Loan-to-deposit ratios slightly ticked up at U.S. banks in the fourth quarter of 2021, as loan growth became stronger and the surge in deposits continued.

The aggregate ratio increased roughly 11 basis points to 57.1%, according to data from S&P Global Market Intelligence. This hike ends the consecutive declines that started from the second quarter of 2019 when the ratio was 73.4%.

Loans and deposits up
Total loans and leases at banks rose 3.5% year over year to $11.246 trillion in the fourth quarter, while total deposits jumped 10.5% to $19.699 trillion. The quarter saw loan growth eclipsing deposit growth for the first time since the second quarter of 2019.

Bank of America Corp. was among the banks that booked increases in both loans and deposits. "When you look at the balance sheet, we grew deposits $270 billion in 2021. That was on top of the $360 billion of growth we had in 2020," said Chairman, CEO and President Brian Moynihan on the company's earnings call. "Our loan growth accelerated throughout the year. Fourth quarter represented the strongest quarter of organic loan growth we have experienced at Bank of America."

YOY decreases
Banks have been clearing Paycheck Protection Program loans from their books, but the program was still a factor in loan-to-deposit ratios in the fourth quarter.

Major PPP lenders like WebBank, Celtic Bank Corp. and Cross River Bank were at the top of the list of banks with the largest year-over-year decreases in loan-to-deposit ratios. The companies' ratios dropped 579.4, 237.0 and 99.2 percentage points to 127.9%, 156.9% and 204.6%, respectively.

YOY increases
A number of banks among the list with the largest year-over-year increases in loan-to-deposit ratios ended the quarter with increased lending that surpassed the rise in deposits. Pedcor Financial LLC's loans grew 236.3% and exceeded the 106.2% growth in deposits. At City First Bank NA, loans rose 199.3% and deposits climbed 139.2%.

2022 optimism
Several executives at banks expressed optimism on loan growth in 2022. Bank of America expects continued momentum in lending to translate into a high-single-digit percentage increase in its loan portfolio this year, and Truist Financial Corp. anticipates loans to grow roughly in the mid-single-digit percentage range.

Many banks across the size spectrum also project that deposit growth will push through a reversal in Federal Reserve monetary policy this year. Fifth Third Bancorp anticipates its deposits will increase in 2022, reflecting consumer and commercial account growth.

Deposits are projected to grow 3% from year-ago levels in 2022, while loans are expected to climb 6.75% in the same period.