Bank Stocks Surge on AI Wave
- Jun 1
- 3 min read
June 1, 2026 | Whalen Global Advisors LLC has released The IRA Bank Book Q2 2026, which delivers a detailed look at the operating realities and credit risks building beneath the surface of the US financial system. The 30+ page deep-dive into the US banking sector updates investors on the performance of financials YTD in 2026 after the remarkable performance in 2025.
The IRA Bank Book Q2 2026
“Financial stocks are the only sector of the equity market with positive performance after AI/technology,” notes WGA Chairman Christopher Whalen. JPMorgan Chase (JPM) CEO Jamie Dimon stated that the bank's trading (markets) revenue could rise by at least 11% in the second quarter, which would make it the second-best quarter ever for that business. Additionally, Dimon projected that JPM's investment banking fees would increase by about 10%.
“Credit indicators continue to trend lower even as exposure to areas such a private credit and nonbank financial institutions continue to grow by double-digit rates," notes Whalen. "The rising exposure of US banks to non-depository financial institutions, including private credit funds, credit managers, and private equity sponsors that now sit at the center of the shadow banking system, suggests that bank stocks may be headed for a reset, especially if the FOMC tightens policy later this year.”
The new report includes WGA’s proprietary estimate of the contingent credit exposure of U.S. banks to these NDFIs, a number that may surprise investors who assume bank balance sheets are insulated from the private credit boom. The IRA Bank Book for Q2 2026 also features a discussion of the WGA Bank Top 50 test group as well as extensive tables and charts showing the performance of loans, fixed income assets and other indicia of bank financial performance.
Source: FDIC/WGA LLC
“One reason why bank credit statistics look so good is that the markets remain awash in liquidity, forcing asset prices up and default rates down,” notes Whalen. "We estimate that there are now $3 trillion in unused loan commitments by banks to non-depository financial institutions."
He adds: “The period of Fed tightening from 2021 through the end of last year did not even begin to deflate the asset bubble in US markets fueled by quantitative easing (QE) by the Fed. Many of the indicators of the cost of default are actually falling as Q2 2026 draws to a close, evidence that there remains a huge amount of inflation in financial assets and markets after 15 years of massive securities purchases by the Federal Reserve Board.”
The IRA Bank Book Q2 2026 is available for purchase in The IRA online store and to subscribers to The IRA Premium Service which provides ongoing analysis of bank risk, credit markets, and financial system stress points. Subscribers please login to download your copy of The IRA Bank Book for Q2 2026 report below.
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