Chart 16
"Commercial and industrial charge-off rates may begin to rise in 2006, albeit from low levels."
Date C&I net charge-off rate Spec Bond Default Rates
1985:Q1 0.90% 3.48%
1985:Q2 1.15% 3.63%
1985:Q3 1.35% 4.54%
1985:Q4 1.99% 3.67%
1986:Q1 1.03% 3.92%
1986:Q2 1.40% 4.62%
1986:Q3 1.47% 5.99%
1986:Q4 2.04% 5.64%
1987:Q1 0.87% 5.81%
1987:Q2 1.14% 5.22%
1987:Q3 1.04% 3.73%
1987:Q4 1.56% 4.23%
1988:Q1 0.83% 4.77%
1988:Q2 1.29% 4.62%
1988:Q3 0.95% 4.15%
1988:Q4 1.26% 3.60%
1989:Q1 0.62% 3.13%
1989:Q2 0.85% 2.62%
1989:Q3 0.85% 4.17%
1989:Q4 1.94% 5.80%
1990:Q1 1.07% 6.90%
1990:Q2 1.44% 8.41%
1990:Q3 1.29% 9.56%
1990:Q4 1.92% 10.08%
1991:Q1 1.18% 12.11%
1991:Q2 1.89% 12.70%
1991:Q3 1.92% 11.89%
1991:Q4 2.60% 10.40%
1992:Q1 1.48% 7.99%
1992:Q2 1.32% 6.42%
1992:Q3 1.40% 5.67%
1992:Q4 1.48% 4.83%
1993:Q1 0.74% 4.64%
1993:Q2 0.86% 4.26%
1993:Q3 0.70% 3.91%
1993:Q4 0.82% 3.51%
1994:Q1 0.25% 2.99%
1994:Q2 0.33% 1.93%
1994:Q3 0.23% 2.19%
1994:Q4 0.35% 1.94%
1995:Q1 0.16% 1.21%
1995:Q2 0.14% 2.17%
1995:Q3 0.32% 2.31%
1995:Q4 0.41% 3.32%
1996:Q1 0.25% 3.50%
1996:Q2 0.29% 2.89%
1996:Q3 0.22% 2.21%
1996:Q4 0.30% 1.67%
1997:Q1 0.18% 1.61%
1997:Q2 0.24% 1.62%
1997:Q3 0.34% 2.11%
1997:Q4 0.38% 2.06%
1998:Q1 0.29% 2.41%
1998:Q2 0.35% 3.03%
1998:Q3 0.40% 2.69%
1998:Q4 0.63% 3.44%
1999:Q1 0.44% 3.87%
1999:Q2 0.54% 4.94%
1999:Q3 0.53% 5.91%
1999:Q4 0.79% 5.69%
2000:Q1 0.52% 5.75%
2000:Q2 0.69% 5.63%
2000:Q3 0.70% 5.38%
2000:Q4 1.30% 6.12%
2001:Q1 0.92% 7.79%
2001:Q2 1.20% 8.23%
2001:Q3 1.30% 9.64%
2001:Q4 2.37% 10.54%
2002:Q1 1.47% 10.53%
2002:Q2 1.77% 10.46%
2002:Q3 2.02% 9.70%
2002:Q4 1.83% 8.43%
2003:Q1 1.39% 6.98%
2003:Q2 1.34% 6.15%
2003:Q3 1.18% 6.03%
2003:Q4 1.09% 5.32%
2004:Q1 0.70% 4.36%
2004:Q2 0.59% 3.48%
2004:Q3 0.45% 2.44%
2004:Q4 0.58% 2.35%
2005:Q1 0.28% 2.24%
2005:Q2 0.28% 1.95%
2005:Q3 0.25% 2.09%
2005:Q4 0.46% 1.93%
2006:Q1 1.84%
2006:Q2 2.35%
2006:Q3 2.54%
2006:Q4 2.97%
Source: FDIC, Moody's Investor Service