You are 100% wrong. I knew you would go look up the US average, which is why I cautioned against it. The top 3 banks in the country have over 40% of the deposits, the top 15 have over 74%. There are over 3,000 banks. So when I say “most banks are 1.0-1.25 LTD ratio” I am removing the bias of things like JP Morgan being at 44% LTD with over 16% of all US deposits. The money center banks are a different animal and make their money in different ways than regional banks.
The general rule is the smaller the bank, the higher the ratio. This is because revenue sources expand as the size increases. Money Center, Super Regional, Regional, Community, Local. Follow the trail, or even pick a bank that has grown over time and look at the trends in the ratio.
You seem to think I haven’t been following this closely for 30 years. Like I worked for 5th 3rd from 2004 to 2010 and didn’t watch the ratio drop from 1.1 to 0.9 to its current 0.6 and they grew from under $100 billion to where they are now. I didn’t work at Huntington Bank from 1999-2004 when they were at a 1.25 and have grown and stepped down to sub 1.0 in 2018 and now down to .77.
Last stop was People’s Bank which was only a $1.5 billion bank when I started in 2010, $4 billion when I left in 2015, and getting ready to break $10 billion when their Limestone acquisition closes in Q2. Ratio has gone from 1.1 to currently 0.82 as they have developed their insurance business, investment business, and leasing businesses they bought.
Until a bank is big enough to generate significant fee income from insurance, investments services, derivatives, etc. they have to stay at or above the 1:1 ratio to meet ROA and ROE expectations. Since most banks are too small to back those activities they fall into this category.
Finding a link and understanding what you’re reading are not the same thing.