank A over four quarters, in USD millions:
| Quarter | Net loans (USD m) | Deposits (USD m) | LDR |
|---|---|---|---|
| Q1 | 820 | 1,000 | 82.0% |
| Q2 | 830 | 960 | 86.5% |
| Q3 | 835 | 920 | 90.8% |
| Q4 | 840 | 905 | 92.8% |
Loans grew 2.4% over the year. Deposits fell 9.5%. The ratio rose almost eleven points, from 82.0% to 92.8%, and most of the rise came from the denominator. To get back to 82% with loans at $840 million, Bank A would need $1,024 million of deposits: $119 million more than it has.
This is what happened across the US system after rates rose. The Federal Reserve's May 2023 Supervision and Regulation Report reported that deposits fell by $960 billion between April 2022 and April 2023 from a peak of $18 trillion, and that "the ratio of loans to deposits reached 70 percent in April 2023, up from 61 percent a year prior." The weekly aggregates behind figures like these are in the Federal Reserve's H.8 release, Assets and Liabilities of Commercial Banks in the United States.
There is no regulatory target. Analysts often treat roughly 80% to 90% as a balanced range for a deposit-funded commercial bank: most deposits are lent, with room left for withdrawals. Treat that as convention, and compare a bank with peers of its size first.
Size matters a great deal. The FDIC's Quarterly Banking Profile for the second quarter of 2026 (Table IV-A) gives net loans and leases to deposits by asset size:
| Asset size | Net loans and leases to deposits |
|---|---|
| Less than $100 million | 67.5% |
| $100 million to $1 billion | 79.1% |
| $1 billion to $10 billion | 84.7% |
| $10 billion to $250 billion | 79.0% |
| More than $250 billion | 57.4% |
| All insured institutions | 66.2% |
Community and regional banks lend most of their deposits; the largest banks hold far more of their balance sheet in securities, trading assets and cash, which pulls the industry figure down to 66.2%. An 85% ratio is ordinary for a $3 billion bank and unusual for a $500 billion one.
UK banks disclose a loan-to-deposit ratio in their annual reports too, usually in the funding and liquidity section; the same formula and the same caveats apply.
The loan-to-deposit ratio is not a Basel requirement. The Basel III liquidity standards are the Liquidity Coverage Ratio, which requires enough high-quality liquid assets to cover 30 days of stressed outflows, and the Net Stable Funding Ratio, which compares stable funding with the assets it supports over a year.
In the US those rules apply only to larger banking organizations. Under the tailoring rules adopted in 2019, the Federal Reserve's review of the Silicon Valley Bank failure explains, Category IV firms ($100 billion to $250 billion of assets) "were not subject to the LCR or NSFR unless they had $50 billion or more in average weighted short-term wholesale funding," and banks below $100 billion are outside both. The thresholds have been under review since, so check the current rule before relying on them.
For the thousands of community banks below those thresholds, examiners and analysts still read LDR closely, next to deposit concentration, brokered deposits and borrowing capacity.
A bank's LDR rises for reasons that sit in individual client relationships: a borrower who moves its operating account elsewhere, a depositor who sweeps cash into Treasury bills, the pattern known as deposit flight. Deposit flight by relationship shows which clients are moving balances out, and the worked example on five relationships does it by hand. Lending-only relationships are the other half: clients who borrow but keep no deposits with the bank, each one a 100%-plus LDR on its own. Where LDR sits next to the other client measures is in relationship KPIs for commercial banking.
Covirage computes loans, deposits and the ratio per relationship and per relationship manager from your uploaded portfolio files, reconciled to the ledger, so a rising LDR is traced to the clients behind it. The deterministic tools do every calculation; the external AI model explains the result and never computes. See Covirage for commercial banking. For the earnings side of the same balance sheet, see net interest margin and return on assets, and for where LDR sits among other ratios, see financial ratios.
Analysts often treat roughly 80% to 90% as a balanced range for a deposit-funded commercial bank, but that is convention, not a rule. FDIC data for the second quarter of 2026 put the industry at 66.2%, and banks with $1 billion to $10 billion of assets at 84.7%. Compare with peers of the same size and funding model.
The bank has lent more than it holds in deposits, so it funds part of its loan book from borrowing, bond issuance or other wholesale sources. That can be sustainable but makes the bank more exposed if those markets tighten.
Not under the Basel framework. Regulators set the Liquidity Coverage Ratio and Net Stable Funding Ratio instead, and in the US those apply only to larger banking organizations. Supervisors and analysts still watch LDR, and FDIC statistics report it as net loans and leases to deposits.
As interest rates rose, depositors moved money into higher-yielding alternatives while loan books kept growing. The Federal Reserve reported that deposits fell by $960 billion between April 2022 and April 2023, and the loan-to-deposit ratio rose from 61% to 70%.