The Miyazaki Bank,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥6.51B
• EPS: ¥400.37

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

Miyazaki Bank (Consolidated, JGAAP) reported FY2026 Q2 results with operating income of ¥9.651bn and net income of ¥6.771bn, up 39.4% YoY, indicating a meaningful improvement in profitability despite limited disclosure of revenue-level items. Balance sheet scale remains large at total assets of ¥4,079.3bn and total equity of ¥206.8bn, implying financial leverage of roughly 19.7x, which is typical for a regional bank. Using half-year net income annualized, implied ROE is approximately 6.5% (¥13.5bn annualized NI / ¥206.8bn equity), a solid level for a domestic regional bank in a still-normalizing rate environment. Annualized ROA is approximately 0.33% (¥13.5bn / ¥4,079.3bn), consistent with a conservative asset mix dominated by loans and securities. The effective tax rate appears to be about 24.7% (¥2.22bn tax / ¥8.99bn pre-tax), broadly in line with domestic norms. Ordinary income equals operating income at ¥9.651bn; however, net income plus taxes sums to ¥8.991bn, suggesting roughly ¥0.66bn of extraordinary losses and/or non-operating adjustments before tax. Equity ratio was reported as 0.0% in the template, but this reflects non-disclosure; based on available figures, equity/asset ratio is about 5.1%. Cash flow statements and revenue details are unreported (shown as zero), which is common for bank XBRL mappings where interest income/expense and cash movements are classified differently. The absence of cash flow data limits the assessment of OCF/FCF-based earnings quality; analysis must rely on earnings structure and balance sheet strength. Dividend information (DPS and payout) is also unreported; thus, dividend sustainability must be inferred from earnings capacity and capital position rather than direct coverage metrics. The YoY surge in net income likely reflects improved core profitability and/or normalization of credit costs and securities-related gains/losses, though the precise drivers are not disclosed. Capital structure is stable with liabilities/equity of ~18.8x, consistent with regional banks’ intermediation model. Liquidity ratios like current and quick are not applicable to banks and are unreported; funding health should instead be assessed via deposit trends and liquidity coverage measures, which are not available in this dataset. Looking forward, earnings sustainability will hinge on net interest margin (NIM) resilience, credit cost discipline, and volatility in securities valuation as BOJ policy normalizes. Overall, the half-year run-rate implies healthier profitability versus the prior year’s first half, but limited disclosure necessitates caution when interpreting margin quality and cash conversion.

Profitability Analysis

ROE decomposition (bank-adapted): Using ROA x Leverage, annualized ROA is ~0.33% (¥13.542bn annualized NI / ¥4,079.253bn assets). Financial leverage is ~19.73x (assets/equity), implying an annualized ROE of ~6.5%. Net profit margin and asset turnover from the standard DuPont cannot be assessed due to undisclosed revenue; for banks, NIM and fee income mix are the relevant substitutes but are not provided. Margin quality: The gap between ordinary income (¥9.651bn) and implied pre-tax income (¥8.991bn) points to ~¥0.66bn of extraordinary/non-operating drag; absent itemization, it is hard to determine the repeatability of this effect. Effective tax rate is ~24.7%, consistent with normalized tax burden. Operating leverage: YoY operating income growth is unreported (0.0%), but net income rose 39.4% YoY, suggesting positive operating leverage and/or lower credit costs; the lack of expense and credit cost disclosure prevents precise attribution. Interest expense is reported as zero (not disclosed), so interest coverage metrics are not meaningful for a bank. Overall profitability appears solid on an annualized basis, with ROA/ROE within a reasonable range for a regional bank benefiting from a firmer rate backdrop and disciplined costs, subject to confirmation from detailed segment drivers.

Growth Assessment

Revenue sustainability: Top-line proxies (interest income/fees) are not disclosed; therefore, we infer growth durability from income lines. Net income up 39.4% YoY indicates strong earnings momentum into 1H, likely supported by improved core net business profit, better deposit spread management, or securities-related tailwinds. Profit quality: The ~¥0.66bn extraordinary/non-operating drag suggests the core ordinary line may be somewhat stronger than the pre-tax result, which is a mild positive for quality if non-recurring. However, absent credit cost and gains/losses disclosure, it is unclear how much is repeatable, leaving some risk to 2H run-rate. Outlook: With BOJ normalization and upward pressure on JGB yields, regional banks may see gradual NIM support, but securities valuation and duration management can introduce volatility. Loan demand in Miyazaki Prefecture and broader Kyushu should influence volume growth; corporate capex and tourism-linked activity are potential tailwinds, but macro sensitivity remains. We would expect 2H seasonality and potential credit cost normalization to moderate the 1H growth pace; still, the implied annualized ROE (~6.5%) is achievable if credit costs remain contained and securities marks are stable. Key unknowns include fee income trajectory, mortgage margins, and deposit beta amid rising competition.

Financial Health

Liquidity: Traditional current/quick ratios are not applicable to banks and are not disclosed; liquidity should be evaluated via deposits, liquid securities, and regulatory liquidity ratios, which are unavailable here. Solvency/capital: Equity is ¥206.8bn versus assets of ¥4,079.3bn, implying equity/assets of ~5.1% and leverage of ~19.7x; debt-to-equity of ~18.8x aligns with the banking model. Regulatory capital ratios (domestic standard/CET1) are not disclosed; thus, capital adequacy must be inferred from accounting equity, which is an imperfect proxy. Funding: The liability base of ¥3,882.1bn suggests a deposit-heavy structure typical for regional banks, but mix and cost details are unknown. Interest rate risk and securities duration positioning are key to solvency resilience under rate shocks but are not reported. Overall, the balance sheet appears stable in size and structure; however, conclusions about buffers versus market volatility depend on undisclosed regulatory capital and AFS valuation metrics.

Cash Flow Quality

Earnings quality cannot be assessed via OCF/FCF as all cash flow items are unreported (zeros reflect non-disclosure). For banks, OCF/FCF is less informative than earnings drivers (NIM, fees, credit costs) and realized/unrealized securities gains, which are not provided. The 1H net income uplift (+39.4% YoY) suggests improved core profitability and/or lower credit costs, which would be higher-quality if driven by core spreads and stable fee income rather than one-off securities gains. Working capital metrics are not applicable in the conventional sense for banks (inventories/current assets are not meaningful); liquidity quality should instead be assessed via deposit stability and high-quality liquid assets, which are undisclosed. Given the ~¥0.66bn discrepancy between ordinary and pre-tax, some non-core items affected earnings; absent detail, we tentatively view earnings quality as moderate, pending confirmation that gains are not one-off and credit costs remain normalized.

Dividend Sustainability

Dividend data (DPS, payout, FCF coverage) are not disclosed; EPS for 1H is ¥400.37, implying annualized EPS of ~¥801 if 2H is similar. Without DPS, we cannot compute a payout ratio or cash coverage. Capital capacity appears reasonable with equity of ¥206.8bn and annualized NI of ~¥13.5bn, suggesting room for distributions if regulatory capital is adequate. Historically, regional banks often target payout ratios in the 30–40% range, but Miyazaki Bank’s explicit policy and capital targets are not provided here. Dividend sustainability will depend on core earnings stability (NIM, fees), credit cost normalization, and securities valuation volatility under changing rates. In the absence of regulatory capital data and DPS disclosure, we cannot opine on coverage; the outlook is cautiously neutral pending further information on policy and capital adequacy.

Risk Assessment

Business Risks:

• Net interest margin compression if deposit betas rise faster than asset yields
• Credit cost normalization amid regional macro softness in Miyazaki/Kyushu
• Volatility in securities portfolio (AFS/HTM) from BOJ policy normalization and JGB yield shifts
• Fee income weakness if retail investment flows or settlement/foreign exchange volumes slow
• Concentration risk to local SMEs and mortgages in the home region

Financial Risks:

• Duration and OCI sensitivity of the bond portfolio not disclosed; potential capital volatility
• Limited disclosure of regulatory capital ratios; unknown buffer versus stress
• Funding competition for deposits potentially pressuring margins
• Potential for extraordinary items (approx. ¥0.66bn in 1H) to recur and dilute core profitability
• Interest rate and reinvestment risk affecting securities income

Key Concerns:

• Lack of revenue breakdown and cash flow data constrains assessment of earnings quality
• Absence of credit cost/NPL disclosures limits visibility on risk trends
• Dividend and capital policy not disclosed; payout sustainability cannot be verified

Investment Implications

Key Takeaways:

• 1H FY2026 net income of ¥6.77bn (+39.4% YoY) indicates stronger earnings momentum
• Annualized ROE ~6.5% and ROA ~0.33% are healthy for a regional bank
• Ordinary income of ¥9.65bn exceeds implied pre-tax by ~¥0.66bn, suggesting non-core drag
• Equity/assets ~5.1% and leverage ~19.7x are in line with peers’ balance sheet structures
• Disclosure gaps (revenue, cash flows, capital ratios, DPS) limit precision of analysis

Metrics to Watch:

• Net interest margin and deposit beta trends as BOJ policy normalizes
• Credit cost ratio and NPL trends in the regional loan book
• Securities portfolio duration/OCI sensitivity and realized gains/losses
• Fee income trajectory (investment trusts, settlement, FX) and cost discipline
• Regulatory capital ratios (CET1/domestic standard) and any capital policy updates
• Loan and deposit growth in Miyazaki/Kyushu, particularly SME and mortgage segments

Relative Positioning: On limited data, Miyazaki Bank’s profitability (annualized ROE ~6.5%) appears competitive within the regional bank cohort, supported by balance sheet leverage and likely NIM tailwinds; however, visibility is weaker than for peers with fuller disclosures on credit costs, capital ratios, and securities risk.

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