Learning under Localized Minority Imbalance

Real-world categorization is severely hampered by class imbalance because traditional ensembles favor majority classes, which lowers minority performance and overall F1-score. We provide a unique ensemble technique for imbalanced problems called CAMO (Class-Aware Minority-Optimized).Through a hierarchical procedure that incorporates vote distributions, confidence calibration, and inter model uncertainty, CAMO dynamically boosts underrepresented classes while preserving and amplifying minority forecasts. We verify CAMO on two highly unbalanced, domain-specific benchmarks: the DIAR-AI/Emotion dataset and the ternary BEA 2025 dataset. We benchmark against seven proven ensemble algorithms using eight different language models (three LLMs and five SLMs) under zero-shot and fine-tuned settings .With refined models, CAMO consistently earns the greatest strict macro F1-score, setting a new benchmark. Its benefit works in concert with model adaptation, showing that the best ensemble choice depends on model properties .This proves that CAMO is a reliable, domain-neutral framework for unbalanced categorization.

Facing imbalanced binary classification, we aim at maximizing the recall while limiting the proportion of false detections in the minority class. For doing that, the present work studies the effect of several rebalancing strategies, from the uniform subsampling of the observations from the minority class, to a more involved local data augmentation scheme. To be more specific, we establish that only rebalancing class proportions cannot modify the classification performance, whereas local data augmentation is proved to have an impact on the final results. The local augmentation scheme is introduced by means of a two-step procedure. The first step randomly subsamples anchor points among the training observations. These anchor points are used in the second step, for drawing new augmentation data following an ''augmentation kernel'' to be specified. This enables us to decouple the impact of the anchor points subsampling from the one of drawing augmentation data accounting (or not) for the local geometry of the support. The experiments on synthetic data illustrate the practical performance of several strategies for subsampling anchor points combined with either a Gaussian or a diffusion-based augmentation kernel. Compared to SMOTE-like data augmentation procedures, a better performance is achieved when subsampling in the close neighborhood to the classification boundary combined with a Gaussian augmentation kernel. Furthermore in specific settings where the geometric structure of the support matters, the experimental results show that using a diffusion-based augmentation kernel outperforms the Gaussian one.

Financial distress prediction remains a significant challenge in enterprise risk analysis due to the highly imbalanced nature of real-world financial datasets, where bankrupt or distressed firms typically constitute only a small minority of observations. This paper presents a comparative evaluation of classical statistical methods, ensemble learning approaches, and exploratory neural models for minority-class financial distress prediction under class imbalance constraints. The study incorporates structured preprocessing, imbalance mitigation using the Synthetic Minority Oversampling Technique (SMOTE), comparative evaluation across ensemble learning architectures including XGBoost, CatBoost, LightGBM, Random Forest, and explainability analysis using SHAP-based feature attribution methods. Experimental evaluation demonstrates that gradient-boosting approaches achieved improved minority-class sensitivity relative to baseline statistical classifiers under severe imbalance conditions. The workflow additionally emphasises reproducibility, interpretability, auditability, and governance-oriented machine learning evaluation within enterprise financial risk environments. The work is positioned as an applied engineering evaluation intended to support reproducible and interpretable machine learning workflows for financial distress prediction under severe class imbalance constraints.