THE TOTTORI BANK,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥779M
• EPS: ¥84.33

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

Tottori Bank (8383) reported consolidated FY2026 Q2 results under JGAAP with net income of ¥789 million, up 10.6% YoY, indicating earnings resilience despite limited disclosed line items. Operating income and ordinary income were both reported at ¥1,141 million for the period, suggesting relatively low non-operating volatility in 1H. The effective tax burden appears to be about 27.5% (¥314 million tax on roughly ¥1,141 million pre-tax), consistent with a normalized rate. Reported EPS was ¥84.33 for the period, implying improved per-share profitability versus the prior year’s first half. Balance sheet size remains substantial at ¥1,116.1 billion in total assets, with total equity of ¥49.8 billion and total liabilities of ¥1,058.4 billion. The implied financial leverage (assets/equity) is high at 22.41x, which is typical for a regional bank business model anchored by deposits. Using period-end balances, half-year ROA is approximately 0.07% (¥789m / ¥1,116,135m), which annualizes to about 0.14%, translating to an annualized ROE of about 3.2% (ROA × leverage). While reported DuPont subcomponents in the dataset show zeros for margin and turnover, this reflects disclosure gaps rather than true zeros; bank-relevant ROE decomposition (ROA × leverage) provides a more appropriate lens. Revenue, gross profit, depreciation, interest expense, and cash flow items are unreported in the XBRL extract; therefore, detailed margin analysis, cost efficiency, and cash flow-based quality assessments are constrained. The equity ratio shown as 0.0% is a placeholder; the implied equity-to-asset ratio is roughly 4.5% (¥49.8b / ¥1,116.1b), reasonable for a deposit-funded bank. Dividend line items are unreported (DPS and payout ratio shown as 0), so dividend sustainability must be assessed qualitatively. Given operating and ordinary income alignment, earnings appear to be driven by core banking activities with limited extraordinary effects in the half. The YoY net income growth suggests either better core profitability (e.g., net interest income or fees) or lower credit costs, but the split is not disclosed. Interest rate normalization by the BOJ and market valuation swings in the securities book remain key external drivers for future quarters. Capital strength and asset quality cannot be fully evaluated without CET1/total capital ratios, NPL ratios, or unrealized gains/losses data. Overall, the bank delivered modest profitability with stable leverage and improving YoY bottom line, but the lack of cash flow and segment detail limits deeper conclusions. Monitoring funding costs, loan growth, and securities portfolio risk remains essential for the outlook.

Profitability Analysis

ROE is best viewed via a bank-style decomposition: ROE ≈ ROA × leverage. Estimated half-year ROA is ~0.07% (¥789m / ¥1,116,135m), annualizing to ~0.14%. With financial leverage at 22.41x, annualized ROE is ~3.2%. This level is modest for a regional bank and suggests earnings are adequate but not high relative to capital. Net profit margin and asset turnover from the provided DuPont table are non-informative due to undisclosed revenue; for banks, reported revenue is not a meaningful driver of profitability comparability. Operating income and ordinary income both at ¥1,141m indicate limited reliance on non-recurring items and narrow non-operating effects during the half. The implied effective tax rate is ~27.5% (¥314m / ¥1,141m), consistent with normalized taxation. Operating leverage cannot be precisely assessed without revenue and expense breakdowns; however, the 10.6% YoY increase in net income suggests some combination of improved net interest margin, better fee/other income, or lower credit costs. Margin quality appears stable given the close alignment between operating and ordinary income, though absence of credit cost and securities-related gains/losses disclosure is a limitation. Overall profitability is steady but constrained by a low ROA environment typical of Japanese regional banks.

Growth Assessment

Net income grew 10.6% YoY to ¥789m for 1H, signaling positive earnings momentum. Operating income is reported unchanged YoY in the dataset (+0.0%), but this likely reflects missing detail rather than true flat growth; only the net income YoY can be relied upon here. Without loan/deposit growth, NIM, fee income, or credit cost data, the sustainability of growth cannot be firmly established. If growth was driven by lower credit costs, it may be less repeatable; if by core net interest income from rate normalization, some durability is possible but depends on deposit beta and asset repricing. Securities portfolio performance under rising yields can introduce volatility to other comprehensive income and potentially to P&L if realized; no such details are disclosed. The regional macro backdrop in Tottori and surrounding areas (aging demographics, SME exposure) typically caps volume growth, suggesting a focus on margin and fee initiatives. Outlook hinges on BOJ policy normalization pace, deposit competition, and credit quality trends; absent granular disclosures, near-term growth visibility is moderate at best. We therefore view the 1H YoY uplift as constructive but with limited visibility on its drivers.

Financial Health

Total assets ¥1,116.1b, total equity ¥49.8b, and total liabilities ¥1,058.4b imply an equity-to-asset ratio of ~4.5%. Financial leverage of 22.41x is typical for a deposit-funded regional bank. Current ratio and quick ratio are not meaningful for banks and are undisclosed. Debt-to-equity of 21.25x aligns with the leverage profile. Solvency and capital adequacy cannot be fully evaluated without CET1/total capital ratios, risk-weighted assets, or leverage ratio; these are not provided. Liquidity risk assessment would normally reference LCR/NSFR and deposit mix; such data are absent here. Asset quality (NPL ratio, coverage, Stage 3 loans) is also not disclosed, limiting solvency analysis via credit cost buffers. Hence, while headline balance sheet scale and leverage appear in line with peers, the depth of financial health assessment is constrained by missing regulatory metrics.

Cash Flow Quality

All cash flow line items (OCF, ICF, FCF, FCF coverage) are unreported in the dataset, which is common for interim disclosures or bank XBRL mapping differences. As such, OCF/Net Income and accruals-based diagnostics cannot be computed. For banks, operating cash flows are inherently volatile due to balance sheet movements (loans/deposits and securities), and earnings quality is better assessed via credit cost normalization, NIM stability, fee income durability, and realized vs unrealized gains; these are not provided. The alignment of operating income and ordinary income suggests limited non-core distortions in 1H, a mild positive for earnings quality. Working capital metrics are not applicable in a traditional sense for banks and are undisclosed.

Dividend Sustainability

Dividend items (DPS, payout ratio, and FCF coverage) are unreported here; therefore, quantitative coverage analysis cannot be performed. With 1H net income of ¥789m, a hypothetical full-year run-rate would be ~¥1.6b if performance is maintained, but seasonality and credit costs could alter this. Historically, regional banks target stable dividends anchored by earnings capacity and capital policy; without CET1 or retained earnings details, headroom cannot be assessed. If the bank maintains an earnings-linked payout, the implied annualized ROE of ~3.2% suggests moderate but not expansive capacity for shareholder returns absent balance sheet optimization. Policy outlook should be guided by disclosed capital ratios and medium-term plan targets when available.

Risk Assessment

Business Risks:

• Net interest margin compression if deposit beta rises faster than asset repricing under BOJ normalization
• Credit cost uptick from SME concentration and regional economic softness
• Fee income stagnation amid limited regional growth and competition
• Operational risk and IT investments required for digitalization affecting cost base
• Demographic headwinds (aging, population decline) constraining loan demand

Financial Risks:

• Securities portfolio valuation losses under rising JGB yields and duration exposure
• Interest rate risk in the banking book (duration gap) affecting both OCI and earnings
• Liquidity risk from deposit outflows or mix shifts to higher-cost time deposits
• Capital adequacy uncertainty without disclosed CET1/total capital ratios
• Concentration risk in local industries and real estate collateral valuations

Key Concerns:

• Absence of key disclosures (NIM, credit costs, CET1, unrealized gains/losses) limits visibility
• Modest annualized ROE (~3.2%) indicates profitability constraints versus capital
• Sensitivity to BOJ policy shifts and market rate volatility

Investment Implications

Key Takeaways:

• 1H FY2026 net income rose 10.6% YoY to ¥789m, indicating improved profitability
• Leverage is high but typical for a regional bank (assets/equity 22.41x)
• Annualized ROE approximates ~3.2%, reflecting a low-ROA environment
• Tax rate appears normalized at ~27.5%, with limited non-operating noise
• Visibility is limited due to undisclosed revenue, cash flows, capital, and credit metrics

Metrics to Watch:

• CET1 ratio and total capital ratio (Basel III) and their buffers
• Net interest margin and deposit beta; loan/deposit growth and mix
• Credit costs (provisions), NPL ratio, and coverage
• Unrealized gains/losses on AFS/HTM securities and portfolio duration
• Overhead ratio (OHR), fee income ratio, and cost initiatives
• Liquidity metrics (LCR/NSFR) and funding concentration

Relative Positioning: Based on the sparse disclosed metrics, Tottori Bank exhibits typical regional bank balance sheet leverage with modest profitability uplift YoY; however, without capital adequacy, asset quality, and margin data, its relative standing versus regional peers cannot be robustly benchmarked.

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