Tokyo TY Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Financial Statements
Years Ended March 31, 2017 and 2016
Contents:
Tokyo TY Financial Group, Inc. and Consolidated Subsidiaries
Independent Auditor’s Report
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
The Tokyo Tomin Bank, Limited
Non-consolidated Balance Sheets (Unaudited)
Non-consolidated Statements of Income (Unaudited)
The Yachiyo Bank, Limited
Non-consolidated Balance Sheets (Unaudited)
Non-consolidated Statements of Income (Unaudited)
ShinGinko Tokyo, Limited
Non-consolidated Balance Sheets (Unaudited)
Non-consolidated Statements of Income (Unaudited)Tokyo TY Financial Group Inc. and Consolidated Subsidiaries
Consolidated Balance Sheets
As of March 31, 2017 and 2016
Millions of Yen
2016
2017
AssetsCash and due from banks (Notes 21 and 24)
Call loans and bills bought
Monetary claims bought
Trading account securities (Note 24)
Securities (Notes 3, 6 and 24)
Loans and bills discounted (Notes 4,6 and 24)
Foreign exchanges
Other assets (Note 6)
Tangible fixed assets (Note 5)
Intangible fixed assets
Net defined benefit asset (Note 10)
Deferred tax assets (Note 15)
Customers’ liabilities for acceptances and guarantees
Reserve for loan losses
Total assets¥¥

Liabilities
Deposits (Notes 6 and 24)
Negotiable certificates of deposit
Call money and bills sold (Note 6)
Payables under securities lending transactions (Notes 6 and 24)
Borrowed money (Notes 6, 7 and 24)
Foreign exchanges
Bonds payable (Note 8)
Bonds with stock acquisition rights (Note 8)
Other liabilities (Note 9)
Reserve for employees’ bonuses
Net defined benefit liability (Note 10)
Reserve for officers and directors’ retirement benefits
Reserve for point card program
Reserve for losses on interest repayments
Reserve for losses from reimbursement of inactive accounts
Reserve for losses on cancellation of system contracts
Reserve for contingent losses
Deferred tax liabilities (Note 15)
Deferred tax liabilities on land revaluation (Notes 5 and 15)
Acceptances and guarantees (Note 11)
Total liabilities¥

Net assets (Notes 12, 13 and 16)
Shareholders’ equity:
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities (Note 14)
Deferred gains or losses on hedges
Revaluation reserve for land (Note 5)
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Stock acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets¥

See notes to consolidated financial statements.

1

515,886
3,987
45,724794
1,281,164
3,621,372
7,584
42,61756,085
1,903
14,125
7,823
7,880(29,644)5,577,306

4,717,562
21,34040,706361,309
103,416
936
30,150
2,213
4,453
110
57
10
1,010
200
675
1,902
14
7,880
5,293,949¥¥¥

Thousands of
U.S. Dollars(Note 2)
2017405,539
43,6004,202
658
1,210,097
3,359,919
6,531
29,31453,217
2,039
8,647
7,035
5,860
(24,122)
5,112,540$

4,598,327
35,540407,563
7,082
11,419,597
32,278,925
67,604
379,871499,914
16,968125,90769,732
70,244(264,236)$ 49,713,043

4,502,192
34,206
293,327
7,425
68
16,0005,000
35,803
2,038
5,530
85
53
14
988
659
55
14
5,860
4,909,324$

42,049,755
190,213362,837
3,220,518
921,793
8,345
268,741
19,727
39,692
980
513
92
9,008
1,782
6,019
16,958129
70,24447,187,353

27,500150,733
104,574(632)
282,175

20,00099,58580,913(594)
199,905

245,119
1,343,555
932,118(5,635)2,515,159

3,166
(209)
8
(2,216)748
95
337
283,357
5,577,306

8,390
6
(209)
11
(5,221)
2,977
46
286
203,216
5,112,540

28,219(1,867)72(19,752)
6,672
853
3,004
2,525,690
49,713,043¥$

Tokyo TY Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Statements of Income
For the Years Ended March 31, 2017 and 2016
Thousands of
U.S. Dollars(Note 2)
2017

Millions of Yen
2016
2017
IncomeInterest income:Interest on loans and discounts
Interest and dividends on securities
Interest on call loans and bills boughtInterest on receivables under securities borrowing transactions
Interest on due from banks
Other interest income
Trust fees
Fees and commissions
Other operating income
Other income (Note 17)
Total income¥

45,992
11,570
77
0
324
924
61
16,165
5,301
22,280102,698¥

45,740
9,060
204
311
523
15,832
4,899
3,402
79,975$409,953
103,134
689
0
2,891
8,240
546
144,09347,252
198,596915,397

Expenses
Interest expense:
Interest on deposits
Interest on negotiable certificates of deposit
Interest on call money and bills soldInterest on payables under securities lending transactions
Interest on borrowed money
Interest on bonds payable
Interest on bonds with stock acquisition rights
Other interest expense
Fees and commissions payments
Other operating expenses
General and administrative expenses (Note 18)
Other expenses (Note 19)
Total expenses

2,078
5
26
1,219
128
225
53
55
3,540
1,815
59,976
6,121
75,248

2,147
27
0
664
131
488
107
56
3,424
363
54,2693,742
65,423

18,52649
239
10,868
1,141
2,014
479
493
31,562
16,178534,599
54,567670,719

Income before income taxes

27,45014,551

244,677

Income taxes (Note 15):
Current
Deferred
Total income taxes

1,997
(120)
1,876

2,475
2,638
5,113

17,800(1,078)16,722

Net income (Note 16)

25,5749,437

227,955

38

24

343

Net income belonging to non-controlling shareholders¥

Net income belonging to parent company’s shareholders
See notes to consolidated financial statements.

2

25,535

¥

9,412

$

227,611Tokyo TY Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Statements of Comprehensive Income
For the Years Ended March 31, 2017 and 2016
Millions of Yen
2016
2017
¥

Net Income
Other comprehensive loss (Note 20):
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of affiliate accounted for by
the equity method
Total other comprehensive loss

25,574¥

9,437

Thousands of
U.S. Dollars(Note 2)
2017$

227,955(5,318)
(6)
(3)
3,005

(1,284)4
0(5)(5,654)(47,407)(62)(32)
26,790104(2,218)(108)(7,046)932(19,778)

Comprehensive income¥

23,355

¥

2,390

$

208,177

Total comprehensive income attributable to:Parent company’s shareholders
Non-controlling shareholders¥

23,306
48

¥

2,363
26

$

207,741436

See notes to consolidated financial statements.

3

Tokyo TY Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2017 and 2016
Millions of Yen
Shareholders’ Equity

Thousands
Issued number ofshares ofcommon stock
Balance, April 1, 2015
Cash dividends
Net income belonging toparent company’s
shareholders
Purchase of treasury stock
Disposition of treasury
stock
Change in interest in
subsidiaries
Net changes in items otherthan those inshareholders’ equity
Total changes during theyear

29,227

Balance, March 31, 2016
Issuance of new shares
Increase by shareexchanges
Cash dividends
Net income belonging toparent company’s
shareholders
Purchase of treasury stock
Disposition of treasury
stock
Change in interest in
subsidiaries
Net changes in items otherthan those inshareholders’ equity
Total changes during theyear

29,227

Balance, March 31, 2017

30,650CapitalSurplus

CommonStock¥

20,000¥Retained
Earnings

99,607¥73,245(1,744)

Total
Shareholders’EquityTreasury
Stock
¥

(544)

¥

9,412
0

(52)

9,412
(52)

2

2

(21)

-

¥

20,000
7,500

(21)

(21)
¥

1,422

99,585
7,500

7,668
¥

80,913

(50)
¥

(594)

7,596
¥

43,71925,5350(47)

25,535
(47)

9

10

(72)

7,500
¥

27,500(72)

51,147¥150,733

See notes to consolidated financial statements.

4

199,905
15,00043,719(1,874)(1,874)

1,422

192,308(1,744)

23,660¥104,574

(37)
¥

(632)

82,270¥282,175

Millions of Yen
Accumulated Other
Comprehensive Income
Valuationdifference on
available-forsale securities

Deferred
gains orlosses onhedgesBalance, April 1, 2015
Cash dividends
Net income belonging toparent company’s
shareholders
Purchase of treasury stock
Disposition of treasury
stock
Change in interest in
subsidiaries
Net changes in items otherthan those inshareholders’ equity
Total changes during the
year

¥

¥

Balance, March 31, 2016
Issuance of new shares
Increase by shareexchanges
Cash dividends
Net income belonging toparent company’s
shareholders
Purchase of treasury stock
Disposition of treasury
stock
Change in interest in
subsidiaries
Net changes in items otherthan those inshareholders’ equity
Total changes during theyear¥

Balance, March 31, 2017

¥

9,784

Revaluation
reserve for
land
2 ¥

(210)

Foreign
Currency
Translation
Adjustments¥

Remeasurementsof defined benefit
plans

17

¥

432

Total
Accumulated
Other
Comprehensive
IncomeStock
Acquisition
Rights

Noncontrolling
Interests¥¥¥

10,026-245

Total Net
Assets¥ 202,580(1,744)
9,412
(52)
2
(21)

(1,393)4

0(5)(5,654)(7,048)46

41(6,960)(1,393)4

0(5)(5,654)(7,048)

46

41

636

6 ¥

(209)

286

¥ 203,216
15,000

8,390

¥

¥

11

¥

(5,221)

¥

2,977

¥

46

¥

43,719(1,874)25,535
(47)
10
(72)
(6)

(5,224)(5,224)
3,166

¥

(6)
- ¥

(209)

(3)
(3)
8

¥

See notes to consolidated financial statements.

5

3,005

¥

3,005
(2,216)(2,229)¥(2,229)
748

49

¥

49
95

¥

50

(2,129)50
337

80,140¥ 283,357

Thousands of U.S. Dollars (Note 2)
Shareholders’ Equity
CapitalRetained
Treasury
Surplus
Earnings
Stock

CommonStock
Balance, April 1, 2016
Issuance of new shares
Increase by shareexchanges
Cash dividends
Net income belonging toparent company’s
shareholders
Purchase of treasury stock
Disposition of treasury
stock
Change in interest in
subsidiaries
Net changes in items otherthan those inshareholders’ equity
Total changes during theyear$

Balance, March 31, 2017$

178,269
66,850$887,654
66,850$721,219$

Total Shareholders’Equity(5,299)$389,689

389,689(16,711)(16,711)
227,6117(422)

227,611
(422)

87

94

(647)

Valuationdifference on
available-forsale securities

Deferred
gains orlosses onhedgesBalance, April 1, 2016
Issuance of new shares
Increase by shareexchanges
Cash dividends
Net income belonging toparent company’s
shareholders
Purchase of treasury stock
Disposition of treasury
stock
Change in interest in
subsidiaries
Net changes in items otherthan those inshareholders’ equity
Total changes during the
year

$

$

Balance, March 31, 2017$

74,786(335)(5,635)

Thousands of U.S. Dollars (Note 2)
Accumulated Other
Comprehensive Income
Total
Foreign
Accumulated
Revaluation
Remeasurements
Currency
Other
reserve forTranslation of defined benefit Comprehensive
land
plans
Adjustments
IncomeStock
Acquisition
Rights

Noncontrolling
Interests

$

$

62 $

$

(1,867)$455,900
1,343,555

(647)

$

66,850245,119105$

1,781,843
133,701$(46,543)

210,899
932,118$

26,543

415

$

2,556

733,315
2,515,159

Total Net
Assets$ 1,811,358
133,701
389,689(16,711)
227,611
(422)
94
(647)

(62)

(46,566)(46,566)
28,219

$

(62)
- $

(1,867)

(32)

$

(32)
72

See notes to consolidated financial statements.

6

26,790$26,790(19,752)(19,870)$(19,870)
6,672

438

$

438
853

$

447

(18,984)

447
3,004

714,331$ 2,525,690

Tokyo TY Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Statements of Cash Flows
For the Years Ended March 31, 2017 and 2016
Thousands of
U.S. Dollars(Note 2)
2017

Millions of Yen
2016

2017
Operating activities:
Income before income taxes
Depreciation and amortization
Retirement benefit expenses
Gain on negative goodwill
Equity in earnings of investment in affiliate
Net decrease in reserve for loan losses
Net increase (decrease) in reserve for employees’ bonuses
Net (increase) decrease in retirement benefit asset
Net (decrease) increase in retirement benefit liability
Net increase (decrease) in reserve for officers and directors’
retirement benefits
Net increase in reserve for point card program
Net decrease in reserve for losses on interest repayments
Net increase in reserve for losses from reimbursement ofinactive accounts
Net increase in reserve for losses on cancellation of system
contracts
Net decrease in reserve for contingent losses
Interest income
Interest expense
Net gains related to securities transactions
Net exchange (gains) losses
Net losses (gains) on disposition of fixed assets
Net increase in provision for special account for advanced
depreciation of fixed assets
Gain on state subsidy and other grants
Net increase in trading securities
Net increase in loans and bills discounted
Net (decrease) increase in deposits
Net (decrease) increase in negotiable certificates of deposit
Net (decrease) increase in borrowed money (excluding
subordinated borrowed money)
Net decrease (increase) in due from banks (excluding due fromthe Bank of Japan)
Net decrease (increase) in call loans and bills bought
Net increase in call money
Net increase in payables under securities lending transactions
Net (increase) decrease in foreign exchange-assets
Net increase (decrease) in foreign exchange-liabilities
Interest received
Interest paid
Other-net
Subtotal
Income taxes paid
Income taxes refunded¥¥

Net cash (used in) provided by operating activities

27,4503,023
830(19,443)
(78)
(454)
37
(5,478)(1,215)¥

14,551
3,485
(216)
(189)
(4,791)
(36)
2,130
2,204

$

244,677
26,945
7,400(173,311)(700)(4,050)336(48,832)(10,837)

24
4
(3)

(51)
2
(0)

216
37
(33)

21

144

194

200
(5)
(58,889)
3,793(2,544)(8,308)272(80)(55,840)
3,623(2,984)
19,144
(87)

1,782
(44)
(524,909)
33,812(22,680)(74,054)
2,432

(156)
(136)
(38,866)(78,076)(12,866)

122
(132)
(51)
(65,117)
10,886
7,168(1,395)(1,213)(346,430)(695,926)(114,680)(2,009)15(17,910)1,860
29,81940,706
67,982(1,053)867
60,717(4,354)(5,554)(1,881)(2,745)350(33)(15,852)
152,450
1,200(70)
57,631(3,845)(16,436)
108,940(3,544)
312

16,582
265,791
362,837
605,957(9,389)7,735
541,205(38,812)(49,506)(16,773)(24,471)
3,127(4,276)¥

105,708$(38,117)(Continued)

7Tokyo TY Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Statements of Cash Flows
For the Years Ended March 31, 2017 and 2016
Thousands of
U.S. Dollars(Note 2)
2017

Millions of Yen
2016

2017
Investing activities:
Purchases of securities
Proceeds from sales of securities
Proceeds from maturity of securities
Purchases of tangible fixed assets
Payments for disposition of tangible fixed assets
Proceeds from sales of tangible assets
Purchases of intangible assets
Payments of investments in capital
Proceeds from state subsidy and other grants¥(556,723)
362,521291,314(4,467)
(171)
42
(758)
(103)
58

¥

(657,580)
577,21494,063(1,408)
(41)
534
(260)
234

$

(4,962,328)
3,231,320
2,596,616(39,819)(1,527)380(6,764)(922)
521

91,712

12,757

817,477(2,000)(21,000)
14,881(1,877)
(54)
(47)
10

(9,600)(1,747)(6)(52)
2(17,826)(187,182)
132,647(16,734)
(487)
(422)
94

(52)

-

(465)

81
(363)

(390)

721
(3,237)(10,421)(11,794)(92,892)

4037

Net increase in cash and cash equivalents

77,018106,671686,504

Cash and cash equivalents at beginning of year

393,056

286,385

3,503,491

Increase in cash and cash equivalents resulting from shareexchange (Note 22)

34,369-306,346

Net cash provided by investing activities
Financing activities:
Repayments of subordinated borrowings
Payments for redemption of subordinated bonds
Proceeds from issuance of shares
Cash dividends paid
Cash dividends paid to non-controlling interests
Payments for purchase of treasury stock
Proceeds from sales of treasury stock
Payments for acquisition of shares in subsidiaries that do not
result in change in scope of consolidation
Proceeds from sales of shares in subsidiaries that do not resultin change in scope of consolidation
Payments of lease obligations
Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents¥

Cash and cash equivalents at end of year (Note 21)504,444¥

393,056$

4,496,343(Concluded)

See notes to consolidated financial statements.

8

Tokyo TY Financial Group, Inc. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended March 31, 2017 and 2016
1. Summary of Significant Accounting Policies
a. Basis of presentation
Tokyo TY Financial Group Inc. (the “Company”) was established as a joint holding company through a sharetransfer between The Tokyo Tomin Bank, Limited (“Tokyo Tomin”) and The Yachiyo Bank, Limited (“Yachiyo”)
on October 1, 2014. The share transfer was accounted for applying the purchase method stipulated in accounting
standards relating to business combinations with Tokyo Tomin as the acquiring company and Yachiyo as theacquired company.
The accompanying consolidated financial statements of the Company and its consolidated subsidiaries have been
prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Act andits related accounting regulations, the Enforcement Regulation for the Banking Act and in conformity withaccounting principles generally accepted in Japan (“Japanese GAAP”), which are different in certain respects as toapplication and disclosure requirements of International Financial Reporting Standards.
As permitted by the Financial Instruments and Exchange Law of Japan, amounts of less than one million yen havebeen omitted. As a result, the totals shown in the accompanying consolidated financial statements (both in yen and
U.S. dollars) do not necessarily agree with the sums of the individual amounts.
b. Principles of consolidation
The accompanying consolidated financial statements include the accounts of the Company and all of its 12
subsidiaries (collectively, the “Group”).
As a result of the management integration with ShinGinko Tokyo, Limited (“ShinGinko Tokyo”), a shareexchange was implemented as of April 1, 2016, in which the Company became a wholly-owning parent and
ShinGinko Tokyo became a wholly-owned subsidiary. ShinGinko Tokyo has accordingly been included in thescope of consolidation from the year ended March 31, 2017.
As of April 3, 2017, Tomin Management Research Institute Co., Limited changed its trade name to Kiraboshi
Consulting Co., Limited.
Under the control and influence concept, those companies which the Company, directly or indirectly, is able toexercise control over operations are fully consolidated, and those companies over which the Group has the ability
to exercise significant influence in terms of its operating and financial policies is accounted for by the equity
method in the consolidated financial statements.
Investments in two affiliated companies are accounted for by the equity method.
From the year ended March 31, 2017, Sky Ocean Assets Management Co., Ltd., a new investment, has been
included in the scope of those accounted for by the equity-method.
All significant intercompany balances and transactions have been eliminated in consolidation. All material
unrealized profit included in assets resulting from transactions within the Group is also eliminated.
The balance sheet dates of the consolidated subsidiaries at March 31, 2017 are as follows:
December 31.......................... 1
March 31................................ 11
The subsidiary with the balance sheet date of December 31 is consolidated after the accounts were provisionallyclosed as of March 31 for the purpose of consolidation. The other subsidiaries are consolidated on the basis of
their respective financial statement with the balance sheet date same as the consolidated balance sheet date.

9

c. Trading account securities
Trading account securities are stated at fair value as of the balance sheet date. Cost of sales of trading accountsecurities is determined using the moving average method.
d. Securities
Held-to-maturity debt securities are carried at amortized cost (straight-line method) determined by themoving-average method.
Available-for-sale securities for which fair value is available are stated at the fair value at the fiscal year-end. Costof sales of these available-for-sale securities is determined using the moving-average method. Available-for-salesecurities for which fair value is not readily determinable are stated at cost determined by the moving averagemethod. Valuation difference on available-for-sale securities, net of applicable taxes, is reported in a separate
component of net assets.
e. Derivative transactions
Derivatives are stated at fair value.
f. Depreciation and amortization of fixed assets
Depreciation of tangible fixed assets (other than lease assets) of consolidated subsidiaries conducting banking
business (“banking subsidiaries”) is computed using the declining-balance method based on the estimated useful
lives of the assets, while the straight-line method is mainly applied to buildings.
The following is the ranges of useful lives of principal tangible fixed assets.
Buildings:
6 to 50 years
Other:
2 to 20 years
Depreciation of tangible fixed assets of other consolidated subsidiaries (“non-banking subsidiaries”) is principally
computed using the declining-balance method based on the estimated useful lives of the assets.
Intangible fixed assets (other than lease assets) are amortized using the straight-line method. Costs of computer
software developed or obtained for internal use are amortized using the straight-line method over the estimateduseful life of 5 years.
Lease assets under finance leases which do not transfer ownership of assets to lessees are depreciated using thestraight-line method over the lease terms of the respective assets. Residual value of these lease assets isguaranteed residual value per the respective lease contracts or zero value.
g. Treatment of deferred assets
Organization costs and stock issuance costs are amortized using the straight-line method over 5 years and 3 years,
respectively.
h. Reserve for loan losses
A reserve for loan losses is provided by consolidated banking subsidiaries in accordance with internallyestablished standards for write-offs and provisions:• For claims on borrowers who have entered into bankruptcy, special liquidation proceedings or similar legal
proceedings under the Bankruptcy Law, Special Liquidation in the Commercial Law or other similar laws(“bankrupt borrowers”), and borrowers who are not legally or formally bankrupt but effectively in similar
conditions (“effectively bankrupt borrowers”), a reserve is fully provided based on the amount of claims, netof the expected amount of recoveries from collateral and guarantees.
• For claims on borrowers who are not currently bankrupt but are perceived to have a high risk of falling into
bankruptcy (“potentially bankrupt borrowers”), a reserve is provided in the amount deemed necessary basedon an overall solvency assessment of the claims, net of the expected amount of recoveries from collateral andguarantees.

10• For other claims, a reserve is provided based on the rates derived from default experiences for a certain
period in the past and other factors.
For claims on borrowers who are effectively bankrupt borrowers or borrowers whose credit terms are rescheduledor reconditioned and exceed certain thresholds, if cash flows from collection of principal and interest can bereasonably estimated, the difference between the cash flows discounted by the original interest rate and thecarrying value of the loan is provided as a reserve for loan losses (discounted cash flows method).
All claims are assessed by the Asset Assessment Department under the cooperation by credit origination
department in accordance with the Group’s policies and guidelines for the self-assessment of asset quality. For
collateralized or guaranteed claims on bankrupt borrowers and effectively bankrupt borrowers of part of theconsolidated subsidiaries engaged in banking, the amount of the claims exceeding the estimated value of collateraland guarantees was deemed to be uncollectible and was written off against the total amount of the outstanding
claims until the year ended March 31, 2015; however, from the year ended March 31, 2016, in line with the
management integration, such amount is no longer written off directly but provided as a reserve. As of March 31,2017 and 2016, the outstanding write-offs made before April 1, 2015 amounted to ¥1,615 million ($14,397
thousand) and ¥1,992 million, respectively.
For part of the consolidated non-banking subsidiaries, a general reserve is provided based on the historical credit
loss experience for normal claims and a specific reserve is provided at the amount deemed uncollectible based onan evaluation of potential losses for each claim other than normal claims.
i. Reserve for employees’ bonuses
A reserve for employees’ bonuses is recorded at the estimated amount attributed to the current fiscal year, toprovide for the future bonus payments to employees.
j. Reserve for officers’ and directors’ retirement benefits
A reserve for officers’ retirement benefits is recorded to provide future pension payments by certain consolidatedbanking subsidiaries and that for directors’ by certain consolidated non-banking subsidiaries in the amountdeemed accrued at the current fiscal year-end based on the estimated amount of benefits.
k. Reserve for point card program
A reserve for point card program is provided by certain consolidated subsidiaries at the amount considerednecessary to cover the estimated future costs of credit points.
l. Reserve for losses on interest repayments
Certain consolidated subsidiaries account for the necessary amount to provide for possible losses on claims for
repayments of interest on loans that exceed the maximum interest rate set by the Interest Limitation Law.
m. Reserve for losses from reimbursement of inactive accounts
A reserve for losses from reimbursement of inactive accounts is provided by consolidated banking subsidiaries at
the amount considered necessary for future payments of deposits which were derecognized from liabilities, owing
to depositors request for reimbursements.
n. Reserve for losses on cancellation of system contracts
A reserve for losses on cancellation of system contracts is provided at the amount considered necessary to cover theestimated future losses on early cancellation of the outsourcing service contracts for existing core systems as a result ofintegrating core systems used by a certain consolidated banking subsidiary to those used by another consolidatedbanking subsidiary, which is expected to be made around May 2018.

o. Reserve for contingent losses
A reserve for contingent losses is provided by consolidated banking subsidiaries at the amount considerednecessary to cover possible contingent losses in accordance with the Joint Responsibility System of Credit
Guarantee Corporations.

11

p. Retirement benefits
In determining the retirement benefit liability for certain consolidated banking subsidiaries, the benefit formulabasis is adopted as the attribution method of the projected retirement benefit.
Prior service costs are charged to income using the straight-line method based on the average remaining service
period of the employees (3 years).
Actuarial differences are charged to income from the period following the period in which they arise using thestraight-line method based on the average remaining service period of the employees (11 to 12 years, 14 to 15
years).
Simplified methods are applied by certain consolidated non-banking subsidiaries in calculating the net defined
benefit liability and retirement benefit expenses which allow them to determine based on the amount considerednecessary upon voluntary resignation at the end of fiscal year.
q. Translation of assets and liabilities denominated in foreign currencies
Assets and liabilities denominated in foreign currencies are translated into Japanese yen at the exchange rates
prevailing at the balance sheet date.
r. Hedge accounting
For derivatives to hedge the interest rate risk associated with various financial assets and liabilities of theconsolidated banking subsidiaries, the Group applies the deferred method which is stipulated in “Accounting and
Auditing Treatment of Accounting Standards for Financial Instruments in Banking Industry” (Japanese Institute ofCertified Public Accountants (the “JICPA”) Industry Audit Committee Report No. 24, February 13, 2002). The
Group assesses the effectiveness of such hedge for offsetting changes in interest rate, by classifying the hedged
items (such as deposits and loans) and the hedging instruments (such as interest rate swaps) by their maturity. The
Group had not entered into new derivative transactions for the purpose of hedging against changes in interest rates
related to deposits and loans during the fiscal years ended March 31, 2017 and 2016.
Exceptional treatment is applied to interest rate swaps for certain financial assets.
Consolidated non-banking subsidiaries have no transactions to which hedge accounting is applied.
s. Appropriation of retained earnings
Under the Companies Act of Japan (the “Companies Act”), the appropriation of retained earnings with respect to agiven financial period is made by resolution of the stockholders at a general meeting held subsequent to the closeof such financial period. Therefore, the accounts for that period do not, reflect such appropriations. See Note 28.
t. Cash and cash equivalents
For purposes of the consolidated statements of cash flows, cash and cash equivalents include cash and deposits
with the Bank of Japan which are included in “Cash and due from banks” in the consolidated balance sheets.
u. Consumption taxes
The Company and its domestic consolidated subsidiaries account for consumption taxes and local consumption
taxes by the tax-exclusion method whereby receipts and payments of consumption taxes are not included in thetransaction amounts and, accordingly, consumption tax amounts do not affect the measurement of profit or losstransactions. However, consumption taxes etc. relating to tangible fixed assets that are not tax-deductible areaccounted for as an expense in the fiscal year in which they are incurred.
v. Change in accounting policies
The Group has adopted the “Practical Solution on a Change in Depreciation Method Due to Tax Reform 2016” (ASBJ
PITF No.32, June 17, 2016) from the year ended March 31, 2017, and has changed its depreciation method for building
fixtures and structures acquired on or after April 1, 2016, from the declining-balance method to the straight-line method.
The effect of this change on income before income taxes for the year ended March 31, 2017 is immaterial.

12w. Additional information
The Group has adopted the “Implementation Guidance on Recoverability of Deferred Tax Assets (ASBJ Guidance
No. 26, March 28, 2016) from the year ended March 31, 2017.
2. U.S. Dollar Amounts
Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rate of ¥112.19 =$1, the approximate rate of exchange on March 31, 2017, has been used in translation. The inclusion of suchamounts is not intended to imply that Japanese yen have been or could be readily converted, realized or settled in
U.S. dollars at that rate or any other rate.
3. Securities
As of March 31, 2017 and 2016, securities included equity investments in an affiliated company that amounted to¥977 million ($8,714 thousand) and ¥998 million, respectively.
As of March 31, 2016, Japanese government bonds included bonds of ¥2,999 million, which were being loaned tothird parties without collateral under lending contracts (securities lending transactions).
Japanese corporate bonds included bonds offered through private placement. The Group’s guarantee obligation forsuch private-placement bonds as of March 31, 2017 and 2016 were ¥32,246 million ($287,429 thousand) and¥27,889 million, respectively.
In the following description, in addition to “Securities”, also presented are negotiable certificates of deposit which
are classified as “Trading account securities” and “Cash and due from banks” in the consolidated balance sheets
and beneficiary claims on loan trusts which are classified as “Monetary claims bought” in the consolidatedbalance sheets.
As of March 31, 2017 and 2016, valuation gain on trading securities included in income before income taxes was¥3 million ($33 thousand) and ¥6 million, respectively.

13 Held-to-maturity securities
The following tables summarize carrying values, fair values and differences of securities with available fair values
as of March 31, 2017 and 2016:
Millions of Yen
2017
Carrying value
Securities with fair value exceeding carrying value:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Foreign securities
Subtotal
Securities with fair value not exceeding carrying value:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Foreign securities
Subtotal
Total

¥

¥

295,633
34,28683,007
26,132
439,059
12,126
11,8772,000
26,004
465,063

Fair value¥¥

Net unrealized
gains (losses)

310,271 ¥
34,576
83,962
26,343455,154

14,638290955
211
16,095

11,935
11,772
1,922
25,630480,785 ¥

(190)
(105)
(77)
(373)
15,722Millions of Yen
2016
Carrying value
Securities with fair value exceeding carrying value:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Foreign securities
Subtotal
Securities with fair value not exceeding carrying value:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Foreign securities
Subtotal
Total

¥

¥

14

340,371
63,637
90,237
15,133509,380
40
4,017
6,308
3,000
13,365
522,745

Fair value¥¥

Net unrealized
gains (losses)

359,354 ¥
64,07291,40815,674
530,509

18,982
435
1,170
541
21,129

40
4,016
6,306
2,931
13,294
543,804 ¥

(0)
(0)
(1)
(68)
(70)
21,059

Thousands of U.S. Dollars
2017
Net unrealized
Carrying value
Fair value
gains (losses)
Securities with fair value exceeding carrying value:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Foreign securities
Subtotal
Securities with fair value not exceeding carrying value:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Foreign securities
Subtotal
Total

$

$

2,635,112
305,607739,883
232,928
3,913,532
108,086
105,872
17,826
231,785
4,145,317$$

2,765,590 $
308,196
748,398
234,814
4,057,001

130,478
2,589
8,514
1,886
143,468

106,385
104,932
17,137
228,455
4,285,457 $(1,700)(940)(689)(3,329)140,139

 Available-for-sale securities
The following tables summarize carrying values, acquisition costs and differences of securities with available fairvalues as of March 31, 2017 and 2016:
Millions of Yen
2017
Net unrealized
Carrying value Acquisition cost gains (losses)
Securities with carrying value exceeding acquisition cost:
Corporate stocks¥
24,204 ¥16,819 ¥7,384
Bonds:
Japanese government bonds
148,645
147,655
989
Japanese local government bonds
27,141
26,869271
Japanese short-term corporate bonds
209,327
207,669
1,658Japanese corporate bonds
Total bonds
385,114382,1942,920
109,950
108,321
1,628
Other securities
Subtotal
519,269
507,335
11,933
Securities with carrying value not exceeding acquisition
cost:
Corporate stocks
8,202
9,929
(1,726)
Bonds:
Japanese government bonds
29,05929,909(849)
Japanese local government bonds
10,928
11,184(256)
Japanese short-term corporate bonds
9,999
9,999
117,576
118,415(839)
Japanese corporate bonds
Total bonds
167,563
169,509(1,945)
154,855(3,946)150,909
Other securities
326,675
334,293(7,618)Subtotal¥
845,944¥841,629
¥
4,315
Total

15

Millions of Yen
2016

Securities with carrying value exceeding acquisition cost:
Corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese short-term corporate bonds
Japanese corporate bonds
Total bonds
Other securities
Subtotal
Securities with carrying value not exceeding acquisition
cost:
Corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese short-term corporate bonds
Japanese corporate bonds
Total bonds
Other securities
Subtotal
Total

Carrying value

Acquisition cost

Net unrealized
gains (losses)

¥

¥

¥

22,32915,163

7,166

176,318
47,711
231,717455,747
122,218
600,295

173,763
46,957229,548450,268
118,917584,349

2,555
754
2,169
5,478
3,301
15,946

10,428

12,975(2,546)

1,984
999
9,999
26,79339,77743,53993,746
694,041

1,998
1,000
9,999
27,04240,04044,52997,546
681,895

(13)
(0)
(248)
(262)
(990)
(3,800)12,146

Thousands of U.S. Dollars
2017
Net unrealized
Carrying value
Acquisition cost
gains (losses)
Securities with carrying value exceeding acquisition cost:
Corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese short-term corporate bonds
Japanese corporate bonds
Total bonds
Other securities
Subtotal
Securities with carrying value not exceeding acquisition
cost:
Corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese short-term corporate bonds
Japanese corporate bonds
Total bonds
Other securities
Subtotal
Total

$

$
16

215,744$

149,919$

65,825

1,324,941
241,923
1,865,833
3,432,698
980,038

1,316,118
239,503
1,851,047
3,406,670
965,520

8,822
2,420
14,78526,02814,517

4,628,481

4,522,110

106,371

73,11388,504(15,390)259,020
97,406
89,134
1,048,010

266,594
99,69089,134
1,055,491(7,574)(2,283)(7,481)

1,493,572
1,345,119
2,911,806
7,540,287

1,510,911
1,380,294
2,979,710
7,501,820(17,338)(35,174)(67,904)
38,467$$

Securities with fair values (excluding securities held for trading purpose) that have substantially declined from theacquisition cost are valued at fair value and losses on devaluation of those securities are recognized in the
consolidated statements of income unless the value is considered recoverable.
For the year ended March 31, 2017, impairment loss of ¥1 million ($14 thousand) for bonds was recognized.
For the year ended March 31, 2016, no impairment loss was recognized.
Determining whether the fair value has “significantly declined” is based on the fair value declining by more than
50% or the criteria considering the trend of the fair value during a certain past period and credit risks of the issuers
when the fair value declined between 30% and 50% of the acquisition cost.
The following table summarizes total available-for-sale securities sold and amounts of the related gains and losses
for the years ended March 31, 2017 and 2016:
Millions of Yen
2017
Sales proceeds
Realized gains Realized losses¥
4,474 ¥
1,198¥
77
Corporate stocks
Bonds:
131,326
1,067
562
Japanese government bonds
27,691376
11
Japanese local government bonds
Japanese short-term corporate bonds
28,888448
150Japanese corporate bonds
187,905
1,892
723
Total bonds
149,008
1,059
867
Other securities
Total¥
4,149 ¥
1,669¥
341,388
Millions of Yen
2016
Corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese short-term corporate bonds
Japanese corporate bonds
Total bonds
Other securities
Total

Sales proceeds¥
6,692

Realized gains¥
844

Realized losses¥
241

315,467
60,42985,625461,522
101,347

771
318
344
1,434
904

10
2
12
213

¥

569,563

¥

3,183

¥

467

Thousands of U.S. Dollars
2017
Corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese short-term corporate bonds
Japanese corporate bonds
Total bonds
Other securities
Total

Sales proceeds$
39,885

Realized gains$
10,681

Realized losses$
694

1,170,570
246,823
257,496
1,674,889
1,328,177

9,513
3,357
3,995
16,866
9,440

5,009
98
1,344
6,452
7,733

$
17

3,042,952$

36,989$14,8804. Loans and Bills Discounted
Loans and bills discounted include loans to borrowers in bankruptcy, delinquent loans, loans past due for threemonths or more, and restructured loans. The amounts of these loans as of March 31, 2017 and 2016 were as
follows:

Loans to borrowers in bankruptcy
Delinquent loans
Loans past due for three months or more
Restructured loans
Total

¥

¥

Millions of Yen
2017
2016
5,768 ¥
3,693
83,62083,414
239
291
3,253
3,138
90,53692,882 ¥Thousands of
U.S. Dollars
2017$
51,418745,346
2,139
28,997$
827,901

Loans are generally placed on non-accrual status when the ultimate collectability of either the principal or interest
becomes doubtful because payments have been in arrears for a certain period of time or due to other reasons.
Loans to borrowers in bankruptcy represent non-accrual loans to borrowers in legal bankruptcy as defined in the
Corporation Tax Law. Delinquent loans represent non-accrual loans other than loans to borrowers in bankruptcy
and restructured loans.
Loans past due for three months or more represent loans on which payments of principal or interest have been inarrears for three months or more, but do not meet the criteria for loans to borrowers in bankruptcy and delinquentloans.
Restructured loans are loans that have been restructured to support the rehabilitation of certain borrowers who areencountering financial difficulties, with the intention of ensuring recovery of the loans by providing easier
repayment terms for the borrowers (such as by reducing the rate of interest or by providing a grace period for thepayment of principal/interest, etc.), and are not classified in any of the above categories.
These amounts represent the gross amounts before deduction of the reserve for loan losses.
Notes discounted are recorded as cash lending/borrowing transactions in accordance with “Accounting and
Auditing Treatments of the Application of Accounting Standards for Financial Instruments in the Banking
Industry” (JICPA Industry Audit Committee Report No. 24). The Group has a right to sell or collateralize suchbills at its discretion. As of March 31, 2017 and 2016, total face value of commercial bills and bills of exchangeacquired through discounting amounted to ¥40,944 million ($364,960 thousand) and ¥42,124 million,
respectively.
As of March 31, 2017 and 2016, loans and bills discounted included the portion of extended to original borrowers
based on loan participation agreements, as permitted by the JICPA Accounting Committee Report No. 3, in theamount of ¥500 million ($4,458 thousand) and ¥1,500 million, respectively.
Line-of-credit agreements relating to overdrafts and loans are agreements which oblige the Group to lend funds up
to a certain limit agreed to in advance. The Group makes the loan upon the request of an obligor to draw down
funds under such a loan agreement as long as there is no breach of the various terms and conditions stipulated in
the relevant loan agreement. The unused line-of-credit balance relating to these overdrafts and loan agreements asof March 31, 2017 and 2016 amounted to ¥923,915 million ($8,235,277 thousand) and ¥878,776 million,
respectively. The amount related to overdrafts and loans with a term of one year or less or overdrafts and loans
which permit unconditional cancellation at any time were ¥898,224 million ($8,006,280 thousand) and ¥855,417
million, as of March 31, 2017 and 2016, respectively.

18

As many of these contracts expire undrawn, the aggregate total of the undrawn amount does not necessarily affectthe future cash flows of the Group. Many of these contracts have clauses that allow the Group to turn down a loan
request or reduce the amounts of the credit line if there is a change in financial conditions, a need to establish
increased securities, or other similar reasons. In addition to obtaining necessary collateral (real estate, securities,etc.) at the time the commitment contract is entered into, the Group assesses the condition of the customer’sbusiness operations, and analyzes other information, based on internal procedures and standards. If necessary, thecontract is reviewed and revised, or additional steps are taken to secure the credit extended to the customer.
5. Tangible Fixed Assets
Tangible fixed assets were shown at net of the following accumulated depreciation:

Accumulated depreciation¥

Millions of Yen
2017
2016
38,204 ¥37,825

Thousands of
U.S. Dollars
2017$
340,534

Land used for Tokyo Tomin’s business activities has been revalued on the basis prescribed by the Law Concerning
Land Revaluation (Proclamation No. 34 dated March 31, 1998). As for the revaluation difference, the income tax
account corresponding to the revaluation difference amount is included in liabilities as “Deferred tax liabilities onland revaluation,” and the revaluation difference, net of this deferred tax liability, is included in net assets as“Revaluation reserve for land.”Date of revaluation:
March 31, 1998
Revaluation method as stated in Article 3-3 Law Concerning Land Revaluation
The value of land is based on the posted land price governed by the Law Concerning Public Notification of Land
Prices and the standard land price governed by the Order for Enforcement of the National Land Use Planning Law,
with making reasonable adjustments, as stipulated in Article 2-1 or 2-2 of the Order for Enforcement of the Law
Concerning Land Revaluation (Cabinet Order No. 119 promulgated on March 31, 1998). Difference between therevalued carrying amount and fair value of lands being revalued pursuant to the Article 10 of the law as of March
31, 2017 and 2016 were ¥153 million ($1,363 thousand) and ¥149 million, respectively.
The advanced depreciation entry for tangible fixed assets amounted to ¥191 million ($1,704 thousand) and ¥216
million for the years ended March 31, 2017 and 2016, respectively.
6. Pledged Assets
Assets pledged as collateral as of March 31, 2017 and 2016 consisted of the following:

Millions of Yen
2017
2016
Assets pledged as collateral:
Securities¥
Loan and bills discounted
Other assets
Liabilities corresponding to assets pledged as collateral:
Deposits¥
Call money and bills soldPayable under securities lending transactions
Borrowed money

19

Thousands of
U.S. Dollars
2017

505,717 ¥
17,54436

330,44536$

4,507,689
156,379
325

43,013 ¥15,706354,801
98,00055,382
293,3272$

383,403
140,000
3,162,509
873,518

In addition to the assets presented above, securities totaling ¥82,363 million ($734,140 thousand) and ¥89,194
million were pledged as collateral relating to transactions on exchange settlements, foreign exchange
administration services, cooperative system settlements and derivative transactions or as substitutes for futuretransaction margins as of March 31, 2017 and 2016, respectively.
Other assets as of March 31, 2017 and 2016 included following:Thousands of
U.S. Dollars
2017

Millions of Yen
2017
2016
Deposits
Margin deposits to central counterparty clearing
house

¥

5,701 ¥
10,236

5,513
129

$

50,81991,245

7. Borrowed Money
Borrowed money as of March 31, 2017 and 2016 included subordinated borrowings amounting to ¥5,000 million($44,567 thousand) and ¥7,000 million, respectively.
Annual maturities of borrowed money as of March 31, 2017 and 2016 were as follows:Year ending March 31
2018
2019
2020
2021
2022
2023 and thereafter
Total
8.

¥

¥

Millions of Yen
2017
2016
30,278 ¥277
30,06063
10,04345
28,025
28
8
10
7,000
5,000
7,425
103,416 ¥Thousands of
U.S. Dollars
2017$269,881
267,941
89,524
249,80374
44,567$921,793

Bonds Payable

Bonds payable and bonds with stock acquisition rights as of March 31, 2017 and 2016 consisted of the following:

Millions of Yen
2017
2016
Issued by the Company:
1st unsecured subordinated bonds with stock acquisitionrights, due September 2016, 2.15% interest
Issued by Tokyo Tomin:
6th unsecured fixed and floating callable (subordinated)debenture bonds, due November 2021, 2.38% interest
7th unsecured fixed and floating callable (subordinated)debenture bonds, due November 2021, 2.38% interest
Total

¥

¥

Thousands of
U.S. Dollars
2017

- ¥

5,000 $--

12,500

-

- ¥

3,500
21,000 $-On November 4, 2016, the 6th unsecured fixed and floating callable (subordinated) debenture bonds and the 7th
unsecured fixed and floating callable (subordinated) debenture bonds were fully redeemed prior to maturity.
209. Other Liabilities

Lease obligations
Lease obligations of ¥1,455 million ($12,969 thousand) were included in “Other liabilities”. The average interest
rate on lease obligations as of March 31, 2017 with maturities dates subsequent to March 31, 2018 was 4.03%.
The aggregate annual maturities of lease obligations subsequent to March 31, 2017 were summarized as follows:

Millions of Yen
¥
360
349
302
186
118
137
¥
1,455

Year ending March 31
2018
2019
2020
2021
2022
2023 and thereafter
Total

Thousands of
U.S. Dollars
$
3,213
3,113
2,693
1,666
1,060
1,223
$
12,969

10. Retirement Benefit Plans(1) Outline of retirement benefit plans adopted
Tokyo Tomin maintains a corporate pension fund plan and a lump-sum payment plan. As of October 1, 2013, theretirement benefit system was revised and a switch was made from a defined benefit corporate pension plan to acash balance-type pension plan using a point system. In some cases, premium severance may be paid whenemployees retire.
In 1987, for participants with the participating period of 20 years or more, approximately 20% of the retirement
benefits were transferred from a lump-sum payment plan to a welfare pension fund plan.
Concerning the substitutional portion of the welfare pension fund plan, approval by the Minister of Health, Laborand Welfare on the exemption from the obligation to pay the future portion of funds was received on April 1, 2004
and approval on the return of the past portion was received on April 1, 2005.
Yachiyo maintains a corporate pension plan and a lump-sum payment plan. Concerning the corporate pension plan,a corporate pension fund was established as of March 1, 2004 as a result of an approved transfer from a welfare
pension fund and, as of April 1, 2005, the corporate pension plan was transferred from a fund-type to acontract-type.
On March 31, 2004, a portion of retirement benefits was shifted to a defined contribution pension plan established
as of March 1, 2004. The defined contribution pension plan adopted matching contributions as of January 1, 2013.
Certain domestic consolidated subsidiaries, other than the above mentioned two banks, maintain lump-sum
payment plans and defined contribution pension plans. For the lump-sum payment plans, the simplified method isapplied in calculating the net defined benefit liability and retirement benefit expenses.
Tokyo Tomin and Yachiyo have established retirement benefit trusts.

21

(2) Defined benefit plans
The changes in the benefit obligation during the years ended March 31, 2017 and 2016 were as follows:
Thousands of
U.S. Dollars

Millions of Yen
2017

Retirement benefit obligation at beginning of year
Increase due to share exchange
Service cost
Interest cost
Actuarial difference
Retirement benefits paid
Other
Retirement benefit obligation at end of year

2016

2017

¥

58,717
138
1,575
205
485
(3,485)-¥57,004
1,425
357
3,491
(3,552)(7)$523,376
1,231
14,042
1,836
4,328(31,064)-¥

57,637¥58,717$513,751

The changes in plan assets during the years ended March 31, 2017 and 2016 were as follows:

Plan assets at beginning of year
Expected return on plan assets
Actuarial difference
Contributions by employers
Retirement benefits paid
Plan assets at end of year¥¥

Thousands of
U.S. Dollars
Millions of Yen
2017
2016
2017
61,833¥64,455$551,152
1,214
1,263
10,8274,000(4,345)35,656
2,801
2,903
24,969(2,443)(22,639)(2,539)67,310¥61,833 $599,966

The following table sets forth the funded status of the plans and the amounts recognized in the consolidatedbalance sheets as of March 31, 2017 and 2016.

Funded retirement benefit obligation
Plan assets¥

Unfunded retirement benefit obligation
Net defined benefit asset in the consolidatedbalance sheets¥

Net defined benefit liability
Net defined benefit asset
Net defined benefit asset in the consolidatedbalance sheets

¥
¥

22

Millions of Yen
2017
2016
57,412¥58,651(61,833)(67,310)(9,897)(3,181)65
224(9,672)¥(3,116)

Millions of Yen
2017
2016
4,453
¥
5,530
(8,647)(14,125)(9,672)¥(3,116)

Thousands of
U.S. Dollars
2017$
511,747(599,966)(88,218)
2,004$(86,214)

Thousands of
U.S. Dollars
2017$
39,692(125,907)$(86,214)

The components of retirement benefit expenses for the years ended March 31, 2017 and 2016 were as follows:

Millions of Yen
2017
2016
¥
1,575
¥
1,425
205
357
(1,214)(1,263)
1,258
241
(427)
(564)
(80)
3
¥
1,400
¥
115

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial difference
Amortization of prior service cost
Other
Retirement benefit expenses for defined benefit plans

Thousands of
U.S. Dollars
2017$
14,042
1,836(10,827)
11,214(3,814)35$
12,486The components of remeasurements of defined benefit plans included in other comprehensive income (before tax
effect) for the years ended March 31, 2017 and 2016 were as follows:

Prior service cost
Actuarial difference
Other
Total

¥

¥

Millions of Yen
2017
2016
(427) ¥
(564)
4,772
(7,595)(77)
4,344 ¥
(8,237)

Thousands of
U.S. Dollars
2017$(3,814)42,542$
38,728The components of remeasurements of defined benefit plans included in accumulated other comprehensive
income (before tax effect) as of March 31, 2017 and 2016 were as follows:

Unrecognized prior service cost
Unrecognized actuarial difference
Total

¥
¥

Thousands ofMillions of Yen
U.S. Dollars
2017
2016
2017
- ¥
(427) $
7,970
28,505
3,198
3,198 ¥
7,542 $
28,505The plan assets, by major category, as a percentage of total plan assets as of March 31, 2017 and 2016 were as
follows:
2017
29.7%
54.0%
8.9%
4.1%
3.3%
100.0%

Debt securities
Equity securities
Cash and due from banks (including call loans)Life insurance general accounts
Other
Total

2016
32.2%
51.3%
9.5%
4.3%
2.7%
100.0%

Total plan assets included retirement benefit trusts of 32.3% and 30.0% as of March 31, 2017 and 2016,
respectively, which were set for corporate pension plans.
The long-term expected rate of return on plan assets has been estimated based on the current and anticipatedallocation of plan assets and the current and long-term expected return on plan assets composed of various assets.
23

The main assumptions used in accounting for the above plans for the years ended March 31, 2017 and 2016 wereas follows:
2016
2017
Discount rate
0.36% or 0.68%
0.57% or 0.64%
Long-term expected rate of return on plan assets
1.90% or 2.00%
1.90% or 2.00%
Expected rate of salary increase
3.38% or 5.00%
3.70% or 5.00%(3) Defined contribution plans
The amount to be paid to defined contribution plans by consolidated subsidiaries was ¥96 million ($863 thousand)and ¥95 million for the years ended March 31, 2017 and 2016, respectively.
11. Acceptances and Guarantees
All contingent liabilities arising from acceptances and guarantees are included in this account. As a contra account,“Customers’ liabilities for acceptances and guarantees” are shown on the assets side, which represents the Group’s
right of indemnity from the applicants.
12. Shareholders’ Equity
Japanese companies are subject to the Companies Act. The significant provisions in the Companies Act that affectfinancial and accounting matters are summarized below:(1) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to theyear-end dividend upon resolution at the shareholders’ meeting. For companies that meet certain criteria, such as(1) having a Board of Directors, (2) having independent auditors, (3) having an Audit & Supervisory Board, and(4) the term of service of the directors is prescribed as one year rather than two years of normal term by its articles
of incorporation, the Board of Directors may declare dividends (except for dividends in kind) at any time during
the fiscal year if the company has prescribed so in its articles of incorporation. The Company meets all the above
criteria.
The Companies Act permits companies to distribute dividends in kind (noncash assets) to shareholders subject to acertain limitation and additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if thearticles of incorporation of the company so stipulate. The Companies Act provides certain limitations on theamounts available for dividends or the purchase of treasury stock. The limitation is defined as the amountavailable for distribution to the shareholders, but the amount of net assets after dividends must be maintained at noless than ¥3 million.
(2) 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 (acomponent of retained earnings) or as additional paid in capital (a component of capital surplus), depending on theequity account charged upon the payment of such dividends until the aggregate amount of legal reserve andadditional paid in capital equals 25% of the common stock. Under the Companies Act, the total amount ofadditional 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 under certain conditions upon resolution of the shareholders.
(3) Treasury Stock and Treasury Stock Acquisition Rights
The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stock byresolution of the Board of Directors. The amount of treasury stock purchased cannot exceed the amount available
for distribution to the shareholders which is determined by a specific formula. Under the Companies Act, stockacquisition rights are presented as a separate component of equity. The Companies Act also provides thatcompanies can purchase both treasury stock acquisition rights and treasury stock. Such treasury stock acquisitionrights are presented as a separate component of equity or deducted directly from stock acquisition rights.
2413. Stock Options
The stock options outstanding as of March 31, 2017 were as follows:
Stock option
1st Stock
Option2nd Stock
OptionGrantees
8 directors
10 directors ofsubsidiaries
7 directors
11 directors ofsubsidiaries

Number of options
granted (*)

Vesting
periodGrant date

Exercise period

12,000 shares

August 3,
2015

Not defined

From August 3, 2015
to August 2, 2045

22,000 shares

August 1,
2016

Not defined

From August 1, 2016
to July 31, 2046(*) Number of options granted is expressed in number of shares of common stock granted.
Conditions for the exercise of stock options are not defined.
The stock option activity for the stock options for the year ended March 31, 2017 was as follows:
1st Stock
Option2nd Stock
OptionNon-vested (Shares) (*1)
March 31, 2016 – Outstanding
GrantedForfeited
VestedMarch 31, 2017 – Outstanding-

22,00022,000-

Vested (Shares) (*1)
March 31, 2016 – Outstanding
VestedExercised
Forfeited
March 31, 2017 – Outstanding

12,0002,600
9,400

22,00022,000Exercise price (Yen)
Average stock price at exercise date (Yen)Fair value price at grant date (Yen)

¥
¥
¥

1
2,363
3,881

¥
¥
¥

1
2,695

Exercise price (U.S. Dollar)
Average stock price at exercise date (U.S. Dollar)
Fair value price at grant date (U.S. Dollar)

$
$
$

0.00
21.06
34.59

$
$
$

0.00
24.02

(*1) Numbers of options granted are expressed in number of shares of common stock granted.
Fair value price of the 2nd Stock Option is estimated using the Black-Scholes model based on the following
assumptions:
Stock price volatility (*1)
44.3%
Expected remaining period (*2)
2.0 years
Expected dividend (*3)
¥60 ($0.53) per share
Risk free rate (*4)-0.27%(*1) Calculated based on actual stock prices for 2.0 years, i.e., the expected remaining period.
(*2) Estimated by subtracting average term of office of current directors from that of past directors.
(*3) Actual dividend for the six-month period ended March 31, 2016 is annualized.
(*4) Interest rate of government bonds corresponding to the expected remaining period.
25

Actual numbers of forfeited options are used to measure the number of vested options, considering the difficulty
to reasonably estimate future forfeitures.
Stock option expenses recognized in general and administrative expenses were ¥59 million ($528 thousand) and¥46 million for the years ended March 31, 2017 and 2016, respectively.
14. Valuation Difference on Available-for-sale Securities
Valuation difference on available-for-sale securities as of March 31, 2017 and 2016 consisted of the following:

Valuation difference on available-for-securities
Valuation difference on money held in trust
Deferred tax liabilities applicable to valuation difference
Valuation difference on available-for-sale securities,
net of the applicable income taxes before adjustment for
non-controlling interest
Amount attributable to non-controlling interests
Share of valuation difference on available-for-sale securities
held by affiliate accounted for by the equity method
Valuation difference on available-for-sale securities¥¥

Millions of Yen
2017
2016
4,437 ¥
13,193(4,886)(1,451)Thousands of
U.S. Dollars
2017$
39,555(12,940)

2,985
(20)

8,307
(12)

26,614(180)

200
3,166 ¥

95

1,785

8,390 $

28,21915. Income Taxes
The significant components of the deferred tax assets and liabilities as of March 31, 2017 and 2016 were as
follows:
Thousands of
U.S. Dollars
Millions of Yen
2016
2017
2017
Deferred tax assets:
Net losses carried forward¥
13,131¥
2,033$
117,046
Items related to retirement benefits
5,399
7,316
48,129Reserve for loan losses
8,422
7,156
75,070Depreciation of securities
1,006
1,023
8,967
Depreciation expense
472
844
4,210
Other
2,343
30,174
3,385
Subtotal
31,816
20,717
283,598
Valuation allowance(4,728)(157,997)(17,725)
Total
14,091
15,989125,600
Deferred tax liabilities:
Items related to securities
(896)
(931)
(7,994)
Valuation difference on available-for-sale securities(3,419)(4,526)(30,475)
Items related to asset retirement obligations
(23)
(35)
(209)
Valuation of assets(3,830)(3,516)(34,147)
Other
(0)
Total
(9,009)(72,827)(8,170)Net deferred tax assets
¥
5,920
¥
6,979
$
52,77326

Net deferred tax assets as of March 31, 2017 and 2016 are included in the following accounts in the consolidatedbalance sheets.

Deferred tax assets
Deferred tax liabilities¥

Millions of Yen
2017
2016
7,823
¥
7,035
1,902
55

Thousands of
U.S. Dollars
2017$
69,732
16,958The Group is subject to Japanese national and local income taxes which, in the aggregate, resulted in normal
effective statutory tax rates of approximately 30.86% and 33.06% for the years ended March 31, 2017 and 2016,
respectively.
The following table summarizes the significant differences between the statutory tax rate and the effective tax rate
for consolidated financial statement purposes for the years ended March 31, 2017 and 2016.
2017

Statutory tax rate
Entertainment expenses and other items permanently excluded fromdeductible expenses
Dividend income and other items permanently excluded from reportablerevenue
Per capita inhabitants’ tax
Decrease in deferred tax assets due to tax rate changes
Change in valuation allowance
Refund of income taxes
Gains on negative goodwill
Other
Effective tax rate

2016

30.86%
0.41

33.06%
0.78(0.30)(0.71)

0.39(3.01)(21.86)
0.34
6.83%

0.68
3.13
(0.80)(0.40)(0.60)
35.14%

16. Amounts per Share
Amounts per share as of and for the years ended March 31, 2017 and 2016 were as follows:Yen
2017
Net income per share:
Basic
DilutedNet assets per share¥

830.61511.407,476.05

2016¥

323.84311.896,982.00

U.S. Dollars
2017
$

7.40
4.55
66.63

Basic net income per share is computed based on the average number of shares of common stock outstanding
during the year. Diluted net income per share is computed based on the average number of shares of common
stock outstanding during the year after giving effect to the dilutive potential of shares of common stock to beissued upon the exercise of stock acquisition rights.
Net assets per share are computed based on the net assets excluding stock acquisition rights and non-controllinginterests and the number of shares of common stock outstanding at the year end.

27

The bases for calculation are as follows:
Thousands of
U.S. Dollars

Millions of Yen
2017
Basic net income per share:
Net income belonging to parent company’s shareholders¥
Amount not belonging to shareholders of common stock―
preferred dividends
Net income belonging to parent company’s shareholders in
relation to common stock
Average number of shares of common stock during theperiod (thousands of shares)

25,535

Diluted net income per share:
Adjustment to net income belonging to parent company’s¥
shareholders
Including, interest on bonds with stock acquisition rights(net of applicable taxes)
Including, preferred dividends
Effect of dilutive securities (thousands of shares)
Including, bonds with stock acquisition rights
Including, preferred stock
Including, stock acquisition rights
Summary of residual securities not included in calculationof dilutive net income per share because they have no
dilutive effects
Net assets per share:
Total of net assets
Amount deducted from total of net assets
Including, amount paid in for preferred stock
Including, preferred dividends
Including, stock acquisition rights
Including, non-controlling interests
Net asset amount for common stock at year end
Number of shares of common stock outstanding at year
end for calculating net assets per share (thousands ofshares)

28

2016

¥

¥

2017

9,412

$

227,611

221

-

1,972

25,314

9,412

225,639

30,47629,064

258

¥

71 $

37
221
19,527666
18,836
24

71
1,344
1,336
7

-

-

283,357
55,56555,000132
95
337
227,791
30,469¥203,216333
46
286
202,882
29,057

2,303
331
1,972

$ 2,525,690
495,278490,239
1,180
853
3,004
2,030,411

17. Other Income
Other income for the years ended March 31, 2017 and 2016 is as follows:

Gain on sales of securities
Gain on sales of monetary claims
Equity in earnings of investment in affiliate
Gain on negative goodwill
Gain on recovery of write-offs of monetary claims
Gain on disposition of fixed assets
Gain on state subsidy and other grants
Other
Total

¥

¥

Millions of Yen
2017
2016
1,235
¥
969
17
0
78
189
19,443
186
528
5
258
156
132
1,156
1,323
22,280¥3,402

Thousands of
U.S. Dollars
2017$
11,014153
700
173,311
1,665
45
1,395
10,309$198,596

18. General and Administrative Expenses
General and administrative expenses include following items for the years ended March 31, 2017 and 2016:

Salaries and allowances
Retirement benefit expenses
Operations consignment expenses

Millions of Yen
2017
2016
26,983¥24,982
1,497
213
6,065
4,918

¥

Thousands of
U.S. Dollars
2017$
240,514
13,35054,061

19. Other Expenses
Other expenses for the years ended March 31, 2017 and 2016 are as follows:

Write-offs of loans
Loss on sales of securities
Loss on sales of monetary claims
Loss on disposition of fixed assets
Provision for special account for advanced
depreciation of fixed assets
Reserve for losses on cancellation of system contracts
Provision for loan losses
Other
Total

¥

Millions of Yen
2017
2016
242
¥
190
121
299
156
117
278
171
200
2,419
2,703

¥

29

6,121

¥

122
1,103
1,737
3,742

Thousands of
U.S. Dollars
2017
$
2,160
1,083
1,396
2,478

$

1,782
21,565
24,10054,567

20. Comprehensive Income
Each component of other comprehensive (loss) income for the years ended March 31, 2017 and 2016 was thefollowing:Thousands of
U.S. Dollars
2017

Millions of Yen
2017
2016
Valuation difference on available-for-sale securities:
Amount arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Deferred gains or losses on hedges
Amount arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Revaluation reserve for land
Amount arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectTotal
Foreign currency translation adjustments
Amount arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectTotal
Remeasurements of defined benefit plans
Amount arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Share of other comprehensive income of affiliate
accounted for by the equity method
Amount arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectTotal
Total other comprehensive (loss) income

¥

¥

30

(5,301)(2,271)(7,573)2,255(5,318)¥

1,188(3,165)(1,976)692(1,284)$(47,258)(20,248)(67,506)
20,099(47,407)

1
(12)
(10)
4
(6)

(2)
9
6
(2)
4

15
(112)
(97)
35
(62)

-

0
0

-

(3)
(3)
(3)

(5)
(5)
(5)

(32)
(32)
(32)

3,514
830
4,344
(1,339)3,005(7,837)(400)(8,237)
2,582(5,654)31,3277,400
38,728(11,937)
26,790104
104
104(2,218)

(102)
(5)
(108)
(108)
(7,046)

932
932
932
(19,778)¥$21. Supplementary Cash Flow Information
The reconciliation of cash and due from banks in the consolidated balance sheets to cash and cash equivalents inthe consolidated statements of cash flows as of March 31, 2017 and 2016 was as follows:

Cash and due from banks
Time deposits
Negotiable certificates of deposit
Other deposits
Cash and cash equivalents¥¥

Millions of Yen
2017
2016
515,886¥
405,539(40)(2,043)(10,000)(10,000)(439)(1,400)504,444¥
393,056

Thousands of
U.S. Dollars
2017$ 4,598,327(363)(89,134)(12,486)$ 4,496,343

22. Assets and Liabilities Held by Subsidiary Newly Consolidated through Share Exchange
For the year ended March 31, 2017, breakdown of assets and liabilities held by ShinGinko Tokyo newly
consolidated through share exchange at the time of the consolidation was as follows.

Total assets
Including, loans and bills discounted
Including, securities
Including, reserve for loan losses
Total liabilities
Including, deposits

Millions of Yen¥
463,533
222,587
175,000(5,976)

Thousands of
U.S. Dollars$ 4,131,682
1,984,020
1,559,862(53,272)

400,370
293,4453,568,680
2,615,613

23. Leases
Finance leases
As lessee of finance leases which do not transfer ownership of leased assets to lessees:
The leased assets primarily consist of computers, office machinery and equipment and software. See Note 1. f. forthe depreciation method of the leased assets.
Operating leases
Total future lease payments under non-cancelable operating leases as of March 31, 2017 and 2016 were as
follows:
As lessee

Within one year
Over one year
Total

¥
¥

31

Millions of Yen
2017
2016
119
¥
103
230
189
309
¥
333

Thousands of
U.S. Dollars
2017
$
1,069
1,692
$
2,761

As lessor

Within one year
Over one year
Total

¥
¥

Millions of Yen
2017
2016
26
¥
26
¥

60
26
87

Thousands of
U.S. Dollars
2017
$
238
$
238

24. Financial Instruments
Overview(1) Policy for financial instruments
The Group’s operations center on the banking business such as deposits business and lending business, withfinancial services including credit card services and credit guarantee services. The Group raises funds mainly
through local customer deposits and invests them in loans and bills discounted and securities. In this way, theGroup principally holds financial assets and financial liabilities that are subject to interest rate fluctuations, and
the Group conducts asset-liability management (ALM) to minimize the negative impact of interest rate
fluctuations. ALM includes the use of derivative transactions.
(2) Primary details of financial instruments and their risk
The Group’s financial assets mainly consist of loans and bills discounted extended to domestic corporate andprivate customers, and securities. Loans and bills discounted are subject to credit risk stemming from a borrower’s
failure to meet a contractual obligation.
Securities mainly consist of domestic debt and equity securities and investment funds. Debt securities areclassified into held-to-maturity securities and available-for-sale securities. In addition, trading account securities
are held for trading purposes. These securities are subject to issuers’ credit risk and market fluctuation risk ininterest rates and prices, respectively.
The Group’s financial liabilities mainly consist of deposits raised from domestic corporate and private customers.
Such deposits are subject to liquidity risk, which is the risk that the Group is unable to secure the funds required tohonor these deposits because of certain conditions in the operating environment.
The Group is also engaged in derivative transactions with domestic corporate customers and financial institutions.
Such derivative transactions are subject to credit risk stemming from a counterparty’s failure to meet a contractual
obligation and market fluctuation risk in interest rates and exchange rates.
(3) Risk management system for financial instruments(a) Integrated risk management
The Group establishes an integrated risk management system that captures overall risks evaluated by risk category,compares them with the Group’s strength and checks its management soundness.
(b) Management of credit risk
The Group manages credit risk appropriately, in accordance with rules and standards for credit risk management,
mainly through credit screening of each proposal with a perspective of future business prospects, credit rating ofeach borrower, self-assessment of loan assets, assistance efforts for business reconstruction and problem loan
management. Credit portfolio is monitored for concentration level by industry and customer and is aimed to be
developed eliminating concentration risk.
Credit risk management is handled by each branch office and the Credit Management Department and reported
regularly to the Company’s Risk Management Committee. The audit function audits the status of credit risk
management.
32

(c) Management of market risk
The Group manages market risk appropriately, in accordance with rules and standards for market risk
management, through evaluating, monitoring and controlling market risk under the mutual checking structure ofthree departments, the Market Transaction Department (front office), the Market Operations Management
Department (back office) and the Market Risk Management Department (middle office).
The Market Risk Management Department measures the volume of market risk for measurable market risk and, inorder to control the market risk volume appropriately, sets limits to holdings and losses, monitors the status ofcompliance and reports to the Group Risk Management Committee on a monthly basis.
The Group’s main financial instruments affected by market risk are “Due from banks,” “Securities,” “Loans andbills discounted,” “Deposits,” “Borrowed money,” “Bonds payable” and “Derivative transactions.”
The Group calculates Value at Risk (VaR) on these financial assets and financial liabilities (observation period offive years, holding period of six months for listed stocks other than those held for political reasons, Japanese
government bonds, Japanese local government bonds, Japanese corporate bonds, investment funds, foreign
securities, deposits, loans and bills discounted, interest rate swaps and other assets and liabilities that have interest
rate sensitivity, and one year for listed stocks held for political reasons, confidence interval of 99%,
variance-covariance method) and uses it to capture and control the volume of market risk.
The Group’s volume of market risk is managed as the sum of that of the consolidated subsidiaries, Tokyo Tomin,
Yachiyo and ShinGinko Tokyo, and, as of March 31, 2017 and 2016, the volume of market risk were ¥41,011
million $365,549 thousand) and ¥40,634 million, respectively.
However, such volume is calculated using certain statistical probabilities based on historical market fluctuations.
Consequently, this process may not capture risk in the event that market condition changes drastically in a mannerthat is unthinkable under normal circumstances.
The Group conducts back-testing with respect to each banking subsidiary to check the accuracy of market risk
measurement model by comparing the VaR calculated by the model with actual gains or losses. As a result of suchback-testing for the year ended March 31, 2017, the Group believes that the model being used captures market
risk to an adequate degree of precision.
(d) Management of liquidity risk
In the Group, in accordance with rules and standards for liquidity risk management, the Liquidity Risk
Management Department appropriately handles daily stable cash flow management, mainly through watchingmarket environment and analyzing the status of financing and investments.
The status of cash flow management and status of financing and investments are monitored daily, including
holding certain level or more of assets as liquidity reserve that are readily convertible into cash in a short time,and is reported regularly to the Company’s Risk Management Committee.
(4) Supplementary explanations of the estimated fair value of financial instruments
The fair value of financial instruments is based on the market price or the reasonably calculated values withcertain assumptions in case no market prices exist. Since various assumptions and factors are reflected inestimating the fair value, different assumptions and factors could result in different fair value.
Fair values of financial instruments
Carrying values and fair values of the financial instruments on the consolidated balance sheets as of March 31,2017 and 2016 were as follows. The following table does not include financial instruments for which it isextremely difficult to determine the fair value (See Note 2 below). Immaterial items are omitted.

33

Assets:(1) Cash and due from banks(2) Trading account securities:
Trading securities(3) Securities:
Held-to-maturity bonds
Available-for-sale securities(4) Loans and bills discounted
Reserve for loan losses (*1)

Total
Liabilities:(1) Deposits(2) Payables under securities lending transactions(3) Borrowed money
Total

Carrying value

Millions of Yen
2017
Fair value

¥

¥

-

465,063
798,197
3,621,372(28,431)

480,785
798,197

15,722-

3,592,940

3,618,333
5,413,997

25,392
41,114¥

4,717,519
361,309
103,429

¥

(42)
13

¥

5,182,258

¥

(29)

1,179
1,179

¥

1,179
-

¥

-

¥

1,179

¥

-

¥

Carrying value

Millions of Yen
2016
Fair value

Difference

¥

¥

¥

¥
¥
¥
34

794

4,717,562
361,309
103,416
5,182,288¥

Derivatives (*2):
Hedge accounting not applied
Hedge accounting applied
Total

794

¥

¥

Liabilities:(1) Deposits(2) Payables under securities lending transactions
Total

-

¥

¥

Total

¥

5,372,883¥

Assets:(1) Cash and due from banks(2) Trading account securities:
Trading securities(3) Securities:
Held-to-maturity bonds
Available-for-sale securities(4) Loans and bills discounted
Reserve for loan losses (*1)

515,886¥¥

Derivatives (*2):
Hedge accounting not applied
Hedge accounting applied
Total

515,886

Difference

405,539

405,533

(5)

658

658

-

522,745679,839
3,359,919(23,479)
3,336,440
4,945,223

543,804
679,839

21,059-3,371,825
5,001,661

35,38456,4384,502,192
293,327
4,795,520

¥
¥

¥
¥

¥

4,502,306
293,327
4,795,634

1,514 ¥
(10)
1,503 ¥

1,514
(10)
1,503

¥

¥

¥

114
114
-

Thousands of U.S. Dollars
2017
Carrying value
Fair value
Difference
Assets:(1) Cash and due from banks(2) Trading account securities:
Trading securities(3) Securities:
Held-to-maturity bonds
Available-for-sale securities(4) Loans and bills discounted
Reserve for loan losses (*1)

$

Total

$

Liabilities:(1) Deposits(2) Payables under securities lending transactions(3) Borrowed money
Total

$

$

Derivatives (*2):
Hedge accounting not applied
Hedge accounting applied
Total

$
$

4,598,327$

4,598,327

$

-

7,082

7,082

-

4,145,317
7,114,697
32,278,925(253,423)
32,025,501
47,890,926

4,285,457
7,114,697

140,139-

32,251,831

226,330$ 48,257,396

42,049,755
3,220,518
921,793
46,192,067$ 42,049,373
3,220,518
921,912$ 46,191,803

10,511
10,511$$

10,511
10,511$$

366,470
(382)
118
(263)

$
$
$

-

(*1) General and specific reserve for loan losses on “Loans and bills discounted” are deducted.
(*2) Derivatives are included within the amounts indicated for “Other assets” and “Other liabilities.” Net amountsof receivables and payables arising from derivative transactions are indicated. Parentheses indicate totals thatare net payable amounts.
Notes:
1. Primary method of calculating the fair value of financial instruments
Assets(1) Cash and due from banks
With regard to cash and due from banks without maturities and with short-term remaining maturities (within oneyear), the fair values and book values are similar, so the book values are assumed as the fair values. For due frombanks with maturities over one year, the fair values are determined by the prices indicated by the financial
institutions handling these transactions for the Group.
(2) Trading account securities
The fair values of bonds and other securities held for dealing operations are determined by the statistical reference
prices released by the Japan Securities Dealers Association or the prices indicated by the financial institutions
handling these transactions for the Group.
(3) Securities
The fair values of equity securities are determined by their prices on stock exchanges. The fair values of bonds are
determined by the reference statistical prices released by the Japan Securities Dealers Association or the prices
indicated by the financial institutions handling these transactions for the Group. For investment trusts, the fairvalues are determined by the publicly released base prices or base prices indicated by securities investment trust
management companies. For private placement bonds guaranteed by the Group, the present values calculated by
the discounted cash flow method are assumed as the fair values.
35With regard to private placement bonds guaranteed by the Group issued by bankrupt borrowers, effectively
bankrupt borrowers and potentially bankrupt borrowers, the fair values are similar to the expected amounts ofrecoveries calculated based on guarantees, etc. at the consolidated balance sheet date, so those expected amounts
are assumed as the fair values.
See Note 3 for the description of securities by classification.
(4) Loans and bills discounted
With regard to loans with floating interest rates, as they reflect market interest rates in the short term, the fairvalues of them are similar to the book values unless the credit status of the borrowers change significantly after
execution, so the book values are assumed as the fair values. With regard to those with fixed interest rates, thepresent values are assumed as the fair values, being calculated by discounting the future cash flows by theappropriate index interest rates such as interest rate swap rates plus credit spread, etc., or by the assumed rates
which would be applied if a similar new loan were entered into. For those with short-term remaining maturities(within one year), the fair values and book values are similar, so the book values are assumed as the fair values.
With regard to loans to bankrupt borrowers, effectively bankrupt borrowers and potentially bankrupt borrowers,
the reserve for loan losses is provided based on the expected amounts of recoveries from collateral and guarantees,
and the fair values are similar to the amounts of claims less the reserve for loan losses on the consolidated balance
sheet at the consolidated balance sheet date, so the net amounts are taken as the fair value.
For loans that have no specific repayment period because loan amounts are limited within the value of the assets
securing them, the fair values are assumed to be similar to the book values based on their expected payment dates
and interest rates, so the book values are taken as the fair value.
Interest rate swaps that qualify for hedge accounting and meet specific matching criteria for an exceptional
treatment are accounted for as part of hedged loans. Their fair values are determined using discounted present
values and included in the fair values of the hedged loans.
Liabilities(1) Deposits
The fair values of demand deposits are determined as if the payment amounts (book values) were demanded on
the consolidated balance sheet date. The fair values of time deposits and installment savings are calculated bycategorizing these deposits and savings by term, estimating their future cash flows and discounting them to theirpresent values at the rate applied to new deposits (the actual rate for the last month of the fiscal year). For thosewith short-term remaining maturities (within one year), the fair values and book values are similar, so the bookvalues are assumed as the fair values.
(2) Payables under securities lending transactions
With regard to payables under securities lending transactions, the maturities remain short-term (within one year)
and the fair values and book values are similar, so the book values are assumed as the fair values.
(3) Borrowed money
With regard to borrowed money with floating interest rates, as they reflect market interest rates in the short term,
and the credit status of the Company and the consolidated subsidiaries has not changed significantly since theexecution, the fair values of them are similar to the book values, so the book values are assumed as the fair values.
With regard to those with fixed interest rates, the present values are assumed as the fair values, being calculated
for the sum of the principal and interest categorized by the remaining period to the maturity, by discounting by theassumed rates which would be applied if a new similar borrowing were made. For those with short-term
remaining maturities (within one year), the fair values and book values are similar, so the book values are assumed
as the fair values.
Derivatives
Fair value information for derivatives is included in Note 25.
36

2. Financial instruments for which it is extremely difficult to determine the fair value
Carrying values of financial instruments for which it is extremely difficult to determine the fair value as of March
31, 2017 and 2016 were as follows. These amounts are not included in “Assets, (3) Available-for-sale securities”
in the above table.
Thousands of
U.S. Dollars
Millions of Yen
2017
2016
2017
Carrying value
Unlisted stocks (*1) (*3)
¥
5,056
¥
5,146
$
45,072
Investments in limited partnerships (*2) (*3)
2,365
114,509
12,846
Total¥
17,903¥
7,512$
159,582(*1) Unlisted stocks are not subject to disclosures of fair values because there are no quoted market price and it isextremely difficult to determine the fair value.
(*2) Investments in limited partnerships are not subject to disclosures of fair values because their assets comprisethose extremely difficult to determine fair values, such as unlisted stocks.
(*3) For the year ended March 31, 2017, impairment losses were not recorded.
For the year ended March 31, 2016, impairment losses were ¥0 million on unlisted stocks.
3. Redemption schedule for receivables and securities with maturities
The redemption schedule for receivables and securities with maturities as of March 31, 2017 and 2016 aresummarized as follows:

Due from banks
Securities:
Held-to-maturity bonds:
Japanese government bonds
Japanese local government
bonds
Japanese corporate bonds
Foreign securities
Available-for-sale securities
with maturities:
Japanese government bonds
Japanese local government
bonds
Japanese short-term
corporate bonds
Japanese corporate bonds
Other
Loans and bills discounted (*)
Total

Millions of Yen
2017
Due after
Due after
Due after
three years
five years seven years
throughthroughthrough ten
five years seven years
years
¥
¥
¥
-

Due inone yearor less¥ 475,564

Due after
one yearthroughthree years
¥
-

2,470

11,10097,100147,000-

44,00010,98016,565
-

5,780
9,693
-

13,82439,012
16,8281,500
14,758
5,609

1,150
9,800
2,000

350
2,971
4,000

24,000130,130

5,000

-

-

16,000

2,283

8,159

2,927

5,533

14,6383,960

10,00040,8292,531
763,687

81,301
14,167726,049

100,528
62,962
451,302

29,262
24,983
288,381

40,637
66,744
313,907

28,776
10,701
752,795¥ 1,348,911¥ 986,381¥ 789,485¥ 517,029¥ 448,877¥ 863,555

37

Due after
ten years¥-

Due from banks
Securities:
Held-to-maturity bonds:
Japanese government bonds
Japanese local government
bonds
Japanese corporate bonds
Foreign securities
Available-for-sale securities
with maturities:
Japanese government bonds
Japanese local government
bonds
Japanese short-term
corporate bonds
Japanese corporate bonds
Other
Loans and bills discounted (*)
Total

Due from banks
Securities:
Held-to-maturity bonds:
Japanese government bonds
Japanese local government
bonds
Japanese corporate bonds
Foreign securities
Available-for-sale securities
with maturities:
Japanese government bonds
Japanese local government
bonds
Japanese short-term
corporate bonds
Japanese corporate bonds
Other
Loans and bills discounted (*)
Total

Millions of Yen
2016
Due after
Due after
Due after
three years
five years seven years
throughthroughthrough ten
five years seven years
years¥ 2,000¥¥-

Due inone yearor less¥ 365,182

Due after
one yearthroughthree years¥-

44,1408,070

68,600133,000

48,00034,00033,01013,140-14,51022,208-5,000
16,932
11,26812,12434,998
-

1,550
6,990
3,000

400
4,000

-

140,000

11,600-10,00013,000

4,254

5,040

7,208

314

29,958975

10,00038,614
3,625
721,324

67,214
18,494
656,701

107,60375,603408,077

11,133
6,692
298,205

24,40531,335
328,051

6,677
661,379¥ 1,233,290¥ 932,238¥ 713,892¥ 496,467¥ 483,291¥ 720,431

Due inone yearor less$ 4,238,918

Thousands of U.S. Dollars
2017
Due after
Due after
Due after
one year
three years
five years
throughthroughthroughthree years five years seven years
$
- $
- $
-

Due after
seven years
through ten
years
$
-

Due after
ten years$-

Due after
ten years¥-

22,016

98,939865,496

1,310,277-

392,191

97,869147,651-

51,51986,398-123,219
347,731150,000

13,370131,544
50,000

10,25087,351
17,826

3,119
26,48335,653

213,922

1,159,907

44,567--

142,615

20,35572,732

26,09749,325130,477

35,30089,134363,932
22,564
6,807,091

724,673
126,283
6,471,606

896,054561,211
4,022,661

260,832
222,692
2,570,475

362,219594,927
2,797,994

256,494
95,3906,710,005$ 12,023,458$8,792,060$7,037,038$4,608,517$4,001,048$7,697,255

38

(*) As of March 31, 2017 and 2016, loans do not include an estimated ¥90,033 million ($802,509 thousand) and¥87,883 million, respectively, in uncollectible loans such as those to bankrupt borrowers, effectively bankrupt
borrowers and potentially bankrupt borrowers, and ¥235,215 million ($2,096,579 thousand) and ¥198,295 million,
respectively, in loans that have no set term.
4. Repayment schedule for other interest-bearing liabilities
The repayment schedule for other interest-bearing liabilities as of March 31, 2017 and 2016 are summarized asfollows:

Deposits (*)
Payables under securities
lending transactions
Borrowed money
Total

Deposits (*)
Payables under securities
lending transactions
Total

Deposits (*)
Payables under securities
lending transactions
Borrowed money
Total

Millions of Yen
2017
Due after
Due after
three years
five years
throughthroughfive years seven years¥ 38,785¥
27

Due inone yearor less¥ 4,433,756

Due after
one yearthroughthree years¥ 244,949

361,30930,27840,104¥ 4,825,344¥ 285,053¥

Due inone yearor less¥ 4,312,538

Due after
one yearthroughthree years¥ 170,939

Millions of Yen
2016
Due after
Due after
Due after
three years
five years seven years
throughthroughthrough ten
five years seven years
years¥ 18,630¥
33¥
29

293,327-¥ 4,605,865¥ 170,939

Due inone yearor less$39,520,067

Thousands of U.S. Dollars
2017
Due after
Due after
Due after
one year
three years
five years
throughthroughthroughthree years five years seven years$2,183,345$ 345,712$
243

28,033
66,81918,6303,220,518
269,881357,466

249,877$43,010,467$2,540,812$ 595,590

Due after
ten years
¥
17

5,000

-

¥

¥

Due after
seven years
through ten
years
¥
25

27

¥

5,025

¥

33

¥

243

29

¥

20

Due after
seven years
through ten
years
$
228

Due after
ten years$
158

44,567-$44,795(*) Within deposits, demand deposits are included in the column of “Due in one year or less.”39

17

Due after
ten years
¥
20

-

$

¥

$

158

25. Derivative Transactions
The Group has entered into various derivative transactions in order to manage certain risks arising from adverse
fluctuations in interest rates and foreign currency exchange rates.
The fair value and unrealized gain or loss on derivative transactions are estimates considered appropriate based on
the market at the balance sheet date and, thus, fair value is not necessarily indicative of the actual amounts that
may be realized or settled in the future. The contract or notional amount is not a direct measure of the Group’s risk
exposure in connection with the derivative transactions.
Summarized below are the contract or notional amounts and the estimated fair value of the derivative instruments
outstanding at March 31, 2017 and 2016, for which hedge accounting has not been applied.
(1) Interest-related transactions

Contract
or notionalamountOver-the-counter (OTC) interest rate swaps:
Receive/fixed and pay/floating
Receive/floating and pay/fixed
OTC interest rate swaptions:
Sell
Buy
OTC interest rate caps:
Sell
Buy

¥

Millions of Yen
2017
Contract ornotional
amount due
Fair Valueafter one year

128,913 ¥128,054

110,763
110,838

¥

1,484
(324)

420
420

(1)
1

6
1

2,208
2,337

1,924
2,053

-

65
(16)

¥

Contract
or notionalamount
¥

1,484
(324)

1,070
1,070

Total

OTC interest rate swaps:
Receive/fixed and pay/floating
Receive/floating and pay/fixed
OTC interest rate swaptions:
Sell
Buy
OTC interest rate caps:
Sell
Buy

¥

Unrealized
gains (losses)

1,159

Millions of Yen
2016
Contract ornotional
amount due
Fair value
after one year

1,215

Unrealized
gains (losses)

132,367 ¥
130,967

115,163
113,718

2,970
2,970

1,070
1,070

(0)
0

17
0

2,883
2,937

2,825
2,825

-

77
(19)
1,135

Total

¥

¥

¥

40

2,013
(954)

1,059

¥

¥

2,013
(954)

Contact ornotional
amountOTC interest rate swaps:
Receive/fixed and pay/floating
Receive/floating and pay/fixed
OTC interest rate swaptions:
Sell
Buy
OTC interest rate caps:
Sell
Buy

$ 1,149,064
1,141,408

Thousands of U.S. Dollars
2017
Contract ornotional
amount due
Fair value
after one year

Unrealized
gains (losses)$$

987,281
987,949$

13,233(2,894)

13,233(2,894)

9,537
9,537

3,743
3,743

(14)
14

53
14

19,68817,156

20,83818,306

10,338

581
(150)

Total

$

$

10,838Notes:
1. The above derivative transactions are stated at fair value with the valuation difference being included in the
consolidated statements of income.
2. The fair values of the OTC transactions are determined using the discounted present values or option pricing
model.
(2) Currency-related transactions

OTC currency swaps
OTC foreign exchange contracts:
Sell
Buy
OTC currency options:
Sell
Buy

Contract ornotional
amount¥ 10,830

Millions of Yen
2017
Contract ornotional
amount due
Fair value
after one year
¥
6,151
¥
12

Unrealized
gains (losses)¥
12

43,65824,196

446
280

(162)
169

(162)
169

24,7992,289

24,799

2,289

(420)
420
19

108
26
154

Total

¥

41

¥

OTC currency swaps
OTC foreign exchange contracts:
Sell
Buy
OTC currency options:
Sell
Buy

Contract ornotional
amount¥ 14,807

Millions of Yen
2016
Contract ornotional
amount due
Fair value
after one year
¥
4,380
¥
30

28,334
14,449

411
140

549
(126)

549
(126)

8,822

896

8,901

896

(119)
120
455

72
(15)
511

Total

OTC currency swaps
OTC foreign exchange contracts:
Sell
Buy
OTC currency options:
Sell
Buy

Unrealized
gains (losses)¥
30¥

Contract ornotional
amount$96,533Thousands of U.S. Dollars
2017
Contract ornotional
amount due
Fair value
after one year$
54,834 $114¥

Unrealized
gains (losses)$
114

389,152
215,672

3,976
2,503

(1,451)
1,510(1,451)
1,510

221,048
221,048

20,403
20,403(3,744)
3,744
173

969
237
1,380

Total

$

$

Notes:
1. The above derivative transactions are stated at fair value with the valuation difference being included in the
consolidated statements of income.
2. The fair values of the OTC transactions are determined using the discounted present values or option pricing
model.
Summarized below are the contract or notional amounts and the estimated fair value of the derivative instruments
outstanding at March 31, 2017 and 2016, for which hedge accounting has been applied.

42

(1) Interest-related transactions

Method ofaccounting

Hedged item

Millions of Yen
2017
Contract ornotional
Contact oramount due
notional
after one year
amountFair value¥¥

Interest rate swaps:
Receive/floating and pay/fixedBasicmethodLoans andbills
discounted

Exceptional
treatment

Loans andbills
discounted

-

¥

-

-

Interest rate swaps:
Receive/fixed and pay/floating

32,84932,539Total

Method ofaccounting

Hedged item

(Note 3)¥-

Millions of Yen
2016 (Note 1)
Contract orContract ornotional
notional
amount due
amountafter one year

Fair value

¥

¥

(10)

¥

(Note 3)
(10)Interest rate swaps:
Receive/floating and pay/fixedBasicmethodLoans andbills
discounted

Exceptional
treatment

Loans andbills
discounted

550

¥

-

Interest rate swaps:
Receive/fixed and pay/floating

39,77833,271

Total

Method ofaccounting

Hedged item

Thousands of U.S. Dollars
2017
Contract ornotional
Contract oramount due
notional
after one year Fair value
amountInterest rate swaps:
Receive/fixed and pay/floating

Exceptional
treatment

Loans andbills
discounted

Total

292,798

290,035(Note 3)$-

Notes:
1. For the year ended March 31, 2016, the Group basically applied the deferred method which is stipulated in“Accounting and Auditing Treatment of Accounting Standards for Financial Instruments in Banking Industry”(JICPA Industry Audit Committee Report No. 24).
43

2. The fair values of the exchange-traded transactions are based on the closing/final price at Tokyo Financial
Exchange. The fair values of the OTC transactions are determined using the discounted present values or
option pricing model.
3. Interest rate swaps that qualify for hedge accounting and meet specific matching criteria for an exceptional
treatment are accounted for as part of hedged loans and their fair values are included in the fair values of thehedged loans.
26. Segment Information
The Group’s only reporting segment is the banking business. Note that the Group operates businesses outside thebanking business, including a computer-related service business, an information provision service business, andcredit card services. This information has been omitted because the ratio of these businesses to all segments is notmaterial.
(1) Information by service

Ordinary income from external customers

Millions of Yen
2017
Securities
ServiceLending investment transactions
Other
Total
¥ 46,196 ¥ 15,708 ¥ 16,165 ¥ 5,021 ¥ 83,092

Ordinary income from external customers

Millions of Yen
2016
Securities
ServiceLending investment transactions
Other
Total
¥ 46,269 ¥ 12,250 ¥ 15,832 ¥ 5,232 ¥ 79,583

Ordinary income from external customers

Thousands of U.S. Dollars
2017
Securities
ServiceLending investment transactions
Other
Total
$ 411,772 $ 140,017 $ 144,093 $ 44,760 $ 740,644

Note: Ordinary income is presented as counterparts of sales of companies in other industries.
(2) Information by geographical area(a) Ordinary income
Ordinary income from external customers by geographical area has been omitted as ordinary income from thedomestic operations accounted for more than 90% of the consolidated ordinary income.
(b) Tangible fixed assets
Information about tangible fixed assets by geographical area has been omitted as tangible fixed assets in Japanaccounted for more than 90% of the consolidated tangible fixed assets.
(3) Information by major customers
Information by major customers has been omitted as no single customer accounts for more than 10% of theconsolidated ordinary income.

4427. Business Combination
1. Overview of the business combination(1) Name, business content and size of the acquired company
Name of company:
ShinGinko Tokyo
Description of business:
Banking business
Capital:¥20,000 million ($178,269 thousand)(2) Main reasons for the business combination
While both of the Company and ShinGinko Tokyo have contributed to facilitating regional finance andregional economic development as regional finance providers in the capital of Tokyo, taking advantage ofrespective strength, the management integration has been implemented because both companies have thecommon business objective of supporting small and medium-sized enterprises in Tokyo and it is expected
to give full scope to their ability as regional finance providers in the Tokyo metropolitan area throughachieving synergy by the integration.
(3) Date of the business combination
April 1, 2016(4) Legal form of the business combination
Share exchange(5) Company name after the business combination
No change to the company name after the business combination.
(6) The acquired ratio of voting rights
100%(7) Main basis for deciding on the acquiring company
The Company was designated as the acquiring company as a result of comprehensive consideration offactors including acquisition-deciding factors in the applicable accounting standards for businesscombinations and various other factors.
2. Period of performance of the acquired company included in the consolidated financial statements
From April 1, 2016 to March 31, 2017
3. Acquisition costs for the acquired company and breakdown

Consideration for the acquisition:
The Company’s common stock delivered at the business combination date
The Company’s preferred stock delivered at the business combination date
Acquisition cost

Millions of Yen

Thousands of
U.S. Dollars

¥

$

¥

3,719
40,00043,719$33,151
356,538
389,689

4. Exchange ratio by type of stock, the calculation method, and number of shares delivered(1) Exchange ratio by type of stock(i) 0.24 share of the Company common stock for every 1 share of ShinGinko Tokyo common stock(ii) 1 share of the Company preferred stock for every 1 share of ShinGinko Tokyo preferred stock(2) Calculation method for the share exchange ratio
The calculation of the share exchange ratio was first commissioned to multiple financial advisors as
third-party calculation institutions, and then, determined through consultation among the relevant parties
based on the reports submitted by the advisors.
45

(3) Number of shares delivered
Common stock
Preferred stock

1,422,289 shares
2,000,000 shares

5. Major content and amount of acquisition related cost
Advisory fees and commissions:¥144 million ($1,284 thousand)6. Amount and cause of accrual of gain on negative goodwill(1) Amount of gain on negative goodwill¥19,443 million ($173,311 thousand)(2) Cause of accrual
As the acquisition costs were lower than the net of the amounts allocated to the acquired assets and assumed
liabilities, the difference was recognized as a gain on negative goodwill.
7. Amounts of the acquired assets and assumed liabilities as of the date of the business combination andbreakdown

Total assets
Including, loans and bills discounted
Including, securities
Including, reserve for loan losses
Total liabilities
Including, deposits

Millions of Yen¥
463,533
222,587
175,000(5,976)

Thousands of
U.S. Dollars$ 4,131,682
1,984,020
1,559,862(53,272)

400,370
293,4453,568,680
2,615,613

28. Subsequent Event
Dividends
The following distribution of retained earnings of the Group, which has not been reflected in theaccompanying consolidated financial statements for the year ended March 31, 2017, was approved at theboard of directors’ meeting held on May 12, 2017 and became effective on June 12, 2017:
Thousands ofMillions of Yen U.S. Dollars
Dividends on common stock (¥ 30 ($0.26) per share)
¥
914 $
8,147
Dividends on 1st tranche class 1 preferred stock (¥127.64 ($1.13) per
95
853
share)
Dividends on class 2 preferred stock (¥18.364 ($0.16) per share)
36
327

46

The Tokyo Tomin Bank, Limited
Non-consolidated Balance Sheets (Unaudited)
As of March 31, 2017 and 2016
Millions of Yen
2016
2017
AssetsCash and due from banks
Call loans
Monetary claims bought
Trading account securities
Securities
Loans and bills discounted
Foreign exchanges
Other assets
Tangible fixed assets
Intangible fixed assets
Prepaid pension cost
Deferred tax assets
Customers’ liabilities for acceptances and guarantees
Reserve for loan losses
Total assets¥¥

Liabilities
Deposits
Negotiable certificates of deposit
Call money
Payables under securities lending transactions
Borrowed money
Foreign exchanges
Bonds payable
Other liabilities
Reserve for employees’ bonuses
Reserve for officers and directors’ retirement benefits
Reserve for point card program
Reserve for losses from reimbursement of inactive accounts
Reserve for losses on cancellation of system contracts
Reserve for contingent losses
Deferred tax liabilities on land revaluation
Acceptances and guarantees
Total liabilities¥

Net assets
Shareholders’ equity:
Common stock
Capital surplus
Retained earnings
Total shareholders’ equity
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Revaluation reserve for land
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets¥

See notes to consolidated financial statements.

47

316,026
987
2,004
32
543,504
1,837,946
3,329
24,69434,477
1,099
16,221
3,629
3,078(13,725)
2,773,306¥

2,312,237
18,740312,048
5,216
935
13,924
1,087
75
2
397
85
280
14
3,078
2,668,124¥¥Thousands of
U.S. Dollars(Note 2)
2017295,2354,497
0
31
586,946
1,842,130
3,406
17,051
32,574
1,116
14,316
4,194
2,926(12,466)
2,791,960$

2,390,437
32,706474
236,597
7,225
65
16,00013,212
1,079
60
2
374
291
14
2,926
2,701,469$$

2,816,887
8,800
17,867289
4,844,497
16,382,443
29,676
220,117
307,317
9,797
144,589
32,34927,440(122,341)
24,719,733

20,610,013
167,038
2,781,433
46,492
8,341
124,119
9,691
674
22
3,542
757
2,500
129
27,44023,782,196

55,62025,583
20,387
101,590

48,12018,08318,65584,859495,771
228,035
181,719905,525

3,800
(209)
3,591
105,182
2,773,306

5,840
(209)
5,631
90,491
2,791,960

33,878(1,867)32,011
937,536
24,719,733¥$

The Tokyo Tomin Bank, Limited
Non-consolidated Statements of Income (Unaudited)
For the Years Ended March 31, 2017 and 2016
Millions of Yen
2016
2017
IncomeInterest income:Interest on loans and discounts
Interest and dividends on securities
Interest on call loans
Interest on receivables under securities borrowing transactions
Interest on due from banks
Other interest income
Fees and commissions
Other operating income
Other income
Total income¥

22,785
7,466
59
0
228
131
8,431
2,692
1,659
43,455¥24,503
5,677
54
233
149
8,204
2,209
1,684
42,717

Thousands of
U.S. Dollars(Note 2)
2017$

203,095
66,555
534
0
2,033
1,174
75,152
24,003
14,789387,340

Expenses
Interest expense:
Interest on deposits
Interest on negotiable certificates of deposit
Interest on call money
Interest on payables under securities lending transactions
Interest on borrowed money
Interest on bonds payable
Other interest expense
Fees and commissions payments
Other operating expenses
General and administrative expenses
Other expenses
Total expenses

574
4
13
1,215
103
225
41
2,583
923
29,4183,908
39,013

1,047
26
7
649
126
488
31
2,689
142
28,3172,310
35,837

5,117
43
117
10,835
921
2,014
371
23,024
8,233
262,22134,841
347,743

Income before income taxes

4,442

6,880

39,596

Income taxes:
Current
Deferred
Total income taxes

231
1,440
1,672

84
2,564
2,649

2,060
12,843
14,903¥

Net income
See notes to consolidated financial statements.

48

2,770

¥

4,231

$

24,692

The Yachiyo Bank, Limited
Non-consolidated Balance Sheets (Unaudited)
As of March 31, 2017 and 2016
Millions of Yen
2016
2017
AssetsCash and due from banks
Call loans
Monetary claims bought
Trading account securities
Securities
Loans and bills discounted
Foreign exchanges
Other assets
Tangible fixed assets
Intangible fixed assets
Deferred tax assets
Customers’ liabilities for acceptances and guarantees
Reserve for loan losses
Total assets¥¥

Liabilities
Deposits
Negotiable certificates of deposit
Call money
Payable under securities lending transactions
Borrowed money
Foreign exchanges
Other liabilities
Reserve for employees’ bonuses
Reserve for officers and directors’ retirement benefits
Reserve for losses from reimbursement of inactive accounts
Reserve for losses on cancellation of system contracts
Reserve for contingent losses
Deferred tax liabilities on land revaluation
Acceptances and guarantees
Total liabilities¥

Net assets
Shareholders’ equity:
Common stock
Capital surplus
Retained earnings
Total shareholders’ equity
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets¥

See notes to consolidated financial statements.

49

173,7433,787
762
566,529
1,552,605
4,255
13,14630,253
583
5,727
2,766
(10,227)
2,343,931¥

2,149,113
6,730
15,70649,260
0
4,416
855
2,575
613
85
370
2,481
2,766
2,234,975¥¥

Thousands of
U.S. Dollars(Note 2)
2017

110,233
39,5774,202
627
613,955
1,517,513
3,124
8,302
29,368
786
3,359
2,934
(9,736)2,324,249$

2,124,520
5,630
56,7305,000
212,687
844
2,810
614
367
2,481
2,934
2,214,623$$

1,548,655
33,7596,792
5,049,731
13,839,073
37,928117,176
269,664
5,197
51,047
24,657(91,165)
20,892,519

19,156,017
59,987140,000
439,085
439,362
7,623
22,957
5,466
757
3,302
22,12324,657
19,921,344

43,73432,92230,496
107,154

43,73432,922
27,540104,197

389,828
293,455
271,830
955,114

1,184
616
1,801
108,956
2,343,931

4,819
(7)
616
5,428
109,626
2,324,249

10,5605,499
16,060971,175$ 20,892,519¥

The Yachiyo Bank, Limited
Non-consolidated Statements of Income (Unaudited)
For the Years Ended March 31, 2017 and 2016
Millions of Yen
2016
2017
IncomeInterest income:Interest on loans and discounts
Interest and dividends on securities
Interest on call loans
Interest on due from banks
Other interest income
Fees and commissions
Other operating income
Other income
Total income¥

19,773
6,300
31
71
359
5,901
2,198
1,129
35,766¥

21,195
5,551
156
77
380
5,986
2,316
1,934
37,599Thousands of
U.S. Dollars(Note 2)
2017$

176,246
56,159
283
636
3,207
52,604
19,596
10,070318,804

Expenses
Interest expense:
Interest on deposits
Interest on negotiable certificates of deposit
Interest on call money
Interest on payables under securities lending transactions
Interest on borrowed money
Interest on interest swaps
Other interest expense
Fees and commissions payments
Other operating expenses
General and administrative expenses
Other expenses
Total expenses

770
1
29
3
53
9
12
1,719
586
25,312
3,043
31,541

1,104
1
0
15
107
9
14
1,780
25
25,3091,980
30,348

6,865
11
261
32
479
81
107
15,326
5,231
225,617
27,128281,144

Income before income taxes

4,225

7,250

37,659

Income taxes:
Current
Deferred
Total income taxes

1,185
(760)
425

1,817
661
2,478

10,563(6,774)
3,789¥

Net income
See notes to consolidated financial statements.

50

3,799

¥

4,772

$

33,870ShinGinko Tokyo, Limited
Non-consolidated Balance Sheets (Unaudited)
As of March 31, 2017 and 2016
Millions of Yen
2016
2017
AssetsCash and due from banks
Call loans
Monetary claims bought
Securities
Loans and bills discounted
Other assets
Tangible fixed assets
Intangible fixed assets
Customers’ liabilities for acceptances and guarantees
Reserve for loan losses
Allowance for investment loss
Total assets¥¥

Liabilities
Deposits
Call money
Borrowed money
Other liabilities
Reserve for employees’ bonuses
Reserve for officers and directors’ bonuses
Reserve for employees’ retirement benefits
Reserve for losses on cancelation of system contracts
Reserve for contingent losses
Deferred tax liabilities
Acceptances and guarantees
Total liabilities¥

Net assets
Shareholders’ equity:
Common stock
Capital surplus
Retained earnings
Total shareholders’ equity
Accumulated other comprehensive incomeValuation difference on available-for-sale securities
Total net assets
Total liabilities and net assets¥

See notes to consolidated financial statements.

51

56,0453,000
39,932160,968
230,567
858
23
148
2,035
(4,091)
489,488

297,580
25,00098,000
2,060
132
156
30
24
1,113
2,035
426,133¥¥¥

35,18831,727
172,355
222,587
761
39
265
2,215
(5,976)(264)
458,899

293,445
100,000
1,976
137
7
138
21
903
2,215
398,844

Thousands of
U.S. Dollars(Note 2)
2017
$

$

$

499,559
26,740355,936
1,434,782
2,055,153
7,648
206
1,327
18,146(36,470)
4,363,031

2,652,465
222,836
873,518
18,369
1,181
1,391
267
216
9,926
18,146
3,798,320

20,00032,046
8,203
60,25020,00032,046
5,407
57,454

178,269
285,648
73,122537,040

3,104
63,354489,4882,600
60,055458,899

27,669564,710
4,363,031¥$

ShinGinko Tokyo, Limited
Non-consolidated Statements of Income (Unaudited)
For the Years Ended March 31, 2017 and 2016
Thousands of
U.S. Dollars(Note 2)
2017

Millions of Yen
2016
2017
IncomeInterest income:Interest on loans and discounts
Interest and dividends on securities
Interest on call loans
Interest on due from banks
Other interest income
Trust fees
Fees and commissions
Other operating income
Other income
Total income

¥

3,398
2,700
0
30
539
61
194
215
1,839
8,979

¥

3,436
2,983
3
31
525
52
231
1,911
9,175

$

30,291
24,074
0
269
4,807
546
1,732
1,924
16,39580,040

Expenses
Interest expense:
Interest on deposits
Interest on call money
Interest on borrowed money
Other interest expense
Fees and commissions payments
Other operating expenses
General and administrative expenses
Other expenses
Total expenses

743
(1)
20
0
144
4,142
785
5,835

855
100
0
141
203
3,888
262
5,453

6,628
(10)
181
0
1,289
36,926
6,999
52,015

Income before income taxes

3,144

3,721

28,024

116
(11)
105

39
(244)
(204)

1,040
(103)
936

Income taxes:
Current
Deferred
Total income taxes¥

Net income
See notes to consolidated financial statements.

52

3,039

¥

3,926

$

27,088