North Pacific Bank, Ltd. (8524) AI Stock Analysis

• Market Cap: ¥403.60B
• Dividend Yield: 3.01%
• Average Volume (3M): 2.56M
• Price to Earnings (P/E): 14.6
• Beta (1Y): 1.43
• Revenue Growth: 19.69%
• EPS Growth: 70.91%
• Country: JP
• Employees: 2,799
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 20.82
• Shares Outstanding: 378,060,180
• 10 Day Avg. Volume: 2,725,260
• 30 Day Avg. Volume: 2,556,740
• PEG Ratio: 0.16
• Price to Book (P/B): 0.52
• Price to Sales (P/S): 1.43
• P/FCF Ratio: 5.87
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 70.15
• Revenue Forecast (FY): ¥137.25B

• Rating: 72 Outperform
• Price Target: ¥1,185.00 ▲(65.27% Upside)
• Action: Reiterated Date: 02/21/26
• Date: Action: Reiterated 02/21/26

The score is driven primarily by solid financial performance (strong revenue growth and high gross margin), tempered by a significant free cash flow drop. Technicals are supportive with a clear uptrend and positive MACD, though overbought indicators add near-term risk. Valuation is reasonable with a moderate P/E and ~3% dividend yield.

Positive Factors

Revenue Growth

Sustained double-digit revenue growth (20.9%) indicates expanding core lending and fee activities. Over a 2–6 month horizon, this supports higher scale, strengthens deposit and loan franchise economics, and provides a durable base to fund investments and absorb cost pressures.

High Gross Margin

An exceptionally high gross margin (93.7%) reflects efficient interest spread and low direct cost of earning assets. This structural efficiency provides resilience to margin compression and helps sustain earnings even if funding costs rise or loan mix shifts over the medium term.

Stable Capital / Manageable Leverage

A measurable equity position with debt-to-equity of 4.47 shows leverage is within a manageable range for a regional bank. Together with a positive ROE (5.42%), the balance sheet has structural capacity to support lending growth and regulatory buffers over coming months.

Negative Factors

Sharp Free Cash Flow Drop

A near-total drop in free cash flow (-96.6%) materially reduces internal funding for dividends, buybacks, or reinvestment. This poses a structural risk to capital allocation and could constrain balance sheet flexibility and strategic initiatives over the next several quarters.

Low Equity Ratio / Liability Reliance

An equity ratio of 2.83% signals limited capital relative to liabilities. While common in banking, this low buffer leaves the franchise more sensitive to credit losses or market stress and increases the need for prudent capital management in the medium term.

Modest Net Profit Margin

Despite strong top-line and gross margins, a modest net margin (14.9%) implies higher operating costs, provisions, or noninterest expenses. This limits conversion of revenue gains into durable bottom-line improvement absent structural expense or credit-cost reductions.

North Pacific Bank, Ltd. Business Overview & Revenue Model

Company Description

North Pacific Bank, Ltd. (8524) is a financial institution based in Japan that offers a wide range of banking services, including personal banking, commercial banking, and investment services. The bank primarily serves individuals, small to medium-sized enterprises (SMEs), and corporate clients, providing products such as savings and checking accounts, loans, mortgages, and wealth management services. North Pacific Bank is committed to fostering economic growth in its local communities by offering tailored financial solutions to meet the diverse needs of its customers.

How the Company Makes Money

North Pacific Bank generates revenue primarily through the interest spread between the rates it pays on deposits and the rates it earns on loans and other financial products. Key revenue streams include interest income from personal and commercial loans, fees from account services, transaction fees, and investment income from its portfolio of securities. Additionally, the bank may engage in wealth management and advisory services for high-net-worth individuals and businesses, generating management fees and commissions. Strategic partnerships with local businesses and community organizations further enhance its customer base and service offerings, contributing to its overall earnings.

North Pacific Bank, Ltd. Financial Statement Overview

Summary

Solid overall fundamentals supported by strong revenue growth (+15.9%) and very high gross margin (93.71%). Offsetting factors include modest net margin (14.87%) and a sharp free cash flow decline (-96.58%), which raises cash flow quality and allocation concerns.

Income Statement

North Pacific Bank, Ltd. shows robust revenue growth, with the latest annual revenue increasing by 15.9% compared to the previous year. The gross profit margin remains high at 93.71%, reflecting efficient cost management. However, the net profit margin of 14.87% suggests room for improvement in operational efficiency and cost control.

Balance Sheet

The bank maintains a stable equity position with a debt-to-equity ratio of 4.47, indicating manageable leverage. The equity ratio is 2.83%, suggesting a heavy reliance on liabilities, which is typical for banks but could pose risks if not managed carefully. The return on equity is solid at 5.42%, though there is potential for higher returns.

Cash Flow

Operating cash flow remains strong, but there was a significant decline in free cash flow compared to the previous year, with a decrease of 96.58%. The operating cash flow to net income ratio is 1.89, showing sufficient cash generation relative to earnings. Nevertheless, the sharp drop in free cash flow growth raises concerns about cash allocation and capital expenditures.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	143.40B	138.57B	120.67B	115.38B	112.98B	116.99B
Gross Profit	143.40B	129.87B	119.60B	113.76B	112.10B	115.08B
EBITDA	26.30B	37.59B	28.03B	23.25B	25.20B	22.03B
Net Income	21.28B	20.61B	12.83B	9.65B	11.76B	9.42B
Balance Sheet
Total Assets	13.28T	13.45T	13.24T	12.52T	13.54T	11.86T
Cash, Cash Equivalents and Short-Term Investments	0.00	2.65T	3.06T	2.80T	4.34T	2.63T
Total Debt	1.69T	1.70T	1.53T	941.78B	2.00T	1.30T
Total Liabilities	12.88T	13.06T	12.80T	12.11T	13.12T	11.42T
Stockholders Equity	393.16B	380.48B	442.68B	403.35B	416.81B	436.05B
Cash Flow
Free Cash Flow	33.66B	33.66B	983.81B	-1.37T	1.73T	1.16T
Operating Cash Flow	39.05B	39.05B	988.14B	-1.36T	1.74T	1.17T
Investing Cash Flow	-328.51B	-328.51B	-703.01B	-172.00B	-16.14B	-171.64B
Financing Cash Flow	-9.05B	-9.05B	-19.16B	-4.82B	-4.03B	-32.28B

North Pacific Bank, Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 717.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8524, the sentiment is Positive. The current price of 717 is below the 20-day moving average (MA) of 1006.00, below the 50-day MA of 941.55, and below the 200-day MA of 737.95, indicating a bullish trend. The MACD of 34.01 indicates Negative momentum. The RSI at 69.16 is Neutral, neither overbought nor oversold. The STOCH value of 61.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8524.

North Pacific Bank, Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7173	80 Outperform	¥354.90B	9.32	―	1.95%	19.69%	50.61%
7380	76 Outperform	¥385.02B	15.77	―	2.94%	1.91%	9.73%
8358	76 Outperform	¥408.78B	14.60	8.13%	2.12%	22.44%	59.32%
8524	72 Outperform	¥403.60B	14.60	―	3.01%	19.69%	70.91%
8370	71 Outperform	¥274.38B	12.78	7.61%	3.81%	17.68%	20.15%
8368	68 Neutral	¥431.09B	21.17	3.95%	2.19%	9.29%	28.34%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%