Financial Data
2022
Year ended March 31, 2022

CONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED BALANCE SHEET……………………………………… 1
CONSOLIDATED STATEMENT OF INCOME…………………………… 2
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME……… 2
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY……………… 3
CONSOLIDATED STATEMENT OF CASH FLOWS……………………… 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS……………… 6
INDEPENDENT AUDITOR’S REPORT……………………………………… 43
NON-CONSOLIDATED FINANCIAL STATEMENTS
The Hokuriku Bank, Ltd.
NON-CONSOLIDATED BALANCE SHEET (UNAUDITED)…………… 48
NON-CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)…… 49
The Hokkaido Bank, Ltd.
NON-CONSOLIDATED BALANCE SHEET (UNAUDITED)…………… 50
NON-CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)…… 51

Hokuhoku Financial Group, Inc.

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CONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED BALANCE SHEET
Hokuhoku Financial Group, Inc. and Consolidated Subsidiaries

2022

2021

Thousands of
U.S. dollars (Note 1)2022¥ 5,471,090
26,731
21,2173,454
18,4742,206,987
9,193,283
25,628201,789
99,135
10,323
10,8393,275
60,310(72,470)¥ 5,096,491―
27,985
3,407
18,545
2,107,290
9,050,446
22,385
202,694
95,784
13,5683,084
3,596
52,921(62,731)$ 44,702,107
218,412173,355
28,228150,946
18,032,421
75,114,665
209,399
1,648,742
809,994
84,351
88,565
26,761
492,775(592,128)¥17,280,071¥16,635,471$141,188,593¥ 13,202,604
318,920
21,123288,815651
2,608,500
647
4,514
125,967
3,703
123
943
1,495
10
13,9094,984
60,310¥ 12,788,914
280,517
24,670307,787349
2,385,969
447
2,942
120,203
3,566
192
755
1,629
7
20,966
5,123
52,921$ 107,873,228
2,605,769
172,594
2,359,796
5,326
21,313,020
5,292
36,884
1,029,230
30,262
1,009
7,712
12,217
83
113,648
40,725492,775

16,657,226

15,996,966

136,099,570

70,895125,128500
359,045(852)

70,895
133,905
538
344,103(1,180)579,255
1,022,371
4,088
2,933,617(6,969)56,225
325
7,791
338

80,937(61)
8,088(1,986)459,394
2,659
63,661
2,766

619,396
3,449
622,845¥17,280,071

635,241
3,263
638,504¥16,635,471

5,060,842
28,181
5,089,023$141,188,593

Millions of yen
March 31

AssetsCash and due from banks (Notes 5 and 31)
Call loans and bills bought (Note 31)
Monetary claims bought (Notes 8 and 31)
Trading assets (Notes 6, 8, 31 and 32 )Money held in trust (Note 7)
Securities (Notes 8, 14, and 31)
Loans and bills discounted (Notes 9, 14, 15, and 31)
Foreign exchanges (Note 10)
Other assets (Notes 14 and 32)
Tangible fixed assets (Note 11)
Intangible assets (Note 12)
Assets for retirement benefits (Note 18)
Deferred tax assets (Note 28)
Customers’ liabilities for acceptances and guarantees (Note 13)
Allowance for loan losses (Note 3)
Total assets
Liabilities and equity
Liabilities
Deposits (Notes 14, 16, and 31)
Call money and bills sold (Notes 14 and 31)
Payables under repurchase agreements
Payables under securities lending transactions (Note 14)
Trading liabilities (Notes 6 and 32 )Borrowed money (Notes 14, 17, and 31)
Foreign exchanges (Note 10)
Borrowed money from trust account
Other liabilities (Note 32)
Liability for retirement benefits (Note 18)
Reserve for directors’ and audit & supervisory board members’ retirement benefits
Reserve for contingent losses
Reserve for reimbursement of deposits
Reserve under the special laws
Deferred tax liabilities (Note 28)
Deferred tax liabilities for revaluation (Note 28)
Acceptances and guarantees (Note 13)
Total liabilities
Equity (Notes 19, 20, and 22)
Capital stock
Capital surplus
Stock acquisition rights (Notes 21 and 22)
Retained earnings
Treasury stock
Accumulated other comprehensive income
Valuation difference on available-for-sale securities (Note 8)
Deferred gains (losses) on hedges
Revaluation reserve for land (Note 11)
Defined retirement benefit plans (Note 18)
Total
Non-controlling interests
Total equity
Total liabilities and equity
See notes to consolidated financial statements.

Hokuhoku Financial Group, Inc. Financial Data 2022

CONSOLIDATED BALANCE SHEET

1

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CONSOLIDATED STATEMENT OF INCOME
Hokuhoku Financial Group, Inc. and Consolidated Subsidiaries

Millions of yen

Thousands of
U.S. dollars (Note 1)
2022

Year ended March 31

2022

2021

IncomeInterest income:Interest on loans and discounts
Interest and dividends on securities
Interest on receivables under resale agreements
Interest on deposits with other banks
Other interest income
Trust fees
Fees and commissions (Note 33)
Trading income
Other ordinary income (Note 24)
Other income (Note 26)
Total income¥82,578
16,353
―
5,504
362
36
39,571
1,627
20,067
15,683
181,785¥84,053
18,554
(1)
1,432
463
42
37,817
1,625
20,04911,994
176,032$674,715
133,614―44,9752,964
296
323,324
13,300163,961
128,145
1,485,294

Expenses
Interest expense:
Interest on deposits
Interest on payables under repurchase agreements
Interest on payables under securities lending transactions
Interest on borrowings and rediscounts
Other interest expense
Fees and commissions
Other ordinary expenses (Note 25)
General and administrative expenses
Provision of allowance for loan losses
Other expenses (Note 27)
Total expenses

435
9
390
7
642
15,455
19,66087,273
12,874
11,801
148,552

623
27
216
37
858
15,356
14,97091,511
12,8158,436
144,854

3,554
82
3,190
61
5,254
126,284
160,640
713,080
105,188
96,427
1,213,760

33,23331,177

271,534

11,656890
20,685
158¥20,526

10,646(1,066)
21,598263¥21,334

95,242
7,278
169,014
1,298$167,716

Income before income taxes
Income taxes (Note 28):
Current
Deferred
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent

Yen

Per share of common stock (Notes 2-u and 23)
Basic net income
Diluted net income
Cash dividends applicable to the year

¥147.47146.95
35.00

U.S. dollars¥152.17151.68
35.00

$1.20
1.20
0.28

See notes to consolidated financial statements.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Hokuhoku Financial Group, Inc. and Consolidated Subsidiaries

Year ended March 31

2022

2021

Thousands of
U.S. dollars (Note 1)
2022

Net income
Other comprehensive income (loss) (Note 29)
Valuation difference on available-for-sale securities
Deferred gains (losses) on hedges
Defined retirement benefit plans
Share of other comprehensive income (loss) of associates accounted forusing equity method
Total comprehensive income (loss)
Comprehensive income (loss) attributable to owners of the parent
Comprehensive income (loss) attributable to non-controlling interests¥20,685(21,974)(24,707)386
2,324¥21,598
33,54925,343
1,014
7,063$169,014(179,544)(201,876)
3,159
18,99421¥(1,288)(1,474)
185

127¥55,148
54,825322

179$(10,530)(12,046)
1,516

Millions of yen

See notes to consolidated financial statements.

2

Hokuhoku Financial Group, Inc. Financial Data 2022

CONSOLIDATED STATEMENT OF INCOME、CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Hokuhoku Financial Group, Inc. and Consolidated Subsidiaries
Thousands
IssuedIssuednumber of
number ofshares ofshares ofcommon stock preferred stock
BALANCE, APRIL 1, 2020

132,163

96,698Millions of yen

Capitalstock

Capitalsurplus¥70,895¥139,269

StockacquisitionrightsRetainedearnings¥497¥329,343

Cash dividends(6,697)

Net income attributable to owners of the parent

21,334Purchases of treasury stock
Retirement of treasury stock(10,743)7

61(5,371)

5,371

Reversal of revaluation reserve for land

122

Net changes in the year41
132,163

85,955¥70,895¥133,905¥538¥344,103

Cash dividends(5,882)

Net income attributable to owners of the parent

20,526

Purchases of treasury stock(3,392)(10,743)0155(8,778)

8,778

Reversal of revaluation reserve for land297

Net changes in the year
BALANCE, MARCH 31, 2022¥(1,180)(8,606)

Disposals of treasury stock
Retirement of treasury stock¥(1,237)(5,375)

Disposals of treasury stock

BALANCE, MARCH 31, 2021

Treasury
stock

(38)
128,770

75,212¥70,895¥125,128¥500¥359,045¥(852)

Millions of yen
Accumulated other comprehensive income
Valuation
Deferreddifference on
available-for-sale gains (losses)on hedges
securities
BALANCE, APRIL 1, 2020

¥55,525¥(1,076)

Revaluation
reserve forland

Definedretirement
benefit plans¥8,211¥(9,049)

Noncontrollinginterests

Total¥592,378¥2,941Total
equity¥595,319

Cash dividends(6,697)(6,697)

Net income attributable to owners of the parent

21,334

21,334Purchases of treasury stock(5,375)(5,375)

Disposals of treasury stock

68

68

Retirement of treasury stock――Reversal of revaluation reserve for land

122

122

Net changes in the year

25,412

1,014

(122)

7,063

33,409322

33,731BALANCE, MARCH 31, 2021

¥80,937¥(61)¥8,088¥(1,986)¥635,241¥3,263¥638,504

Cash dividends(5,882)(5,882)

Net income attributable to owners of the parent

20,526

20,526

Purchases of treasury stock(8,606)(8,606)

Disposals of treasury stock

156

156

Retirement of treasury stock――Reversal of revaluation reserve for land

297

297

Net changes in the year

(24,712)

386

(297)

2,324

(22,336)

185(22,151)

BALANCE, MARCH 31, 2022

¥56,225¥325¥7,791¥338¥619,396¥3,449¥622,845

Hokuhoku Financial Group, Inc. Financial Data 2022

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

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Capitalstock
BALANCE, MARCH 31, 2021

$579,255

Thousands of U.S. dollars (Note 1)
Stock
CapitalRetainedacquisition
surplusearnings
rights$1,094,087$4,402$2,811,531

Cash dividends(48,059)

Net income attributable to owners of the parent

167,716

Purchases of treasury stock

Treasurystock$(9,645)(70,317)

Disposals of treasury stock

6

1,271

Retirement of treasury stock(71,722)71,722

Reversal of revaluation reserve for land

2,429

Net changes in the year
BALANCE, MARCH 31, 2022

(314)
$579,255$1,022,371$4,088$2,933,617$(6,969)

Thousands of U.S. dollars (Note 1)
Accumulated other comprehensive income
Valuation
Deferreddifference on
available-for-sale gains (losses)on hedges
securities
BALANCE, MARCH 31, 2021

$661,310$(500)

Revaluation
reserve forland

Definedretirement
benefit plans$66,089$(16,228)

Total
equity$5,190,301$26,668$5,216,969

Cash dividends(48,059)(48,059)

Net income attributable to owners of the parent

167,716

167,716

Purchases of treasury stock(70,317)(70,317)

Disposals of treasury stock

1,277

1,277

Retirement of treasury stockReversal of revaluation reserve for land

―

―

2,429

2,429

Net changes in the year

(201,916)

3,159(2,428)18,994(182,505)

1,513(180,992)

BALANCE, MARCH 31, 2022

$459,394$2,659$63,661$2,766$5,060,842$28,181$5,089,023

See notes to consolidated financial statements.

4

Total

Noncontrollinginterests

Hokuhoku Financial Group, Inc. Financial Data 2022

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

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CONSOLIDATED STATEMENT OF CASH FLOWS
Hokuhoku Financial Group, Inc. and Consolidated Subsidiaries

Millions of yen
Year ended March 31
1. Cash flows from operating activities:
Income before income taxes
Depreciation
Impairment losses
Amortization of goodwill
Equity in losses (gains) of affiliates
Increase (decrease) in allowance for loan losses
Increase (decrease) in reserve for contingent losses
Decrease (increase) in asset for retirement benefits
Increase (decrease) in liability for retirement benefits
Increase (decrease) in reserve for directors’ andaudit & supervisory board members’ retirement benefits
Increase (decrease) in reserve for reimbursement of deposits
Interest income
Interest expense
Losses (gains) on securities
Losses (gains) on money held in trust
Losses (gains) on foreign exchange
Losses (gains) on sales of fixed assets
Net decrease (increase) in trading assets
Net increase (decrease) in trading liabilities
Net decrease (increase) in loans and bills discounted
Net increase (decrease) in deposits
Net increase (decrease) in negotiable certificates of deposit
Net increase (decrease) in borrowed money (excluding subordinated borrowed money)
Net decrease (increase) in due from banks (excluding deposits with the Bank of Japan)
Net decrease (increase) in call loans, bills bought, commercial paper,and other debt purchased
Net increase (decrease) in call money and bills soldNet increase (decrease) in payables under securities lending transactions
Net decrease (increase) in foreign exchanges (assets)
Net increase (decrease) in foreign exchanges (liabilities)
Net increase (decrease) in borrowed money from trust accountInterest income—cash basis
Interest expense—cash basis
Other, net
Subtotal
Income taxes paid
Net cash provided by (used in) operating activities
2. Cash flows from investing activities:
Purchases of securities
Proceeds from sales of securities
Proceeds from redemption of securities
Purchases of money held in trust
Proceeds from sales of money held in trust
Proceeds from fund management
Purchases of tangible fixed assets
Proceeds from sales of tangible fixed assets
Purchases of intangible assets
Net cash provided by (used in) investing activities
3. Cash flows from financing activities:
Dividends paid
Dividends paid to non-controlling shareholders
Purchases of treasury stock
Proceeds from disposals of treasury stock
Net cash provided by (used in) financing activities
4. Effect of exchange rate changes on cash and cash equivalents
5. Net increase (decrease) in cash and cash equivalents
6. Cash and cash equivalents at beginning of the period
7. Cash and cash equivalents at end of the period (Note 5)

Thousands of
U.S. dollars (Note 1)
2022

2022

2021

¥ 33,233
6,682
414
2,102
(24)
9,738
188
(7,755)137¥ 31,177
6,743
685
2,102
(12)
8,028
(269)
(3,084)(8,633)$ 271,534
54,5983,390
17,177(199)
79,573
1,539(63,365)
1,121

(68)
(134)
(104,798)
1,485
743
(18)
(13,380)
522
(46)
302
(142,837)
413,849(158)
222,530(9,291)

1(348)(104,502)
1,763(7,089)7(6,357)
402
382
(147)
(393,996)
1,166,557(16,261)
1,558,395(6,676)(560)(1,101)(856,269)
12,141
6,073(154)(109,325)
4,271
(383)
2,472
(1,167,066)
3,381,397(1,298)1,818,208(75,914)(19,962)
34,855(18,972)(3,242)200
1,571
87,995(1,615)(22,891)
471,354(8,941)
462,41364,493225,045
13,146(3,370)333
2,408
84,791(2,016)2,498
2,616,197(7,977)2,608,220(163,108)284,790(155,014)(26,497)
1,636
12,841
718,976(13,198)(187,034)
3,851,252(73,056)
3,778,196(963,265)
680,813
192,934(20,543)
20,462
16,371(8,170)372(1,629)(82,653)(945,725)
449,479
250,893(20,013)
20,156
18,554(3,549)138(1,309)(231,376)(7,870,458)
5,562,656
1,576,394(167,849)
167,187
133,768(66,757)
3,043(13,314)(675,330)(5,882)(0)(8,606)0(14,488)36
365,3085,086,143¥5,451,451(6,697)(0)(5,375)0(12,073)192,364,789
2,721,353¥5,086,143(48,059)(4)(70,317)2(118,378)
299
2,984,787
41,556,857$44,541,644

See notes to consolidated financial statements.

Hokuhoku Financial Group, Inc. Financial Data 2022

CONSOLIDATED STATEMENT OF CASH FLOWS

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Hokuhoku Financial Group, Inc. and Consolidated Subsidiaries

1. Basis of Presentation
The accompanying consolidated financial statements have been
prepared in accordance with the provisions set forth in theJapanese Financial Instruments and Exchange Act and its related
accounting regulations, the Enforcement Regulation for the
Banking Act, and in conformity with accounting principles
generally accepted in Japan (“Japanese GAAP”), which are
different in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards.
In preparing these consolidated financial statements, certain
reclassifications and rearrangements have been made to theconsolidated financial statements issued domestically in order topresent them in a form which is more familiar to readers outsideof Japan. In addition, certain reclassifications have been made in
the 2021 consolidated financial statements to conform to theclassifications used in 2022.
All Japanese yen figures in the consolidated financial
statements have been rounded down to the nearest million yen.
Accordingly, the total of each account may not be equal to the
combined total of the individual items. The U.S. dollar amounts
are then rounded to thousand dollars.
The consolidated financial statements are stated in Japaneseyen, the currency of the country in which Hokuhoku Financial
Group, Inc. (the “Company”) is incorporated and operates. The
translations of Japanese yen amounts into U.S. dollar amounts
are included solely for the convenience of readers outside Japanand have been made at the rate of ¥122.39 to U.S. $1, the rateof exchange at March 31, 2022. Such translations should not be
construed as representations that the Japanese yen amounts
could be converted into U.S. dollars at that or any other rate.

2. Summary of Significant Accounting Policies
a. Consolidation
The consolidated financial statements as of March 31, 2022
include the accounts of the Company and its 12 subsidiaries(together, the “Group”).
Under the control and influence concepts, those companies inwhich the Company, directly or indirectly, is able to exercise
control over operations are fully consolidated, and thosecompanies over which the Group has the ability to exercise
significant influence are accounted for by the equity method.
All significant intercompany balances and transactions havebeen eliminated in consolidation. All material unrealized profit
included in assets resulting from transactions within the Group isalso eliminated.
An investment in one associated company is accounted for by
the equity method.
Two companies were not treated as subsidiaries even though
the Group owns over 50% of its voting rights because theobjective for the Group to own the voting rights is merely toinvest business succession and the investment meets therequirement according to Paragraph 16 of the AccountingStandards Board of Japan (the ”ASBJ”) Guidance No. 22“Implementation Guidance on Determining a Subsidiary and an
Affiliate.”
Two companies were not treated as affiliates even though theGroup owns 20% to 50% of its voting rights because the objective
for the Group to own the voting rights is merely to invest businesssuccession and the investment meets the requirement according
to Paragraph 24 of the ASBJ Guidance No. 22 “Implementation
Guidance on Determining a Subsidiary and an Affiliate.”
Assets and liabilities of newly consolidated subsidiaries are6

Hokuhoku Financial Group, Inc. Financial Data 2022

Basis of Presentation

valued at fair value at the respective dates of acquisition, andgoodwill is amortized using the straight-line method over 20
years.
b. Cash and Cash Equivalents
For the purpose of reporting cash flows, “Cash and cash
equivalents” consists of “Cash” and “Due from the Bank ofJapan.”
c. Trading Purpose Transactions“Transactions for trading purposes” (for purposes of seeking tocapture gains arising from short-term changes in interest rates,
currency exchange rates, or market prices of securities and othermarket-related indices or from gaps among markets) are included
in “Trading assets” and “Trading liabilities” on a trade-date basis.
Trading securities and monetary claims bought for trading
purposes are stated at fair value at the balance sheet date.
Trading-related financial derivatives, such as swaps, futures, andoptions are stated at amounts that would be received or paid forsettlement if such transactions were terminated at the balance
sheet date. Income and losses on trading purpose transactions
are recognized on a trade-date basis and recorded as “Trading
income” or “Trading losses.”
Trading income and losses include interest received and paid
during the fiscal year and unrealized gains and losses resulting
from the change in the fair value of securities, monetary claimsbought, and derivatives between the balance sheet dates.
d. Securities
Securities are classified and accounted for, based principally on
the Group’s intent, as follows: (a) held-to-maturity debt securities,
which are expected to be held to maturity with the positive intent
and ability to hold to maturity, are stated at amortized costcomputed by the straight-line method and (b) available-for-salesecurities, which are not classified as trading purpose securities
or held-to-maturity securities, are stated at fair value withunrealized gains and losses, net of applicable taxes, reported in a
separate component of equity. Nonmarketable available-for-sale
equity securities are stated at cost determined by the movingaverage method.
For other-than-temporary declines in fair value, securities are
reduced to net realizable value by a charge to income.
Securities included in money held in trust are recorded in thesame manner as securities mentioned above.
e. Tangible Fixed Assets (excluding Lease Assets)
Tangible fixed assets are stated at cost less accumulated
depreciation. The Company and its consolidated banking
subsidiaries (the subsidiaries hereafter referred to as the“Banks”) depreciate their equipment based on the decliningbalance method and their premises principally based on thestraight-line method. The estimated useful lives of major assets
are as follows: (1) buildings: 6 to 50 years and (2) equipment: 3 to
20 years.
Consolidated non-banking subsidiaries depreciate theirequipment and premises principally based on the decliningbalance method over their expected useful lives.
f. Intangible Assets (excluding Lease Assets)
Intangible assets are amortized based on the straight-line
method. Capitalized software for internal use owned byconsolidated subsidiaries is amortized using the straight-line2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）

method over its estimated useful life (mainly five years).
g. Lease Assets
Lease assets under non-transfer ownership finance lease
contracts (in which the ownership of leased assets is nottransferred to the lessee; included in tangible fixed assets andintangible assets) are depreciated on a straight-line basis overthe lease period with a residual value of zero, excepting whencontracted amounts for residual value are specified.
h. Long-Lived Assets
The Group reviews its long-lived assets for impairment whenever
events or changes in circumstances indicate the carrying amountof an asset or asset group may not be recoverable. An
impairment loss would be recognized if the carrying amount of anasset or asset group exceeds the sum of the undiscounted future
cash flows expected to result from the continued use andeventual disposition of the asset or asset group. The impairment
loss would be measured as the amount by which the carrying
amount of the asset exceeds its recoverable amount, which is thehigher of the discounted cash flows from the continued use andeventual disposition of the asset or the net selling price at
disposition.
i. Allowance for Loan Losses
The Banks provide an allowance for loan losses which isdetermined based on management’s judgment and anassessment of future losses based on their self-assessment
systems. These systems reflect past experience of credit losses,
possible credit losses, business and economic conditions, thecharacter, quality, and performance of the portfolio, the value ofcollateral or guarantees, and other pertinent indicators.
The Banks have implemented a self-assessment system todetermine the quality of their assets. The quality of all loans is
assessed by branches and the credit supervisory division with asubsequent audit by the asset review and inspection division inaccordance with the Banks’ policy and guidelines for the selfassessment of asset quality.
The Banks have established a credit rating system underwhich borrowers are classified into five categories based on theirfinancial condition, cash flows, earnings ability and otherconsiderations. The credit rating system is used in the selfassessment of asset quality. All loans are classified into fivecategories for self-assessment purposes: “Normal,” “In need ofcaution (“Substandard” borrowers with substandard loans orother borrowers in need of caution),” “Possible bankruptcy,”“Virtual bankruptcy,” and “Legal bankruptcy.”
The definitions of these categories are as follows:
Normal:A “Normal” borrower has strong results and no particular
problems with its financial position.
In need of caution:
An “In need of caution” borrower has problems with lending
conditions, has problems with fulfillment, has poor results oris unstable, has problems with its financial position, orotherwise requires special attention in future management.
Substandard:
A “Substandard” borrower has substandard loans.
“Substandard” loans are loans to “In need of caution”
borrowers that are “three months or more in arrears” orhave restructured loans.

Possible bankruptcy:
A “Possible bankruptcy” borrower is not bankrupt now but isfacing business difficulties and has failed to make adequate
progress on its business improvement plan, etc., such that
there is a strong possibility of it going into bankruptcy in the
future.
Virtual bankruptcy:
A “Virtual bankruptcy” borrower is not yet legally andformally bankrupt, but is in serious business difficulties fromwhich it is considered impossible to rebuild. In other words,
the borrower is practically bankrupt.
Legal bankruptcy:
A “Legal bankruptcy” borrower is legally and formallybankrupt. This would include bankruptcy, liquidation,
corporate reorganization, civil-rehabilitation, composition,and deposition by suspension of business in the clearing
house.
For loans to borrowers classified as "Legal bankruptcy" or"Virtual bankruptcy," the Banks fully provide the net amount ofloans and estimated collectible amounts by collateral or
guarantees.
For borrowers classified as "Possible bankruptcy" with which
the unsecured portion of claims exceeds a certain amount, or alarge lot borrowers holding substandard loans, if cash flows fromcollection of principal and interest can be reasonably estimated,the Banks provide the difference between the present values ofthese cash flows discounted at the initial contractual interest rate
and the book values of the loans (the “DCF” method).
For borrowers classified as "Possible bankruptcy" or holding
substandard loans without using the “DCF” method, a specificreserve or a general allowance is provided based on three-year
expected loan losses. Expected loan losses are measured basedon three-year historical loan loss ratio and forward-looking
information.
For borrowers classified as “Normal” or “In need of caution”
loans, the Banks segregate the loans into two categories”Business loan” or “Consumer loan.” General allowance for thesecategories is provided based on one-year expected loan losses,
respectively. Expected loan losses are measured by eachcategories based on one-year historical loan loss ratios andforward-looking information.
The Company and its consolidated non-banking subsidiaries
determine the allowance for loan losses by a similar selfassessment system as that of the Banks.
For collateralized or guaranteed claims to borrowers who arein “Virtual bankruptcy” or “Legal bankruptcy,” the amountexceeding the estimated value of collateral or guarantees has
been deducted as deemed uncollectible directly from thoseclaims. The deducted amounts were ¥33,911 million ($277,078
thousand) and ¥37,109 million at March 31, 2022 and 2021,
respectively.
j. Accounting Method for Retirement Benefits
In calculating retirement benefit obligations, the benefit formulabasis is used as a method of attributing expected retirement
benefits to the period up to the end of this fiscal year.
The past service cost is amortized using the straight-line
method over nine years within the employees’ average remaining
service period. It’s commenced from the fiscal year of incurrence.
The unrecognized actuarial (gains) losses are amortized using
the straight-line method over eight or nine years within theemployees’ average remaining service period, commencing fromthe next fiscal year of incurrence.
Hokuhoku Financial Group, Inc. Financial Data 2022

Basis of Presentation7

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）k. Reserve for Directors’ and Audit & Supervisory Board
Members’ Retirement Benefits
A reserve for directors’ and audit & supervisory board members’
retirement benefits is provided for payment of retirement benefits
to directors and audit & supervisory board members in theamount deemed accrued at the fiscal year end, based on theestimated amount of benefits.
The Company and the Banks abolished their directors’ andaudit & supervisory board members’ retirement benefits systemat the Board of Directors’ meeting on May 11, 2012, and resolved
to provide a lump-sum payment of retirement benefits of directors
and audit & supervisory board members at the general meetingof shareholders on June 26, 2012. According to theseresolutions, the lump-sum payment of retirement benefits ofdirectors and audit & supervisory board members shall beeffectuated upon the retirement of each individual director andaudit & supervisory board member. Reserve for directors’ andaudit & supervisory board members’ retirement benefits wasended in June 2012, and the entire remaining amount is included
in “reserve for directors’ and audit & supervisory board members’
retirement benefits.”
l. Reserve for Contingent Losses
A reserve for contingent losses is provided for possible losses inaccordance with the Joint Responsibility System of Credit
Guarantee Corporations and possible losses from contingencies
not covered by other specific reserves.
m. Reserve for Reimbursement of Deposits
A reserve for reimbursement of deposits which were notpreviously recognized as liabilities under certain conditions isprovided for possible losses on the future claims of withdrawal
based on historical reimbursement experience.
n. Reserve under the Special Laws
A reserve under the special laws is a reserve for contingent
liabilities and provided for compensation for losses fromsecurities related transactions or derivative transactions inaccordance with Article 46-5 of the Japanese Financial
Instruments and Exchange Act.
o. Stock Options
The companies are required to recognize compensation expensefor employee stock options based on the fair value of the stock
options at the date of grant and over the vesting period as
consideration for receiving goods or services. The companies arealso required to account for stock options granted to nonemployees based on the fair value of either the stock option or the
goods or services received. In the consolidated balance sheet, thestock options are presented as stock acquisition rights as aseparate component of equity until exercised.
p. Income Taxes
The provision for income taxes is computed based on the pretax
income included in the consolidated statement of income. The
asset and liability approach is used to recognize deferred tax
assets and liabilities for the expected future tax consequences of
temporary differences between the carrying amounts and the tax
bases of assets and liabilities. Deferred taxes are measured byapplying currently enacted income tax rates to the temporary
differences.

8

Hokuhoku Financial Group, Inc. Financial Data 2022

Basis of Presentation

q. Translation of Foreign Currencies
Assets and liabilities denominated in foreign currencies aretranslated into Japanese yen mainly at the exchange rate
prevailing as of the balance sheet date.
r. Derivatives and Hedging Activities
Derivatives are stated at fair value. Derivative transactions thatmeet hedge accounting criteria are primarily accounted for under
the deferral method whereby unrealized gains and losses aredeferred until maturity as deferred gains (losses) on hedge
accounting in a separate component of equity.
The Banks hedge interest rate risks arising from their financial
assets and liabilities by employing the technique known as“individual hedging” that establishes a specific position to directly
hedge a particular item. Such hedges, limited to certain assets
and liabilities, are accounted for by the deferred method or,where appropriate interest rate swaps are involved, by the
special rule method.
The effectiveness of hedges is assessed as follows: theBanks specify the hedged items according to their risk
management regulations, with the aim of centralizing hedging
instruments, and verify the extent to which the exposure ofinterest rate risks on hedged items is mitigated.
The Banks hedge currency exchange fluctuation risks arisingfrom their foreign currency denominated financial assets andliabilities. Such hedges are accounted for by the deferred method
specified in the “Accounting and Auditing Treatments in Banking
Business in Accounting for Foreign Currency DenominatedTransactions and Others” (The Japanese Institute of Certified
Public Accountants (“JICPA”) Industry Committee Practical
Guidelines No. 25).
The effectiveness of these hedges is assessed as follows:
where currency swap transactions and exchange swap
transactions are used as hedging instruments to offset exchange
fluctuation risks arising from foreign currency denominatedfinancial assets and liabilities, hedge effectiveness is assessedby verifying the agreement of the amounts of the designatedhedging instruments corresponding to the hedged foreign
currency financial assets and liabilities.
The Company and consolidated non-banking subsidiaries are
not engaged in hedging operations using derivative transactions.
s. Finance Lease
Sales and cost of sales are accounted for when lease payments
are paid.
t. Per Share Information
Basic net income per share is computed by dividing net income
attributable to common shareholders by the weighted-average
number of shares of common stock outstanding for the period.
Diluted net income per share reflects the potential dilution that
could occur if the outstanding stock options were exercised.
Diluted net income per share assumes full exercise of theoutstanding stock options at the beginning of the year (or at thetime of grant).
Cash dividends per share presented in the accompanying
consolidated statement of income are dividends applicable to therespective fiscal years, including dividends to be paid after theend of the fiscal year.

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）

u. New Accounting Pronouncements
Accounting standards for Fair Value Measurement
On June 17, 2021, the ASBJ has issued the revised ASBJ
Guidance No. 31 (revised 2021), "Implementation Guidance on
Accounting Standard for Fair Value Measurement"(the "New
Accounting Standards").
At the time of publication of the Accounting Standard for Fair
Value Measurement, ASBJ announced that it would spend
approximately one year to review the proposed amendments tothe accounting standard, and to release the revised accounting
standard.
This is because, in revising its accounting standards, ASBJ
considered it necessary to discuss with relevant parties in order
to examine the "calculation of the fair value of investment trusts".
In addition, ASBJ considered that the notes to the fair value of"Investments in a Partnership, etc., in which the equity equivalentis recorded on the balance sheet on a net basis" also requires
discussions and such discussions require some time.
The examination was to be conducted approximately one year
after the publication of the “Accounting Standard for Fair Value
Measurement", it has been revised and published the "New
Accounting Standards."
The New Accounting Standards are effective for annual
periods beginning on or after April 1, 2022.
The Company is in the process of measuring the effects ofapplying the New Accounting Standards in future applicable
periods.

3. Significant Accounting Estimate
The significant accounting estimate that can significantly affectthe consolidated financial statements for the next fiscal year is asfollows:
Allowance for loan losses(1) Carrying amount on the consolidated financial statements offiscal year ended March 31, 2022 and 2021 were as follows.
2022

2021

Thousands of
U.S. dollars
2022¥72,470¥62,731$592,128

Millions of yen

Allowance for loan losses

Recording allowance for loan losses has a significant impact on
operating results and financial status because of relatively highpercentage of loans and bills discounted on the consolidatedbalance sheet as March 31, 2022. Therefore, we determined that
it was significant accounting estimate.
(2) Information on the significant accounting estimate(a) Methodology for estimate
The Banks estimate the allowance for loan losses
according to the methodology described in Note 2,"Summary of Significant Accounting Policies, i. Allowancefor Loan Losses” to the consolidated financial statements.
(b) Principal assumption
Principal assumption is the prospects for recovery ofborrowers’ business performance in the future periods andthe achievability of the borrowers’ medium-tern to longterm
business
improvement
plans(“Business
Improvement Plans”). In addition, the Group’s current
expectation is that the majority of the impact of the novel
coronavirus disease (“COVID-19”) on our society willcontinue for the time being, and that during this period,
there will be a distinct impact on the financial health ofborrowers.
In case of borrowers whose business results or financial
position is currently unfavorable or unstable, the Banks
frequently determine the borrowers classifications basedon the latest changes in the borrowers’ businessconditions or the borrowers’ “Business Improvement
Plans” in addition to the borrowers’ historical businessperformance. The latest changes in the borrowers’
business conditions include the impact of COVID-19 orcontainment thereof on the borrowers’ businessconditions. ”
About the above, there are no significant changes fromprevious consolidated fiscal year(c) The risk that might affect carrying amount to theconsolidated financial statements in next financial year
Including the impact of COVID-19, if the assumption for
the evaluation of the achievability of the borrowers’“Business Improvement Plans” changes, it is possiblethat the situation will have a significant impact onallowance for loan losses.

4. Accounting Change(Application of “Accounting Standard for Revenue Recognition”)
Effective April 1, 2021, the Company adopted ASBJ Statement
No. 29, “Accounting Standard for Revenue Recognition,” andASBJ Guidance No. 30, "Implementation Guidance on AccountingStandard for Revenue Recognition,” issued on March 31, 2020("ASBJ Statement No. 29") and recognizes revenue at theamount expected to be received in exchange for promised goods
or services when control of the goods or services is transferred tocustomers. This will not affect retained earnings and profit or loss.
The Company discloses Note 33 "Revenue recognition" without
comparative information in prior fiscal year in accordance withtransitional treatment provided in paragraph 89-3 of “AccountingStandard for Revenue Recognition”(Application of “Accounting Standard for Fair Value
Measurement”)
Effective April 1, 2021, the Company adopted ASBJ Statement
No. 30, “Accounting Standard for Fair Value Measurement,” andASBJ Guidance No. 31, "Implementation Guidance on
Accounting Standard for Fair Value Measurement,” issued onJune 17, 2019 ("ASBJ Statement No. 30") and ASBJ GuidanceNo. 19 (revised 2019), " Implementation Guidance on Disclosuresabout Fair Value of Financial Instruments," and revised related
ASBJ Statements and ASBJ Guidance (the "New AccountingStandards"). The Company applies the New AccountingStandards prospectively, in accordance with transitional
treatment provided in paragraph 19 of “Accounting Standard for
Fair Value Measurement” and in paragraph 44-2 of "Implementation Guidance on Disclosures about Fair Value of
Financial Instruments."
Under the "New Accounting Standards," the fair value of stocks
quoted market price are valued at the market price as of theconsolidated fiscal year end, for the current fiscal year, while
under the previous accounting standards, were determined basedon the average quoted market prices in the last month of the
fiscal year. Furthermore, the Company discloses the level of thefair value hierarchy within which the fair value measurements are
categorized in their entirety in Note 31 "fair value of financial
instrument" without comparative information in prior fiscal year inaccordance with transitional treatment provided in paragraph 7-4of “Implementation Guidance on Disclosures about Fair Value of
Financial Instruments”

Hokuhoku Financial Group, Inc. Financial Data 2022

Basis of Presentation9

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）5. Cash and Cash Equivalents
The reconciliation of “Cash and cash equivalents” in the consolidated statement of cash flows and “Cash and due from banks” in the
consolidated balance sheet as of March 31, 2022 and 2021 consisted of the following:
Millions of yen
2022
2021

Cash and due from banks
Due from banks except for deposits with the Bank of Japan
Cash and cash equivalents¥5,471,090(19,639)¥5,451,451¥5,096,491(10,347)¥5,086,143

Thousands of
U.S. dollars
2022$44,702,107(160,463)$44,541,644

6. Trading Assets and Liabilities
Trading assets and liabilities as of March 31, 2022 and 2021 consisted of the following:

Trading Assets

Millions of yen
2022
2021

Trading securities
Trading-related financial derivatives
Total¥2,710744¥3,454

Trading Liabilities

Millions of yen
2022
2021

Trading-related financial derivatives
Total

¥651
¥651

¥2,926481¥3,407¥349¥349

Thousands of
U.S. dollars
2022$22,148
6,080$28,228
Thousands of
U.S. dollars
2022$5,326$5,326

7. Money Held in Trust
Money held in trust for trading purposes as of March 31, 2022 and 2021 consisted of the following:Amounts recorded in the consolidated balance sheet
Valuation gain (loss) included in consolidated statement of income

Millions of yen
2022
2021

Thousands of
U.S. dollars
2022¥14,124(0)$115,404(4)¥14,045
12

Money held in trust for other purposes as of March 31, 2022 and 2021 consisted of the following:
Millions of yen
2022
2021

Amounts recorded in the consolidated balance sheet
Valuation gain (loss) included in consolidated statement of income¥4,350―¥4,500―Thousands of
U.S. dollars
2022$35,542―

8. Securities(1) Securities as of March 31, 2022 and 2021 consisted of the following:
Millions of yen
2022
2021

Japanese national government bonds
Japanese local government bonds
Japanese corporate bonds
Japanese corporate stocks
Other securities
Total¥ 428,800
614,707
276,518
224,545
662,416¥2,206,987¥ 448,020
551,450
288,519
238,941
580,358¥2,107,290

Thousands of
U.S. dollars
2022$ 3,503,557
5,022,530
2,259,325
1,834,668
5,412,341$18,032,421

As of March 31, 2022 and 2021, securities included equity investments in non-consolidated subsidiaries that amounted to ¥1,944 million($15,886 thousand) and ¥1,334 million, respectively.
In the following description, in addition to “Securities,” also presented are trading account securities which are classified as “Trading
assets” in the consolidated balance sheet and beneficiary claims on loan trusts which are classified as “Monetary claims bought” in the
consolidated balance sheet.

10

Hokuhoku Financial Group, Inc. Financial Data 2022

Cash and Cash Equivalents、Trading Assets and Liabilities、Money Held in Trust、Securities

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）(2) Valuation gain or loss on trading account securities included in income before income taxes was ¥(26) million ($(220) thousand) and¥(29) million as of March 31, 2022 and 2021, respectively.
(3) The amounts on the consolidated balance sheet, aggregate fair value, and unrealized gains (losses) on held-to-maturity debt
securities as of March 31, 2022 and 2021 were as follows:
Millions of yen
March 31, 2022

Fair value exceeding amount on consolidated balance sheet:
Held-to-maturity debt securities:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total
Fair value below amount on consolidated balance sheet:
Held-to-maturity debt securities:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total
Grand total

Amount on
consolidatedbalance sheet

Estimated
fair value¥1,5001,500―¥3,000¥1,5071,511―¥3,018

¥

¥

―
1,000
―
1,000
¥4,000―999―
999¥4,018Net unrealized
gains (losses)

¥7
11
―
¥18

¥

―
(0)
―
(0)
¥17

Millions of yen
March 31, 2021

Fair value exceeding amount on consolidated balance sheet:
Held-to-maturity debt securities:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total
Fair value below amount on consolidated balance sheet:
Held-to-maturity debt securities:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total
Grand total

March 31, 2022

Fair value exceeding amount on consolidated balance sheet:
Held-to-maturity debt securities:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total
Fair value below amount on consolidated balance sheet:
Held-to-maturity debt securities:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total
Grand total

Amount on
consolidatedbalance sheet

Estimated
fair value

Net unrealized
gains (losses)¥61,496
2,500
107,714¥171,710¥70,316
2,518
108,364¥181,199¥8,81918
650¥9,488

¥

¥

¥

―
―
27,171
27,171¥198,881――
27,066
27,066¥208,265

―
―
(104)
(104)
¥9,383Thousands of U.S. dollars
Amount on
Estimated
Net unrealized
consolidated
fair value
gains (losses)balance sheet$12,259
12,256―$24,515$12,317
12,348―$24,665

$ ―
8,171
―
8,171
$32,686

$ ―
8,168
―
8,168
$32,833

$58
92
―
$150

$

―
(3)
―
(3)
$147

Hokuhoku Financial Group, Inc. Financial Data 2022

Cash and Cash Equivalents、Trading Assets and Liabilities、Money Held in Trust、Securities11

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）(4) The amounts on the consolidated balance sheet, acquisition or amortized cost, and unrealized gains (losses) on available-for-salesecurities as of March 31, 2022 and 2021 were as follows:

March 31, 2022

Amount on consolidated balance sheet exceeding acquisition or amortized cost:
Japanese corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total bonds
Other securities:
Foreign securities
Other
Total other securities
Total
Amount on consolidated balance sheet below acquisition or amortized cost:
Japanese corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total bonds
Other securities:
Foreign securities
Other
Total other securities
Total
Grand total

March 31, 2021

Millions of yen
Amount on
Acquisition/
Net unrealized
consolidatedbalance sheet amortized cost gains (losses)

Amount on consolidated balance sheet exceeding acquisition or amortized cost:
Japanese corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total bonds
Other securities:
Foreign securities
Other
Total other securities
Total
Amount on consolidated balance sheet below acquisition or amortized cost:
Japanese corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total bonds
Other securities:
Foreign securities
Other
Total other securities
Total
Grand total

12

Millions of yen
Amount on
Acquisition/
Net unrealized
consolidatedbalance sheet amortized cost gains (losses)

Hokuhoku Financial Group, Inc. Financial Data 2022

Cash and Cash Equivalents、Trading Assets and Liabilities、Money Held in Trust、Securities¥161,697¥57,223¥104,474

168,768
119,163
180,700
468,632

160,072
118,714179,081457,868

8,695
449
1,619
10,76357,472
112,125
169,597¥799,928

51,964
104,610
156,575¥671,666

5,507
7,515
13,022¥128,261¥36,761¥46,386¥(9,625)

258,531493,043
95,817
847,393

262,106
496,252
96,694855,054(3,574)(3,209)(876)(7,660)354,584
140,123494,707
1,378,862¥2,178,790

379,336
149,376
528,7131,430,154¥2,101,821(24,752)(9,252)(34,005)(51,291)¥76,969¥ 186,287¥ 68,158¥ 118,129

177,332
323,798
122,143
623,275

176,297
322,674
120,440
619,411

1,035
1,124
1,703
3,863

132,027
114,931
246,958¥1,056,521

122,450
104,440
226,890¥914,460

9,576
10,491
20,067¥142,060¥ 23,191¥ 29,177¥ (5,986)

209,191
225,151
31,490465,833

210,399
225,761
31,629467,790(1,207)(609)(139)(1,956)217,934
143,446
361,380
850,405¥1,906,926

230,169
153,694
383,863
880,831¥1,795,292(12,234)(10,248)(22,482)(30,425)¥111,634

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）

Thousands of U.S. dollars
Amount on
Acquisition/
Net unrealized
consolidatedbalance sheet amortized cost gains (losses)

March 31, 2022

Amount on consolidated balance sheet exceeding acquisition or amortized cost:
Japanese corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total bonds
Other securities:
Foreign securities
Other
Total other securities
Total
Amount on consolidated balance sheet below acquisition or amortized cost:
Japanese corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total bonds
Other securities:
Foreign securities
Other
Total other securities
Total
Grand total$1,321,169$467,548$853,621

1,378,936
973,640
1,476,435
3,829,011

1,307,890
969,970
1,463,203
3,741,063

71,046
3,670
13,232
87,948469,583
916,134
1,385,717$6,535,897

424,581854,731
1,279,312$5,487,923

45,002
61,403
106,405$1,047,974$300,361$379,007$(78,646)

2,112,361
4,028,463
782,891
6,923,715

2,141,569
4,054,684
790,054
6,986,307(29,208)(26,221)(7,163)(62,592)

2,897,166
3,099,409
1,144,896
1,220,498
4,042,062
4,319,907
11,266,138 11,685,221$17,802,035 $17,173,144(202,243)(75,602)(277,845)(419,083)$628,891(5) Information on held-to-maturity debt securities, which were sold during the years ended March 31, 2022 and 2021 is as follows:
Millions of yen
Year ended March 31

Proceeds

2022
Realized
gains

Realized
lossesProceeds

2021
Realized
gains

Realized
lossesThousands of U.S. dollars
2022
Realized
Realized
Proceeds
gains
losses¥－¥－¥－$33,104$37,609
Japanese government bonds¥4,051¥4,602¥551
A consolidated subsidiary sold a portion of held-to-maturity debt securities curbing the expansion of future interest rate risk.

$4,505

Hokuhoku Financial Group, Inc. Financial Data 2022

Cash and Cash Equivalents、Trading Assets and Liabilities、Money Held in Trust、Securities13

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）(6) Information on available-for-sale securities, which were sold during the years ended March 31, 2022 and 2021 is as follows:
March 31, 2022

Japanese corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total bonds
Other securities:
Foreign securities
Other
Total other securities
Total

March 31, 2021

Proceeds

Millions of yen
Realized gains Realized losses¥49,826¥8,178¥1,340184,375
10,496
7,323
202,195

1,469
96
82
1,648

477
―
―
477

234,771
108,054342,826¥594,848

1,682
3,938
5,620
¥15,447

8,089
1,955
10,045¥11,863

Millions of yen
Realized gains Realized losses

Japanese corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total bonds
Other securities:
Foreign securities
Other
Total other securities
Total

March 31, 2022

Thousands of U.S. dollars
Proceeds
Realized gains Realized losses

Japanese corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total bonds
Other securities:
Foreign securities
Other
Total other securities
Total

14

Proceeds

Hokuhoku Financial Group, Inc. Financial Data 2022

Cash and Cash Equivalents、Trading Assets and Liabilities、Money Held in Trust、Securities¥47,367¥8,053¥1,05949,097
42,10370
91,271

81
241
0
323

96
207
―
303

149,578
90,638240,217¥378,856

4,111
2,745
6,856
¥15,233

1,012
5,921
6,934
¥8,297$407,113$66,823$10,955

1,506,461
85,763
59,834
1,652,058

12,004792
677
13,473

3,902
―
―
3,902

1,918,224
882,874
2,801,098$4,860,269

13,74332,17845,921$126,217

66,097
15,97882,075$96,9322022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）(7) A consolidated subsidiary of the Group sold a portion of held-to-maturity debt securities and changed classification from held tomaturity debt securities to available-for-sale securities. As a result, available-for-sale securities and valuation difference on availablefor-sale securities increased by ¥189,803 million ($1,550,812 thousand), ¥5,157 million ($42,140 thousand), respectively, and deferred
tax assets decreased by ¥2,253 million ($18,415 thousand).
(8) Impairment losses on available-for-sale securities amounted to ¥1,677 million ($13,710 thousand) and ¥116 million as of March 31,
2022 and 2021, respectively.
An impairment of securities is recognized if the decline in fair value is substantial and the decline is determined to be other-thantemporary. The assessment of whether or not a decline in fair value is other-than-temporary by classification of the security issuer
which is used in the self-assessment of asset quality is as follows:(i) For issuers who are classified as borrowers under “In need of caution,” “Possible bankruptcy,” “Virtual bankruptcy,” “Legal bankruptcy.”
Stocks: where the fair value is lower than the acquisition cost.
Bonds: where the fair value declines by over 30% compared to the amortized cost or acquisition cost.
(ii) For issuers who are classified as borrowers under “Normal.”
Stocks and bonds: where the fair value declines by 50% or more compared to the amortized cost or acquisition cost, or the fairvalue declines by over 30% but less than 50% compared to the amortized cost or acquisition cost and market prices remaining
below a certain level.
* In determination of impairment losses, stocks’ fair value are determined based on the average quoted market prices in the lastmonth of the consolidated fiscal year.
(9) Reconciliation of valuation difference on available-for-sale securities to the amounts included in “valuation difference on available-forsale securities,” presented as a separate component of net assets as of March 31, 2022 and 2021, in the consolidated balance sheet,
was as follows:
Millions of yen
2022
2021

Valuation difference before taxes on available-for-sale securities
Deferred tax liabilities
Valuation difference on available-for-sale securities (before adjustment)
Amounts attributable to non-controlling interests
The Company’s portion of valuation difference on available-for-sale securities of equity method investees
Amounts recorded in the consolidated balance sheet¥77,978(21,725)
56,253(245)
217¥56,225¥111,634(30,674)
80,960(218)
195¥ 80,937

Thousands of
U.S. dollars
2022$637,134(177,513)
459,621(2,007)1,780$459,394

Hokuhoku Financial Group, Inc. Financial Data 2022

Cash and Cash Equivalents、Trading Assets and Liabilities、Money Held in Trust、Securities15

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）9. Loans and Bills Discounted
Loans and bills discounted as of March 31, 2022 and 2021
consisted of the following:

Bills discounted
Loans on bills
Loans on deeds
Overdrafts
Total

Millions of yen
2022
2021

Thousands of
U.S. dollars
2022¥27,344¥19,701
161,850
172,132
7,976,173 7,797,266
1,027,914 1,061,345¥9,193,283 ¥9,050,446$223,421
1,322,417
65,170,144
8,398,683$75,114,665

Claims under The Banking Act and the Financial
Reconstruction Law include Japanese corporate bonds insecurities, which are guaranteed for all or part of the redemptionof the principal and the payment of interest, and the issuance of
these are limited to a private placement of securities (pursuant to
Article 2, Clause 3 of the Japanese Financial Instruments andExchange Act), loans and bills discounted, foreign exchanges,
accrued interest and suspense payments in other assets andcustomers’ liabilities for acceptances and guarantees. The
amounts of these claims were as follows:
Thousands of
U.S. dollars
2022

Millions of yen
2022
2021

Bankrupt andsubstantially bankrupt
Doubtful
Substandard
Loans past due
for 3 months or more
Restructured loans
Non Performing Loans
NormalTotal¥15,743¥14,464$128,632

165,173

143,420

1,349,567

34,08725,552

278,515

51

428

421

34,03525,123
278,094¥215,004¥183,436 $1,756,714
9,231,734 9,112,116 75,428,834¥9,446,739 ¥9,295,552 $77,185,548

Bankrupt and substantially bankrupt represent claims to
obligors under bankruptcy and similar claims, as provided forunder the Bankruptcy Law, the Corporate Reorganization Law,
the Civil Rehabilitation Law and similar laws.
Doubtful represent claims to obligors that are not yet inbankruptcy but have experienced deterioration in their financial
condition and operating performance and for which there is a highprobability of contractual defaults on principal and interest
payments.
Loans past due for three months or more represent loans
which the principal and/or interest is three months or more pastdue, but exclude bankrupt and substantially bankrupt anddoubtful.
Restructured loans are loans where the Group relaxes lending
conditions by reducing the original interest rate or by forbearing
interest payments or principal repayments to support theborrower’s reorganization. Restructured loans exclude bankrupt
and substantially bankrupt, doubtful, loans past due for threemonths or more.
Normal represent claims to obligors that are experiencing no
particular problems with their financial condition or operating
performance, other than claims in any of the three categories
above.
These amounts represent the gross amounts before
deduction of the allowance for loan losses.
(Change in Presentation)
Due to enforced Cabinet Office Ordinance Partially Amending

16

Hokuhoku Financial Group, Inc. Financial Data 2022

Loans and Bills Discounted

the Enforcement Regulations of the Banking Act, etc. (Cabinet
Office Ordinance No. 3 of January 24, 2020) at March 31, 2022,
the Group presents the claims under the Financial Reconstruction
Law as the classification of risk monitored loans under the
Banking Act.
Bills discounted are accounted for as financial transactions inaccordance with “Accounting and Auditing treatment of
Accounting Standards for Financial Instruments in Banking
Industry” (JICPA Industry Committee Practical Guidelines No.
24). The Banks have the right to sell or repledge as collateralsuch discounted bills at their discretion. The total face value ofbank acceptance bills, commercial bills, documentary bills andforeign currency bills bought, which were obtained at a discount,
were ¥29,762 million ($243,174 thousand) and ¥21,346 million asof March 31, 2022 and 2021, respectively.

10. Foreign Exchanges
Foreign exchanges as of March 31, 2022 and 2021 consisted of
the following:
Millions of yen
2022
2021

AssetsDue from foreign banks
Foreign exchange bills bought
Foreign exchange bills receivable
Total
Liabilities
Due to foreign banks
Foreign exchange bills sold
Foreign exchange bills payable
Total

Thousands of
U.S. dollars
2022¥20,9212,417
2,289¥25,628¥19,040
1,644
1,700¥22,385$170,937
19,75418,708$209,399

¥178
88
380
¥647

¥227
0
220
¥447

$1,463724
3,105$5,292

11. Tangible Fixed Assets
Tangible fixed assets as of March 31, 2022 and 2021 were as
follows:
Millions of yen
2022
2021

Buildings
Land
Lease assets
Construction in progress
Other tangible fixed assets
Total¥31,91257,771
669
3,580
5,201
¥99,135¥32,61256,597
847
221
5,505
¥95,784

Thousands of
U.S. dollars
2022$260,743
472,029
5,470
29,25642,496$809,994

Accumulated depreciation amounted to ¥106,906 million($873,490 thousand) and ¥105,989 million as of March 31, 2022
and 2021, respectively.
The book value of tangible fixed assets adjusted for gains onsales of replaced assets amounted to ¥5,821 million ($47,565
thousand) and ¥5,824 million as of March 31, 2022 and 2021,
respectively.
Under the “Act Concerning Land Revaluation,” Hokuriku
Bank, Ltd. revalued its own land for business operations as ofMarch 31, 1998. The revaluation gain is included in net assets as“Revaluation reserve for land.” The carrying amount of the land
after the above one-time revaluation exceeded the market valueby ¥16,024 million ($130,926 thousand) and ¥16,422 million asof March 31, 2022 and 2021, respectively.

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）12. Intangible Assets

15. Loan Commitments

Intangible assets as of March 31, 2022 and 2021 were as follows:
Millions of yen
2022
2021

Software
Goodwill
Lease assets
Other intangible assets
Total¥4,180
5,080
197
865
¥10,323¥5,404
7,182
259
720
¥13,568

Thousands of
U.S. dollars
2022$34,159
41,511
1,612
7,069$84,351

Overdraft facility and loan commitment contracts with customers
to lend up to the prescribed limits in response to customers’applications for a loan, as long as there is no violation of any
condition within the contracts. The unused amount of suchcontracts totaled 2,491,442 million ($20,356,582 thousand) and¥2,492,147 million as of March 31, 2022 and 2021, respectively,of which amounts with original agreement terms of less than one
year are ¥2,336,350 million ($19,089,394 thousand) and¥2,337,027 million as of March 31, 2022 and 2021, respectively.

13. Customers’ Liabilities for Acceptances and Guarantees

Since the majority of the commitments expire without being

All contingent liabilities arising from acceptances and guarantees

drawn upon, the unused amount does not necessarily represent a
future cash requirement. Most of these contracts have conditions

are reflected in acceptances and guarantees in liabilities on the
consolidated balance sheet. As a contra account, customers’
liabilities for acceptances and guarantees are also shown in
assets, which represent the Banks’ right of indemnity from theapplicants.
Guarantee obligations on securities issued by private
placement (pursuant to Article 2, Clause 3 of the Japanese
Financial Instruments and Exchange Act) amounted to ¥163,443

allowing the Group to refuse customers’ applications for a loan ordecrease the contract limits with proper reasons (e.g., changes infinancial situation, deterioration in customers’ creditworthiness).
At the inception of the contracts, the Group obtains collateralincluding real estate, securities, etc., if considered necessary.
Subsequently, the Group performs a periodic review of themillion ($1,335,430 thousand) and ¥168,245 million as of Marchcustomers’ business results based on internal rules and takes
necessary measures to reconsider conditions in contracts and31, 2022 and 2021, respectively.

require additional collateral and guarantees.

14. Assets Pledged

16. Deposits

Assets pledged as collateral and their relevant liabilities as ofMarch 31, 2022 and 2021 were as follows:

Deposits as of March 31, 2022 and 2021 consisted of theMillions of yen
2022
2021

Assets pledged as collateral:
Securities¥1,208,022 ¥1,141,336
Loans and bills discounted 2,452,157 2,331,618
Relevant liabilities to the above assets:
Deposits
27,85729,281
Call money and bills sold
20,00078,000
Payables under securities
288,815
307,787
lending transactions
Borrowed money
2,602,410 2,380,313$9,870,268
20,035,607
227,614
163,4122,359,796

Securities
Other assets¥ 2,097
105,219¥ 2,056
105,219

Thousands of
U.S. dollars
2022$ 17,141859,709

In addition to the above, initial margins for futurestransactions, cash collateral paid for financial instruments, andguarantee deposits that are included in “Other assets” in the
consolidated balance sheet as of March 31, 2022 and 2021 wereas follows:
Millions of yen
2022
2021

Cash collateral paid forfinancial instruments
Guarantee deposits

Millions of yen
2022
2021

Thousands of
U.S. dollars
2022

Current deposits, ordinary
deposits, saving deposits ¥9,636,970 ¥9,144,928 $78,739,851
and deposits at noticeTime deposits and3,382,658 3,443,341
27,638,354
installment savings
Negotiable certificates of deposit
64,07964,238523,572
Other deposits
118,895
136,404
971,451
Total¥13,202,604¥12,788,914 $107,873,228

21,263,263

In addition to the assets presented above, the following
assets were pledged as collateral relating to transactions on
exchange settlements or as substitutes for futures transaction
margins as of March 31, 2022 and 2021:
Millions of yen
2022
2021

following:Thousands of
U.S. dollars
2022

17. Borrowed Money
As of March 31, 2022 and 2021, the weighted-average annualinterest rates applicable to borrowed money were 0.02%.
Annual maturities of borrowed money as of March 31, 2022
were as follows:Year ending March 31

2022
2023
2024
2025
2026
2027 and thereafter
Total

Millions of yen

Thousands of
U.S. dollars¥1,647,615
362,309
303,171294,688404
310¥2,608,500$13,462,008
2,960,291
2,477,095
2,407,784
3,306
2,536
$21,313,020

Thousands of
U.S. dollars
2022¥11,005¥7,203$89,920

4,355

4,057

35,585

Hokuhoku Financial Group, Inc. Financial Data 2022

Loans and Bills Discounted

172022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）18. Retirement Benefits(3) Reconciliation

Overview of the Group’s retirement benefit plans
The Hokuriku Bank, Ltd. and The Hokkaido Bank, Ltd. provided
two defined benefit retirement programs, corporate pensions andretirement bonuses, in addition to the defined contribution
pension plan. At the time of retirement, employees may be issued
a premium retirement grant that is not subject to inclusion in theactuarial computation of projected benefit obligations inconformity with the standards for accounting for retirement
benefits. The Banks have established retirement benefit trusts.
The consolidated domestic subsidiaries, other than the two
noted above, provide retirement lump-sum grants.
(Additional information)
On March 1, 2022, the Hokkaido Bank transferred a portion of its
defined benefit corporate pension plans to the defined
contribution pension plans. Following this change, the Bank
adopted “Accounting for Transfer between Retirement Benefit
Plans” (ASBJ Guidance No. 1, issued on December 16, 2016)
and “Practical Solution on Accounting for Transfer between
Retirement Benefit Plans” (Practical Issues Task Force No. 2
issued on February 7, 2007) .
Due to this, assets for retirement benefits increased ¥3,662
millions ($29,921 thousands) and defined retirement benefit plansdecreased ¥159 millions ($1,299 thousands). In addition, ¥3,891
millions ($31,799 thousands) were recorded in other income.
(a) Defined benefit plan
(1) The changes in defined benefit obligations for the years
ended March 31, 2022 and 2021 were as follows:

Balance at beginning of year
Service cost
Interest cost
Actuarial (gains) losses
Benefits paid
Past service cost
Decrease resulting fromtransfer to defined
contribution pension plans
OthersBalance at end of year

Millions of yen
2022
2021

Thousands of
U.S. dollars
2022¥94,864
2,133
578
481
(5,458)(1,742)¥96,454
2,255
593
776
(5,298)－$775,099
17,4334,730
3,930(44,601)(14,239)(7,593)－(62,047)80¥83,34383¥94,864

660$680,965(2) The changes in plan assets for the years ended March 31,
2022 and 2021 were as follows:

Balance at beginning of year
Expected return on plan assets
Actuarial (gains) losses
Contributions from the employer
Benefits paid
Decrease resulting fromtransfer to defined
contribution pension plans
OthersBalance at end of year

18

Millions of yen
2022
2021

Thousands of
U.S. dollars
2022¥94,382
2,568
1,822
513
(4,956)¥84,254
2,395
9,699
2,031
(4,082)$771,159
20,982
14,8904,194(40,497)(3,931)－(32,119)80¥90,479

83¥94,382660$739,269

Hokuhoku Financial Group, Inc. Financial Data 2022

Retirement Benefits

betweentheliability

recordedintheconsolidated balance sheet and the balances of defined
benefit obligation and plan assets was as follows:

Funded defined benefit obligation
Plan assets
Unfunded defined benefit obligation
Plan assets
Net liability (asset) arising fromdefined benefit obligation

Millions of yen
2022
2021

Thousands of
U.S. dollars
2022¥69,714(80,554)(10,839)
13,628(9,924)
3,703¥80,622(83,706)(3,084)
14,242(10,675)
3,566$569,612(658,177)(88,565)
111,353(81,091)
30,262¥(7,135)¥ 482$(58,303)

Millions of yen
2022
2021

Liability for retirement benefits
Asset for retirement benefits
Net liability (asset) arising fromdefined benefit obligation

Thousands of
U.S. dollars
2022¥3,703(10,839)¥3,566(3,084)$30,262(88,565)¥(7,135)¥ 482$(58,303)(4) The components of net periodic benefit costs for the years
ended March 31, 2022 and 2021 were as follows:
Millions of yen
2022
2021

Service cost
Interest cost
Expected return on plan assets
Recognized actuarial (gains) losses
Recognized past service cost
OthersNet periodic benefit costs¥2,133578(2,568)
501
(16)
114
¥744

¥2,255593(2,395)1,229－
118¥1,800Thousands of
U.S. dollars
2022$17,433
4,730(20,982)
4,097
(132)
938
$6,084(5) Amounts recognized in other comprehensive income (before
income tax effect) in respect of defined retirement benefit
plans for the years ended March 31, 2022 and 2021 were as
follows:
Millions of yen
2022
2021

Past service cost
Actuarial gains (losses)
Total¥1,726
1,613¥3,340¥－
10,152¥10,152

Thousands of
U.S. dollars
2022$14,107
13,185$27,292(6) Amounts recognized in accumulated other comprehensive
income (before income tax effect) in respect of defined
retirement benefit plans as of March 31, 2022 and 2021 wereas follows:
Millions of yen
2022
2021

Unrecognized past service cost
Unrecognized actuarial (gains) losses
Total¥(1,726)1,242¥(484)¥－
2,856¥2,856

Thousands of
U.S. dollars
2022$(14,107)
10,151$(3,956)2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）(7)Plan assets• Components of plan assets
Plan assets as of March 31, 2022 and 2021 consisted of thefollowing:
Bonds
StocksCash and deposits
General accounts
Other
Total

2022

2021

29.69%
44.98
2.06
7.14
16.13
100.00%29.13%
45.43
2.75
7.11
15.58
100.00%Note: Plan assets include retirement benefit trusts of 20.25% and19.28%
as of March 31, 2022 and 2021, respectively.

• Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determinedconsidering the long-term rates of return, which are expectedcurrently and in the future, from the various components of theplan assets.
(8) Assumptions used for the years ended March 31, 2022 and2021 were set forth as follows:
2022

Discount rate
Expected rate of return on plan assets

2021

0.61%-0.63% 0.61%–0.63%
2.6%-3.0% 2.7%–3.0%(b) Defined contribution pension plan
Millions of yen
2022
2021

Contribution

¥350

¥345

Thousands of
U.S. dollars
2022$2,86019. Equity
Japanese banks are subject to the Banking Act and theCompanies Act of Japan (the “Companies Act”). The significant
provisions in the Companies Act and the Banking Act that affectfinancial and accounting matters are summarized below:(a) Dividends
Under the Companies Act, companies can pay dividends at any
time during the fiscal year in addition to the year-end dividend
upon resolution at the shareholders’ meeting. Additionally, forcompanies that meet certain criteria including (1) having a
Board of Directors, (2) having independent auditors, (3) having
an Audit & Supervisory Board, and (4) the term of service of thedirectors being prescribed as one year rather than the normal
two-year term by its articles of incorporation, the Board of
Directors may declare dividends (except for dividends-in-kind)at any time during the fiscal year if the company has prescribedso in its articles of incorporation. With respect to the third
condition above, the Board of Directors of companies with anaudit and supervisory committee (as implemented under theCompanies Act effective May 1, 2015) may also declare
dividends at any time because such companies, by nature,
meet the criteria under the Companies Act. The Company isorganized as a company with an audit and supervisorycommittee, effective June 27, 2017. The Company meets all theabove criteria, and accordingly, the Board of Directors may
declare dividends (except for dividends-in-kind) at any time
during the fiscal year.
Semiannual interim dividends may also be paid once a

year upon resolution by the Board of Directors if the articles ofincorporation of the company so stipulate. The Companies
Act provides certain limitations on the amounts available fordividends or the purchase of treasury stock. The limitation isdefined as the amount available for distribution to theshareholders, but the amount of net assets after dividends
must be maintained at no less than ¥3 million.
(b) Increases / decreases and transfer of common stock,reserve, and surplus
The Banking Act requires that an amount equal to 20% of
dividends must be appropriated as a legal reserve (acomponent of retained earnings) or as additional paid-in
capital (a component of capital surplus), depending on theequity account charged upon the payment of such dividends,
until the aggregate amount of the legal reserve and additional
paid-in capital equals 100% of common stock. Under theCompanies Act, the total amount of additional paid-in capitaland legal reserve may be reversed without limitation. The
Companies Act also provides that common stock, legal
reserve, additional paid-in capital, other capital surplus, andretained earnings can be transferred among the accounts
within equity under certain conditions upon resolution of theshareholders.
(c) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchasetreasury stock and dispose of such treasury stock byresolution of the Board of Directors. The amount of treasury
stock purchased cannot exceed the amount available for
distribution to the shareholders, which is determined by aspecific formula.
Under the Companies Act, stock acquisition rights arepresented as a separate component of equity.
The Companies Act also provides that companies canpurchase both treasury stock acquisition rights and treasury
stock. Such treasury stock acquisition rights are presented asa separate component of equity or deducted directly fromstock acquisition rights.
On October 1, 2016, the Company implemented a common stock
consolidation at a ratio of ten stocks to one stock based on the
resolution of the General Shareholders’ meeting held on June 24,
2016.
(d) Appropriations of retained earnings
The following appropriations of retained earnings at March 31,
2022 was approved at the Company’s general shareholders’meeting held on June 23, 2022:
Cash dividends, ¥35.00 ($0.28)
per share of common stock
Cash dividends, ¥7.50 ($0.06)
per share of preferred stock(Type 5)

Millions of yen

Thousands of
U.S. dollars¥4,478$36,591

564

4,608

Hokuhoku Financial Group, Inc. Financial Data 2022

Retirement Benefits192022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）20. Capital Stock

21. Stock Acquisition Rights

Information with respect to capital stock of the Company as ofMarch 31, 2022 and 2021 is as follows:

Stock acquisition rights as of March 31, 2022 and 2021 consistedof stock options.

2022

Number of shares:
Authorized:
CommonPreferred (Type 5)
Issued and outstanding:CommonPreferred (Type 5)
Treasury stock:
CommonPreferred (Type 5)

2021

22. Stock Options
The stock option plans grant options to the Company’s directors
280,000,000
110,000,000

280,000,000
110,000,000

128,770,814
75,212,000

132,163,014
85,955,000

831,643
11,112

953,838
11,128Preferred stock (Type 5)
Preferred stock (Type 5) is noncumulative and nonparticipating.
Shareholders of the preferred stock (Type 5) are not entitled tovote at the general meeting of shareholders, except when the
proposal to pay the prescribed dividends to shareholders is not
submitted to the general meeting of shareholders or is rejected at
the general meeting of shareholders.
Annual dividends per share of preferred stock (Type 5) are
paid to shareholders at ¥15.00.
The changes in the number of treasury stock for the fiscal
years ended March 31, 2022 and 2021 were as follows:
As of April Changes during the fiscal year As of March
1, 20212022
Increase*1 Decrease*2 31, 2022
Common953,838 3,397,257 3,519,452
831,643
Preferred (Type 5)
11,128 10,742,984 10,743,000
11,112As of April Changes during the fiscal year As of March
1, 2020
2021
Increase*1 Decrease*2 31, 2021
Common999,658
4,120
49,940953,838
Preferred (Type 5)
11,144 10,742,984 10,743,000
11,128*1 The increase of common represents the acquisition of treasury stockand odd-lot shares.
The increase of preferred (Type5) represents the acquisition of treasury
stock.
*2 The decrease of common represents the retirement of treasury stockand the exercise of stock options.
The decrease of preferred (Type5) represents the retirement of treasury
stock.

20

Hokuhoku Financial Group, Inc. Financial Data 2022

Retirement Benefits

and the Banks’ directors and executive officers to purchasecertain shares of the Company’s common stock in the respective
exercise periods. The exercise prices are subject to adjustments
for stock issuances below fair value and stock splits.
Stock option expenses in the amount of ¥117 million ($961
thousand) and ¥110 million were recorded under general andadministrative expenses for the years ended March 31, 2022 and
2021, respectively.
The stock options outstanding as of March 31, 2022 were as
follows:

Stock options

Persons
granted19 directors
2012 Stock 23 executive
Optionofficers
19 directors
2013 Stock 22 executive
Optionofficers
19 directors
2014 Stock 21 executive
Optionofficers
18 directors
2015 Stock 24 executive
Optionofficers
19 directors
2016 Stock 25 executive
Optionofficers
20 directors
2017 Stock 25 executive
Optionofficers
19 directors
2018 Stock 24 executive
Optionofficers
19 directors
2019 Stock 24 executive
Optionofficers
19 directors
2020 Stock 23 executive
Optionofficers
19 directors
2021 Stock 24 executive
Optionofficers

Numberof options
granted(Shares)

Date of
grant

Exercise
price Exercise period

105,850

November28, 2012¥1

62,950August 13,
2013

¥1

55,400July 11,2014¥1

41,730July 14,2015¥1

106,200

August 12,
2016

¥1

75,960July 14,2017¥187,420July 11,2018¥1

114,610

July 10,2019¥1

138,000

July 10,
2020¥1July 14,2021¥1154,930

From November
29, 2012 toNovember 28,
2042
From August 14,
2013 to August
13, 2043
From July 12,2014 to July 11,
2044
From July 15,
2015 to July 14,
2045
From August 13,
2016 to August
12, 2046
From July 15,2017 to July 14,
2047
From July 12,2018 to July 11,
2048
From July 11,
2019 to July 10,
2049
From July 11,2020 to July 10,
2050
From July 15,2021 to July 14,2051

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）The stock option activity was as follows:Year ended
March 31, 2022

Non-vested:
March 31, 2021
–outstanding
GrantedCanceled
VestedMarch 31, 2022
–outstanding
Vested:March 31, 2021
–outstanding
VestedExercised
Canceled
March 31, 2022
–outstanding
Exercise price
Average stock
price at exercise
Fair value priceat grant dateYear ended
March 31, 2022

Non-vested:
March 31, 2021
–outstanding
GrantedCanceled
VestedMarch 31, 2022
–outstanding
Vested:March 31, 2021
–outstanding
VestedExercised
Canceled
March 31, 2022
–outstanding
Exercise price
Average stock
price at exercise
Fair value priceat grant date2012 stock option 2013 stock option 2014 stock option 2015 stock option(Shares)(Shares)(Shares)(Shares)

―
―
―
―

―
―
―
―

―
―
―
―

―
―
―
―

―

―

―

―

18,770―7,260―

16,700―4,480―

14,780―4,070―

14,400―5,140―

11,510¥1$0.01

12,220¥1$0.01

10,710
¥1
$0.01

9,260
¥1
$0.01

¥837
$6.83

¥837
$6.83

¥837
$6.83

¥837
$6.83

¥1,080$8.82¥1,820$14.87¥2,010$16.42¥2,650$21.65

Year ended
March 31, 2022

Non-vested:
March 31, 2021
–outstanding
GrantedCanceled
VestedMarch 31, 2022
–outstanding
Vested:March 31, 2021
–outstanding
VestedExercised
Canceled
March 31, 2022
–outstanding
Exercise price
Average stock
price at exercise
Fair value priceat grant date2020 stock option 2021 stock option(Shares)(Shares)

―
―
―
―

―
154,930―
154,930――

138,000――
34,670―154,930――

103,330¥1$0.01

154,930
¥1
$0.01

¥837
$6.83

¥―
$―

¥802
$6.55

¥759
$6.20

2016 stock option 2017 stock option 2018 stock option 2019 stock option(Shares)(Shares)(Shares)(Shares)

Shares and per share figures have been restated, as appropriate,
―
―
―
―

―
―
―
―

―
―
―
―

―
―
―
―

―

―

―

―

44,490―12,720―37,170―10,050―64,420―20,670―98,620―28,000―31,770¥1$0.01

27,120¥1$0.01

43,750¥1$0.01

70,620
¥1
$0.01

¥837
$6.83

¥837
$6.83

¥837
$6.83

¥837
$6.83

¥1,170$9.55¥1,717$14.02¥1,353$11.05¥1,080$8.82

to reflect a one-for-ten stock consolidation effective October 1,
2016.
The Assumptions Used to Measure the Fair Value of the 2021
Stock Options
Estimate method
Black-Scholes option-pricing model
Volatility of stock price32.980%Estimated remaining outstanding period One years and ten months
Estimate dividend¥35.00 per share
Risk-free interest rate
(0.130)%In estimating the vested number of stock options, theCompany basically reflects only the actual forfeited number since
it is difficult to make a reasonable estimate on the future forfeited
number.

Hokuhoku Financial Group, Inc. Financial Data 2022

Retirement Benefits212022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）23. Per Share Information

24. Other Ordinary Income(1) Net income per share of common stock
Reconciliation of the difference between basic and diluted net

Other ordinary income for the years ended March 31, 2022 and2021 is as follows:income per share (“EPS”) for the years ended March 31, 2022

Millions of yen
2022
2021

and 2021 was as follows:Year ended
March 31, 2022

Basic EPS – Net
income available tocommon shareholders
Effect of dilutive securities
Diluted EPS – Net
income for computation

Year ended
March 31, 2021

Basic EPS – Net
income available tocommon shareholders
Effect of dilutive securities
Diluted EPS – Net
income for computation

Thousands ofMillions of yen
shares
Net income
Weightedattributable toowners of parent average shares¥19,318

Yen

U.S. dollars

EPS

130,994 ¥147.47

$1.20

461
¥19,318

131,455 ¥146.95

Thousands ofMillions of yen
shares
Net income
Weightedattributable toowners of parent average shares¥19,964

EPS

131,200 ¥152.17

Losses on sales, redemption
and devaluation of bonds
and other securities
Losses on derivatives
Lease costs
Other
Total

131,620 ¥151.68

2021 were as follows:
Yen
2021

¥4,539.12 ¥4,504.91

U.S. dollars
2022$37.08

Net assets per share of common stock as of March 31, 2022 and2021 were calculated based on the following:
Millions of yen
2022
2021

Total equity¥622,845 ¥638,504
Deductions from total equity:
Stock acquisition rights
500
538
Non-controlling interests
3,449
3,263
Preferred stock
37,60042,971
Preferred dividends
564
644
Net assets attributable tocommon stock at the end
580,731 591,085
of the fiscal year
Number of shares of common
stock at the end of the fiscal
year used for the calculation of
net assets per share of common
127,939 131,209
stock (shares in thousands)

22

Hokuhoku Financial Group, Inc. Financial Data 2022

Retirement Benefits$9,6806,284－
11,1401,457¥20,067

5,955
75
11,606
1,431¥20,049

51,347－91,026
11,908$163,961

25. Other Ordinary Expenses

Net assets per share of common stock as of March 31, 2022 andNet assets per shareof common stock¥ 980

Other ordinary expenses for the years ended March 31, 2022 and2021 are as follows:Yen(2) Net assets per share of common stock2022¥1,184$1.20

419¥19,964

Gain on foreign exchangetransactions – net
Gains on sales and redemptionof bonds and other securities
Gains on derivatives
Lease receipts
Other
Total

Thousands of
U.S. dollars
2022

Thousands of
U.S. dollars
2022$5,089,023
4,088
28,181
307,219
4,608
4,744,927

Millions of yen
2022
2021

Thousands of
U.S. dollars
2022¥9,076
9
10,258316¥19,660$74,15674
83,822
2,588$160,640¥3,951－
10,689329¥14,970

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）26. Other Income

A reconciliation between the normal effective statutory tax rate

Other income for the years ended March 31, 2022 and 2021 are
as follows:

and the actual effective tax rate reflected in the accompanying
consolidated statement of income for the year ended March 31,

Millions of yen
2022
2021

Gains on sales of stocks
Gains on sales of tangible
fixed assets
Other
Total

Thousands of
U.S. dollars
2022¥9,780¥9,612$79,91299
5,803¥15,68325
2,356¥11,994815
47,418$128,145

27. Other Expenses

2022 and 2021 are as follows:
2022

Normal effective statutory tax rate
Change in valuation allowance
Permanently non-taxable income
Per capita portion of inhabitants’ taxes
Permanently non-deductible expenses
Other
Actual effective tax rate

2021

30.45% 30.45%
5.58(1.65)(1.04)(1.08)
0.46
0.46
0.17
0.21
2.13
2.33
37.75% 30.72%

Other expenses for the years ended March 31, 2022 and 2021
are as follows:

29. Other Comprehensive Income (Loss)
Millions of yen
2022
2021

Losses on write-offs of loans¥500
and bills discounted
Losses on sales of stocks
2,889
Losses on impairments of
4,842
stocks and other securities
Losses on sales of loans
135
Losses on impairments and1,037
disposals of fixed assets
Other
2,396
Total
¥11,801

Thousands of
U.S. dollars
2022

¥466
4,427

$4,091
23,60898
193

39,567
1,107

1,113
2,136
¥8,436

8,477
19,577$96,427

28. Income Taxes
The Company and its domestic subsidiaries are subject toJapanese national and local income taxes which, in theaggregate, resulted in the normal effective statutory tax rate of
approximately 30.45% for the years ended March 31, 2022 and2021.
The tax effects of significant temporary differences and tax
loss carryforwards which resulted in deferred tax assets andliabilities at March 31, 2022 and 2021 are as follows:
Millions of yen
2022
2021

Thousands of
U.S. dollars
2022¥29,430
625
4,852
11,885
5,302
52
52,14930,375
21,774¥27,639696
8,116
10,8055,193
47
52,49927,231
25,267$240,462
5,113
39,646
97,11043,327432
426,090
248,182
177,908

Deferred tax liabilities:
Valuation difference on
26,78037,170available-for-sale securities
Land transfer through merger
2,765
2,765
Other
2,861
2,701
Total deferred tax liabilities
32,40842,637
Net deferred tax assets¥(10,634) ¥(17,369)

218,816
22,59823,381
264,795$(86,887)

Deferred tax assets:
Allowance for loan losses
Depreciation
Liability for retirement benefits
Loss on valuation of securities
Other
Operating loss carryforwards
Subtotal
Less: Valuation allowance
Total deferred tax assets

The components of other comprehensive income (loss) for theyears ended March 31, 2022 and 2021 are as follows:
Millions of yen
2022
2021

Valuation difference on
available-for-sale securities:
Amount incurred¥(32,495)
during the fiscal year
Reclassification adjustment(1,153)
Prior to deducting tax effect (33,648)
Tax effect
8,941
Total
(24,707)

Thousands of
U.S. dollars
2022¥42,800(6,881)35,919(10,575)
25,343$(265,508)(9,424)(274,932)
73,056(201,876)

Deferred gains (losses) on hedges:
Amount incurred during
the fiscal year
Reclassification adjustment
Prior to deducting tax effectTax effect
Total

(860)
1,414
553
(167)
386

401
843
1,245
(230)
1,014

(7,032)
11,5584,526(1,367)
3,159

Defined retirement benefit plans:
Amount incurred during
the fiscal year
Reclassification adjustment
Prior to deducting tax effectTax effect
Total

2,854
485
3,340
(1,015)
2,324

8,922
1,229
10,152(3,089)7,063

23,327
3,965
27,292(8,298)18,994

183
(0)
183
(55)
127

393
(125)
268
(89)
179

¥33,549$(179,544)

Share of other comprehensive
income (loss) of associates
accounted for using the equity
method:Amount incurred during48
the fiscal year
Reclassification adjustment(15)
Prior to deducting tax effect32
Tax effect
(10)
Total
21
Total othercomprehensive
income¥(21,974)(loss)

Hokuhoku Financial Group, Inc. Financial Data 2022

Other Income232022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）30. Leases(1) Finance lease transactions(Lessee)
The Group leases ATMs, computer equipment, software, andother assets.
(2) Operating lease transactions(Lessee)
The minimum rental commitments under noncancelable operatingleases as of March 31, 2022 and 2021 are as follows:
Millions of yen
2022
2021

Within one year
Over one year
Total

¥3
5
¥9

¥3
9
¥13

Thousands of
U.S. dollars
2022

$32
48
$80

31. Financial Instruments and Related Disclosures(1) Group policy on financial instruments
The Group provides a wide variety of financial services, centeredon banking services such as deposit-taking and lending.
The Group's lending activities are aimed at achieving coprosperity with the regional economy and the Group endeavors tomanage the Group's lending in a sound and appropriate manner,
while simultaneously working to strengthen credit risk
management.
Investments in securities are strictly managed based on theGroup’s risk management policies and regulations. Regarding
deposit-taking operations, the Group aims to ensure stable
fundraising by the expansion and upgrading of financial services
for all customers in the region. Borrowed money and corporate
bonds are used mainly for medium- to long-term fundraising.
Given the different term structures of the Group’s financial
assets such as loans and financial liabilities such as deposits, theGroup is exposed to interest-rate fluctuation risk in the financial
markets. For this reason, the Group conducts comprehensive
asset liability management (“ALM”) to appropriately control suchmarket risk and ensure stable earnings.
(2) Nature and extent of risks arising from financial instruments
The financial assets held by the Group consist primarily of
securities and loans to domestic customers. Loans are subject tocredit risks that could cause financial loss to the Group, such as
declines or losses in asset value resulting from a possible
deterioration in the financial condition of borrowers. With regard
to securities, the Group is exposed to the credit risk of issuers,interest-rate risk, and market price volatility risk. However, theGroup takes adequate steps to mitigate these risks.
Financial liabilities, including deposits and borrowed money, areexposed to liquidity risk arising from the possibility that the Groupmay be obliged to procure funds at interest rates significantly higher
than normal owing to a sudden change in the market environment ora deterioration in the Group’s financial position.
The Banks make use of currency-related derivatives such as
currency swaps, forward exchange contracts, and currency
options, as well as interest-related derivatives such as interestrate swaps, interest-rate futures, and interest-rate caps, to meet
the ALM needs of the Banks as well as the various needs of the24

Hokuhoku Financial Group, Inc. Financial Data 2022

Other Income

Banks’ customers. These derivatives are exposed to the following
risks among others: interest-rate risk, the risk of exchange rate
fluctuations, price volatility risk, and credit risk.
However, none of the Group’s financial assets and liabilities
are attended by notably high risk levels, nor do they include any
particular derivatives with high market price volatility.
The Banks apply hedge accounting to hedge the value ofsome of its assets and liabilities against interest-rate fluctuations.
When applying hedge accounting, the Banks adopt integrated
management in both hedging instruments and hedged items aslong as hedging is managed and evaluates the effectiveness ofthe hedges.
(3) Risk management for financial instruments
The Group have established risk management departments andhave stipulated basic regulations for risk management and otherregulations pertaining to risk. In addition, the Group haveestablished an ALM Committee and a Comprehensive Risk
Management Committee, where qualified risks and administration
matters are discussed regularly to ensure that all categories ofrisk are managed effectively. Changes in regulations andorganizational structures of the Banks are revised or supervisedby the Company to ensure conformance to the Group’s policies
and the results of the above committees are reported to theCompany.
(a) Credit Risk Management
The Group’s fundamental policy is to strive for improved earnings
and ensure sound business operations through the appropriate
management of credit risk. In line with this policy, the Company
and the Banks collaborated in establishing various regulations,
including Credit Risk Management Regulations, and ensuring theeffective operation of internal checking functions by separating
business promotion departments from credit risk management
departments. Rigorous screening is also conducted and credit
ratings are granted based on Credit Policy. Additionally, thesetting of credit limits is managed on an individual customer basis
to avoid the risk of an overconcentration of loans in particularsectors. Finally, the Banks carry out self-assessment and credit
risk quantification procedures and the risk situation is regularly
reported to the Banks’ board of directors.
As for the loan screening process of the Banks, the branches
concerned carefully analyze each loan application and screen eachcustomer involved. In the event that the decision exceeds the limitsof authority of the branch manager, the appropriate loan screening
departments at the headquarters of the Banks carry out their own
analysis and screening. Specialized staff members in place within
the screening departments are responsible for particular industries
and geographical areas. These specialists provide the appropriate
advice and guidance to the branches based on the particularfeatures of the customer.
Concerning the creditworthiness of security issuers andcounterparty risk in derivative transactions, credit information andthe state of transactions are regularly monitored and managed by
the risk management departments of the Banks.
(b) Market Risk Management
Having stipulated regulations such as Market Risk Management
Regulations and an arranged organizational structure including
ALM and other committees, the Banks appropriately control

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）

market risk associated with lending and deposit-taking in order toensure stable earnings.
Interest Rate Risk Management
The risk management departments of the Banks regularly andcomprehensively monitor the interest rates and time-frames
involved in the Banks’ financial assets and liabilities and monitor
interest rate risk levels through methods such as gap analysis
and sensitivity analysis of interest rates, based on the Banks’
Interest Rate Risk Management Regulations and other related
regulations where the methods and procedures to be employed
for risk management are described in detail.
The Banks set ceiling amounts for each type of interest raterisk to control such risk appropriately. Derivatives such as
interest-rate swaps and interest-rate caps are employed from an
ALM perspective so that the Banks reduce interest rate risk byhedging against interest rate fluctuations.
Foreign Exchange Risk Management
Using measures such as currency swaps to reduce foreignexchange risk, the Banks manage exchange risk arising fromfluctuations in foreign exchange rates that affect the values ofassets and liabilities denominated in foreign currencies.
Price Volatility Risk Management
Regarding investments in instruments such as securities, theBanks carry out prior screening and set investment ceilings, andthen constantly monitor the investment status to minimize pricevolatility risk. Every process above has to be strictly managed
under the supervision of the Banks’ Board of Directors and to be inline with policies laid down by Management Committees. A highpercentage of the stocks held by the Banks are acquired and held
for long-term strategic purposes. The Banks monitor the market
conditions and financial positions of the securities issuers. Valueat Risk (“VaR”) and other methods are used to determine theamount of market risk for each security held. The staff members of
the responsible departments provide regular reports to the Banks’
Board of Directors and Management Committees to confirm thatprice risk is controllable and all rules pertaining to market risk
management are being followed correctly.
Derivatives
The Banks arrange their organizational structures securing theseparation and internal check-and-balance mechanisms among
front sections (specializing in market transactions), middle
sections (engaging in risk management), and back sections(responsible for book entries and settlements). Management
sections confirm the validity of transactions, value the Banks’ daily
derivative positions, and measure gains and losses as well as risk
levels. Derivative transactions are carefully managed in such a
way that losses never exceed a predetermined maximum.
Quantitative Information Related to Market Risk
Hokuriku Bank and Hokkaido Bank measure quantitative
information related to market risk.
• Financial instruments in the trading accountIn calculating VaR for trading securities and a portion ofcurrency-related and interest-related derivative transactions
held in the trading account, Hokuriku Bank adopts the historicalsimulation method (a holding period of 1 business day, aconfidence interval of 99%, and a main observation period of
1,250 business days).

The market risk amounts (VaR) of the trading business of
Hokuriku Bank were ¥297 million ($2,427 thousand) and ¥179
million as of March 31, 2022 and 2021, respectively.
Hokkaido Bank has no financial instruments in the trading
accounts.
• Financial instruments in the banking accountIn the Banks, the main financial instruments affected by interest
rate risk are monetary claims bought, loans and bills
discounted, bonds, deposits, borrowed money, and transactionsof interest rate swaps, interest swaptions, and interest rate caps
held in derivative transactions. The main financial instruments
affected by market value are listed stocks and investment trust.
The Banks use VaR for integrated management of thesefinancial instruments.
For calculating VaR, the Banks adopted the historicalsimulation method (a holding period of 120 business days, aconfidence interval of 99% and main observation period of 1,250
business days) and consider the correlations between interestand the fluctuation of prices of the listed stocks. In addition,
Hokkaido Bank has set a holding period of 10 business days for
trading account securities (including public bonds traded over thecounter) and for specified fund trust as investment securities.
Hokkaido Bank also considers the correlation between interest
rates and the fluctuation of prices of the listed stocks in calculating
VaR of specified fund trust as investment securities.
Hokuriku Bank’s VaR of the financial instruments in thebanking account was ¥28,903 million ($236,155 thousand) and¥48,751 million as of March 31, 2022 and 2021, respectively.
Hokkaido Bank’s VaR of the financial instruments in the banking
account was ¥21,868 million ($178,675 thousand) and ¥13,527
million as of March 31, 2022 and 2021, respectively. Hokkaido
Bank’s trading account securities totaled ¥8 million ($65
thousand) and ¥13 million as of March 31, 2022 and 2021,
respectively. Hokkaido Bank’s specified fund trust totaled ¥0
million ($4 thousand) and ¥2 million as of March 31, 2022 and
2021, respectively.
The Banks perform back testing of the VaR measurement
model at fixed intervals. VaR measures the amount of market risk
by certain occurrence probabilities that are statistically calculated
based on past market movements. Therefore, there are cases inwhich VaR cannot capture risk under sudden and dramaticchanges in markets beyond normal circumstances.
VaR shows the maximum loss during the holding period of
the financial instruments under a confidence interval (99%) thatis statistically calculated based on past market movements. In
particular, the Banks calculate 100BPV (100 Basis Point Value)as supplements of the assets and liabilities and change in theirpresent value on the assumption that index interest rate rises by
1.00%.
Hokuriku Bank’s 100BPV was a ¥61,557 million increase($502,958 thousand increase) and a ¥70,800 million increase
as of March 31, 2022 and 2021, respectively. Hokkaido Bank’s
100BPV was a ¥768 million decrease ($6,275 thousand
decrease) and a ¥6,977 million increase as of March 31, 2022
and 2021, respectively.

Hokuhoku Financial Group, Inc. Financial Data 2022

Other Income252022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）For calculating 100BPV, the correlations between interest
rates and the other parameters are not considered because the
100BPV is measured on the assumption that risk parameters
other than interest rate remain unchanged. Actual risk canexceed the calculated 100BPV in the case of a drastic change ininterest rates beyond reasonable prior expectations.
(c) Liquidity Risk Management
In accordance with the Banks’ rules for management of liquidity
risk, the Banks form an accurate appraisal of fund operations andprocurement, and take measures to ensure smooth cash flows.
Specifically, the Banks set benchmarks in various different
categories to check liquidity risk on a daily basis, and maintainadequate levels of high-liquidity assets that are readily
convertible into cash, such as government bonds.
The Banks have in place mechanisms for periodicallyassessing and managing liquidity risk through ALM committees,
to prepare for every possible scenario.
(4) Supplementary explanation relating to fair values offinancial instruments
The fair values of financial instruments include certain
assumptions that are used in the measurement of such amounts.
Accordingly, the results of such measurement may vary if
different assumptions are used.

Millions of yen
March 31, 2021

Monetary claims bought *1
Securities
Bonds classified as
held-to-maturity
Available-for-sale securities
Loans and bills discounted
Allowance for loan losses *1

Millions of yen
Fair value

Unrealized
gain (loss)¥21,217¥21,217

¥－

4,000

4,018

17
－

Total assets

2,157,573 2,157,573
9,193,283(70,487)
9,122,796 9,196,126¥11,305,587 ¥11,378,936

73,330¥73,348

Deposits
Borrowed money
Total liabilities¥13,202,604 ¥13,202,684
2,608,500 2,606,603¥15,811,104 ¥15,809,288¥79(1,896)¥(1,816)

March 31, 2022

Monetary claims bought *1
Securities
Bonds classified as
held-to-maturity
Available-for-sale securities
Loans and bills discounted
Allowance for loan losses *1

Derivative transactions *2
Derivative transactions not
qualifying for hedge accounting
Derivative transactions
qualifying for hedge accounting*3
Total derivative transactions

26

Carrying
amount¥(4,182)¥(4,182)¥－(1,587)(1,587)*4－¥(5,769)¥(5,769)¥－

Hokuhoku Financial Group, Inc. Financial Data 2022

Other Income

Fair value

Unrealized
gain (loss)¥27,985¥27,985¥―

198,881

208,265

9,383―

Total assets

1,878,941
1,878,941
9,050,446(61,071)8,989,375
9,086,869¥11,095,184 ¥11,202,061

97,493¥106,877

Deposits
Borrowed money
Total liabilities¥12,788,914 ¥12,789,094
2,385,969
2,386,764¥15,110,645 ¥15,111,620

¥180
794
¥974

Derivative transactions *2
Derivative transactions not
qualifying for hedge accounting
Derivative transactions
qualifying for hedge accounting *3
Total derivative transactions

March 31, 2022

(5) Fair value of financial instruments
The fair values of the main financial instruments at March 31,
2022 and 2021 are as follows.
These amounts do not include stocks without a quoted market
price and investments in partnerships (see Note 1) . In addition,
Cash and due from banks, Call loans and bills bought, negotiablecertificate of deposit, Call money and bills sold, Payables under
securities lending transactions are omitted since these
instruments are mainly settled in the short term (within 1 year)
and the book values approximate the fair values.
Fair value of financial instruments

Carrying
amountMonetary claims bought *1
Securities
Bonds classified as
held-to-maturity
Available-for-sale securities
Loans and bills discounted
Allowance for loan losses *1¥(626)¥(626)¥―(2,311)(2,311)*4―¥(2,937)¥(2,937)¥―

Thousands of U.S. dollars
Carrying
Unrealized
Fair value gain (loss)
amount$173,355$173,355$－

32,686

32,833147－

Total assets

17,628,678 17,628,678
75,114,665(575,924)
74,538,741 75,137,892$92,373,460 $92,972,758

Deposits
Borrowed money
Total liabilities$107,873,228 $107,873,882$654
21,313,020 21,297,521 (15,499)$129,186,248 $129,171,403 $(14,845))

Derivative transactions *2
Derivative transactions not
qualifying for hedge accounting
Derivative transactions
qualifying for hedge accounting *3
Total derivative transactions

599,151$599,298$(34,171)$(34,171)$－(12,971)(12,971)*4－$(47,142)$(47,142)$－*1. Allowance for loan losses shown in this table represents the generalallowance and specific allowance for loan losses. Figures for allowance
for loan losses on monetary claims bought are directly deducted fromthe balance of monetary claims bought as the amount concerned isinsignificant.
*2. Derivative transactions included in trading assets and liabilities andother assets and liabilities are shown together. Assets and liabilities
arising from derivative transactions are shown within parentheses withrespect to net liabilities.
*3. Transactions to which hedge accounting is applied include interest rate
swap transactions designated as hedging instrument for the purpose ofbalancing interest rate fluctuations in loans, securities, etc. Deferredhedge accounting is applied to these transactions. Of these hedge
relationships to which “Practical Solution on the Treatment of Hedge
Accounting for Financial Instruments that Reference LIBOR” (ASBJ
PITF No. 40, March 17, 2022) applies are accounted for under the
standard.
*4. As interest-rate swaps subject to exceptional treatment are accounted
for together with the loans being hedged by the swaps, their fair value
is included in the loans in question on the consolidated balance sheet.

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）(Note 1) The following are the consolidated balance sheet
amounts of stocks without a quoted market price, andinvestments in partnerships. These amounts are not included in“Available-for-sale securities” in fair value of financial
instruments.
Consolidated balance sheet amounts
March 31

Millions of yen
2022
2021

Thousands of
U.S. dollars
2022

Unlisted stocks *1, 2
Unlisted foreign securities *1
Total¥26,0890¥26,089$213,167
3$213,170¥29,467
0¥29,467*1. In accordance with paragraph 5 of “Implementation Guidance on
Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance
No.19, March 31, 2020), these items are not subject to disclosure of thefair value.
*2. Unlisted stocks were written down by ¥3,263 million ($26,667
thousand) and ¥21 million as of March 31, 2022 and 2021, respectively.
*3. In accordance with paragraph 27 of “Implementation Guidance on
Accounting Standard for Fair Value Measurement” (ASBJ Guidance
No.31, July 4, 2019), investments in partnerships are not subject todisclosure of the fair value. The consolidated balance sheet amounts ofthese were ¥19,323 million ($157,886 thousand) and ¥13,793 million atMarch 31, 2022 and 2021, respectively.

Hokuhoku Financial Group, Inc. Financial Data 2022

Other Income272022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）(Note 2) Maturity analysis for financial assets and securities with contractual maturities
Millions of yen
Due in 1 year
or less

Due after 1 year
through 3 years¥883
155,988¥―
260,989¥―
293,740¥―
328,254¥20,268
831,044

Bonds classified as held-to-maturity

1,000

1,500

1,500

―

―

Japanese government bonds

March 31, 2022

Monetary claims bought
Securities

28

Due after 3 years Due after 5 years
through 5 years through 7 years

Due after
7 years

1,000

500

―

―

―

Japanese local government bonds

―

1,000

1,500

―

―

Japanese corporate bonds

―

―

―

Available-for-sale securities with maturities
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Other
Loans and bills discounted
Total

154,988
52,00035,01749,30918,6612,856,264¥3,013,136

259,489―
91,33285,29682,8601,468,056¥1,729,046

292,240
16,000104,868
65,978105,394
1,086,697¥1,380,438―
328,254
45,50083,103
13,580186,070
737,138¥1,065,392―
831,044
308,000
299,958
61,731
161,354
2,845,084¥3,696,397

March 31, 2021

Due in 1 year
or less

Due after 1 year
through 3 years

Monetary claims bought
Securities
Bonds classified as held-to-maturity
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Available-for-sale securities with maturities
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Other
Loans and bills discounted
Total¥1,003
180,391
37,362――37,362
143,028
94,00026,525
13,6528,850
2,825,811¥3,007,206¥―
284,199
61,4501,500
500
59,450222,748
52,00085,122
24,84660,7801,449,373¥1,733,572

Hokuhoku Financial Group, Inc. Financial Data 2022

Maturity analysis for financial assets and liabilities with contractual maturities

Millions of yen
Due after 3 years Due after 5 years
through 5 years through 7 years¥―
240,394
42,361
10,000500
31,861
198,032―
95,40937,35965,263
1,137,331¥1,377,725¥―
189,488
6,985
―
1,500
5,485
182,503
12,00058,964
13,743
97,795
793,060¥982,548

Due after
7 years¥26,788859,460
50,72550,000―725
808,735
227,500
281,70362,540236,9902,667,890¥3,554,139

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）

March 31, 2022

Due in 1 year
or less

Thousands of U.S. dollars
Due after 1 year Due after 3 years Due after 5 years
through 3 years
through 5 years through 7 years

Monetary claims bought
Securities
Bonds classified as held-to-maturity
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Available-for-sale securities with maturities
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Other
Loans and bills discounted
Total$7,222
1,274,520
8,171
8,171
―
―
1,266,349
424,871
286,114402,890
152,474
23,337,399$24,619,141$―
2,132,442
12,256
4,085
8,171
―
2,120,186―
746,243696,922677,021
11,994,905$14,127,347$―
2,400,039
12,255―
12,255―2,387,784
130,730
856,838
539,080
861,136
8,878,972$11,279,011$―
2,682,033――――
2,682,033
371,762
679,004
110,960
1,520,307
6,022,866$8,704,899

Due after
7 years$165,603
6,790,131――――
6,790,131
2,516,545
2,450,843
504,381
1,318,362
23,246,056$30,201,790

Loans and bills discounted
Claims on "Legal bankruptcy" borrowers, "Virtual bankruptcy" borrowers, and "Possible bankruptcy" borrowers amounted to ¥179,726
million ($1,468,476 thousand) and ¥156,342 million as of March 31, 2022 and 2021, respectively, and loans with no contractual maturities
amounted to ¥20,315 million ($165,991 thousand) and ¥20,636 million as of March 31, 2022 and 2021, respectively. They are notincluded in the table above.
(Note 3) Maturity analysis for financial liabilities with contractual maturities

March 31, 2022

Due in 1 year
or less

Due after 1 year
through 3 years

Deposits
Borrowed money
Total¥12,210,561
1,647,615¥13,858,176¥724,888
665,481¥1,390,370

March 31, 2021

Due in 1 year
or less

Due after 1 year
through 3 years

Deposits
Borrowed money
Total¥11,840,670
1,650,985¥13,491,656¥724,147
430,946¥1,155,093

March 31, 2022

Due in 1 year
or less

Deposits
Borrowed money
Total$99,767,638
13,462,008$113,229,646

Millions of yen
Due after 3 years Due after 5 years
through 5 years through 7 years¥196,648
295,093¥491,741¥3,415310¥3,725

Millions of yen
Due after 3 years Due after 5 years
through 5 years through 7 years¥152,074
303,530¥455,605¥4,689428¥5,118

Thousands of U.S. dollars
Due after 1 year Due after 3 years Due after 5 years
through 3 years
through 5 years through 7 years

Due after
7 years¥3,011
─¥3,011
Due after
7 years¥3,09477¥3,172
Due after
7 years$5,922,775
5,437,386$1,606,733
2,411,090$27,907
2,536$24,604─$11,360,161$4,017,823$30,443$24,604

Deposits
Demand deposits are included in “Due in 1 year or less.”

Hokuhoku Financial Group, Inc. Financial Data 2022

Maturity analysis for financial assets and liabilities with contractual maturities29

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）(6) Financial Instruments Categorized by Fair Value Hierarchy
The fair value of financial instruments is categorized into the following three levels, depending on the observability and significance of the
inputs used in fair value measurements:
Level 1: Fair values measured by using quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Fair values measured by using inputs other than quoted prices included within Level 1 that are observable for the assets or
liabilities, either directly or indirectly.
Level 3: Fair values measured by using unobservable inputs for the assets or liabilities.
If multiple inputs are used that have a significant impact on the measurement of fair value, fair value is classified at the lowest level in thefair value measurement among the levels to which each of these inputs belongs.
Investment trust and stocks without a quoted market price and investments in partnerships and partnerships are not included in following
table in accordance with transitional treatment provide in paragraph 26, 27 of “Implementation Guidance on Accounting Standard for Fair
Value Measurement” (ASBJ Guidance No.31, July 4, 2019).
(a) The financial assets and liabilities measured at the fair values in the consolidated balance sheet
Millions of yen
March 31, 2022

Monetary claims bought
Securities
Available-for-sale securities
Japanese government bonds and Japanese local government bonds

Level 1
¥─
836,054
836,054

Level 2
¥─
914,193914,193

389,535
─
182,996

Japanese corporate bonds
Japanese stocks

100,224

176,294

276,518

20,444

─

203,440

1,039,507

Other

263,522

143,552

─

407,074

Total assets¥836,054¥914,193¥197,511¥1,947,758

¥─
─
─
─
¥─

¥553
(6,357)43
─
¥(5,760)

¥─
─
─
(9)
¥(9)

¥553
(6,357)43(9)¥(5,769)

Derivative transactions *1 *2
Interest rate - related transactions
Foreign exchange - related transactions
Commodity - related transactions
Credit derivative transactions
Total derivative transactions

30

Total
¥21,217
1,926,541
1,926,541

649,971

Level 3
¥21,217
176,294
176,294─

Hokuhoku Financial Group, Inc. Financial Data 2022

Maturity analysis for financial assets and liabilities with contractual maturities

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）

Thousands of U.S. dollars

Total$173,355
15,741,004
15,741,004

5,310,660

Level 3$173,355
1,440,429
1,440,429
──

818,896

1,440,429

2,259,325

Japanese stocks

1,495,189

167,045─

1,662,234

Other2,153,136

1,172,908

─3,326,044

Total assets$6,831,066$7,469,509$1,613,784$15,914,359

$─
─
─
─
$─

$4,524(51,944)354
─$(47,066)

$─
─
─
(76)
$(76)

$4,524(51,944)354(76)$(47,142)

March 31, 2022

Monetary claims bought
Securities
Available-for-sale securities
Japanese government bonds and Japanese local government bonds

Level 1
$─
6,831,066
6,831,066

Level 2
$─7,469,509
7,469,509

3,182,741

Japanese corporate bonds

Derivative transactions *1 *2
Interest rate - related transactions
Foreign exchange - related transactions
Commodity - related transactions
Credit derivative transactions
Total derivative transactions

8,493,401*1. Derivative transactions included in trading assets and liabilities and other assets and liabilities are shown together. Assets andliabilities arising from derivative transactions are shown within parentheses with respect to net liabilities.
*2. As interest-rate swaps subject to exceptional treatment are included in the loans in question on the consolidated balance sheet.
*3. Investment trust was excluded in the above. It amounted to ¥231,032 million ($1,887,674 thousand) as of March 31, 2022(b) The financial assets and liabilities not measured at the fair values in the consolidated balance sheet
Millions of yen
March 31, 2022

Securities
Bonds classified as held-to-maturity
Japanese government bonds and Japanese local government bonds

Level 1
¥1,507
1,507

Level 2
¥2,5102,510

Level 3¥──Total
¥4,018
4,018

1,507

2,510

─

4,018

Loans and bills discounted
Total assets
Deposits
Borrowed money
Total liabilities──

9,196,126

9,196,126¥1,507¥2,510¥9,196,126

──¥─

13,138,604
2,603,262¥15,741,867

─
3,340¥3,340¥9,200,145
13,138,604
2,606,603¥15,745,208

Level 1
$12,317
12,317

Level 2
$20,516
20,516

Level 3$──

Total
$32,833
32,833

12,317

20,516

─32,833──

75,137,892

75,137,892$12,317$20,516$75,137,892

──$─

107,350,310
21,270,225$128,620,535

─
27,296$27,296$75,170,725
107,350,310
21,297,521$128,647,831

Thousands of U.S. dollars
March 31, 2022

Securities
Bonds classified as held-to-maturity
Japanese government bonds and Japanese local government bonds
Loans and bills discounted
Total assets
Deposits
Borrowed money
Total liabilities(Note 1) The following is a description of valuation methodologies and inputs used for measurement of the fair value of assets andliabilities
Monetary claims bought
Trust beneficiary rights for mortgage and loans are stated at the level 3 fair value based on the price provided by the financial institutions.
Trust beneficiary rights for account receivables are stated at the level 3 based on the present value as discounting cash flows by market
interest rates in consideration of credit risk.
Securities
When quoted prices are available in an active market, the Group adopts the quoted prices to measure the fair value are classified as
Level 1 of the fair value hierarchy that include stocks listed on the First Section of the Tokyo Stock Exchange and Japanese Government
Bonds. The fair value of an input that can be directly or indirectly observed other than Level 1 input is classified as Level 2 of the fair value
hierarchy.
When a quoted price is not observable, an entity measures fair value using valuation technique such as discount present value method of
future cash flows and that maximises the use of relevant observable inputs which include interest market rates and the probability ofdefault. When an unobservable input is significant to the entire measurement, the fair value is classified as Level 3 of the fair value
hierarchy that include privately-placed bonds.

Hokuhoku Financial Group, Inc. Financial Data 2022

Maturity analysis for financial assets and liabilities with contractual maturities312022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）

Loans and bills discounted
For loans, the fair value is measured using the total future cash flows from principal and interest discounted by current market interest
rates, taking into account the credit risk involved. This measurement is performed separately for each different category of loans,classified by type of loan, internal credit ratings, and maturity length. As loans with variable interest rates reflect short-term market interest
rates, the book value will approximate the fair value unless the creditworthiness of the borrower changes subsequent to the grading of theloan. Because of this, the book value is employed as the fair value.
Regarding the fair value of claims on "Legal bankruptcy" borrowers, "Virtual bankruptcy" borrowers, and "Possible bankruptcy" borrowers,
credit losses are estimated based on the present value of estimated future cash flows or the estimated value recoverable from collateraland guarantees. Since the book value stated on the consolidated balance sheet as of the consolidated balance sheet date, minus thepresent value of estimated bad debt, approximates the fair value, this figure is treated as the fair value. These fair values are classified as
Level 3 of the fair value hierarchy. Also, fair value of loans are accounted hedged by the swaps for together with the loans are reflected
the fair value of such interest-rate swaps.
Deposits
For demand deposits, the amount payable on demand as of the consolidated balance sheet date (i.e., the carrying amount) is considered
to be the fair value and is classified as Level 2 of the fair value hierarchy. In addition, the fair value of time deposits is calculated bydiscounting the estimated future cash flows for each of the specified periods and is classified as Level 2 of the fair value hierarchy. Thismeasurement is performed separately as per the remaining maturity of time deposits. The discount rate employed is the interest rate isavailable in the market.
Borrowed money
Borrowed money with floating interest rates reflects market interest rates and because the credit standing of the Company and its
consolidated subsidiaries has changed little since taking out such loans, the book value is deemed to approximate the fair value and istherefore treated as such. For money borrowed through loans carrying fixed rates, the current value of such loans is determined bydiscounting the total of their principal plus interest (separately for each specific period) at the rate currently applied to other loans of thesame duration and terms. These fair values are mainly classified as Level 2 of the fair value hierarchy.
Derivative transactions
Derivative transactions for which unadjusted quoted prices in active markets are available are classified as Level 1 of the fair value
hierarchy. However, since most derivative transactions are over-the-counter transactions and there are no published quoted prices, fairvalues are measured using valuation techniques such as the discounted present value method and the Black-Scholes model dependingon the type of transaction and the period to maturity. The main inputs used in these valuation techniques are interest rates, exchange
rates, volatility, etc. When an unobservable input is not entire or is not significant for the fair value measurement, the fair values areclassified as Level 2 of the fair value hierarchy that include plain vanilla swap, currency option, and so on.
The fair value used significant unobservable inputs are classified as Level 3 fair value of the fair value hierarchy.
(Note 2) The information of level 3 fair value with the financial assets and liabilities measured at the fair values in the consolidatedbalance sheet(a) The quantitative information of fair values measured by using unobservable inputs for the assets or liabilities
March 31, 2022

valuation method
Monetary claims bought

Discounted cash flow
methodPrivately-Placed bonds

Discounted cash flow
methodUnobservable inputs for
Range of valuation input
the assets
Bankruptcy probability
0.002%
by ratings
Expected loss ratio
11.517%
Expense ratio
0.426%
Bankruptcy probability
0.000%－5.380%
by ratings
Expected loss ratio
11.517%－19.244%
Expense ratio
0.036%－0.426%(b) Adjustment sheet from beginning balance to ending balance as of period and unrealized gains (losses) recognized as gains (losses)
for the period
Millions of yen
March 31, 2022

Balance at the beginning of the period
Profit and loss or other comprehensive income at
the current period
Included in profit and loss
Included in other comprehensive income*1
Purchase, Issue
Sales, Redemption, Settlement
Transfer to fair value level 3
Transfer from fair value level 3
Balance at the end of current period
Unrealized gains (losses) on financial assets andliabilities held as of the consolidated balance sheet
date among the amount recorded to gains (losses)
for the period

32

Monetary claims bought¥27,985

Privately-Placed bonds¥45,060¥73,046

(95)

(48)

(143)

1
(96)
3,248
(9,922)──
21,217(48)
022,830(19,032)
127,484─
176,294(46)(96)
26,078(28,954)
127,484
─
197,511

¥─

¥─

¥─

Hokuhoku Financial Group, Inc. Financial Data 2022

Maturity analysis for financial assets and liabilities with contractual maturities

Total

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）

Thousands of U.S. dollars
March 31, 2022

Monetary claims bought

Corporate bonds soldthrough private placement$368,171

Total

Balance at the beginning of the period$228,659$596,830
Profit and loss or other comprehensive income at
(779)
(393)
(1,172)the current period
Included in profit and loss
12
(396)
(384)
Included in other comprehensive income*1
(791)
3
(788)
Purchase, Issue
26,545186,535
213,080
Sales, Redemption, Settlement(81,070)(155,506)(236,576)
─Transfer to fair value level 3 *2
1,041,622
1,041,622
───
Transfer from fair value level 3
Balance at the end of current period
173,355
1,440,429
1,613,784
Unrealized gains (losses) on financial assets andliabilities held as of the consolidated balance sheet$─$─$─date among the amount recorded to gains (losses)
for the period*1. Those amounts are included in valuation difference on available for sale securities of other comprehensive income in the consolidated
statement of comprehensive income.
*2. Due to changed classification from held maturity debt securities to available-for-sale securities.

(c) Description of the valuation processes used by the entity
In accordance with the policies and procedures established by the Corporate Planning Department regarding the fair values, the Banks
verifies the appropriateness of the valuation techniques and inputs used in the measurement of fair values by the back offices of the
Banks. The report of these verifies is submitted to middle offices, therefore, the appropriateness of fair value hierarchy and policy orprocess of fair value measurement are securely established.
In measurement of the fair value, the Banks use an evaluation model that is most adequate that reflects the nature, characteristics andrisks of each asset. In addition, when using quoted prices provided by the third parties, the appropriateness of prices is verified byappropriate methods such as confirmation of the valuation techniques and inputs used and comparison with the market prices of similar
financial instruments.
(d) Description of the sensitivity of the fair value measurement to changes in unobservable inputs
Significant unobservable inputs used in measurement of the fair value of purchased monetary claims and privately-placed bonds are theprobability of default by rating, the expected credit loss ratio and the expense ratio. A significant increase (decrease) in these inputs affectmitigate or magnify of the fair value.

Hokuhoku Financial Group, Inc. Financial Data 2022

Maturity analysis for financial assets and liabilities with contractual maturities33

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）32. Derivatives(1) Derivative transactions to which hedge accounting is not appliedWith respect to derivatives to which hedge accounting is not applied, notional principal or contract amount, fair value at the balance sheet
date by transaction type, and related unrealized gain or loss. Note that contract amounts do not represent the market risk exposure ofderivative transactions.
• Interest Rate-Related Transactions

March 31, 2022

Over-the-counter transactions
Swaps
Receive/fixed and pay/floating
Receive/floating and pay/fixed
Others/sell
Others/buy
Total

March 31, 2021

Over-the-counter transactions
Swaps
Receive/fixed and pay/floating
Receive/floating and pay/fixed
Others/sell
Others/buy
Total

March 31, 2022

Over-the-counter transactions
Swaps
Receive/fixed and pay/floating
Receive/floating and pay/fixed
Others/sell
Others/buy
Total

Millions of yen
Notional principal or contract amount
Fair value
Total
Due after 1 year

¥46,968
46,937479
479/¥38,004
37,989
479
479
/

¥575
(274)
(0)
0
¥300

Millions of yen
Notional principal or contract amount
Fair value
Total
Due after 1 year

¥67,51267,500510
510/¥55,140
55,092510
510/¥1,275
(820)
(0)
0
¥455

Thousands of U.S. dollars
Notional principal or contract amount
Fair value
Total
Due after 1 year

$383,759
383,508
3,918
3,918
/

$310,520
310,398
3,918
3,918
/

$4,699(2,247)(7)
7$2,452

Unrealized gain (loss)

¥575
(274)
10
(3)
¥306

Unrealized gain (loss)¥1,275
(820)
10
(4)
¥461

Unrealized gain (loss)$4,699(2,247)83(32)$2,503

Note: The above transactions are stated at fair value and unrealized gain or loss is charged to income or expenses in the consolidated statement of income.

• Foreign Exchange-Related Transactions

March 31, 2022

Over-the-counter transactions
Swaps
Forward contracts/sell
Forward contracts/buy
Options/sellOptions/buy
Total

March 31, 2021

Over-the-counter transactions
Swaps
Forward contracts/sell
Forward contracts/buy
Options/sellOptions/buy
Total

March 31, 2022

Over-the-counter transactions
Swaps
Forward contracts/sell
Forward contracts/buy
Options/sellOptions/buy
Total

Millions of yen
Notional principal or contract amount
Fair value
Total
Due after 1 year

¥5,051
136,733
57,89827,52327,523/¥2,327
1,336
1,321
15,404
15,404/¥3(5,429)
909
(675)
675
¥(4,516)

Millions of yen
Notional principal or contract amount
Fair value
Total
Due after 1 year

¥2,10076,77462,72639,851
39,851/¥2,100509
553
18,716
18,716/¥1(2,223)
1,074
(656)
655
¥(1,148)

Thousands of U.S. dollars
Notional principal or contract amount
Fair value
Total
Due after 1 year

$41,276
1,117,193
473,063
224,885
224,885/$19,015
10,92010,800125,863
125,863/$32(44,365)7,430(5,520)5,520$(36,903)

Unrealized gain (loss)¥3(5,429)909
34
122¥(4,360)

Unrealized gain (loss)¥1(2,223)
1,074
833
(625)
¥(939)

Unrealized gain (loss)$32(44,364)
7,430
278
997
$(35,627)

Note: The above transactions are stated at fair value and unrealized gain or loss is charged to income or expenses in the consolidated statement of income.

34

Hokuhoku Financial Group, Inc. Financial Data 2022

Derivative transactions to which hedge accounting is not applied

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）• Commodity-Related Transactions

March 31, 2022

Over-the-counter transactions
Swaps
Receive/fixed and pay/floating
Receive/floating and pay/fixed
Total

March 31, 2021

Over-the-counter transactions
Swaps
Receive/fixed and pay/floating
Receive/floating and pay/fixed
Total

March 31, 2022

Over-the-counter transactions
Swaps
Receive/fixed and pay/floating
Receive/floating and pay/fixed
Total

Millions of yen
Notional principal or contract amount
Fair value
Total
Due after 1 year

¥1,0601,060/¥1,0491,049/¥(415)
458¥43

Millions of yen
Notional principal or contract amount
Fair value
Total
Due after 1 year

¥842
842
/

¥832
832
/

¥(79)
145
¥66

Thousands of U.S. dollars
Notional principal or contract amount
Fair value
Total
Due after 1 year

$8,665
8,665/$8,578
8,578/$(3,394)
3,748
$354

Unrealized gain (loss)¥(415)
458¥43

Unrealized gain (loss)

¥(79)
145
¥66

Unrealized gain (loss)$(3,394)
3,748
$354

Notes: 1. The above transactions are stated at fair value and unrealized gain or loss is charged to income or expenses in the consolidated statement of income.
2. The above derivative transactions consist of those for oil, copper, aluminum, etc.

• Credit Derivative Transactions

March 31, 2022

Over-the-counter transactions
Credit default options
Sell
Buy
Total

March 31, 2022

Over-the-counter transactions
Credit default options
Sell
Buy
Total

Millions of yen
Notional principal or contract amount
Fair value
Total
Due after 1 year

¥─
488
/

¥─
471
/

¥─
(9)
¥(9)

Thousands of U.S. dollars
Notional principal or contract amount
Fair value
Total
Due after 1 year

$─
3,991
/

$─
3,856
/

$─
(76)
$(76)

Unrealized gain (loss)

¥─
(8)
¥(8)

Unrealized gain (loss)

$─
(71)
$(71)

Notes: 1. The above transactions are stated at fair value and unrealized gain or loss is charged to income or expenses in the consolidated statement of income.
2. “Sell” and “Buy” indicate assumption and cession of credit risk, respectively

Hokuhoku Financial Group, Inc. Financial Data 2022

Derivative transactions to which hedge accounting is not applied35

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）• Others

March 31, 2022

Over-the-counter transactions
Earthquake derivatives
Sell
Buy
Total

March 31, 2021

Over-the-counter transactions
Earthquake derivatives
Sell
Buy
Total

March 31, 2022

Over-the-counter transactions
Earthquake derivatives
Sell
Buy
Total

Millions of yen
Notional principal or contract amount
Fair value
Total
Due after 1 year

¥8,965
8,965
/

¥─
─
/

¥(57)
57
¥─

Millions of yen
Notional principal or contract amount
Fair value
Total
Due after 1 year

¥9,015
9,015
/

¥―
―
/

¥(58)
58
¥―

Thousands of U.S. dollars
Notional principal or contract amount
Fair value
Total
Due after 1 year

$73,249
73,249/$──/$(471)
471$─

Unrealized gain (loss)

¥─
─
¥─

Unrealized gain (loss)

¥―
―
¥―

Unrealized gain (loss)

$─
─
$─

Note: The above transactions are stated at fair value and unrealized gain or loss is charged to income or expenses in the consolidated statement of income.

36

Hokuhoku Financial Group, Inc. Financial Data 2022

Derivative transactions to which hedge accounting is not applied

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）(2) Derivative transactions to which hedge accounting is appliedWith respect to derivatives to which hedge accounting is applied, notional principal or contract amount and fair value at the balance sheet
date by transaction type and hedge accounting method. Note that contract amounts do not represent the market risk exposure ofderivative transactions.
• Interest Rate-Related Transactions
March 31, 2022
Hedge accounting method

Type

Hedged item

Accounting method
employed in principle

Swaps
Receive/floating and pay/fixed
Swaps
Receive/floating and pay/fixed

Yen-based bondExceptional treatment forinterest swaps
Total

Hedge accounting method

Type

Hedged item

Accounting method
employed in principle

Swaps
Receive/floating and pay/fixed
Swaps
Receive/floating and pay/fixed

Yen-based bond

¥70,000¥20,000¥253

36,718/36,672/*2¥253

Millions of yen
Notional principal or contract amountTotal
Due after 1 year

Fair value¥73,000¥68,000¥(199)

37,670/37,670/*2¥(199)

Loans and bills discounted

March 31, 2022
Hedge accounting method

Type

Hedged item

Accounting method
employed in principle

Swaps
Receive/floating and pay/fixed
Swaps
Receive/floating and pay/fixed

Yen-based bondExceptional treatment forinterest swaps
Total

Fair value

Loans and bills discounted

March 31, 2021

Exceptional treatment forinterest swaps
Total

Millions of yen
Notional principal or contract amountTotal
Due after 1 year

Thousands of U.S. dollars
Notional principal or contract amount
Fair value
Total
Due after 1 year

$571,942$163,412$2,071300,013/299,638/*2$2,071Loans and bills discounted

Notes: 1. Deferred hedge accounting is mainly applied in accordance with JICPA Industry Committee Practical Guidelines No. 24.
2. Amounts resulting from interest swaps with exceptional treatment are accounted for together with the financial instruments hedged. As a result, thefair value is included in the fair value of the loans stated in Note 31, "Financial Instruments and Related Disclosures.”Hokuhoku Financial Group, Inc. Financial Data 2022

Derivative transactions to which hedge accounting is applied37

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）• Foreign Exchange-Related Transactions
March 31, 2022
Hedge accounting method

Accounting method
employed in principle

Type

Swaps
Forward contracts

Hedged item

Foreign loans and foreign
securities
Call loans and due frombanks (foreign currencies)

Total
March 31, 2021
Hedge accounting method

Accounting method
employed in principle

Type

Swaps
Forward contracts

Hedged item

Foreign loans and foreign
securities
Call loans and due frombanks (foreign currencies)

Total
March 31, 2022
Hedge accounting method

Accounting method
employed in principle

Type

Swaps
Forward contracts

Total

Hedged item

Foreign loans and foreign
securities
Call loans and due frombanks (foreign currencies)

Millions of yen
Notional principal or contract amountTotal
Due after 1 year¥249¥(1,281)

19,650

─

(559)

/

/

¥(1,840)

Millions of yen
Notional principal or contract amountTotal
Due after 1 year

Hokuhoku Financial Group, Inc. Financial Data 2022

Derivative transactions to which hedge accounting is applied

Fair value¥34,665¥239¥(2,111)

―
/

―
/

―
¥(2,111)

Thousands of U.S. dollars
Notional principal or contract amount
Fair value
Total
Due after 1 year

$152,418$2,041$(10,472)

160,558

─

(4,570)//$(15,042)

Note: Deferred hedge accounting is mainly applied in accordance with JICPA Industry Committee Practical Guidelines No. 25.

38

Fair value¥18,6542022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）33. Revenue Recognition(1) Disaggregation of Revenue from contracts with customers
Revenues from contracts with customers on a disaggregated basis for the year ended March 31, 2022, were as follows:
Millions of yen
2022
Reportable segment
Hokuriku Bank Hokkaido Bank
Total

Trust fees
Fees and commissions
Deposits and loan operations
Domestic and foreign exchange operations
Investment operations
Agency operations
Safe keeping and safe operations
Other
Other ordinary incomes
Other incomes
Ordinary income from contracts with customers
Ordinary income except the above
Ordinary income from external customers¥36
15,057
4,257
5,413
1,595
574
149
3,068
―
―
15,09372,773¥87,867¥―
14,279
5,601
4,236
1,596
639
77
2,128
―
―
14,27957,358¥71,637¥36
29,336
9,858
9,650
3,191
1,213
226
5,196
―
―
29,373130,132¥159,505

Other *

Total

¥―
4,576
―
―
1,207
441
―
2,927
1,445
33
6,054
12,233¥18,288¥36
33,912
9,858
9,650
4,399
1,654
226
8,123
1,445
33
35,427
142,366¥177,793

Thousands of U.S.dollars
2022
Reportable segment
Other *
Hokuriku Bank Hokkaido Bank
Total

Trust fees
Fees and commissions
Deposits and loan operations
Domestic and foreign exchange operations
Investment operations
Agency operations
Safe keeping and safe operations
Other
Other ordinary incomes
Other incomes
Ordinary income from contracts with customers
Ordinary income except the above
Ordinary income from external customers$296
123,028
34,783
44,231
13,035
4,693
1,218
25,068――123,324594,604$717,929$―$296
116,671
239,699
45,76580,54834,61878,84913,041
26,076
5,224
9,917
634
1,852
17,39042,458――――116,671
239,995
468,654 1,063,258$585,325 $1,303,254$―
37,389
―
―
9,867
3,604
―
23,91811,809270
49,46899,959$149,427

Total

$296
277,088
80,54878,84935,943
13,521
1,852
66,376
11,809270
289,463
1,163,217$1,452,681* “Other” was included financial instruments business, leasing, credit card operations and others without banking.
(2) Basic information to understand the revenue from contracts with customers
The Group recognizes revenue in accordance with that core principle by applying the following 5 steps:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation
Accounting Standard for Revenue Recognition is applied to contracts with customers are mainly Fees and commission in the Banks. The
Banks provides exchange settlements services such as transfer of fund and deposit services such as account transfers and sales agency
services for investment trusts and life insurance contracts. If the performance obligations are satisfied at a point in time such as
settlement and conclusion of sales contracts, the fees received in connection with the services are recognized as revenue when theperformance obligations satisfied.
In addition, if performance obligations are satisfied for a certain period of time, revenue is recognized as the performance obligations
satisfied over time.
The Company and its consolidated non-banking subsidiaries recognize the revenues by a similar method as that of the Banks.

Hokuhoku Financial Group, Inc. Financial Data 2022

Revenue Recognition39

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）34. Segment Information
An entity is required to report financial and descriptive information about its reportable segments. Reportable segments are operating
segments or aggregations of operating segments that meet specified criteria. Operating segments are components of an entity about
which separate financial information is available and such information is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance. Generally, segment information is required to be reported on the same
basis as is used internally for evaluating operating segment performance and deciding how to allocate resources to operating segments.
(1) Description of reportable segments
The Group's reportable segments are those for which separate financial information is available and regular evaluation by the Board of
Directors and Management Committees is being performed in order to decide how resources are allocated among the Group and assess
performance.
The Group comprehensively conducts banking business as its core business and other financial services under the control of theCompany.
The Company recognized each of its consolidated subsidiaries as an operating segment. Therefore, Hokuriku Bank and Hokkaido
Bank are reportable segments.
(2) Methods of measurement for the amounts of ordinary income, profit (loss), assets, liabilities and other items for eachreportable segment
The accounting policies of each reportable segment are consistent with those disclosed in Note 2, "Summary of Significant Accounting
Policies." Profits of reportable segments are the same as net income. Ordinary income from intersegment transactions is based ontransaction prices determined in the same manner as ordinary income from external customers.

40

Hokuhoku Financial Group, Inc. Financial Data 2022

Segment Information、Related Party Transactions、Subsequent Events

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）(3) Information about ordinary income, profit (loss), assets, liabilities, and other items
Segment results for the years ended March 31, 2022 and 2021 are as follows:
Millions of yen
2022
Reportable segment
Hokuriku Bank Hokkaido Bank
Total

Ordinary income
Ordinary income from external customers
Ordinary income from intersegment transactions
Total
Segment profit
Segment assets
Segment liabilities
OthersDepreciation
Amortization of goodwill
Unamortized balance of goodwill
Increase in tangible fixed assets and intangible
assets¥87,867
1,131
88,998
13,102
10,178,190¥9,808,584¥71,637¥159,505
1,345
2,476
72,983
161,982
8,770
21,873
7,065,244 17,243,435¥6,842,923 ¥16,651,508

Other

Total

¥20,145¥179,650
4,308
6,785
24,453
186,435
2,302
24,176
94,854 17,338,290¥64,994 ¥16,716,502

Reconciliations Consolidated¥(1,856)¥177,793
─
(6,785)(8,641)
177,793(3,649)20,526(58,218) 17,280,071¥(59,276) ¥16,657,226¥3,787──

¥2,650──

¥6,438
─
─

¥243
─
─

¥6,682
─
─

¥0
2,102
5,080

¥6,682
2,102
5,080¥7,015¥2,712¥9,727¥102¥9,830¥(11)¥9,818Millions of yen
2021
Reportable segment
Hokuriku Bank Hokkaido Bank
Total

Ordinary income
Ordinary income from external customers
Ordinary income from intersegment transactions
Total
Segment profit
Segment assets
Segment liabilities
OthersDepreciation
Amortization of goodwill
Unamortized balance of goodwill
Increase in tangible fixed assets and intangible
assets¥85,281
1,145
86,427
14,297
9,857,292¥9,473,122¥70,337¥155,619
1,234
2,380
71,572
157,999
8,192
22,4906,737,566 16,594,859¥6,514,085 ¥15,987,208

Other

Total

¥20,518¥176,137
4,671
7,052
25,190183,189
2,408
24,898
95,160 16,690,020¥66,948 ¥16,054,156

Reconciliations Consolidated¥(174)¥175,963(7,052)―(7,226)
175,963(3,563)
21,334(54,548) 16,635,471¥(57,190) ¥15,996,966¥3,957――¥2,515――¥6,473
―
―

¥268
―
―

¥6,741
―
―

¥1
2,102
7,182

¥6,7432,102
7,182¥2,817¥2,170¥4,988¥60¥5,048¥6¥5,055

Thousands of U.S. dollars
2022

Ordinary income
Ordinary income from external customers
Ordinary income from intersegment transactions
Total
Segment profit
Segment assets
Segment liabilities
OthersDepreciation
Amortization of goodwill
Unamortized balance of goodwill
Increase in tangible fixed assets and intangible
assetsReportable segment
Hokuriku Bank Hokkaido Bank
Total

Other

$717,929
9,244
727,173
107,055
83,161,945$80,142,042$164,598 $1,467,852
35,20255,439199,800
1,523,291
18,816
197,535
775,021 141,664,270$531,043 $136,583,893$585,325 $1,303,254
10,993
20,237596,318
1,323,491
71,664
178,719
57,727,304 140,889,249$55,910,808 $136,052,850

Total

Reconciliations Consolidated$(15,171) $1,452,681―(55,439)(70,610)
1,452,681(29,819)
167,716(475,677) 141,188,593$(484,323) $136,099,570$30,946──

$21,659──$52,605──$1,991
──

$54,596──$217,17741,511$54,598
17,17741,511$57,320$22,160$79,480$840$80,320$(96)$80,224

Hokuhoku Financial Group, Inc. Financial Data 2022

Segment Information、Related Party Transactions、Subsequent Events

41

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）(4) Information about services
Millions of yen
Investment
Other
operations

Deposit andloan operations

Year ended March 31, 2022

Ordinary income from external customers¥95,708¥39,040

Year ended March 31, 2021

¥96,141¥39,914

Ordinary income from external customers

Total¥39,907¥175,963

Thousands of U.S. dollars
Investment
Other
operations

Deposit andloan operations

Year ended March 31, 2022

¥177,793

Millions of yen
Investment
Other
operations

Deposit andloan operations

Ordinary income from external customers

Total¥43,044$781,997$318,988

Total$351,696$1,452,681(5) Information about geographical areas
There is no geographical segment outside Japan accounting for 10% or more of ordinary income and tangible fixed assets.
(6) Information about major customers
There are no major customers individually accounting for 10% or more of ordinary income.

35. Related Party Transactions
Related party transactions as of March 31, 2022 and 2021 were as follows:• Officers and principal individual shareholders of the company submitting consolidated financial statements
March 31, 2022
Transaction amount *5
Related party

Account Classification

Minamidani Kanamono Co., Ltd. *2
Nakamura-Tome Precision Industry Co., Ltd. *3
NAKAMURA-TOME HOLDING CO., LTD. *3
Yagikuma Co., Ltd *4

Loans and bills discounted
Loans and bills discounted
Loans and bills discounted
Loans and bills discounted

Balance at end of year

Millions of yen

Thousands of
U.S. dollars

Millions of yen

Thousands of
U.S. dollars

¥21
¥947
¥500
¥344

$172
$7,738$4,085$2,811

¥19
¥─
¥500
¥314

$155
$─
$4,085$2,566

March 31, 2021
Related party

Account Classification

Nakamura-Tome Precision Industry Co., Ltd. *3 Loans and bills discounted
NAKAMURA-TOME HOLDING CO., LTD. *3 Loans and bills discounted

Transaction amount *5

Balance at end of year

Millions of yen

Millions of yen

¥950
¥500

¥950
¥500

Notes: 1. Terms and conditions of the transactions are similar to those with unrelated parties.
2. Close relatives of a member of the Hokuriku Bank’s director own the majority of the voting rights.
3. A member of the Hokuriku Bank’s audit & supervisory board and his close relatives own the majority of the voting rights, and he is the president ofthese companies.
4. A member of the Hokuriku Bank’s audit & supervisory board and his close relatives own the majority of the voting rights.
5. Transaction amount was reported at the average balance for the period.

36. Subsequent Events
Acquisition of a portion of preferred stock
The Company resolved to acquire the following preferred stock in accordance with the provisions of Article 13 of the Article of
Incorporation at the meeting of the Board of Directors held on July 15, 2022:

42

Type of preferred stock acquired

Preferred Stock (Type 5)

Total number of stock acquired

A seventh part of outstanding shares (excluding treasury shares) of the preferred stock on
the date of acquisition

Acquisition price per share (yen)¥500

Sellers and how acquired

All holders of preferred stock. The Company will acquire a seventh part of the stocks ofeach one

Date of acquisition

October 1, 2022

Hokuhoku Financial Group, Inc. Financial Data 2022

Segment Information、Related Party Transactions、Subsequent Events

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）

INDEPENDENT AUDITOR’S REPORT

Hokuhoku Financial Group, Inc. Financial Data 2022

INDEPENDENT AUDITOR’S REPORT

43

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）44

Hokuhoku Financial Group, Inc. Financial Data 2022

INDEPENDENT AUDITOR’S REPORT

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）

Hokuhoku Financial Group, Inc. Financial Data 2022

INDEPENDENT AUDITOR’S REPORT45

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）46

Hokuhoku Financial Group, Inc. Financial Data 2022

INDEPENDENT AUDITOR’S REPORT

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）

Hokuhoku Financial Group, Inc. Financial Data 2022

INDEPENDENT AUDITOR’S REPORT

47

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）

NON-CONSOLIDATED FINANCIAL STATEMENTS

NON-CONSOLIDATED BALANCE SHEET (UNAUDITED)The Hokuriku Bank, Ltd.

2022

2021

Thousands of
U.S. dollars
2022

Cash and due from banks¥3,607,139¥3,368,633$29,472,500

Call loans and bills bought

26,731―

218,412

Monetary claims bought

21,21727,985

173,356

Trading assets

1,048

793

8,568

Money held in trust

4,945

4,947

40,404

Securities

1,294,377

1,268,165

10,575,847

Loans and bills discounted

5,061,661

5,033,384

41,356,822

Foreign exchanges

19,983

13,597

163,275

Other assets

66,27066,840541,467

Tangible fixed assets

76,24473,176

622,965

Intangible assets

2,774

3,363

22,669Prepaid pension cost

3,616

3,786

29,551

Customers’ liabilities for acceptances and guarantees

32,70825,950267,247

Millions of yen
March 31

AssetsAllowance for loan losses
Total assets(40,527)(33,332)(331,138)¥10,178,190¥9,857,292$83,161,945

Liabilities and equity
Liabilities
Deposits¥7,536,937¥7,350,562$61,581,318

Call money and bills sold318,920

280,517

2,605,769

Payables under repurchase agreements

21,123

24,670172,594

Payables under securities lending transactions

186,628

221,036

1,524,869

Trading liabilities

651

349

5,326

Borrowed money

1,630,857

1,485,575

13,325,089

Foreign exchanges

354

92

2,895

Borrowed money from trust account

4,514

2,942

36,884

Other liabilities

54,485

53,158445,182

Reserve for employee retirement benefits

948

368

7,749

Reserve for directors’ and audit & supervisory board members’ retirement benefits

43

43

355

Reserve for contingent losses

562

495

4,598

Reserve for reimbursement of deposits

1,015

1,138

8,297

Deferred tax liabilities

13,84721,097113,145

Deferred tax liabilities for land revaluation

4,984

5,123

40,725

Acceptances and guarantees

32,70825,950267,247

9,808,584

9,473,122

80,142,042

Capital stock

140,409140,409

1,147,230

Capital surplus

14,99814,998

122,550

Retained earnings

157,746

151,491

1,288,886

48,64969,269397,497

9

(87)

79

Total liabilities
EquityValuation and translation adjustments
Valuation difference on available-for-sale securities
Deferred gains (losses) on hedges
Revaluation reserve for land
Total equity
Total liabilities and equity

48

Hokuhoku Financial Group, Inc. Financial Data 2022

NON-CONSOLIDATED BALANCE SHEET (UNAUDITED)_Hokuriku

7,791

8,088

63,661

369,606

384,1703,019,903¥10,178,190¥9,857,292$83,161,945

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）

NON-CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)The Hokuriku Bank, Ltd.
Thousands of
U.S. dollars
2022

Millions of yen
2022

2021

Interest on loans and discounts¥41,196¥42,557$336,604

Interest and dividends on securities

12,664

13,369103,478

Interest on deposits with other banks

3,386

1,003

27,670

224

318

1,838

36

42

296

18,743

17,523

153,142

IncomeInterest income:

Other interest income
Trust fees
Fees and commissions
Trading income
Other ordinary income

14

50

115

4,322

4,063

35,314

Other income

8,428

7,522

68,865

Total income

89,01686,452

727,322

315

436

2,575

9

27

81

205

155

1,682

1

6

15

Expenses
Interest expenses:
Interest on deposits
Interest on payables under repurchase agreements
Interest on payables under securities lending transactions
Interest on borrowings and rediscounts
Other interest expenses
Fees and commissions

609

850

4,980

7,386

7,397

60,351Other ordinary expenses

5,675

1,450

46,370General and administrative expenses

42,44744,738346,822

Provision of allowance for loan losses

8,369

8,330

68,382Other expenses

3,921

3,403

32,043

Total expenses

68,942

66,795563,301

Income before income taxes

20,074

19,657

164,02158,873

Income taxes:
Current

7,205

6,453

Deferred(233)(1,093)(1,907)

Net income¥13,102¥14,297$107,055

Hokuhoku Financial Group, Inc. Financial Data 2022

NON-CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)_Hokuriku

492022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）

NON-CONSOLIDATED FINANCIAL STATEMENTS

NON-CONSOLIDATED BALANCE SHEET (UNAUDITED)The Hokkaido Bank, Ltd.

2022

2021

Thousands of
U.S. dollars
2022

Cash and due from banks¥1,862,525¥1,725,165$15,217,954

Trading account securities

2,406

2,614

19,660

Money held in trust

9,179

9,098

75,000905,214832,023

7,396,148
33,903,937

Millions of yen
March 31

AssetsSecurities
Loans and bills discounted

4,149,502

4,031,781

Foreign exchanges

5,645

8,787

46,123

Other assets

85,96886,138702,414

Tangible fixed assets

28,33728,009231,534

Intangible assets

2,313

2,809

18,905Prepaid pension cost

5,797

978

47,373

Deferred tax assets

6,391

5,626

52,221

Customers’ liabilities for acceptances and guarantees

27,59926,966

225,507

Allowance for loan losses
Total assets(25,637)(22,433)(209,472)¥7,065,244¥6,737,566$57,727,304$46,543,449

Liabilities and equity
Liabilities
Deposits¥5,696,452¥5,465,108

Payables under securities lending transactions

102,186

86,751

834,927

Borrowed money

972,200

895,500

7,943,459

Foreign exchanges

293

355

2,397

Other liabilities

41,94036,981

342,680

Reserve for employee retirement benefits
Reserve for directors’ and audit & supervisory board members’ retirement
benefits
Reserve for contingent losses

1,359

1,589

11,105

37

93

308

374

248

3,056

479

491

3,920

27,59926,966

225,5076,842,923

6,514,085

55,910,808

93,524

93,524764,147

Reserve for reimbursement of deposits
Acceptances and guarantees
Total liabilities
EquityCapital stock
Capital surplus

16,795

16,795

137,226

Retained earnings

105,150

101,751

859,142

6,535

11,38453,401

315

26

2,580

222,320

223,480

1,816,496¥7,065,244¥6,737,566$57,727,304

Valuation and translation adjustments
Valuation difference on available-for-sale securities
Deferred gains (losses) on hedges
Total equity
Total liabilities and equity

50

Hokuhoku Financial Group, Inc. Financial Data 2022

NON-CONSOLIDATED BALANCE SHEET (UNAUDITED)_Hokkaido

2022/09/09 9:40:12 / 22857669_株式会社ほくほくフィナンシャルグループ_ディスクロージャー誌（通期）

NON-CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)The Hokkaido Bank, Ltd.
Thousands of
U.S. dollars
2022

Millions of yen
2022

2021

¥41,445¥41,568$338,638

6,227

6,041

50,887

―

(1)

―

2,117

428

17,298

IncomeInterest income:Interest on loans and discounts
Interest and dividends on securities
Interest on receivables under resale agreements
Interest on deposits with other banks

137

143

1,125

Fees and commissions

Other interest income

16,12815,709131,780

Other ordinary income

3,147

2,947

25,713

Other income

7,752

4,778

63,342

Total income

76,956

71,615

628,783

Interest on deposits

120

187

983

Interest on payables under securities lending transactions

184

61

1,508

Interest on borrowings and rediscounts

(30)

(5)

(247)

Other interest expenses

33

8

273

9,790

9,895

79,996

Expenses
Interest expenses:

Fees and commissions
Other ordinary expenses

4,988

2,514

40,761

General and administrative expenses

37,02338,977

302,506

Provision of allowance for loan losses

4,708

4,488

38,473

Other expenses

6,751

4,082

55,163

Total expenses

63,57160,210519,416

Income before income taxes

13,385

11,405

109,367

3,406

3,115

27,836

Income taxes:
Current
Deferred

1,207

97

9,867

Net income¥8,770¥8,192$71,664

Hokuhoku Financial Group, Inc. Financial Data 2022

NON-CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)_Hokkaido

51

Hokuhoku Financial Group, Inc.

Hokuhoku Financial Group, Inc.

Financial Data 2022

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