178 - 8, Okada, Nagano-city 380 - 8682, Japan
Phone:(026)227-1182
https://www.82bank.co.jp/

2020
Ye a r e n d e d M a r c h 3 1 , 2 0 2 0This brochure was printed
using vegetable oil ink.

7748
48

3,138

10,47018.9
18.94
94 % (BIS standards)

55,395,395

151 DoDomestic Branches (Japan)
1 Overseas
Ove
Ove
Branch (Hong Kong)
3 Re
ep
RepresentativeOﬃces(Shanghai,(Sha
Bangkok & Singapore)

Total C
Capital Ratio

6
6,975

*Figures less than 1 billion yen are rounded off

Credit R
Rating (Long-Term)
S&P GloGlobal Ratings

A- (as of July 31, 2020)(Rating and Investment Information, Inc.)
R&I (RaA+(Jap Credit Rating Agency, Ltd.)JCR (JapanAA

as of March 31, 2020

The Hachijuni Bank, Ltd. is one of the leading regional banks in Japan.
We are mainly based in Nagano Prefecture, which is geographicallylocated in the center of Japan and is well-known for its coexistence withbeautiful nature and advanced industries.
Since its establishment in 1931 in Nagano City, Hachijuni Bank has
consistently maintained sound management policies, and is now playing
a significant role as one of the largest regional banks in Japan.
Branches of Hachijuni Bank can be found in Nagano, Gunma, Saitama, Niigata and Gifu Prefectures, as wellas in Tokyo, Osaka and Nagoya metropolitan areas. We also have an overseas branch in Hong Kong, as wellas, the Shanghai Representative Office, the Bangkok Representative Office, and the Singapore Representative
Office.

CONTENTS
2

Message from the President		10 Major Affiliated Companies

3

Management Policies

		 10 Major Shareholders

4

Business Performance and Financial Standings

5

Corporate Governance		 14 Financial Section

6

Risk Management

			 14 Consolidated Balance Sheet

7

International Operations

			 15 Consolidated Statement of Income

8

Corporate Social Responsibility (CSR)

			 15 Consolidated Statement of Comprehensive Income

10

Board of Directors

			 16 Consolidated Statement of Changes in Equity

10

Audit & Supervisory Board Members

			 17 Consolidated Statement of Cash Flows10

Organization

			 18 Notes to Consolidated Financial Statements

11

Independent Auditor’s Report1Management Philosophy“Stick firmly to the sound banking principles, thereby contributing to the development of the regional community”

Corporate Vision: Shining at the center of Japan -8 shines
Shoichi Yumoto
President

Strong trustworthiness from thepeople and the region of Nagano

Entirely sound,constant & steady earning power

Agreeable correspondence tothe request of our customers

Business promotion fromour customers’ viewpoint

High awareness ofcompliance

Every staff’s speedy,
lively & responsible action

Trustworthy, efficient & assured
operational system and condition

Advanced and confident
computer system

Long-Term Management Guideline

Message from the President
August 2020
We would like to begin by expressing our sincere gratitude for your patronage.
Since its establishment in 1931, and in tandem with the development of the regional economy, Hachijuni
Bank (“the Bank”) has continued to grow and has established itself as a key financial institution within its
community. This is in large part due to the long-lasting support and patronage of our shareholders, ourcustomers, and the community, for which we are very grateful.
We have designed our “Annual Report 2020” to present, in an easy-to-understand format, our earnings
results and the details of our businesses for the fiscal year ended March 31, 2020. We sincerely hope that thisreport will help give you a better understanding of the Bank.
The overall Japanese economy remained sluggish in FY2019 owing to weakness in consumer spending andcapital investments. Contributing factors included a decline in exports which were affected by the US-China

The 31st Long-Term Management Plan (April 1, 2018 ~ March 31, 2021)“Dare to Change ; Create the Next Generation”
Strengthening and expansion of “face-to-face sales” in order to realize
customer profits
Expansion of investment in developing “human resources” and more opportunities
for their active participation
Reform of sales promotion structure and operational processes
Numerical Targets
Management
Targets

trade conflict, the consumption tax hike, and natural disasters such as Typhoon Hagibis. Since January 2020,
the coronavirus outbreak has substantially harmed economic activities. In addition to the difficulty ofpredicting when COVID-19 will be contained, there are many uncertain factors including overseas economic
conditions and post-tax hike consumption trends, and therefore the economic outlook is forecast to remain

Regional
Vitality Targets

unpredictable.
Under such conditions, the Bank promoted its 31st Long-Term Management Plan entitled “Dare to Change;
Create the Next Generation.” In order to ceaselessly contribute to regional development, the Bank willtransition itself towards the future and make efforts to create the next generation. We will celebrate our 90th
anniversary in August 2021. The Bank will support regional communities coping with typhoon damages andWe kindly ask for your continued support and patronage in the years to come; in exchange, we will commit
ourselves to doing our utmost to live up to your expectations.
Sincerely yours,
Shoichi Yumoto
President2

Net income attributable to owners of the parent (for March 2021)¥25 billion

Ratio of consolidated profits to parent company’s profits (for March 2021)
Dividend payout ratio (consolidated; annual)

Environmental
Targets

1.25
Over 30%

Number of new business launches (over three years)

1,000

Number of cases through business matching (sales channel development, etc.)(over three years)

6,000

Number of cases utilizing private placement bonds, funds, etc. (over three years)

500

Number of business successions, M&As, and change/discontinuation ofbusinesses (over three years)

1,000
15% reduced(compared to fiscal 2013)

Amount of greenhouse gas emissions reduced (for March 2021)

coronavirus pandemic to restore their vitality without delay, and also work to achieve customer profit througha concerted effort by all its officers and employees.

ROE : 5% or higher

Number of new contracts for electronic delivery servies (over three years)

3,000

Number of new contracts for and renewals to e-livret (over three years)

100,000

Number of environmental investments and loans (over three years)

3,000

Challenge Targets
As of March 31,
2020

Target amount

Target achievement
periodBalance of loans to SMEs

¥1,463.9 billion¥2,000 billion

Fiscal 2027

Number of SME borrowers

26,90330,000Fiscal 2027

¥5.7 billion¥10.0 billion

Fiscal 2022

OHR (gross business profit basis)

61.7%

Under 60%

Fiscal 2022

Amount of greenhouse gas emissions
reduced (compared to fiscal 2013)18.80%

30%

By fiscal 2030

Target item

Revenue from investment type products(bank + securities)3

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0LOOLRQVRI<HQCorporate Governance Principle

The Bank defines the Corporate Governance Principle as the basic policy which regulates all of the Bank’s business activities,
keeps the group’s sustainability, enhances corporate value and carries out its social responsibility to realize the Bank’s
philosophy.
The Corporate Governance Principle defines our basic stance toward the “customers,” “shareholders,” “employees,” and the“regional community,” as well as basic policies related to corporate governance, observation of laws, corporate ethics anddisclosure of information.

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Organizational Structure

Shareholders’
The Bank appoints audit & supervisory board members(to form anMeeting
Audit & Supervisory Board) based on the recognition thatbusinessoversight
functionshouldbeseparatedfrombusiness
executionfunction. While the Boardof Directors Dismissal
decides andDismissal
Appointment
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Appointment
implements business operations, the Audit & Supervisory Board oversees business operations.
Furthermore, the Bank appoints both outside directors and outside audit & supervisory board members who are not prone tohaving conflicts of interest withAccountshareholders.
audit
Account audit

Account
auditing of Business Execution
Board of Directors
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Summary of Business Performance
Consolidated Business Results

Ordinary profit decreased ¥907 million from the previous year to¥33,447 million and net income attributable to owners of the parent
decreased ¥415 million to ¥22,077 million.

Non-Consolidated Business Results

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The Audit & Supervisory Board is held everyHead
monthOfficein principle.
It consistsof five ( 5 ) members including three ( 3 ) outside/ Business
Branches
30 By attending the Board of Directors and providing appropriate advice, each member
audit & supervisory board members.
strictly oversees the execution of duties of directors. Two full-time audit & supervisory board members may attend theManagement Committee and oversee
the execution of business operations through inspecting each kind of matter, such as the20
status of internal controls and branches’ audit results. They regularly discuss with Representative Directors in order to provide
their views about management policy or issues, and also discuss with the Account Auditing Company.
10

Shareholders’MeetingNominating and Compensation Committee＊

Summary of Financial Standings

Board of Directors

Directors (10) (including 2 outside directors)

Results of Consolidated Main Accounts

Outstanding balance of deposits increased ¥240.6 billion to ¥6,975.5 billion from a year earlier owing to increases indeposits from general corporations and from individuals.
Outstanding balance of loans and bills discounted increased ¥133.2 billion to ¥5,395.2 billion due to increases in loans forgeneral corporations and individuals.
Outstanding balance of securities increased ¥145.1 billion to ¥2,911.1 billion due mainly to increases in foreign securities
and corporate bonds.
Outstanding balance of deposits increased ¥242.2 billion from ayear earlier to ¥6,989.1 billion.
Outstanding balance of loans and bills discounted increased¥133.4 billion to ¥5,443.9 billion.
Outstanding balance of securities increased ¥148.8 billion to¥2,920.4 billion.

Total Capital Ratio ( Basel 3 standards )Total capital ratio was 18.94% on a consolidated basis and 17.59%
on a non-consolidated basis.

Profit Sharing

The Bank changed the dividend policy in FY2015 as follows.
Setting the lower limit of dividend per share to ¥5.0 a year, the Bank will positively
provide returns to shareholders by stable dividend and purchase of own stocks.
With respect to year-end dividends, the Bank decided to pay ¥8.0 per
share. As a result, annual dividends, together with the interim dividend,
were ¥14.0 in total.

Account 0Auditing Company(Decision / Supervision of business execution)

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(Head Office)Business Planning Department

Business Promotion Department
International Department

ALM and Comprehensive
Risk Conference

Operations Administration Department

Loan Management Conference

Loan Control Department

Computer Systems Department

Planning and Coordination Department
Personnel Department
General Secretariat

General Affairs Department

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( Oversight of directors’ business execution )Tokyo Liaison Office

Audit & Supervisory Board Members (5)( Including 3 outside audit & supervisory board members )(Internal audit section)Internal Audit Department

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Compliance and Operational
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Ordinary income increased ¥3,398 million from a year earlier to¥124,445 million due to increases in gains on sales of bonds, gains onmoney held in trust, and interest and dividends on securities despite a$FWXDOQHW
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Ordinary expenses increased ¥4,401 million from a year earlier to¥96,423 million due to increases in loss on sales of bonds and loss on sales of stocks despite a decrease in operating expenses.
As a result, ordinary profit decreased ¥1,002 million to ¥28,021 million.
Net income decreased ¥2,267 million to ¥19,562 million due to the lack of extraordinary gains of ¥1,600 million from theabsorption-type merger of a subsidiary recorded in the previous year.

Results of Non-Consolidated Main Accounts

Directors (8)Under the Board of Directors, the Management Committee is established with three special conferences: ALM andComprehensive Risk Conference, Compliance and Operational Risk Conference and Loan Management Conference.
The Board of Directors is held at least oncea month in principle.
In this meeting,directors engage in substantial discussions
Appointment
Reporting
Reporting
Supervisionand supervise the status of business operations with one another.
The Boardof Directors consists of eight ( 8) internal directors and two ( 2) outside directors and the Management Committee
Trouble Inspection Committee
consists of senior executives. 50
The Bank has established the “Nominating and Compensation Committee” as an advisory body in an aim to strengthen the
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Internal audit

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（as of June 19, 2020）

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Remuneration

As for directors’ remuneration, the Bank introduces three types of remuneration: fixed-amount compensation, performancelinked compensation and stock-based compensation.
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The monthly amount of fixed-amount compensation is limited to be within ¥25 million. Performance-linked compensation isbased on the Bank’s net income. The form of stock-based compensation is stock options (share options).
The amount of stock
options is limited to be within ¥100 million in a year, to be decided at the shareholders’ meeting. The payment amount to eachdirector is decided by a consultation of the Board of Directors.
Audit & supervisory board members’ remuneration is fixed-amount compensation. The monthly
amount of such
remuneration is limited to be within ¥8 million by the resolutions of the shareholders’ meeting and the payment amount toeach member is decided by a consultation among audit & supervisory board members.
With respect to the proposals for submission to the shareholders’ meeting regarding remunerationof directors and audit &supervisory members and other remuneration-related matters, the Board of Directors receives advice and proposal from theNominating and Compensation Committee.
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Comprehensive Risk Management

Nagano Prefecture, which is the major business base for the Bank, hasInternational Department
developed as an advanced region in Japan in terms of foreign trade andinternational business operations. Now there are about 2,900 bases of◆ Nagano Main Officeour customers in other countries, primarily in Asia.
178-8, Okada, Nagano-City 380-8682, Japan
Since the launch of its foreign exchange business in January 1962, thePhone: (026)227-1182 Facsimile: (026)226-2982
Bank has expanded its international operations to meet the growing◆ Tokyo Officeneeds of customers who operate worldwide.
1-22, Nihonbashi Muromachi 4-chome, Chuo-ku,
The Bank maintains a network of overseas bases covering four major
Tokyo 103-0022, Japan
Asian cities. In addition to the Hong Kong Branch, which functions as
Phone: (03)3242-0082 Facsimile: (03)3277-0146
the Asian control center and offers full banking services, we have three
SWIFT Address: HABK JPJT
representative offices – Shanghai, Bangkok and Singapore.
Leveraging this network – one of the most powerful of any Japanese
Financial Market Department
regional bank – our staff of international banking specialists at◆ Tokyo Officeheadquarters and overseas offices stand ready to offer customers a wide
1-22, Nihonbashi Muromachi 4-chome, Chuo-ku,
range of support services to meet their needs in overseas transactions,Tokyo 103-0022, Japanoverseas business expansion and business development. The Bank continues
Phone: (03)3277-0082 Facsimile: (03)3246-4675
to be one of Japan’s leading regional banks in terms of the amount offoreign exchange transactions handled. The Bank offers to parent
companies in Japan the capital funds they need to expand overseas and the funds they need to finance their overseas subsidiaries(“parent-subsidiary loans”). And we are also promoting initiatives to expand cross-border loans whereby our domestic offices offer
direct loans to customers operating around the world, not only in Asia such as China, Thailand, Indonesia, Vietnam andPhilippines, but also in America or Europe (as of the end of March 2020). We also handle loans denominated in Thai Baht.
In addition, the Bank can meet the fund-raising needs of customers’ overseas subsidiaries by making the most of ourpartnership with leading overseas banks.

The Bank’s Board of Directors defines the basic policy regarding comprehensive risk management to ensure soundness ofmanagement and adequacy of its business operations. Targeted main risks are market risk, liquidity risk, operational risk andcredit risk as described in the Risk Management Organization Chart (see below). By managing these risks comprehensively andreflecting them in the decision-making process of executives, the Bank restrains risk amount to the appropriate level relative tothe Bank’s capacity. The Bank makes a profit plan and allocates management resources suited to each form of risk.
ALM and Comprehensive Risk Conference manages market risk, credit risk and liquidity risk. Compliance and Operational Risk
Conference manages operation risk, computer system risk, and other operational risk. Loan Management Conference manages
more diversified credit risks.

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Regarding Terminologies:
Loans to Customers in Bankruptcy
Of loans for which substantial doubt is judged to exist as to ultimate collectibility ofeither principal or interest because they are past due for a certain period or for otherreasons, the loans to customers who are alleged to commence legal corporate
rearrangement procedures under Company Rehabilitation Law, Bankruptcy Law, Civil
Rehabilitation Law, and/or to customers whose transactions with banks are suspended
by the rules of clearing house.
Past Due Loans
Of loans for which substantial doubt is judged to exist as to ultimate collectibility ofeither principal or interest because they are past due for a certain period or for otherreasons, the loans to customers other than customers in bankruptcy and customers on

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which the Bank granted concessions such as deferral of interest payments in order tosupport for their management reconstruction.
Loans Contractually Past Due 3 months or more
Loans, either principal or interest payment of which is contractually past due for 3
months or more; excludes loans to customers in bankruptcy and past due loans.
Restructured Loans
Loans to customers on which the Bank granted concessions such as reduction of thestated interest rate, deferral of interest payments, extension of maturity date, debt
forgiveness and other arrangements favoring customers to support for their
management reconstruction; excludes loans to customers in bankruptcy, past due loans
and loans contractually past due 3 months or more.

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Since its opening in May 1991, the Hong Kong Branch has been expanding withoffering the financial services to the customers. As a result, the Bank now handles
the large foreign exchange volume due to the Hong Kong Branch. Furthermore, theHong Kong Branch offers a wide range of services such as providing various
information, supporting business expansion for customers who seek to extend
business in China and other Asian countries. Aiming to satisfy various needs ofcustomers, the Hong Kong Branch has been offering renminbi-denominatedtransactions such as deposit, transfer and loan since 2010, and cross-border loans tocustomers’ subsidiaries in Southeast Asia and mainland China since 2012.
◆ Hong Kong Branch1602-05, 16F The Gateway Tower 2 25 Canton Road, Tsimshatsui, Kowloon, Hong Kong
Phone: 852-2845-4188 Facsimile: 852-2537-1757 SWIFT Address: HABKHKHHSingapore / Bangkok

Southeast Asia, together with China, has always attracted the attention of our customers as a region with strong growthpotential. Currently, there are over about 1,000 customer bases in ASEAN countries.
Singapore is the distribution, financial and economic center in Southeast Asia. The Bank established its Singapore
Representative Office in 1997. And in 2007, it established the Bangkok Representative Office, which is the first in Thailand
among all regional banks in Japan. Both offices collect and analyze information on
the rapidly changing social, financial and economic conditions in the region, andoffer the latest information to local customers. In cooperation with the Bank’s head
office and domestic branches, both offices help customers to expand their businesses
in Southeast Asia.
◆ Representative Office Registered in Singapore

16 Raffles Quay, #15- 05 Hong Leong Building, Singapore 048581
Phone: 65-6221-1182 Facsimile: 65-6221-0556◆ Bangkok Representative Office

Bhiraj Tower at EmQuartier 18th floor, Unit1804 689 Sukhumvit Road, North Klongton,
Vadhana, Bangkok 10110 Thailand Phone: 66-2261-8226 Facsimile: 66-2261-8227

Shanghai

China is an important huge market for Japan and Nagano Prefecture. Our customers
have established over 800 manufacturing and sales facilities in mainland China, andtheir making inroads to coastal regions are especially remarkable. Since its opening
in May 2002, the Shanghai Representative Office supports its customers in theirmaking inroads to China from various aspects and tries to provide them with every
kind of information from the city of Shanghai, which is the largest business city as
well as a center of the economy and finance in China. In addition, the Bank closed
Dalian Representative Office in October 2019, and integrated it into Shanghai
Representative Office.
◆ Shanghai Representative Office

6

8F, Hang Seng Bank Tower, 1000 Lujiazui Ring Road, Pudong New Area, Shanghai, China
Phone: 86-21-6841-1882 Facsimile: 86-21-6841-2118

7

Environmental Conservation Activities
Environmental Policy

Environmental Philosophy
The Hachijuni Bank Group positions environmental conservation activities as elements vital to corporate social responsibility and willcontribute to the creation of a sustainable regional community through positive and continual improvements in the environment.

Reduction Targets for Greenhouse Gas
Emissions

Change in GHG emissions

During FY2019, the Bank has reduced
GHG emissions by 18.8% from the baseyear of FY2013. The Bank set as a target
for FY2020 a 15% reduction in GHG
emissions from the base year of FY2013.





(Target of FY2020) Contribution tocustomers’ activities in environmental
improvements by providing
environment-friendly financial products

2 Reduction of internal
environmental burden(Target of FY2020) Achievement of
the reduction in both environmental
burden and the Bank’s costs throughenergy saving and resource
conservation

Environmental
conservation cost
Business area cost

(Target of FY2020) Contribution to
the regional community throughenvironmental volunteer activities



The Bank responded to the CDP 2019 (Climate Change) questionnaire and gained the comprehensive rating “B (management)”
that falls under the first rank group in the Japanese banking sector. CDP rated our business management particularly
highly for being conscious of climate change, and its steady reduction of greenhouse gas emissions by setting medium-and
long-term goals.
TCFD
As countries around the world continue to suffer serious damage from extreme weather and natural disasters in recent years,
initiatives to address climate change are spreading globally. Typhoon Hagibis, which swept through Japan last year, caused
damage in various parts of Nagano Prefecture and many local governments including Nagano Prefecture announced climate
emergency declarations. Against this backdrop, the Bank announced its support for TCFD in March 2020.

1RWH 7RHOLPLQDWHLQIOXHQFHVRI
LQFUHDVHGGHFUHDVHG
HPLVVLRQIDFWRUVRYHU*+*
HPLVVLRQVWKHHOHFWULFLW\)< )< )< )< )< )< )< )< )<
HPLVVLRQIDFWRULV
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7DUJHW\HDU
IL[HGDW



Energy-derived indirect emissions

Electricity

1 Purchased goods & services

Stationery, copying paper, water and sewage, etc.

2 Capital goods

Scope 3Heavy oil, kerosene, city gas, gasoline, propane gas

FY2019

2,661
7,894

10,307

14,701

2,872

2,600

All buildings belonging to the Bank, construction-in-progress
accounts and other tangible fixed assets

3,413

6,985

3 Fuel and energy-related activities notincluded in Scope 1 or 2

Heavy oil, kerosene, city gas, gasoline, propane gas,
electricity

1,040

1,549

4 Transportation and delivery (upstream)

Postage, transportation

744

1,526

5 Waste generated in operations

All forms of waste

52

41

6 Business travel

Business trips

570

522

CommutingTotal

Note1 : Categories 8, 9, 10, 11, 12, 13 and 14 of scope 3 were zero. Category 15 of scope 3 was not calculated.
Note 2 : The above figures were authorized by Lloyd’s Register Quality Assurance Limited ( LRQA) as the third party guarantee.

8

2,755

(Unit : t-CO 2)

9,162

7 Employee commuting

69

699

(millions of yen)

Income from environment-related
Item
loans

(millions of yen)

31
FY2019Pollution
prevention
cost
Business
area
cost

690

0
699

Globalenvironmental
Resource
circulation costconservation cost (*1)

30
39

31
668

Pollution prevention
Administrative
activitycost
cost

660

0
65

Global environmental
Personnel costcost (*1)
conservation(*3 ) EB contracts
Cost
savedfrom
Income

39
42

668
42

Total
Income from ISO14001 consultations

66
11

65
14

*1 Installation
Cost
saved (*3 )cost of LED, renewal cost of air conditioners,
20
7

42
3

42
4

11
10

14
5

Maintenance of environmental(*2 )Socialactivity costmanagement
system

3
17

184

Total
Monitoring of environmental burden

152
10

7825

Social activity cost (*2 )

17

18

Total

152

782

FY20181,554

FY2019
1,351

1,591
25

1,369
9

1,554
12

1,351
9

20
25

7
9

1,611
12

1,376
9

IncomeIncome from EB contracts

Income from environment-related
Incomeloans from ISO14001 consultations

installation cost of solar power generation systems*2 Support funds for “Hachijuni-no-Mori,” donations to
Total
1,376
1,611
Nagano Environment Conservation Associations*3 The amount reduced in utilities expenses, supplies*1 Installation
costof LED,forrenewal
costofofwastes
air conditioners,
expenses andexpensesdisposingthrough(stated byinstallation
cost of solar
power
generation
systems
energy and resourcesavingeffortsstraight*2 Support
funds
forthe“Hachijuni-no-Mori,”comparison
withprevious fiscal year)donations to
NaganoEnvironment
Conservation
figure means
an increaseAssociations
from the previous fiscal
A negative*3 Theyear.amount reduced in utilities expenses, supplies
expenses and expenses for disposing of wastes throughenergy and resource saving efforts (stated by straightcomparison with the previous fiscal year)
A negative figure means an increase from the previous fiscal
year.

CO 2 emission reduced by the Bank’s internal efforts (by straight comparison with the previous fiscal year)

FY2018(millions of yen)

Item
FY2018 FY2019
Economic benefit associated with environmental
conservation
activities
Income1,591
1,369Classification

Current State of Greenhouse Gas Emissions

Beginning in FY2014, the Bank has calculated GHG emissions up to Scope 3, including emissions in its supply chains.

％





Environmental conservation benefit (Reduction of carbon dioxide emission)

Our Initiatives to Address Global Warming

Direct emissions％ ％30
FY2018Personnel costof environmental
Maintenancemanagement system
Disclosure of environment
information
andadvertisement
Monitoring ofenvironmental
burdenOur replies to CDP rewarded with No. 1 rank in the banking sector

Scope 2



Resource circulation
cost
Classification

Disclosure of activity
environment
Administrative
cost
information and advertisement

TopicsScope 1

Results of Environmental
Accounting
for Fiscal Year 2018
Classification
FY2018 FY2019

3 Contribution to the regional
economy and reinforcement ofenvironmental education

Items

（8QLW:ｔ&2）(millions of yen)Three Pillars
1 Environmental conservation
activities by the Bank’s corebusiness 



Action Program
1. The Group will try to prevent pollution, mitigate the effects of climate change and adapt to climate change by accurately
determining the impact of its activities on the environment as well as the impact from the external environment, and will set,achieve, and review its environmental objectives.
2. The Group will comply with all laws, regulations, and agreements concerning the environment.
3. The Group will make efforts to conserve resources and energy toward reducing environmental burden.
4. By providing financial products, services, and information, the Group aims to support its clients who are directly involved withenvironmental preservation, thereby contributing to improving the local environment.
5. Recognizing the importance of biodiversity which is a blessing of nature, the Group will work to preserve biodiversity.
6. All officers and employees of the Group, and their families, will engage in activities for environmental conservation, as wellas enhance their awareness of environmental issues.



1,616

1,478

22,22325,256(t- CO 2)

FY2018317

FY2019503(t- CO 2)

CO 2 emission reduced by customers throughthe help of the Bank’s core businesses
Classification

481,745
FY2018556,486
FY2019Total
CO 2 emission reduced by the Bank’s internal efforts (by straight comparison with the previous fiscal year)

482,062317

556,989503

CO 2 emission reduced by customers through the help of the Bank’s core businesses

481,745556,486

ISO14001 Certification

The
TotalBank received the ISO14001 certification for its head office in March 1999, which was a first for
482,062
556,989a regional bankin Japan.
It expanded the scope of this certification to all domestic branches in March 2002. A total of 165 offices (as of March 31, 2020)and nearly 5,400 employees are involved in this effort.

Contribution to the Region and SocietyAs members of the “Hachijuni Volunteer Club,” our employees are encouraged to participate in various social activities which
include community cleaning campaigns, forest management programs, collaborations in events, and others. Our offices are also
working actively in their own unique ways by cooperating in major events such as the “Nagano Prefecture Judan Ekiden (ekiden
relay race through Nagano Prefecture),” welfare-related activities and collection volunteers, along with environmental volunteer
activities. During FY2019, a total of around 6,600 of our employees worked as volunteers.
To further support volunteers and motivate them, the Bank introduced the “Special Holiday System to Encourage Volunteer
Activities.”
The Bank established the “Nagano Economic Research Institute” in 1984 as a think tank to contribute to the advancement anddevelopment of the regional community in response to its highly sophisticated needs.
The Bank also established the “Hachijuni Culture Foundation” in 1985 to contribute to the development of the regional
community, specifically in arts and culture.
9

Shoichi Yumoto
President

Masaki Matsushita
Deputy President

Yoshimi Kitazawa
Audit & Supervisory Board Member

Hiroyuki Miyahara
Managing Director

Takahiko AsaiManaging Director

Kiyohito Yamasawa
Outside Audit & Supervisory Board Member

Yuichi SatoManaging Director

Muneo Yoshie
Managing Director

Shinji SatoManaging Director

Kayo Tashita
Director (Outside Director)

Takeshi Kadota
Outside Audit & Supervisory Board Member

Hideo Funami
Director

Chishu Minemura
Audit & Supervisory Board Member

Yasuyoshi Wada
Outside Audit & Supervisory Board Member（as of June 19, 2020）

The ratio of outside directors : 20%
The ratio of female directors : 10%

Sokichi Kurosawa
Director (Outside Director)

Shareholders’ Meeting

Audit & Supervisory Board Members, Audit & Supervisory Board

Board of Directors
Management
Committee

Branches and Sub-Branches
Operation Centers

Business Planning Department

President
Deputy PresidentManaging Directors

Business Promotion Department
International Department
Financial Market Department
Loan Control Department
Operations Administration Department
Computer Systems Department
Planning and Coordination Department

Nominating and Compensation
Committee*

Personnel Department
General Secretariat
General Affairs Department
Risk Management Department
Tokyo Liaison OfficeInternal Audit Department＊ It is not a committee pursuant to the Companies Act but established voluntarily by the Bank.

（as of June 19, 2020）

Date ofestablishment

The Hachijuni Bank, Ltd.

Hachijuni Securities Co., Ltd.
Hachijuni Lease Co., Ltd.
Hachijuni Card Co., Ltd.
Hachijuni Credit Guarantee Co., Ltd.
Hachijuni System Development Co., Ltd.
Hachijuni Capital Co., Ltd.
Hachijuni Staff Service Co., Ltd.
Yamabiko Services Co., Ltd.
Hachijuni Auto Lease Co., Ltd.

Numberof sharesin thousands
The Master Trust Bank of Japan, Ltd. (Trust Account)
26,509Japan Trustee Services Bank, Ltd. (Trust Account)
21,111
Meiji Yasuda Life Insurance Company
17,867
Nippon Life Insurance Company
17,000Japan Trustee Services Bank, Ltd. (Trust Account 9)
14,560
Name

%
5.41
4.31
3.65
3.47
2.97

Line of business

May 1949

Securities business

June 1974

Leasing

August 1982

Credit card business

December 1983

Guarantee to consumer loan

December 1983

Development of computer systems

September 1984

Venture capital for high-tech companies

September 1986

Placement of temporary working staff

June 2000

Credit collection and management

October 2005

Leasing（as of June 19, 2020）

Numberof sharesin thousands
State Street Bank and Trust Company 505223
13,708MUFG Bank, Ltd.
12,364Shin-Etsu Chemical Co., Ltd.
11,830Showa Shoji Co., Ltd.
11,820
Aioi Nissay Dowa Insurance Co., Ltd.
11,091
Name

%
2.80
2.52
2.41
2.41
2.26

（as of March 31, 2020）

10

11

12

13

Consolidated Statement of Income
Year Ended March 31, 2020

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17

Notes to Consolidated Financial Statements
Year Ended March 31, 2020

1. BASIS OF PRESENTATION OF CONSOLIDATEDFINANCIAL STATEMENTS

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 and the Enforcement Regulation
for the Banking Law, and in accordance with accounting
principles generally accepted in Japan (Japanese GAAP), which
are different in certain respects as to the application anddisclosure requirements of International Financial ReportingStandards (IFRS).
In preparing these consolidated financial statements, certain
reclassifications and rearrangements have been made to theconsolidated financial statements issued domestically in orderto present them in a form that is more familiar to readers
outside Japan. In addition, certain reclassifications have been
made in the 2019 consolidated financial statements to conformto the classifications used in 2020.
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 consolidated financial statements are stated in Japaneseyen, the currency of the country in which The Hachijuni Bank,
Ltd. (the "Bank") is incorporated and operates. The translationsof Japanese yen amounts into U.S. dollar amounts are included
solely for the convenience of readers outside Japan and havebeen made at the rate of ¥108.66 to $1, the rate of exchange at
March 31, 2020. 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.

Trading income includes interest received and paid during
the fiscal year and unrealized gains and losses resulting
from the change in the value of securities, monetary claimsbought, and derivatives between the consolidated balance
sheet dates.
d. Securities _ Securities other than investments inunconsolidated subsidiaries and associated company areclassified into three categories, based principally on theGroup's intent, as follows: (a) trading securities are
securities held in anticipation of gains arising fromshort‑term changes in market value and/or held for resale tocustomers and are carried at fair value with corresponding
unrealized gains and losses recorded in income;(b) held‑to‑maturity debt securities, which are expected tobe held to maturity with the positive intent and ability tohold to maturity, are stated at amortized cost computed
using straight‑line method; and (c) available-for-salesecurities, which are not classified as either of theaforementioned securities. Marketable available‑for‑salesecurities are stated at fair value with unrealized gains andlosses, net of applicable taxes, reported in a separate
component of equity. Available‑for‑sale securities for whicha fair value is not reliably determined are stated at costcomputed using the moving‑average method.

2.SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES

In addition, investments in unconsolidated subsidiaries andassociated company that are not accounted for by the equity
method are carried at cost determined by themoving‑average method.

a.	Consolidation _ The consolidated financial statements as ofMarch 31, 2020, include the accounts of the Bank and its
nine significant subsidiaries (together, the "Group").

Individual securities are written down when a decline in fairvalue below the cost of such securities is deemed to be otherthan temporary.

Under the control and influence concepts, those companies
in which the Bank, directly or indirectly, is able to exercise
control over their operations are fully consolidated.
Investments in five (six in 2019) unconsolidated subsidiaries
and in two associated companies are stated at cost, and areincluded in securities in the consolidated financial
statements. If the equity method of accounting had been
applied to the investments in these companies, the effect on
the accompanying consolidated financial statements would
not be material.
All significant intercompany balances and transactions havebeen eliminated in consolidation. All material unrealized
profit included in assets resulting from transactions within
the Group is eliminated.

b. Cash Equivalents _ For the purpose of reporting of cash
flows, "Cash and cash equivalents" consists of "Cash" and"Due from the Bank of Japan."c. Trading Assets and Liabilities _ Transactions for trading
purposes (for purposes of seeking to capture gains arisingfrom short‑term changes in interest rates, currency exchange
rates, or market prices of securities and other market‑related
indices or from gaps among markets) are included in"Trading assets" and "Trading liabilities" on a trade‑datebasis.

18

Trading securities and monetary claims bought for trading
purposes are stated at fair value at the consolidated balance
sheet date. Trading‑related financial derivatives, such as
swaps, futures, and options are stated at amounts that would
be received or paid for settlement if such transactions were
terminated at the consolidated balance sheet date.

e. Securities in Money Held in Trust _ Securities included in"Money held in trust" are stated at fair value.

f.	
P roperty, Plant, and Equipment _ Property, plant, andequipment are stated at cost less accumulated depreciation.
Depreciation for buildings and equipment of the Group iscomputed under the declining‑balance method at rates basedon the estimated useful lives, which are principally from 1
to 50 years for buildings and from 3 to 20 years forequipment.
g. Software _ Capitalized software for internal use isdepreciated using the straight‑line method over its estimateduseful life (principally 5 years).
h. Long‑Lived Assets _ The Group reviews its long‑lived assets
for impairment whenever events or changes in circumstancesindicate the carrying amount of an asset or asset group may
not be recoverable. An impairment loss would be recognized
if the carrying amount of an asset or asset group exceeds thesum of the undiscounted future cash flows expected to result
from the continued use and eventual 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 the higher of the
discounted cash flows from the continued use and eventual
disposition of the asset or the net selling price at disposition.

i. Allowance for Credit Losses _ The allowance for credit
losses is recorded as follows in accordance withpredetermined amortization and allowance standards.
(a) Claims on obligors in which facts of legal or formal
management failure have occurred, such as bankruptcy,
corporate rehabilitation, and transaction suspension at aclearing house, and debtors who are unable to meet their
obligations. Claims in excess of collateral are recorded
for any amounts that may not be recovered.
(b)Also, for obligors debtors to obligors who are notcurrently in a state of business failure but are likely topotentially fall into business failure in the future, theexpected amount of collateral disposal and the expectedamount of recovery by guarantee are deducted from theamount of the loan. Of the remaining balance(hereinafter referred to as "non-conservation amount"),
the amount deemed necessary is recorded.
For large obligors with a certain amount of credit or
more, the bank estimates the Allowance for loan by themethod below.
(1)The bank comprehensively judges an obligor’ssituation and estimates a recoverable amounts by cashflow.
(2)The allowance for loan is the balance of nonconservation amounts less the recoverable amounts
estimated step 1.
For debtors of debtors other than those mentioned
above, an allowance for loan losses is provided bymultiplying the non-conservation amount by the
expected loss rate calculated from the bankruptcy
probability from past periods.
(c)For claims against the obligor who have loans withrevised lending terms and increased monitoring the
debtor, the difference between the cash flow discounted
at the original contracted interest rate and the carrying
amount of the receivable would be recorded as theallowance for loan losses.
(d)For creditors to debtors other than (a) to (c) , theallowance for loan losses is recorded based on the
expected loss rate calculated from the probability ofbankruptcy in the past certain period.
(Note1) Grouping in calculating the probability of bankruptcy
The probability of bankruptcy is allocated to six categories,
including one normal division, three cautionable divisions
and two bankruptcy concerns.
Cautionable divisions are classified according to thecomprehensive judgment of the creditworthiness of theobligor and the existence of loans with relaxed loan terms.
(Note2) A certain period in which the expected loss rate willbe estimated in the future
Allowance for doubtful accounts is determined based on the
expected loss rate for normal loans over the next one year
and for loans requiring attention over the period
corresponding to the average remaining life of the loans.
(Note3) Changes in the probability of bankruptcy probability
and future prospects
The probability of bankruptcy used to calculate theallowance is determined by comparing the average value ofthe last three calculation periods with the long-term averagevalue, considering the entity’s business cycle. The averagevalue for the three most recent calculation periods is
calculated by including necessary revisions such as thecurrent circumstances and future projections.
Based on the self-assessment standard of assets, allreceivables are assessed by the asset assessment
department, which is independent from the sales
department, and the internal audit department provides anassessment of these results.

j. Asset and Liability for Employees' Retirement Benefits _The Bank and its consolidated subsidiaries have acontributory funded pension plan and noncontributory
unfunded retirement benefit plans, together covering
substantially all of their employees.
The Bank accounts for the liability for retirement benefits
based on the projected benefit obligations and plan assets atthe balance sheet date. The projected benefit obligations are
attributed to periods on a benefit formula basis. Actuarial
gains and losses that are yet to be recognized in profit orloss are recognized within equity (accumulated othercomprehensive income), after adjusting for tax effects andare recognized in profit or loss over 10 years no longer thanthe expected average remaining service period of theemployees.
k. Provision for Reimbursement of Deposits _ A provision
for reimbursement of deposits, which were derecognized asliabilities under certain conditions, is provided for possible
losses on future claims of withdrawal based on historicalreimbursement experience.
l. Provision for Contingent Losses _ A provision forcontingent losses is provided for the contribution to the
National Federation of Credit Guarantee Corporations'liability sharing program and is recorded in the amount of
estimated future contributions based on subrogate
performance, etc.
m.	Reserve under Special Laws _ A reserve under special
laws is provided for contingent liabilities from brokering of
securities or derivative transactions in accordance with
Article 46‑5 of the Financial Instruments and ExchangeAct.
n. Stock Options _ In December 2005, the AccountingStandards Board of Japan ("ASBJ") issued ASBJ Statement
No. 8, "Accounting Standard for Stock Options," and related
guidance that require companies to recognize compensation
expense for employee stock options based on the fair value
at the date of grant and over the vesting period as
consideration for receiving goods or services. The standard
also requires companies 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, the stock option is presented asa stock acquisition right as a separate component of equity
until exercised. The standard covers equity‑settled,share‑based payment transactions, but does not covercash‑settled, share‑based payment transactions.
o. Leases _ Finance leases that are deemed to transfer
ownership of the leased property to the lessee arerecognized as lease receivables, and finance leases that are
not deemed to transfer ownership of the leased property to
the lessee are recognized as investments in lease.
p. Income Taxes _ The provision for income taxes iscomputed based on the pretax income included in the
consolidated statement of income. The asset and liability
approach is used to recognize deferred tax assets andliabilities for the expected future tax consequences of
temporary differences between the carrying amounts andthe tax bases of assets and liabilities. Deferred taxes aremeasured by applying currently enacted income tax rates tothe temporary differences.

19

6HFXULWLHV1DWLRQDOJRYHUQPHQWERQGV
1DWLRQDOJRYHUQPHQWERQGV/RFDOJRYHUQPHQWERQGV/RFDOJRYHUQPHQWERQGV&RUSRUDWHERQGV&RUSRUDWHERQGV(TXLW\VHFXULWLHV(TXLW\VHFXULWLHV
2WKHUVHFXULWLHV
2WKHUVHFXULWLHV
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q. Foreign Currency Transactions _ Assets and liabilities
denominated in foreign currencies held domestically andthe accounts of the Bank's overseas branch are translated
into Japanese yen generally at the exchange rates prevailingon the consolidated balance sheet date.
r. Derivatives and Hedging Activities _ Derivatives arestated at fair value. Derivative transactions that meet hedge
accounting criteria are primarily accounted for under thedeferral method whereby unrealized gains and losses aredeferred until maturity as deferred gain (loss) under hedge
accounting in a separate component of equity.
The hedging derivative instruments must be highly effectivein achieving offsetting changes in fair values or variable
cash flows from the hedged items attributable to the risk
being hedged.
The Bank adopted portfolio hedging in accordance with
Industry Audit Committee Report No. 24 issued by theJapanese Institute of Certified Public Accountants("JICPA"). Under portfolio hedging, a portfolio of hedged
items, such as deposits or loans with common maturities, ismatched with a group of hedging instruments, such as
interest rate swaps, which offset the effect of fair value
fluctuations of the hedged items by identified maturities.
The effectiveness of the portfolio hedge is accessed by eachgroup.
Currency swap and foreign exchange swap transactions areaccounted for using deferral hedge accounting by fully
applying Industry Audit Committee Report No. 25 issued
by the JICPA. Under deferral hedge accounting, hedged
items are identified by grouping the foreign
currency‑denominated financial assets and liabilities by
currencies and designating derivative transactions, such as
currency swap transactions and forward exchange contracts
as hedging instruments. Hedge effectiveness is reviewed bycomparing the total foreign currency position of the hedged
items and hedging instruments by currency.
With respect to derivative transactions between
consolidated subsidiaries or internal transactions between
trading accounts and other accounts, the Bank manages
interest rate swap and currency swap transactions
designated as hedging instruments in accordance with thestrict hedging criteria for external mirror transactions
stipulated in the Industry Audit Committee Reports No. 24
and No. 25. Therefore, the Bank accounts for the gains andlosses on these swap transactions in its earnings or defers
until maturity as deferred gain (loss) under hedge
accounting in a separate component of equity.
The interest rate swaps that qualify for hedge accounting
and meet specific matching criteria are not measured at fairvalue but the net payments or receipts under the swap
agreements are recognized and included in interest expense
or income.
s. Per Share Information _ Basic net income per share("EPS") is computed by dividing net income available tocommon shareholders by the weighted‑average number ofcommon shares outstanding for the period, retroactively
adjusted for stock splits.
Diluted EPS reflects the potential dilution that could occur
if securities were exercised or converted into common
stock. Diluted EPS of common stock assumes fullconversion of the outstanding convertible notes and bonds
at the beginning of the year (or at the time of issuance) with
an applicable adjustment for related interest expense, net oftax, and full exercise of outstanding warrants.

20

Cash dividends per share presented in the accompanying
consolidated statement of income are dividends applicableto the respective years including dividends to be paid after
the end of the fiscal year.
t. New Accounting Pronouncements _Accounting Standard for Fair Value Measurement (ASBJ
Statement No.30 on July 4, 2019)
Implementation Guidance on Accounting Standard for
Fair Value Measurement (ASBJ Guidance No.31 on July4, 2019)
Accounting Standard for Financial Instruments (ASBJ
Statement No.10 on July 4, 2019)
Implementation Guidance for Disclosure of Fair Value of
Financial Instruments (ASBJ Guidance No.19 on March
31, 2020)(a) Overview
In order to enhance comparability of financial statements
among domestic and overseas companies, ASBJ developed
an “Accounting Standard for Fair Value Measurement” andissued a new standard together with its implementation
guidance. The section which adopted the accounting
standard and implementation guidance are financial
instruments defined by “Accounting Standard for Financial
Instruments”(b) Scheduled date of adoption
The companies expect to adopt the accounting standard andimplementation guidance from the beginning of the fiscal
year ending March 31, 2022(c) Impact of the adoption of accounting standard andimplementation guidance
The companies are currently evaluating the impact of the
adoption of this accounting standard and implementation
guidance on the financial statements
Accounting Standards for Disclosure of Accounting
Estimates (ASBJ Statement No.31 on March 31, 2020)(a) Overview
Accounting standards for disclosure of accounting
estimates, referred to the provisions of paragraph 125 of
IAS 1 "Presentation of financial statements" and referred tocorporate accounting. This standard was developed andpublished by the standards committee. Requirements
include expanded individual notes as a basic policy fordevelopment rather than showing the principle (disclosure
purpose), and the specific disclosures should be determinedby the company based on the facts and circumstances.
(b) Scheduled date of adoption
The companies anticipate adopting the new accounting
standards for disclosures of accounting estimates from theend of the fiscal year ending March 31, 2021.
u. Additional Information _ The Bank assumes that thecredit risk of loans and claims will be affected to someextent and the financial capacity for repayment of
obligators will weaken because of the spread of the novel
coronavirus(“COVID-19” ) infection. However, the Bank
calculates the allowance for credit losses based on theassumption that credit losses will not significantly
increase.
The assumption is uncertain. Therefore, the performanceof the Bank for on and after the fiscal year ended March
31, 2021, may be affected depending on the COVID-19
infection and its impact on the economic environment.

3. CASH AND CASH EQUIVALENTS
The reconciliation of "Cash and cash equivalents" in the
consolidated statement of cash flows and "Cash and due frombanks" in the consolidated balance sheet as of March 7KRXVDQGVRI
31, 2020 and
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2019, was as follows:86'ROODUV
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4. TRADING ASSETS AND LIABILITIES
Trading assets and liabilities as of March 31, 2020 and 2019,consisted of the following:
7KRXVDQGVRI
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    
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5. MONEY HELD IN TRUST 

The aggregate fair value of money held in trust that is listed on
stock exchanges or over‑the‑counter markets as of March 31, 2020
and 2019, is as follows:)DLU9DOXH
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0RQH\KHOGLQWUXVW³7UDGLQJ  6. SECURITIESSecurities as of March 31, 2020 and 2019, consisted of thefollowing:
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(TXLW\VHFXULWLHV
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  
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The securities placed under unsecured lending agreements areincluded in the above national government bonds in the amount of¥186,244 million ($1,714,015 thousand) and ¥173,166 million as of
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March 31,2020 and 2019, respectively.
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9DOXH*DLQVplacement/RVVHV(defined&RVWin private
Guarantee obligations for bondsinArticle 2 (3) of Financial Instruments and Exchange Act) included
6HFXULWLHVFODVVLILHGDV
in$YDLODEOHIRUVDOH
securities were ¥45,268 million ($416,604 thousand) and and
 
(TXLW\VHFXULWLHV 31,2020¥37,357
million as of March
2019,
respectively.
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In thefollowing description, 
in addition 
to "Securities" beneficial interests
+HOGWRPDWXULW\
consolidatedbalance sheet, also presented
arein trust investments within the item "Monetary claims bought."
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The carrying amounts and aggregate fair value of the securities asof March 31, 2020 and 2019, are as follows:
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Proceeds from sales of available‑for‑sale securities for the years
ended March 31, 2020 and 2019, were ¥758,063 million($6,976,472 thousand) and ¥808,800 million, respectively. Gross&DUU\LQJ$PRXQW
realized gains and losses on these sales, computedon themoving‑average cost basis, were ¥16,640 million&DUU\LQJ$PRXQW
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thousand),
respectively, for the year ended March 31, 2020, and¥15,915
million and ¥3,944 million, respectively, for the year
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
(TXLW\VHFXULWLHV
ended
March 31, 2019.
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7.
LOANS AND BILLS DISCOUNTED+HOGWRPDWXULW\


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Loansand bills discounted as of March 31, 2020 and 2019,
6KDUHVRIVXEVLGLDULHVDQGDIILOLDWHGFRPSDQLHV
consisted of the following:

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Of total loans, loans to customers in bankruptcy, which represent
nonaccrual loans and which were included in loans and bills
discounted, amounted to ¥2,982 million ($27,451 thousand) and¥5,556 million as of March 31, 2020 and 2019, respectively; past
due loans, which represent nonaccrual loans other than loans tocustomers in bankruptcy, amounted to ¥51,968 million($478,269 thousand) and ¥53,711 million as of March 31, 2020 and
2019, respectively.
Of total loans, accruing loans contractually past due three months
or more amounted to ¥237 million ($2,185 thousand) and¥203 million as of March 31, 2020 and 2019, respectively.
Of total loans, restructured loans amounted to ¥22,908 million($210,827 thousand) and ¥16,525 million as of March 31, 2020 and
2019, respectively. Restructured loans, designed to assist in therecovery of the financial health of debtors, were loans on which
the Bank granted concessions (e.g., reduction of the stated interest
rate, deferral of interest payment, extension of maturity date,
reduction of the face amount). Loans classified as nonaccrualloans or accruing loans contractually past due three months ormore were excluded from restructured loans.

21

%DODQFHDWHQGRI\HDU

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8. FOREIGN EXCHANGES
Foreign exchanges as of March 31, 2020 and 2019, consisted of thefollowing:
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Property, plant, and equipment as of March 31, 2020 and 2019, netof accumulated depreciation of ¥72,335 million($665,700 thousand) and ¥71,552 million, respectively, consistedof the following:
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As of March 31, 2020 and 2019, deferred gains for tax purposes of¥7,921 million ($72,904 thousand) and ¥8,207 million,
respectively, on property, plant, and equipment sold and replacedwith similar assets have been deducted from the cost of newly
acquired property, plant, and equipment.

10. ACCEPTANCES AND GUARANTEES
Acceptances and guarantees include all contingent liabilities
associated with the issuance of letters of credit, acceptances ofbills, and issuances of guarantees. The contra account included in
the assets side of the consolidated balance sheet represents the
Bank's potential claim against applicants.
11. ASSETS PLEDGED
Assets pledged as collateral as of March 31, 2020 and 2019,consisted of the following:
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22

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9. PROPERTY, PLANT, AND EQUIPMENT AND
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addition to the above, assets
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12. DEPOSITS

Deposits as of March 31, 2020 and 2019, consisted of the
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13. BORROWED MONEY
As of March 31, 2020 and 2019, the weighted‑average annualinterest rates applicable to borrowed money were 0.17% and0.28%, respectively.
Borrowed money includes borrowings from the Bank of Japan andother financial institutions. Annual maturities of borrowed money
as of March 31, 2020, were as follows:<HDU(QGLQJ0DUFK

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14. RETIREMENT AND PENSION PLANS

The Bank and its domestic consolidated subsidiaries have acontributory funded pension plan and noncontributory unfunded
retirement benefit plans.
In the contributory funded pension plan, the Group adopted a cash
balance plan that each employee has a "hypothetical accountbalance," which accumulates pay credits based on each salarylevel, interest credits based on the trend of market interest rate,
and pay retirement lump‑sum grants or pension, based on theirsalary and length of service. Some funded pension plan
contributed to employee pension trust.

 

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In the noncontributory unfunded plan, the Group pays retirement
lump‑sum grants based on salary and length of service.
Employees whose service with the Bank or its domestic
consolidated subsidiaries is terminated are, under mostcircumstances, entitled to retirement and pension benefits
determined by reference to basic rates of pay at the time oftermination, length of service, and conditions under which thetermination occurs. If the termination is involuntary, caused byretirement at the mandatory retirement age or death, the employee
is typically entitled to a larger payment than in the case ofvoluntary termination.
In addition, some consolidated subsidiaries adopt the simplified
method to calculate their liability for employees' retirement benefit
and retirement benefit costs.
(1) The changes in defined benefit obligation, excluding the ones
calculated by the simplified method, (3) below, for the years
ended March 31, 2020 and 2019, were as follows:

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(2) The changes in plan assets, excluding the ones calculated by thesimplified method, (3) below,
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2020 and 2019, were as follows:
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0LOOLRQVRI<HQ retirement benefits
 7KRXVDQGVRI(3) The changes in liability for employees'
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calculated by the simplified
for 
the years
ended
March
31,
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

2020 and 2019, were as follows: 
 
%DODQFHDWEHJLQQLQJRI\HDU  7KRXVDQGVRI%DODQFHDWEHJLQQLQJRI\HDU  
0LOOLRQVRI<HQ
1HWSHULRGLFEHQHILWFRVW1HWSHULRGLFEHQHILWFRVW 86'ROODUV





%HQHILWVSDLG




%HQHILWVSDLG








,QFUHDVHGXHWRFKDQJHIURPVLPSOLILHG,QFUHDVHGXHWRFKDQJHIURPVLPSOLILHG
PHWKRG WRSULQFLSOHPHWKRGDVD %DODQFHDWEHJLQQLQJRI\HDU




PHWKRG WRSULQFLSOHPHWKRGDVDUHVXOWRIPHUJHU1HWSHULRGLFEHQHILWFRVW



UHVXOWRIPHUJHU




%HQHILWVSDLG



   
%DODQFHDWHQGRI\HDU,QFUHDVHGXHWRFKDQJHIURPVLPSOLILHG 
    
%DODQFHDWHQGRI\HDUPHWKRG WRSULQFLSOHPHWKRGDVDUHVXOWRIPHUJHU 7KRXVDQGVRI
7KRXVDQGVRI
0LOOLRQVRI<HQ
0LOOLRQVRI<HQ
86'ROODUV
86'ROODUV %DODQFHDWHQGRI\HDU
 




  
)XQGHGGHILQHGEHQHILWREOLJDWLRQ 

)XQGHGGHILQHGEHQHILWREOLJDWLRQ 
7KRXVDQGVRI


3ODQDVVHWV


0LOOLRQVRI<HQ


3ODQDVVHWV
  86'ROODUV






  

7RWDO


  

7RWDO



8QIXQGHGGHILQHGEHQHILW   
)XQGHGGHILQHGEHQHILWREOLJDWLRQ
8QIXQGHGGHILQHGEHQHILWREOLJDWLRQ





3ODQDVVHWV


REOLJDWLRQ



1HWDVVHWDULVLQJIURPGHILQHG
  

7RWDO



1HWDVVHWDULVLQJIURPGHILQHG

 EHQHILWREOLJDWLRQ 

 
8QIXQGHGGHILQHGEHQHILW
 EHQHILWREOLJDWLRQ 

 
REOLJDWLRQ


7KRXVDQGVRI
7KRXVDQGVRI
1HWDVVHWDULVLQJIURPGHILQHG
0LOOLRQVRI<HQ
0LOOLRQVRI<HQ
86'ROODUV
 86'ROODUVEHQHILWREOLJDWLRQ   









%DODQFHDWEHJLQQLQJRI\HDU


 
%DODQFHDWEHJLQQLQJRI\HDU  


1HWSHULRGLFEHQHILWFRVW



1HWSHULRGLFEHQHILWFRVW






%HQHILWVSDLG






%HQHILWVSDLG





,QFUHDVHGXHWRFKDQJHIURPVLPSOLILHG,QFUHDVHGXHWRFKDQJHIURPVLPSOLILHG
PHWKRGWRSULQFLSOHPHWKRGDVDPHWKRG WRSULQFLSOHPHWKRGDVD(4) Reconciliation between the asset and liability UHVXOWRIPHUJHU
recorded in theUHVXOWRIPHUJHU
consolidated balance sheet and the balances of defined benefit

%DODQFHDWHQGRI\HDU

 that%DODQFHDWHQGRI\HDU
by


obligation and plan assets,
includingcalculatedthe
simplified method (3) above is as follows:
7KRXVDQGVRI
7KRXVDQGVRI
0LOOLRQVRI<HQ
0LOOLRQVRI<HQ
86'ROODUV
86'ROODUV









)XQGHGGHILQHGEHQHILWREOLJDWLRQ
  
)XQGHGGHILQHGEHQHILWREOLJDWLRQ 

 
3ODQDVVHWV





3ODQDVVHWV





 
7RWDO






7RWDO



8QIXQGHGGHILQHGEHQHILW
8QIXQGHGGHILQHGEHQHILWREOLJDWLRQ


REOLJDWLRQ


1HWDVVHWDULVLQJIURPGHILQHG
1HWDVVHWDULVLQJIURPGHILQHG
EHQHILWREOLJDWLRQ


EHQHILWREOLJDWLRQ
 


/LDELOLW\IRUHPSOR\HHV/LDELOLW\IRUHPSOR\HHV UHWLUHPHQW
UHWLUHPHQWEHQHILWVEHQHILWV$VVHWIRUHPSOR\HHV$VVHWIRUHPSOR\HHV UHWLUHPHQWEHQHILWVUHWLUHPHQWEHQHILWV



 

 
7KRXVDQGVRI
7KRXVDQGVRI
0LOOLRQVRI<HQ
0LOOLRQVRI<HQ
86'ROODUV
86'ROODUV













1HWDVVHWDULVLQJIURP
1HWDVVHWDULVLQJIURP

GHILQHGEHQHILWREOLJDWLRQ
GHILQHGEHQHILWREOLJDWLRQ 








 
 






 






 


(5) The components of net periodic benefit costs for the years
ended March 31, 2020 and 2019, were as follows:
0LOOLRQVRI<HQ

7KRXVDQGVRI
86'ROODUV



       
6HUYLFHFRVW,QWHUHVWFRVW
 7KRXVDQGVRI 


([SHFWHGUHWXUQRQSODQDVVHWV
0LOOLRQVRI<HQ
86'ROODUV


5HFRJQL]HGDFWXDULDOJDLQV






1HWSHULRGLFEHQHILWFRVWVFDOFXODWHGE\WKHVLPSOLILHGPHWKRG
       
6HUYLFHFRVW
2WKHUV





,QWHUHVWFRVW 7KRXVDQGVRI 



([SHFWHGUHWXUQRQSODQDVVHWV
0LOOLRQVRI<HQ
1HWSHULRGLFEHQHILWFRVWV
 


5HFRJQL]HGDFWXDULDOJDLQV 


86'ROODUV
1HWSHULRGLFEHQHILWFRVWVFDOFXODWHGE\



WKHVLPSOLILHGPHWKRG
 7KRXVDQGVRI
0LOOLRQVRI<HQ







6HUYLFHFRVW

2WKHUV



(6) Amounts recognized in other comprehensive income
86'ROODUV(before benefit ,QWHUHVWFRVW
income tax effect) in respect ofdefinedretirementplans 
 
 


([SHFWHGUHWXUQRQSODQDVVHWV
1HWSHULRGLFEHQHILWFRVWV
7KRXVDQGVRI
for the years ended March
31,0LOOLRQVRI<HQ
2020
2019,
were
as follows:


$FWXDULDOORVVHV





5HFRJQL]HGDFWXDULDOJDLQV and86'ROODUV
1HWSHULRGLFEHQHILWFRVWVFDOFXODWHGE\
7KRXVDQGVRI



0LOOLRQVRI<HQWKHVLPSOLILHGPHWKRG
 7KRXVDQGVRI
86'ROODUV0LOOLRQVRI<HQ  
6HUYLFHFRVW

2WKHUV    

86'ROODUV





,QWHUHVWFRVW




 
 
 


([SHFWHGUHWXUQRQSODQDVVHWV



1HWSHULRGLFEHQHILWFRVWV

$FWXDULDOORVVHV



8QUHFRJQL]HGDFWXDULDOJDLQV ORVVHV 



5HFRJQL]HGDFWXDULDOJDLQV   
1HWSHULRGLFEHQHILWFRVWVFDOFXODWHGE\
7KRXVDQGVRI
0LOOLRQVRI<HQWKHVLPSOLILHGPHWKRG
 other comprehensive 86'ROODUV(7) Amounts recognized in accumulated


2WKHUV






(beforeincomeincome tax effect) in respectof defined
'HEWLQYHVWPHQWV
retirement
benefitORVVHVplans,
beforeadjustingfortax effects,
as of 


(TXLW\LQYHVWPHQWV

8QUHFRJQL]HGDFWXDULDOJDLQV



$FWXDULDOORVVHV

1HWSHULRGLFEHQHILWFRVWV


*HQHUDODFFRXQWDVVHWVRIOLIHLQVXUDQFHFRPSDQLHV

March
31, 2020 and 2019, were as follows:
&DVKDQGFDVKHTXLYDOHQWV
 7KRXVDQGVRI
7KRXVDQGVRI
0LOOLRQVRI<HQ 86'ROODUV
0LOOLRQVRI<HQ
2WKHUV

86'ROODUV

'HEWLQYHVWPHQWV







7RWDO


(TXLW\LQYHVWPHQWV


8QUHFRJQL]HGDFWXDULDOJDLQVORVVHV 

 

 
$FWXDULDOORVVHV



*HQHUDODFFRXQWDVVHWVRIOLIHLQVXUDQFHFRPSDQLHV


&DVKDQGFDVKHTXLYDOHQWV

2WKHUV
 7KRXVDQGVRI
0LOOLRQVRI<HQ (8) Plan assets
 86'ROODUV


'HEWLQYHVWPHQWV

7RWDO


  ²  ²
a. 'LVFRXQWUDWHVComponentsofplan
assets(TXLW\LQYHVWPHQWV

²
²
([SHFWHGUDWHVRIUHWXUQRQSODQDVVHWV 
*HQHUDODFFRXQWDVVHWVRIOLIHLQVXUDQFHFRPSDQLHV


8QUHFRJQL]HGDFWXDULDOJDLQVORVVHV  



Plan
assets
as
of
March
31,
2020
and
2019,
consistedofthe
6DODU\LQFUHDVHUDWHV&DVKDQGFDVKHTXLYDOHQWV


following:
2WKHUV







0LOOLRQVRI<HQ
² 
²
'LVFRXQWUDWHV
7RWDO
'HEWLQYHVWPHQWV

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23

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Employee pension trusts for the years ended 86'ROODUV
March
31, 2020
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areincluded in ORVVHV
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b. Method of determining the expected rate of return on plan
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considering the long‑term rates of return
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components of the plan assets.
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15. EQUITY

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The significant provisions in the Banking Law and
theCompanies
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Act of Japan (the "Companies Act") that affect financialand
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accounting matters are summarized below:
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a. Dividends
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Under the Companies Act, companies can pay dividends at any
time during the fiscal year in addition to the year‑end dividend
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upon resolution at the shareholders' meeting.0LOOLRQVRI<HQ
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the directors being prescribed as one year rather$PRUWL]DWLRQRIQHWDFWXDULDOORVV  than the
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normal two‑year term by its articles of incorporation,the
Boardof Directors may declare dividends (except for dividends in
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upon resolution by the Board of Directors if the articles of
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incorporationof the company so stipulate. The Companies Act
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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 Companies Act requires that an amount equal to 10% of
dividends must be appropriated as a legal reserve (a componentof retained earnings) or as additional paid‑in capital (acomponent of capital surplus) depending on the equity accountcharged upon the payment of such dividends until the aggregate
amount of the legal reserve and additional paid‑in capitalequals 25% of common stock. Under the Companies Act, thetotal amount of additional paid‑in capital and legal reserve may
be reversed without limitation. The Companies Act also
provides that common stock, legal reserve, additional paid‑in
capital, other capital surplus, and retained earnings can betransferred among the accounts within equity under certain
conditions upon resolution by the shareholders.
c. Treasury Stock and Treasury Stock Acquisition Rights
The Companies Act also provides for companies to purchasetreasury stock and dispose of such treasury stock by resolutionof the Board of Directors. The amount of treasury stock
purchased cannot exceed the amount available for distribution
to the shareholders, which is determined by a specific formula.
24

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Stock Option
2019&DQFHOHG
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The stock option activity is asfollows:
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25

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18. OTHER INCOME

Other income for the years ended March 31, 2020 and 2019,consisted of the following:
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19. OTHER OPERATING EXPENSES

Other operating expenses for the years ended March 31, 2020 and
2019, consisted of the following:
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20. GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses for the years ended March
31, 2020 and 2019, consisted of the following:
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21. OTHER EXPENSES

Other expenses for the years ended March 31, 2020 and 2019,consisted of the following:
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22. INCOME TAXESThe Bank and its domestic consolidated subsidiaries are subject toJapanese national and local income taxes that, in the aggregate,
resulted in normal effective statutory tax rates of 30.35% and30.34% for the years ended March 31, 2020 and 2019 respectively.
The tax effects of significant temporary differences that resulted
in deferred tax assets and liabilities as of March 31, 2020 and
2019, are as follows:

26

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23. LEASES WD[UDWH&KDQJHLQYDOXDWLRQDOORZDQFHLessor
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The
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Maturitiesof lease receivables
financeleases
that aredeemed7KRXVDQGVRI
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property to the lessee
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24.
RELATED‑PARTY TRANSACTIONS

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the fiscal years
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25. FINANCIAL INSTRUMENTS AND RELATEDDISCLOSURES(1) Group Policy for Financial Instruments
The Group offers financial services such as providing loans andsales of investment products to customers. In performing these
operations, the Bank uses funds received as deposits from
customers or by borrowing money from the market inconsideration of market conditions and the balance in funding
periods between the short term and the long term.
As the Bank holds financial assets and liabilities affected byinterest rate movements, it carries out Asset Liability Management("ALM") to avoid negative effects of interest movements. In
managing interest rate movements, the Bank utilizes derivatives.
The Bank and certain consolidated subsidiaries also holdsecurities for sale to customers.

(2) Nature and Extent of Risks Arising from Financial
Instruments(a) Loans
The Bank provides loans mainly to domestic customers, butdoes not focus on specific groups of companies. These loans
are exposed to credit risk in the case of the customers'
breach of the contract. In all domestic loans, the percentage
of loans in Nagano Prefecture, the Bank's main businessarea, is approximately 50%. As such, the Bank's credit risk
is likely to deteriorate if there are negative changes in theeconomy in Nagano Prefecture.
(b) Securities
Securities are mainly bonds, stocks, investment trusts,
and corporate investment funds. These securities areclassified into categories, such as (1) securities held tomaturity, (2) securities available for sale, and(3) securities for trading purposes to sell to customers.
All securities are exposed to the credit risk of the
securities' issuers or interest rate risk, market price risk,
foreign exchange risk, and liquidity risk.
(c) Deposits
The Bank receives deposits from customers. These
deposits are exposed to interest rate risk, foreignexchange risk, and liquidity risk.
(d) Derivatives
The purpose of using derivatives is to provide customers
various hedging instruments to hedge the Bank's
portfolio under ALM and to enhance the Bank's profit.
Derivatives include interest rate swaps, interest cap
transactions, and currency exchange swaps. Using thesederivatives as hedging instruments for loans andsecurities, the Bank applies hedge accounting toderivative transactions and assesses the effectivenessbetween the hedged items and hedging instruments fromthe start of hedging. These derivative transactions are
exposed to market risk and credit risk.
Derivative transactions used for hedging purposes arecarried out in accordance with the Bank's annual
hedging policy.
(3) Risk Management for Financial Instruments(a) Credit risk management
In accordance with internal rules of credit risk
management, the Bank examines every loan, manages
loans according to credit lines for each debtor, addresses
troubled loans, reviews each debtor's credit rating, andmanages the Bank's loan portfolio. Regarding the loan
examination structure, the loan promotion section isseparated from the loan examination section in the head
office. These two sections monitor and check each other.
Every loan from the business branches is examined inmany stages from loan application to the Bank's final
decision. The Bank reviews each debtor's credit rating ona regular basis to identify troubled loans in a timely
manner. In addition, the Bank uses examination resultsin order to reduce credit risk and to manage the Bank's
loan portfolio.
To address the credit risk of securities' issuers, the Bank
carries out its business under credit line limits for eachdebtor. Such limits are defined by the Risk Management
Department on a semiannual basis.
(b) Market risk management (interest rate risk, foreignexchange risk, and market price risk)

The Group stipulates internal rules of market risk
management and controls market risk so as to maintainmanagement soundness and profitability.

  
27

Considering the market and the Bank's conditions, theBank updates its Market Risk Management Policy on asemiannual basis to maintain an appropriate balance
between risk and return and to adjust the volume of risk.
Furthermore, the management committee confirms therisk limit and loss limit by each transaction type for eachcustomer according to the Market Risk Management
Policy. The Bank defines the limit of investment, limit ofholding, and limit of valuation losses, as necessary. It
also defines the threshold that should limit market risk
and losses to certain amounts. Each section should carryout its business within risk limits, as well as report therisk status to an executive officer on a daily basis.

Quantitative Information on Market Risk
The Bank principally uses VaR for quantitative analysisof the market risk of all financial instruments,and VaR
is multiplied by a certain stress (1 to 1.35 times) to
calculate market risk amount.For calculating VaR, thehistorical simulation method (confidence interval of
99.9%; observation period of 1,250 days; and holding
period of 10 days for Bank's trading business, 240 daysfor Bank's banking business, and 120 days for others)
has been adopted.
The VaRs in the Bank's trading business are¥1,128 million ($10,384 thousand) and ¥908 million andthe VaRs in the Bank's banking business are¥318,036 million ($2,926,894 thousand) and¥298,318 million as of March 31, 2020 and 2019,respectively.

Regarding management of business operations, the front
office is separated from the back office. The middle
office which controls and manages risk is also separated
from these two offices. These three offices monitor andcheck each other.

The Bank conducts backtesting to compare the VaR
calculated using the model with actual loss amounts.
According to the bank testing results, it is believed thatthe measurement model that the Bank uses is adequate tocapture market risk. It should be noted that VaR
measures the amount of market risk at certain
probability levels statistically calculated based on
historical market fluctuations, and therefore, there may
be cases where market risk cannot be captured insituations when market conditions change dramaticallybeyond what has been experienced historically.

Management of Interest Rate Risk
To manage risk caused by interest rate fluctuations, theBank uses Value at Risk ("VaR") for the change of
economic value and uses ALM for the change of interest
rate in gap analysis. The "ALM and Integrated Risk
Conference" monitors the Group's risk status anddiscusses various measures corresponding to risks. As
stated above, the Bank uses some derivative transactions
under ALM.
Management of Foreign Exchange Risk(c) Liquidity risk management
The Bank manages liquidity risk through diversificationof funding and adjustment of funding periods between
long term and short term under ALM.

The Bank manages the change of economic value arisingfrom fluctuations in foreign exchange rates by VaR. To
avoid excessive foreign exchange risk, the Bank defines
the upper holding limit in its Market Risk Management
Policy.

(4) Fair Value of Financial Instruments
Fair values of financial instruments are based on quoted
prices in active markets. If quoted prices are not available,
other rational valuation techniques are used instead. Please
see Note 26 for the details of the fair value of derivatives.

Management of Market Price Risk
The Bank manages the change of economic value arisingfrom fluctuations in market prices by VaR. The Board of
Directors define the upper limit of risk on a semiannual
basis by taking into account the Bank's capital status andmarket conditions. Certain consolidated subsidiaries
report market values of holding securities to the Bank's
Board of Directors on a regular basis.

(a) Fair value of financial instruments
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The Principles of Derivative Transactions
The Bank establishes internal rules for derivativetransactions and manages the Group's risk in an
integrated fashion, including derivative transactions
made by consolidated subsidiaries. Regarding
derivatives, the Risk Management Department reports
the total positions, market values, and market risk
amounts to both executive officers and the "ALM andIntegrated Risk Conference" on a regular basis.

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  Cash and Due from Banks

Carrying values of cash and due from banks that have nomaturity dates are approximately equivalent to fair values.
Regarding due from banks with maturity dates, the carrying
values of products with short maturities (less than one year)
are equivalent to the fair values.
Securities

Fair values of stocks are measured at the quoted market
prices in stock markets. Fair values of bonds are measured
at the quoted market prices in bond markets or the quoted
prices obtained from financial institutions.
Fair values of investment trusts are measured at thestandard prices disclosed in public.

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Fair values of private placement bonds with guarantees aremeasured at the total amounts of the principal and interest
discounted at market rates, plus spreads. The spreads aredefined in internal guidelines.
Information relating to securities for holding purpose isincluded in Note 6.

Loans

Because floating‑rate loans are immediately affected by the
movement of interest rates, the carrying values of these loans
are equivalent to fair values in cases where the credit risk of
debtors has not totally changed from the execution of the loans.
For fixed‑rate loans used to fund business, fair values are
determined by discounting the total amounts of the principal
and interest at market rates plus spreads. The spreads aredefined in internal guidelines.
For fixed‑rate loans other than business funds, fair values are
determined by discounting the total amounts of the principal
and interest at expected rates if the Bank newly executes
similar loans to customers. Such expected rates are determinedaccording to the loans' type and period. The carrying values of
fixed‑rate loans other than business funds with short maturity(less than one year) are equivalent to the fair values.
For loans to debtors who are legally bankrupt, virtuallybankrupt, and possibly bankrupt, a reserve for possible loan
losses calculated from the current value of expected future cash
flows or from the amount expected to be collected throughdisposal of collateral or execution of guarantees is provided.
Therefore, the book values at the consolidated balance sheet
date, net of reserve amounts, are regarded as the fair values.
Specific loans in which the loan amount can be increased or
decreased within the collateral amount have no maturity dates.
The carrying values of such loans are assumed to be equivalent
to the fair values because of the loans' period and conditions.
Deposits and Negotiable Certificates of Deposit

Fair values of demand deposits are measured at the expectedamount to be paid to depositors from the Bank at theconsolidated balance sheet date (book values). For time
deposits, according to each period, fair values are measured
at the total amount of the principal and interest discounted at
the rate that the Bank applies to new deposits.
Call Money and Bills Sold and Payables under Securities
Lending Transactions

Carrying value of these whose terms are short (within oneyear) approximates the fair value and is therefore deemed
equal to the fair value.
Borrowed Money

Because floating‑rate borrowed money is immediately
affected by the movement of interest rates, the carrying
value of this borrowed money is equivalent to fair value
in cases where the credit risk of consolidated subsidiaries
has not totally changed from when the money wasborrowed.
The fair value of fixed‑rate borrowed money, which isclassified in accordance with its period, is estimated bydiscounting future cash flows, using rates that would beoffered to similar borrowings. The carrying value ofborrowed money whose term is short (within one year)
approximates the fair value and is therefore deemed
equal to the fair value.
Derivatives

Information on the fair value of derivatives is included in
Note 26.
(b) Financial instruments whose fair value cannot be reliably
determined
Thousands ofMillions of
U.S. Dollars
Yen
March 31
2020
2019
2020
Investments in equity instrumentsthat do not have a quoted market
price in an active market¥ 28,309 ¥ 26,693 $ 260,535
29

(5) Maturity Analysis for Financial Assets and Securities with Contractual Maturities
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26. DERIVATIVES

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Interest rate-related transactions:	Interest rate swaps and interest
rate options
Currency-related transactions:	Currency swaps, currency
options, and forward foreignexchange contracts
Stock-related transactions:
Stock index futures and stock		
index future options
Bond futures and bond future options
Bond-related transactions:
Other transactions:
Earthquake derivatives
The Bank and certain subsidiaries use derivatives primarily tohedge risks for customers to maximize the profit of their own
trading account and to manage the potential risks in their own
portfolio as a part of ALM.

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(6) Scheduled Repayment Amount after the Consolidated Balance Sheet Date for Borrowed Money and Other Interest‑Bearing Liabilities
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30

On the other hand, concerning credit risk management, the Bank
sets up credit limits of customers according to their credit
standings and manages it strictly not to exceed each credit ceilingof customers.
It should be noted that the nominal contract value or notional
principal amount is used in determining the value of receipts or
payments of interest and as an indicator representative of thevolume of transactions, but those values do not necessarily reflect
such things as market risk or credit risk.

Derivative Transactions to Which Hedge Accounting Is Not Applied at March 31, 2020

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Derivatives are subject to market risk and credit risk. Market risk
is the exposure created by potential fluctuations in market
conditions, including interest rates, foreign exchange rates, or
prices of bonds. Credit risk is the possibility that a loss may result
from a counterparty's failure to perform according to the terms
and conditions of the contract.

Risk control of derivatives is the responsibility of the Risk
Management Department independent from the front office. The
Risk Management Department is in charge of controlling market
risks in order to make the risk control system work effectively.

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Derivatives that the Bank and certain consolidated subsidiaries use
are as follows:

The Bank comprehensively controls derivative risks of the Bankand certain consolidated subsidiaries in accordance with its Risk
Management Regulations and Market Risk Management
Regulations. The position amounts, market values, and market
risks are reported periodically to the responsible executive officers
and the ALM Committee, where evaluations and analyses ofderivatives are made.

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31

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contract or notional amounts of derivatives
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do not measure the Group's exposure to credit or market risk.
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33

27. LOAN COMMITMENTS

The Bank and its consolidated subsidiaries issue commitments toextend credit and establish credit lines for overdrafts to meet thefinancing needs of their customers. Unfunded amounts relating tothese contracts totaled ¥1,680,566 million ($15,466,284 thousand)and ¥1,701,511 million as of March 31, 2020 and 2019,respectively.
As a large majority of these commitments expire without being
drawn down upon, the unfunded amounts do not necessarily
represent future cash requirements. Many of these agreements
include conditions granting the Bank the right to reject the
drawdown or to reduce the amount on the basis of changes in thefinancial circumstances of the borrower or other reasonablegrounds.
In addition, the Bank obtains collateral when necessary to reduce
credit risk related to these commitments.

(2) Net assets per share for the years ended March 31, 2020 and 2019,were as follows:<HQ<HQ

1HWDVVHWVSHUVKDUH
1HWDVVHWVSHUVKDUHThe components of other comprehensive income (loss) for theyears ended March 31, 2020 and 2019, were as follows:
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(1) Basic EPS for the years ended March 31, 2020 and 2019, is asfollows:
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The net assets per share figure is calculated on the basis of thefollowing:
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28. OTHER COMPREHENSIVE INCOME (LOSS)
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31. SEGMENT INFORMATION

Under ASBJ Statement No. 17, "Accounting Standard for
Segment Information Disclosures," and ASBJ Guidance No. 20,"Guidance on Accounting Standard for Segment Information
Disclosures," an entity is required to report financial anddescriptive information about its reportable segments.
Reportable segments are operating segments or aggregations ofoperating segments that meet specified criteria. Operating
segments are components of an entity about which separate
financial information is available and such information isevaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing
performance. Generally, segment information is required to bereported 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 financial
information is available separately and regular evaluation by
the Bank's management is performed in order to decide how
resources are allocated among the Group. The Group consistsof the banking and leasing segments. Banking consists of thebanking and credit card businesses. Leasing consists of theleasing business.

(2) Methods of Measurement for Sales, Profit (Loss), Assets,
Liabilities, and Other Items

The accounting policies of each reportable segment areconsistent with those disclosed in Note 2, "Summary of
Significant Accounting Policies."

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30. SUBSEQUENT EVENT

The following appropriations of retained earnings at March 31,
2020, were approved at the Bank's shareholders' meeting held on
June 19, 2020:
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35

(4) Information about Services

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36(5) Information about Geographical Areasa. Ordinary income
This information is not disclosed as the domestic share ofordinary income from external customers exceeds 90% of
ordinary income in the consolidated statement of income.

b. Tangible fixed assets
This information is not disclosed as the domestic share oftangible fixed assets exceeds 90% of tangible fixed assets inthe consolidated balance sheet.
(6) Information about Major Customers
This information is not disclosed as ordinary income from a
specific customer does not exceed 10% of ordinary income inthe consolidated statement of income.