Write-Off Report: Bankruptcies Higher in June Led by Medium-Sized Filings

Research evidence excerpt

Write-Off Report: Bankruptcies Higher in June Led by Medium-Sized Filings

USA | Large-Cap & Mid-Cap Banks EquityJulyResearch20, 2026

Exhibit 1 - Trailing Two-Quarter Large & Mid-Write-Off Report: Bankruptcies Higher in June

Size Bankruptcy Trends Are Highly Correlated

with C&I Net Charge-OffsLed by Medium-Sized Filings

Total bankruptcies continued to normalize in 2Q from historically low levels, 450 400 Correlation: 91% 0.80%0.70%

350 0.60%

0.50%increasing 12% Y/Y and 1% Q/Q. Growth was driven primarily by a 19% Y/Y 300250

0.40%

0.30%

150increase in medium-sized filings, while large and small bankruptcies roughly 0.20% 100

50 0.10%

0 0.00%flat. Importantly, the trailing count of large/medium-sized bankruptcies, a metric

2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 1Q2023 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 3Q2024 4Q2024 1Q2025 2Q2025 3Q2025 4Q2025 1Q2026 2Q2026

Trailing Two-Quarter Count of Large & Medium BK's (LHS)closely correlated with C&I NCOs, declined sequentially in 2Q'26. Consistent Fed C&I NCO Ratio (RHS)

Median Fed C&I NCO Ratio from 2000 to 2026

.with this, bank earnings thus far in 2Q point to stable-to-improving credit. Source: Jefferies; BankruptcyData.com; Federal Reserve. C&I

NCOs based on the top 100 banks. Correlation reflects a two-

quarter lag.

Bankruptcy filings are trending higher on a Y/Y and Q/Q basis (Exhibits 2-13), The most 2Q26formulaC&I NCO rate reflects the output of our regression

pronounced deltas are seen in small- and medium-sized bankruptcies, which are up 11%/9% Y/Y

on a TTM basis, respectively, with large bankruptcies down 12% Y/Y on a TTM basis.

Total bankruptcies in 2Q'26 were 2,421, or 75% above the quarterly avg.