Data envelopment analysis (DEA) was used to analyze the 1987 and 1992 input/output efficiency of U.S. banks operating internationally. In 1987, banks belatedly began to acknowledge with huge writeoffs the crisis in lending to less-developed countries (LDCs). Some 20% of the banks were identified as inefficient in each year, and approximately 50-60% of the total inputs/outputs of inefficient banks were excessive/deficient, with inputs proportionately more so than outputs. In 1987, the herd instinct that had led to the LDC loan crisis caused DEA's empirical “best practice” production frontier to identify as efficient banks that were financial “bad practice” banks. However, by 1992, normalcy had returned and DEA best practice banks were also financial good practice banks. Overall, it was found that management should focus on overall efficiency, but with particular attention to inputs, especially cash and real capital, and to foreign loans among the outputs.