FDIC News: Agencies Issue Host State Loan-to-Deposit Ratios

[from Federal Deposit Insurance Corporation, released June 28]

Federal bank regulatory agencies today issued the host state loan-to-deposit ratios that are used to evaluate compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. These ratios replace those from June 2021.

By law, a bank is generally prohibited from establishing or acquiring branches outside of its home state primarily for the purpose of acquiring additional deposits. This prohibition seeks to ensure that interstate bank branches will not take deposits from a community without the bank also reasonably helping to meet the credit needs of that community.

Section 109 Host State Loan-to-Deposit Ratios [Archived PDF].

How to Be an Info-Observer and Knowledge Self-Educator: Parachutist Skills

MetaIntelligence is the mental jump where you go from being processed by the system to being the processor of the system.

The U.S. Federal Deposit Insurance Corporation has a “flagship” publication called FDIC Quarterly.

In Volume 15 of this periodical, Number 2, 2021 [PDF] there’s an article called:

The Historic Relationship between Bank Net Interest Margins and Short-Term Interest Rates

(pages 31 to 41)

The authors of this piece have a boxed insert on the first page where they define NIM (Net Interest Margin) which is a phrase and acronym you see in the title above.

The insert begins like this:

Net Interest Margin is a key profitability ratio…

This measure is so popular that banks report it, bank examiners assess it for individual banks, and the FDIC calculates it for the industry every quarter in the “Quarterly Banking Profile.” For a vast majority of banks, net interest income is the primary source of income, and for such banks NIM is a primary component of profitability.

(FDIC Quarterly, 2021, Volume 15, Number 2, page 31)

Such FDIC publications are freely available online and otherwise. Suppose you borrow an issue from the Library or download a copy from their archive and read it attentively. You could begin the process of “parachuting” into something outside of your ken, namely banking and finance.

This learning to become a “parachutist” in knowledge and information is the only way to escape the kind of “house arrest” forced on you by whatever you happened to specialize in in school and if you accept this kind of “knowledge detention” you will always be “stranded on your lonely island” which is not what you want and is potentially a form of “stupidization.” This agility acknowledges the fact that obviously “you can’t major in everything.”

To parachute in and back out of knowledge domains is a profound component of the remedial educational skill we call MetaIntelligence.