The Toho Bank,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥6.60B
• EPS: ¥25.10

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

Toho Bank (Consolidated, JGAAP) reported FY2026 Q2 cumulative net income of ¥6.271 billion, up 37.1% YoY, indicating solid profit momentum despite limited disclosure of revenue line items typical for banks. Ordinary income and operating income both stood at ¥9.131 billion, suggesting stable core profitability in the interim period, although the absence of segment detail (net interest income, fees, trading, and credit costs) constrains attribution analysis. Pre-tax income implied by the tax charge is approximately ¥8.279 billion, yielding an effective tax rate of about 24.2%, which appears normalized. With total assets of ¥6.644 trillion and equity of ¥208.9 billion, the equity/asset ratio is about 3.15% and balance sheet leverage is roughly 31.8x, consistent with regional bank norms. Return on equity on a half-year basis is about 3.0%, which annualizes to roughly 6.0%—a reasonable level for a regional bank in the current rate environment. Implied ROA is approximately 0.094% for the half-year (about 0.19% annualized), which, combined with leverage, reconciles to the estimated ROE. EPS for the period is ¥25.10; this implies an average diluted share count on the order of ~250 million shares, although the official share count was not disclosed in the dataset. Liquidity ratios and cash flow metrics are not meaningful for banks in the provided template, and the zeros should be interpreted as undisclosed rather than actual zero values. The balance sheet scale and high leverage underscore the importance of credit cost control and securities portfolio risk management, particularly amid BOJ policy normalization. The YoY earnings growth likely reflects a mix of margin resilience, cost discipline, and potential normalization of credit costs or securities-related gains, but the lack of detail prevents firm conclusions. Dividend data are not available, so payout assessment must be anchored to EPS and historical policy outside this dataset. From a solvency perspective, book equity is adequate for a regional bank balance sheet size, but capital adequacy (CET1, total capital ratio) was not disclosed and remains a key unknown. Overall, underlying profitability looks improved, the tax rate is in a normal range, and leverage is typical for the sector, but the absence of core banking line items limits visibility on sustainability and risk. Monitoring interest rate risk in the bond book, credit costs in the local economy, and fee income trends remains critical. Data limitations warrant cautious interpretation, focusing on trend confirmation in subsequent quarters.

Profitability Analysis

ROE decomposition (bank-adapted): ROA (NI/Assets, half-year) ≈ ¥6.271b / ¥6,643.796b = 0.094%; annualized ROA ≈ 0.19%. Financial leverage (Assets/Equity) ≈ 31.8x. Implied annualized ROE ≈ 0.19% × 31.8 ≈ ~6.0% (half-year ROE ≈ 3.0%). Traditional DuPont margin and asset turnover are not meaningful due to banking revenue recognition, and revenue was undisclosed in the dataset. Margin quality: Net income to pre-tax implies an effective tax rate of ~24.2% (¥2.008b / ¥8.279b), suggesting no unusual one-off tax effects. Profit mix cannot be disaggregated between net interest income, fees, trading, or realized gains given disclosure gaps; therefore, the durability of the margin uplift cannot be verified. Cost discipline appears supportive, as ordinary income equals operating income; however, without an expense breakdown (e.g., OHR), operating efficiency cannot be quantified. Credit costs and valuation gains/losses are the most material swing factors for regional banks and remain undisclosed; profitability quality should therefore be viewed as moderate but with uncertainty. Operating leverage: With revenue lines undisclosed, we cannot measure operating leverage; however, the 37.1% YoY increase in net profit versus a relatively modest change in pre-tax/tax indicates a profit delta likely driven by core margin improvement and/or lower credit costs rather than tax effects.

Growth Assessment

Revenue sustainability: Core revenue components (net interest income, fees, trading) were not disclosed; thus, we cannot conclusively assess sustainability. Profit growth: Net income rose 37.1% YoY to ¥6.271b, a strong improvement for a regional bank, with no evidence that tax effects drove the increase (tax rate ~24.2%). Outlook: Sustainability hinges on net interest margin stability amid BOJ normalization, loan growth vs. deposit beta, fee income diversification, and credit cost normalization. If the uplift was driven by lower credit costs, growth may moderate as provisioning normalizes; if driven by NIM expansion or fee growth, improvement could persist provided funding costs remain contained. Securities portfolio performance (JGB/credit duration and unrealized gains) could be a double-edged sword as yields evolve. Absent segment data, we assume a balanced contribution from core banking, but treat any securities-related gains as potentially non-recurring. Near-term trajectory should be validated by subsequent quarters’ ordinary income and credit cost disclosure. Inferred EPS strength (¥25.10 for H1) sets a higher base for full-year EPS, conditional on stable credit and rate environments.

Financial Health

Liquidity: Traditional current and quick ratios are not applicable to banks; the zeros in the dataset indicate non-disclosure. Balance sheet funding quality (deposit ratio, L/D, liquidity coverage) was not provided and remains a key blind spot. Solvency and capital: Total assets ¥6.644t, equity ¥208.9b, implying an equity/asset ratio of ~3.15% and leverage of ~31.8x—typical for a regional bank. Regulatory capital ratios (CET1, total capital) were not disclosed; these metrics are essential to fully assess solvency resilience. Liability structure details (wholesale funding reliance, subordinated debt) were not provided; however, the reported debt-to-equity proxy (liabilities/equity) of ~30.9x aligns with sector norms. Interest expense is shown as zero in the template but should be treated as undisclosed; interest-bearing liability costs are material for banks. Overall, financial health appears in line with a standard regional bank profile, but confirmation requires regulatory capital and liquidity metrics.

Cash Flow Quality

Operating, investing, and financing cash flows were not disclosed (zeros reflect missing data), which is common for abbreviated bank templates. For banks, OCF/NI and FCF constructs are less diagnostic than for non-financials due to the nature of financial intermediation. Earnings quality should instead be assessed through credit costs, NPL/coverage ratios, securities gains/losses, and fee vs. market-dependent income—none of which were provided. The implied pre-tax and tax relationship looks normal, suggesting earnings are not tax-driven. Working capital measures and EBITDA are not meaningful in a banking context. In the absence of cash flow data, we cannot compute FCF coverage or accrual-based red flags; focus should be on credit cost trends and realized versus unrealized securities P&L in future disclosures.

Dividend Sustainability

Dividend per share and payout ratio were not disclosed; zeros indicate non-disclosure. With EPS at ¥25.10 for H1, the capacity to fund ordinary dividends appears adequate in principle, but this cannot be confirmed without an actual DPS and policy. FCF coverage is not meaningful for a bank without proper cash flow and capital data. Dividend sustainability for regional banks typically depends on recurring core earnings, credit cost normalization, and capital adequacy (CET1 buffer above regulatory minima), none of which are available here. Policy outlook should be inferred from management guidance and historical payout tendencies outside this dataset. Until DPS and capital ratios are provided, payout assessment remains indeterminate.

Risk Assessment

Business Risks:

• Net interest margin compression if deposit betas rise faster than asset yields amid BOJ policy normalization.
• Credit cost volatility tied to the regional economy and SME exposure within Fukushima/Tohoku footprint.
• Securities portfolio valuation risk (duration in JGBs/munis/credit) with interest rate and spread movements.
• Limited fee income diversification may heighten earnings cyclicality if NII weakens.
• Competition from megabanks and fintechs in retail/SME lending and payments.
• Regulatory changes affecting capital requirements, conduct, or provisioning frameworks.

Financial Risks:

• High balance sheet leverage (≈31.8x) inherent to banking amplifies sensitivity to asset quality.
• Potential unrealized losses in available-for-sale securities as yields rise.
• Liquidity risk if wholesale funding reliance is material (not disclosed).
• Capital adequacy uncertainty due to absent CET1/total capital data.
• Interest rate risk in the banking book (IRRBB) affecting NII and OCI.

Key Concerns:

• Earnings sustainability unclear without NII/fee/trading/credit cost breakdowns.
• Lack of disclosure on capital and liquidity ratios limits solvency assessment.
• Dividend capacity and policy cannot be evaluated without DPS and capital data.

Investment Implications

Key Takeaways:

• FY2026 Q2 net income rose 37.1% YoY to ¥6.271b, indicating improved profitability.
• Effective tax rate ~24.2% suggests profits are operational rather than tax-driven.
• Annualized ROE estimated around 6.0% (half-year ~3.0%), with annualized ROA ~0.19%.
• Leverage ~31.8x and equity/asset ratio ~3.15% are typical for regional banks.
• Core revenue and credit cost drivers are not disclosed, limiting visibility on durability.
• Dividend data are absent; payout sustainability cannot be assessed from this dataset alone.

Metrics to Watch:

• Net interest margin and loan-deposit spread
• Loan growth and deposit beta trends
• Credit costs, NPL ratio, and coverage ratio
• Cost-to-income ratio (OHR) trajectory
• Securities portfolio duration, unrealized gains/losses (OCI), and AFS mix
• Regulatory capital ratios (CET1, total capital) and leverage ratio
• Ordinary income growth vs. one-off gains
• Dividend per share and payout ratio guidance

Relative Positioning: Based on available data, Toho Bank’s profitability has improved YoY with an estimated annualized ROE around 6%, broadly consistent with or slightly better than many regional peers in periods of stable credit costs. Leverage and equity-to-asset levels appear typical for the sector. However, incomplete disclosure on income mix, credit quality, capital, and dividends leaves its relative resilience versus regional peers indeterminate pending fuller financials.

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