The Ehime Bank,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥2.46B
• EPS: ¥68.90

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

Ehime Bank (TSE: 8541) reported FY2026 Q2 consolidated results under JGAAP with ordinary income of ¥3.94bn and net income of ¥2.69bn, up 19.9% YoY, indicating improved profitability in the half. Many line items (revenue, gross profit, cash flows) are unreported in XBRL, which is typical for banks where net interest income and fees are presented under different labels; analysis therefore focuses on the available banking-relevant totals. Total assets stand at ¥2,990.9bn and total equity at ¥142.9bn, implying equity-to-assets of roughly 4.8% and financial leverage of 20.9x, consistent with the DuPont leverage figure provided. Using half-year net income and period-end assets, simple ROA is about 0.09% (2,691/2,990,935), which annualizes to ~0.18%; combined with leverage, this implies an annualized ROE of roughly 3.7–3.9%. The effective tax burden, inferred from disclosed tax expense, is 29.6%, suggesting normalized taxation rather than one-offs driving the bottom line. Ordinary income equals operating income at ¥3.94bn, consistent with Japanese bank disclosures where recurring banking profits dominate. The YoY increase in net income likely reflects improved core profitability and/or lower credit costs or securities-related gains, but the exact mix is not disclosed. Liquidity ratios such as current/quick are not meaningful for banks and appear as zeros due to non-disclosure. Cash flow statements are unreported; for banks, OCF is not a primary quality-of-earnings indicator, so we evaluate earnings quality via stability of ordinary income and tax normalization. Dividend data (DPS, payout) are unreported; thus, dividend sustainability cannot be quantified, though current profitability provides capacity. Capital structure appears typical for a regional bank, with high leverage and modest equity ratio; regulatory capital metrics (CET1/RWAs) are not provided. The balance sheet size (¥3.0tn assets) underscores the importance of deposit funding stability and interest rate risk management, but funding and duration profiles are not disclosed. Overall, the half shows resilient profit momentum and acceptable returns for a regional bank context, but data gaps limit precision on drivers (NIM, fees, credit costs). Key watchpoints include trends in ordinary income, credit cost behavior, and interest rate sensitivity as BOJ policy evolves.

Profitability Analysis

• DuPont/ROE decomposition (bank-adapted): Using half-year NI of ¥2.691bn and period-end assets of ¥2,990.9bn, ROA ≈ 0.09% (annualized ~0.18%). With financial leverage of 20.94x, implied annualized ROE ≈ 0.18% × 20.94 ≈ 3.7–3.9%. Reported DuPont net margin and asset turnover are shown as 0%/0 due to unreported revenue; for banks, ROA×leverage is the more appropriate lens.
• Margin quality: Ordinary income = operating income = ¥3.939bn indicates profit driven by core banking operations, but the split between net interest income, fees, and securities gains is not disclosed. The effective tax rate inferred at ~29.6% (¥1.129bn tax / ¥3.820bn pre-tax) suggests underlying earnings are not reliant on tax credits.
• Operating leverage: YoY net income +19.9% with flat reported operating income (+0.0% per system tag) likely reflects either cost control and/or non-interest items (e.g., lower credit costs or better securities P/L). Without expense and revenue detail, quantitative operating leverage cannot be computed.
• Interest coverage: Not meaningful for banks; interest expense line is unreported.
• Conclusion: Profitability is modest but improving on an annualized basis; sustaining ROE near ~4% will depend on net interest margin, cost efficiency, and credit costs, which are not disclosed here.

Growth Assessment

• Revenue and ordinary income trajectory: Ordinary income at ¥3.939bn with net income +19.9% YoY indicates positive earnings momentum in the half. Top-line revenue is unreported (banking presentation), limiting revenue mix analysis.
• Profit quality: The alignment of ordinary and operating income implies recurring profit contribution; the normalized tax rate (~29.6%) supports quality. However, absent data on credit costs and securities gains, we cannot confirm if gains are repeatable.
• Outlook considerations: For regional banks, earnings drivers include loan growth, deposit repricing, BOJ policy normalization impacts on NIM, fee income, and credit costs. Given sector context, modest NIM tailwinds and disciplined costs could support steadier profits, but sensitivity to securities valuation and credit cycles remains. Data limitations preclude a quantified outlook.
• Sustainability: With asset base stable at ~¥3.0tn and equity of ~¥143bn, the bank has scale to maintain core operations; sustaining the +19.9% YoY pace will likely require continued NIM support or lower credit costs, which are not verifiable here.

Financial Health

• Liquidity: Traditional current/quick ratios do not apply to banks and are unreported. Liquidity assessment would normally rely on loan-to-deposit ratio and HQLA/NSFR, which are not provided.
• Solvency/capital: Total equity is ¥142.9bn versus assets of ¥2,990.9bn, implying an equity ratio of ~4.8% and leverage of 20.9x—typical for a regional bank. Regulatory capital ratios (CET1, total capital, leverage ratio) are not disclosed; thus, we cannot opine on buffers against stress.
• Funding structure: Total liabilities of ¥2,827.0bn (~94.6% of assets) indicate deposit- and wholesale-funded balance sheet; the precise deposit mix and term structure are not disclosed.
• Debt-to-equity: Reported 19.79x aligns with banking leverage norms; not directly comparable to non-financial corporates.

Cash Flow Quality

• Earnings quality: For banks, accrual-to-cash flow comparisons are less informative; OCF/NI is unreported. Quality is inferred from the stability of ordinary income and normalized tax rate (~29.6%). Lack of disclosed credit cost provisioning and securities gains limits assessment of persistence.
• Free cash flow: Not meaningful for banks in the same way as corporates; FCF is unreported.
• Working capital: Traditional working capital metrics do not apply; loan/deposit dynamics would be the appropriate lens but are not disclosed.
• Conclusion: Neutral view on earnings quality given data gaps; watch for consistency in ordinary income and disclosure of credit costs and valuation gains/losses in future periods.

Dividend Sustainability

• Payout ratio: DPS and payout are unreported. With half-year net income of ¥2.691bn, capacity for distributions exists, but we cannot quantify payout or retention.
• FCF coverage: Not applicable; OCF/FCF are unreported and not directly meaningful for banks.
• Policy outlook: Without disclosed dividend policy or capital ratios, we cannot assess flexibility under regulatory constraints. Sustained profitability and capital generation would support dividends, but confirmation requires CET1 and earnings guidance.

Risk Assessment

Business Risks:

• Net interest margin pressure from competitive loan pricing and deposit repricing
• Credit cost volatility amid macroeconomic slowdown or regional borrower stress
• Securities portfolio valuation risk from interest rate and credit spread movements
• Fee income headwinds if retail and SME activity softens
• Operational and compliance risks within regional branch networks

Financial Risks:

• High leverage inherent to banking (assets/equity ~20.9x)
• Funding concentration risk if deposit mix skews to time deposits or wholesale
• Interest rate mismatch risk without disclosed duration gap
• Capital adequacy uncertainty due to undisclosed CET1/total capital ratios
• Limited loss-absorbing capacity visibility absent TLAC/MREL disclosures

Key Concerns:

• Data gaps on NIM, fees, costs, and credit provisioning hinder driver analysis
• Unreported cash flows and dividend data limit assessment of distributions and resilience
• Sensitivity to BOJ policy normalization without disclosed interest rate risk metrics

Investment Implications

Key Takeaways:

• Net income grew 19.9% YoY to ¥2.691bn in H1, indicating improved profitability
• Implied annualized ROE around ~3.7–3.9% based on ROA and leverage
• Equity ratio ~4.8% and leverage ~20.9x are in line with regional bank norms
• Earnings quality appears reasonable given normalized tax, but drivers (NIM/credit costs) are undisclosed
• Significant disclosure gaps (cash flows, dividends, capital ratios) constrain deeper evaluation

Metrics to Watch:

• Net interest margin and loan/deposit growth rates
• Credit cost (provision) ratio and NPL trends
• Securities gains/losses and duration exposure
• Cost-to-income ratio for operating efficiency
• Regulatory capital ratios (CET1, total capital) and dividend policy updates
• Ordinary income trajectory versus guidance

Relative Positioning: Based on limited data, Ehime Bank’s profitability and leverage appear broadly consistent with Japanese regional bank peers; however, the absence of NIM, credit cost, and capital ratio disclosures prevents a clear assessment of competitive positioning on returns and resilience.

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