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

• Market Cap: ¥342.21B
• Dividend Yield: 3.01%
• Average Volume (3M): 2.56M
• Price to Earnings (P/E): 10.2
• Beta (1Y): 1.39
• 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): 1.35
• 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: ¥1,033.00 ▲(44.07% 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

Consistent double-digit top-line expansion demonstrates durable demand for the bank's lending and fee services across its regional franchise. Sustained revenue growth supports reinvestment in branches and digital channels, and provides a structural buffer to absorb cycle-related earnings volatility.

High Gross Margin

A structurally high gross margin indicates efficient operating cost control relative to interest and fee income. This margin cushion helps sustain profitability through modest net interest margin compression or higher funding costs and gives the bank persistent earnings leverage versus peers.

Manageable Leverage / ROE

Leverage appears calibrated for a regional bank and the positive ROE shows capital is being deployed to generate returns. A stable equity position and controlled leverage support continued lending activity and growth while retaining capacity to manage credit cycles without immediate capital raises.

Negative Factors

Free Cash Flow Decline

A near-total drop in free cash flow is a durable red flag for capital allocation and funding flexibility. Even with operating cash generation, such a steep decline constrains reinvestment, increases reliance on external funding or equity, and can pressure dividends or strategic initiatives over multiple quarters.

Modest Net Profit Margin

A mid-teens net margin offers limited cushion against higher credit costs or prolonged NIM compression. Structural margin constraints reduce the bank's ability to absorb loan losses or fund growth internally, potentially forcing tighter underwriting or higher risk-taking to sustain returns.

Low Equity Ratio / Liability Reliance

A low equity ratio means the balance sheet is heavily funded by liabilities, which is typical but reduces capital flexibility. This structural reliance tightens regulatory and growth levers, making the bank more sensitive to funding stress and limiting room to expand credit without raising additional capital.

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, Ltd. primarily earns revenue from (1) net interest income and (2) fee and commission income. Net interest income is generated by collecting interest on loans and other interest-earning assets (e.g., corporate/SME lending and consumer lending) and paying interest on funding sources such as customer deposits and other borrowings; the spread between these rates (and the size/quality of the loan book) is a central driver of earnings. Fee and commission income comes from services provided to customers, such as payment/settlement-related fees, account service fees, remittance and transfer fees, and fees associated with distributing or arranging financial products and services. The bank may also recognize other income (or losses) from activities such as securities investment and trading, foreign exchange-related services, and gains/losses on financial instruments; however, specific breakdowns, major partnerships, and quantitatively significant contributing factors are null.

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	152.23B	146.52B	129.68B	121.27B	117.72B	131.27B
Gross Profit	138.70B	134.58B	123.36B	114.38B	114.01B	121.68B
EBITDA	28.25B	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	889.59B	1.70T	1.77T	941.78B	4.01T	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: Negative
• Last Price: 717.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 Negative. The current price of 717 is below the 20-day moving average (MA) of 989.65, below the 50-day MA of 971.44, and below the 200-day MA of 766.49, indicating a neutral trend. The MACD of -13.21 indicates Positive momentum. The RSI at 44.26 is Neutral, neither overbought nor oversold. The STOCH value of 30.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	77 Outperform	¥336.39B	7.80	―	1.95%	19.69%	50.61%
7380	76 Outperform	¥330.45B	9.60	―	2.94%	1.91%	9.73%
8358	76 Outperform	¥367.76B	9.10	8.52%	2.12%	22.44%	59.32%
8524	72 Outperform	¥342.21B	10.18	―	3.01%	19.69%	70.91%
8368	68 Neutral	¥381.39B	11.65	3.95%	2.19%	9.29%	28.34%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
8304	54 Neutral	¥343.66B	10.57	4.74%	3.38%	5.47%	―