FINANCIAL REPORT 2020

Contents

Message from the Management

2

Operating Results

3

Cash Flows

4

Consolidated Financial Statements

5

Directors and Corporate Auditors

11

Status of Principal Shareholders

11Bank Data

11

Bank Network

111

Message from the Management
We would like to thank you for your ongoing support of the Chukyo Bank.
This disclosure report presents the settlement of accounts for the fiscal year ended March 31,
2020. We hope that reading this report will help you gain a deeper understanding of the Bank.
During the fiscal year, the Japanese economy continued to show a gradual economic recovery,
with corporate profits proceeding firmly at a high level and a pickup in consumer spending
continuing. However, the impact of novel coronavirus disease (COVID-19) at the end of the fiscal
year caused a significant downswing. In the Tokai region, the economy grew at a moderate pacereflecting a positive stance of companies toward capital investment being maintained throughout the
fiscal year along with improvement of the employment and income environment and gradual
growth in consumer spending. However, around the time of the end of the fiscal year, the economy
has suddenly declined mainly due to the suppression of economic activity on various fronts
resulting from the issuance of the state of emergency declaration by the Japanese government, andthe current situation is extremely harsh.
Amid such economic conditions, the Chukyo Bank, while giving priority to securing the safetyof customers and its executives and employees, is responding as quickly and as best as it can tomaintain a system that ensures the continuity of operations, help its business-operating customers
maintain a cash flow, and negotiate the terms and conditions of loan repayments with individual
customers, among other responses. We believe it is our duty as a regional financial institution tocontribute to the stability and early recovery of the regional economy. To that end, the Chukyo Bank
aspires to realizing its management vision of being “The first bank to ask for advice.” By working
to further improve the quality of our service, we want to contribute to greater business growth andlifestyle enrichment for our customers. We recognize now is the time when the true value of oureffort is attracting greater scrutiny.
In addition, we have been carrying out various measures driven by the three basic strategies of“strengthening sales capabilities,” “enhancing productivity,” and “developing personnel,” which arein accordance with the theme of “achieving further growth as an urban-style regional bank” underthe 17th Medium-Term Management Plan “Chukyo Action Plan 17” launched in April 2018. The
business model of an urban-style regional bank is one where there is a network of branches in a
major city, but where those individual branches don’t possess full banking functions on astand-alone basis and instead provide full banking functions by working together in small-area
networks. The advantage of this model is that sustainable growth can be delivered even inside
existing markets. We will answer the diversifying needs of our customers, thereby contributing to
the development and invigoration of the regional economy through financial services.
All of us at the Bank would appreciate your continued support and patronage as we implement a
range of initiatives.

September 2020
Ryo Nagai, President

2Operating Results
The Bank implemented a range of measures under its 17th Medium-Term Management Plan
launched in April 2018 and strove to increase its corporate value to achieve further growth as anurban-style regional bank.
In services for individual customers, we carried out initiatives to improve customer convenienceby starting to offer the Chukyo Visa Debit Cards and participating in the Cashless Payment
Promotion Program introduced by Ministry of Economy, Trade and Industry of Japan. In addition,
we worked to provide solutions to various needs by developing various campaigns such as“Asset-accumulation by iDeCo (the individual-type defined contribution pension plan) campaign”
aimed to assist customers accumulate stable assets, as well as beginning to offer the <Chukyo>
Guardianship Support Deposit to strengthen initiatives to provide security and safety for customers
and their entire families.
In services for business customers, the Bank worked to respond to broad ranging needs throughoffering finance properly evaluated on the strength of the business as a proactive measure to meetdemand for sound financing, and strengthening initiatives for providing support to businesses
starting up and new businesses, overseas expansion support, proposals for business succession andbusiness matching.
In addition to those initiatives, at the end of the fiscal year, the Bank established a point ofcontact, held holiday consultation meetings to expedite business consultations regarding cash flow
assistance for medium- and small-sized businesses and private-business-owners who are currently
affected or concerned about being affected by the impact on corporate activities by the spread of
COVID-19, and started offering special financing. Through such measures, the Bank has
strengthened initiatives to support the regional economy and its customers from the financial side oflife.
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 1,775.1 billion yen
as a result of an increase in deposits of 3.6 billion yen from the end of the previous fiscal year,
mainly as a result of increases in the balances of corporate customers.
Loans and bills discounted totaled 1,363.7 billion yen as of the end of the fiscal year, an
increase of 52.2 billion yen from the end of the previous fiscal year. This increase mainly reflects
the promotion of financing for medium- and small-sized businesses that bases evaluation mainly on
business attributes.
The balance of securities at the end of the fiscal year stood at 494.0 billion yen, a decrease of
21.4 billion yen year on year mainly due to a decrease in net gain on valuation.
In terms of income, interest income decreased by 783 million yen year on year to 19,648 million
yen mainly due to the continuing decline in interest on loans and discounts resulting from adecrease in yield despite a net increase in loans and bills discounted, mainly for medium- andsmall-sized businesses. Fees and commissions decreased by 232 million yen year on year to 5,007
million yen mainly due to the decline in agent fees associated with insurance sales despite anincrease in income from fees associated with various solutions offered to businesses. Primarily as aconsequence of the aforementioned, total income increased by 397 million yen year on year to30,929 million yen.

3

As for expenses, general and administrative expenses declined by 397 million yen year on year
to 17,870 million yen mainly as a result of efficiency gains in operations and a decline in personnel
expenses due to staff reductions. Other expenses increased by 1,555 million yen year on year to2,953 million yen mainly as a result of an increase in reserve for possible loan losses. Primarily as aconsequence of the aforementioned, total expenses increased by 1,166 million yen year on year to27,500 million yen.
As a result, profit attributable to owners of the parent decreased 1,165 million yen, or down by
33.5% year on year to 2,316 million yen.

Cash Flows
Cash flows for the fiscal year ended March 31, 2020 were as follows. Net cash used in operating
activities totaled 21,070 million yen, mainly due to net increase in loans and bills discounted. Net
cash provided by investing activities totaled 8,876 million yen, mainly due to proceeds from salesof securities and proceeds from maturities of securities. Net cash used in financing activities totaled
1,713 million yen, mainly reflecting dividends paid.
As a result of the above, cash and cash equivalents at the fiscal year-end totaled 72,691 million
yen, a decrease of 13,953 million yen during the fiscal year ended March 31, 2020.

4

Consolidated Financial Statements
THE CHUKYO BANK, LIMITED AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSMARCH 31, 2020 AND 2019
Thousands of
U.S. Dollars
2020

Millions of Yen
2020
2019
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
Payables 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, 21,745 thousand shares in 2020 and 2019
Capital surplus
Retained earnings
Treasury stock, at cost –65 thousand shares in 2020 and
48 thousand shares in 2019
Accumulated other comprehensive income:Net unrealized gain on available-for-sale securities
Deferred loss on derivatives under hedge accounting
Land revaluation surplus
Remeasurements of defined benefit plans
Total
Share acquisition rights
Total equity
Total liabilities and equity

5

73,839494,005
1,363,747
10,58916,76218,804
1,918
552
688
3,460
(8,038)
1,976,330¥

87,355515,428
1,311,543
6,760
16,282
19,249
2,329
797
384
4,005
(7,327)
1,956,809$

678,480
4,539,235
12,530,984
97,298154,020
172,783
17,623
5,072
6,321
31,792(73,858)
18,159,790

1,775,100
30,41137,00099
5,000
22,017
203
389
509
118
2,547
3,460
1,876,857

1,771,435
35,1166
5,000
18,152
232
478
494
6,019
2,552
4,005
1,843,493

16,310,759
279,435
339,979909
45,943202,306
1,865
3,574
4,677
1,084
23,40331,792
17,245,768

31,84423,99433,817

31,84423,99432,366292,603
220,472
310,732

(169)

(139)

(1,552)

6,011
(725)
5,357
(953)
99,177295
99,472¥ 1,976,330

20,211
(323)
5,367
(248)
113,073242
113,316¥ 1,956,809

55,232(6,661)
49,223(8,756)911,3022,710
914,012$18,159,790

THE CHUKYO BANK, LIMITED AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOMEYEARS ENDED MARCH 31, 2020 AND 2019
Thousands of
U.S. Dollars
2020

Millions of Yen
2020
2019
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

12,455
7,040
153
5,007
2,892
4
1
3,374

¥

12,968
7,254
209
5,239
2,550
77
1
2,231

$

114,444
64,6881,405
46,007
26,57336
931,00230,92930,531

284,195

244
56
1,042
2,034
3,232
17,870
1,548
19
45
1,405

314
56
1,118
2,080
2,998
18,267
310
55
45
1,087

2,242
514
9,574
18,68929,697
164,201
14,224174
413
12,910Total expenses

27,50026,334

252,687

PROFIT BEFORE INCOME TAXES

3,429

4,197

31,507

INCOME TAXES:
Current
Deferred
Total income taxes

853
259
1,112

271
444
716

7,837
2,379
10,217

PROFIT

2,316

3,481

21,280EXPENSES: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

PROFIT ATTRIBUTABLE TO OWNERS OF THE PARENT

¥

2,316

PER SHARE OF COMMON STOCK:
Basic earnings
Cash dividends applicable to the year¥

106.74
40.00

¥

3,481

$

¥

160.5040.00

U.S. Dollars
$
0.98
0.36

Yen

6

21,280THE CHUKYO BANK, LIMITED AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEYEARS ENDED MARCH 31, 2020 AND 2019
Millions of Yen
2020
2019
PROFIT
OTHER COMPREHENSIVE INCOME:
Net unrealized (loss) gain on available-for-sale securities
Deferred loss on derivatives under hedge accounting
Remeasurements of defined benefit plans
Share of other comprehensive income of associates accounted forusing equity method
Total other comprehensive income¥

COMPREHENSIVE INCOME
COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Owners of the parent

¥

7

2,316

¥

3,481

Thousands of
U.S. Dollars
2020$

21,280(14,181)
(401)
(705)

1,485
(5)
56

(130,304)(3,684)(6,477)(18)(15,306)

(3)
1,533

(165)
(140,641)(12,990)¥

5,015$ (119,360)(12,990)¥

5,015$ (119,360)

THE CHUKYO BANK, LIMITED AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITYYEARS ENDED MARCH 31, 2020 AND 2019

Thousands

BALANCE AT April 1, 2018
Profit attributable to owners of theparentCash dividends, ¥40.00 per share
Purchases of treasury stock
Disposal of treasury stockReversal of land revaluation surplus
Net changes of items other thanshareholders’ equity
BALANCE AT MARCH 31, 2019
Profit attributable to owners of theparentCash dividends, ¥40.00 per share
Purchases of treasury stock
Disposal of treasury stockReversal of land revaluation surplus
Net changes of items other thanshareholders’ equity
BALANCE AT MARCH 31, 2020

BALANCE AT MARCH 31, 2019
Profit attributable to owners of theparentCash dividends, $0.36 per share
Purchases of treasury stock
Disposal of treasury stockReversal of land revaluation surplus
Net changes of items other thanshareholders’ equity
BALANCE AT MARCH 31, 2020

Millions of Yen
Accumulated Other Comprehensive Income

Outstanding
Number of
Shares ofCommonStockCommonStockCapitalSurplusRetained
Earnings

TreasuryStock21,674¥ 31,844¥ 23,994¥ 29,751

¥

(3)
25
-

-

-

21,697

31,844(27)
10
21,680Net Unrealized
Gain onAvailable-for-sale
Securities

Deferred Losson Derivatives
under Hedge
Accounting¥¥¥ 18,728

3,481
(867)
(23)
24

(7)
73
-

-

-

-

-

23,99432,366

(139)

1,482
20,211

(5)
(323)

(24)
5,367

-

-

2,316
(868)
(7)
9

(61)
31
-

-

-

-

¥ 31,844¥ 23,994¥ 33,817(169)

CommonStockCapitalSurplusRetained
Earnings

TreasuryStock$ 292,603$ 220,472$ 297,399$--

21,280(7,975)(64)
82$ 292,603$ 220,472$ 310,732$¥(14,199)
6,011

¥

(318)

Remeasurements ofDefinedBenefit Plans

(205)

¥

¥

Land
Revaluation
Surplus

(401)
(725)

¥

5,391

(9)
5,357

Thousands of U.S. Dollars
Accumulated Other Comprehensive Income
Net Unrealized
Deferred Loss
Gain onon Derivatives
Land
Available-for-sale
under Hedge
Revaluation
Securities
Accounting
Surplus(1,277)$ 185,711$ (2,967)$ 49,315

(560)
284
-

-

-

-

(1,552)(130,469)$ 55,232(3,684)$ (6,661)(82)$ 49,223

8

¥

(304)

$

¥

¥ 109,103

3,481
(867)
(7)
50
24

-

3,481
(867)
(7)
50
24

56
(248)

1,509
113,073

21
242

1,531
113,316

-

2,316
(868)
(61)
23
9

-

2,316
(868)
(61)
23
9

¥

Remeasurements ofDefinedBenefit Plans$

108,883

Total
Equity

220

(705)
(953)

¥

Total

Share
Acquisition
Rights(15,316)
99,177

¥

Total

Share
Acquisition
Rights(2,278)$ 1,038,987-

21,280(7,975)
(560)
211
82

(6,477)(8,756)$(140,733)
911,302

$

$

52
295

¥

(15,263)
99,472

Total
Equity2,223$ 1,041,220-

21,280(7,975)
(560)
211
82

477
2,710

$

(140,246)
914,012

THE CHUKYO BANK, LIMITED AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSYEARS ENDED MARCH 31, 2020 AND 2019
Millions of Yen
2020
2019
OPERATING ACTIVITIES:Profit before income taxes
Adjustments for:
Income tax paid
Depreciation and amortization
Impairment loss on long-lived assets
Share of profit of entities accounted for using equity method
Net gain on sales and redemption of securities
Net foreign exchange loss (gain)
Net loss (gain) on sales and disposal of premises and equipment
Changes in assets and liabilities:
Net increase in loans and bills discounted
Net increase in deposits
Net increase in borrowed money (excluding subordinated borrowings ofthe Bank)
Net increase in due from banks (excluding due from the Bank of Japan)
Net increase (decrease) in payables under securities lending transactions
Net (increase) decrease in foreign exchange, assets
Net increase (decrease) in foreign exchange, liabilities
Net increase (decrease) in reserve for possible loan losses
Net increase in asset for retirement benefit asset
Net increase in liability for retirement benefit liability
Net increase in interest receivable
Net increase in interest payable
Net decrease (increase) in other assets
Net increase (decrease) in other liabilities
Total adjustments¥

Net cash used in by operating activities¥

FORWARD

3,429

¥

4,197

Thousands of
U.S. Dollars
2020$

31,507

(350)
1,620
45
(51)
(2,189)
1,073
14

(785)
1,755
45
(35)
(1,072)(2,635)(21)(3,216)
14,885413(468)(20,113)9,859
128(52,204)
3,664(8,228)1,432(479,683)
33,6671,884(437)
30,411(3,829)
92
711
(889)
88
(6,828)
73
318
2,281
(24,499)

4,597
(211)
(18,303)
1,227(22)(1,128)(840)
238(7,222)
19(4,097)(3,439)(38,730)

17,311(4,015)
279,435(35,183)845
6,533(8,168)808(62,740)
670
2,921
20,959(225,112)(21,070)(34,533)(193,604)(21,070)¥(34,533)$(193,604)(Continued)

9

THE CHUKYO BANK, LIMITED AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSYEARS ENDED MARCH 31, 2020 AND 2019
Millions of Yen
2020
2019
FORWARD¥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(21,070)¥(34,533)

Thousands of
U.S. Dollars
2020$(193,604)(125,639)
73,09955,981
6,646
(318)
51
(943)
8,876

(101,727)
68,576
83,313
7,021
(371)
130
(716)
56,226(1,154,451)
671,680
514,389
61,067(2,921)
468(8,664)81,558FINANCING 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)
(868)
(61)
23
(751)
(1,713)

(56)
(867)
(7)
50
(953)
(1,834)(514)(7,975)(560)
211(6,900)(15,740)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

(46)
(13,953)
86,644
72,691(45)
19,813
66,83186,644(422)(128,209)
796,140
667,931¥¥$

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
domestically in 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 ¥108.83 to $1, the approximate rate of exchange at
March 31, 2020. 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.

10Directors and Corporate Auditors
Shigenobu Tokuoka
Ryo Nagai(as of June 30, 2020)

ChairmanPresident
Director and Senior Managing Executive
Officer
Director and Managing Executive Officer
Director and Managing Executive Officer
Director and Managing Executive Officer
Director
Director and Executive Officer
Director (Outside)
Director (Outside)
Audit & Supervisory Board Member
Audit & Supervisory Board Member (Outside)
Audit & Supervisory Board Member (Outside)

Noriaki Kojima
Toshiyuki Wakao
Akira Hotta
Hideo Kobayashi
Hiroshi Kawai
Junko Hiratsuka
Yuki Shibata
Kenichi Nakamatsu
Junji Miyazaki
Kazuhiko Kimura
Yoshiko Kurimoto

Status of Principal Shareholders(as of March 31, 2020)

Name

Address

MUFG Bank, Ltd.

Japan Trustee Services Bank, Ltd. (trust a/c 4)

7-1, Marunouchi 2-Chome, Chiyoda-ku, Tokyo
15-56, Heian 2-Chome, Kita-ku, Nagoya-City,
Aichi
8-11, Harumi 1-Chome, Chuo-ku, TokyoJapan Trustee Services Bank, Ltd. (trust a/c)

8-11, Harumi 1-Chome, Chuo-ku, Tokyo

Misono Service Co., Ltd.

Tamazen Co., Ltd.
The Chukyo Bank Employees Shareholding
Association
Daido Life Insurance Company(Standing proxy: Japan Trustee Services Bank, Ltd.)The Master Trust Bank of Japan, Ltd. (trust a/c)
Aioi Nissay Dowa Insurance Co., Ltd.
(Standing proxy: The Master Trust Bank of Japan,
Ltd.)
Nippon Life Insurance Company(Standing proxy: The Master Trust Bank of Japan,
Ltd.)17-2, Marunouchi 1-Chome, Naka-ku,
Nagoya-City, Aichi
33-13, Sakae 3-Chome, Naka-ku, Nagoya-City,
Aichi
2-1, Edobori 1-Chome, Nishi-ku, Osaka-City, Osaka(8-11, Harumi 1-Chome, Chuo-ku, Tokyo)
11-3, Hamamatsu-cho 2-Chome, Minato-ku,
Tokyo28-1, Ebisu 1-Chome, Shibuya-ku, Tokyo(11-3, Hamamatsu-cho 2-Chome, Minato-ku,
Tokyo)
6-6, Marunouchi 1-Chome, Chiyoda-ku, Tokyo(11-3, Hamamatsu-cho 2-Chome, Minato-ku,
Tokyo)

Total
Note

Number ofshares held
(thousand)

Percentageof shareownership(%) (Note)

8,534

39.36

1,202

5.54

993

4.58

772

3.56

610

2.81

483

2.23

470

2.16

415

1.91

392

1.81

341

1.57

14,216

65.57

The 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, 2020, non-consolidated)(as of June 30, 2020)
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

38

Date of Establishment:

February 10, 1943

Aichi

28

Capital Stock:

31.844 billion yen

Mie

15

Shizuoka

1

Nara

2

Osaka

1

Tokyo

1

Internet branch

1

Total

87

Number of ATMs

203

Deposits:

1,780.7 billion yen*Including negotiable certificates of deposit

Loans and Bills Discounted:

1,363.3 billion yen

Number of Employees:

1,120

11