The Park Place Economist


Commercial banking is a substantial industry with over 5,000 commercial banks in the United States. An important feature of a bank’s activity is lending for different purposes. Different types of loans distributed by banks are crucial to propel an economy forward. My research focuses on the commercial banking industry in the Midwest region of the United States. Specifically, I will examine Illinois (IL), Indiana (IN), Iowa (IA), Kansas (KS), Kentucky (KY), Michigan (MI), Minnesota (MN), Missouri (MS), Ohio (OH), and Wisconsin (WI). In 2013, these 10 states together housed 2,446 of the 5,865 banks in the nation, which is 42% of the nation’s total banks. Specifically, this paper will analyze how regional economic indicators and bank-specific indicators impact commercial and industrial (C&I) loans. Analyzing C&I loans is relevant because understanding the underlying factors that affect C&I lending is important from a bank’s risk management perspective.