The Bank of Toyama,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥627M
• EPS: ¥118.16

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

Toyama Bank (8365) reported FY2026 Q2 (consolidated, JGAAP) ordinary income of ¥987 million, flat YoY per disclosure, with net income of ¥629 million, up 17.1% YoY. For banks, the reported zeros for revenue, gross profit, and cash flow items indicate non-disclosure rather than true zeros; therefore, analysis focuses on available non-zero items and bank-relevant balance sheet structure. Total assets were ¥575.44 billion, total liabilities ¥519.07 billion, and total equity ¥31.36 billion, implying assets/equity (financial leverage) of roughly 18.3x and liabilities/equity (debt-to-equity) of about 16.6x. Using net income and EPS (¥118.16), implied average shares outstanding are approximately 5.32 million, suggesting figures are for a small regional bank scale. Income tax expense was ¥220 million; combining taxes with net income yields an implied pre-tax profit of roughly ¥849 million and an estimated effective tax rate near 26%, acknowledging that ordinary income may include items not aligned with pre-tax profit under JGAAP bank presentation. The YoY rise in bottom-line despite flat ordinary income likely reflects lower credit costs, improved extraordinary items, or tax normalization. The reported DuPont net margin and asset turnover figures are not meaningful for banks and reflect data omissions, but leverage at ~18x is within typical regional bank ranges. Equity to assets, computed from disclosed totals, is about 5.45%, typical for regional banks though regulatory capital ratios (CET1/Tier1) were not disclosed. Liquidity and working capital metrics are not applicable to banking balance sheets; deposit funding stability and liquidity coverage ratios would be more relevant but are unavailable. Operating cash flow, investing cash flow, and financing cash flow were unreported; consequently, cash flow-based assessments and FCF coverage cannot be derived from this dataset. Dividend data (DPS and payout) are also unreported; however, EPS supports potential capacity for distribution subject to capital policy and regulatory constraints. Overall profitability appears modest but improving, with capital structure and leverage consistent with peers, while data limitations constrain deeper margin and risk factor decomposition. Outlook hinges on BOJ policy normalization effects on deposit betas and securities valuations, as well as regional credit conditions in Toyama and surrounding markets. Key uncertainties include credit cost trajectory, securities portfolio duration/OCI sensitivity, and regulatory capital adequacy. Given the limited disclosures, conclusions rely on inferred metrics and standard banking analytical context rather than a full financial model.

Profitability Analysis

ROE decomposition for a bank relies on net income, leverage, and an economic margin measure; detailed revenue margins are not provided. Using an annualized estimate, if ¥629 million is 1H net income, annualized net income would be ~¥1.26 billion; on equity of ¥31.36 billion, annualized ROE approximates ~4.0% (assumption-based). Financial leverage derived from the balance sheet is ~18.3x (assets/equity = 575.44/31.36), a key driver of bank ROE. Net profit margin and asset turnover from the provided DuPont section are not applicable to banks due to accounting presentation differences and missing data. Ordinary income was flat YoY while net income rose 17.1% YoY, indicating improved below-ordinary items (e.g., lower credit costs booked below operating line, extraordinary gains, or a lower effective tax rate). The implied effective tax rate, using net income + tax as a proxy for pre-tax, is ~25.9% (220 / (629 + 220)), down or normalized relative to prior year if net income grew faster than ordinary income. Operating leverage cannot be assessed because operating revenue and cost breakdowns (net interest income, fees, operating expenses) are not disclosed; however, the spread between ordinary and net income suggests manageable non-operating drag in the half. Margin quality hinges on net interest margin stability and credit costs; both are undisclosed, so we infer that credit and valuation items were not excessively adverse this period. Overall, profitability is modest for a regional bank, with leverage doing most of the ROE work and underlying margin dynamics unobservable in the dataset.

Growth Assessment

Revenue-related lines are undisclosed; ordinary income was flat YoY and net income rose 17.1% YoY, indicating quality of growth may stem from non-operating improvements or tax effects rather than core income expansion. Sustainability of profit growth will depend on net interest margin resilience as BOJ policy evolves, deposit beta management, and credit cost containment in the bank’s regional footprint. The balance sheet scale of ¥575.44 billion in assets suggests limited capacity-driven growth without expanding risk appetite; absent loan/deposit growth data, we cannot attribute growth to volume or mix shifts. Securities portfolio performance (valuation gains/losses) can materially swing ordinary-to-net income; lack of disclosure prevents isolating this contribution. Assuming annualization, net income could be ~¥1.26 billion for the full year, implying mid-single-digit ROE, but this depends on H2 seasonality and credit costs. Profit quality is uncertain due to missing breakdown of recurring net interest/fee income versus one-offs. Outlook is cautious-neutral: growth likely tracks regional economic activity, BOJ rate path, and credit quality trends, with scope for gradual earnings normalization if asset yields reprice faster than deposit costs. Any acceleration would likely require cost efficiencies or fee income expansion.

Financial Health

Total assets were ¥575.44 billion, liabilities ¥519.07 billion, and equity ¥31.36 billion. The computed equity-to-assets ratio is approximately 5.45%, in line with Japanese regional bank norms, though regulatory capital ratios (CET1/Tier1) are not disclosed. Leverage measured as liabilities/equity is ~16.6x; assets/equity is ~18.3x. Liquidity metrics such as current and quick ratios are not meaningful for banks; deposit structure, LCR, and NSFR would be relevant but are unreported. No maturity ladder or interest rate risk disclosure is available; therefore, duration gap and OCI sensitivity cannot be assessed from this dataset. The gap between ordinary income (¥987 million) and net income (¥629 million) after ¥220 million tax implies limited drag from extraordinary items, consistent with stable financial health in the period. Overall solvency appears adequate given equity size relative to assets, but without risk-weighted assets and capital buffers, resiliency to shocks cannot be quantified.

Cash Flow Quality

Operating, investing, and financing cash flows are not disclosed (reported as 0 indicating unreported), preventing direct assessment of earnings-to-cash conversion. The provided OCF/Net Income ratio and FCF are mechanically zero due to non-disclosure and should not be interpreted as weak cash generation. For banks, traditional FCF is not a meaningful construct; cash flow quality is better assessed via core income stability, credit cost volatility, and securities OCI swings—none of which are detailed here. Working capital metrics are not applicable in a banking context; loan and deposit flows would be the appropriate focus but are unavailable. Given net income growth vs. flat ordinary income, we infer no material cash-earnings divergence this quarter, but this remains unverified without CF statements.

Dividend Sustainability

Annual DPS and payout ratio are unreported. With EPS of ¥118.16 for the half-year period, there appears to be capacity for dividends subject to regulatory capital needs and internal growth plans; however, without DPS and capital adequacy ratios, sustainability cannot be gauged. Free cash flow coverage is not applicable for banks and was reported as zero due to non-disclosure. Absent a stated dividend policy, we cannot infer target payout or stability. Any dividend outlook will hinge on full-year earnings trajectory, credit cost trends, and capitalization (CET1/Tier1) versus regulatory minima and management buffers.

Risk Assessment

Business Risks:

• Net interest margin compression if deposit betas rise faster than asset yield repricing under BOJ policy normalization
• Valuation volatility in bond and equity securities portfolios affecting OCI and earnings
• Regional credit concentration in Toyama and neighboring prefectures, exposing earnings to local economic cycles
• Limited scale constraining fee income diversification and operating leverage
• Competitive pressure on deposit pricing from larger banks and fintechs

Financial Risks:

• Credit cost spikes from SME exposures or collateral devaluations
• Interest rate risk from duration mismatch; unrealized losses if yields rise (data not disclosed)
• Capital adequacy uncertainty due to lack of reported CET1/Tier1 and RWA
• Funding concentration in retail deposits without LCR/NSFR disclosure
• Earnings sensitivity to extraordinary items and tax normalization given flat ordinary income

Key Concerns:

• Absence of cash flow and revenue detail limits assessment of core earnings durability
• Unreported regulatory capital ratios impede solvency analysis beyond simple leverage
• Potential for securities-related earnings volatility not visible in current data

Investment Implications

Key Takeaways:

• Net income grew 17.1% YoY to ¥629 million despite flat ordinary income at ¥987 million
• Leverage is typical for a regional bank (assets/equity ~18.3x; liabilities/equity ~16.6x)
• Computed equity-to-assets ratio is ~5.45%, consistent with peers but regulatory capital not disclosed
• Effective tax rate is estimated around 26%, contributing to bottom-line dynamics
• Data limitations (cash flows, revenue mix, capital ratios) constrain depth of analysis

Metrics to Watch:

• Net interest income and margin (NIM) trends as BOJ policy normalizes
• Credit costs, NPL ratio, and coverage ratio
• Securities gains/losses and OCI sensitivity to rate moves
• Cost-to-income ratio and expense control
• Capital adequacy (CET1/Tier1) and buffers versus regulatory minima
• Loan/deposit growth and loan-to-deposit ratio
• Liquidity metrics (LCR/NSFR) and deposit mix/betas

Relative Positioning: Toyama Bank appears to deliver modest, improving profitability with leverage and equity ratios broadly in line with Japanese regional peers, but with limited scale and high sensitivity to interest rate and securities valuation dynamics; incomplete disclosures hinder a more definitive comparative assessment.

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