ENVALITH
株式会社富山第一銀行 logo

THE FIRST BANK OF TOYAMA,LTD.

7184・Prime Market・Banks

Official website
株式会社富山第一銀行 logo
THE FIRST BANK OF TOYAMA,LTD.7184

Business

The Daiichi Bank of Toyama, Ltd. was founded in 1944 and converted to an ordinary bank in 1989. It is a regional financial institution based primarily in Toyama Prefecture. In addition to conducting banking operations—including Deposit Business, Lending Business, foreign exchange, and securities trading—through its head office and 65 branches, the company operates as a comprehensive financial group with five consolidated subsidiaries: Toyama First Lease (Leasing Business), Toyama First DC (credit and guarantee business), Toyama Finance (lending business), and First Bank Capital Partners (Operation & Management of Investment Limited Partnerships). The company listed on the First Section of the Tokyo Stock Exchange in 2016 and transitioned to the Prime Market in 2022. Its main customers are business operators and individuals in the Hokuriku region.

Business Model

The core of earnings is the traditional deposit-taking and lending/securities investment model, drawing primarily on deposits (period-end balance of ¥1,437,719 million) as the main funding source and deploying them into loans (consolidated balance of ¥1,033,018 million) and securities (¥556,039 million). While securing net interest income through the spread between the yield on interest-earning assets of 1.79% and the cost of funding of 0.26%, the Bank supplements non-interest income with fee income such as investment trust sales commissions (¥880 million). Through collaboration with group companies, the Bank also builds up income from leasing, guarantees, and investment partnership operations.

Company Strengths

Standalone core net business profit reached ¥11,867 million in FY2026 (ending March 2026), marking a record high for the fourth consecutive year. The core OHR (expense ratio) improved by 4.27 points year on year to 51.65%, substantially exceeding the 1st STAGE target of below 60% set under the long-term vision "VISION10." The company absorbed the increase in personnel expenses from wage hikes through reductions in non-personnel expenses, simultaneously improving profitability and efficiency.

Even amid a significant increase in risk assets due to the finalization of Basel III, proactive capital accumulation lifted the standalone capital adequacy ratio by 0.25 points from the previous fiscal year-end to 11.96%. The consolidated capital adequacy ratio stood at 12.30%. The coverage ratio for non-performing loans remained at a high level of 86.20% (up 0.94 points year on year), confirming sound asset quality.

The standalone balance of investment trusts reached ¥73,651 million, an increase of ¥15,799 million from the previous fiscal year-end. Among fee-based services revenue, income from the investment trust business expanded to ¥880 million (from ¥811 million in the previous fiscal year). Initiatives such as financial seminars leveraging the new NISA program and consistent after-sales support have translated into balance growth, confirming the steady build-up of a non-interest income base.

ENVALITH's Perspective

For FY2027 (ending March 2026), consolidated ordinary profit is forecast at ¥18,000 million (down 14.2% year on year) and net profit at ¥13,000 million (down 13.7%), indicating a swing to lower profit. The company cites increased human capital investment, preparation costs for updating its core systems, increased investment in generative AI utilization, and additional credit costs arising under an uncertain economic environment as the main factors. While the external tailwind of increased interest income on loans from policy rate hikes continues, the pace of increase in deposit interest costs (¥3,578 million, up ¥2,408 million year on year) is accelerating, requiring a cautious view on the sustainability of margin improvement.

For FY2026 (ending March 2025), consolidated other ordinary income surged to ¥13,963 million (up ¥2,805 million year on year), the majority of which is believed to stem from gains on sale of shares. On a non-consolidated basis, net gains/losses on equities (the three-account balance) stood at ¥10,758 million, equivalent to 53% of ordinary profit of ¥20,306 million, indicating a large divergence from core business profit. The structure whereby performance is influenced by an external factor—stock market conditions—represents an important point for investors in assessing the quality and sustainability of earnings. Fluctuations in the level of consolidated valuation gains on other securities (¥100,052 million) also directly affect net assets and warrant continued attention.

For FY2026 (ending March 2025), the annual dividend was significantly increased to ¥84 per share (up ¥50 year on year), with a payout ratio of 35.2% and total dividends paid reaching ¥5,279 million. For FY2027 (ending March 2026), the dividend is planned to be reduced to ¥75 (down ¥9), but the policy is to maintain the 35.2% payout ratio. In addition, the company plans to conduct share buybacks of up to ¥5.5 billion (a resolution in May 2026 to acquire up to 2,000,000 shares for up to ¥5,500,000,000) and to retire 1,309,700 shares. Maintaining shareholder returns despite the profit decline forecast demonstrates a commitment to improving capital efficiency, but the level of the capital adequacy ratio (domestic standard, consolidated: 12.30%) and its prioritization against growth investment warrant ongoing confirmation.

Growth Strategy

Capturing rising interest rates and asset formation demand while building the next growth foundation through human capital and DX investment

Non-consolidated loan balances expanded to ¥1,059,728 million (up ¥35,747 million year on year) through expanded lending to businesses and increased housing loans. Interest on loans is expected to increase due to both rising yields (1.23%) associated with policy rate hikes and volume growth. The policy of increasing balances will continue in FY2027 (ending March 2027).

Portfolio reviews reflecting trends in bond, equity, and foreign exchange markets continue, achieving both an increase in interest and dividend income and the realization of gains on unrealized positions. Non-consolidated securities balances expanded to ¥533,091 million (up ¥65,300 million year on year). The policy of actively booking realized gains will be maintained in FY2027 (ending March 2027).

Support for individual asset formation, including utilization of the new NISA, expanded non-consolidated investment trust balances to ¥73,651 million (up ¥15,799 million year on year). Fee-Based Services Business revenue increased to ¥2,848 million (up ¥206 million year on year), maintaining an upward trend. Consulting revenue is being further strengthened through the deployment of specialized personnel.

In addition to increased personnel expenses (¥6,069 million on a non-consolidated basis, up ¥180 million year on year) due to wage increases, expenses for study and preparation toward future core system renewal and the utilization of generative AI are positioned as growth investments and actively promoted. These have been factored in as a cost increase factor for FY2027 (ending March 2027).

Based on the policy of a dividend payout ratio of 35% or more, a substantial dividend increase to ¥84 per share annually (up ¥50 year on year) was implemented for FY2026 (ending March 2026). ¥75 is planned for FY2027 (ending March 2027). A share buyback of up to ¥5.5 billion (up to 2,000,000 shares) and the cancellation of 1,309,700 shares were resolved in May 2026, aiming to improve capital efficiency and enhance corporate value.

Last updated: July 19, 2026