The Miyazaki Taiyo Bank, Ltd. FY2026 Q2 earnings report and financial analysis
About Quarterly Earnings Report Disclosures
| Item | Current | Prior | YoY % |
|---|---|---|---|
| Ordinary Income | ¥924M | ¥1.24B | -25.2% |
| Income Tax Expense | ¥320M | - | - |
| Net Income | ¥592M | ¥862M | -31.3% |
| Net Income Attributable to Owners | ¥597M | ¥869M | -31.3% |
| Total Comprehensive Income | ¥2.83B | ¥-346M | +917.9% |
| Basic EPS | ¥103.15 | ¥154.57 | -33.3% |
| Diluted EPS | ¥59.84 | ¥89.30 | -33.0% |
| Dividend Per Share | ¥25.00 | ¥25.00 | +0.0% |
| Item | Current End | Prior End | Change |
|---|---|---|---|
| Property, Plant & Equipment | ¥13.16B | - | - |
| Intangible Assets | ¥171M | - | - |
| Total Assets | ¥824.60B | ¥814.72B | +¥9.87B |
| Total Liabilities | ¥769.80B | - | - |
| Total Equity | ¥47.57B | ¥44.92B | +¥2.64B |
| Item | Value |
|---|---|
| Debt-to-Equity Ratio | 16.18x |
| Item | YoY Change |
|---|---|
| Ordinary Income YoY Change | -25.2% |
| Net Income YoY Change | -31.2% |
| Net Income Attributable to Owners YoY Change | -31.2% |
| Item | Value |
|---|---|
| Shares Outstanding (incl. Treasury) | 5.34M shares |
| Treasury Stock | 57K shares |
| Average Shares Outstanding | 5.29M shares |
| Book Value Per Share | ¥8,999.27 |
| Item | Amount |
|---|---|
| Q2 Dividend | ¥25.00 |
| Year-End Dividend | ¥25.00 |
| Item | Forecast |
|---|---|
| Ordinary Income Forecast | ¥1.90B |
| Net Income Forecast | ¥1.40B |
| Net Income Attributable to Owners Forecast | ¥1.40B |
| Basic EPS Forecast | ¥245.00 |
| Dividend Per Share Forecast | ¥25.00 |
This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.
Analysis integrating XBRL data (GPT-5) and PDF earnings presentation (Claude)
Miyazaki Taiyo Bank (Consolidated, JGAAP) reported FY2026 Q2 results with ordinary income and operating income both at ¥924 million and net income of ¥597 million, down 31.2% YoY. While the disclosure omits many standard manufacturing-style line items (e.g., revenue, gross profit), this is common for banks; the key profit indicator is ordinary income, which was flat YoY (+0.0%). The decline in net income despite flat ordinary income implies pressure below ordinary income (e.g., higher credit costs, lower securities gains, or a higher tax burden). The reported income tax was ¥320 million, implying an effective tax rate of roughly 34.9% (¥320m tax / ~¥917m pre-tax), somewhat above the typical c.30% level and a probable contributor to net income contraction. Balance sheet scale stands at ¥824.6 billion in total assets with total equity of ¥47.6 billion, indicating a book equity-to-asset ratio of about 5.8% (our calculation using disclosed figures) and financial leverage (A/E) of 17.34x, consistent with regional bank profiles. Half-year ROE is approximately 1.25% (¥597m / ¥47,566m); annualized, this implies c.2.5%, which is modest and below many regional-bank cost-of-equity benchmarks. Half-year ROA is about 0.07% (annualized ~0.15%), also subdued. Ordinary income equaling operating income suggests limited non-operating swings in the period; thus, the net income decline likely reflects items within banking operations such as credit cost normalization, securities valuations/realizations, or taxation. Liquidity metrics, cash flows, and detailed funding mix are not disclosed in this dataset; for banks, liquidity is better assessed via LCR/NSFR and loans-to-deposits, which are not provided. Dividend data are also not disclosed here; historically, regional banks tend to maintain stable dividends when earnings are steady, but the YoY decline and thin ROE warrant caution without further detail. Given the BOJ policy regime shift and ongoing repricing of yen interest rates, rate sensitivity of the securities book and deposit beta management are likely key drivers of future earnings. Credit risk remains tied to the regional economy of Miyazaki and adjacent areas, with demographics and SME exposure being structural considerations. Overall, earnings quality appears serviceable but conservative, with capital levels (book basis) typical for a regional bank; near-term outlook depends on net interest margin resilience, credit costs, and securities-related P&L. Data gaps (cash flows, detailed income mix, asset quality, capital ratios, dividends) limit precision; the analysis focuses on the available non-zero disclosures and standard banking inferences.
From Earnings Presentation: Miyazaki Taiyo Bank's interim results for September 2025 show increased ordinary income of 8,382 million yen (up 1,030 million yen YoY) due to higher loan interest income, but ordinary profit decreased by 311 million yen to 924 million yen due to increased credit costs (605 million yen, up 379 million yen YoY). On a non-consolidated basis, core business profit remained almost flat at 927 million yen (down 3 million yen), but the sharp increase in credit costs from 226 million yen in the previous period to 605 million yen was the primary factor compressing profits. Net interest income increased by 175 million yen to 5,095 million yen, and the loan interest rate rose to 1.66% (up 0.17pt), benefiting from rising interest rates, although deposit interest expenses also increased by 552 million yen to 675 million yen, raising funding costs. The capital adequacy ratio improved by 0.22pt to 8.42% (preliminary). Full-year forecasts project ordinary profit of 1,800 million yen and net income of 1,400 million yen, but credit costs have been significantly revised upward from the initial 500 million yen to 1,200 million yen, reflecting a deteriorating credit environment. The bank is actively promoting regional economic revitalization initiatives (sales channel development, university partnerships, next-generation business school, VC investments through Miyazaki Taiyo Capital, etc.) and SDGs-related social contribution activities, advancing its regional banking strategy.
ROE decomposition, margin quality, operating leverage: Using DuPont framing adapted for banks: (1) Net profit margin proxy: net income to ordinary income is ~64.6% (¥597m / ¥924m), but note this is not a standard revenue-based margin; bank 'revenue' is not disclosed. (2) Asset turnover proxy: for banks, asset turnover is low by design; with assets of ¥824.6b and half-year net of ¥0.597b, half-year ROA is ~0.07% (annualized ~0.15%). (3) Financial leverage is 17.34x (assets/equity), amplifying modest asset returns into a half-year ROE of ~1.25% (annualized ~2.5%). The YoY net income decline (−31.2%) against flat ordinary income indicates margin compression at the net level, likely due to higher effective tax (≈34.9%) and/or higher credit costs or reduced securities gains. Ordinary income equals operating income, suggesting limited non-operating effects this quarter and pointing to the core bank P&L drivers. Operating leverage insight is limited without expense details, but the flat ordinary income implies that any positive NIM or volume effects were offset by higher costs/credit costs or weaker securities/fees. Profitability remains constrained versus typical mid-single-digit ROE aspirations for regional banks.
revenue_sustainability, profit_quality, outlook: Ordinary income was flat YoY at ¥924m, signaling limited top-line momentum within core banking. Net income fell to ¥597m (−31.2% YoY), indicating deterioration in profit conversion, likely from higher taxes, credit costs, or weaker securities-related earnings. With no disclosure of net interest income, fee income, or gains/losses on securities, sustainability of the ordinary income run-rate cannot be precisely gauged. Profit quality appears acceptable insofar as ordinary income matched operating income, implying few transient non-operating items; however, the net line is sensitive to tax and credit costs. Near-term outlook hinges on: (1) net interest margin stabilization under BOJ policy normalization; (2) deposit beta management and funding mix; (3) credit cost trends in SME/consumer portfolios amid a still-recovering regional economy; and (4) securities portfolio valuation/gains. Absent volume/margin acceleration, earnings growth may remain muted, with downside risks if credit costs normalize upward from historically low levels.
liquidity, solvency, capital_structure: Total assets are ¥824.6b, liabilities ¥769.8b, and equity ¥47.6b. The book equity-to-asset ratio is approximately 5.8% (calculated), typical for a regional bank balance sheet; the reported equity ratio is undisclosed in this dataset. Financial leverage is 17.34x (assets/equity), while liabilities-to-equity (a proxy for debt-to-equity) is 16.18x. Regulatory capital ratios (CET1/Total capital), LCR/NSFR, loans-to-deposits, and liquidity buffers are not disclosed; these are critical for a bank’s solvency and liquidity assessment. Without asset quality metrics (NPL ratio, coverage), solvency inference is limited; that said, current profitability and equity base appear consistent with ongoing operations. Interest-bearing liability structure, duration risk in the securities book, and unrealized AFS losses are unknown but are key determinants under rising rate scenarios.
earnings_quality, FCF_analysis, working_capital: Cash flow statements are not provided here (zeros denote not disclosed). For banks, operating cash flow is inherently volatile and less indicative of earnings quality than metrics such as core net business income, credit costs, fee stability, and securities gains, which are not detailed. Earnings quality in this period appears mainly driven by core operations (ordinary income = operating income), but the decline at the net level highlights sensitivity to tax and potential credit or securities-related items. Free cash flow is not a meaningful construct for banks in the same way as for non-financials; capital generation is better assessed via net income versus required capital build. Working capital concepts are not applicable; instead, we would focus on funding mix and liquidity buffers, which are not disclosed.
payout_ratio_assessment, FCF_coverage, policy_outlook: Dividend per share and payout data are not disclosed in this dataset. Using available figures, EPS for the half-year is ¥103.15; if annualized earnings were maintained, full-year EPS could approximate ~¥206, but this is sensitive to H2 seasonality and credit costs. Without an announced DPS or historical policy in this disclosure, payout sustainability cannot be quantified. For banks, dividend capacity is driven by retained earnings and regulatory capital headroom; neither CET1 nor risk-weighted assets are provided. If management pursues stable dividends typical of regional banks, a conservative payout would be prudent given subdued ROE (~2.5% annualized on our calculation) and YoY profit decline. FCF concepts do not apply; coverage should be gauged by net income and capital generation versus regulatory requirements, which are not available.
Full-year forecast for fiscal year ending March 2026: core business profit of 1,900 million yen, ordinary income of 14,000 million yen, ordinary profit of 1,800 million yen, and net income of 1,400 million yen. Assumes profit accumulation in the second half against first-half results (ordinary profit 867 million yen, net income 592 million yen), but credit costs have been revised upward to 1,200 million yen for the full year (605 million yen in first half, 595 million yen assumed for second half). While rising interest rates support net interest income through improved loan yields, maintaining total interest margins remains challenging due to rising deposit rates (beta emergence). Focus is on monitoring the credit environment in the second half and beyond, given deteriorating disclosure ratio (2.27%) and risk of persistently high credit costs. Strategy involves maintaining customer base through enhanced consulting functions such as sales channel development and business succession support, countering structural headwinds including rising labor and raw material costs, US tariff issues, and population decline. Capital adequacy ratio improved to 8.47% (preliminary, non-consolidated) due to reduced risk assets from Basel III finalization, but attention is needed on the impact of increased credit costs and securities valuation risks on capital buffers.
Management explained in the September 2025 interim results presentation that increased credit costs reflect 'movements including sales declines and business disposals centered on clients whose business performance has been poor since before COVID, as well as concerns about cash flow deterioration due to repayment of COVID-era loans. Additionally, this reflects the business conditions surrounding our clients, including rising raw material and labor costs and the immediate US tariff issue.' Management clearly stated their policy to continue aggressive risk-taking with local clients, noting 'while conducting early warning management, we are advancing asset soundness by recording appropriate loan loss provisions according to client business conditions. We continue to provide business reconstruction support to clients for whom provisions have been made,' demonstrating a balanced approach between credit management and ongoing support. The improvement in capital adequacy ratio to 8.47% is attributed to two factors: 'increase in equity capital from profit recognition' and 'reduction in risk assets due to Basel III (finalization) standard changes.' No explicit mention of dividends in the materials. Detailed description of regional economic revitalization initiatives (sales channel development, university partnerships, next-generation business school, VC investments through Miyazaki Taiyo Capital, etc.) emphasizes fulfillment of social responsibilities as a regional financial institution.
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Relative Positioning: Based on available figures, Miyazaki Taiyo Bank exhibits typical regional bank balance sheet leverage and scale but currently generates below-peer target returns, with flat ordinary income and a notable decline in net income; relative attractiveness will hinge on its ability to stabilize margins, manage credit costs, and navigate rate risk versus other regional peers.
This analysis was auto-generated by AI. Please note the following:
| Capital Stock | ¥8.75B | - | - |
| Capital Surplus | ¥7.41B | - | - |
| Retained Earnings | ¥22.34B | - | - |
| Treasury Stock | ¥-165M | - | - |
| Owners' Equity | ¥45.89B | ¥43.27B | +¥2.62B |