The Hachijuni Bank,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥27.87B
• EPS: ¥64.75

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

Hachijuni Bank (8359) reported FY2026 Q2 consolidated results under JGAAP with operating income (banking equivalent) of ¥41.946bn and net income of ¥29.762bn, up 52.5% YoY. While revenue-related lines are not disclosed in the XBRL, profits indicate a strong half, with an estimated effective tax rate of roughly 20.2% (¥7.519bn tax on ~¥37.3bn pre-tax profit). Ordinary income equaled operating income in this dataset, implying limited non-operating swings during the period. Balance sheet scale remains substantial at total assets of ¥13.5126tn and total equity of ¥1.0411tn, translating to assets-to-equity (financial leverage) of about 12.98x and an equity-to-asset ratio of approximately 7.7%. Using period-end equity, half-year ROE is roughly 2.9% (non-annualized), implying ~5.7% on a simple annualized basis, and half-year ROA is ~0.22% (~0.44% annualized), consistent with a conservative regional bank profile. Net income growth outpaced operating income growth (flat YoY per disclosure), suggesting YoY improvement primarily from below-operating-line items such as lower credit costs, tax effects, or mix shift rather than topline expansion. EPS was ¥64.75, which, combined with net income, implies roughly 460 million shares outstanding (approximation, as outstanding shares were not disclosed). Liquidity metrics like current ratio and quick ratio are not meaningful for banks, and cash flow items were not disclosed; for banks, period OCF/FCF can be volatile and less indicative of core performance. The capital structure shows liabilities-to-equity of ~12.05x, consistent with a deposit-funded regional bank. With interest rates normalizing in Japan, rising yields may pressure securities valuations in the short term but can support net interest margins over time. Fee and commission trends, credit cost normalization, and deposit beta management will be key to sustaining profitability through the rate cycle. Equity growth appears healthy relative to asset growth, supporting solvency, although regulatory capital ratios were not disclosed. Dividend information was not provided; thus, payout and coverage assessments rely on qualitative inference typical for regional banks. Data limitations (notably revenue, CF, dividends, and current items) constrain precision, but the available figures point to improved earnings quality via a lower tax burden and steady core profitability. Overall, Hachijuni’s FY2026 Q2 shows solid profitability momentum with balance sheet strength aligned with a conservative regional bank stance, though sensitivity to rate and market-value movements remains a central risk.

Profitability Analysis

ROE_decomposition: Using a banking-adapted DuPont view (noting revenue and turnover lines are undisclosed), half-year ROE ≈ Net income / Ending equity = ¥29.762bn / ¥1,041.123bn ≈ 2.86% (≈5.7% annualized). Financial leverage (Assets/Equity) ≈ 12.98x. ROA (half-year) ≈ 0.22%, implying net interest/fee economics consistent with a low-risk regional bank. Standard margin and turnover components are not computable due to undisclosed revenue. margin_quality: Net income of ¥29.762bn against ordinary income of ¥41.946bn indicates a net-to-ordinary conversion of ~71%. Effective tax rate is about 20.2%, likely aiding YoY net profit growth given operating income was flat YoY. With limited disclosed non-operating items, margin quality appears supported by lower taxes and potentially benign credit costs. operating_leverage: Operating income was flat YoY (+0.0%), while net income rose +52.5% YoY. This suggests the YoY uplift came below operating level (tax/credit costs/mix) rather than operating leverage from revenue growth. True operating leverage can’t be quantified without revenue and expense breakdowns, but the pattern indicates improved cost of risk and tax efficiency rather than structural margin expansion.

Growth Assessment

revenue_sustainability: Revenue lines are undisclosed; however, stable operating income suggests core earnings were steady YoY. In a rising-rate environment, NIM can trend higher, but deposit beta and securities valuation offsets are key determinants. profit_quality: Net income growth (+52.5% YoY) with flat operating income implies quality improvements driven by lower taxes and/or credit costs, which may not be fully repeatable. Sustainability hinges on maintaining low credit costs and gradually improving NIM and fees. outlook: With total assets at ¥13.5tn and equity at ¥1.04tn, the bank has capacity to modestly expand loans as rates normalize. Near-term earnings trajectory will depend on NIM expansion, fee income growth, and stable credit quality. Securities portfolio valuation volatility remains a swing factor.

Financial Health

liquidity: Bank-specific liquidity is primarily deposit-funded; current/quick ratios are not meaningful. No run-rate liquidity stress is evident from disclosed aggregates, but granular funding mix and LCR/NSFR are not provided. solvency: Equity-to-asset ratio ≈ 7.7% (computed), with liabilities-to-equity ≈ 12.05x. These are typical for a conservative regional bank. Regulatory capital (CET1/Total capital) is not disclosed, limiting a full solvency assessment. capital_structure: Assets ¥13.5126tn; liabilities ¥12.5477tn; equity ¥1.0411tn. Leverage (A/E) ≈ 12.98x. Balance sheet scale and leverage are in line with peers; sensitivity to securities valuation under higher rates requires monitoring.

Cash Flow Quality

earnings_quality: Cash flow statements are undisclosed here. For banks, period OCF correlates poorly with earnings due to balance sheet flows. Earnings quality is better gauged via credit costs, NIM, and fee stability—none detailed in this dataset. FCF_analysis: Free cash flow is not applicable in the industrial sense for banks and is undisclosed. Absent CF data, we cannot reconcile earnings to cash generation. working_capital: Working capital metrics are not meaningful for deposit-taking institutions. Asset-liability management (duration, repricing gaps) is the relevant lens but not disclosed.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio are not disclosed. EPS is ¥64.75 for the half-year; without DPS, we cannot compute payout. Historically, regional banks target stable dividends, but no period-specific data is available here. FCF_coverage: Not assessable due to undisclosed cash flows and DPS. For banks, dividend coverage is better assessed against recurring net income and regulatory capital buffers, which are not provided. policy_outlook: In the absence of disclosed dividends and capital ratios, we assume a cautious, stability-oriented policy typical of regional banks, contingent on credit costs and rate environment.

Risk Assessment

Business Risks:

• Interest rate risk from BOJ policy normalization impacting NIM and securities valuation
• Market risk on bond/equity portfolios leading to OCI and P&L volatility
• Credit risk in SME and regional borrower base amid economic slowdown
• Demographic headwinds in core regions (aging, depopulation) constraining loan demand
• Fee income growth constraints due to competitive regional landscape
• Competition for deposits driving higher deposit betas

Financial Risks:

• Securities valuation losses if yields rise further (unrealized losses crystallizing on sales)
• Repricing gap between assets and liabilities compressing margins if deposit costs rise faster
• Potential uptick in credit costs from real estate and SME exposures
• Capital ratio pressure if unrealized losses accumulate or risk-weighted assets grow
• Concentration risk to local economy

Key Concerns:

• Net income growth reliance on lower taxes/credit costs rather than core operating expansion
• Undisclosed regulatory capital metrics limiting solvency visibility
• Sensitivity of earnings to rate and market value swings

Investment Implications

Key Takeaways:

• FY2026 Q2 net income ¥29.8bn (+52.5% YoY) despite flat operating income indicates below-the-line tailwinds
• Half-year ROE ~2.9% (≈5.7% annualized) and ROA ~0.22% align with conservative regional bank profile
• Equity-to-asset ratio ~7.7% and D/E ~12.05x show a typical regional bank capital structure
• Tax rate ~20% aided net profit; sustainability depends on credit costs and NIM trajectory
• Rate normalization presents a two-edged sword: near-term securities valuation pressure but medium-term NIM upside

Metrics to Watch:

• Net interest margin and deposit beta
• Credit costs and NPL trends
• Securities portfolio duration and unrealized gains/losses (OCI)
• Fee and commission income growth
• Regulatory capital ratios (CET1, Total capital) and leverage ratio
• Loans/deposits growth in core regions

Relative Positioning: Positioned as a sizeable, conservatively run regional bank with solid balance sheet leverage metrics; earnings sensitivity is moderate to interest-rate and securities valuation dynamics, with upside from gradual NIM improvement if deposit costs are controlled.

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