The Hyakugo Bank,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥10.14B
• EPS: ¥41.70

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

Hyakugo Bank (8368) reported FY2026 Q2 (cumulative) consolidated net income of ¥10.175 billion, up 10.7% YoY, despite flat reported operating/ordinary income at ¥14.085 billion in the dataset. Using the balance sheet provided, total assets were ¥7,557.9 billion and total equity was ¥480.2 billion, implying a leverage ratio (assets/equity) of 15.74x. A simple half-year ROE proxy is approximately 2.1% (¥10.175b / ¥480.178b), which annualizes to roughly 4.2% assuming no significant seasonality; this reconciles with ROA of about 0.27% annualized multiplied by the 15.74x leverage. The effective tax rate, computed from disclosed figures, was 25.9% (¥3.563b tax on ¥13.738b pre-tax income), indicating a normalized tax burden for a regional bank. Equity ratio (equity/assets) is about 6.36%, which is typical for Japanese banks but not a substitute for regulatory capital ratios (Basel III not disclosed here). EPS was ¥41.70 for the half-year; this implies roughly 244 million shares outstanding based on net income, though actual share count was not disclosed in the feed. Profit improvement YoY, despite flat ordinary income in the dataset, suggests mix effects such as lower credit costs, improved fee income, or tax normalization; however, lack of segment details limits attribution. Revenue, gross profit, and cash flow items appear as zero due to disclosure conventions for banks and/or data mapping, not actual zeros, so analysis relies on the non-zero headline profit and balance sheet figures. For a bank, ordinary income and credit cost trends, net interest margin (NIM), and securities-related gains/losses are key, but these subcomponents were not provided. Liquidity metrics such as current ratio are not meaningful for banks; instead, deposit stability and liquidity coverage would be more relevant but are unavailable. The capital structure shows liabilities/equity of 14.57x (deposits and market funding), in line with a regional bank balance sheet. Cash flow metrics are not informative here due to banking-specific accounting and unreported line items. Dividend data were not disclosed; hence payout and sustainability must be inferred cautiously from earnings capacity and capital buffers. Overall, profitability appears stable-to-improving on a YoY basis, leverage is typical for the sector, and computed ROE remains modest, leaving room for improvement through margin normalization and cost control if macro tailwinds persist. Data limitations are significant, so conclusions should be treated as preliminary and cross-checked with the company’s statutory filings for NIM, credit costs, and capital adequacy.

Profitability Analysis

ROE_decomposition: Bank-adapted DuPont: ROE ≈ ROA × Leverage. Half-year ROA ≈ Net income / Assets = ¥10.175b / ¥7,557.938b = 0.135% (annualized ≈ 0.27%). Leverage (Assets/Equity) = 15.74x. Implied annualized ROE ≈ 0.27% × 15.74 ≈ 4.2% (half-year simple ROE ≈ 2.12%). margin_quality: Traditional gross/operating margins are not meaningful for banks. Using available data, net income to ordinary income was ~72.2% (¥10.175b / ¥14.085b), suggesting benign below-the-line items (taxes, credit costs) in the period; however, without credit cost and fee/market gains breakdown, margin quality cannot be fully assessed. operating_leverage: Reported ordinary/operating income was flat YoY, while net income rose 10.7% YoY, indicating positive operating leverage at the bottom line likely driven by lower credit costs, better fee mix, or tax effects. Lack of expense and credit cost disclosure prevents precise decomposition.

Growth Assessment

revenue_sustainability: Revenue lines are unreported in the dataset; for a regional bank, core revenue sustainability hinges on NIM, loan growth in Mie and adjacent regions, and fee income (asset management/settlement). Data to assess these drivers are not provided. profit_quality: Net income growth of +10.7% YoY alongside flat ordinary income suggests improvements in non-operating or below-the-line items (e.g., credit costs, taxes). Profit quality would be higher if driven by core NIM/fees; absent detail, sustainability is uncertain. outlook: Assuming continued normalization of domestic rates and stable credit costs, earnings could benefit from a modestly wider loan-deposit spread. Offsetting risks include valuation losses on securities from higher yields and slower regional loan demand. Near-term trajectory depends on NIM, credit cost ratio, fee momentum, and market-related gains/losses not disclosed here.

Financial Health

liquidity: Conventional current/quick ratios are not applicable to banks. Liquidity should be assessed via deposit stability, LCR/NSFR, and high-quality liquid assets; these were not disclosed. solvency: Equity ratio ≈ 6.36% (¥480.178b / ¥7,557.938b). Regulatory capital (CET1/Total capital) not provided; solvency cannot be fully assessed without Basel III ratios and risk-weighted assets. capital_structure: Liabilities/Equity = 14.57x (¥6,997.77b / ¥480.178b), typical for a regional bank funded primarily by deposits. Leverage (Assets/Equity) is 15.74x.

Cash Flow Quality

earnings_quality: Operating cash flow is unreported and not very informative for banks under JGAAP. Earnings quality should be evaluated via credit cost trends, NPL/NPA ratios, coverage, and realized/unrealized securities gains—none are provided. FCF_analysis: Free cash flow is not a meaningful construct for banks in the same way as for industrials; reported FCF is 0 due to unreported items. Focus should be on core pre-provision profit, credit costs, and capital generation. working_capital: Traditional working capital metrics are not applicable for banks; loan/deposit dynamics and liquidity buffers are the relevant equivalents.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio were not disclosed (both appear as 0 due to data gaps). With EPS at ¥41.70 for H1, implied annualized EPS is ~¥83.4 absent seasonality, but actual payout cannot be determined. FCF_coverage: Not assessable given banking-specific cash flows and undisclosed DPS; dividends for banks are typically assessed against net income and regulatory capital rather than FCF. policy_outlook: Without stated dividend policy or capital ratios, sustainability cannot be judged. Typically, regional banks target stable dividends subject to profit and capital adequacy; confirmation requires CET1 data and management guidance.

Risk Assessment

Business Risks:

• Net interest margin compression if deposit betas rise faster than asset yields
• Weak regional loan demand due to demographics and local economic conditions
• Fee income volatility from securities brokerage/asset management flows
• Competitive pressure from megabanks and digital challengers

Financial Risks:

• Interest rate risk in the banking book (valuation losses on JGBs/AFS securities if yields rise)
• Credit risk from SME/real estate exposures; potential uptick in NPLs
• Market risk from equity/foreign bond holdings amid volatility
• Capital adequacy uncertainty due to undisclosed Basel III ratios
• Liquidity risk if deposit mix shifts toward higher-cost time deposits

Key Concerns:

• Lack of disclosure in the dataset for NIM, credit costs, and capital ratios limits visibility
• Flat ordinary income with higher net income suggests reliance on below-the-line items, the durability of which is unclear
• Potential unrealized losses in securities portfolios in a rising rate environment

Investment Implications

Key Takeaways:

• Net income rose 10.7% YoY to ¥10.175b despite flat ordinary income, indicating supportive below-the-line factors
• Computed annualized ROE is modest at ~4.2%, with ROA ~0.27% annualized and leverage 15.74x
• Equity ratio ~6.36%; regulatory capital metrics are missing and are critical for full assessment
• EPS of ¥41.70 (H1) implies ~244 million shares; DPS not disclosed, so payout visibility is low
• Earnings sensitivity to NIM, credit costs, and securities valuation remains the primary driver

Metrics to Watch:

• Net interest margin (NIM) and loan-deposit spread
• Credit cost ratio, NPL ratio, and coverage
• Fee and commission income growth vs. market-related gains/losses
• Cost-to-income (overhead) ratio
• Basel III CET1 and total capital ratios, risk-weighted assets
• Unrealized gains/losses on AFS/Held portfolio and duration gap
• Loan growth, deposit beta, and loan-to-deposit ratio
• Dividend payout ratio and any share buyback announcements

Relative Positioning: Based on limited data, Hyakugo Bank exhibits typical regional bank leverage and a modest ROE profile; without NIM, credit costs, and capital ratios, its relative standing versus regional peers (profitability, efficiency, and capital strength) cannot be conclusively determined.

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