THE FIRST BANK OF TOYAMA,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥7.09B
• EPS: ¥115.55

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Toyama First Bank (consolidated, JGAAP) reported FY2026 Q2 cumulative operating income of ¥10.10bn, flat YoY, while net income declined 30.5% YoY to ¥7.30bn. The flat operating/ordinary income alongside a sharp drop in net income suggests a heavier tax burden and/or higher credit costs or other below-operating-line items in the period, despite stable core profit generation. EPS was ¥115.55 on a consolidated basis. Depreciation and amortization totaled ¥0.55bn, consistent with a largely light-asset operating base typical of regional banks. Operating cash flow was ¥9.48bn, exceeding net income (OCF/NI 1.30x), indicating healthy cash conversion despite limited disclosure on working-capital-like movements within the banking balance sheet. Total assets were ¥1,638.69bn and total equity ¥175.70bn, implying an equity ratio of roughly 10.7% (calculated) and financial leverage (assets/equity) of 9.33x, both within a typical range for regional banks. Liabilities stood at ¥1,441.73bn (debt-to-equity ≈8.21x), reflecting the deposit-funded model. Several key line items (revenue, cost of sales, current assets/liabilities, interest expense, investing CF, DPS, shares outstanding) are unreported in XBRL; this is common for banks where standard industrial formats do not map well to bank financial statements. The equality of operating and ordinary income indicates limited non-operating contributions this period. The negative YoY swing in net income, despite flat operating income, points to less favorable below-operating impacts (e.g., tax normalization, valuation/realized securities losses, or higher credit costs); precise attribution is not disclosed here. With EBITDA of ¥10.65bn (operating income plus D&A), implied operating efficiency appears stable, but operating leverage is weak near term given flat operating income. Liquidity ratios like current/quick are not meaningful for banks, and their zero values reflect non-disclosure rather than weak liquidity. Dividend data are not disclosed; financing CF outflow of ¥1.64bn likely includes dividends and/or liability management, but details are unavailable. Overall, core profitability looks stable while bottom-line pressure and disclosure gaps warrant monitoring of credit costs, securities valuation, and tax effects. Our analysis relies on non-zero disclosed figures, supplemented with standard banking diagnostics and calculated metrics, with appropriate caution around incomplete disclosure.

Profitability Analysis

ROE_decomposition: Using available data, half-year ROE (NI/ending equity) ≈ 7.303 / 175.696 = 4.16% for the interim period; annualized ~8.3%, assuming proportional run-rate and stable average equity. DuPont components based on conventional industrial revenue are not applicable for banks; reported Net Profit Margin and Asset Turnover are zero due to unreported revenue. Financial leverage (Assets/Equity) is 9.33x. On a bank-adapted view, ROE is driven by net interest margin, fee/other income, cost-to-income, credit costs, and taxes; the YoY net income decline despite flat operating/ordinary income signals adverse movements in credit costs, securities-related results, or taxes. margin_quality: Operating income ¥10.10bn and ordinary income equal imply that the core banking result dominated, with minimal non-operating swing this period. The drop in net income (-30.5% YoY) indicates lower margin quality at the bottom line—likely from higher tax expense (reported taxes ¥4.37bn) and/or increased credit costs or valuation losses not broken out here. operating_leverage: Operating income was flat YoY, suggesting limited positive operating leverage. With net income falling, negative operating leverage is evident at the bottom line, reflecting either higher risk costs or reduced non-operating gains offsetting stable core revenues.

Growth Assessment

revenue_sustainability: Traditional revenue/COGS metrics are not meaningful for banks and are unreported. Stability in operating/ordinary income indicates steady core earnings power in the half despite macro headwinds. Sustainability will hinge on loan growth in the Toyama and surrounding regions, net interest margin resilience amid the BOJ’s evolving rate framework, and stability of fee income. profit_quality: OCF/NI at 1.30x is supportive of earnings quality. However, the divergence between operating/ordinary income and net income suggests non-core drags (taxes/credit costs/valuation), lowering the quality of bottom-line growth. D&A is modest (¥0.55bn), pointing to low non-cash distortion at the operating line. outlook: Assuming stable deposits and cautious loan growth, near-term earnings should track rate dynamics and credit cost normalization. Any uptick in domestic rates can aid NIM, but mark-to-market volatility in securities could offset benefits. Credit cost trends in an aging, slow-growth local economy are a key swing factor for 2H.

Financial Health

liquidity: Bank-specific liquidity is driven by deposits and liquid securities rather than current/quick ratios (unreported). With assets of ¥1,638.69bn and a deposit-funded liability structure (debt-to-equity 8.21x), structural liquidity appears typical for a regional bank; detailed LCR/NSFR are not disclosed here. solvency: Calculated equity ratio ≈ 10.7% (175.70/1,638.69), and financial leverage 9.33x are within peer norms for Japanese regional banks. Regulatory capital ratios (CET1/Total capital) are not disclosed; solvency commentary is therefore limited. capital_structure: Liabilities of ¥1,441.73bn vs equity of ¥175.70bn produce a liabilities-to-equity multiple of ~8.21x. Some discrepancy between Assets and Liabilities+Equity may reflect valuation differences or undisclosed components (e.g., non-controlling interests or OCI), but the overall structure remains consistent with a deposit-rich balance sheet.

Cash Flow Quality

earnings_quality: OCF of ¥9.48bn exceeds net income of ¥7.30bn (1.30x), indicating that reported earnings are supported by cash generation. For banks, OCF can reflect changes in loans/deposits and securities; without detail, we treat the ratio as directionally positive. FCF_analysis: Investing CF is unreported (0 in feed), so free cash flow cannot be reliably computed. For banks, traditional FCF is less meaningful given the nature of financial assets; focus should be on core cash earnings, stability of funding, and securities cash flows. working_capital: Standard working capital metrics are not applicable to banks and are unreported. Monitoring loan/deposit trends and securities duration is more informative for liquidity and cash flow timing.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are unreported. EPS is ¥115.55; absent DPS data, we cannot compute payout. Historically, regional banks target stable dividends aligned with earnings capacity and regulatory capital buffers. FCF_coverage: With investing CF unreported and FCF not meaningful for banks, we assess coverage qualitatively: OCF > NI suggests capacity to fund distributions, subject to capital requirements and asset quality considerations. policy_outlook: Without explicit guidance or historical DPS, we assume a conservative, stability-oriented policy typical of regional banks, sensitive to credit costs, securities valuation swings, and regulatory capital thresholds.

Risk Assessment

Business Risks:

• Regional concentration in Toyama and adjacent prefectures, exposing earnings to local economic and demographic headwinds
• Net interest margin pressure from low/gradually normalizing domestic rates and competitive deposit pricing
• Fee income dependence on limited regional customer base
• Operational and IT risks, including digital transformation and cybersecurity
• Competition from megabanks, internet banks, and fintech platforms

Financial Risks:

• Credit cost volatility tied to SME exposures and potential stress in local sectors
• Securities portfolio valuation risk (JGBs and credit) under rate and spread movements
• OCI/capital volatility with AFS portfolio under JGAAP
• Funding mix sensitivity to deposit migration and potential repricing
• Regulatory capital headwinds from Basel III finalization and domestic supervisory expectations

Key Concerns:

• 30.5% YoY decline in net income despite flat operating/ordinary income
• Limited disclosure on credit costs and securities gains/losses, obscuring the drivers of the bottom-line decline
• Absence of regulatory capital ratios (e.g., CET1) to gauge loss-absorption capacity

Investment Implications

Key Takeaways:

• Core operating/ordinary income was stable in 1H, but net income fell materially due to below-operating impacts
• Cash conversion is solid (OCF/NI 1.30x), supporting the quality of reported earnings
• Leverage (assets/equity 9.33x) and calculated equity ratio (~10.7%) are in line with regional bank norms
• Disclosure gaps on key banking metrics limit precision (NIM, credit costs, securities results, capital ratios, DPS)

Metrics to Watch:

• Net interest margin and loan/deposit growth
• Credit costs, NPL ratio, and coverage
• Securities portfolio unrealized gains/losses and duration gap
• Cost-to-income ratio and efficiency initiatives
• Regulatory capital ratios (CET1, total capital) and OCI sensitivity
• Dividend policy guidance and total payout

Relative Positioning: Based on available figures, profitability appears mid-range for Japanese regional banks (annualized ROE around the mid-to-high single digits), leverage is typical, and cash conversion is supportive; however, visibility on risk costs and capital strength is below peers with fuller disclosure.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis