On Tuesday, we got the answer (or at least a partial answer) to the question we posed last month when we asked the following: “How long before the impairments and charges currently targeting smaller firms finally shift to the bigger ones? And how underreserved is JPMorgan for that eventuality?”

We were of course referring to JPMorgan’s exposure to America’s dying oil patch where a rash of defaults and bankruptcies are just around the corner once the bevy of cash flow negative producers see their credit facilities cut by 10-20% when RBL is reevaluated in April.

What prompted us to ask specifically about JPMorgan’s exposure was the fact that in Q4, the bank did something it hasn’t done in 22 quarters: it increased loan loss provisions.

That very likely had to do with the worsening prospects for its energy book where O&G exposure is a whopping $44 billion against which the bank said yesterday it will now provision an exra $500 million in Q1 of 2016. That brings total provisions against JPMorgan’s energy exposure to $1.3 billion, or around 3%. Of the total $44 billion in energy exposure, $19 billion is HY or, junk.

Of course that’s just one bank. What we don’t know is what the breakdown looks like for other large, systemically important institutions, nor do we have any idea what the granular data is for the banking sector is as a whole. 

What we do know, however, is that when you look out across 6,182 FDIC-insured institutions, provisions have been on the rise for six consecutive quarters and they jumped sharply in Q4, rising $3.8 billion in total.

“Some of the increase in loss provisions is attributable to stress in the energy sector,” the FDIC said, adding that “there are signs of growing credit risk, particularly among loans related to energy and agriculture.”

Yes, “particularly” there. Given the fact that banks habitually put off setting aside adequate reserves in order to “smooth” out earnings, one wonders what the Q4 numbers would have looked like had provisions been appropriately large. And that raises the next question: what will Wall Street’s earnings look like when postponing the inevitable is no longer possible?