Order the following steps that a commercial bank must follow to determine its lending capacity based on reserves: 1) Calculate required reserves, 2) Assess total deposits, 3) Identify excess reserves, 4) Decide on lending limits.

First, a bank looks at its total deposits, because that tells how much money it has to work with. Next, it calculates the required reserves, the amount it must keep on hand according to regulations. After that, it subtracts the required reserves from its total reserves to find the excess reserves that can be used for loans. Finally, it uses those excess reserves to set a realistic lending limit that keeps the bank compliant and safe. This process lets the bank know exactly how much it can lend while staying within reserve rules.