NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) announces the release of this month’s edition of Bank Talk: The After-Show, by Ethan Heisler, founder and editor-in-chief of The Bank Treasury Newsletter and Senior Director at KBRA.
In this issue, Bank Deposits Do Not Grow on Trees, Ethan and Van explore the venerable loan-to-deposit ratio (LDR) and how it varies by state and by region. The two discuss how the difference in LDRs between banks in the Fed’s large bank and small bank peer groups have diverged significantly in the last five years, with large bank LDRs averaging 70% and small bank LDRs averaging 89%. Ethan pointed to the Host State LDR report and how banks in the New England states have the highest LDRs on average in the country, followed by the Mid-Atlantic states.
Ethan then leads Van through his most recent state-by-state analysis, which screened for banks with LDRs greater than 90%. Ethan discusses a scatter plot analysis based on his analysis, which shows that banks in states with a high percentage of banks with LDRs over 90% are also states where the average cost of time deposits is above-average, while banks with a lower quotient of such banks, also report lower deposit costs.
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KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.