FINANCIAL REPORT 2023

Contents

Operating Results

2

Cash Flows3

Consolidated Financial Statements

4

Directors and Audit and Supervisory Committee Members

10

Status of Principal Shareholders

10Bank Data

10

Bank Network

10

1

Operating Results
Aichi FG, which is a wholly owning parent company of the Chukyo Bank (the “Bank”) and The
Aichi Bank, Ltd., was established by way of a joint share transfer between both banks on October 3,
2022, and carries out operations based on its management vision, which comprises the three elementsof “purpose,” “mission” and “value.”
In addition, under the 18th Medium-Term Management Plan “CX Plan,” for the purpose ofcontributing to the growth of the local community, we are pursuing various measures to transition to
a company that provides comprehensive consulting services tailored to the life stages of ourcustomers in a timely fashion that complements our financial intermediary functions to “become aconsulting company that contributes to the community with financial functions.”
For customers operating businesses, in order to respond to diversifying needs, the Bank provided
support on a companion-based model through consulting functions such as activities to offer solutions
to the various management issues and worked to contribute to the revitalization of the regional
economy and the solving of social issues. Furthermore, through the provision of the “establishment
support package,” the Bank supported the establishment of new businesses for medium- and smallsized businesses, and worked to contribute to regional revitalization by working on initiatives torevitalize local industries so that they can create stable employment.
For individual customers, the Bank established retail strategies by segment, and established asystem that can respond to advanced asset formation needs through the wealth management team, etc.
carrying out consulting sales. Furthermore, the Bank worked to enhance convenience for customers
through the promotion of DX (digital transformation), such as by commencing the acceptance of“Establishment of Ordinary Savings Account” and “Changes to Items Concerning Notification(Address/Name/Seal)” through the use of tablet devices.
As a result, the operating results for the Bank and its consolidated subsidiaries were as follows.
The balance of deposits (including negotiable certificates of deposit) stood at 1,925.6 billion yen
as of the end of the fiscal year, an increase of 65.5 billion yen during the fiscal year, mainly due toincreases in both corporate and individual customers.
Loans and bills discounted totaled 1,568.6 billion yen as of the end of the fiscal year, an increaseof 19.1 billion yen during the fiscal year. This increase mainly reflects the Bank’s efforts to provide
financial support to corporate customers affected by the changing situation in Japan and overseas andrising resource prices in addition to the Bank’s proactive response to the demand for funds by
individual customers, mainly for housing loans.
The balance of securities at the end of the fiscal year stood at 400.7 billion yen, a decrease of 4.4
billion yen during the fiscal year mainly due to a decrease in domestic bonds, etc.
In terms of income, interest income decreased by 162 million yen year on year to 18,923 million
yen mainly due to a decrease in interest on loans and discounts as a result of declining loan yields aswell as a decrease in interest on deposits with banks, despite an increase in interest and dividends on
securities. Fees and commissions increased by 226 million yen year on year to 6,212 million yen
mainly due to an increase in corporate-related fees and commissions as a result of an increase inactivity for solution sales to customers who conduct business. Other ordinary income decreased by
186 million yen year on year to 1,228 million yen mainly due to a decrease in gain on foreignexchange transactions and gain on sale of bonds. Other income decreased by 3,834 million yen year
on year to 1,207 million yen mainly due to a decrease in gain on sale of equity securities. Primarily
as a consequence of the aforementioned, total income decreased by 4,151 million yen year on year to2

27,961 million yen.
As for expenses, financing expenses increased by 471 million yen year on year to 1,293 million
yen mainly due to an increase in foreign currency funding costs as a result of investment in foreign
currency-denominated bonds. Fees and commissions decreased by 42 million yen year on year to
1,951 million yen. Other ordinary expenses increased by 2,946 million yen year on year to 4,350
million yen mainly due to an increase in loss on sale of bonds. General and administrative expenses
decreased by 1,339 million yen year on year to 15,686 million yen mainly due to decreases inpersonnel expenses and property expenses. Other expenses decreased by 347 million yen year on year
to 3,869 million yen. Primarily as a consequence of the aforementioned, total expenses increased by
2,457 million yen year on year to 30,060 million yen.
As a result, loss attributable to owners of the parent deteriorated 5,346 million yen, or down by
143.5% year on year, to 1,618 million yen.

Cash Flows
Cash flows for the fiscal year ended March 31, 2023 were as follows. Net cash used in operating
activities totaled 209,372 million yen, mainly due a decrease in borrowed money as a result ofreviewing financial procurement from the Bank of Japan for financial operations in response to the
spread of COVID-19. Net cash provided by investing activities totaled 4,510 million yen, mainly due
to proceeds from sales of securities and proceeds from maturities of securities. Net cash used infinancing activities totaled 13,968 million yen, mainly reflecting purchases of treasury stock.
As a result of the above, cash and cash equivalents at the fiscal year-end totaled 130,973 million
yen, a decrease of 218,830 million yen during the fiscal year ended March 31, 2023.

3

Consolidated Financial Statements
THE CHUKYO BANK, LIMITED AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSMARCH 31, 2023 AND 2022
Thousands of
U.S. Dollars
2023

Millions of Yen
2023
2022
ASSETS:Cash and due from banks
Securities
Loans and bills discounted
Foreign exchange
Other assets
Premises and equipment
Intangible assets
Retirement benefit asset
Deferred tax assets
Customers’ liabilities for acceptances and guarantees
Reserve for possible loan losses
Total assets¥

LIABILITIES:
Deposits
Call money and bills soldPayables under securities lending transactions
Borrowed money
Foreign exchange
Subordinated bonds
Other liabilities
Retirement benefit liability
Reserve for reimbursement of dormant deposits
Reserve for contingencies
Deferred tax liabilities
Deferred tax liabilities for land revaluation surplus
Acceptances and guarantees
Total liabilities

EQUITY:
Capital stock:
Common stock –authorized, 50,000 thousand shares;
issued, 13,239 thousand shares in 2023 and21,780 thousand shares in 2022
Capital surplus
Retained earnings
Treasury stock, at cost –None in 2023 and5 thousand shares in 2022
Accumulated other comprehensive income:Net unrealized gain on available-for-sale securities
Deferred gain on derivatives under hedge accounting
Land revaluation surplus
Remeasurements of defined benefit plans
Total
Share acquisition rights
Total equity
Total liabilities and equity

4

132,101
400,775
1,568,602
7,262
25,93017,579
1,522
4,053
1,176
2,239
(11,107)2,150,136¥

350,633
405,263
1,549,464
6,589
21,757
17,802
1,724
3,251
341
2,462
(11,093)
2,348,196$

989,298
3,001,385
11,747,187
54,384
194,188
131,648
11,39830,352
8,807
16,767(83,179)
16,102,269

1,925,677
72,807
19,40051
5,000
32,764
11
100
640
2,128
2,239
2,060,823

1,860,106
45,000
9,001
291,500
57
5,000
22,908
122
562
1,030
2,298
2,462
2,240,049

14,421,306
545,248
145,285381
37,444245,368
82
748
4,792
15,936
16,767
15,433,408

31,87931,879238,740

24,02923,62724,02938,551

179,952
176,941

-

(11)

-

4,039
1,022
4,480
232
89,31289,312¥ 2,150,136

8,110
472
4,864
18
107,915
230
108,146¥ 2,348,196

30,247
7,653
33,5501,737
668,853
668,853$16,102,269

THE CHUKYO BANK, LIMITED AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOMEYEARS ENDED MARCH 31, 2023 AND 2022
Millions of Yen
2023
2022
INCOME:Interest income:Interest on loans and discounts
Interest and dividends on securities
Other interest income
Fees and commissions
Other ordinary income
Gain on sales and disposal of premises and equipment
Recoveries of written-off receivables
Other income¥

Total income
EXPENSES:Interest expenses:
Interest on deposits
Interest on bonds
Other interest expenses
Fees and commissions
Other ordinary expenses
General and administrative expenses
Provision of reserve for possible loan losses
Loss on sales and disposal of premises and equipment
Impairment loss on long-lived assets
Other expenses
Total expenses(LOSS) PROFIT BEFORE INCOME TAXESINCOME TAXES:
Current
Deferred
Total income taxes(LOSS) PROFIT(LOSS) PROFIT ATTRIBUTABLE TO OWNERS OF THE
PARENTPER SHARE OF COMMON STOCK:
Basic earnings
Cash dividends applicable to the year5

13,132
5,448
342
6,212
1,228
145
2
1,449

¥

13,459
5,231
394
5,985
1,415
584
1
5,041

Thousands of
U.S. Dollars
2023$

98,34440,7992,561
46,521
9,196
1,085
14
10,851

27,961

32,113

209,398

187
56
1,048
1,951
4,350
15,686
1,530
6
568
4,673

158
56
606
1,993
1,404
17,025
2,475
13
1,250
2,617

1,400
419
7,848
14,61032,576
117,471
11,45844
4,253
34,99530,06027,603

225,117(2,098)

4,509(15,711)

89
(570)
(480)

1,506
(725)
781

666
(4,268)(3,594)(1,618)

3,728(12,117)¥(1,618)

¥

3,728

$

(12,117)¥

Yen(97.34)255.00¥171.3055.00

U.S. Dollars$(0.72)
1.90

THE CHUKYO BANK, LIMITED AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEYEARS ENDED MARCH 31, 2023 AND 2022
Millions of Yen
2023
2022
(1,618)¥(LOSS) PROFITOTHER COMPREHENSIVE INCOME:
Net unrealized loss on available-for-sale securities
Deferred gain on derivatives under hedge accounting
Remeasurements of defined benefit plans
Total other comprehensive income¥

COMPREHENSIVE INCOME¥(4,926)¥(1,682)$(36,890)

COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Owners of the parent¥(4,926)¥(1,682)$(36,890)(4,070)550
213(3,307)

6

3,728

Thousands of
U.S. Dollars
2023$(6,282)
1,123(250)(5,410)(12,117)(30,480)
4,118
1,595
(24,765)

THE CHUKYO BANK, LIMITED AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITYYEARS ENDED MARCH 31, 2023 AND 2022

Thousands

BALANCE AT APRIL 1, 2021
Cumulative effects of changes inaccounting policies
Restated balance
Issuance of new shares
Profit attributable to owners of theparentCash dividends, ¥55.00 per share
Purchases of treasury stock
Disposal of treasury stockReversal of land revaluation surplus
Net changes in items other thanshareholders’ equity
BALANCE AT MARCH 31, 2022
(Loss) profit attributable to owners of
the parent
Cash dividends, ¥255.00 per share
Purchases of treasury stock
Cancellation of treasury stockReversal of land revaluation surplus
Net changes in items other thanshareholders’ equity
BALANCE AT MARCH 31, 2023

BALANCE AT MARCH 31, 2022
(Loss) profit attributable to owners of
the parent
Cash dividends, $1.90 per share
Purchases of treasury stock
Cancellation of treasury stockReversal of land revaluation surplus
Net changes in items other thanshareholders’ equity
BALANCE AT MARCH 31, 2023

Millions of Yen
Accumulated Other Comprehensive Income

Outstanding
Number of
Shares ofCommonStockCommonStockCapitalSurplusRetained
Earnings

Treasury
Stock21,715¥ 31,844¥ 23,994¥ 35,211¥

34

31,84435

23,994
35

(1)
26
-

-

21,774(8,535)

13,239Net Unrealized
Gain onAvailable-for-sale
Securities

Deferred Gainon Derivatives
under Hedge
Accounting¥¥

14,393
-

(650)
-

5,407
-

269
-

(48)
110,344
70

-

3,728
(869)
(13)
542

(2)
68
-

-

-

-

-

31,87924,02938,551(11)(6,282)
8,110

1,123
472

(542)
4,864

-

-

(1,618)(3,476)(10,211)383(10,200)
10,211----¥ 31,879¥ 24,029¥ 23,627

CommonStockCapitalSurplusRetained
Earnings

TreasuryStock$ 238,740$ 179,952$ 288,706$--(12,117)(26,031)(76,469)
2,868$ 238,740$ 179,952$ 176,941

$

¥

550
1,022

¥

(383)
4,480

Thousands of U.S. Dollars
Accumulated Other Comprehensive Income
Net Unrealized
Deferred Gain
Gain onon Derivatives
Land
Available-for-sale
under Hedge
Revaluation
Securities
Accounting
Surplus(82)$ 60,735(76,387)
76,469---(30,480)$ 30,247

$

$

7

3,534

$ 36,426

-

-

4,118
7,653

(2,868)$ 33,550

¥

¥

¥

(78)
-

(4,070)4,039

269

110,392(48)
35,163
-

¥

5,407

Total

Share
Acquisition
Rights¥ 14,393-(650)

Remeasurements ofDefinedBenefit Plans

(78)

¥

¥

Land
Revaluation
Surplus

¥

3,728
(869)
(2)
54
542

-

3,728
(869)
(2)
54
542

(250)
18

(5,952)
107,915(68)
230(6,021)
108,146-(1,618)(3,476)(10,200)
383-(1,618)(3,476)(10,200)
383

213
232

¥

134

$

1,595
1,737

(3,690)89,312-

110,691

-

$

299

(48)
110,643
70

Remeasurements ofDefinedBenefit Plans$

Total
Equity299¥¥(3,921)89,312

Total

Share
Acquisition
Rights

Total
Equity808,170$

1,722$ 809,900-(12,117)(26,031)(76,387)
2,868(1,722)-(29,364)$ 668,853(12,117)(26,031)(76,387)
2,868
$

(230)
-

(27,634)
668,853$

THE CHUKYO BANK, LIMITED AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSYEARS ENDED MARCH 31, 2023 AND 2022
Millions of Yen
2023
2022
OPERATING ACTIVITIES:(Loss) profit before income taxes
Adjustments for:
Income taxes paid
Extra retirement payments
Depreciation and amortization
Impairment loss on long-lived assets
Other extraordinary loss
Net loss (gain) on sales and redemption of securities
Net foreign exchange gain
Net gain on sales and disposal of premises and equipment
Changes in assets and liabilities:
Net increase in loans and bills discounted
Net increase (decrease) in deposits
Net (decrease) increase in borrowed money (excluding subordinatedborrowings of the Bank)
Net (increase) decrease in due from banks (excluding due from the Bankof Japan)
Net (decrease) increase in call money
Net increase in payables under securities lending transactions
Net (increase) decrease in foreign exchange, assets
Net (decrease) increase in foreign exchange, liabilities
Net increase in reserve for possible loan losses
Net increase in retirement benefit asset
Net increase (decrease) in retirement benefit liability
Net increase in interest receivable
Net increase in interest payable
Net increase in other assets
Net increase in other liabilities
Total adjustments¥

Net cash (used in) provided by operating activities¥

FORWARD(2,098)¥

4,509

Thousands of
U.S. Dollars
2023$(15,711)

(947)
1,184
568
2,091
2,494
(3,971)(138)(1,590)
(876)
1,188
1,250
876
(3,894)(3,971)(570)(7,092)
8,866
4,253
15,65918,677(29,738)(1,033)(19,137)
65,570(13,594)(36,639)(143,316)
491,050(272,100)

235,200(2,037,744)(298)(45,000)
63,806
(672)
(5)
13
(494)
11
(5,355)
153
(855)
5,807
(207,273)

71
45,000
9,001
9,341
34
1,838
(653)
(164)
(5,277)24(2,153)362
234,805(2,231)(337,002)
477,840(5,032)(37)
97(3,699)82(40,103)
1,145(6,403)
43,488(1,552,257)(209,372)

239,315(1,567,977)

239,315$ (1,567,977)(209,372)¥(Continued)

8

THE CHUKYO BANK, LIMITED AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSYEARS ENDED MARCH 31, 2023 AND 2022
Millions of Yen
2023
2022
FORWARD¥(209,372)¥

Thousands of
U.S. Dollars
2023

239,315$ (1,567,977)

INVESTING ACTIVITIES:
Purchases of securities
Proceeds from sales of securities
Proceeds from maturities of securities
Dividends and interest received from investing activities
Purchases of premises and equipment
Proceeds from sales of premises and equipment
Purchases of intangible assets
Net cash provided by investing activities(167,336)
121,265
46,531
5,333(1,044)
311
(551)
4,510

(73,427)
55,43034,854
4,748(1,345)966(684)
20,542(1,253,171)
908,147
348,468
39,938(7,818)2,329(4,126)
33,775FINANCING ACTIVITIES:Payments as financing activities
Dividends paid
Purchases of treasury stock
Proceeds from sales of treasury stock
Repayments of lease obligations
Net cash used in financing activities(56)(3,476)(10,200)(235)(13,968)

(56)
(869)
(2)
54
(305)
(1,179)(419)(26,031)(76,387)(1,759)(104,605)

FOREIGN CURRENCY TRANSLATION ADJUSTMENTS ON CASH
AND CASH EQUIVALENTS
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR

(218,830)
349,803

0258,679
91,124(1,638,807)
2,619,658¥

130,973¥

349,803$

980,850(Concluded)

Basis of presentation
These financial statements without footnotes have been compiled from the consolidated financial statements prepared in accordance with the provisions set forth in theJapanese Financial Instruments and Exchange Act and its related accounting regulations and the Ordinance for Enforcement of the Banking Act, and in conformity withaccounting principles generally accepted in Japan. Certain reclassifications and rearrangements have been made to the consolidated financial statements issued domesticallyin order to present them in a form which is more familiar to readers outside Japan.
U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of ¥133.53 to $1, the approximate rate of exchange at
March 31, 2023. Amounts less than one million yen and amounts less than one thousand dollars are omitted. As a result, totals shown in the accompanying financial statements
without footnotes do not necessarily agree with the sum of the individual amounts.

9

Directors and Audit and Supervisory Committee Members
Shigenobu Tokuoka
Hideo Kobayashi
Noriaki Kojima
Makoto Hayakawa
Hiroshi Kawai
Hisashi Sebayashi
Tatsuhiro Morita
Koichiro Murao
Kazuaki Mano
Kazuhiko Kimura
Hiroyuki Noguchi

Status of Principal Shareholders(as of March 31, 2023)

Name

Address
14-12, Sakae 3-Chome, Naka-ku, Nagoya-City,
Aichi

Aichi Financial Group, Inc.
Note

(as of June 30, 2023)

ChairmanPresident
Director and Senior Managing Executive
Officer
Director and Managing Executive Officer,
General Manager of General Planning
Department
Director and Executive Officer
Director and Executive Officer, General
Manager of Human Resources Department
Director and Executive Officer, General
Manager of Loan Management Department
Director and Executive Officer, General
Manager of Sales Promotion Department
Director (Audit and Supervisory Committee
Member)Director (Audit and Supervisory Committee
Member, Outside)
Director (Audit and Supervisory Committee
Member, Outside)

Number ofshares held
(thousand)

Percentageof shareownership(%) (Note)

13,239100.00

Total
13,239100.00The figures presented for percentage of share ownership show the percentage of the total number of shares issued (excluding treasury stock).

Bank Data

Bank Network(as of March 31, 2023, non-consolidated)(as of June 30, 2023)
Head Office andbranches and sub-branches

Name:

The Chukyo Bank, Limited

Location of Head Office:33-13, Sakae 3-Chome, Naka-ku,
Nagoya-City, Aichi

Nagoya-shi

39

Date of Establishment:

February 10, 1943

Aichi

27

Capital Stock:

31.879 billion yen

Mie

15

Shizuoka

1

Osaka

3

Tokyo

1

Internet branch

1

Total

87

Number of ATMs

161

Deposits:

1,865.5 billion yen*Including negotiable certificates of deposit

Loans and Bills Discounted:

1,549.1 billion yen

Number of Employees:

88210