DAISHI REPORT 2018Year ended March 31, 2018

A complete view of the Head Oﬃce at the time of its founding

Niigata, Our Target Market

Nihonkai-Tohoku Expressway

In Niigata Prefecture, basic technology indispensable for
manufacturing is accumulating at an accelerated rate. This
includes mold-making, high-precision machining, casting,forging, and metal pressing. Niigata Prefecture is the number
one manufacturer in Japan of products such as metal tableware and oil stoves.
With a prosperous agricultural industry centering on rice
growing, it is a leading producer of rice and the number one
manufacturer of rice confectionery in Japan.

Niigata Airport

Hokuriku
Expressway

Banetsu
Expressway

NaoetsuPort
JoetsuShinkansen Line

Hokuriku
Shinkansen Line

Kanetsu Expressway
Joshinetsu Expressway

Advantage of transportation networks

Niigata Prefecture, Daishi Bank's target market
Area

12,584 km2( 5 th of 47 pref.)Population

2,267 thousands(15 th of 47 pref.)GDP¥8,699 billion(15 th of 47 pref.)¥258 billion(12 th of 47 pref.)Industrial shipment per capital¥4,670 billion(23 th of 47 pref.)Annual sales¥6,198 billion(14 th of 47 pref.)Gross agricultural output

NiigataPort■Expressways that extend in ﬁve directions(Kanetsu, Hokuriku, Joshinetsu, Banetsu and Nihonkai-Tohoku)■Joetsu Shinkansen Line
■Hokuriku Shinkansen Line
■Conventional railway line such as the Shinetsu Line Hokuriku Line,and Uetsu Line
■Niigata Airport
Domestic routes: 8 routes(Sapporo, Narita, Chubu International, Komaki, Itami,
Kansai International, Fukuoka, and Okinawa)
International routes: 6 routes(Seoul, Shanghai, Harbin, Khabarovsk, Vladivostok, Taiwan)

Profile (Consolidated)■Niigata Port
General port and functional port:
International marine containers division
Certiﬁed LNG (liqueﬁed natural gas) division

Based in Niigata Prefecture northwest of Tokyo,
Daishi Bank is the oldest bank in Japan■Naoetsu Port
Functional port: Certiﬁed LNG (liqueﬁed natural gas) divisionand the most influential financial institution in the prefecture.
It was founded in 1873 as the Fourth National Bank of Japan.
(As of March 31, 2018)

Head Office1071-1, Higashiborimae-dori, 7-bancho,
Chuo-ku, Niigata, JapanFoundedNovember 1873

Deposits¥4,840 billion

Loans¥3,246 billion

Total assets¥5,916 billion

Credit rating

A2 (Moody’s)(As of June 30, 2018)

Contents
1 Message from the president

2 New Medium-Term Business Plan
4 Topics

28 Consolidated Balance Sheets

29 Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income

6 Financial Hiligts

30 Consolidated Statements of Shareholders' Equity

8 Daishi’s ESG Report

32 Notes To Consolidated Financial Statements

12 Society

49 Corporate Data

7 Financial Review

31 Consolidated Statements of Cash Flows

9 Environment

48 Corporate Organization Directory Chart

24 Governance

50 Company History

27 Financial Data Corporate Data

Message from the President

Fujio Namiki President
Thank you very much for your continued
support.

the best quality and service to customers andaim for transformation into a bank that custom-

I would like to express my deepest condo-

ers continue to choose. We also believe that welences for the people who lost their lives and mymust leap forward to a new stage through our

sympathies for the people who suﬀered damage

management integration with Hokuetsu Bank,

during the heavy rains in July 2018. I hope forLtd.

the safety of everyone aﬀected and that recon-

As speciﬁc initiatives for channel reforms as

struction is achieved as quickly as possible forpart of structural reforms, we opened the Internet

the damaged areas.

Branch in order to improve customer convenience

We worked towards the evolution of theand launched the Daishi Bank Account Opening

consulting function as the most important tactic

App for smartphones from April of this year. We

of Step-Up 2nd Stage, the previous medium-term

will continue to work to improve services so thatbusiness plan, and we have achieved results in

the Bank is more convenient for customers going

various ﬁelds including contributions to regional

forward.

revitalization.

In order to fulﬁll our role and mission as a

The environment that surrounds the ﬁnancial

regional ﬁnancial institution that grows in acommunity, including a rapid population decline

sustainable manner together with the local

at a faster rate than anticipated from the decline

community, we believe initiatives that take intoof birthrates and an aging population, theconsideration ESG (environment, society, andprolonging of a lax monetary policy, and thegovernance) are essential. The Bank is actively

advance of digitalization, has rapidly increased

engaged in initiatives aimed at achieving regional

the changing pace of the business, and has

revitalization including the establishment of thefurther added to the multi-faceted nature and

ESG Promotion Oﬃce in February 2018, thecomplexity to the business that has broughtrelease of the Daishi Bank Group ESG Action

about a revolutionary period of unprecedented

Policies in May 2018, and the provision of

proportions.

eco-friendly products and services including

In response to these environmental changes,

green ATMs that received a Minister of theunder the new medium-term business plan,“

Environment Award. Going forward, we will

Step-Up New Stage̶Transformation and Leap

continue to put into practice ESG management

Forward̶”that was started from this ﬁscal year,

to fulﬁll our corporate social responsibility.

we will implement three branches of major

In addition, by further accelerating strategic

structural reforms by utilizing digitalization in

partnerships in various ﬁelds in the Tsubasa

operational reforms, branch reforms, and channel

Alliance that is a framework for wide-range

reforms. Through various eﬀorts including struc-cooperation among regional banks, we willtural reforms, the Bank will put into practice theendeavor to provide high added value service.

policy of putting the customer ﬁrst by oﬀering

We ask for your continued support.
July 2018

DAISHI REPORT 2018

1

New Medium-Term Business Plan

Step-Up New Stage
New Medium-Term Business Plan

Step-Up New Stage〜 Transformation and Leap Forward 〜
In light of the business environment that is characterized by a rapid population decline at a faster rate
than anticipated from the decline of birthrates and an aging population, the prolonging of a lax monetary
policy, and the rapid advance of digitalization, this plan will maintain the three basic strategies of theprevious medium-term business plan and continue with the topline reforms as the most important
strategies based on the policy of putting the customer first and implement three branches of major
structural reforms by utilizing IT technologies on operational reforms, branch reforms, and channel
reforms in order to overcome important management issues Through the efforts involved in this plan, theBank will accomplish its mission, and also perform its role as a regional bank that contributes to theregional economy and assists in the growth in regional communities and customers, in order to continue
its sustainable growth with the local region through the creation of shared value. The “Transformation andLeap Forward” in the title of the plan expresses the aim for transformation into a bank that customers
continue to choose through various measures including bold structural reforms and the intention to leap
forward to a new stage through management integration with Hokuetsu Bank, Ltd.

April 2018 to March 2021 (3 years)

Plan period

Ⅰ

Ⅱ

Topline reforms

Basicstrategies

Benchmarks
goals formanagement(KPI)*The synergies from management
integration with Hokuetsu
Bank, Ltd. have not been
incorporated. The plan will
be flexibly revised asnecessary in consideration of
the management plans andfuture changes in theenvironment for the Daishi
Hokuetsu Financial Group,
Inc. that is scheduled to beestablished in October ofthis year.

2

DAISHI REPORT 2018

Most important
strategies

Ⅲ

Human resources capabilities
and organizational strength*Refer to the next page

Risk management

VisionVisionVisionCreation of shared values

Organization that achieves targets
through the sharing of a strong sense ofurgency among all employees

Conversion into a management
structure based on risk appetite

Build up a stable earnings base byproviding high-quality services tolocal customers

Realize topline reforms through the establishment of anorganization that allows all employees to perform to thebest of their abilities and contribute to the local community

Put into practice risk control tosupport topline reforms

Category

KPI

FY2018 targets

Profitability

Consolidated net income *1¥11.6 billion yen

SME loan balance¥1,189.1 billion

Consumption loan balance¥798 billion

Non-interest revenue *2¥14.8 billion

Core operational gross profit OHR

74.9％

Consolidated ROE(shareholders equity base*3)

3.47％（4.41％）

Growthpotential

Efficiency*1
Net profit
attributable toowners of theparent company*2
Total of otheroperating income
excluding profits
from businessdealings and gains(losses) on
government bonds*3
The denominator isnet assets excluding
valuation difference
on available-for-salesecurities

New Medium-Term Business Plan

Most important strategies

Topline reforms

Through structural reforms based on the three branches of operational reforms, branchreforms, and channel reforms, we will further strengthen the consulting function by reassigning
200 people to consulting positions in sales and planning departments (core business).

Offering the best quality and service to customers
Putting into practice of putting the customer first
Reassignment of
200 people fromadministrative andfinancing posts

Structural reform

Strengthening of consulting capabilities

Operational
reformBranchreformChannelreformStrengthening of
personnel in sales
and planningdepartments

Human
resourcesdevelopment

Achievementof thefive lesses

Transformationof sales offices
into consulting
spaces

Improvements incustomerconvenience throughnon-face-to-facechannelShifting
personnel tocore
operations

Establishment of new
human resources
development
programs

(1)
(2)
(3)

(4)
(5)

Use of IT technologies*1 RPA is an acronym for robotic process automation. RPAs are intended for automating routine tasks by personal computers which were previously
undertaken by people through the utilization of software robots. It can also be referred to as digital labor or virtual intellectual labor, and it isattracting attention as a technology that can resolve management issues such as the decline in the working-age population and working style reforms.
*2 Making a trade-off is making a choice from two conflicting concepts.

DAISHI REPORT 20183

Topics

Management Integration with Hokuetsu Bank
Daishi Bank and Hokuetsu Bank plan to establish Daishi Hokuetsu Financial Group, Inc. that will
become the wholly-owning parent company of the Banks as of October 1, 2018, assuming that
permissions, etc. are acquired from the relevant authorities.
Management philosophy of the Daishi Hokuetsu Financial GroupFor regional society

Regio
nal
soc
iet

rs
me
o
t
us

Make permanent contributions to thedevelopment of regional society
through the use of the know-how andnetworks of the BanksyExpand and improve the convenience of
products and services through the use ofmanagement resources and strengtheningof the consulting functionC

For customers

Management philosophy of the Daishi Hokuetsu Financial GroupWe will
continue to provide services that live up
to the expectations of customers andcontribute to the development of regionalsociety as a trusted ﬁnancial group,and boldly take on challenge to create
new value.

For shareholders

Sh

Improve the corporate value of the newGroup through management integration

ar

eh

old

Action principles
MissionVision and approach

Emp

e rs

e
lo y

es

For employees
Improve the meaningfulness for each andevery employee through more opportunities
to take on challenges and participate

Benefits expected from management integration
By strengthening management resources through the management integration we will work to improve
convenience for customers and support the maximization of corporate value for customers and perpetuallycontribute to regional revitalization and the development of the regional economy.
Strengthening ofmanagement resource
Improving management efficiency
Augmentationof salespersonnel
Augmentationof investment
capacity● Streamlining of headquarters

Benefits returned to customers throughthe management integration
Individuals

structureexpertise on asset management
and succeeding assets to the next
generation (inheritance)● Optimization of branchallocation● Reduction in fees, etc. for transfers● Standardization of systems andbetween the two banks, etc.

administrative procedures

Corporate

Expansion of
network● Utilization of Group company

function●Utilization of regional
information networks (mutual
complementation of business
partners and branches outside
the prefecture)● Expansion of business creation,business succession, and M&A support● Increase in a business matching

opportunities through a broad network● Establishment of financing fund for

local companies based on businessfeasibility assessments*1, etc.

● Mutual complementation of know-how● Effective utilization of IT

to-face services using fintech● Expanding advice that uses

Improving financial intermediary function
and information intermediary function
Improvingfinancial service
capabilities● Provision of highly convenient non-face-

Region● Establishment of regional trading

company*2 through joint
investments with local companies● Human resources and know-how

support for local companies● Effective use of surplus space fromRole andmission ofregional banks
Contributing
to regional
revitalizationand thedevelopmentof theregional
economybranch optimization, etc.

*1 Appropriately assessing the business details and growth potential, etc., of local companies without relying on financial data andcollateral or guarantees more than necessary.
*2 A company that distributes information on and sells regional resources inside and outside of the region through consistent production
including manufacturing, processing, and sales, as well as branding of local resources (local products, tourism, etc.).

4

DAISHI REPORT 2018

Topics

Overview of the management integration
Form of the management integration

Integration
method● The Banks shall conduct a joint share transfer where they create a newly established wholly-owningparent company incorporated in a share transfer as a holding company, and in which the Banks
become wholly-owned subsidiaries of the holding company established through the same sharetransfer.
● The basic policy is for the Banks to conduct the merger about two years following the effective dateof the share transfer (October 1, 2018).

Share transfer
ratio● The holding company shall deliver 1 common share of the holding company for 1 common share of
Daishi Bank and 0.5 common shares of the holding company for 1 common share of Hokuetsu Bank
to the respective shareholders of Daishi Bank and Hokuetsu Bank.

Business integration schedule
March 23, 2018

Signing of definitive agreement onshare transfer

May 11, 2018

Resolution on drafting of share transfer
plan (board of directors of the Banks)

June 26, 2018

Resolution for the approval of the share transfer plan(ordinary general meeting of shareholders of the Banks)

September 26, 2018 (scheduled)

Delisting date for the Banks

Step 1

Establishment of holding company through a joint stock transfer

October 1, 2018 (scheduled)
Step 2

Establishment date and listing date for theholding company

最終契約締結時の記者会見

Bank merger and optimization of Group companies

Scheduled about two years fromestablishment of the holding company

Merger of the BanksFAQ
A FAQ regarding the management integration with Hokuetsu Bank, Ltd. is available on our website.
URL :https://w w w .da ish i- b an k. co . jp / in q u ir y/ t o u go u / q a. p h pJointly held one of the largest business panels in Niigata Prefecture with Hokuetsu Bank
Niigata Business Panel of Food and Integrated Business (Shoku Biz!) - Improving Productivity for the Future We jointly held Niigata Business Panel of Food and Integrated Businesses(Shoku Biz!) - Improving Productivity for the Future - with Hokuetsu Bank in
May 2018. We expanded the scope of industries that were covered inFood Eco-Plus! Niigata Food, Environment, and Health Exhibition Meetingthat had been held eight times up until now since 2010 to offer companies
from all industries PR and business panel opportunities for their products
and technologies, and also provided the latest information that could leadto improvements in productivity through the use of AI, IoT, and othertechnologies. The business panel that was one of the largest in Niigata
Prefecture was visited by 2,685 people and featured 566 individual businessmeetings with buyers from inside and outside of the prefecture.

URL :https://w w w .shok u-b iz . jp /Exhibition booths

Individual businessmeetings

Information pamphlet
for Shoku Biz!

DAISHI REPORT 2018

5

Financial Highlights

Financial
Highlights(Consolidated)
Financial
Highlights(Consolidated)Thousands of
U.S. Dollars

Millions of Yen

2016

2017

2018

2018

Interest on Loans andDiscounts.....................................

¥ 32,275¥ 29,608¥ 29,051$ 273,450

Interest and Dividends on
Securities .....................................

18,852

19,373

19,421

182,811

99,627

94,82799,445936,041

Interest on Deposits .......................

1,991

1,081

806

7,589

General and Administrative
Expenses .....................................

46,79748,26147,087443,21375,50878,14478,846742,156

14,467

11,527

13,776

129,670

Securities ........................................ 1,784,598
Loans and Bills Discounted............ 2,949,815
Total Assets .................................... 5,342,251

1,765,941

1,762,555

16,590,314

3,142,667

3,236,059

30,459,893

5,673,726

5,957,587

56,076,689

4,694,499

4,819,992

45,368,904

5,347,584

5,621,461

52,912,850

32,77632,77632,776

308,518

245,571

252,949

262,2492,468,464

319,683

326,142

336,126

3,163,839(For the Years ended March 31)

IncomeTotal Income ...................................
Expenses

Total Expenses ...............................
Net Income ...................................
AssetsLiabilities
Deposits ......................................... 4,545,036
Total Liabilities ................................ 5,022,567
Net Assets
Capital Stock ..................................
Shareholders’ Equity ......................
Total Net Assets .............................

Yen

U.S. Dollars

Amounts per Share of Capital StockNet Income .....................................

42.04

33.66

407.22

3.83

Cash Dividends ..............................

9.00

9.00

49.50

0.46

Notes: (1) In this annual report, Japanese yen in millions are indicated with fractions omitted.
(2) The translations of the Japanese yen amounts into U.S. dollars are using the prevailing exchange rate at March 31, 2018, which was¥109.24 to U.S. $1.
(3) This is the total of the interim dividend of 4.5 yen and the year-end dividend of 45 yen. The dividend per share for FY2017 without
taking into consideration the share consolidation would be 9 yen.

6

DAISHI REPORT 2018

Financial Highlights

Financial Review（Non-Consolidated）
Balance of deposits
Deposits increased mainly among customers
making deposits in Niigata Prefecture, and thedeposit balance (including negotiable certificatesof deposit) as of March 31, 2018 was 4,840.1
billion yen.

(100 million yen)

50,00048,40147,14045,63440,00030,00020,00010,0000Balance of loans
As a result of actively responding to the financial
needs of customers, the loan balance as of March
31, 2018 was 3,246.1 billion yen.

FY ended March 31, 2016 FY ended March 31, 2017 FY ended March 31, 2018(100 million yen)

35,00032,461

31,551

29,61230,00025,00020,00015,00010,0005,000
0FY ended March 31, 2016 FY ended March 31, 2017 FY ended March 31, 2018

Capital-to-assets ratio

Consolidated capital-to-assets ratio

Non-consolidated capital-to-assets ratio

Although this must be at least 4% based on the

10.83%

11.48%
10.16%

Japanese domestic standards adopted by the Bank,

10.79%

9.65%

10.25%

the ratio is over 10% on both a non-consolidated
and consolidated basis, and accordingly a highdegree of soundness continues to be maintained.

Japanesestandards

4%

FY ended March 31, 2016

Credit rating
Although this must be at least 4% based on theJapanese domestic standards adopted by the
Bank, a sufficient level has been secured on both anon-consolidated and consolidated basis, andaccordingly a high degree of soundness continues
to be maintained.

Status of nonperforming loans
The balance of nonperforming loans based on the
Financial Reconstruction Law (assets subject to

FY ended March 31, 2017

●Japan Credit Rating Agency (JCR)FY ended March 31, 2018

●Moody's

Daishi Bank

Daishi Bank

AA+

A1

AA

Aaa

AA

A

Aa

A2

-AA

A

A3

AAA

BBB

Baa

BB

Ba

B

B

CCC

Caa

CC
C

Ca

D

C

Nonperforming loan ratio(As of June 30, 2018)

Loans subject to bankruptcy or rehabilitation
Loans at risk
Loans requiring management

1.88％

1.61％

1.29％

57.3 billion yen

52.3 billion yen

43.2 billion yen

FY ended March 31, 2016

FY ended March 31, 2017

FY ended March 31, 2018

disclosure under the Financial Reconstruction Law)
as of March 31, 2018 was 43.2 billion yen, and theratio of nonperforming loans was 1.29%.
The head office and sales offices are working
together to provide customers with management
improvement support.

DAISHI REPORT 20187

Daishi s ESG Report
The Daishi Bank Group actively works to resolve social issues related to ESG(environment, society, and governance) in order to fulfill its social responsibilityof achieving a sustainable society, and aims to achieve sustainable growth withthe local community by contributing to the realization of SDGs* (sustainable
development goals) promoted by the United Nations.
*SDGs: Abbreviation for sustainable
development goals.
These goals were adopted in a
United Nations summit in September
2015, and all 193 UN member
countries have decided to work
towards the attainment of thesegoals. The SDGs consist of 17 goals
and 169 targets as efforts to ensurethat nobody is left behind while
trying to eliminate all forms ofpoverty, combat inequality, andrespond to climate change in the
period of 15 years until 2030.

● CO N T E NTS
Ｅ= Environment
Environmental initiatives

Ｓ

9= S o c i e ty
Initiatives to fulfill our social mission

12

Community-focused financial services -Together
12with the local communityUse of policies for initiatives for SME management supportand regional revitalization and financial intermediaryfunction benchmarks (FY2017)12
Ⅰ Performance of a management support andconsulting function for client companies

Ⅱ Performance of a financial intermediaryfunction including the smooth provision of funds

13

Ⅲ Active efforts aimed at regional revitalization

15
17

Ⅳ Active provision of information to the local
community and users

19

Social contributions and measures to improve20
customer satisfaction

Measures to improve market value-To our shareholders-

22

Measures to improve employee satisfaction
23-Promotion of a work-life balance-Ｇ= Governance
Measures to strengthen corporate governance 24
26
Risk management structure28
Compliance structure

8

DAISHI REPORT 2018

Environment

Environmental Initiatives
E nvironment

We support customers involved in environmental conservation while
actively engaging in regional environmental conservation activities andglobal environmental issues as a corporate citizen in order to protect theabundant and beautiful nature in its base of Niigata Prefecture andcontribute to the achievement of a sustainable society.

Daishi Bank Group Environmental Policy

Basic Philosophy

The Bank has established the Daishi Bank Group Environmental Policy, and isactively engaged in activities including efforts to reduce our environmental footprint,
the provision of environmentally-friendly financial products and services, and regional
environmental conservation activities.

Comply with laws,

1 regulations, etc.
Action Guidelines

We will comply with laws, regulations, policies, etc. related tothe environment and conduct activities while giving sufficientconsideration to their impact on the environment.

Promote activities to

We will set targets aimed at reducing our environmental footprint, andconduct ongoing activities aimed at environmental improvements
including energy saving, resource saving, and recycling activities.

Support customers

We will provide comprehensive financial services through thedevelopment, etc. of environmentally-friendly products and services,and support customers involved in environmental conservation.

Implement

All employees of the Group will deepen their understanding ofenvironmental issues and implement activities with anawareness of environmental conservation.

our
2 reduce
environmental footprint
our core
3 throughbusiness

4 environmental
conservation activities

Signing of Agreement on the Niigata Prefecture Carbon Offset Program
In order to promote the further use of the Niigata
Prefecture Carbon Offset*1 Program, we signed theAgreement on the Niigata Prefecture Carbon Offset
Program Coordinator with Niigata Prefecture in January
2018. At the same time, we signed the Contract on
Introduction Services by the Niigata Prefecture Carbon
Offset Program Coordinator with forestry businesses,
etc.*3 who hold carbon offset credit*2 ( credit ), and wewill serve as a coordinator to introduce the sales anduse of credit to customers working to prevent global
warming, etc.

*1 Carbon offsetting is an approach in which greenhouse gases such as
CO2 emitted in daily life or economic activities are offset with theamount of greenhouse gases that are recognized as absorbed inanother location through purchasing.
*2 Carbon offset credit is credit certified for the amount of CO2
absorbed through activities by forestry businesses, etc. in Niigata
Prefecture (carbon offsetting project).
*3 Forestry businesses, etc. are five bodies consisting of the Niigata
Agriculture & Forestry Corporation, Tsunanmachi Forestry
Cooperative, Agamachi, Uonuma City, and Minamiuonuma City.

Niigata Carbon Offset
Agreement ceremony

Information pamphlet on
the Niigata Carbon Offset
Program

Green ATMs
We are continuing our efforts with green ATMs with acarbon offset function under the Niigata Credit program
based on the concept of ATMs that contribute to theenvironment more the more they are used, for which wewill offset 20g of CO2 every time these ATMs are used.
As of March 31, 2018, 43 of these ATMs have been
installed at 19 locations in Niigata Prefecture, andapproximately 167 tons of CO2 have been offset since
the initiative was commenced in August 2014.

Carbon offset results as of March 31, 2018

167 t (cumulative total since August 2014)

DAISHI REPORT 20189

Environment

Environmental Initiatives
Green accounts
In order to expand environmentally-friendly products
and services, we started offering accounts withoutpassbooks (nickname: green accounts) for individual
customers for the first time in January 2018. Because
no passbooks are issued for these accounts,
procedures for entry and carrying-over are notrequired. These accounts are also environmentallyfriendly because they help to reduce paper and CO2.
Many customers are also submitting new applications
or switching over to these accounts from existingaccounts because you do not have to worry about
your passbook becoming lost or stolen.

Start of paperless sales of investment trusts and life insurance
From January 2018, we started offering services forcustomers for investment trusts and life insurance
through the use of tablet devices for the wholeprocess ranging from the proposal to contract signing.
This is the first time that a financial institution in Niigata
Prefecture has used a tablet device to support the fullrange of procedures ranging from the proposal to thecustomer, confirmation of intent, production selection,and settlement.
Through confirmation and a digital signature on thetablet device, it is possible to complete seal-less andpaperless procedures, reduce the burden for thecustomer associated with filling in and attaching a seal
to documents, and reduce the time required forprocedures.

Paperless sales through a tablet device

Opening of the Internet Branch, enhancement of smartphone app
We opened the Internet Branch and launched the
Account Opening App for smartphone in April 2018.
The Internet Branch differs from conventional
branches in that it is a virtual branch on the Internet. It
allows customers that cannot easily visit physicalbranches to make conduct procedures for deposit
account opening and loans ranging from applications
until contract signing. In addition, the Account Opening
App can be used to open an account at the Internet
Branch that does not require a branch visit or at the
Bank s headquarters and branches within Niigata

Account Opening App

Prefecture.
BThe Daishi Bank App for smartphones has beenrenewed as the Niigata Town Information App. For
even more convenient use, in addition to the standard
bank transaction menu, the app offers a wide variety ofcontent including dining information and outing
information for Niigata Prefecture and discountcoupons that can be used at dining establishments in
Niigata Prefecture and leisure facilities in Japan. It canalso be used by people who do not do business with
the Bank.

Niigata Town Information App

See here
for iPhone

See here
for iPhone

See here forAndroid

See here forAndroid

10 DAISHI REPORT 2018

Environment

Handling World Bank Green Bonds
Daishi Securities of the Daishi Bank Group soldGreen Bonds (INR-denominated) that were issued by
the World Bank in September 2017.
Green Bonds are issued to support developing
countries struggling with global warming, and the funds
procured are used to finance development projects of
the World Bank including projects to reducegreenhouse gas emissions.
This product was developed as a joint measure of
the group securities companies of the member banksof the Tsubasa Financial System Advancement Alliance,
and the Bank also offers this product through financial
product intermediary services (introduction
intermediary services).

Information pamphlet on
World Bank Green Bonds

Expansion of lineup of investment trust products
We expanded our lineup of investment trust
products with a focus on balanced funds in order tosupport medium to long-term asset formation basedon the Basic Policy on Customer-Oriented Business
Management developed and released in June 2017.
In addition, in July 2018 we started handling theSumitomo Mitsui Japanese Equities ESG Fund(Distribution Re-investment Course) (asset manager:
Sumitomo Mitsui Asset Management), which is a fundthat invests in stocks of Japanese companies that are
expected to invest more in ESG. We will endeavor to
expand our lineup of investment trust products in the
future in response to diversifying investment needs.

Sumitomo Mitsui AssetManagement Sumitomo
Mitsui Japanese Equities ESG
Fund (Distribution
Re-investment Course)

Receipt of Minister of Environment Award
Reflecting the strong reputation of initiatives aimed
at reducing our environmental footprint including theEnergy Saving Equipment Support Fund and Green
ATMs, we received the top award entitled the Ministerof Environment Award for both the FY2014 Ministry of
the Environment s Principles for Financial Action
towards a Sustainable Society (Principles for Financial
Action for the 21st Century) and the FY2015 5thCarbon Offset Awards from the Ministry of theEnvironment.

Daishi-no-Mori (Daishi Forest) creation
In order to maintain green and abundant forests in
the region in the future, Daishi Bank has participated inforest preservation promotion activities. In addition to
the Daishi-no-Mori (Daishi Forest) project in Agamachi,
Higashikanbara-gun, Niigata Prefecture that we havebeen involved with since FY2009, we started
afforestation activities at Araihama Forest Park in
Tainai, Niigata Prefecture in FY2017.
In October 2017, a total of 571 executives andemployees and their family members participated in
activities to plant 500 broadleaf trees.
We will continue to actively promote local
environmental conservation activities.

DAISHI REPORT 201811

Society

Initiatives to Fulfill Our Social Mission
S ocial社会

Initiatives aimed atachieving regional
revitalization

We work to provide an underpinning for the actual regional economy through theprovision of a wide range of financial services that live up to the expectations of
the local community and society while contributing to the development of theregional society through the use of management resources including diverse humanresources in consideration of the needs of the local community and society.

Community-focused financial services -Together with the local community-

Use of policies for initiatives for SME management support and regional
revitalization and financial intermediary function benchmarks (FY2017)
A part of our corporate philosophy is to contribute to the region while being appreciated and trusted as
Niigata Prefecture s best bank. We believe that it is our social responsibility to offer management support to
SMEs (including small-scale businesses) in the region and contribute to the regional revitalization through theperformance of a financial intermediary function and consulting function and active participation in overall
regional regeneration. In providing management support for customers and promoting regional revitalization, we
will contribute to the development of the regional society and economy through the smooth provision ofcomprehensive financial services to customers with a focus on the following four priority items.Furthermore, in
initiatives for community-focused financial services including the performance of a financial intermediary function,
we will conduct objective self-assessments while also utilizing financial intermediary function benchmarks, andstrengthen PDCA management in an aim for further improvements in corporate value for customers.

Policies for initiatives for SME management support and regional revitalization

Ⅰ

Performance of a management support and consulting function for client companies

Ⅱ

Performance of a financial intermediary function including the smooth provision of fundscompanies

Ⅲ

Active efforts aimed at regional revitalization

Ⅳ

Active provision of information to the local community and users

Financial intermediary function benchmarks

Benchmarks for objectively assessing the level of performance of a financial intermediaryfunction at a financial institution, including the provision of financing and solutions inaccordance with needs and challenges of customer companies
Shared benchmarks

Benchmarks for assessing progress, challenges, etc. related to financial intermediary efforts by all financial institutions

Selective
benchmarks

Benchmarks that can be selected based on the business strategy, business model, etc. thatIndependent
benchmarks

Benchmarks that can be independently set by financial institutions when conducting a selfassessment of financial intermediary efforts if there is a more appropriate benchmark

applies for each financial institution*The financial intermediary function benchmarks (FY2017) are described in the sections of each of the related items on
the next page.
*The numbers of customers stated on the follow page are totals on a non-consolidated basis for Daishi Bank, as long as
there are no notes stating otherwise.

12 DAISHI REPORT 2018

Society

Ⅰ

Performance of a Management Support and Consulting Function for Client Companies

Actively supporting client companies in accordance with their life stage
SMEs in the region fulfill the important role as pillars that support the regional society and economy.
The Bank will contribute to the development of the regional economy by actively providing management support
based on the life stages of SMEs in the region.
Number of customers and loan balance by life stage

Number of credit
customers

All credit customers
Foundation

GrowthMaturity

DeclineRegeneration

FY 2016

18,282

972

799

8,735

530

2,190

FY 2017

18,530

972

722

8,794

631

1,998

FY 2016

1,904.6
billion yen

866
billion yen

1,338
billion yen

11,760billion yen

450billion yen

1,228
billion yen

FY 2017

19,631billion yen

1,048
billion yen

1,246
billion yen

11,400billion yen

739
billion yen

1,143
billion yen

SharedLoan balance

FY 2016
Number of customers and loan balance in cases which the Bank is the mainbank (loan balance number 1) (note: number of customers is on a Group basis)

SharedOf the above, number of customers that improved management
indicators, etc. (note: figures are on a Group basis)
Loan balance for last three years for customers
that improved management indicators, etc.
among the above

all customers and number of customers byregionNumber of customers in cases which the Bankis the main bank (loan balance number 1) andtheir percentage of all customers
Selective

6,008

6,256

9,890 billion yen
4,943

FY 2014

FY 2015

FY 2016

FY 2015

FY 2016

FY 2017

7,812
billion yen

8,194billion yen

8,232
billion yen

8,301
billion yen

8,637
billion yen

8,745
billion yen

Within Niigata
Prefecture

Outside of
Niigata Prefecture

Total

Within Niigata
Prefecture

Outside of
Niigata Prefecture

Total

16,7601,522

18,282

16,845

1,685

18,530

Number of customers incases which the Bank is
the main bank

Their percentage of
all customers

Number of customers incases which the Bank is
the main bank

Their percentage of
all customers

7,912

43.3 ％

8,744

47.2 ％

14.4 ％

23.9 ％

Percentage of credit
customers that financial
instruments are sold to

Percentage of credit
customers that financial
instruments are not sold to

Percentage of credit
customers that financial
instruments are sold to

Percentage of credit
customers that financial
instruments are not sold to9.2 ％90.8 ％

13.4 ％

86.6 ％

Percentage of branch performance evaluation toevaluation related to core business support for customers

Selective

9,348 billion yen
4,698

Percentage of customers which the Bank is the main bankthat management improvement proposals are provided for
Percentage of all credit customers that
financial instruments are sold to andpercentage of all credit customers that
financial instruments are not sold to

FY 201713.4 ％

15.5 ％FY 2016

FY 2017

Number of customers supported with core business(improvement in corporate value) and their percentage of all
customers (note: number of customers is on a Group basis)

1,675

10.6％

3,132

19.6％

Number of customers solutions are proposed to andtheir percentage of all customers (note: number ofcustomers is for the entire Daishi Bank Group)

2,203

13.9％

3,515

21.9％

Loan balance of customers solutions are proposed
to and percentage of loan balance of all customers

5,173 billion yen

27.2％

5,968 billion yen

30.4％

Number of support measures for attracting
companies to the local region
Number of management human resources,
management support human resources, andspecialized human resources introductions for SMEs

−*

303

28 people

44 people*Because measurement started from FY2017, FY2016 is displayed as −.

DAISHI REPORT 201813

Society
Communityfocused financial
services

Together with the Local Community

Foundation

We support companies aiming to become
established or develop new business inconsideration of their technologies, products,
services, and the uniqueness and growth potential of
their business model. From November 2017, westarted the New Business One-stop Support Program
in cooperation with the Group company Daishi
Management Consulting Co., Ltd. as a one-stop
support program for customers planning to establish
business in Niigata Prefecture (including the second
stage of business establishment) that are in thefoundation stage to growth stage. We also actively
hold various seminars for customers consideringbusiness establishment or developing new business.
SharedAssumed major
challenges andneeds for companies

Contents of main solution
proposals

FinancingUtilization of venture funds,
institutional financing, andguarantee systems

Development ofsales channels

Utilization of businesspanels, business matching,and Bridge Niigata

Information andconsultation
environment

Provision of assistanceinformation, provision of
JETRO overseas information

Cases of involvement in business establishment by the Bank
Cases of involvement in second stage of business establishment by the Bank

Selective Cases of support using SME support measures (subsidiary applications, etc.) related to core business support for customers *FY 2016398 cases
3 cases
438 cases

FY 2017740 cases
41 cases
100 cases*The main reason for the decrease in FY2017 was the decrease in the number of invitations forapplications to the manufacturing subsidy provided by the Small and Medium Enterprise Agency (from twotimes in FY2016 to one time in FY2017)

GrowthWe position areas such as the environment,
health, agriculture, and tourism as growthfields, in which we conduct various support
measures for business expansion including
business panels and business matching. In
addition to within the prefecture, we are also
actively involved in business panels andbusiness support outside of the prefecture andoverseas, as well as financing support utilizing
various funds and the holding of seminars, etc.
to make businesses have higher added value.

Selective

Maturity

Contents of main solution
proposals

Securing humanresources

Human resources matching anddevelopment in cooperation
with external organizations

Financing,hedging risks

Support for increased
operating and capital funds,
derivatives, interest rate swaps

Product
development anddeveloping higher
added value

Expert advice (energy saving
diagnosis, industry-academia
collaboration, generalmanagement)

FY 2016615

FY 2017593

Sales channel development support for companies other than local companies

355

669

Sales channel development support for overseas

324

688

Sales channel development support for local companies

In March 2018, we launched the BusinessSuccession Support Program to offer broad
one-stop support for succession amonggroup companies, succession to executives
and employees, and M&As. etc. for the
purpose of strengthening support for
consultations regarding business succession.
In addition, we also work together with avariety of external organizations including
Daishi Management Consulting Co., Ltd. tosupport business succession and M&As inorder to resolve the management issues ofcustomers.Furthermore, we propose avariety of financing methods depending on
the needs of customers, including syndicatedloans and private placement bonds.
Selective

14 DAISHI REPORT 2018

Customers assisted with sales
channel development

Assumed major
challenges andneeds for companies

Assumed major
challenges andneeds for companies

Contents of main solution
proposals

New market
development

Support for new businessdevelopment in partnershipwith external organizations

Succession
and M&As

Business succession and M&A
supportFinancingSupport for various forms offinancing including syndicatedloans, private placement
bonds, liquidity solutions, andABL

Number of customers assisted with business succession (number of own shares evaluation and consulting contract customers)
Number of customers assisted with M&As

FY 2016
182
48

FY 2017208
52

Society

Decline andregeneration

We propose optimal solutions and support
the formulation of management improvement
plans through multi-faceted studies after
sharing management issues and challenges
with customers. After plans are formulated,
we conduct follow-up activities aimed at planachievement. In addition, we arestrengthening alliances with external
agencies and external experts andperforming a consulting function that includes
utilizing the optimal regeneration methods
and designing mechanisms to support
prompt business regeneration by customers.

Assumed major
challenges andneeds for companies

Contents of main solution
proposals

Declining or
sluggish demand

Management improvement
plan formulation
support,holding seminars to
improve management
capabilities

Poor
performance incore business

Regeneration support utilizing
the Council to Support
Revitalization of Small andMedium Enterprises
ABL, utilization of business
regeneration fundFinancing

FY 2016

FY 2017

948

1,962

REVIC

11

9

Organization for Small & Medium
Enterprises and Regional Innovation

4

9

Average number of years remaining a potentially bankrupt borrower

5.0 years

5.3 years

Selective Number of customers that improved rank from potentially bankrupt borrower in classification of obligors

141

184

Core business support customers that saw improvements in management
Number of customers using REVIC (Regional Economy
Shared Vitalization Corporation of Japan) and the Organization for
Small & Medium Enterprises and Regional Innovation

Ⅱ

Performance of a Financial Intermediary Function Including the Smooth Provision of Funds

Initiatives to facilitate financing
The Bank is sufficiently aware of its public and social responsibility and mission as a regional financial institution,and it works to facilitate financing through the establishment of its Basic Policy on Financial Facilitation in order tofulfill an appropriate and active financial intermediary function while taking into consideration the soundness andappropriateness of business operations.

Supporting new loans and changes in loan conditions
TWe respond sincerely when we receive consultations or applications from customers regarding matters such as new loans
and changes in loan conditions. When we receive a consultation or application, we do not make judgments merely on
cosmetic aspects such as financial statements. We instead conduct appropriate reviews that aim to assess in detailed manner
aspects including technological capabilities, sales capabilities, future potential, management conditions, and business values. If
a customer has received loans from other financial institutions, we respond appropriately by making an effort to work together
closely with these financial institutions (including credit guarantee associations) after gaining the consent of the customer.
FY 2016
2,097

Number of SMEs that have changed loan terms
Shared Progress of management improvement plans bycompanies above

FY 2017
1,928Good progress Steady progress Unfavorable progress Good progress Steady progress Unfavorable progress

252

565

1,280

231

627

1,070

*Unfavorable progress includes companies that have not formulated a management improvement plan (1,118 companies for FY 2016,861 companies for FY 2017 ).

DAISHI REPORT 201815

Society
Communityfocused financial
services

Together with the Local Community

Utilization of financing methods that are not excessively dependent on real estate collateral or guarantees

TIn order to contribute to the growth of customers and improvements in management at customers, we work
to conduct detailed assessment of business values and management conditions including technologicalcapabilities, sales capabilities, and future potential while proposing financing that is not excessively dependent oncollateral or guarantees by using assets such as movable property or accounts receivable as necessary.
FY 2016

Percentage of
Number of unsecured credit customers and percentage of unsecured credit
customers
unsecured finance amount among local SME credit customers

Percentage of
unsecuredfinance amount

53.4 ％

Percentage of credit customers that fixed collateral has notbeen set for among local SME credit customers
Percentage of non-guaranteed main customers among local
Selective
SME credit customers

23.4 ％FY 2017

Percentage of
unsecured credit
customers

Percentage of
unsecuredfinance amount

54.3 ％

24.7 ％

70.7 ％

72.1 ％

3.0 ％

3.3 ％

Percentage ofPercentage ofPercentage ofPercentage ofPercentage of finance amount with a guarantee from a credit finance amount finance amount with finance amount finance amount withguarantee association and percentage of financing with a 100% with a guarantee a 100% guarantee with a guarantee a 100% guarantee

guarantee among local SME financing

9.7 ％Number of cases of fund utilization (business establishment,
business revitalization, regional revitalization, etc.)

2.8 ％

7.6 ％

6

1.9 ％

7

Efforts in response to Guidelines on Management Guarantees
We promote further financing that is not dependent on management guarantees after taking into fullconsideration the intent and details of the Guidelines on Management Guarantees.
FY 2016

Number of customers using Guidelines on Management Guarantees
Selective
and percentage of all credit customers

1,691

FY 2017
9.2 ％

1,569

8.6 ％

Business Feasibility Assessment Initiatives
The Bank defines business feasibility assessment as using
appraisal capabilities to assess the business feasibility ofpartners businesses and provide growth and management
improvement support in order to back the actual economy in
the region and contribute to the development of regionalsociety and partner businesses, and it is actively engaged indeveloping systems and human resources development forbusiness feasibility assessments. The Regional Industrial
Promotion Fund and Jimoto (Local) Fund were established as
financing programs for instilling business feasibility
assessments in June 2017. These funds actively work to
improve corporate value and improve productivity throughthe performance of a financial intermediary function aimed atsolving problems and attaining goals for customers.

SharedNumber of credit customers provided finance based on business feasibility assessments and their loan balance

Ratio of the above to all credit customers and the loan balance
Number of partner businesses that have been presented the results ofbusiness feasibility assessment and local benchmark in dialogue
Percentage of short-term loans in working capital
Selective Number of customers provided with core business support utilizing external experts【 Main initiatives aimed at improving appraisal capabilities 】

Company
Support Review
Meeting

Review meeting for all sales personnel
involved to exchange opinions with theparticipation of the department or
branch manager on the nature of thecustomer s business, assumed
management challenges, and solutions
for these challenges

Partnership with theRegional Economy
Vitalization
Corporation of Japan(REVIC)

Partnership for providing multifaceted
management support by accepting
human resources with specialized
know-how dispatched from REVIC andutilizing REVIC knowledg

1,703
9.3 ％

FY 2016
5,64 billion yen
29.6 ％

2,665
14.4 ％FY 2017
6,73.7 billion yen
34.3 ％

2,304

3,502

26.7 ％
18

31.0 ％
33

Number of times training provided on core business support Number of time Number of participants Number of people Number of time Number of participants Number of people
in training
acquiring qualification
training heldin training
acquiring qualification
for partner businesses, number of participants in this training, training heldand number of people acquiring qualification
48 times
442
207
70 times
922
306
Independent Average number of days from date of receiving financing inquiry to date of response to customers
10.9 days
9.8 days

16 DAISHI REPORT 2018

Society

Ⅲ

Active Efforts Aimed at Regional Revitalization

The Daishi Bank Group is cooperating with comprehensive strategies of the national government and local
governments, and working actively as an entire Group towards measures that lead to the virtuous cycle of towns,
people, and jobs in order to achieve regional revitalization.

Creation ofTowns andPeopleInitiatives through industry, government, academia, and finance partnerships
We are actively working together with Niigata University, local governments, etc. to create opportunities for companies in theprefecture and university students to interact in order to improve the employment rate in the prefecture in the future and promote thecreation of an environment for joint research by universities and companies.
In June 2017, we worked together with six companies in the prefecture to support the establishment of a curriculum for learning
about the entire agricultural and food industry that is the major industryof Niigata Prefecture though the supply chain (extracurricular class for
the Niigata University College of Creative Studies).
In addition, we continued from the previous fiscal year to conductcompany visits and exchange projects with companies in Niigata
Prefecture for students from Niigata University. In FY2017, projects wereconducted in the three cities of Shibata City, Joetsu City, and Ojiya City,and these efforts that mainly consisted of company visits deepened
Exchanges between university students and companies throughexchanges with employees.
industry, government, academia, and finance partnerships
Independent

Number of companies with technology alliances with local universities and efforts to promote employment of local university students

FY 201628

FY 201768

Flow from issuance of Future Support Private Placement Bonds and Regional Revitalization
Private Placement Bonds to contributions and donations
We offer the Future Support Private Placement Bond that uses a portion of bond issuance fees to donate schools supplies suchas books and sporting goods to local schools together with private placement bond issuing companies.In addition, we offer the
Regional Revitalization Private Placement Bond with bond issuing companies that donates a portion of bond issuance fees to local
governments as a product that supports the town, people, and job creation efforts of local governments.
Flow from issuance of Future
Support Private Placement Bonds
and Regional Revitalization
Private Placement Bonds tocontributions and donations

Issuingcompany

Issuance ofprivate placement bonds

Newspapers
media

Press release

PR in newspaper
notice(subsequently)

Independent

Future Support
Private Placement Bond

Conﬁrmation of desires of recipients ofcontributions/donations and support
projects
Arrangements forcontributions/donations

Contributions/donations
under joint name of issuing
company and the Daishi Bank

Number of Future Support Private Placement Bondissues and issuance amount
Number of Regional Revitalization Private Placement
Bond issues and issuance amount

Local elementary andjunior high schools, etc.

Regional Revitalization
Private Placement Bond
Municipalities
in Niigata
Prefecture

85 cases

FY 2016
9.2 billion yen

53 cases

8.6 billion yen

Information brochure
for Future Support
Private Placement Bond

Cumulative total since launch in September 2013 ▶
Cumulative total since launch in July 2016 ▶

Information brochure for
Regional Revitalization
Private Placement BondFY 2017106 cases
10.1 billion yen
422 cases
41.9 billion yen
43 cases
3.8 billion yen
96 cases
12.4 billion yen

Introduction of RPA
The Bank is currently introducing RPA (robotics process automation) that is a form of software robot that performs
standard tasks instead of people in order to improve work productivity as part of working style reform. The BizRobo! of RPA
Technologies. Inc. is being introduced, and robot development is being conducted by The Daishi Computer Service Co., Ltd.
Going forward, we will expand the tasks applying RPA, improve productivity and make fundamental revisions in
administrative work, and work to improve the efficiency of management while promoting working style reforms.

DAISHI REPORT 201817

Society
Community-focusedfinancial services

Together with the Local Community - For Corporate Customers Creation ofJobs

New Business One-stop Support Program
From November 2017, we started the New Business Onestop Support Program in cooperation with the Group company
Daishi Management Consulting Co., Ltd. as a one-stop support
program from the foundation stage to growth stage. We offer
paid consulting services providing one-stop support for various
management issues thatarise depending on the
progress of the businessfrom the foundation
stage to growth stage,
including various
foundation procedures,
business feasibility
assessment, and theformulation of businessplans and management
Information on the New Businessstrategy.
One-stop Support Program

Founders and second stage of business founders
One-stop support

Certiﬁed accountants

Daishi Management Consulting

Tax accountants

Accounting, consulting• Foundation contact point• Support for commercialization andvarious foundation procedures• Funding support, ﬁnancial arrangements• Hands-on support after foundation

Tax consultations, preparationof tax documents

Support and cooperation

Attorneys

Legal consultations,
corporate legal aﬀairs

Daishi Bank

Local governments, etc.
within Niigata Prefecture

Juridical scriveners

Registration, preparation oflegal documents• Information activities, training and raising awareness• Foundation ﬁnance, support for grants and subsidies
Business
partnerships• Working together with public foundation
support organizations• Matching with organizations planning to abandon business, etc.

• Foundation consultation counter,dispatching of specialists• Grants and subsidies• Foundation seminars,
foundation courses

Public consultants on social
and labor insurance

Investment/
operations

Niigata Prefecture Credit
Guarantee Associati

NCS Corporation

Investment• Management consultation counter,dispatching of specialists• Guarantees related tofoundation, etc.
• Foundation seminars,
exchange projects

Private equity fund
• Provision of growth capital through stock acquisition• Supporting improvements in corporate value

Personnel and labor management,social security
IT and information
system development

Research Center of Niigata
Think tank activities andmarket research

External specialist
organizations

Daishi Bank Group

Business Succession Support Program
In March 2018, we launched the Business Succession
Support Program to offer broad one-stop support forsuccession among group companies, succession to
executives and employees, and M&As. etc. for the purpose ofstrengthening support for consultations regarding businesssuccession that have increased along with the aging ofmanagers. We accept and provide support for a wide rangeof consultations from the stage when the manager is not surewhether to succeed or abandon a business.

Information on theBusiness Succession
Support Program

Niigata Glocal Strategy Promotion Program
Since April 2016, we have offered a full support programfrom advance preparations to commencement of overseas
transactions for customers that are interested in businessoverseas based on the main theme of overseas market
expansion and development as the Global Market
Development Challenge Program.
In April 2018, we deepened this program andlaunched the Niigata Glocal Strategy Promotion Program
to further improve the effect of regional revitalization in
the field of international business. We are promoting
glocalization* in Niigata by expanding the scope of
support to related areas such as outbound business(export and overseas penetration) of prefectural
products (products, technologies, and know-how),
inbound business for foreigners (tourism and sales within
Japan), and the utilization of foreign human resources,
and further strengthening of local partnerships.
Going forward, we will implement various forms ofoverseas business support that utilize the Bank s richoverseas network.

*Glocal (= glocalization): This word means acting locally while thinking on a global
scale as a hybrid word blending the two words of globalization as a trend that issimultaneously involving the whole world and localization as a trend that takes
into consideration the characteristics and qualities of the region.

[Overseas partner banks]
People’s Republicof China

Shanghai Representative Oﬃce

Central Paciﬁc Bank

VietnamIndia

JSC Bank for Foreign
Trade of Vietnam

State Bank of India

HD Bank

ThailandPhilippines

Kasikorn Bank

Indonesia

Bank Negara Indonesia

Number of companies assisted with overseas expansion in Japan or overseas
Independent
Number of companies assisted utilizing external cooperation bodies or support systems

18 DAISHI REPORT 2018

United States(Hawaii)

Industrial andCommercial Bank of China

Metrobank

Number of companies assisted with overseas
sales channel development in FY2017

Total of 324
FY 2016140 cases
47 cases

FY 2017273 cases
79 casesSociety

Holding of the Niigata Foundation Award and Niigata Business Idea Contest
We sponsored the Niigata Foundation Award for the purpose ofrevitalizing regional business foundation, and held the Niigata
Business Idea Contest with Niigata Isetan Mitsukoshi and the
Niigata Branch of East Japan Railway Company for the purpose of
establishing new regional brands in Niigata and distributing
information throughout Japan.
After these events were held, we also provided follow up
through means such as marketing and sales channel expansionⅣsupport for business plans and ideas submitted in order tosupport new business in getting started and growing in Niigata.
NiigataFoundation
Award ceremony
Niigata Business
Idea Contest
ceremony

Active provision of information to the local community and users

Distributing information through the website
Through our website, we actively distribute various forms of information in a manner that is easy
to understand on topics such as seminars and campaigns. In addition, we have incorporated thefeedback we have received from customers to enhance the part of the website that introduces
products and services, and to revise how information is displayed so that customers can moreeasily find the information they are looking for in an effort to improve convenience.

Distributing information through seminars
By providing timely information in response to changes inthe environment by holding seminars, we actively
implement measures that effectively support the growth of
our customers. Some of the themes of the seminars held
are listed on the right.

Daishi Bank

SearchDaishi Bank's website URL

http://www.daishi-bank.co.jp/[Seminar themes]● Seminar on Utilizing Measures of the

Ministry of Economy, Trade and Industry

Introduction to manufacturing and energy saving subsidies● AI/IoT Seminar

Introduction to AI and IoT utilization methods
to improve productivity

Seminar on Utilizing Measuresof the Ministry of Economy,
Trade and Industry● Business Founder Seminar

FY 2016 FY 2017
Independent Number of seminars held for corporate customers to support improvements in unique corporate value 39 times 42 times● Overseas Business Seminar

Introduction of experiences by senior
management, etc.

● Business Succession and M&A Seminar

Introduction to business succession and M&A case studies
Introduction of information for expansion of sales
channels and manufacturing bases overseas

Issued Aiming to Achieve Regional Revitalization
We have issued Aiming to Achieve Regional Revitalization, a booklet that introduces
initiatives aimed at regional revitalization by the Bank. The booklet is available at eachbranch and can also be viewed on our website.
Website address for Aiming to Achieve Regional Revitalization

http://www.daishi-bank.co.jp/company/csr/pdf/creation̲2905.pdf

Bridge Niigata
The Bridge Niigata exhibition and business talks space in Nihonbashi, Tokyo is usedby various municipalities and companies as a base for communicating products andinformation from Niigata to the Tokyo metropolitan area.
Independent

FY 2016 FY 2017
Number of times Bridge Niigata was used for sales channel development
30 times 34 times
and regional industry support through external collaboration**Industry, government, and academia collaboration with companies, universities, municipalities, etc. from outside the prefecture

Initiatives to facilitate financing
While the deadline for the Act on Financial Facilitation for Small and Medium-sizedEnterprises was reached at the end of March 2013, the entire Bank will continue to actively
perform a consulting function and promote initiatives aimed at the facilitation of financing.

Bridge Niigata in Nihonbashi, Tokyo

Consultation number for financial facilitation

0120-041151

Opening hours: 9:00 to 17:00 on weekdays(Excluding bank holidays and national holidays)

DAISHI REPORT 201819

Society
CSR

Social contributions and measures to improve customer satisfaction

In an aim to contribute to the region while being appreciated and trusted as Niigata Prefecture s bestbank, we are actively engaged in financial and economic education and the promotion of regional
culture and sports. In addition, we will work to expand our network and enhance products and services
in an aim to become a more accessible and convenient bank.

Daishi Hall
We have continued to hold the Daishi Life-up Concert
that invites leading musician from Japan and overseas
to provide high-quality music at a low price.
For FY2017, we held a piano recital by the Ukrainian
pianist Anna Fedorova who has received awards inmany international contests in Niigata for the first timeand a rakugo performance by rakugo performer Karoku
Yanagiya, which was the first such event for the Bank.
For FY2018, in July we held a classical concert by
Noé Inui who has performed in various parts of theworld as a master of reinterpreting European violinmusic, and in March 2019 we plan to hold a rakugo
performance by rakugo performer Kikunojo Kokontei.
Information including the schedule will be announced
through the Daishi Bank website as appropriate.

Anna Fedorova

Karoku Yanagiya

Daishi Academy
In order to support the mental and physical developmentof children, we have held the Daishi Academy since FY 2013.
The Daishi Academy provides children in the area with theopportunity to interact with professionals in various fields inorder to develop sensitivities outside of school and home,
and to make them more familiar with finance.Since the Daishi
Academy was held in FY2013, over 1,000 students haveparticipated every year, and the total cumulative number ofparticipants up to FY2017 was 8,326.In addition, we plan toincorporate the perspective of SDGs in classes from FY2018
in order to develop and educate human resources who willcontribute to the sustainable growth of the region. In the
new class on living things, we offer students an opportunity
to become interested in and curious about a sustainable

recycling-oriented society from the nearby Sea of Japan andlocal nature, based on the theme of thinking about our future
through the sea.
Finance

Science

Cooking

Basketball

Economics Koshien
The Twelfth National High School Student Finance andEconomics Quiz Championships Economics Koshien Niigata
Tournament was sponsored by the Bank in December
2017. This championship that was held for the fifth time in
Niigata Prefecture was participated in by a record-high 32
teams and 64 participants. Among the six teams that
advanced to finals, N Shinano boys from Niigata Meikun
Senior High School won the championship and advanced to

the national championship to aim for the top to competewith 1,297 teams from 517 schools on financial knowledge.

Economics Koshien Niigata Tournament

Promoting Sports
As part of efforts to promote local sports, we willcontinue to support the Niigata City Marathon that isscheduled to be held in October 2018.
The Bank s employees plan to participate as runners
under the team name of Speedy Solutions , and toalso participate in volunteer activities in order to makethe Niigata City Marathon lively together with everyonein the local community.The Bank also actively
promotes local sports through sponsorship of youth
baseball tournaments such as the 39th Little Senior

20 DAISHI REPORT 2018

Niigata Bloc Chairman s Cup Scramble Tournament
and the 35th Japan Youth Rubber BaseballTournament Niigata Preliminary Tournament.

Niigata City Marathon

Youth baseball tournament

Society

Received Award for Creating Communities that are Accessible to People (Facilities Category)
The Sanjo Branch and Sanjohigashi Branch that were relocatedand opened in April 2017 received the FY2017 Award for
Creating Communities that are Accessible to People from Niigata
Prefecture.
The Award for Creating Communities that are Accessible toPeople is provided by Niigata Prefecture in recognition of groups,
individuals, etc., that lead community building that takes into
consideration social welfare that enables everyone including
elderly people and people with disabilities to freely participate insociety while maintaining their autonomy. It is provided for thedevelopment of facilities and the activities of groups, etc. thatserve as a model within the prefecture. The Sanjo Branch andSanjohigashi Branch were recognized as a facility developed in amanner that allows safe and comfortable use by many people
including elderly people and people with disabilities.
Sanjo Branch and Sanjohigashi Branch

Spacious waiting lobby

Kids corner in the waiting lobby

CotoCoto Community Art Museum

Tulip Donation Activities

In support of the efforts of the CotoCoto Community Art Museum,works of art including paintings made by people with disabilities are on
display in the lobby of the Minami Niigata Branch. The lease fees
received for the works on exhibition are partially paid to the creatorsand they are also allocated to
discovering new creators, which leads
to an increase in income and creation of
employment for people with disabilities,
as well as the creation of contact points
for people with disabilities and society.
Daishi Bank Minami Niigata Branch

We donate tulips that are the Bank s official flower
to social welfare facilities, etc. within Niigata
Prefecture. We have conducted these activities since1970, and they have become instilled as the social
contribution activities
with the longest
history for the Bank.
Potted plants andbulbs are delivered toa total of over 130
facilities, every spring
and fall, respectively.
Donation of tulips

Tsubasa Alliance
The Bank participates in the Tsubasa Alliance as aframework for wide-range cooperation in different businessareas with the seven banks of Daishi Bank, Chiba Bank,
Chugoku Bank, Iyo Bank, Toho Bank, Hokuyo Bank, andHokuetsu Bank. Cooperation covers various fields such as
surveys and research on fintech, the joint formation ofsyndicated loans, mutual introductions of customers, andjoint operations for administrative work.
We will contribute to the sustainable growth of local
communities through the further acceleration of strategic
alliances that maximize the benefits of wide-range

cooperation and the provision of financial services with highadded value for customers.

Tsubasa Alliance

Investments in Social Bond (JICA Bond)
We have invested in the JICA Bond as a social bond* issued
by the Japan International Cooperation Agency ( JICA ,President: Shinichi Kitaoka) in June 2018. As an investment in
ESG (environment, society, and governance) aimed at therealization of a sustainable society, this bond aims to achieve
economic and social development in developing areas andcontribute to environmental considerations and the resolutionof social issues from a long-term perspective.
In support of these objectives of the JICA Bond, the Bankhas made an investment for the purpose of resolving social
issues through its core business and further strengthening thedegree of social contribution and information communication
capabilities as part of putting ESG management in practice forsustainable growth that is an important tactic of new
medium-term business plan, Step-Up New Stage̶
Transformation and Leap Forward̶ , to realize the creationof shared values with stakeholders.
*Social bond: A social contribution-based bond that takes into consideration ESG
and allocates the funds procured to projects that contribute to the resolution ofsocial issues such as basic infrastructure development (water supply andsewerage systems, sanitation, transportation, etc.) and improving access tosocial services (health, education, employment, financial services, etc.).

DAISHI REPORT 201821

Society
CSR

Measures to Improve Market Value: For Shareholders

In consideration of public nature of the banking industry and in order to be able to continue providing
to shareholders returns in the future, our policy for returns to shareholders is a basic policy of continuing
to provide stable returns to shareholders while giving consideration to the increase of internal reserves
in order to strengthen the earnings base.

Policy for Returns to Shareholders
Our policy for returns to shareholders is a basic policy ofcontinuing to provide stable returns to shareholders while giving
consideration to the increase of internal reserves in order tostrengthen the earnings base, and we aim for a rate of return toshareholders of about 40%, combining dividends and theacquisition of treasury shares.
The Bank conducted a share consolidation that consolidated 10
common shares into 1 common share with an effective date ofOctober 1, 2017. The annual dividend for FY2017 was aninterim dividend of 4.5 yen (before the share consolidation) anda year-end dividend of 45 yen (after the share consolidation).

Information on the dividends for Daishi Hokuetsu Financial
Group, Inc. that will be the holding company after businessintegration will be provided promptly after it is decided on.

[Annual dividends per share (unit: yen)]
FY2013

FY2014FY2015FY2016FY2017889949.5 *2*1*1 Annual dividends per share for FY2013 include a 140 anniversary commemorative dividend of 1 yen.
*2 This is the total of the interim dividend of 4.5 yen and the year-end dividend of 45 yen. The dividend
per share for FY2017 without taking into consideration the share consolidation would be 9 yen.

Shareholder Privilege System
The Bank has introduced a shareholder privilege
system as a means of expressing thanks toshareholders for their everyday support and increasing
the attractiveness in investing in our shares so that evenmore shareholders hold our shares over the long-term.

【 Applicable shareholders 】

Number of share held
100 to1,000 shares
10,000 sharesor moreLocal specialty
products

Tsubasa Alliancejoint specialty products course

Equivalent to 2,500 yen
Equivalent to 6,000 yen

Shareholders that own at least 1,000 shares (1 unit)
consecutively for at least one year*, with March 31 as
the base date shall be applicable.

*A share consolidation (consolidation of 10 shares into 1 share) was
conducted on October 1, 2017.
consecutive times with the same shareholder number on our current
shareholder register as of March 31 and September 30 every year.

【 Details of the shareholder privilege system 】
Shareholders can select the specialty products andother goods they prefer based on the number of shares
they hold from either a catalog that mainly contains
specialty products from Niigata Prefecture or a catalog
jointly created by five participating banks of the Tsubasa
Alliance (Daishi, Chiba, Chugoku, Iyo, and Toho banks).

Shareholder privilege catalog

Information on the shareholder privilege system for
Daishi Hokuetsu Financial Group, Inc. after businessintegration will be provided promptly after it is decided
on.

Disclosure Activities
For the purpose of ensuring the transparency andsoundness of management, and so that all of our
stakeholders including customers, the local community,
and shareholders have an understanding of ourmanagement situation, we are actively engaged indisclosure activities aimed at communication of ourmanagement situation and other information. The
Daishi Bank Disclosure Policy that stipulates matterssuch as the Bank s basic stance toward information
disclosure was released in April 2018.We release theDAISHI REPORT and other publications through our
website, and we also hold briefings on the company in

22 DAISHI REPORT 2018

Tokyo for institutional investors in an aim to improve
corporate value. Furthermore, we also hold company
briefings for individual investors in Niigata Prefecture
where we have our main business base.

Company briefing for institutional investors (Tokyo)

Society
CSR

Measures to Improve Employee Satisfaction: Promotion of a Work-Life Balance

We work to develop working environments that support the values of diversifying employees and allow
each and every employee to work in a vibrant and lively manner while performing to the best of their ability.

Creating Friendly Working Environment and Revising Working Styles
For yearly paid holidays, we promote the acquisition ofholiday through the establishment of various systems
including continuous leave, season leave, power-up leave,
and anniversary day leave, and the creation andmanagement of holiday acquisition plans. In addition, inorder to control long working hours and promote effective

and well-balanced working styles, we regularly hold Bankwide early work completion campaigns such as Bank-wide
no overtime days and sales office no overtime days, and we
also promote the use of the morning work system as partof efforts to revise working styles in order to achieve further
improvements in productivity and reduce overtime work.

Promoting the Active Participation of Female Employees
A basic policy and numerical targets for promoting the active participation of
female employees were set in FY2014, and further efforts have been madeaccordingly.The name Shining Project Wing has been used for positive
actions to promote the active participation of female employees, under which
efforts to transform awareness and revitalize the organization, support theactive participation of radiant women, and support the continuation of work

have been implemented.

Shining Project Wing activities[Percentage of women in management and supervising positions]Fiscal year

End of FY2014

End of FY2015

End of FY2016

End of FY2017

End of FY2018 (target)

End of FY2020 (target)

Results

20.99％

22.38％

24.02％

25.16％

26% or above

30% or above[Childcare leave acquisition rate by person giving birth/spouse of person giving birth]Fiscal year
Women
Men

Number of people acquiring childcare leave

FY2014FY2015FY2016FY201724 people

32 people

29 people

38 people

Acquisition rate

100％

100％

100％

100％

Number of people acquiring childcare leave

0 people

13 people

13 people

20 people

Acquisition rate

0％

16.5％

22.4％

46.5％

Evaluation of External Institutions[ Eruboshi Certification]
In July 2018, the Bank acquired the top rank of the threeclasses of Eruboshi Certification* from the Minister of Health,Labour and Welfare as an excellent company for initiatives topromote the active participation of women.We will continue
efforts to create workplaces that allow each and every employee
to feel secure working and experience the joys of growth.

* Eruboshi Certification is a system based on the Act
on Promotion of Women s Participation andAdvancement in the Workplace. Under this system, theMinister of Health, Labour and Welfare certifies
companies with excellent initiatives to promote theactive participation of women. There are three ranks(1st, 2nd, and 3rd) based on the number of evaluation
items that are fulfilled.

Eruboshi Certification mark[Excellent Enterprise of Health and Productivity Management 2018 (White 500)]
In February 2018, the Bank was certified as an Excellent Enterprise of
Health and Productivity Management 2018 (White 500) under the
Certified Health & Productivity Management Outstanding Organizations
Recognition Program jointly conducted by the Ministry of Economy,
Trade and Industry and the Nippon Kenko Kaigi.
The Certified Health & Productivity Management Outstanding
Organizations Recognition Program recognizes excellence in the efforts
of companies that are strategically working on the health managementof their employees from the viewpoint of management.
Based on our corporate philosophy to contribute to the region while
being appreciated and trusted as Niigata Prefecture s best bank, we
believe that the maintenance and improvement of the physical andmental health of employees is the foundation of human resources that

contribute to the region, and accordingly, we have worked to expand
opportunities for disease prevention and improve mental health care.

[Excellent Enterprise of Health and Productivity
Management 2018 (White 500)][Excellent Enterprise of Health and Productivity
Management 2018 (White 500)]

DAISHI REPORT 201823

Governance

Measures to Strengthen Corporate Governance
Governance

The Bank recognizes the strengthening and enhancement of corporate governance asimportant management issue for improving financial soundness and profitability in order toestablish a strong reputation and unshakable credibility from stakeholders including customers,
the local community, and shareholders, and it works to enhance the functions of audits andoversight on corporate management and improve the transparency of management activities.

Governance Structure● Board of Directors

The Board of Directors is composed of fourteen
members, including eight directors who are not audit andSupervisory committee members and six directors who
are auditors (of which, four are outside directors). In
addition to attending to basic management matters andmaking important decisions regarding business
management, the Board of Directors monitors the statusof business execution by each director.

● Audit and Supervisory Committee

The Audit and Supervisory Committee has a supervisory
function similar to the Board of Directors and alsosupervises the business execution of directors who are
not audit and Supervisory committee members inaccordance with laws and regulations, articles ofincorporation, and Auditing and Supervisory Committee
Regulations, etc.

● Executive Committee

Established as a management council under the Boardof Directors, the Executive Committee decides on,
deliberates, and reviews important items on business
management on the basis of fundamental policies
decided at board meetings and matters delegated by the
Board of Directors. Note that the Executive Committeethat is composed of directors with specific titles with arank of executive director or above is also attended bystanding audit and Supervisory committee members who
provide advice as necessary.

● Various committees

There are also a number of committees which provide
advice to the Executive Committee. These include theRisk Management and Compliance Committee, the Asset
Liability Management (ALM) Committee, and the Cyber
Security Management Committee..

● Corporate officers

In order to speed up decision making and improve
management implementation capabilities, Daishi Bank
has established a system of corporate officers. The Boardof Directors elects corporate officers, who are each
responsible for overseeing operations in their respective
sectors.

● Internal audits

The Audit and Inspection Division is under the directcontrol of the Board of Directors and is independent
from the divisions it audits. The Audit and Inspection
Division audits branch offices, head office divisions andgroup companies, verifying the suitability of thecompliance and risk management frameworks.

Corporate Governance Organization Chart (as of July 1, 2018)
Risk Management andCompliance Committee
General Meetingof Shareholders

Board of Directors
Auditand oversight

Executive Committee

Audit and Supervisory
Committee

Instructions
and orders

Audit andInspection Division(Internal audit department)

ALM Committee
Cyber Security
Management Committee

Audit and Supervisory
Committee Oﬃce

Cooperation and collaboration
AuditsOﬃces
Head Oﬃce
Group companies

Accounting Auditors

24 DAISHI REPORT 2018

GovernanceRisk Management Structure
Risk Management Structure
The Bank s basic policy of risk management is to stably secure profits
corresponding to risk and plan the appropriate distribution ofmanagement resources by accurately assessing and appropriately
managing risks, and by then auditing this process. Organizationally,
under this basic policy, Daishi Bank assigns specific jurisdiction over
responses to each type of risk to specific sectors to respond to various
types of risks, while establishing a Management Administration Divisionthat understands and manages risk comprehensively, cutting acrossorganizational boundaries. The Audit and Inspection Division (internal
audit department), which is separated from the sectors it audits andunder the direct control of the Board of Directors, conducts rigorous
audits of the general sweep of bank operations, testing theappropriateness and effectiveness of Daishi Bank s internal-control
provisions.
Specifically, Daishi Bank has instituted a number of committees tooversee risk management. The Risk Management and Compliance
Committee supervises risk management, advances organizational

restructuring for the entire bank, and pursues business management thatthoroughly complies with laws and regulations. The ALM Committee
measures and analyzes risk, with the aim of controlling risk and securing
stable revenues. The Cyber Security Management Committee develops
cyber security management systems. These committees are also
attended by Audit and Supervisory committee members and are held ona regular basis and as required.
Under the risk-management system described above, For the purposeof ensuring financial soundness and using capital efficiently, Daishi Bank
maintains sound control of its assets and conducts effective risk
allocation, ensuring that assets are invested prudently for the effective
management of risk capital. In addition, we have established a crisis
management structure that included the formulation of a Basic Policy on
Business Continuity that prioritizes the continuity of important
operations in the event of an unexpected occurrence that would make it
impossible to continue business, such as an earthquake or other majordisaster, or the outbreak of a disease such as new strains of influenza.

Risk Management Organization Chart (as of Juiy 1, 2018)
Board of Directors
Audit and Supervisory Committee
Executive Committee
Risk Management andCompliance Committee

Discussions, etc. on importantmatters related to asset liability
management

Discussions, etc. on importantmatters related to cyber-security
risk

Risk Management Policy
Risk Supervision Division (department to supervise risk management)
Credit risk

Type of risk

Credit Risk
Management
Regulations

Market risk
Market Risk
Management
Regulations

Liquidity Risk
Management
Regulations

Business management
department

Cyber security risks
Cyber Security
Management Regulations

Other operational risks

Management
regulations

Risk Jurisdiction
Division

Operational risk
Operational Risk Management Regulations

Liquidity risk

Risk Supervision Division

Administrative
risk

SystemInformationrisk
security

Administrative
Risk
Management
Regulations

Systems
Risk
Management
Regulations

Operation Administration
Division

Systems
Planning
Division

risk

Legal
risk

Personnel Tangible Outsourcing Reputational
asset
risk
risk
risk
risk

Information
Security
Management
Regulations

Legal Risk
Management
Regulations

Personnel
Risk
Management
Regulations

Tangible
Asset Risk
Management
Regulations

Outsourcing
Management
Regulations

PublicRelations
ManualRisk
Supervision
Division

Risk
Supervision
Division

Personnel
Division

GeneralAﬀairsDivision

Risk
Supervision
Division

Planning
Coordination
DivisionOﬃces, Head Oﬃce, Group company

Systems
Planning
Division

Audit and Inspection Division (internal audit department)

Overall risk (integrated risk management)

External audits (accounting audits)

Discussions, etc. on importantmatters related to risk
management and compliance

Cyber Security
Management Committee.

ALM Committee

DAISHI REPORT 201825

GovernanceCompliance Structure
Fundamental Policies Toward Compliance
Customer trust is a bank s greatest asset. To ensure that we
continue to earn and maintain the trust of our customers, we at
Daishi Bank must improve the soundness of management and win
the confidence of the community based on our corporate ethics.

The cornerstone of this effort is compliance. At Daishi Bank,
compliance is our top priority. Adhering to four basic principles, alldirectors and employees are working every day to establish
management that is firmly grounded in the spirit of compliance.

Four basic principles

1

Guided by our mission and adhering to our corporate ethics, we are establishing a thorough compliance framework
through the development and execution of a practical compliance program.

2

In operations, all directors and employees understand both the letter and spirit of the code of conduct regulated by the Japanese Bankers
Association. The directors and employees of Daishi Bank work together to apply the code of this charter with common principles of conduct.

3

Through training and awareness-raising exercises, we build and instill a strong ethical consciousness and compliance-oriented mindset in our employees. We also
work hard to develop systems for checking business execution processes, and strengthening measures to prevent compliance violations and other problems.

4

We appropriately verify, evaluate, and report the status of compliance and of the implementation of our compliance program. We make every
effort to discover issues early and solve them promptly, with effective measures for correction of problems and prevention of their recurrence.

Compliance Structure
Headquarters System

Risk Management and Compliance Committee

The Risk Management and Compliance Committee, whose
activities are linked closely with management, meets to discuss
important issues and the status of efforts on compliance.
In addition, the Compliance Office, established within the Risk
Supervision Division as a supervisory department, planscompliance measures, monitors the status of compliance ateach office, supports each Head Office division, and offers
guidance on compliance issues to each branch.

Chair: Responsible executive of Risk Supervision Division
Members: Manager of 11 related departments(observers: Audit and Supervisory Committee members)
Consideration of Basic Policy on Compliance (Legal Compliance Policy)
and internal rules (Legal Compliance Regulations)
Consideration of Compliance Manual● Consideration of and progress management for the compliance program● Management and consideration of countermeasures related to violations● Discussions on other important matters related to compliance●●

Reports and proposals

System in Head Office Divisions and Offices
The manager of each Head Office division and office serves
as the compliance supervisor for each respective division, while
the second-highest ranking position is appointed as the legal
check supervisor. Furthermore, an Office Compliance
Committee has been established in each office to prevent andconduct early detection of compliance issues and consider andformulate recurrence prevention measures.

Risk Supervision Division (Compliance Office)〈 Compliance Supervision Departments〉
Risk Management and Compliance Committee Office● Planning and implementation concerning compliance● Consultations and guidance concerning compliance●●●

Reporting and consultation

Training and Education Activities
Our Compliance Manual is distributed to all of our directors andemployees, and is used in joint training sessions and in complianceseminars held in our offices and branches. We are strengthening ourpractical training curriculum, which includes e-learning sessions to test
knowledge and understanding of major relevant laws, regulations andordinances, and also includes group discussions and case studies.
These are helpful in broadening employee awareness of complianceissues, and ensuring they remain vigilant about such matters.

26 DAISHI REPORT 2018

Training, education, and awareness raising concerning compliance
Legal checks on documents, etc. issued by the Head Office

Guidance and awareness raising

Head Office divisions and offices●●

Compliance supervisor
Legal check supervisor〈 Office Compliance Committees and Workshops〉
Confirmation of status of compliance in offices and considerationof improvement measures (causal analysis of problems andformulation of prevention and recurrence prevention measures)● Implementation of compliance training in offices●

Financial Data
Corporate Data
● C O NT E N TS

Consolidated Balance Sheets

28

Consolidated Statements of Operations

29

Consolidated Statements of Comprehensive Income
Consolidated Statements of Shareholders' Equity
30
Consolidated Statements of Cash Flows

31

Notes To Consolidated Financial Statements

32

Corporate Organization Directory Chart

48

Corporate Data

49

Company History

50

THE DAISHI BANK 2018 ANNUAL REPORT

27

Consolidated Balance Sheets
Years ended March 31, 2017 and 2018
Note : The translations of the Japanese yen amounts into US dollars are using the prevailing exchange rate
at March 31,2018, which was ￥106.24 to US $1.
Millions of Yen

Thousands of
U.S. Dollars

2018

2017

2018

AssetsCash and due from banks
Monetary claims bought
Trading account securities
Securities
Loans and bills discounted
Foreign exchanges
Other assets
Property,plant and equipment
Intangible assets
Deferred tax assets
Customers' liabilities for acceptances and guarantees
Allowance for loan losses

Total Assets

775,395
15,313
1,715
1,762,555
3,236,059
9,479
101,059
43,484
12,209822
12,330(12,836)$ 7,298,531
144,137
16,143
16,590,314
30,459,893
89,229951,239
409,302
114,923
7,737
116,061(120,823)¥ 5,673,726¥ 5,957,587$ 56,076,689¥ 4,694,499––
261,329
309,754208
45,231
91
2,786
34
385
830
12
13,832
5,521
13,065¥ 4,819,992
36,735
326,708
357,105
144
45,541
100
811
33
2,088
770
11
13,566
5,520
12,330$ 45,368,904
345,777
3,075,196
3,361,311
1,355
428,661
948
7,641
319
19,6607,251
109127,693
51,957116,061¥ 5,347,584¥ 5,621,461$ 52,912,850

¥

¥

$

¥

606,548
15,554
1,873
1,765,941
3,142,667
11,506
72,26944,451
13,440765
13,065(14,358)¥

Liabilities
Deposits and Negotiable certificates of deposit
Payables under repurchase agreements
Payables under securities lending transactions
Borrowed money
Foreign exchanges
Other liabilities
Provision for directors' bonuses
Net defined benefit liability
Provision for directors' retirement benefits
Provision for reimbursement of deposits
Provision for contingent loss
Reserves under special laws
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Acceptances and guarantees

Total Liabilities

Net Assets
Capital stock
Authorized-57,699 thousand shares,
Issued-34,625 thousand shares
Capital surplus
Retained earnings
Treasury stock
Shareholders' equity
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for landRemeasurements of defined benefit plans
Valuation and translation adjustments
Subscription rights to shares
Non-controlling interests
Total Net assets

Total Liabilities and Net Assets

28

THE DAISHI BANK 2018 ANNUAL REPORT

32,77625,152
197,851(2,831)
252,949
52,648(361)
6,988(2,123)57,151
498
15,542

32,77625,179208,533(4,240)262,249
51,126
(380)
6,984
(666)
57,064554
16,258308,518
237,006
1,962,856(39,915)
2,468,464
481,233(3,583)65,747(6,273)537,123
5,218
153,031

326,142

336,126

3,163,839¥ 5,673,726¥ 5,957,587$ 56,076,689

Consolidated Statements of Operations
Years ended March 31, 2017 and 2018

Thousands of
U.S. Dollars

Millions of Yen
2018

2017

2018

IncomeInterest on loans and discounts
Interest and dividends on securities
Other interest income
Fees and commissions
Other ordinary income
Other income

Total Income¥

29,60819,373538
17,683
4,572
23,051¥

29,051
19,421
518
19,1294,865
26,457$

273,450
182,811
4,879
180,059
45,801
249,038¥

94,827¥99,445$936,041

¥

1,081
189
3,261
4,748
2,231
48,261
18,369

¥

806
149
3,827
4,630
3,098
47,087
19,247

$

7,589
1,410
36,031
43,582
29,160443,213
181,167¥

78,144¥78,846$742,156¥

16,683¥

20,598$

193,884

Expenses
Interest on deposits
Interest on borrowings and rediscounts
Other interest expenses
Fees and commissions payments
Other ordinary expenses
General and administrative expenses
Other expenses

Total Expenses
Profit before income taxes
Provision for income taxes:
Income taxes-current
Income taxes-deferred
ProfitProfit attributable to non-controlling interests

Profit attributable to owners of parent

¥

4,768
(416)

6,539
(425)

61,550(4,006)

12,331804

14,484
708

136,340
6,670¥

11,527

13,776

Yen
Amounts per share of capital stock:
Net income
Cash dividends¥

336.63
9.00$

129,670

U.S. Dollars¥

407.22
49.50

$

3.83
0.46

Because a 10 for 1 share consolidation for common shares was implemented on October 1, 2017, the calculation of net income pershare assumed that this share consolidation was conducted at the beginning of the previous consolidated fiscal year.

Consolidated Statements of Comprehensive Income
Years ended March 31, 2017 and 2018

2018

2017
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Remeasurements of defined
Total comprehensive income
Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

Thousands of
U.S. Dollars

Millions of Yen¥

12,331(1,760)(4,120)61
2,299
10,571
9,534
1,036

¥

14,48484(1,353)(19)
1,457
14,56913,691877

2018$

136,340792(12,744)(181)
13,718137,133
128,876
8,257

THE DAISHI BANK 2018 ANNUAL REPORT

29

Consolidated Statements of Shareholders' Equity
Years ended March 31, 2017 and 2018
Millions of Yen
Shares of
Capital stock Capital(Thousands) stock

Valuationdifference on Deferred Revaluation Remeasurements Subscription NonCapital Retained Treasury available- gains orreserveof definedrights to controlling
surplus earnings stock
for-sale losses on for land benefit plans
sharesinterests
securities hedges¥ 35,735 ¥ 32,776 ¥ 25,987 ¥ 193,584 ¥ (6,777) ¥ 57,002 ¥ (422) ¥ 6,931 ¥ (4,423)
Balance at March 31, 2016––––––
(3,106)
––
––
––
––
––
Dividends from surplus–––––– 11,527
––
––
––
––
––
Profit attributable to owners of parent
––
––
––
––
(1,505)––––––––Purchase of treasury stock
––
––
(60)
––
579
––
––
––
––
Disposal of treasury stock(1,110)––(774) (4,097)
4,871
––
––
––
––
Retirement of treasury stock
––
––
––
(56)
––
––
––
––
––
Reversal of revaluation reserve for land
Net changes of items other than
––
––
––
––
––
(4,353)61
56
2,299
shareholders' equity
––
––
(835)
4,267
3,945
(4,353)61
56
2,299
Total changes of items during the period¥ 508 ¥ 14,515¥ 34,625 ¥ 32,776 ¥ 25,152 ¥ 197,851 ¥ (2,831) ¥ 52,648
Balance at March 31, 2017––––––
(3,065)––––
Dividends from surplus–––––– 13,776––––
Profit attributable to owners of parent
––
––
––
––
(1,817)––Purchase of treasury stock
––
––
––
(32)
407
––
Disposal of treasury stock
––
––
––
3
––
––
Reversal of revaluation reserve for land
Changes to parent company's ownership due to
––
––
27
––
––
––
transactions with non-controlling shareholders
Net changes of items other than
––
––
––
––
––
(1,522)shareholders' equity––––
27 10,682(1,409) (1,522)
Total changes of items during the period¥ 498 ¥ 15,542

Balance at March 31, 2018 ¥ 34,625 ¥ 32,776 ¥ 25,179 ¥ 208,533(4,240) ¥ 51,126¥ (361) ¥ 6,988(2,123)

––
––
––
––
––
––

––
––
––
––
––
––

(10)
(10)

1,026
1,026

––
––
––
––
––

––
––
––
––
––

––
––
––
––
––

––
––
––
––
––

––
––
––
––
––

––

––

––

––

––

(19)
(19)

(3)
(3)

1,457
1,457

55
55

715
715

(380) ¥ 6,984¥ (666)¥ 554 ¥ 16,258

A share consolidation (10 for 1 share consolidation for common shares) was implemented on October 1, 2017 based on a resolution
made at the 206th Annual General Meeting of Shareholders held on June 27, 2017. As a result, the total number of issued shares
decreased by 311,628,125 shares to 34,625,347 shares.

Thousands of U.S. Dollars
Capitalstock

Valuationdifference on Deferred Revaluation Remeasurements Subscription NonCapital Retained Treasury available- gains orreserveof definedrights to controlling
surplus earnings stock
for-sale losses on for land benefit plans
sharesinterests
securities hedges$ 308,518 $ 236,748 $ 1,862,306 $ (26,651) $ 495,564 $ (3,401) $ 65,779 $ (19,991) $ 4,693 $ 146,294
Balance at March 31, 2017––––(28,851)
––
––
––
––
––
––
––
Dividends from surplus––––
129,670
––
––
––
––
––
––
––
Profit attributable to owners of parent–––––– (17,103)
––
––
––
––
––
––
Purchase of treasury stock––––(301) 3,839
––
––
––
––
––
––
Disposal of treasury stock
––
––
32
––
––
––
––
––
––
––
Reversal of revaluation reserve for land
Changes to parent company's ownership due to
––
257
––
––
––
––
––
––
––
––
transactions with non-controlling shareholders
Net changes of items other than
––
––
––
––
(14,331)(181)(32) 13,718
525
6,737
shareholders' equity––
257
100,549 (13,264) (14,331)(181)(32) 13,718
525
6,737
Total changes of items during the period

Balance at March 31, 201830

THE DAISHI BANK 2018 ANNUAL REPORT$ 308,518 $ 237,006 $ 1,962,856 $ (39,915) $ 481,233 $ (3,583) $ 65,747$ (6,273)$ 5,218 $ 153,031

Consolidated Statements of Cash Flows
Years ended March 31, 2017 and 2018

2018

2017
Net cash provided by (used in) operating activities:
Profit before income taxes
Adjustments to reconcile profit before income taxes
to net cash provided by operating activities:
Depreciation and amortization
Impairment loss
Increase (decrease) in allowance for loan losses
Increase (decrease) in provision for contingent loss
Increase (decrease) in provision for directors' bonuses
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for directors' retirement benefits
Increase (decrease) in provision for reimbursement of deposits
Gain on fund management
Financing expenses
Loss (gain) related to securities
Foreign exchange losses (gains)
Loss (gain) on disposal of noncurrent assets
Net decrease (increase) in trading account securities
Net decrease (increase) in loans and bills discounted
Net increase (decrease) in deposit
Net increase (decrease) in negotiable certificates of deposit
Net increase (decrease) in borrowed money (excluding subordinated borrowings)
Net decrease (increase) in deposit (excluding deposit paid to Bank of Japan)
Net decrease (increase) in call loans
Net increase (decrease) in call money
Net increase (decrease) in payables under securities lending transactions
Net decrease (increase) in foreign exchanges-assets
Net increase (decrease) in foreign exchanges-liabilities
Proceeds from fund management
Payments for finance
Other, net

Thousands of
U.S. Dollars

Millions of Yen¥

16,683¥

20,5982018$

193,884

69,281(303)
77
48,724(4,603)
527

3,930
10
(1,522)
(59)
9
122
(0)
1,703
(48,991)
4,784(2,182)(0)
44
158(93,391)
151,308(25,815)
47,350(194)
242
36,73565,3792,027(64)47,133(5,013)(21,719)

Income taxes paid

154,720(4,807)

182,579(4,531)(204,442)
1,718,560(42,649)

Total adjustments

133,229

157,450

1,482,026

2,725
242
(1,246)
(176)
(11)
(484)
3
(69)
(49,520)
4,533(2,378)(0)34378(192,852)
129,596
19,865
112,68751
952––

sub-total

Net cash provided by (used in) operating activities¥

Net cash provided by (used in) investment activities:
Purchase of securities
Proceeds from sales of securities
Proceeds from redemption of securities
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from sales of property, plant and equipment
Proceeds from sales of intangible assets

Net cash provided by (used in) investment activities:¥

12,131¥(4,645)

1,675,911(6,089,405)
3,985,131
2,077,158(9,715)(7,951)1,060
0$(43,721)(3,065)(10)(28,851)
(97)

––

(123)
(1,817)265(1,165)(17,103)
2,500(4,342)¥605,202(4,750)$¥773,856(44,717)1
1,587,472
5,696,563

0
168,653605,2020
157,702447,500¥$(3,106)(10)(1,505)279¥

178,048(646,938)
423,380
220,677(1,032)
(844)
112
0

––

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year

Cash and cash equivalents at the end of the year¥

(562,920)
351,924
228,873(2,162)(3,693)110

Net cash provided by (used in) financing activities:
Cash dividends paid
Dividends paid to non-controlling interests
Payments from changes in ownership interests in subsidiaries
that do not result in change in scope of consolidation
Purchase of treasury stock
Proceeds from sales of treasury stock

Net cash provided by (used in) financing activities

149,91236,99997(14,331)
(564)
84
1,153
(7)
16,033(461,141)
45,032(20,546)
(1)
415
1,489
(879,061)
1,424,210(242,987)
445,697(1,828)2,279
345,777
615,395
19,081(610)
443,648(47,193)$7,284,036

THE DAISHI BANK 2018 ANNUAL REPORT

31

Notes To Consolidated Financial Statements
March 31, 2017 and 2018

1. Basis of presenting consolidated
financial statements

The Daishi Bank, Ltd., (the “Bank”) and its consolidated
domestic subsidiaries maintain their official accounting records
in Japanese yen in accordance with the provisions set forth in
the Japanese Corporation Law, the Bank Law of Japan, and the
Financial Instruments and Exchange Law, and in conformity
with accounting principles and practices generally accepted inJapan (“Japanese GAAP”). Certain accounting principles andpractices generally accepted in Japan are different fromInternational Financial Reporting Standards and standards inother countries in certain respects as to application anddisclosure requirements. Accordingly, the accompanying
consolidated financial statements are intended for use by those
who are informed about Japanese accounting principles andpractices.
The accompanying consolidated financial statements havebeen restructured and translated into English with some
expanded descriptions and the inclusion of consolidated
statements of stockholders’ equity from the consolidated
financial statements of the Bank which were prepared inaccordance with Japanese GAAP and filed with the appropriate
Local Finance Bureau of the Ministry of Finance as required by
the Financial Instruments and Exchange Law. Some supplementary information included in the statutory Japanese
language consolidated financial statements, but not required forfair presentation, is not presented in the accompanying
consolidated financial statements.
Amounts less than one million yen have been omitted. As aresult, the totals in Japanese yen shown in the financial
statements do not necessarily agree with the sum of theindividual amounts.
The translations of the Japanese yen amounts into
U.S.Dollars are included solely for the convenience of thereaders, using the prevailing exchange rate on March 31, 2018,
which was ¥106.24 to U.S. $1. These convenience translations
should not be construed as representations that the Japanese yenamounts have been, could have been, or could in the future beconverted into U.S. dollars at this or any other rate of exchange.

2. Significant accounting policies

Consolidation
The consolidated financial statements include the accounts of
the Bank and all of its significant subsidiaries (together, the“Group”). The number of consolidated subsidiaries as of March
31, 2018 and 2017 was 7. All significant intercompany balances
and transactions have been eliminated.
Cash and cash equivalents
In preparing the consolidated statements of cash flows, cash
and due from THE BANK OF JAPAN are considered to be
cash and cash equivalents.
Trading account securities
The Bank’s trading account securities are stated at fairmarket value, and unrealized gains or losses are recognized in
the consolidated statements of income.
Realized gains or losses on sale of such securities are

32

THE DAISHI BANK 2018 ANNUAL REPORT

primarily computed using the moving-average cost.
Securities
According to the Japanese Accounting Standards for
Financial Instruments, securities are classified as follows basedon their intention of holdings: (a) securities held for trading
purposes (hereafter, “trading securities”), (b) debt securities
intended to be held to maturity (hereafter, “held-to-maturity
debt securities”), (c) equity securities issued by subsidiaries andaffiliated companies, and (d) for all other securities that are notclassified in any of the above categories (hereafter, “availablefor-sale securities”)
Trading securities are stated at fair market value. Gains andlosses realized on disposal and unrealized gains and losses frommarket value fluctuations are recognized as gains or losses in
the period of the change.
Held-to-maturity debt securities are stated at amortized cost.
Equity securities issued by subsidiaries and affiliated companies which are not consolidated or accounted for using theequity method are stated at moving-average cost.
Available-for-sale securities with available fair values arestated at fair value. Unrealized gains and unrealized losses onthese securities are reported, net of applicable income taxes, asa separate component of net assets. Realized gains and losses
on sale of such securities are computed using moving-average
cost.
Other securities whose fair value is judged to be difficult todetermine are stated at moving-average cost.
If there is significant decline in the market value of held-tomaturity debt securities, equity securities issued by unconsolidated subsidiaries and affiliated companies, and available-forsale securities, such securities are stated at fair value and thedifference between fair value and the carrying amount isrecognized as loss in the period of the decline. If the fair valueof equity securities issued by unconsolidated subsidiaries andaffiliated companies not on the equity method is not readily
available, such securities should be written down to net asset
value with a corresponding charge in the income statement in
the event that net asset value declines significantly. In thesecases, such fair value or the net asset value will be the carrying
amount of the securities at the beginning of the next year.
Derivatives
Derivative financial instruments are stated at fair value andchanges in the fair value are recognized as gains or losses
unless derivative financial instruments are used for hedging
purposes.
Property, plant and equipment (excluding lease assets)
Property, plant and equipment are stated at cost less accumulated depreciation.
Depreciation of property, plant and equipment is computed
mainly using the declining-balance method while the straightline method is applied to buildings, building-attached facilities
and structures acquired after April 1, 2016 at rates based on theestimated useful lives of respective assets. The estimated useful
lives of major items are as follows:
Buildings; 10 – 50 years
Others; 2 – 20 years

Intangible assets (excluding lease assets)
Intangible assets are amortized on a straight-line depreciation.
Software for internal use is amortized on a straight-line basis
over its estimated useful life (5 – 9 years).
Lease assets
Among “property, plant and equipment” and “intangible
assets”, lease assets relating to finance leases which do nottransfer ownership to lessees are amortized on the straight-line
method over the lease term. For residual value, residual value
guarantees decided upon based on lease contracts are shown at
the aforementioned residual value guarantee amount, others areshown as zero.
Foreign currency translation
Assets and liabilities denominated in foreign currencies aretranslated into Japanese yen at the exchange rates prevailing on
the balance sheet date.
Allowance for loan losses
For loans to insolvent customers who are undergoingbankruptcy or other collection proceeding or in a similar
financial condition, allowance for loan losses is provided in thefull amount of such loans, excluding the portion that is
estimated to be recoverable due to available security interests orguarantees.
For the unsecured and unguaranteed portions of loans tocustomers not presently in the above circumstances but for
which there is a high probability of so becoming, the allowance
for loan losses is provided for estimated unrecoverable amounts
determined after evaluating the customer’s overall financial
conditions.
For other loans, allowance for loan losses are provided basedon the rate of the Bank’s actual loan losses in the past.
All branches and other business related sections evaluate allloans in accordance with the self-assessment rule, and theirevaluations are audited by the asset audit section, which is
independent from branches and other business related sections,and the evaluations are revised as required based on the audits.
Also, consolidated subsidiaries provide for an allowance forloan losses. It consists of the estimated uncollectible amountwith respect to identified doubtful accounts and an amountcalculated mainly using the rate of actual loan losses in the past.
Loans to insolvent customers who are undergoing bankruptcy
or other collection proceedings or in a similar financial
condition are stated net of estimated uncollectible amount equal
to the full amount of such loans less the portion that is
estimated to be recoverable due to available security interests orguarantees.
Such estimated uncollectible amounts directly deducted fromreceivables amounted to ¥10,501 million and ¥7,935 million($74,696 thousand) at March 31, 2017 and 2018, respectively.

treatment method of the past service cost and the actuarial gains
and loss.
Past service cost: Treatment of gains and loss throughstraight-line method for the fixed amount of years (10 years)
during the average remaining working lives of employees inpractice.
Actuarial gains and loss: Treatment of gains and loss fromthe following consolidated fiscal year of the distributed amountresulting from the straight-line method of the fixed amount ofyears (10 years) during the average remaining working lives of
employees in practice for each consolidated fiscal year.
For the calculation of the liabilities concerning retirement
benefits and retirement benefit cost, some consolidated
subsidiaries have applied the simplified method where thevoluntary accrued benefits at the end of the year pertaining toretirement benefits will be deemed as retirement benefit
obligations.
Provision for directors’ retirement benefits
The reserve for directors’ retirement benefits of the consolidated subsidiaries is appropriated in the amount of the portionof expected total retirement-benefit payment that is recognized
as generated in the consolidated fiscal year under review, toprovide for payment of retirement benefits to directors.
Provision for reimbursement of deposits
Reserves against refund of inactive bank accounts areprepared against repayment losses that may be incurred when
the holders of inactive bank accounts with suspended liability
appropriation demand repayment. These reserves are preparedin the amount of the estimated future repayment loss based on
past repayment results.
Provision for directors’ bonuses
Provision for directors’ bonuses is appropriated as the total
amount of bonuses expected to be paid to directors within thecurrent consolidated fiscal year.
Provision for contingent loss
The reserve for contingent liabilities is a reserve forunexpected or incidental losses not covered by the otherreserves. Losses expected to occur in the future are estimated,
and the amount deemed necessary is appropriated.
Reserves under the special laws
Reserves under the special laws are reserves for financial
products transaction liabilities in securities business consolidated subsidiaries, and in order to compensate for any losses
incurred with respect to securities futures, etc., are appropriatedat an amount calculated based on the establishment of article
46, provision 5 of the Financial Instruments and Exchange Law.

Accounting method for retirement benefits
For the calculation of retirement benefit obligations, thebenefit formula criteria is used as a way to attribute theestimated retirement benefit amount into the period ending thecurrent consolidated fiscal year. In addition, the following is the

THE DAISHI BANK 2018 ANNUAL REPORT33

Lease transaction revenue/expense appropriation standards
Revenue/expense appropriation standards concerning financelease transactions depend on the appropriation method forproceeds and costs of sales at the time of lease charge acceptance.
Hedge accounting①Hedge accounting for interest rate risk
As hedge accounting for interest rate risk accompanying
various financial assets and liabilities, the Bank applies
individual hedges directly responding to the hedged item andthe hedging instrument for some assets and liabilities, treatingthem as deferred hedges. The effectiveness of a hedge isassessed through the integrated management of the hedging
instrument and the hedged item, and verifying whether interest
risks associated with the hedged item are being mitigated by thehedging instrument.
In addition, for interest rate swap that fulfills the requirements for the exceptional accrual method, the assessment ofhedge effectiveness is omitted based on the fulfillment of therequirements for the exceptional accrual method.
②Hedge accounting for exchange rate risk
As for the hedge accounting method applied to hedging
transactions for exchange rate risk arising from foreigncurrency- denominated financial assets and liabilities, the Bank
applies deferred hedge accounting stipulated in “the Treatment
for Accounting and Auditing Concerning Accounting for
Foreign Currency Transactions in Banking Industry” (JICPA
Industry Audit Committee Report No.25).
The effectiveness of such hedge accounting is assessed byconsidering currency swap transactions, which are for the
purpose of offsetting foreign exchange risks arising fromforeign-currency-denominated financial assets and liabilities ashedge methods, and by verifying the existence of
foreigncurrency-position of such hedging methods matching up
to the foreign-currency-denominated assets and liabilities of thehedging objects.
Amounts per share
Computation of net income per share is based on theweighted-average number of capital shares outstanding during
each year.
Cash dividends per share represent the actual amounts
declared as applicable to the respective years.
Cash and cash equivalents
The reconciliation of cash and due from banks in the
consolidated balance sheets and cash and cash equivalents inthe consolidated statements of cash flows for 2017 and 2018 is
as follows:
Millions of Yen

2017

2018

Thousands of
U.S. Dollars

2018

Cash and due from banks ¥ 606,548 ¥ 775,395 $ 7,298,531(1,345)(1,539)Other(14,495)
Cash and cash equivalents ¥ 605,202 ¥ 773,856 $ 7,284,036

34

THE DAISHI BANK 2018 ANNUAL REPORT(Changes in accounting policies)
Not applicable.
(Additional information)(Transactions of Delivering the Company’s Own Stock to
Employees etc. through Trusts)(1) Overview of transaction
Since November 13, 2015, as part of the welfare program
for the employees, the Bank has been allocating its own
stocks to the Employee Stock Ownership Association
through the Special Trust.
This is an incentive plan for all employees who aremembers of Daishi Bank Employee Stock Ownership
Association (hereinafter, “the Association”). In this plan,
the Bank will set up a Daishi Bank Employee Stock
Ownership Association Special Trust (hereinafter, the“Employee Special Trust”) in the trust bank. The Employee
Special Trust will acquire in advance the number of Bank
stocks that the Association expects to obtain by 2020. The
Bank stocks will then be continuously allocated to the
Association from the Employee Special Trust. Also, in thecase of an accumulated amount equivalent to profit on thesale of stocks in the Employee Special Trust at the time ofits maturity, the said amount will be distributed as aremaining asset to those who qualify as recipients. Further,
the Bank will act as the guarantor for a loan to enable the
Employee Special Trust to acquire the Bank stocks. In theevent that a fall in the Bank stock price generates anaccumulated loss on the sale of stocks in the Employee
Special Trust and at the time of its maturity there is aremaining debt equivalent to the said loss, the Bank will
liquidate the said remaining debt in accordance with theguarantee contract.
(2) The Bank stocks held by the Employee Special Trust
The remaining stocks of the Bank in the Trust is booked
as Treasury stock in the Net Assets section. The book value
and number of shares of the Treasury stock is 634 million
yen and 110,000 shares, respectively.
(3) The book value of the loan that has been booked throughthe adoption of the total method:
779 million yen.

3. Issues relating to fair value, etc. offinancial instruments

The consolidated balance sheet amounts, fair values, and theirdifferences as of March 31, 2017 and 2018 are as follows.
Non-listed stock, etc. whose fair value is judged to be difficult todetermine are not included in the following charts (see Note 1).
Millions of Yen

Thousands of U.S. Dollars
2018

Fair value

Difference（1）Cash and due from banks $ 7,298,531 $ 7,298,531（2）Securities
Trading securities
17
17
Held-to-maturity debt securities
690,622713,355
Other securities
15,857,203 15,857,203（3）Loans
30,459,893
Allowance for loan losses(115,481)––

Book value

2017

Fair value

Difference（1）Cash and due from banks ¥ 606,548 ¥ 606,548（2）Securities
2
2
Trading securities
75,90379,352
Held-to-maturity debt securities
1,685,955 1,685,955
Other securities
3,142,667（3）Loans(13,733)
Allowance for loan losses––

Book value

3,144,111

15,178¥ 5,497,343 ¥ 5,515,971¥ 18,628

3,128,933
Asset capital（1）Deposits（2）Negotiable deposit（3）Payables under securities
lending transactions（4）Borrowed money
Total liabilities

––
3,449
––

4,475,436
219,0634,475,649
219,063(213)(0)

261,329
309,754261,329
309,780––(25)¥ 5,265,583 ¥ 5,265,822

Derivative transactions
Hedge accounting not applied
Hedge accounting applied

673
(744)

Total derivative transactions ¥(70) ¥

¥

––
(432)

673
(1,177)
(503)

(239)

¥

30,468,499

124,087$ 54,190,786 $ 54,337,606$ 146,820

30,344,411
Asset capital（1）Deposits（2）Negotiable deposit（3）Payables under securities
lending transactions（4）Borrowed money
Total liabilities––
22,733––43,549,927
1,818,977

43,551,065
1,818,977(1,137)(0)

3,075,196
3,361,311

3,075,196
3,361,471

––
(159)

$ 51,805,413 $ 51,806,710$ (1,297)

Derivative transactions
Hedge accounting not applied
Hedge accounting applied

15,56012,453

15,5609,834––(2,619)Total derivative transactions $28,013 $25,394$ (2,619)(Note 1) The financial instruments whose fair value is judged tobe difficult to determine are as follows. They are not included
in “Assets Other securities” in fair value information for
financial instruments.

(432)

Millions of Yen
2018

Fair value

Difference（1）Cash and due from banks ¥ 775,395 ¥ 775,395（2）Securities
1
1
Trading securities
73,37175,786
Held-to-maturity debt securities
1,684,669 1,684,669
Other securities
3,236,059（3）Loans(12,268)
Allowance for loan losses––

Book value

3,236,973

13,183¥ 5,757,229 ¥ 5,772,827¥ 15,598

3,223,790
Asset capital（1）Deposits（2）Negotiable deposit（3）Payables under securities
lending transactions（4）Borrowed money
Total liabilities

––
2,415
––

4,626,744
193,248

4,626,865
193,248(120)(0)

326,708
357,105

326,708
357,122––(16)¥ 5,503,807 ¥ 5,503,944

Derivative transactions
Hedge accounting not applied
Hedge accounting applied

1,653
1,323

1,653
1,044

Total derivative transactions ¥2,976 ¥

2,697

¥

(137)
––
(278)

¥

(278)

THE DAISHI BANK 2018 ANNUAL REPORT

35

Thousands of
U.S. Dollars

Millions of Yen

2017①Listed stock②Associated investments, etc.

¥ 2,771
1,341

Total

¥ 4,1132018¥ 2,769

Thousands of U.S. Dollars
2018

2018

1,775

$ 26,069
16,709¥ 4,544$ 42,778(Note 2) The scheduled repayment amount after the consolidated balance sheet date for monetary claims and matured
securities.
Millions of Yen
2017

1 to 3years

5 to 7years

7 to 10 Over 10
years years$ 6,956,160
––
––
––
––
––
Due from banks
Securities
1,411
65,032 377,447 246,371––––
Held-to-maturity debt securitiesThose that are Japanese––
56,475 367,093 244,728––––
government bonds
Japanese local government
––
––
––
––
––
––
bonds
8,556
10,353
1,642
1,411
––
––
Corporate bonds
2,136,028 4,768,463 2,388,174 890,038 3,057,354 113,197
Other securitiesThose that are Japanese
94,126
1,156,814 2,141,378 743,599 376,506 169,427
government bonds
Japanese local––
180,798 354,656 258,612 84,243 1,410,907
government bonds––
398,915 640,670 755,490 168,085 263,092
Corporate bonds
4,074,472 6,446,978 4,499,303 2,687,221 3,200,922 5,460,493
Loans

1 to 3years

3 to 5years

5 to 7years¥ 569,881
Due from banks
Securities
Held-to-maturity debt securities 2,184
Those that are Japanese
1,000
government bonds
Japanese local government
––
bonds
1,184
Corporate bonds
215,322
Other securitiesThose that are Japanese
116,000
government bonds
Japanese local
27,989government bonds
38,107
Corporate bonds
444,065
Loans

––

––

––

––

––

14,73758,729

193

––

––

Total

13,00058,000

––

––

––

––
1,737
525,593

––
––
––
729
193
––
361,960 122,432 220,771

––
––
6,036

(Note 3) The scheduled repayment amount after the consolidated balance sheet date for borrowed money and otherinterest-bearing debt.

273,100

119,300

17,0005,000

52,78888,002
639,467––
25,425 15,550 84,185––
44,585 18,774 11,638
529,726 276,510 311,728 525,299

Total¥ 1,231,453 ¥ 1,179,798 ¥ 950,416 ¥ 399,135 ¥ 532,499 ¥ 531,335

Millions of Yen$13,231,693 $11,592,889 $ 7,133,849 $ 3,578,671 $ 6,258,277 $ 5,573,691

Millions of Yen
2017Within 1
year

1 to 3years

5 to 7years

7 to 10years

Over 10years¥ 4,148,188 ¥ 298,316 ¥ 24,099 ¥ 2,105
Deposits––––
218,852
211
Negotiable deposit
Payables under securities––––––
261,329
lending transactions
520
11,607 178,662 118,806
Borrowed money¥ 2,726
––

––
––

––
137

––
20

Total

Within 1
year

1 to 3years

3 to 5years

5 to 7years¥ 739,022
Due from banks
Securities
Held-to-maturity debt securities 6,909
Those that are Japanese
6,000
government bonds
Japanese local government
––
bonds
909
Corporate bonds
226,931
Other securitiesThose that are Japanese
122,900
government bonds
Japanese local
19,208government bonds
42,380
Corporate bonds
432,871
Loans

––

––

––

––

––

40,10026,174

150

––

––

39,00026,000

––

––

––

––
1,100
506,601––
174
253,719

––
––
150
––
94,557 324,813––––
12,026

227,500

79,00040,000¥ 2,863¥ 20

5 to 7years

7 to 10years

Over 10years¥ 4,315,094 ¥ 285,517 ¥ 21,559 ¥ 1,983
Deposits––––––
193,248
Negotiable deposit
Payables under securities––––––
326,708
lending transactions
295
71,086 234,737 50,907
Borrowed money¥ 2,589
––

––
––

––
64

––
13

Total

¥ 2,654¥ 13

10,00037,67868,064
684,927

27,475 8,950 149,894––
80,263 17,857 27,951––
478,005 285,490 340,065 580,122

Total¥ 1,405,735 ¥ 1,231,628 ¥ 757,900 ¥ 380,198 ¥ 664,879 ¥ 592,148

THE DAISHI BANK 2018 ANNUAL REPORT

Millions of Yen

7 to 10 Over 10
years years

18,0003 to 5years¥ 4,639,977 ¥ 477,190 ¥ 142,905 ¥ 2,626

2018

36

3 to 5years

Within 1
year

74,000

7 to 10 Over 10
years years

Within 1
year

2018

Within 1
year

1 to 3years

3 to 5years¥ 4,906,138 ¥ 520,254 ¥ 72,466 ¥ 2,279

Thousands of U.S. Dollars
2018

Within 1
year

1 to 3years

3 to 5years

5 to 7years

7 to 10years

Over 10years$ 40,616,479 $ 2,687,472 $ 202,933 $ 18,668
Deposits––––––
1,818,977
Negotiable deposit
Payables under securities––––––
3,075,196
lending transactions
2,784
669,114 2,209,502 479,172
Borrowed money$ 24,373
––

––
––

––
611

––
125

Total

$ 24,984$ 125$ 46,179,767 $ 4,896,975 $ 682,106 $ 21,453

4. Securities(A) The following tables summarize acquisition costs, bookvalues, fair value, and other information of securities withavailable fair values as of March 31, 2017 and 2018:(1) Trading securities

Book value¥
Amount of net unrealized
gains included in theincome statement

1,716 $ 16,161(2) Held-to-maturity debt securities
Millions of Yen

Book value
Fair value
Difference

¥

64

6

7

Thousands of
U.S. Dollars

2018

2018

2017

75,903 ¥79,352
3,449

73,371 $ 690,622
75,786713,355
2,415
22,733(3) Available-for-sale securities
Millions of Yen
2017
Acquisition
cost

Stocks
Bonds
Other than stocks
and bonds
Total¥

Millions of Yen

2018

2018

1,875 ¥(C) Valuation difference on available-for-sale securities at
March 31, 2017 and 2018 were as follows:

Thousands of
U.S. Dollars

Millions of Yen

2017(B) Held-to-maturity debt securities sold in the year ended
March 31, 2017 were not applicable. and those sales inthe year ended March 31, 2018 were ¥5 million and therelated gain was ¥0 million.

Book value

Difference

71,965 ¥131,100 ¥1,012,956
1,032,950

59,13419,993525,728524,246¥ 1,610,650 ¥ 1,688,297 ¥(1,481)
77,6462017

Difference between
Cost and Fair Value on
available-for-sale securities
Deferred tax liability
Sub-total
Non-controlling interests
Valuation difference on
Available-for-sale securities

2018

Thousands of
U.S. Dollars

2018¥ 77,646 ¥ 75,762 $ 713,126(23,207) (22,677) (213,453)
54,43953,085499,672(1,790)(1,958)(18,439)¥ 52,648¥ 51,126$ 481,233(D) Total sales of available-for-sale securities sold in the year
ended March 31, 2017 amounted to ¥271,462 million andthe related gains and losses amounted to ¥5,315 million and¥2,740 million, respectively, and those sales in the year
ended March 31, 2018 amounted to ¥290,265 million($2,732,163 thousand) and the related gains and losses
amounted to ¥5,681 million ($53,482 thousand) and ¥3,463
million ($32,599 thousand), respectively.

Millions of Yen
2018
Acquisition
cost

Stocks
Bonds
Other than stocks
and bonds
Total¥

73,574 ¥978,655

Book value

Difference

140,428 ¥991,365

66,854
12,710557,533
553,731¥ 1,609,763 ¥ 1,685,526 ¥(3,802)75,762Thousands of U.S. Dollars
2018
Acquisition
cost

Stocks
Bonds
Other than stocks
and bonds
Total$

Book value

Difference

692,528 $ 1,321,804 $ 629,275
9,211,742
9,331,381
119,638

5,247,869
5,212,082(35,787)$ 15,152,141 $ 15,865,267 $ 713,126

THE DAISHI BANK 2018 ANNUAL REPORT

37

5. Derivative financial instruments

The Bank engages in derivative transactions to mitigate
interest rate risk and liquidity risk of foreign currencies in thenormal course of asset-liability management (ALM), and tomeet customers’ needs. The Bank established the ALM
committee and Risk Control Team to assess derivative transactions and market risks surrounding these transactions according
to the Bank’s policy regarding derivative transactions. The
Risk Control Team analyzes risks related to derivative transactions and reports to the ALM committee for review every
month.
The Bank’s consolidated subsidiaries did not engage in any
derivative transactions for the years ended March 31, 2017 and2018.
The following tables summarized the underlying notional
principal amounts and fair values for outstanding derivative
financial instruments by risk category and instrument type at
March 31, 2017 and 2018:

Millions of Yen

2018
Notional
principal Fair value
amount2018
Notional
principal
Fair value
amount¥ 16,131 ¥37 $ 151,839 $357
Currency Swap:
Foreign exchange contract:
31,774646
299,083
6,081
Sell
13,099(80) 123,304
(759)
Buy
Currency options:
178,841 (3,959) 1,683,369 (37,266)
Sell
178,828
3,960 1,683,250 37,277
Buy

Fair values of interest rate and currency swap contracts are
estimated based on discounted cash flow method.
Derivative transactions for which hedge accounting isapplied are excluded from the table above.

(Finance lease transactions)
1. Lease receivables among lease investment assets, estimatedresidual value, and equivalent interest/dividends received
values2017
Notional
principal Fair value
amountSwap:
Receive fixed – pay variable rate
Receive variable – pay fixed rate
Option:Sell
Buy

Thousands of
U.S. Dollars

6. Information for certain lease transactions(1) Interest rate-related transaction

Swap:
Receive fixed – pay variable rate
Receive variable – pay fixed rate
Option:Sell
BuyMillions of Yen¥ 54,246 ¥ 627
54,246 (155)

Millions of Yen

2017

2,104
2,181

(1)
1

Millions of Yen

Thousands of
U.S. Dollars

2018
Notional
principal Fair value
amount2018
Notional
principal
Fair value
amount¥ 75,925 ¥ 1,148 $ 714,663 $10,813
75,925(100)
714,663
(942)
2,030
2,063

(0)
0

19,107
19,420(4)
2

Cost estimation residual
value amounts
Estimated residual value
Equivalent interest/dividends
received values
Lease investment assets

2018(4,335)(4,010)¥ 14,513
Currency Swap:
Foreign exchange contract:
36,495
Sell
40,074
Buy
Currency options:
161,813
Sell
161,808
Buy

38¥¥ 30,213 ¥ 29,425 $ 276,975(1) Lease credit
2017

21

¥
Due within 1 year
Due after 1 year but within 2 years
Due after 2 years but within 3 years
Due after 3 years but within 4 years
Due after 4 years but within 5 years
Due after 5 years
Total

396
(217)
(5,115)
5,117

THE DAISHI BANK 2018 ANNUAL REPORT(37,751)

2. Estimated receivables for lease receivables amounts after the
consolidated balance sheet date regarding lease credit andlease investment assets.

(2) Foreign exchange-related transactions
2017
Notional
principal Fair value
amount2018¥ 33,503 ¥ 32,475 $ 305,682
1,046
960
9,044

Millions of Yen

Millions of Yen

Thousands of
U.S. Dollars

2018

964 ¥
871
636
494
382
375

Thousands of
U.S. Dollars

2018

928
764
622
489
260
358

$ 8,742
7,194
5,861
4,603
2,448
3,374

¥ 3,725 ¥ 3,423$ 32,224

(2) Lease investment assets

Millions of Yen

2017

2018

2018

9,784 ¥
8,013
6,205
4,226
2,733
2,539

9,801
7,912
5,892
4,331
2,390
2,147

$ 92,260
74,48055,461
40,76822,49920,212¥ 33,503 ¥ 32,475$ 305,682¥
Due within 1 year
Due after 1 year but within 2 years
Due after 2 years but within 3 years
Due after 3 years but within 4 years
Due after 4 years but within 5 years
Due after 5 years
Total

Thousands of
U.S. Dollars(Operating lease transactions)
1. Lessees
Not applicable
2. Lessors
Future minimum lease receipts under non-cancelable financeand operating leases
Millions of Yen

2017

Thousands of
U.S. Dollars

2018

2018

Due within 1 year
Due after 1 year

¥

108
116

¥

108
160

$ 1,022
1,509

Total

¥

224

¥

268

$ 2,531

7. Loans and bills discounted
Loans and bills discounted at March 31, 2017 and 2018consisted of the following:
Millions of Yen

Thousands of
U.S. Dollars

2018

2017

2018

Loans on notes
Loans on deeds
Bills discounted
Overdrafts
Other

¥

Total

¥ 3,142,667 ¥ 3,236,061 $ 30,459,916

605,224
64,299 $66,299 ¥25,899,189
2,684,516 2,751,529
123,593
13,13012,3203,716,980
394,892
368,566
114,927
12,20910,963

Non-accrual loans, accrual loans past due over more than
three months, and restructured loans at March 31, 2017 and2018 were as follows:
Millions of Yen

Thousands of
U.S. Dollars

2017

2018

2018

Non-accrual loans:
Loans to borrowers underbankruptcy proceedings ¥ 1,116
Loans past due six
46,595months or more

¥ 1,175$ 11,062

38,190359,474

Total non-accrual loans¥ 47,711¥ 39,365$ 370,536¥¥

Accrual loans past due overmore than three months
Restructured loans-adjusted
the terms in favor ofborrowers for financial
assistance798¥ 4,255942$8,875¥ 3,925$ 36,945

8. Deposits
Deposits at March 31, 2017 and 2018 consisted of thefollowing:
Millions of Yen

2017

2018

Thousands of
U.S. Dollars

2018

231,370 ¥ 273,174 $ 2,571,294
2,606,556 2,774,001 26,110,707

Current deposits
Ordinary deposits
Negotiable certificates ofdeposits
Savings deposits
Deposits at noticeTime deposits
Other deposits

¥

Total

¥ 4,694,499 ¥ 4,819,992 $ 45,368,904

219,063
26,874
21,151
1,478,164
111,317

193,248
26,17015,251
1,459,511
78,634

1,818,977
246,330
143,557
13,737,874
740,163

THE DAISHI BANK 2018 ANNUAL REPORT

39

9. Assets Pledged
Assets pledged as collateral and related liabilities at March
31, 2017 and 2018 were as follows:
Millions of Yen

Thousands of
U.S. Dollars

2018

2017

Assets pledged:
Securities¥ 596,544 ¥ 739,781
Related liabilities:
Deposits
76,91748,926
Payables under repurchaseagreements
36,735
Payables under securities
lending transactions
326,708
261,329
Borrowed money
299,714 ¥ 347,238

2018

10. Employee’s severance and pension benefits
1. Defined benefit system(1) Adjustment table for the opening and closing balances ofretirement benefit obligations (excluding systems for which
the simplified method has been applied)$ 6,963,306

2017

460,523

In addition, the following assets were pledged as collateralfor settlement of exchange, short-term financial transaction, andforward exchange contracts.

¥ 46,531
Restated balance
Service costs – benefits
1,090
earned during the year
Interest cost on projected
benefit obligation
463
Actuarial gains and losses
accrued amount
410
Retirement benefit payment amount (2,247)––
Past service cost accrued amount
86
Other

Thousands of
U.S. Dollars

Closing balances of retirement¥ 46,335
benefit obligations

Millions of Yen

¥

Total

¥ 32,836

20
32,815

3,075,196$ 3,268,432

2018

2017

Trading account securities
Securities

345,777

¥

20
4,101

¥ 4,1222017

Cash collateral paid for¥ 3,432
financial instruments
1,141
Guarantee deposits
Central counterparty clearing––
house initial margin¥ 4,573
Total

$

195
38,607

THE DAISHI BANK 2018 ANNUAL REPORT2018$ 436,143

1,082

10,185

461

4,346

428
(2,341)
––
83

4,032
(22,039)––784¥ 46,050$ 433,453$ 38,802

Thousands of
U.S. Dollars

2018

2018

¥ 5,696854$ 53,622
8,038

29,000¥ 35,550

272,966$ 334,627(2) Adjustment table for the opening and closing balances ofpension assets (excluding systems for which the simplified
method has been applied)Thousands of
U.S. Dollars

Millions of Yen

Opening balances ofthe pension assets
Expected return on plan assets
Actuarial gains and losses
accrued amountContributions fromthe business owner
Retirement benefit
payment amountContribution to retirement
benefit trust
Other
Closing balances ofthe pension assets

40

2018

¥ 46,335

2018

Other assets include cash collateral paid for financial
instruments and guarantee deposits, and the amounts are as
follows.
Millions of Yen

Thousands of
U.S. Dollars

Millions of Yen

2017

2018

2018

¥ 40,762
743¥ 44,212770$ 416,156
7,255

2,381

1,382

13,015

1,949

1,213

11,425(1,709)(1,745)(16,426)

––
86

––
83

––
784

¥ 44,212¥ 45,918$ 432,212

(3) Adjustment table for the opening and closing balances ofretirement benefit obligations of systems for which thesimplified method has been applied

2018

Opening balances of retirement
benefit obligations
Severance and retirement
benefit expenses
Retirement benefit
payment amountContributions to the system
Reduction accompanying
transfer to a defined
contribution pension plan
Closing balances of retirement
benefit obligations

¥

¥

809

¥

662

2018

$

6,240

62

62

589

(21)
––

(45)
––

(429)
––

(186)

––

––

662

¥

679

$

6,400

(4) Adjustment table for the closing balances of retirement
benefit obligations and pension assets and retirement benefit
obligations and retirement benefit assets recorded on the
consolidated balance sheets

2018

2017

¥ 46,050(45,918)$ 433,453(432,212)

2,123

131

1,240

662

679

6,400

Non-savings-type system
retirement benefit obligations

Net liabilities and assets
recorded on the consolidatedbalance sheets¥ 2,786¥

Service costs – benefits
earned during the year
Interest cost on projected
benefit obligation
Expected return on plan assets
Amortization of actuarial
gains and losses
Amortization of past
service costs
Retirement benefit costs
calculated throughthe simplified method
Other

811

$

7,641

Retirement benefit for thedefined-benefit system

Millions of Yen

2017

2018

2018

Retirement benefit obligations
Retirement benefit assets¥ 2,786
––

¥ 811
––

$ 7,641––

Net liabilities and assets
recorded on the consolidatedbalance sheets¥ 2,786¥ 811$ 7,641

1,082$ 10,185

463
(743)

461
(770)

4,346
(7,255)

1,400

1,204

11,339

(62)

(62)

(583)

62
63

62
78

589
735

2,056

$ 19,358¥ 2,274¥¥(6) Adjustments pertaining to retirement benefits
The breakdown of items (before tax credit) adjusted for
retirement benefits is as follows.
Thousands of
U.S. Dollars

Millions of Yen

2017

2018

(62) ¥
3,370

(62)
2,159

$

¥

2,097

$ 19,739

Actuarial gains and losses
Past service costs

¥

Total

¥ 3,308

2018

(583)
20,322(7) Cumulative adjustments for retirement benefits
The breakdown of the items recorded under adjustments for
retirement benefits (before tax effect exemption) is asfollows.

(Note) Include systems for which the simplified method has
been applied.
Thousands of
U.S. Dollars

2018¥ 1,090

2018

Savings-type system
retirement benefit obligations ¥ 46,335
Pension assets(44,212)

2018

2017

Thousands of
U.S. Dollars

Millions of Yen

Thousands of
U.S. Dollars

Millions of Yen

Thousands of
U.S. Dollars

Millions of Yen

2017(5) Retirement benefit costs and amounts for breakdown items

Thousands of
U.S. Dollars

Millions of Yen

Unrecognized priorservice costs
Unrecognized actuarial
gains and losses
Total

¥

2017

2018

(212) ¥

(149)

3,268

1,108

10,437958$ 9,026¥ 3,056

¥

2018

$

(1,411)

THE DAISHI BANK 2018 ANNUAL REPORT

41

(8) Matters concerning pension assets① The ratios for each major category of assets among total
pension assets are as follows.
2017

2018

Bonds
StocksCash and deposits
General accounts
Other

35%
33%
0%
25%
4%

35%
35%
0%
23%
4%

Total

100%

100%

(Note) In total pension assets, the retirement benefit trust
established for the corporate pension plan accounted for 12%
during the previous consolidated fiscal year and 14% during thecurrent consolidated fiscal year, and the retirement benefit trust
established for the lump-sum pension plan accounted for 14%
during the previous consolidated fiscal year and 14% during thecurrent consolidated fiscal year.
② Method for determining the expected long-term investment return
In determining the expected long-term investment return,estimates are made of the current and expected distributionsof pension assets and the current and expected long-term
return rate from the various assets that compose the pension
assets.
(9) Matters concerning calculation assumptions for actuarial
calculations
Major calculation assumptions for actuarial calculations
at the end of the fiscal year
2017

2018

1.00%
1.00%
Discount rate
0%～2.0%0%～2.0%
Expected long-term investment return
1.51%～9.05% 0.73%～8.90%
Projected promotion rate

2. Defined contribution system
The Bank’s and its consolidated subsidiaries required
contribution to defined contribution system was 229 million
yen for the previous fiscal year and 224 million yen for thecurrent fiscal year.

11. Income taxes
The Bank is subject to a number of taxes levied on income,which, in the aggregate, indicate a statutory rate in Japan ofapproximately 30.7% for the year ended March 31, 2017 and30.7 % for the year ended March 31, 2018.
The following table summarizes the significant differences
between the statutory tax rate and the Bank’s effective tax rate
for financial statement purposes for the years ended March 31,2017 and 2018:
2017

2018

Statutory tax rate
Decrease (increase) ofvaluation allowance
Non-taxable income(dividend income, etc.)
Non-deductible expenses
Inhabitants tax
Other

30.7%

––

(5.3)
(0.9)

––
––

0.5
0.4
0.6

––
––
––

Effective tax rate

26.0%This information is omitted because the difference between
the statutory effective tax rate and the burden of the corporatetax, etc. after the application of tax effect accounting is no morethan 5% of the statutory effective tax rate during the current
consolidated fiscal year.
Significant components of deferred tax assets and liabilities
at March 31, 2017 and 2018 were as follows:
Millions of Yen

2017

Deferred tax liabilities:
Unrealized gains on
securities available
for saleGain on contibution of
securities to employee
retierment benefit trust
Other
Total deferred income tax
liabilities
Net deferred tax assets(liabilities)

42

THE DAISHI BANK 2018 ANNUAL REPORT

2018

Deferred tax assets:
Allowance for loan losses
and write-off of claims ¥ 5,367 ¥ 4,787
Net defined benefit liability
4,005
3,488
Depreciation
1,386
1,411
Other
4,680
5,234
Less valuation allowance (2,956)(2,679)Total deferred income tax
assetsThousands of
U.S. Dollars

2018

$

45,05932,834
13,28949,273(25,218)

12,483

12,242

115,238(23,207)(22,677)(213,453)(852)(1,490)(907)(1,402)(8,538)(13,202)(25,550)(24,987)(235,194)¥ (13,066) ¥ (12,744)$ (119,956)

12. Revaluation reserve for land
Pursuant to the Law concerning Revaluation of Land (the“Law”), land used for business operations was revalued at fairvalue at March 31, 1998. Due to the revaluation, land wasappreciated by ¥21,889 million to ¥41,412 million at March 31,
1998. Net unrealized gain was classified in a separate component of net assets, net of applicable income taxes, as “Revaluation reserve for land” and in liabilities as “Deferred tax
liabilities for land revaluation” in the accompanying consolidated balance sheets. Under the Law, once after the Bank
revalued the land, it is not permitted to revalue the land. Suchunrealized revaluation loss at March 31, 2018 was ¥14,484
million ($136,340 thousand).

13. Long-lived Assets
This information is omitted because it lacks materiality.

14. Accumulated depreciation
Accumulated depreciation of Property, plant and equipment
were ¥70,355 million as of March 31, 2017 and ¥67,328
million($633,742 thousand) as of March 31, 2018.

THE DAISHI BANK 2018 ANNUAL REPORT

43

15. Segment information
Segment information for the years ended March 31, 2017 and 2018 is shown in the tables below:
Millions of Yen

2017
Banking

Leasing

Securities

Subtotal

Others

Total

Adjustment Consolidated

Operating income:External customers
Intersegment¥

72,5001,731¥ 17,093
587¥ 3,161
5¥

92,755
2,324¥ 2,729
1,553¥

95,485 ¥
(661)
3,877
(3,877)¥

94,823
––

Total

¥

74,231¥ 17,681¥ 3,166¥

95,079¥ 4,282¥

99,362 ¥ (4,538)¥

94,823

15,231

943

639

16,813

1,253(1,110)16,956

Assets¥ 5,635,239¥ 50,573¥ 20,571¥ 5,706,383¥ 21,446¥ 5,727,830 ¥ (54,103)¥ 5,673,726

Liabilities¥ 5,334,171¥ 37,861¥ 8,746¥ 5,380,779¥ 11,465¥ 5,392,245 ¥ (44,661)¥ 5,347,584

2,344
49,908
4,475

324
130
176

24
200
4

2,693
50,239
4,656

19
333
7

2,713
50,5734,663

11(1,052)
(129)

2,725
49,520
4,533

5,430

276

8

5,715

75

5,790

65

5,855

Operating profit

OthersDepreciation and amortization
Interest income
Interest expenses
Increase in tangible andintangible fixed assets

18,067

Millions of Yen

2018
Banking

Leasing

Securities

Subtotal

Others

Total

Adjustment Consolidated

Operating income:External customers
Intersegment¥

76,719 ¥ 16,791
1,819
458

¥ 3,746
4¥

97,2572,282¥ 2,773
1,686¥ 100,030 ¥
(589)
3,969
(3,969)¥99,441
––

Total

¥

78,538 ¥ 17,249¥ 3,751¥

99,539¥ 4,460¥ 103,999 ¥ (4,558)¥

99,441819

1,077

20,555

1,333(1,237)

20,651

Assets¥5,916,232 ¥ 49,679¥ 21,425¥ 5,987,337¥ 23,340¥ 6,010,678 ¥ (53,090)¥ 5,957,587

Liabilities¥5,608,364 ¥ 36,295¥ 8,966¥ 5,653,626¥ 12,846¥ 5,666,473 ¥ (45,012)¥ 5,621,461

18,658Operating profit

OthersDepreciation and amortization
Interest income
Interest expenses
Increase in tangible andintangible fixed assets

21,8893,560
49,513
4,735

279
148
143

34
195
6

3,874
49,857
4,885

23
302
6

3,897
50,1594,892

32(1,168)
(108)

3,930
48,991
4,784

1,404

386

18

1,809

52

1,862

14

1,876

Thousands of U.S. Dollars

2018
Leasing

Securities

Subtotal

Others

Total

Adjustment Consolidated

Operating income:External customers
Intersegment$722,134
17,121$ 158,052
4,313$ 35,260
46$

915,447
21,482$ 26,104
15,877$

941,551
37,359$(5,545) $(37,359)

936,006
––

Total

$

739,256$ 162,366$ 35,307$

936,929$ 41,981$

978,911$ (42,905) $936,006(11,650)

194,387

175,628

7,710

10,145

193,483

12,554

206,038

Assets$ 55,687,432$ 467,619$ 201,667$ 56,356,720$ 219,694$ 56,576,414$ (499,725) $ 56,076,689

Liabilities$ 52,789,579$ 341,634$ 84,399$ 53,215,613$ 120,921$ 53,336,534$ (423,684) $ 52,912,850

33,513
466,056
44,576

2,632
1,393
1,351

324
1,838
61

36,470469,288
45,989

219
2,848
62

36,689472,137
46,051

310(10,995)(1,019)36,999461,141
45,032

13,2203,633

177

17,032496

17,528138

17,667

Operating profit

OthersDepreciation and amortization
Interest income
Interest expenses
Increase in tangible andintangible fixed assets

44

Banking

THE DAISHI BANK 2018 ANNUAL REPORT

(Related information)
Current consolidated fiscal year (from April 1, 2017 to March
31, 2018)
1. Segment information by service
Millions of Yen

Securities
Leasing
Investment

Loans

Others

Total(Information on amortization of goodwill and unamortizedbalance by reported segment)
None available(Information on gain on negative goodwill by reported
segment)
None available

Operating income:External customers ¥ 34,170 ¥ 25,711 ¥ 16,643 ¥ 22,915 ¥ 99,441

16. Other income

Thousands of U.S. Dollars

Loans

Securities
Leasing
Investment

OthersTotal$ 242,017$ 215,691$ 936,006

Operating income:External customers $ 321,637$ 156,658

Other income for the years ended March 31, 2017 and 2018consisted of the following:

2018

2017

2. Segment information by location(1) Operating income
Since the operating income for external customers ofJapan is more than 90% of the operating income of theconsolidated income statement, such information is notdisclosed.
(2) Tangible fixed assets
Since the amount of tangible fixed assets in Japan is morethan 90% of the tangible fixed assets of the consolidatedbalance sheet, such information is not disclosed.
3. Segment information by main customers
Since the operating income for specific customers is lessthan 10% of the operating income of the consolidated income
statement, such information is not disclosed.
(Information on impairment loss of fixed assets by reported
segment)
Current consolidated fiscal year (from April 1, 2017 to March
31, 2018)

Thousands of
U.S. Dollars

Millions of Yen

Reversal of allowance¥24
for loan losses
Gain on sales of stocks
and other securities
3,634
Recoveries of written-off claims
985
Other
18,406
Total¥ 23,051

¥

683

2018

$

6,433

4,517
805
20,45042,523
7,585
192,496¥ 26,457$ 249,038

17. Other expenses
Other expenses for the years ended March 31, 2017 and 2018consisted of the following:Thousands of
U.S. Dollars

Millions of Yen

2018

2018

Written-off of loans¥ 1,296
Losses on sales of fixed assets
34
Losses on sales of stocks
and other securities
675
Losses on devaluation of stocks
and other securities
44
Impairment losses
242
Other
16,076¥ 1,18746$ 11,178
440

372

3,507

45
10
17,583432
97
165,511

Total¥ 19,247$ 181,167

2017¥ 18,369

Millions of Yen

Banking Leasing Securities Subtotal

Impairment
loss

¥ 10

––

––

Others

Total

––

¥ 10

Others

Total

––

$ 97

¥ 10

Thousands of U.S. Dollars

Banking Leasing Securities Subtotal

Impairment
loss

$ 97

––

––

$ 97

THE DAISHI BANK 2018 ANNUAL REPORT45

18. Stock options
1. Stock-based compensation expenses was ¥126 million ($1,187 thousand) for the fiscal year ended March 31, 2018.
2. Details/scale of stock options and changes(1)Stock option details
2010 Stock options

2011 Stock options

2012 Stock options

2013 Stock options

Number and type of
option holders

9 directors and 8 executive
officers of the Daishi Bank

8 directors and 10 executive
officers of the Daishi Bank

7 directors and 9 executive
officers of the Daishi Bank

8 directors and 8 executive
officers of the Daishi Bank

Number of stock options
by stock type

Daishi Bank common stock:46,540 stocks

Daishi Bank common stock:60,660 stocks

Daishi Bank common stock:
59,760 stocks

Daishi Bank common stock:
42,390 stocks

Date of grant

July 27, 2010

July 28, 2011

July 30, 2012

July 30, 2013

Vesting conditions

None set

None set

None set

None set

Vesting period

None set

None set

None set

None set

Exercise period

July 28,2010 to July 27,2040

July 29,2011 to July 28,2041

July 31,2012 to July 30,2042

July 31,2013 to July 30,2043

2014 Stock options

2015 Stock options

2016 Stock options

2017 Stock options

Number and type of
option holders

8 directors and 7 executive
officers of the Daishi Bank

8 directors and 7 executive
officers of the Daishi Bank

9 directors and 6 executive
officers of the Daishi Bank

9 directors and 6 executive
officers of the Daishi Bank

Number of stock options
by stock type

Daishi Bank common stock:
32,980 stocks

Daishi Bank common stock:
24,910 stocks

Daishi Bank common stock:36,780 stocks

Daishi Bank common stock:
25,740 stocks

Date of grant

July 30, 2014

July 30, 2015

July 29,2016

July 28,2017

Vesting conditions

None set

None set

None set

None set

Vesting period

None set

None set

None set

None set

Exercise period

July 31,2014 to July 30,2044

July 31,2015 to July 30,2045

July 30,2016 to July 29,2046

July 29,2017 to July 28,2047

Because a 10 for 1 share consolidation for common shares was implemented on October 1, 2017, the number of stock options bystock type that has been adjusted and converted into shares is stated.
(2)Scale of stock options and changes① Number of stock options
Prior to vesting (stocks)
At end of previous consolidated fiscal year
GrantedForfeited
VestedUnvested
After vesting (stocks)
At end of previous consolidated fiscal year
VestedExercised
Forfeited
Unexercised

Prior to vesting (stocks)
At end of previous consolidated fiscal year
GrantedForfeited
VestedUnvested
After vesting (stocks)
At end of previous consolidated fiscal year
VestedExercised
Forfeited
Unexercised46

THE DAISHI BANK 2018 ANNUAL REPORT2010 Stock options

2011 Stock options

2012 Stock options

2013 Stock options

12,620––––1,840
10,78019,960––––2,230
17,73028,700––––2,500
26,20024,190––––3,230
20,960

––
1,840
1,840
––
––

––
2,230
2,230
––
––

––
2,500
2,500
––
––

––
3,230
3,230
––
––

2014 Stock options

2015 Stock options

2016 Stock options

2017 Stock options

23,950––––4,050
19,90019,430––––2,920
16,51036,780––––4,360
32,420––25,740––––25,740

––
4,050
4,050
––
––

––
2,920
2,920
––
––

––
4,360
4,360
––
––

––
––
––
––
––

② Unit price2010 Stock options

2011 Stock options

2012 Stock options

2013 Stock options

1

1

1

1

Avg. stock price at time of exercising (¥)

5,170

5,170

5,170

5,170

Fair carrying value per unit at date of grant (¥)

2,860

2,360

2,110

3,000

2014 Stock options

2015 Stock options

2016 Stock options

2017 Stock options

Exercising price (¥)

1

1

1

1

Avg. stock price at time of exercising (¥)

5,190

5,190

5,190

––

Fair carrying value per unit at date of grant (¥)

3,690

5,110

3,430

4,900

Exercising price (¥)

Because a 10 for 1 share consolidation for common shares was implemented on October 1, 2017, the number of stock options andunit price information have been adjusted.
3. Pro forma calculation of the fair carrying value per unit of stock options
The pro forma calculation of the fair carrying value per unit of 2017 stock options granted in the current consolidated fiscal year
is as follows.
(1) Applied evaluation method: Black-Scholes method(2) Main base numerical value and pro forma calculation2017 Stock options
Volatility of stock price
Expected remaining period

33.28%
2year

Expected dividend¥9 per share

Risk-free interest rate

△0.099%THE DAISHI BANK 2018 ANNUAL REPORT

47

Corporate Organization Directory Chart(As of june 26, 2018)

Secretariat
Planning Coordination Division
Public Relations Ofﬁce
Integretion Promotion Ofﬁce
ESG Promotion Ofﬁce
Digital Banking Promotion Ofﬁce
General Meeting of Stockholders

Risk Supervision Division
Compliance Ofﬁce
ALM Ofﬁce
Business and Regional Revitalization Headquarters
Business Promotion Division
Contact Center
Credit Card Ofﬁce
Customer Relations Ofﬁce
Consulting Promotion Division
Shanghai Representative Ofﬁce
Loan Center
Consulting Plaza

Board of Directors

Audit andSupervisory
Committee

Executive Committee

Loan Examination DivisionCorporate Support Ofﬁce
Treasury and Capital Markets Division
Securities Operation Ofﬁce
Securities Operation Administration Ofﬁce
Personnel Division
Human Resources Development Ofﬁce
Operation Headquarters
Operation Administration Division
Business Innovation Promotion Ofﬁce
Operation Centralization Division
Operation Support Division
System Planning Division
General Affairs Division
Sourcing Administration Ofﬁce
Tokyo Representative Office

Audit and Inspection Division
Assets Review and Audit Ofﬁce

48 DAISHI REPORT 2018

OfficeCorporate Data
Service Network

Board of Directors andAudit and Supervisory Committee
President
Fujio Namiki

Director and Exective Officer
Ken Shibata

Deputy President
Satoshi Hasegawa

Director, Audit and Supervisory Committee Member
Shinjiro Kawai
Nobuaki Miyamoto

Senior Managing Director
Takuya Watanabe

Director（outside）,
Audit and Supervisory Committee Member
Eiichi Tsurui
Koichi Masuda
Toshizo Oda
Katsuaki Fujikawa

Managing Directors
Kiyofumi Obara
Jumatsu Eizuka
Michiro Ueguri
Hiroshi Shindo

Head Office1071-1, Higashiborimae-dori
7-bancho chuo-ku, Niigata 951-8066, Japan
Telephone: 81(25)222-4111
URL: http://www.daishi-bank.co.jp/
Internetional Division Headquarters
Address: same as above.
Telephone: 81(25)222-4111
Facsimile: 81(25)225-2331
SWIFT: DAIS JPJT
Shanghai Representative Office
28 th ﬂoor, Hang Seng Bank Tower,
No.1000 Lujiazui Ring Road,
Pudong New Area,Shanghai,
200120, People’s Republic of China
Telephone: 86(21)5011-9832
Facsimile: 86(21)5011-9833
Chief Represetative
Masanori Kawabe(As of June 26, 2018)

Number of Offices by Area

Major stockholders (10 largest)

Domestic

Number of Share Percent(Thousand)Niigata

112

Tokyo

2

Others7121

1. Japan Trustee Services Bank, Ltd. (Trust Account)

1,746

5.15

2. Nippon Life Insurance Company

1,026

3.02

3. Meiji Yasuda Life Insurance Company

1,015

2.99

Total

4. Tohoku Electric Power Co., Inc.

837

2.47

Overseas

5. Employee’s stockholdings

827

2.44

Shanghai

6. The Master Trust Bank of Japan ,Ltd. (Trust Account)

764

2.25

736

2.17

7. Japan Trustee Services Bank, Ltd.（Trust Account 9）
8. Daido Life Insurance Company

705

2.08

9. Sompo Japan Nipponkoa Insurance Inc.

688

2.03

10. DFA INTL SMALL CAP VALUE PORTFOLIO（Standing proxy: Citibank N.A.,Tokyo Branch）

660

1.94

1

(As of March 31, 2018)(As of March 31, 2018)

Subsidiaries
Company
Daishi Securities Co., Ltd.
8-26, Jonaicho 3-chome, Nagaoka 940-0061

The Daishi Guaranty Co., Ltd.
224-1, Honcho-dori 5-bancho chuo-ku, Niigata 951-8067

The Daishi Management Consulting Co., Ltd.
224-1, Honcho-dori 5-bancho chuo-ku, Niigata 951-8067

The Daishi Lease Co., Ltd.
2-10, Akashi 2-chome chuo-ku, Niigata 950-0084

The Daishi Computer Service Co., Ltd.
1-17, Abumi 1-chome chuo-ku, Niigata 950-0913

The Daishi JCB Card Co., Ltd.
1245, Kamiokawamae-dori 8-bancho chuo-ku, Niigata 950-8068

The Daishi DC Card Co., Ltd.
1245, Kamiokawamae-dori 8-bancho chuo-ku, Niigata 950-8068

Major businessIncorporation

CapitalRatio of shareholder
voting rights held by
the Daishi Bank

The securities industry

Aug. 8,1952¥ 600 million

100%

Credit guarantee business

Oct. 27, 1978

¥ 50 million

100%

Venture capital andconsulting business

June 8, 1984

¥ 20 million

50%

General leasing businessNov. 11, 1974

¥ 100 million

5%Computer-related services

May 10, 1976

¥ 15 million

5%

Credit card andcredit guaranty businesses

Nov. 12, 1982

¥ 30 million

5%

Credit card business

March 1,1990¥ 30 million5%(As of July 1, 2018)

DAISHI REPORT 201849

Company History

1975 Capital of 10 billion yen

Changed listing of shares to the first section of the Tokyo StockEx change

A complete view of the Head Office at the time of its founding

1873

Founded as The Fourth National Bank of Japan

1874

Operations begin, and the Tokyo Office opened

Capital of 200 thousand yen

1977
1978
1979
1980
1981
1982
1983
1984
1985

Began direct dealings with overseas banks
Outstanding deposits reach 1 trillion yen
Capital of 13 billion yen
New online started
Second online completion
Obtained all-inclusive approval for overseas correspondent agreements
Government bonds sales started
Mutual use of ATMs with prefectural financial institutions started
Began dealing operations
Capital of 17 billion yen

1986 The New York Representative Office is opened
1987 Acquired charter for secured debenture trust business.
Outstanding deposits reach 2 trillion yen

A complete view of the newly built Head Office in 1882

1896

Reorganized as Niigata Bank, Ltd.

1912
1917

Successive mergers with banks in Niigata prefecture

1945

1949
1956
1959
1961

1963
1964
1967
1968
1970
1971
1973

The Hong Kong Representative Office is opened
Issued first unsecured convertible bond

Capital of 1 million yen

Corporate name changed to The Daishi Bank, Ltd.
Capital of 5 million yen

A complete view of the newly built Head Office in 19281943

1988 Began handling Japanese commercial paper

Niigata Bank and Nou Bank merged, inherits business of
139 Bank, Kashiwazaki Bank, and Yasuzuka Bank (major
merge of banks within the prefecture)
Merged with Niigata Trust Company to operate trust services
concurrently This brings the number of banks merged with to 29
Capital of 30 million yen
Listed on the Niigata Stock Exchange
Capital of 500 million yen
Capital of 1 billion yen
Began foreign exchange trading

Trust services discontinued

A complete view of the newly built Head Office in 1962

Capital of 2 billion yen
Capital of 3 billion yen
EDPS (computers) introduced
Capital of 4.5 billion yen
Administration center established
Integrated online operations
Capital of 7.5 billion yen
The Daishi Bank celebrates 100 years since its founding
Listed on the second section of the Tokyo Stock Exchange

50 DAISHI REPORT 2018

1989
1990
1991
1992

Began financial futures transaction services
The New York Office is opened
Full-scale operation of third online system
The New Head Office
is completed

A complete view of the current
Head Office completed in 1992

1993 The Hong Kong Office is opened
Began operation as a trust services agent

1994 Acquired license for interest forward transactions and forward exchange transaction
1995 Median price share issue through allotment to shareholders
Capital of 32.7 billion yen

1998 Began handling open foreign currency deposits

Began over-the-counter sales of investment trusts

1999
2000
2001
2002
2003
2005
2006
2009
2011
2012
2013
2015

The New York Office is closed
The Hong Kong Office is closed
Began services as a non-life insurance agent
Began services as a life insurance agent
Offered shares and conducted overseas IR activities
Began a securities brokerage businessNiigata Securities Co., Ltd. made a consolidated subsidiary
Takada Sales Department and Nagaoka Sales Department established
The Shanghai Representative Office is opened
Outstanding deposits reach 4 trillion yen
The Daishi Bank celebrates 140 years since its founding
Start of the Medium-Term Business Plan
Step-up 2nd Stage - Further evolution for the 145th year
Niigata Securities Co., Ltd. became a wholly-owned
subsidiary and name changed to Daishi Securities Co., Ltd.

2016 The Daishi Guaranty Co., Ltd. became a wholly-owned subsidiary2017 Launched operations of new core banking systems Entered a basic
agreement on business integration with The Hokuetsu Bank, Ltd.

2018 Signing of business integration agreement with Hokuetsu Bank, Ltd.