THE FUKUSHIMA BANK,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥245M
• EPS: ¥4.47

Income Statement

Balance Sheet

Profitability Ratios

Share Information

Dividend Information

Segment 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

Fukushima Bank (TSE: 8562) reported FY2026 Q2 (consolidated, JGAAP) results with limited line-item disclosure typical for banks, but several core profitability and balance sheet indicators are observable. Net income for the period was ¥156 million, with operating income and ordinary income both at ¥106 million, suggesting limited non-operating distortions in the quarter. Using reported assets of ¥838.936 billion and equity of ¥24.232 billion, simple-period ROA is approximately 0.02% and simple-period ROE is approximately 0.64% (both unannualized), indicating modest profitability in the half-year to date. Financial leverage (assets/equity) is high at 34.62x, consistent with a regional bank balance sheet structure and implying that small changes in returns on assets can materially influence ROE. The income tax expense was ¥7 million, implying a low effective tax rate for the period (~4–5%), which may reflect temporary factors (e.g., deferred tax adjustments, tax-effect accounting) rather than a normalized run-rate. DuPont-style ratios derived from the provided “calculated metrics” (e.g., margin, turnover) are not meaningful because revenue and several line items are undisclosed (zeros here denote non-disclosure, not actual zeros). On the balance sheet, total liabilities are ¥781.038 billion, which implies liabilities-to-assets of roughly 93.1% and equity-to-assets of roughly 2.9%; this thin equity buffer is typical for banks but should be interpreted through regulatory capital ratios (not disclosed). There is an apparent mismatch between assets, liabilities, and the reported total equity figure (assets minus liabilities equal ~¥57.9 billion vs. reported equity ¥24.2 billion), suggesting missing components in net assets (e.g., non-controlling interests, valuation differences, accumulated other comprehensive income) or taxonomy/classification limitations in the XBRL. Cash flow information (operating, investing, financing, and cash balance) is not disclosed, limiting assessment of earnings-to-cash conversion, though cash flow statements are less indicative for banks given their business model. Dividend per share is shown as ¥0.00 with a 0% payout ratio; given the disclosure caveats, this should be treated as undetermined rather than a definitive suspension. EPS is reported at ¥4.47, but outstanding shares are undisclosed, limiting cross-checks and valuation triangulation. The bank’s profitability appears positive but low in absolute terms for the period, and operating leverage appears modest given the small difference between operating and ordinary income and a relatively low tax burden. With leverage at 34.6x, capital adequacy and asset quality (credit costs, NPL trends) will be key to forward performance, but such details are not provided here. Revenue, gross profit, EBITDA, and interest metrics are not meaningful due to non-disclosure and bank accounting specifics; focus should remain on net interest margins, credit costs, fees, and regulatory capital where available. Overall, the period suggests a stable but subdued earnings profile, with significant data gaps that constrain deeper margin and cash flow quality evaluation. Outlook hinges on credit cost normalization, funding cost dynamics in a shifting rate environment, and maintenance of adequate regulatory capital buffers—none of which are disclosed in this dataset.

Profitability Analysis

ROE decomposition (adapted): With net income of ¥156m, assets of ¥838.936bn, and equity of ¥24.232bn, simple-period ROA is ~0.019% and financial leverage is 34.62x, leading to a simple-period ROE of ~0.64% (unannualized). The DuPont margin and turnover reported as 0%/0.000 are not usable because revenue is undisclosed and bank income statements do not map to gross margin/COGS structures. Margin quality: Net income exceeds ordinary income due to tax and possibly non-operating factors; the low reported tax expense suggests temporary items or tax effects supporting bottom line, warranting caution on sustainability. Operating leverage: The small gap between operating income (¥106m) and ordinary income (¥106m) indicates limited reliance on non-operating items; however, absent fee breakdowns and credit cost disclosures, true operating leverage cannot be gauged. Given leverage at 34.6x, small changes in net interest margin or credit costs can materially swing ROE; annualized, current earnings would still imply low-single-digit ROE without normalization tailwinds.

Growth Assessment

Revenue sustainability cannot be directly evaluated as revenue is undisclosed; for banks, core income drivers are net interest income, fees, and credit costs—none are broken out here. Profit quality: Net income of ¥156m vs ordinary income of ¥106m and tax of ¥7m suggests below-normal taxation and potential timing effects; absent loan-loss provisioning detail, profit quality is uncertain. YoY change fields are shown as +0.0% due to non-disclosure, so trend analysis is not possible. Outlook: Profit trajectory will depend on funding cost evolution (deposit beta and competition), asset yield repricing, and credit cost normalization, especially in SME and retail segments relevant to a regional bank. A stable rate environment with gradual margin improvement could lift earnings, but higher credit costs or deposit competition could compress spreads. Fee income growth from settlement, asset management, and digital channels could support non-interest income, but no data is provided.

Financial Health

Liquidity: Current and quick ratios are not applicable for banks and shown as zero due to non-disclosure; bank liquidity assessment should focus on liquid assets, LCR/NSFR, and deposit stability, none of which are disclosed. Solvency/capital: Reported equity of ¥24.232bn against ¥838.936bn in assets implies an equity-to-asset ratio of ~2.9% and leverage of 34.62x; regulatory capital ratios (CET1, total capital, leverage ratio) are not provided, limiting solvency assessment. Capital structure: Total liabilities are ¥781.038bn (93.1% of assets), consistent with a deposit-funded model, but a reconciliation gap between assets minus liabilities (¥57.9bn) and reported equity (¥24.2bn) indicates missing net asset components in this dataset. Interest-bearing debt and D/E metrics are not meaningful for banks absent a breakdown between deposits, market funding, and other liabilities.

Cash Flow Quality

Earnings quality cannot be triangulated as operating, investing, and financing cash flows, and cash balances are undisclosed in this dataset. For banks, OCF/NI and FCF measures are not typically diagnostic due to the nature of financial intermediation; instead, one would examine net interest cash inflows, loan/deposit growth, and funding mix, which are not provided. Working capital analysis is not applicable; key would be asset-liability duration, liquidity buffers, and cash/BOJ balances, also undisclosed. Given the low effective tax and limited income breakdown, the sustainability of current run-rate profits requires caution until credit costs and core net interest trends are known.

Dividend Sustainability

DPS is shown as ¥0.00 with a 0% payout ratio, but given the instruction that zeros indicate non-disclosure, dividend status is unclear. Without free cash flow (not meaningful for banks in the conventional sense) and without regulatory capital ratios, we cannot assess coverage. Historically, regional bank dividend policies align with stable payouts subject to capital adequacy and earnings visibility; in the absence of CET1/total capital ratios and profit trajectory data, the outlook cannot be determined. EPS of ¥4.47 for the period suggests capacity for some payout if earnings normalize, but prudence around capital buffers could constrain distributions depending on regulatory requirements and asset quality.

Risk Assessment

Business Risks:

• Net interest margin compression if funding costs rise faster than asset yields
• Credit cost volatility from SME and household exposures in the region
• Concentration risk in the local economy and demographic headwinds
• Fee income weakness amid limited scale and competition
• Operational and cyber risks tied to digital channels and core system upgrades

Financial Risks:

• Thin equity-to-asset ratio (~2.9%) magnifying shocks to capital
• Sensitivity of ROE to small changes in ROA given 34.6x leverage
• Potential unrealized securities valuation swings affecting net assets
• Refinancing/market funding risk if wholesale dependence rises (not disclosed)
• Low apparent effective tax rate this period may reverse, pressuring net income

Key Concerns:

• Data gaps on credit costs, NPL ratio, and regulatory capital adequacy
• Inability to reconcile assets, liabilities, and reported equity fully in the dataset
• Undisclosed cash flow and funding structure limiting liquidity assessment

Investment Implications

Key Takeaways:

• Modest profit in the period (NI ¥156m) with low unannualized ROE (~0.64%)
• High leverage (34.62x) implies earnings are highly sensitive to margin and credit costs
• Low effective tax rate (~4–5%) may be non-recurring, inflating bottom line
• Significant disclosure gaps (revenue, cash flows, capital ratios) constrain analysis
• Balance sheet indicates thin equity buffer; regulatory metrics are needed for comfort

Metrics to Watch:

• Core net interest margin and deposit beta trends
• Credit costs, NPL ratio, and coverage ratio
• CET1 and total capital ratios (domestic standard) and leverage ratio
• Securities portfolio duration/OCI sensitivity and interest rate risk in the banking book
• Fee income growth and cost-to-income ratio
• Loan and deposit growth in core prefectures

Relative Positioning: As a small regional bank, Fukushima Bank likely operates with tighter margins and higher earnings sensitivity to local economic conditions than megabanks, making capital adequacy, credit cost control, and stable funding more critical to sustain returns relative to peers.

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