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Factors Affecting Regional Bank Health and Supervisory Rating: An Exploration

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Abstract

Local commercial real estate conditions are positively correlated with the health of regional banks (assets between $10 billion and $100 billion), as measured by the composite confidential supervisory rating. Among other variables, return on assets is positively correlated with our proxy of bank health, but size and capital ratio are negatively correlated. Among the different components of the rating, the management rating has the most influence on the composite rating.

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  • Denise Duffy & Joseph G. Haubrich & Christopher Healy, 2026. "Factors Affecting Regional Bank Health and Supervisory Rating: An Exploration," Working Papers 26-02, Federal Reserve Bank of Cleveland.
    • Handle: RePEc:fip:fedcwq:102379
    DOI: 10.26509/frbc-wp-202602
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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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