On March 2, the Federal Reserve Board released guidance describing the factors that it will employ to evaluate whether to upgrade a community banking organization’s supervisory ratings. The guidance explains that examiners should use balanced judgment to assess demonstrated improvement and where improvement is likely to continue. The guidance also lists specific considerations, including, among others, the extent to which (i) the level of capital and capital planning process are appropriate relative to risk characteristics, (ii) core earnings have improved, and this trend is demonstrably sustainable, and (iii) asset quality is improving, as evidenced by a material decline of adversely classified and nonperforming assets, and this trend is expected to continue.