Williams National Bank has its home office in New York State; however, it has branches in Nebraska. The federal banking agencies most recent host state loan to- deposit publication lists the loan-to-deposit ratio for Nebraska as 78 percent. For Williams Bank to pass the loan-to-deposit screen of the Reigle-Neal Act, what must its loan-to-deposit ratio be for Nebraska?

Question

Quizplus · Accepted Answer

Under the Reigle-Neal Act, a bank with branches in a host state must not have a loan-to-deposit ratio that exceeds the average ratio for all banks in the state by more than 10 percentage points. Therefore, for Williams Bank to pass the loan-to-deposit screen in Nebraska (with a loan-to-deposit ratio of 78 percent), its ratio must be no more than 88 percent (78 percent + 10 percent). The only answer choice that falls below this threshold is C, at 39 percent loan-to-deposit ratio.

Williams National Bank Has Its Home Office in New York