THE AKITA BANK,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥4.17B
• EPS: ¥220.16

Income Statement

Balance Sheet

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

Akita Bank (Consolidated, JGAAP) reported FY2026 Q2 results with ordinary income of ¥5.60bn and net income of ¥3.91bn, up a robust 103.1% YoY, indicating a sharp recovery in profitability versus the prior-year half. While traditional manufacturing-style line items (revenue, gross profit, EBITDA) are unreported for banks and show as zero, the disclosed ordinary income and net income are the most relevant indicators under JGAAP for financial institutions. The effective tax burden is consistent with norms: taxes of ¥1.73bn imply a ~30.7% effective tax rate on an estimated pre-tax income of ~¥5.63bn. The balance sheet remains sizable with total assets of ¥3.575tn and total equity of ¥174.8bn, implying a consolidated equity-to-asset ratio of roughly 4.9% and financial leverage of about 20.45x, typical for a regional bank. Liabilities of ¥3.303tn correspond to a debt-to-equity of ~18.9x, again consistent with deposit-funded models. With net income of ¥3.91bn for H1, simple annualization suggests full-year net income run-rate near ¥7.8–8.0bn, translating to an estimated annualized ROE of roughly 4.5% on period-end equity (non-annualized H1 ROE ~2.2%). Ordinary income is nearly equal to operating income in the dataset, suggesting limited distortion from non-operating items; the small difference between ordinary and pre-tax income points to minor extraordinary gains. Earnings quality can’t be validated from cash flow data because cash flow statements are not disclosed in this extract (zeros indicate non-reporting), but the earnings scale and tax charge look internally consistent. As a bank, profitability drivers likely include net interest income amid a shifting rate backdrop and credit cost normalization; however, line-item detail on net interest margin (NIM), fees, trading/securities gains/losses, and credit costs is not provided. Capital adequacy ratios (e.g., CET1 under Basel III) are not disclosed here; nonetheless, the absolute equity level appears steady relative to assets for a regional bank profile. Dividend data are not available in this snapshot (DPS appears as zero due to non-reporting), so payout sustainability cannot be assessed from this dataset. The YoY profit surge is a notable positive and suggests improved margin dynamics and/or lower credit costs versus last year, but the durability of this rebound requires monitoring given interest rate and securities valuation sensitivity. Key uncertainties center on asset quality, securities portfolio duration risk, and deposit beta behavior as rates evolve. Overall, the interim results show solid profit momentum and stable balance sheet scale, but limited disclosures constrain a full assessment of earnings quality, capital strength, and shareholder return capacity.

Profitability Analysis

ROE_decomposition: Using period-end equity as a proxy, half-year net income of ¥3.906bn implies a non-annualized ROE of ~2.2%; annualized ROE is approximately ~4.5% (¥3.906bn x2 / ¥174.779bn). Traditional DuPont components (net margin, asset turnover) are not meaningful for banks given balance-sheet intermediation; reported zeros in margin/turnover are non-applicable rather than true zeros. Financial leverage is ~20.45x (Assets/Equity = ¥3,574,997m / ¥174,779m). margin_quality: Net income rose 103.1% YoY to ¥3.906bn. Effective tax rate is ~30.7% (¥1.728bn / ¥5.634bn pre-tax), consistent with standard ranges, supporting the credibility of pre-tax profit. Limited gap between ordinary income (¥5.597bn) and pre-tax profit (¥5.634bn) implies minimal extraordinary items. operating_leverage: Insufficient granularity on income mix and expenses to quantify operating leverage. However, the magnitude of YoY net profit growth versus the absolute level of ordinary income suggests either improved spreads/securities results or lower credit costs versus the prior year. Cost-to-income and credit cost ratios are not disclosed, limiting precision.

Growth Assessment

revenue_sustainability: Bank ‘revenue’ metrics are not disclosed in this extract; instead, ordinary income of ¥5.60bn represents core profit momentum. The doubling of net income YoY indicates a strong interim rebound, but sustainability depends on NIM trajectory, deposit beta, fee income stability, and securities income—which are not provided. profit_quality: Tax and profit bridge (ordinary to pre-tax to net) look internally consistent, with only minor extraordinary influence implied. Lack of cash flow data, NIM, fee/trading breakdown, and credit cost details limits assessment of recurring versus one-off drivers. outlook: If rate normalization continues, core NII could remain supportive, but further yield-curve moves could pressure securities valuations. Credit conditions in the regional economy and SME exposure will be pivotal for credit costs. Without guidance or segment detail, a cautious base case is stable to modestly improving profitability from the H1 run-rate, contingent on market volatility and credit trends.

Financial Health

liquidity: Current/quick ratios are not meaningful for banks (reported zeros indicate non-disclosure). Liquidity assessment requires loan-to-deposit ratios, high-quality liquid assets, and liquidity coverage ratios, none of which are provided here. solvency: Total equity ¥174.8bn vs. assets ¥3.575tn implies an equity-to-asset ratio of ~4.9% and liabilities/equity of ~18.9x, typical for a regional bank. Regulatory capital metrics (CET1, total capital, leverage ratio) are not disclosed; thus, solvency evaluation is incomplete. capital_structure: Balance sheet is predominantly liability-funded (deposits and market funding embedded within total liabilities of ¥3.303tn). No data on subordinated debt or hybrid instruments are provided. Equity appears stable in absolute terms; however, sensitivity to AFS securities valuation could affect capital through OCI under market stress.

Cash Flow Quality

earnings_quality: Operating, investing, and financing cash flows are unreported in this dataset (zeros reflect non-disclosure). Therefore, OCF-to-net income, cash conversion, and timing of earnings recognition cannot be assessed. FCF_analysis: Free cash flow is not meaningful for banks in the manufacturing sense, and is unreported here. For banks, core cash generation is better evaluated via NII, fee income, and credit cost trends—all not available in this extract. working_capital: Working capital metrics are not relevant to banks in the conventional sense; no granular data on loans/deposits or securities roll-down provided.

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio are not disclosed (zeros indicate non-reporting). With H1 EPS of ¥220.16, implied annualized EPS would be ~¥440 if H2 mirrors H1, but payout cannot be inferred without an announced policy. FCF_coverage: Not assessable; cash flow data and bank-appropriate cash generation proxies are absent. policy_outlook: Regional banks often target stable or progressively increasing dividends within a payout band, but no company-specific guidance is provided here. Dividend capacity will depend on full-year earnings realization, credit cost stability, and regulatory capital buffers.

Risk Assessment

Business Risks:

• Interest rate risk on the banking book (NIM sensitivity and securities valuation volatility)
• Credit risk concentration in Akita Prefecture and SME portfolios amid demographic headwinds
• Fee income softness if economic activity slows regionally
• Competition for deposits leading to higher deposit beta and margin compression
• Operational and IT risks including cybersecurity and system modernization

Financial Risks:

• Securities portfolio duration and unrealized losses if yields rise further
• Credit cost normalization from low levels or spike in delinquencies during downturns
• Liquidity risk in stressed markets without disclosed LCR/NSFR data
• Capital adequacy uncertainty due to lack of disclosed CET1 and risk-weighted assets
• Valuation swings through OCI impacting equity and regulatory capital buffers

Key Concerns:

• Sustainability of the 103.1% YoY net income growth absent segment disclosure
• Undisclosed credit cost and NPL trends
• Unknown capital ratios and buffers versus Basel III requirements
• Sensitivity to interest rate and securities market volatility
• Limited visibility on dividend policy and shareholder return framework

Investment Implications

Key Takeaways:

• Strong H1 rebound with net income ¥3.91bn (+103.1% YoY) and ordinary income ¥5.60bn
• Annualized ROE estimated at ~4.5% on period-end equity; non-annualized H1 ROE ~2.2%
• Leverage consistent with regional bank norms (Assets/Equity ~20.45x; Liabilities/Equity ~18.9x)
• Effective tax rate ~30.7% supports integrity of the profit bridge
• Limited disclosures on NIM, fees, securities results, and credit costs constrain analysis
• Dividend data not available; payout capacity cannot be assessed from this snapshot

Metrics to Watch:

• Net interest margin and deposit beta dynamics
• Credit costs, NPL ratio, and coverage
• Cost-to-income (OHR) and efficiency initiatives
• Securities portfolio duration, unrealized gains/losses (OCI), and VaR
• Regulatory capital ratios (CET1, total capital, leverage ratio)
• Loan-to-deposit ratio and liquidity coverage metrics

Relative Positioning: Within Japan’s regional banks, Akita Bank’s leverage profile appears typical and profitability is improving from a low base, with estimated ROE still mid-single-digit on an annualized basis; fuller benchmarking requires disclosure of NIM, cost efficiency, credit costs, and capital ratios.

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
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