DAISHI REPORT 2017
Year ended March 31, 2017

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

2,286 thousands(15 th of 47 pref.)GDP¥8,833 billion(14 th of 47 pref.)¥238 billion(13 th of 47 pref.)Industrial shipment per capital¥4,642 billion(23 th of 47 pref.)Annual sales¥6,198 billion(14 th of 47 pref.)Gross agricultural output

NiigataPort

Profile (Consolidated)■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: 7 routes(Sapporo, Narita, Chubu International, Komaki, Itami, Fukuoka,
and Okinawa)
International routes: 5 routes(Seoul, Shanghai, Harbin, Khabarovsk, Vladivostok, Taiwan)■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, 2017)

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

Deposits¥4,714 billion

Loans¥3,155 billion

Total assets¥5,635 billion

Credit rating

A2 (Moody’s)(As of June 30, 2017)

Contents
1 Message from the president

22 Consolidated Balance Sheets

2 Medium-Term Business Plan

23 Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income

3 Digest
4 Financial Highlights
6 Daishi’s ESG
7 Environment
8 Social
18 Governance
21 Financial Data Corporate Data

24 Consolidated Statements of Shareholders' Equity
25 Consolidated Statements of Cash Flows
26 Notes To Consolidated Financial Statements
42 Corporate Organization Directory Chart
43 Corporate Data
44 Company History

Message from the President

with Niigata Isetan Mitsukoshi for the purpose of
establishing new regional brands in Niigata. For
these eﬀort, we also provided assistance in terms ofmarketing and expanding sales channels after they
were held in order to support business in getting
started and growing in Niigata.

Fujio Namiki President
Thank you very much for your continued support.
In order to even further increase your understanding of our company, we have created “DAISHIREPORT 2017,” and we would be grateful if you
would give it a read.
We have set forth the evolution of the consulting
function as the most important tactic of Step-Up
2nd Stage, the medium-term business plan that wasstarted from FY2015, based on which we aim forsustainable growth together with the region
through contributions to regional revitalization.
During FY 2017 as the ﬁnal year of Step-Up 2nd
Stage, we are conducting various activities in orderto cap oﬀ this plan. A new system was launched on
January 4, 2017, and operations have been runningsmoothly.
While some inconveniences may have been causedby the system migration such as suspended ATMs
and the amendment or abolishment of products,
we would like to thank you once more for yourunderstanding and cooperation regarding thismatter. With this system migration as a starting
point, going forward we will be even more actively
engaged in the development of highly convenient
products and new ﬁnancial services.
IDuring FY2016, for the purpose of developing
businesses that contribute to regional revitalizationin Niigata Prefecture, we sponsored the Niigata
Foundation Award with the support of Niigata
Prefecture and 30 municipalities in the prefecture,and jointly held the Niigata Business Idea Contest

By continuing to support the expansion of various
businesses in Niigata in the future, we will contribute to the realization of a positive cycle in whichjobs attract people, and people then attract jobs.
In addition, we established the IT Innovation
Promotion Oﬃce in March 2017 in order tostrengthen systems aimed at the realization of new
ﬁnancial services through the use of IT technologies.
Financial services are undergoing signiﬁcantchanges due to factors including the advance ofdigitization in society in general and the birth of
new means of settlement utilizing ﬁntech. We will
work to develop and provide pioneering and highly
convenient services by rapidly responding to thesechanges based on a ﬂexible way of thinking that is
not held back by preconceived ideas.
The Bank signed a basic agreement on management integration with Hokuetsu Bank, Ltd. in April
2017, and preparations are underway for theestablishment of a holding company in April of nextyear.
By bringing together the trust relationships withcustomers and deep understanding of their respective regions that both banks have developed overmany years and strengthening management
resources, we will work to improve convenience forcustomers and support the maximization of corporate value for customers as a presence that isperpetually contributing to regional revitalizationand the development of the regional economy.
We ask for your continued support.
July 2017

THE DAISHI BANK 2017 ANNUAL REPORT

1

Medium-Term Business Plan

Step-Up 2nd Stage
Medium-TermBusiness Plan

Step-Up 2nd Stage～ Further evolution for the 145th year ～The basic strategy of this Medium-Term Business Plan is to evolve the former Medium-TermBusiness Plan “Step-up 140” and advance top-line reform in response to a management environmenttypified by factors such as population decline, the advance of lower fertility and population aging,the continuation of monetary easing, and the intensification of competition. Through the initiatives ofthis Medium-Term Business Plan, we aim to fulfill our mission as a regional bank of providing an
underpinning for the actual regional economy and contributing to the development of the regionalsociety and customers as we continuously grow along with the region.
Plan period

Benchmark goals for management

April 2015 to March 2018

KPI: Benchmarks for
management

Goals for the final fiscal
year of the plan (FY2017)

Total deposit balance(including NCD)
(average balance)¥4,665 billion

Total loan balance(average balance)¥3,263 billion

Revenues

Core net business profit¥ 15.9 billion

Soundness

Capital-to-assets ratio

10%range

Category

Basic strategies

Evolution of Step-Up 140
Ⅰ. Top-line reform
Ⅱ. Human resources
capabilities andorganizationalstrength
Ⅲ . Risk management

Scale

Role and mission of a regional bank

Providing an underpinning for the actual regional
economy and contributing to the developmentof the regional society and customers
Corporate philosophy
1. To contribute to the regionwhile being appreciatedand trusted as Niigata Prefecture’s best bank2. To be a bank of strong and resolute actionin the face of the challenge of change
3. To be a creative, resourceful, anddynamic bank

PDCA
cycle

A part of our corporate philosophy is to“c o n t r i b u t e to t h e re g i o n w h i l e b e i n gappreciated and trusted as Niigata Prefecture’sbest bank.”
Through the implementation of the MediumTerm Business Plan, we aim to fulfill our rolea n d missio n a s a re gio nal b a n k a n dachieve our corporate philosophy inorder to grow in a sustainable mannerwith the region.

2

THE DAISHI BANK 2017 ANNUAL REPORT

Corporatephilosophy
Overcoming
importantmanagement issues

Medium-Term Business Plan
Basic strategies
Core tactics
Measures and goals for sales oﬃces
Benchmark goals for management－Thoroughly ensuring compliance－

Employees acting basedon their own initiative

DigestManagement Integration with Hokuetsu Bank, Ltd.
Preparations are underway for the establishment of the holding company Daishi Hokuetsu
Financial Group in April 2018 (planned) through a joint share transfer assuming the approval of theshareholders of both banks and authorization by the competent authorities.

Benefits returned to customers through the management integration
1

2

3

By strengthening
management resources
through the management
integration

we will work to improve
convenience for customers andsupport the maximization of
corporate value for customers

and perpetually contributeto regional revitalizationand the development of theregional economy.

1

2

Strengthening of management resources (benefits of management integration for the bank)
Augmentation of sales
personnel

Improving financial
service capabilities●treamlining of
headquarters structure●Mutual complementationof know-how●Optimization of
duplicate branches●Utilization of subsidiary function●Effective utilization of IT

Augmentation of
investment capacity●Standardization ofsystems andadministrative
procedures

Expansion of
network●Utilization of regional information

networks (mutual complementationof business partners and branches
outside the prefecture)

Improve convenience for customers and support the maximization of corporate value forcustomers (benefits returned to customers through the management integration)
Financial intermediary function

Information intermediary function

Consulting function

FintechFintechSpecific integration effects

Individuals● Expansion of a wide variety of asset management products according to changes in the market environment● Expansion of non-face-to-face channel and various services utilizing the latest IT technologies● Improvements in consulting capabilities utilizing specialized knowledge such as succeeding assets tothe next generation (inheritance related) and an increase in support opportunities● Increase in opportunities for information provision including the holding of seminars● Expansion of asset management consulting structure based on the stance of fiduciary duty (customeroriented operations management)

Corporate● Expansion of optimal fund procurement method based on business feasibility assessments (note)through augmented sales personnel and the utilization of investment capacity● Improvement in ability to offer more customized support including prompt responses to applications for fund procurement● Increase in a wide range of business matching opportunities accompanying the increase in business partners● Increase in support opportunities for each life stage including foundation, management improvement
efforts by customers, and smooth business succession● Increase in various information provision opportunities in cooperation with branches in Japan andoverseas and other banks outside of the prefecture, utilizing external partner networks● Improvements consulting capabilities in a wide range of fields and an increase in support opportunities
utilizing the think tank functions of both banks(Note) Business feasibility assessments: Appropriately assessing the business details and growth potential, etc., of borrowing companies without
relying on financial data and collateral or guarantees more than necessary.

In addition, the items to the rightare also being considered as
benefits of the integration being
returned to the local community.

3

Role and mission ofregional banks

Establishment of financing fund for local SMEs based on business feasibility assessments
Reduction in fees, etc. for transfers between the two banks● Supporting local companies through the provision of human resources● Expansion of think tank function that conducts studies and research and provides
recommendations aimed at the development of the regional economy● Expansion of scholarship program for students responsible for the future of Niigata Prefectureand financing programs in which a portion of fees are given back to support the next generation●●

Contributing to regional revitalization andthe development of the regional economy

THE DAISHI BANK 2017 ANNUAL REPORT

3

Financial Highlights

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

Millions of Yen

2015

2016

2017

2017

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

¥ 33,943¥ 32,275¥ 29,608$ 263,916

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

18,02018,852

19,373

172,682

98,074

99,627

94,827845,242Interest on Deposits .......................

1,893

1,991

1,081

9,640

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

47,025

46,79748,261

430,172

72,47675,50878,144

696,533

14,25914,467

11,527102,748

Securities ........................................ 1,875,473
Loans and Bills Discounted............ 2,812,120
Total Assets .................................... 5,193,730

1,784,598

1,765,941

15,740,629

2,949,815

3,142,667

28,012,011

5,342,251

5,673,726

50,572,481

4,545,036

4,694,499

41,844,187

5,022,567

5,347,584

47,665,430

32,77632,77632,776292,156

230,480

245,571

252,949

2,254,650

331,814319,683

326,1422,907,050(For the Years ended March 31)

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

Total Expenses ...............................
Net Income ...................................
AssetsLiabilities
Deposits ......................................... 4,481,243
Total Liabilities ................................ 4,861,915
Net Assets
Capital Stock ..................................
Shareholders’ Equity ......................
Total Net Assets .............................

Yen

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

U.S. Dollars

40.72

42.04

33.66

0.30

8.00

9.00

9.00

0.08

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, 2017, which was¥112.19 to U.S. $1.

4

THE DAISHI BANK 2017 ANNUAL REPORT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, 2016 was 4,563.4
billion yen.

(100 million yen)

50,00047,14045,63444,95240,00030,00020,00010,0000Balance of loans
As a result of actively responding to the financial
needs of customers, the loan balance as of March
31, 2016 was 2,961.2 billion yen.

FY ended March 31, 2015 FY ended March 31, 2016 FY ended March 31, 2017(100 million yen)

35,00031,551

29,612

28,25930,00025,00020,00015,00010,0005,000
0FY ended March 31, 2015 FY ended March 31, 2016 FY ended March 31, 2017

Capital-to-assets ratio

Non-consolidated capital-to-assets ratio

Consolidated capital-to-assets ratio

11.99%
11.48%
11.13%
10.83%
10.79%
10.16%

Although this must be at least 4% based on theJapanese domestic standards adopted by the Bank,
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, 2015

Credit rating
An“AA-”rating (long-term issuer rating) has beenacquired from Japan Credit Rating Agency (JCR)
and an“A2”rating (long-term deposit rating) has
been acquired from Moody’s.

FY ended March 31, 2016

●Japan Credit Rating Agency (JCR)●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

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

FY ended March 31, 2017

C

Ca

D

C

Nonperforming loan ratio

2.22％
64.6 billion yen(As of June 30, 2017)

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

1.88％

1.61％

57.3 billion yen

52.3 billion yen

FY ended March 31, 2016

FY ended March 31, 2017

disclosure under the Financial Reconstruction Law)
as of March 31, 2016 was 57.3 billion yen, and theratio of nonperforming loans was 1.88%.
The head office and sales offices are working
together to provide customers with management
improvement support.

FY ended March 31, 2015

THE DAISHI BANK 2017 ANNUAL REPORT

5

Daishi’s ESG
We aim to faithfully fulfill our corporate social responsibility going forward andto become a bank that shareholders, customers, and local communities feelsecure and safe doing business with.

● CO N T E NTS
ＥEnvironment
Environmental Measures

Ｓ

7

Social
Measures for Regional Revitalization

8

Together with the Local Community

10

Support for Culture, Arts, and Development of the Next Generation 14

Ｇ

6

Measures to Improve Customer Satisfaction

15

Measures to Improve Market Value

16

Measures to Improve Employee Satisfaction

17

G ov er na nc e
Corporate Governance18

Risk Management Structure

19

Compliance Structure

20

THE DAISHI BANK 2017 ANNUAL REPORTEnvironment

Environmental Measures
The Bank has established the Daishi Bank Group Environmental Policy, and is actively engaged in
activities including efforts to reduce our environmental footprint, the provision of environmentallyfriendly financial products and services, and regional environmental conservation activities.
Daishi Bank Group Environmental Policy
Basic Philosophy

Action Guidelines

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

1 Comply with laws, regulations, etc. the environment and conduct activities while giving sufficient

We will comply with laws, regulations, policies, etc. related toconsideration to their impact on the environment.

2 environmental footprint

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.

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

4 conservation activities

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

Promote activities to reduce ourSupport customers through our

Implement environmental

Energy Saving Equipment Support Fund that has a carbon offset function
We established the Energy Saving Equipment Support Fund in
FY2015 in order to support the energy saving measures of companies
and work to reduce the environmental impact within Niigata Prefecture.
This product consists of a framework for further improving theenvironmental awareness of businesses that use it by offering a carbon
offset (*2) function using Niigata Credit (*1).
Since it has been offered in June 2015, it has been used to offset 937
tons of greenhouse gas as of March 31, 2017.

*1.“Niigata Credit”consists of credit certified by theprefecture as credit for the amount of CO2 absorbed
for increasing the amount of forest in Niigata
Prefecture (amount of greenhouse gas emissions
reduced or absorbed), which makes it possible forcompanies to offset their CO2 emissions for use inenvironmental activities, etc.
*2.“Carbon offsetting”is an approach in whichgreenhouse gases such as CO2 emitted in daily
life or economic activities are offset with theamount of greenhouse gases that arerecognized as absorbed in another location.

Green ATMs with a carbon offset function
We are continuing our efforts with green ATMs with a carbon offset
function under the Niigata Credit program based on the concept of ATMs
that contribute to the environment more the more they are used, for which
we will offset 20g of CO2 every time these ATMs are used. As of March 31,
2017, 44 of these ATMs have been installed, and approximately 111 tons of
CO2 have been offset since the initiative was commenced in August 2014.

Receipt of Minister of Environment Award
Reflecting the strong reputation of initiatives aimed at reducing ourenvironmental footprint including the Energy Saving Equipment Support
Fund and Green ATMs, we received the top award entitled the Minister ofEnvironment 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 5th Carbon
Offset Awards from the Ministry of the Environment.

Daishi-no-Mori (Daishi Forest) creation
In order to maintain green and abundantforests in the region in the future, since
FY2009 Daishi Bank has participated in forest
preservation promotion activities under the
Niigata Afforestation Support Project
implemented by the Niigata prefectural
government in the Daishi-no-Mori (Daishi
Forest) in Agamachi, Higashikanbara-gun,
Niigata Prefecture.

THE DAISHI BANK 2017 ANNUAL REPORT

7

SocialCommunity-focusedfinancial services

Together with the Local Community

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 the performance of a financial intermediary function and consulting function andactive 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 andeconomy through the smooth provision of comprehensive 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 selfassessments while also utilizing financial intermediary function benchmarks, and strengthen 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
Benchmarks for objectively assessing the level of performance of a financial

Financial intermediaryintermediary function at a financial institution, including the provision of financing
function benchmarks and solutions in accordance 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. that applies for each financial institution

Independent
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*The financial intermediary function benchmarks (FY2016) are described in the sections of each of the items below.
*The numbers of customers stated below are totals on a non-consolidated basis, as long as there are no notes stating otherwise.

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 All credit customers
by life stage
GrowthFoundation
Maturity
DeclineRegeneration
898
FY 2015
662
8,608
429
2,313
17,742
Number of credit
customers
799
FY 2016
804
8,735
530
2,190
18,282
Shared
1,807.1 billion yen 60.5 billion yen 134.1 billion yen 1,237.3 billion yen 44.4 billion yen 138.2 billion yen
FY 2015
Loan balance
45 billion yen
1,904.6 billion yen 86.6 billion yen 133.8 billion yen 1,176 billion yen
122.8 billion yen
FY 2016

SharedNumber 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)Of the above, number of customers that improved management
indicators, etc. (note: figures are on a Group basis)

FY 2015
5,794

FY 2016876.8 billion yen

6,008

4,555

934.8 billion yen
4,698

FY2015FY2016FY2014FY2015FY2016FY2014
Loan balance for last three years for customers that
improved management indicators, etc. among the above 776.7 billion yen 777.7 billion yen 783.3 billion yen 781.2 billion yen 819.4 billion yen 823.2 billion yen
Selective

8

all customers and number of customers by region

THE DAISHI BANK 2017 ANNUAL REPORT

Within Niigata Prefecture Outside of Niigata Prefecture

16,338

1,323

Total

17,661

Within Niigata Prefecture Outside of Niigata Prefecture

16,470

1,471

Total

17,941

SocialFoundation

We support companies aiming to become established ordevelop new business in consideration of their technologies,
products, services, and the uniqueness and growth potentialof their business model. During FY 2016, we established the“Seeking Entrepreneurs”financial product that includes
consulting services by external companies (experts) for
businesses aiming to establish a business or enter thesecond stage of business establishment. We also actively
hold various seminars for customers considering businessestablishment or developing new business.

SharedAssumed major challenges
and needs for companies
Financing
Development ofsales channels
Information andconsultation environment

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

Contents of main solution
proposals
Utilization of venture funds,
institutional financing, andguarantee systems
Utilization of businesspanels, business matching,and Bridge Niigata
Provision of assistanceinformation, provision of
JETRO overseas information

FY 2015256 cases－*
256 cases

FY 2016398 cases
3 cases
438 cases*Because measurement was started from FY 2016,“－”is displayed for FY 2015.

GrowthWe position areas such as the environment, health,agriculture, and tourism as growth fields, 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 and business support outsideof the prefecture and overseas, as well as financing
support utilizing various funds and the holding of seminars,
etc. to make businesses have higher added value.

Assumed major challenges
and needs for companies

Contents of main solution
proposals

Securing human

Human resources matching anddevelopment in cooperation
with external organizations
Support for increased
operating and capital funds,
derivatives, interest rate swaps
Expert advice (energy saving
diagnosis, industry-academia
collaboration, general management)

resources
Financing,hedging risks
Product development anddeveloping higher added value

Customers assisted Sales channel development support for local companies
Selective with sales channel Sales channel development support for companies other than local companies
Sales channel development support for overseas companies
development

Maturity

In partnership with the Daishi
Management Consulting Co., Ltd. andvarious external organizations, we support
business succession and M&A in order toresolve the management challenges ofcustomers. In addition, we also offer
various means of financing in lines with theneeds of customers, including syndicatedloans and private placement bonds.
Selective

Decline andregeneration

Contents of main solution
proposals

New market

Support for new businessdevelopment in partnershipwith external organizations

development

Succession and M&As Business succession and M&A support
FinancingNumber of customers assisted with M&As

We propose optimal solutions and support theAssumed major challenges
formulation of management improvement plans throughand needs for companies
multi-faceted studies after sharing management issues
Declining or
and challenges with customers. After plans are
sluggish demand
formulated, we conduct follow-up activities aimed at planachievement. In addition, we are strengthening alliances
Poor performance inwith external agencies and external experts andcore businessperforming a consulting function that includes utilizing the
Financing
optimal regeneration methods and designing mechanisms
to support prompt business regeneration by customers.
SharedFY 2016
615
355
324

Assumed major challenges
and needs for companies

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

Number of customers using REVIC (Regional Economy
Vitalization Corporation of Japan) and the Organization for
Small & Medium Enterprises and Regional Innovation

FY 2015
721
521
299

REVIC

Organization for Small & Medium Enterprises and Regional Innovation

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

Support for various forms offinancing including syndicatedloans, private placement bonds,
liquidity solutions, and ABL

FY 201518045

FY 2016
182
48

Contents of main solution
proposals
Management improvement plan
formulation support,holding seminars
to improve management capabilities
Regeneration support utilizing theCouncil to Support Revitalizationof Small and Medium Enterprises
ABL, utilization of business
regeneration fund

FY 201516
7－*

FY 201611
4141 cases*Because measurement was started from FY 2016,“－”is displayed for FY 2015.

THE DAISHI BANK 2017 ANNUAL REPORT

9

SocialCommunity-focusedfinancial services

Ⅱ

Together with the Local Community - For Corporate Customers -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 tofacilitate financing through the establishment of its Basic Policy on Financial Facilitation in order to fulfill an appropriate and active
financial intermediary function while taking into consideration the soundness and appropriateness 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 andchanges 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 withthese financial institutions (including credit guarantee associations) after gaining the consent of the customer.
FY 2015
FY 2016
Number of SMEs that have changed loan terms
2,218
2,097
Progress of management improvement plans by Good progress Steady progress Unfavorable progress Good progress Steady progress Unfavorable progresscompanies above
162
586
1,470
252
565
1,280

Shared*Unfavorable progress includes companies that have not formulated a management improvement plan (1,263 companies for FY 2015, 1,118 companies for FY 2016).

● 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 conductdetailed assessment of business values and management conditions including technological capabilities, sales capabilities, andfuture potential while proposing financing that is not excessively dependent on collateral or guarantees by using assets such as
movable property or accounts receivable as necessary.
Number of unsecured credit customers and percentage of unsecured finance among local SME credit customers

Selective

Percentage of credit customer that fixed collateral has not been set for among local SME credit customers

Percentage of non-guaranteed main customers among local SME credit customers
Number of cases of fund utilization (business establishment, business revitalization, regional revitalization, etc.)

FY 2015
8,530
21.9％
71.8％
0.4％
3 cases

FY 2016
8,717
23.4％
70.7％
3.0％
6 cases● Efforts in response to Guidelines on Management Guarantees

We promote further financing that is not
Usage of Guidelines on Management Guarantees (FY 2016)
dependent on management guarantees after
Number of new non-guaranteed loans
2,847 cases Number of changes in guarantee contracts
324 cases
taking into full consideration the intent and details
Number of new loans
Number of guarantee contracts canceled
21,740cases
21 casesof the Guidelines on Management Guarantees.
Selective

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

FY 20151,542
8.7％

FY 2016
1,691
9.2％

Business Feasibility Assessment Initiatives
The Bank defines business feasibility assessment as using appraisal【 Main initiatives aimed at improving appraisal capabilities 】
capabilities to assess the business feasibility of partners businesses andReview meeting for all sales personnel involved to exchange
provide growth and management improvement support in order toCompany Support opinions with the participation of the department or branchback the actual economy in the region and contribute to thes business, assumed
Review Meeting manager on the nature of the customer’
development of regional society and partner businesses, and it ismanagement challenges, and solutions for these challenges
actively engaged in developing systems and human resources
Activities to resolve the challenges of customers and contribute
Actions todevelopment for business feasibility assessments. In March 2017, we
to higher added value by sharing true management challenges
improve
newly established the Business Feasibility Assessment Promotion Lineand needs and offering a funding and information intermediaryfield assessment
function through interviews with customers utilizing sheets thatwithin the Consulting Promotion Division, strengthened our efforts, andcapabilities
summarize the main points for each industry
expanded the scope of business feasibility assessments to allPartnership with thecustomers as part of efforts to perform a financial intermediary function
Partnership for providing multifaceted management support
Regional Economy
aimed at issue resolution and goal attainment by partner businesses as
by accepting human resources with specialized know-how
Vitalization Corporation
we actively worked to improve corporate value and productivity.
dispatched from REVIC and utilizing REVIC knowledgeof Japan (REVIC)

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

783
4.4％

FY 2015254 billion yen
14.1％

1,703
9.3％

FY 2016564 billion yen
29.6％

Ratio of the above to all credit customers and the loan balance
Number of partner businesses that have been presented the results
783
2,304
of business feasibility assessment and local benchmark in dialogue
Number of customers provided with core business support utilizing external experts
1218
Selective
Number of
Number of people Number of time
Number of
Number of people
Number of times training provided on core business Number of time
support for partner businesses, number of participants in training held participants in training acquiring qualification training held participants in training acquiring qualification
this training, and number of people acquiring qualification
50 times506
161
48 times
442
207
Independent Average number of days from date of receiving financing inquiry to date of response to customers－※
10.97 days
*Because measurement was started from FY 2016,“－”is displayed for FY 2015.

10

THE DAISHI BANK 2017 ANNUAL REPORTSocialⅢ

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.

Creation ofTowns andPeopleInitiatives through industry, government, academia, and finance partnerships
By creating opportunities for companies in the prefecture anduniversity students to interact through partnerships with Niigata
University, local governments, and chambers of commerce, we
encourage a deeper understanding of companies, improvements inthe employment rate in the prefecture in the future, and the creationof an environment for joint research by universities and companies.
In June 2016, Niigata University and Joetsu City worked together
and Niigata University students conducted exchange project withtwo companies in Joetsu City, and in September 2016, Niigata
University, Shibata City, and Shibata Chamber of Commerce andIndustry worked together with four companies in Shibata City, andthese efforts that mainly consisted of company visits deepened
exchanges with employees.

Joetsu manufacturing company
visit and exchange tour
Independent

Shibata food related company
visit and exchange project

In consideration of the growth in foreign tourists as reflected inrecord-high numbers of accommodation stays by foreigners in theprefecture for the third consecutive year since FY2013, tourism
monitor tours by overseas students at universities within theprefecture were conducted for the purpose of revitalization of the
tourism industry in the prefecture.
Overseas students at International University of Japan and Sado
City conducted an exchange project in June 2016, and overseas
students at Niigata University and Joetsu City conducted an
exchange project in October 2016 to allow local governments andthe tourism industry to incorporate the assessment of theprefecture’s tourists sites by foreigners.

Monitor tour for overseas students at International University of Japan

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

FY 2015

FY 2016

6

28

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 such as
books and sporting goods to local schools together with private placement bond issuing companies. In addition, in June 2016 westarted offering the“Regional Revitalization Private Placement Bond”with bond issuing companies that donates a portion of bondissuance 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)

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 Bond issues and issuance amount
Independent
Number of Regional Revitalization Private Placement Bond* issues and issuance amountInformation brochure
for Future Support
Private Placement Bond

Local elementary andjunior high schools, etc.

Regional Revitalization
Private Placement Bond
Municipalities
in Niigata
Prefecture

FY 201551 cases 4.1 billion yen－－

Information brochure for
Regional Revitalization
Private Placement BondFY 201685 cases 9.2 billion yen
53 cases 8.6 billion yen*Because the handling of Regional Revitalization Private Placement Bonds started from FY2016,“－”is displayed for FY2015.

THE DAISHI BANK 2017 ANNUAL REPORT

11

SocialCommunity-focusedfinancial services

Together with the Local Community - For Corporate Customers Creation of

Jobs

Actively Supporting Customer Growth and Sales Channel Development
As the regional bank with the largest branch network in Niigata
Prefecture, the Bank actively supports the expansion of sales channels
by customers through means such as individual business matching andthe holding of business panels while leveraging its branch network.
We offer a broad range of support that goes beyond Niigata
Prefecture to include matching with companies outside of theprefecture and support for expansion overseas in order to support theneeds of customers.

[Number of business matching projects]
Branch networks

112 branches within
Niigata Prefecture[Image of individual business matching]
Branch A

9 branches outside of
Niigata Prefecture

Branch C

Of which, 4 branches in theTokyo metropolitan area

Information sharing network
Supplier needs
information

Sales needs

Partnership needs
Supplier needs

Branch B

Pursuing
customersfor parts

Consultations

Branch D

Consultations

収集した情報・ニーズ等

Consulting Promotion Division
Would like to be
introduced newcustomers

Fukushima

ToyamaIshikawa

Tochigi
Gunma
IbarakiNaganoFukui
Gifu Yamanashi
Chiba
Kyoto
Hyogo Shiga
Aichi
Osaka
Shizuoka
Nara Mie

Saitama Prefecture
Omiya Branch
Ikebukuro BranchTokyo Metropolis

Tokyo Branch

Kanagawa
Prefecture

Tokyo Minami Sales Oﬃce

Yokohama Branch

Number of business matching events and business panels set in FY2016

Wakayama

Would like to purchaseproducts used in new
products

Business panels between companies in Niigata Prefecture: 615 cases
Business panels between companies in Niigata Prefecture
and companies outside of Niigata Prefecture: 355 cases
Total 970 cases

Matching

Selective

Tokyo metropolitan area network

Yamagata
NiigataMiyagi

Outsourcing needs

Pursuing
outsourcers
for parts

Aomori
Akita Iwate

Ordering needs
information

Ordering needs

Hokkaido

Number of branches in JapanFY 2015
Number of companies supported with core business (improvement in corporate value)
1,477
9.5％
and their percentage of all customers (note: number of customers is on a Group basis)
Number of companies solutions proposed to and their percentage of all
1,942
12.6％
customers (note: number of customers is on a Group basis)
Loan balance of companies solutions proposed to and percentage of loan balance of all customers 624.5 billion yen
34.6％

FY 2016

1,675

10.6％

2,203

13.9％

517.3 billion yen

27.2％

Global Market Development Challenge Program
Since April 2016, we have offered a full support program fromadvance preparations to commencement of overseas transactions forcustomers that are interested in business overseas. With this program,in addition to a variety of seminars, we offer a program that
corresponds to the individual needs of customers looking to expand
overseas, including proposals on business panels, market research andsales channel development support, and support for payment
settlement and hedging risks.
Up until now, we have held a series of four Overseas Market
Channel Development Practical Business Seminars, as well as various
seminars as called for including the Niigata Sake Overseas Market
Channel Development Support Explanatory Meeting and the Asia
Market Expansion Support Practical Seminar.
Going forward, we will implement various forms of overseas businesssupport that actively utilize the Bank s rich overseas network.

[Overseas partner banks]
People’s Republicof China

Shanghai Representative Oﬃce

THE DAISHI BANK 2017 ANNUAL REPORT

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

12

United States(Hawaii)

Industrial andCommercial Bank of China

Metrobank

Number of companies assisted with overseas
sales channel development in FY2016

Total of 324
FY 2015127 cases
98 cases

FY 2016140 cases
47 casesSocialHolding of the Niigata Foundation Award and Niigata Business Idea Contest
We sponsored the Niigata Foundation Award for the purposeof revitalizing regional business foundation, and jointly held the
Niigata Business Idea Contest with Niigata Isetan Mitsukoshi forthe purpose of establishing new regional brands in Niigata.
After these events were held, we also provided follow up
through means such as marketing and sales channel expansion
support for business plans and ideas submitted in order tosupport new business in getting started and growing in Niigata.

Ⅳ

Niigata Foundation 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 in the environment byholding seminars, we actively implement
measures that effectively support the growthof our customers. Some of the themes of theseminars held are listed on the right.

Independent

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

Number of seminars held for corporate customers
to support improvements in unique corporate value

FY 2015

FY 2016

24 times

39 times● Seminar on Utilizing Measures of the Ministry of
Economy, Trade and Industry
Introduction to manufacturing and energy saving subsidies● IoT Seminar
Introduction to IoT utilization methods for the
manufacturing industry, etc.
● Business Foundation Support Seminar
Introduction of experience of establishing a businessby veteran entrepreneurs in the prefecture● M&A Seminar for Business Owners
Introduction to business succession and M&A case studies● Economic and Foreign Exchange Market Trends Seminar
Description of outlook on economic and foreignexchange market trends

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 each branch 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/creation_2905.pdf

Bridge Niigata

The Bridge Niigata exhibition and business talks space in Nihonbashi, Tokyois used by various municipalities and companies as a base for communicatingproducts and information from Niigata to the Tokyo metropolitan area.
Independent

Number of times Bridge Niigata was used for sales channel development
and regional industry support through external collaboration*

FY 2015

FY 2016

29 times

30 times*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)

THE DAISHI BANK 2017 ANNUAL REPORT

13

Social
CSR

Support for Culture, Arts, and Development of the Next Generation

In an aim to “contribute to the region while being appreciated and trusted as Niigata Prefecture’s best bank,”
we are actively engaged in financial and economic education and the promotion of regional culture and sports.
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. The concert for FY2016 features the young German cellist Leonard Elschenbroich who
held his first cello recital in Niigata, and a piano recital by Michie
Koyama, who is one of Japan’s most popular and talented pianists.
For FY2017, we have a piano recital by the female pianist Anna
Fedorova who has received awards in many international contests
including the Arthur Rubinstein International Piano Master
Competition scheduled for October, and a rakugo performance,
which will be a first for the Bank, by rakugo performer Karoku
Yanagiya scheduled for March 2018.
Information including the schedule will be announced through the
Daishi Bank website as appropriate.

Daishi Academy
In order to support the mental and physicaldevelopment of children, we have held the Daishi
Academy since FY 2013.
The Daishi Academy provides children in thearea with the opportunity to interact withprofessionals in various fields in order to develop
sensitivities outside of school and home, and to
make them more familiar with finance.
Classes were held in the fields of finance,
science, art, cooking, soccer, basketball, andbaseball in FY 2016.
Since the academy was held in FY 2013, over
1,000 students have participated every year, andthe total cumulative number of participants up to
FY 2016 was 6,000.

Science

SoccerArt

Basketball

Economics Koshien
The Niigata High School Team that won the Eleventh National High SchoolStudent Finance and Economics Quiz Championships Economics Koshien Niigata
Tournament that was sponsored by the Bank in December 2016 participated in
the nationwide championships that were held in Tokyo in February 2017(sponsored by the Association for the Promotion of Financial Literacy) as therepresentative for Niigata Prefecture. The representative for Niigata Prefecture
won the national championship in the previous championships, and it advanced
to the finals in this championship as well, coming in fourth place.

Economics Koshien National
Championship

Niigata City Marathon 2017
As part of efforts to promote local sports, we will continue to support the
Niigata City Marathon that is scheduled to be held in October 2017. The
Bank’s employees plan to participate under the team name of“Speedy
Solutions”, and to also participate in volunteer activities in order to make theNiigata City Marathon lively together with everyone in the local community.
Employees of the Bank serving as watersupply volunteers

14

THE DAISHI BANK 2017 ANNUAL REPORTSocialCSR

Measures to Improve Customer Satisfaction

We will work to expand our network and enhance products and services in an aim to become a more accessible and convenient bank.
Implementation of a Customer Satisfaction Survey
We conduct a customer satisfaction survey in an aim to further improve the satisfaction levels of customers. We will
broadly incorporate the feedback we receive from customers in the development of products and services in the futureand in improvements to customer service and support as we work to further improve the satisfaction levels of customers.

[Main improvements incorporating feedback from customers in FY2016]● In order to make ATM operations more convenient, we added a zoom display function for numbers, and added

a new function that makes it possible to register up to 30 transfer information items to each cash card.

● We promoted barrier-free design at branches including the installation of railings on stairs and the

expansion of parking lots registered with the“Niigata Prefecture Accessible Parking Lot System”.

Aiming for Further Improvements in Financial Services[Relocation and new opening of the Sanjo Branch and Sanjohigashi Branch]
The Sanjo Branch and Sanjohigashi Branch were relocated and opened at a new
branch using a branch-within-a-branch system on Monday, April 17, 2017.
In order to offer one-stop, speedy support for the broad financial needs ofcustomers, the Kenou Loan Center was set up as an annex at the new branch, and theDaishi Securities Sanjo Branch, a branch of a Group company, was also jointly set up.
We will exploit the synergies from the collaboration between our bank business and securities business evenmore than before to contribute to the development of the Niigata region by providing high added value financial
services that respond to the needs of customers.

[Investment trust robot advisor service]
A robot advisor service that provides [Robot advisor service lineup]
asset management support for
Robot advisor and simulation
Investment trust robot
Asset plannercustomers is available on the website.
advisor tool - Portstar
After answering some
After a customer enters the status of their
The robot advisor service makes a
Diagnosis with Portstar! A
simple questions, thefinancial holdings, the service proposes adiagnosis on what investment trusts
proposal is made for the productservice proposes a
combination that is suitable for that customer
suitable for the customer fromcombination of thefrom among many financial products including
are suitable for customers based on
the eMAXIS Optimal Balance
investment trusts offeredyen-denominated savings, government bonds,
simple questions answered bylineup of Mitsubishi UFJ Kokusaiby the Bank that is
and investment trusts based on the life stage
customers, and presents the results.
Asset Management Co., Ltd.
suitable for the customer.
and risk appetite of the customer.
Going forward, we will work tofurther improve products and services See our website for details.
in order to support the wide range of
http://www.daishi-bank.co.jp/individual/add/investment/roboadvisor.php
customer needs.

[Fintech initiatives] Working to create new financial services
The six banks (Daishi Bank, Chiba Bank, Chugoku Bank, Iyo Bank, [Tsubasa Financial System Advancement Alliance]
Toho Bank, and Hokuyo Bank) entered the Tsubasa Financial
System Advancement Alliance as an organization to conduct joint
surveys and research aimed at the use of fintech, which is a type of
IT Innovation Promotion Oﬃce
cutting-edge IT technology in the financial field.
(newly established in April 2017)
In addition, we established the IT Innovation Promotion Office in
Tsubasa Financial System
March 2017 in order to strengthen systems aimed at the realization
Advancement Allianceof new financial services through the use of IT technologies.
We will work to develop and provide pioneering and highly
convenient services based on a flexible way of thinking that is notheld back by preconceived ideas.

Notice to our customers

Launch of operations of a new system

A new system was launched on January 4, 2017, and operations have been running smoothly. While some inconveniences
may have been caused by the system migration such as suspended ATMs and the amendment or abolishment of products,
we would like to thank you once more for your understanding and cooperation regarding this matter.
We will actively work toward providing more convenient products and services utilizing this new system.

THE DAISHI BANK 2017 ANNUAL REPORT

15

SocialCSR

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 policyof continuing to provide stable returns to shareholders while giving consideration to the increase ofinternal reserves in order to strengthen the earnings base.
Policy for Returns to Shareholders
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
Levels of return to shareholders
internal reserves in order to strengthen the
Dividends
Acquisition of treasury shares
Shareholder return ratio
earnings base, and we aim for a rate of return to(Millions of yen)（％）
shareholders of about 40%, combining dividends
8,000
50
and the acquisition of treasury shares.
40.2
In addition, we endeavor to improve ROE mainly
40.0%
37.6
40
by strengthening net income as we aim for an ROE
34.7
6,000
of at least 5% over the medium to long term.
27.6

Annual dividends per share (unit: yen)
4,000

10
9

1

7

5

1,499

140 anniversary commemorative dividend of 1 yen

8

6

2,634

7

7

FY 2012FY 201399FY 2015

FY 2016

8

FY 2014

1,471

999

2,000

0

30

1,499
20

2,517

2,833

2,815

3,081

3,094

FY 2012FY 2013

FY 2014

FY 2015

FY 2016

10

0

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

【 Applicable shareholders 】

Shareholders that own at least 1,000 shares (1 unit) consecutively for at least one year*, with March 31 as thebase date shall be applicable.
*A stock consolidation (one for every ten shares) will be implemented on October 1, 2017, and after the stock consolidation,
shareholders that own at least 100 shares (1 unit) consecutively for at least one year shall be applicable.
“* Consecutively for at least one year”applies for shareholders that have been registered at least three consecutive times with thesame 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 and other 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).
Number of share held

Local specialty
products

Tsubasa Alliancejoint specialty products course

1,000 to9,999 shares

Equivalent to 2,500 yen

10,000 sharesor moreEquivalent to 6,000 yen

Shareholder privilege catalog

Disclosure Activities
For the purpose of ensuring the transparency and soundness of management, and sothat all of our stakeholders including customers, the local community, and shareholders
have an understanding of our management situation, we are actively engaged indisclosure activities aimed at communication of our management situation and otherinformation. We release the DAISHI REPORT and other publications through our
website, and we also hold briefings on the company in Tokyo for institutional investors
in an aim to improve corporate value. Furthermore, we also hold company briefings forindividual investors in Niigata Prefecture where we have our main business base.

16

THE DAISHI BANK 2017 ANNUAL REPORT

Company briefing for institutional
investors (Tokyo)

SocialCSR

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

We work to develop working environments that support the values of diversifying employees andallow each and every employee to work in a vibrant and lively manner while performing to the bestof their ability.
Creating Friendly Working Environment and Revising Working Styles
For yearly paid holidays, we promote the acquisition of holiday 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, in order to control long working hours and promote effective
and well-balanced working styles, we regularly hold Bank-wide 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.

Selected as a Niigata Prefecture Model Business for Low Fertility Countermeasures
As a Niigata Prefecture Model Business for Low Fertility Countermeasures we work to support a balance between both work andchild raising. Specifically, we work to support reinstatement at the workplace, improve awareness of a work-life balance, andenhance various programs that include assistance with transportation costs and babysitting costs for research observer participation
while on childcare leave and the presentation of child product gift certificates to employees that have acquired childcare leave.

Image of the work continuation support system from pregnancy to reinstatement
6 weeks before
giving birth▼

PregnancyChildbirth▼Childbirth

8 weeks after
giving birth
▼

Age 1
▼

Age 1 and 6 months▼

Parental leave
Parental leave

Work-life balance support system

Prenatal and postnatal leave

Entering
Entering
elementary school junior high school
▼
▼

Age 3
▼

After reinstatement

Extension

Spouse childbirth leave
Maternity health care
Reduced work hours for child care
Limitations on night work for child care
Exemption from overtime work for child care
Limitations on overtime work for child careChild nursing days off
Rework plan (re-employment system for resignees)
Officer and part-time conversion system
Child care assistance benefits

Before maternity leav

During holiday or leave

Support Plan for childbirthand child careInterview before maternity leave

Before reinstatement

After reinstatement

Seminar on reinstatement support for people on leave（ ）Leave reinstatement career gathering

Interview before reinstatement（ ）Workplace reinstatement program

Seminar on reinstatement
support for people on leave

Interview before
reinstatement【 Status of leave acquisition for employees giving birth and employees with spouses giving birth 】
FY 2013
Women
Men
Number of employees utilizing childcare leave system(or scheduled to do so)

Acquisition rate

FY 2014Women
Men

FY 2015Women
Men

FY 2016
Women
Men

28

0

24

0

32

13

30

13

96.6％

0.0％

100.0％

0.0％

100.0％

16.5％

100.0％

22.4％

Received the 1st Niigata Work-Life Balance Promotion Award
In recognition of the efforts of the Bank aimed at the promotion of a work-life balance including making it possible to acquirechildcare leave until the end of the fiscal year in which your child turns age two, making it possible to acquire up to one year of
nursing care leave, and efforts in the sales branch evaluation items of the overtime reduction rate, no overtime day compliance
rate, and paid holiday acquisition rate, we received the 1st Niigata Work-Life Balance Promotion Award in January 2017.

THE DAISHI BANK 2017 ANNUAL REPORT

17

GovernanceCorporate Governance
Basic StanceIn order to establish a strong reputation and a high level of trust from all of our stakeholders including customers,
the local community, and shareholders, we recognize improving our financing soundness and profitability alongwith the strengthening and enhancement of corporate governance as important management issues, andaccordingly we are working to enhance the auditing and monitoring of management and to improve transparency.

Governance StructureWith a resolution to change the articles of incorporation at the 205th Ordinary General Meeting of Shareholders heldon June 24, 2016, the Bank transferred to a company with an audit and Supervisory committee system on that day.

● Board of Directors

The Board of Directors is composed of fifteen members,
including nine 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, 2017)

General Meetingof Shareholders

Board of Directors
Auditand oversight

Executive Committee

Audit and Supervisory
Committee

Instructions
and orders

Audit andInspection Division(Internal audit department)

Risk Management andCompliance Committee
ALM Committee
Cyber Security
Management Committee

Audit and Supervisory
Committee Oﬃce

Cooperation and collaboration
AuditsOﬃces
Head Oﬃce
Group companies

Accounting Auditors

18

THE DAISHI BANK 2017 ANNUAL REPORT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 thisbasic 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 Division that understands and manages risk comprehensively, cutting across organizationalboundaries. The Audit and Inspection Division (internal audit department), which is separated from the sectors it audits and under the directcontrol of the Board of Directors, conducts rigorous audits of the general sweep of bank operations, testing the appropriateness andeffectiveness of Daishi Bank’s internal-control provisions.
Specifically, Daishi Bank has instituted a number of committees to oversee risk management. The Risk Management and Compliance Committee
supervises risk management, advances organizational restructuring for the entire bank, and pursues business management that thoroughly
complies with laws and regulations. The ALM Committee measures and analyzes risk, with the aim of controlling risk and securing stablerevenues. The Cyber Security Management Committee develops cyber security management systems. These committees are also attended byAudit and Supervisory committee members and are held on a regular basis and as required.
Under the risk-management system described above, For the purpose of 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 major disaster, or the outbreak of a disease such as new strains of influenza.

Risk Management Organization Chart (as of June 24, 2016)
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

Operational Risk Management Regulations

Cyber Security
Management Regulations

Other operational risks

Management
regulations

Risk Jurisdiction
Division

Operational risk

Liquidity risk

Risk Supervision Division

Administrative
risk

SystemInformationrisk
security

Administrative
Risk
Management
Regulations

Systems
Risk
Management
Regulations

Operation Administration
Division
Loan Examination
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

Credit Risk Management Structure
The Loan Examination Division that is completely isolated from the sales promotion departments, thisdepartment works to improve the soundness of assets by conducting strict loan screening, appropriately
managing problem loans, and providing management improvement supports for business partners as abank-wide effort.
Credit ratings and self-assessments for loans, etc. are strictly conducted through a two-step systemthat includes sales branches and the Head Office. Furthermore, the appropriateness and suitability ofcredit ratings and self-assessments are verified through audits by the Audit and Inspection Division.

THE DAISHI BANK 2017 ANNUAL REPORT

19

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 ourcustomers, we at Daishi Bank must improve the soundness of management and win the confidence of thecommunity 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, all directors 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 throughthe 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 theJapanese Bankers Association. The directors and employees of Daishi Bank work together to apply the code of this charterwith common principles of conduct.

3

Through training and awareness-raising exercises, we build and instill a strong ethical consciousness and complianceoriented mindset in our employees. We also work hard to develop systems for checking business execution processes, andstrengthening 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 complianceprogram. We make every effort to discover issues early and solve them promptly, with effective measures for correction ofproblems and prevention of their recurrence.

Compliance Structure
Headquarters System
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.

Risk Management and Compliance Committee
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 thesecond-highest ranking position is appointed as the legal checksupervisor. Furthermore, an Office Compliance Committee has
been established in each office to prevent and conduct early
detection of compliance issues and consider and formulate
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● Training, education, and awareness raising concerning compliance● Legal checks on documents, etc. issued by the Head Office●

Reporting and consultation

Training and Education Activities
Our Compliance Manual is distributed to all of our directors
and employees, and is used in joint training sessions and incompliance seminars held in our offices and branches. We arestrengthening our practical training curriculum, which includes
e-learning sessions to test knowledge and understanding ofmajor relevant laws, regulations and ordinances, and also
includes group discussions and case studies. These are helpful
in broadening employee awareness of compliance issues, andensuring they remain vigilant about such matters.

20

THE DAISHI BANK 2017 ANNUAL REPORT

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 ON TEN TS

Consolidated Balance Sheets

22

Consolidated Statements of Operations

23

Consolidated Statements of Comprehensive Income
Consolidated Statements of Shareholders' Equity
24
Consolidated Statements of Cash Flows25

Notes To Consolidated Financial Statements

26

Corporate Organization Directory Chart

42

Corporate Data

43

Company History

44

THE DAISHI BANK 2017 ANNUAL REPORT21

&RQVROLGDWHG%DODQFH6KHHWV
<HDUVHQGHG0DUFKDQG
Note : The translations of the Japanese yen amounts into US dollars are using the prevailing exchange rate
at March 31,2017, which was ￥112.19 to US $1.
Millions of Yen

Thousands of
U.S. Dollars

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$VVHWV
Cash 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

7RWDO$VVHWV/LDELOLWLHV%FQPTJUTBOE/FHPUJBCMFDFSUJmDBUFTPGEFQPTJU
Payables under securities lending transactions
Borrowed money
Foreign exchanges
Other liabilities
Provision for directors' bonuses/FUEFmOFECFOFmUMJBCJMJUZ
1SPWJTJPOGPSEJSFDUPSThSFUJSFNFOUCFOFmUT
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

7RWDO/LDELOLWLHV

1HW$VVHWVCapital stock
Authorized-576,999 thousand shares,
Issued-346,253 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 land
3FNFBTVSFNFOUTPGEFmOFECFOFmUQMBOTValuation and translation adjustments
Subscription rights to shares
Non-controlling interests
 7RWDO1HWDVVHWV

7RWDO/LDELOLWLHVDQG1HW$VVHWV

22

THE DAISHI BANK 2017 ANNUAL REPORT

&RQVROLGDWHG6WDWHPHQWVRI2SHUDWLRQV<HDUVHQGHG0DUFKDQG

Thousands of
U.S. Dollars

Millions of Yen






,QFRPHInterest 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$

263,916
172,682
4,798
157,61740,760205,466



94,827$845,242
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
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1,081
189
3,261
4,748
2,231
48,261
18,369

$

9,640
1,692
29,07542,32819,886430,172
163,738



78,144$

696,533

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16,683$

148,708([SHQVHVInterest on deposits
Interest on borrowings and rediscounts
Other interest expenses
Fees and commissions payments
Other ordinary expenses
General and administrative expenses
Other expenses

7RWDO([SHQVHVProfit before income taxes
Provision for income taxes:
Income taxes-current
Income taxes-deferred
ProfitProfit attributable to non-controlling interests

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(416)

42,506(3,716)

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12,331804

109,9177,169

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11,527Yen$PRXQWVSHUVKDUHRIFDSLWDOVWRFN
Net income
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102,748

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

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9.00

$

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U.S. Dollars

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2,299
10,571
9,534
1,036

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$

109,917(15,687)(36,729)547––
20,494
94,22984,986
9,243

THE DAISHI BANK 2017 ANNUAL REPORT23

&RQVROLGDWHG6WDWHPHQWVRI6KDUHKROGHUV (TXLW\<HDUVHQGHG0DUFKDQG
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
hedgessecurities              
Balance at March 31, 2015
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
Dividends from surplus
²²
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
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Purchase of treasury stock

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Disposal of treasury stock
²²
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
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Reversal of revaluation reserve for land 
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²²
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transactions with non-controlling shareholders 
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Net changes of items other than shareholders' equity ²²²²          
Total changes of items during the period               
Balance at March 31, 2016
²²
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²²  
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
Dividends from surplus

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
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
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
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
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
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
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
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
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
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
²²
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²²
²²  
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²²
²²
Purchase of treasury stock

²²
²²
 
²²

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Disposal of treasury stock  ²²    
²²
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Retirement of treasury stock
²²
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 
²²
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Reversal of revaluation reserve for land 
Net changes of items other than

²²
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shareholders' equity
²²
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        
Total changes of items during the period %DODQFHDW0DUFK ¥ 346,253 ¥ 32,776 ¥ 25,152 ¥ 197,851 ¥ (2,831) ¥ 52,648 ¥ (361) ¥ 6,988 ¥ (2,123) ¥ 498 ¥ 15,542

Thousands of U.S. Dollars
Capitalstock
Balance at March 31, 2016
Dividends from surplus
Profit attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Retirement of treasury stockReversal of revaluation reserve for land
Net changes of items other thanshareholders' equity
Total changes of items during the period%DODQFHDW0DUFK

24

THE DAISHI BANK 2017 ANNUAL REPORT

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              ²²²²  
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&RQVROLGDWHG6WDWHPHQWVRI&DVK)ORZV<HDUVHQGHG0DUFKDQG

1HWFDVKSURYLGHGE\ XVHGLQ RSHUDWLQJDFWLYLWLHV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 allowance for investment 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 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$

148,708



















––

––

(176)
(11)
(484)
3
(69)
(49,520)
4,533(2,378)(0)34378(192,852)
129,596
19,865
112,68751
952
69,281(303)
77
48,724(4,603)527(1,570)(102)(4,314)29(619)(441,397)
40,408(21,198)
(0)
304
3,371
(1,718,979)
1,155,156
177,069
1,004,432
462
8,488
617,541(2,702)
688
434,305(41,029)
4,699

Income taxes paid


154,720(4,807)

1,379,094(42,853)

Total adjustments

133,229

1,187,532

sub-total

1HWFDVKSURYLGHGE\ XVHGLQ RSHUDWLQJDFWLYLWLHV
1HWFDVKSURYLGHGE\ XVHGLQ LQYHVWPHQWDFWLYLWLHV
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

Net cash provided by (used in) investment activities:
1HWFDVKSURYLGHGE\ XVHGLQ ILQDQFLQJDFWLYLWLHV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

1HWFDVKSURYLGHGE\ XVHGLQ ILQDQFLQJDFWLYLWLHV

2,725
242
(1,246)







149,91224,2902,162(11,109)$(562,920)
351,924
228,873(2,162)(3,693)110


12,131

1,336,240(5,017,563)
3,136,857
2,040,049(19,275)(32,920)984$

108,133(3,106)
(10)





––––(1,505)279(13,417)2,492 

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


&DVKDQGFDVKHTXLYDOHQWVDWWKHHQGRIWKH\HDU

¥(4,342)(27,687)(92)$

0
157,702447,500

605,202(38,704)0
1,405,670
3,988,776$

5,394,446

THE DAISHI BANK 2017 ANNUAL REPORT

25

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26

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THE DAISHI BANK 2017 ANNUAL REPORT27

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28

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PLOOLRQ\HQ$SSOLFDWLRQRI,PSOHPHQWDWLRQ*XLGDQFHRQ5HFRYHUDELOLW\RI'HIHUUHG7D[$VVHWV´,PSOHPHQWDWLRQ*XLGDQFHRQ5HFRYHUDELOLW\RI'HIHUUHG
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Millions of Yen)DLUYDOXH'LIIHUHQFH（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 ––%RRNYDOXH

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
Derivative transactions
Hedge accounting not applied
Hedge accounting applied

––
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

(239)673(1,177)––(432)

Total derivative transactions (70) (503)(432)

673
(744)

Thousands of U.S. Dollars

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GHWHUPLQHDUHQRWLQFOXGHGLQWKHIROORZLQJFKDUWV VHH1RWH 

'LIIHUHQFH（1）Cash and due from banks  
（2）Securities
Trading securities

Held-to-maturity debt securities 
Other securities
（3）Loans
Allowance for loan losses²²

Asset capital（1）Deposits（2）Negotiable deposit（3）Payables under securities
lending transactions（4）Borrowed money
Total liabilities
Derivative transactions
Hedge accounting not applied
Hedge accounting applied²²
²²



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Total derivative transactions    

 
––Asset capital)DLUYDOXH

'LIIHUHQFH（1）Cash and due from banks 5,406,440 5,406,440（2）Securities
Trading securities
20
20
Held-to-maturity debt securities
676,558
707,308
Other securities
15,027,683 15,027,683（3）Loans
28,012,011
Allowance for loan losses(122,416)（1）Deposits（2）Negotiable deposit（3）Payables under securities
lending transactions（4）Borrowed money
Total liabilities
Derivative transactions
Hedge accounting not applied
Hedge accounting applied––
30,750––28,024,886

135,291

49,000,297 49,166,338

166,041

27,889,594

Millions of Yen%RRNYDOXH)DLUYDOXH%RRNYDOXH

39,891,578
1,952,609

39,893,477
1,952,614(1,899)(5)2,329,344
2,760,984

2,329,344
2,761,213

––
(228)

46,934,516 46,936,650

(2,133)

6,007(10,492)––(3,852)

Total derivative transactions (632) (4,485)(3,852)

6,007(6,639)THE DAISHI BANK 2017 ANNUAL REPORT

29

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







²²



²²  
²²  
   

Total

WR 2YHU\HDUV \HDUVThousands of U.S. Dollars
:LWKLQ
\HDU

WR\HDUV

WR\HDUV

WR\HDUV

WR 2YHU
\HDUV
\HDUV

$ 5,079,611
––
––
––
––
––
Due from banks
Securities
1,720
19,466 131,359 523,482––––
Held-to-maturity debt securitiesThose that are Japanese––
8,913 115,874 516,980––––
government bonds
Japanese local government
––
––
––
––
––
––
bonds
10,553
15,484
6,502
1,720
––
––
Corporate bonds
53,803
1,919,263 4,684,855 3,226,312 1,091,292 1,967,833
Other securitiesThose that are Japanese
44,567
1,033,960 2,434,263 1,063,374 659,595 151,528
government bonds
Japanese local––
249,478 470,527 226,624 138,604 750,384
government bonds––
339,671 784,403 397,413 167,348 103,734
Corporate bonds
3,958,158 5,699,864 4,721,695 2,464,662 2,778,573 4,682,233
Loans
Total

$10,976,500 $10,516,079 $ 8,471,490 $ 3,557,675 $ 4,746,406 $ 4,736,036

1RWH 7KHVFKHGXOHGUHSD\PHQWDPRXQWDIWHUWKHFRQVROLGDWHGEDODQFHVKHHWGDWHIRUERUURZHGPRQH\DQGRWKHULQWHUHVWEHDULQJGHEWMillions of Yen

     :LWKLQ
\HDU

WR\HDUV

WR\HDUV

2YHU
\HDUV   
Deposits²²²²

Negotiable deposit
Payables under securities²²²²²²

lending transactions 

Borrowed money
²²

²²
²²

²²


²²


   





WR\HDUV

WR\HDUV

2YHU
\HDUV

 2,726
––

––
––

––
137

––


4,639,977  477,190 142,905  2,626

2,863

 

Total

WR\HDUV

WR\HDUVMillions of YenMillions of Yen:LWKLQ
\HDU



WR\HDUV

WR\HDUV

WR
\HDUV

 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

––

––

 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

13,00058,000

––

––

––

Total

––
1,737
525,593

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

––
––
6,036

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

30

WR\HDUV:LWKLQ
\HDU

74,000WR 2YHU\HDUV \HDUVWR
\HDUV

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

THE DAISHI BANK 2017 ANNUAL REPORT

Thousands of U.S. Dollars
:LWKLQ
\HDU

WR\HDUV

WR\HDUV

2YHU
\HDUV$ 36,974,674 $ 2,659,030 $ 214,805 $ 18,767
Deposits––––
1,950,728
1,880
Negotiable deposit
Payables under securities––––––
2,329,344
lending transactions
103,462 1,592,503 1,058,975 4,639
Borrowed money$ 24,298
––

––
––

––
1,225

––
178

$ 41,358,210 $ 4,253,414 $ 1,273,781 $ 23,407$ 25,524

$ 178

Total

WR\HDUV

WR
\HDUV

6HFXULWLHV$ 7KHIROORZLQJWDEOHVVXPPDUL]HDFTXLVLWLRQFRVWVERRNYDOXHVIDLUYDOXHDQGRWKHULQIRUPDWLRQRIVHFXULWLHVZLWKDYDLODEOHIDLUYDOXHVDVRI0DUFKDQG
 7UDGLQJVHFXULWLHVMillions of Yen +HOGWRPDWXULW\GHEWVHFXULWLHVBook value
Fair value
Difference

Thousands of
U.S. Dollars





  







 $YDLODEOHIRUVDOHVHFXULWLHVMillions of YenAcquisition
cost

Stocks
Bonds
Other than stocks
and bonds
Total

Book value

Millions of YenBook value  
Amount of net unrealized
gains included in the
income statement





& 9DOXDWLRQGLIIHUHQFHRQDYDLODEOHIRUVDOHVHFXULWLHVDW
0DUFKDQGZHUHDVIROORZVThousands of
U.S. Dollars

Millions of Yen% +HOGWRPDWXULW\GHEWVHFXULWLHVVROGLQWKH\HDUHQGHG
0DUFKZHUHPLOOLRQDQGWKHUHODWHGJDLQ
ZDVPLOOLRQDQGWKRVHVDOHVLQWKH\HDUHQGHG0DUFKZHUHQRWDSSOLFDEOH

Difference  






  



Difference between
Cost and Fair Value on
available-for-sale securities
Deferred tax liability
Sub-total
Non-controlling interests

Thousands of
U.S. Dollars  











Valuation difference on
Available-for-sale securities   

' 7RWDOVDOHVRIDYDLODEOHIRUVDOHVHFXULWLHVVROGLQWKH\HDU
HQGHG0DUFKDPRXQWHGWRPLOOLRQDQG
WKHUHODWHGJDLQVDQGORVVHVDPRXQWHGWRPLOOLRQDQG
PLOOLRQUHVSHFWLYHO\DQGWKRVHVDOHVLQWKH\HDU
HQGHG0DUFKDPRXQWHGWRPLOOLRQWKRXVDQG DQGWKHUHODWHGJDLQVDQGORVVHVDPRXQWHGWRPLOOLRQ WKRXVDQG DQGPLOOLRQ WKRXVDQG UHVSHFWLYHO\Millions of YenAcquisition
cost

Stocks
Bonds
Other than stocks
and bonds
Total

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)
77,646

Thousands of U.S. DollarsAcquisition
cost

Stocks
Bonds
Other than stocks
and bonds
Total

Book value

Difference641,462 1,168,556 527,093
9,028,940
178,2099,207,150
4,686,050(13,202)4,672,847
14,356,454 15,048,554 692,100

THE DAISHI BANK 2017 ANNUAL REPORT

31

'HULYDWLYHILQDQFLDOLQVWUXPHQWV
7KH%DQNHQJDJHVLQGHULYDWLYHWUDQVDFWLRQVWRPLWLJDWH
LQWHUHVWUDWHULVNDQGOLTXLGLW\ULVNRIIRUHLJQFXUUHQFLHVLQWKH
QRUPDOFRXUVHRIDVVHWOLDELOLW\PDQDJHPHQW $/0 DQGWR
PHHWFXVWRPHUV·QHHGV7KH%DQNHVWDEOLVKHGWKH$/0
FRPPLWWHHDQG5LVN&RQWURO7HDPWRDVVHVVGHULYDWLYHWUDQVDFWLRQVDQGPDUNHWULVNVVXUURXQGLQJWKHVHWUDQVDFWLRQVDFFRUGLQJWRWKH%DQN·VSROLF\UHJDUGLQJGHULYDWLYHWUDQVDFWLRQV7KH
5LVN&RQWURO7HDPDQDO\]HVULVNVUHODWHGWRGHULYDWLYHWUDQVDFWLRQVDQGUHSRUWVWRWKH$/0FRPPLWWHHIRUUHYLHZHYHU\PRQWK
7KH%DQN·VFRQVROLGDWHGVXEVLGLDULHVGLGQRWHQJDJHLQDQ\
GHULYDWLYHWUDQVDFWLRQVIRUWKH\HDUVHQGHG0DUFKDQG

7KHIROORZLQJWDEOHVVXPPDUL]HGWKHXQGHUO\LQJQRWLRQDO
SULQFLSDODPRXQWVDQGIDLUYDOXHVIRURXWVWDQGLQJGHULYDWLYH
ILQDQFLDOLQVWUXPHQWVE\ULVNFDWHJRU\DQGLQVWUXPHQWW\SHDW
0DUFKDQG

Millions of YenNotional
principal Fair value
amount
Notional
principal
Fair value
amount   
Currency Swap:
Foreign exchange contract:


Sell




Buy
Currency options:  

Sell  
Buy)DLUYDOXHVRILQWHUHVWUDWHDQGFXUUHQF\VZDSFRQWUDFWVDUH
HVWLPDWHGEDVHGRQGLVFRXQWHGFDVKIORZPHWKRG'HULYDWLYHWUDQVDFWLRQVIRUZKLFKKHGJHDFFRXQWLQJLVDSSOLHGDUHH[FOXGHGIURPWKHWDEOHDERYH

)LQDQFHOHDVHWUDQVDFWLRQV
/HDVHUHFHLYDEOHVDPRQJOHDVHLQYHVWPHQWDVVHWVHVWLPDWHG
UHVLGXDOYDOXHDQGHTXLYDOHQWLQWHUHVWGLYLGHQGVUHFHLYHG
YDOXHV
Notional
principal Fair value
amountSwap:
Receive fixed – pay variable rate
Receive variable – pay fixed rate
Option:Sell
Buy

Thousands of
U.S. Dollars

,QIRUPDWLRQIRUFHUWDLQOHDVHWUDQVDFWLRQV ,QWHUHVWUDWHUHODWHGWUDQVDFWLRQ

Swap:
Receive fixed – pay variable rate
Receive variable – pay fixed rate
Option:Sell
BuyMillions of Yen 



Millions of Yen









Millions of Yen

Thousands of
U.S. Dollars


Notional
principal Fair value
amount
Notional
principal
Fair value
amount    
 












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





(4,335) 
Currency Swap:
Foreign exchange contract:

Sell

Buy
Currency options:Sell

Buy

32

THE DAISHI BANK 2017 ANNUAL REPORT(38,645)  30,213 $ 269,310

(VWLPDWHGUHFHLYDEOHVIRUOHDVHUHFHLYDEOHVDPRXQWVDIWHUWKH
FRQVROLGDWHGEDODQFHVKHHWGDWHUHJDUGLQJOHDVHFUHGLWDQG
OHDVHLQYHVWPHQWDVVHWV /HDVHFUHGLW )RUHLJQH[FKDQJHUHODWHGWUDQVDFWLRQV
Notional
principal Fair value
amount  33,503 $ 298,629

1,046
9,326

Millions of Yen

Millions of Yen

Thousands of
U.S. Dollars





 
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



964
871
636
494
382
375

$ 8,596
7,765
5,676
4,408
3,408
3,350

 3,725$ 33,205 /HDVHLQYHVWPHQWDVVHWVMillions of Yen







9,784
8,013
6,205
4,226
2,733
2,539

$ 87,217
71,42555,30837,671
24,366
22,638 33,503$ 298,629

 
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

2SHUDWLQJOHDVHWUDQVDFWLRQV
/HVVHHV
1RWDSSOLFDEOH
/HVVRUV)XWXUHPLQLPXPOHDVHUHFHLSWVXQGHUQRQFDQFHODEOHILQDQFH
DQGRSHUDWLQJOHDVHVMillions of Yen

Thousands of
U.S. Dollars







Due within 1 year
Due after 1 year




Total







/RDQVDQGELOOVGLVFRXQWHG
/RDQVDQGELOOVGLVFRXQWHGDW0DUFKDQG
FRQVLVWHGRIWKHIROORZLQJ
Millions of Yen





Thousands of
U.S. Dollars



Loans on notes
Loans on deeds
Bills discounted
Overdrafts
Other  
  










Total  

1RQDFFUXDOORDQVDFFUXDOORDQVSDVWGXHRYHUPRUHWKDQWKUHHPRQWKVDQGUHVWUXFWXUHGORDQVDW0DUFKDQG
ZHUHDVIROORZVMillions of YenThousands of
U.S. Dollars





Non-accrual loans:
Loans to borrowers underbankruptcy proceedings 
Loans past due six
months or more

























Total non-accrual loans
Accrual loans past due overmore than three months
Restructured loans-adjusted
the terms in favor ofborrowers for financial
assistance'HSRVLWV'HSRVLWVDW0DUFKDQGFRQVLVWHGRIWKH
IROORZLQJ
Millions of Yen





Thousands of
U.S. Dollars

Current deposits
Ordinary deposits
Negotiable certificates ofdeposits
Savings deposits
Deposits at noticeTime deposits
Other deposits  
  

Total  

 






  




THE DAISHI BANK 2017 ANNUAL REPORT

33

$VVHWV3OHGJHG$VVHWVSOHGJHGDVFROODWHUDODQGUHODWHGOLDELOLWLHVDW0DUFKDQGZHUHDVIROORZVMillions of Yen





Assets pledged:
Securities  596,544
Related liabilities:
Deposits
76,917
Payables under securities
lending transactions
261,329
Borrowed money
299,714

Thousands of
U.S. Dollars


Thousands of
U.S. Dollars





Trading account securities
Securities








Total





2WKHUDVVHWVLQFOXGHFDVKFROODWHUDOSDLGIRUILQDQFLDOLQVWUXPHQWVDQGJXDUDQWHHGHSRVLWVDQGWKHDPRXQWVDUHDV
IROORZVCash collateral paid forfinancial instruments
Guarantee deposits
Total

Thousands of
U.S. Dollars











¥ 3,432
1,141¥ 4,573$ 30,592
10,172$ 40,764
Restated balance
Service costs – benefits
earned during the year
Interest cost on projected
benefit obligation

Actuarial gains and losses
accrued amount
Retirement benefit payment amount 
²²
Past service cost accrued amount

Other
Closing balances of retirement
benefit obligations

THE DAISHI BANK 2017 ANNUAL REPORT





 46,531



1,090



463



410(2,247)––86

–– 46,335



 $GMXVWPHQWWDEOHIRUWKHRSHQLQJDQGFORVLQJEDODQFHVRISHQVLRQDVVHWV H[FOXGLQJV\VWHPVIRUZKLFKWKHVLPSOLILHG
PHWKRGKDVEHHQDSSOLHG
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

34

Thousands of
U.S. Dollars

Millions of Yen



Millions of Yen

 'HILQHGEHQHILWV\VWHP
 $GMXVWPHQWWDEOHIRUWKHRSHQLQJDQGFORVLQJEDODQFHVRIUHWLUHPHQWEHQHILWREOLJDWLRQV H[FOXGLQJV\VWHPVIRUZKLFKWKHVLPSOLILHGPHWKRGKDVEHHQDSSOLHG



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IRUZDUGH[FKDQJHFRQWUDFWVMillions of Yen

(PSOR\HH·VVHYHUDQFHDQGSHQ
VLRQEHQHILWV



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 $GMXVWPHQWWDEOHIRUWKHRSHQLQJDQGFORVLQJEDODQFHVRIUHWLUHPHQWEHQHILWREOLJDWLRQVRIV\VWHPVIRUZKLFKWKH
VLPSOLILHGPHWKRGKDVEHHQDSSOLHG
Thousands of
U.S. Dollars

Millions of Yen

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

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

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

 $GMXVWPHQWWDEOHIRUWKHFORVLQJEDODQFHVRIUHWLUHPHQW
EHQHILWREOLJDWLRQVDQGSHQVLRQDVVHWVDQGUHWLUHPHQWEHQHILWREOLJDWLRQVDQGUHWLUHPHQWEHQHILWDVVHWVUHFRUGHGRQWKH
FRQVROLGDWHGEDODQFHVKHHWV


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



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Net liabilities and assets
recorded on the consolidatedbalance sheets





Non-savings-type system
retirement benefit obligations

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
Retirement benefit for thedefined-benefit system

Millions of YenRetirement benefit obligations 
Retirement benefit assets²²
Net liabilities and assets
recorded on the consolidatedbalance sheets





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––
––



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





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

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

Millions of Yen

Thousands of
U.S. Dollars







Actuarial gains and losses
Past service costs  

 

Total

 



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 &XPXODWLYHDGMXVWPHQWVIRUUHWLUHPHQWEHQHILWV
7KHEUHDNGRZQRIWKHLWHPVUHFRUGHGXQGHUDGMXVWPHQWVIRU
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IROORZV

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EHHQDSSOLHG
Thousands of
U.S. Dollars

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7KHEUHDNGRZQRILWHPV EHIRUHWD[FUHGLW DGMXVWHGIRU
UHWLUHPHQWEHQHILWVLVDVIROORZV

Savings-type system
retirement benefit obligations 
Pension assets

Thousands of
U.S. Dollars

Millions of Yen

Thousands of
U.S. Dollars

Millions of Yen 5HWLUHPHQWEHQHILWFRVWVDQGDPRXQWVIRUEUHDNGRZQLWHPVMillions of Yen

Unrecognized priorservice costs
Unrecognized actuarial
gains and losses
Total

Thousands of
U.S. Dollars



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

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 



THE DAISHI BANK 2017 ANNUAL REPORT35

 0DWWHUVFRQFHUQLQJSHQVLRQDVVHWV① 7KHUDWLRVIRUHDFKPDMRUFDWHJRU\RIDVVHWVDPRQJWRWDOSHQVLRQDVVHWVDUHDVIROORZV


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Bonds
StocksCash and deposits
General accounts
Other













Total





1RWH ,QWRWDOSHQVLRQDVVHWVWKHUHWLUHPHQWEHQHILWWUXVWHVWDEOLVKHGIRUWKHFRUSRUDWHSHQVLRQSODQDFFRXQWHGIRUGXULQJWKHSUHYLRXVFRQVROLGDWHGILVFDO\HDUDQGGXULQJWKH
FXUUHQWFRQVROLGDWHGILVFDO\HDUDQGWKHUHWLUHPHQWEHQHILWWUXVWHVWDEOLVKHGIRUWKHOXPSVXPSHQVLRQSODQDFFRXQWHGIRUGXULQJWKHSUHYLRXVFRQVROLGDWHGILVFDO\HDUDQGGXULQJWKH
FXUUHQWFRQVROLGDWHGILVFDO\HDU
② 0HWKRGIRUGHWHUPLQLQJWKHH[SHFWHGORQJWHUPLQYHVW
PHQWUHWXUQ,QGHWHUPLQLQJWKHH[SHFWHGORQJWHUPLQYHVWPHQWUHWXUQHVWLPDWHVDUHPDGHRIWKHFXUUHQWDQGH[SHFWHGGLVWULEXWLRQVRISHQVLRQDVVHWVDQGWKHFXUUHQWDQGH[SHFWHGORQJWHUPUHWXUQUDWHIURPWKHYDULRXVDVVHWVWKDWFRPSRVHWKHSHQVLRQ
DVVHWV 0DWWHUVFRQFHUQLQJFDOFXODWLRQDVVXPSWLRQVIRUDFWXDULDOFDOFXODWLRQV
0DMRUFDOFXODWLRQDVVXPSWLRQVIRUDFWXDULDOFDOFXODWLRQVDWWKHHQGRIWKHILVFDO\HDU






Discount rate〜
〜
Expected long-term investment return〜 〜Projected promotion rate

'HILQHGFRQWULEXWLRQV\VWHP
7KH%DQN·VDQGLWVFRQVROLGDWHGVXEVLGLDULHVUHTXLUHG
FRQWULEXWLRQWRGHILQHGFRQWULEXWLRQV\VWHPZDVPLOOLRQ\HQIRUWKHSUHYLRXVILVFDO\HDUDQGPLOOLRQ\HQIRUWKH
FXUUHQWILVFDO\HDU,QFRPHWD[HV
7KH%DQNLVVXEMHFWWRDQXPEHURIWD[HVOHYLHGRQLQFRPHZKLFKLQWKHDJJUHJDWHLQGLFDWHDVWDWXWRU\UDWHLQ-DSDQRIDSSUR[LPDWHO\IRUWKH\HDUHQGHG0DUFKDQG
IRUWKH\HDUHQGHG0DUFK
7KHIROORZLQJWDEOHVXPPDUL]HVWKHVLJQLILFDQWGLIIHUHQFHVEHWZHHQWKHVWDWXWRU\WD[UDWHDQGWKH%DQN·VHIIHFWLYHWD[UDWH
IRUILQDQFLDOVWDWHPHQWSXUSRVHVIRUWKH\HDUVHQGHG0DUFK
DQG

Statutory tax rate
Decrease (increase) ofvaluation allowance
Non-taxable income(dividend income, etc.)
Non-deductible expenses
Inhabitants tax
End-of-term deferred tax
assets revised down due totax rate changes
Other
Effective tax rate



30.7%




(5.3)
(0.9)




0.5
0.4




––



26.0%

Millions of Yen



0.6

Total deferred income tax
assetsDeferred tax liabilities:
Unrealized gains on
securities available
for saleGain on contibution of
securities to employee
retierment benefit trust
Other

Thousands of
U.S. Dollars

Deferred tax assets:
Allowance for loan losses
and write-off of claims  ¥ 5,367
Net defined benefit liability
4,005
Depreciation

1,386
Other

4,680
Less valuation allowance
(2,956)

Net deferred tax assets(liabilities)

THE DAISHI BANK 2017 ANNUAL REPORT

6LJQLILFDQWFRPSRQHQWVRIGHIHUUHGWD[DVVHWVDQGOLDELOLWLHV
DW0DUFKDQGZHUHDVIROORZV

Total deferred income tax
liabilities

36





$

47,84635,701
12,356
41,716(26,350)12,483111,270

(23,207)(206,859)




(852)
(1,490)(7,600)(13,282)

(25,550)(227,742)  ¥ (13,066)$ (116,472)

5HYDOXDWLRQUHVHUYHIRUODQG
3XUVXDQWWRWKH/DZFRQFHUQLQJ5HYDOXDWLRQRI/DQG WKH´/DZµ ODQGXVHGIRUEXVLQHVVRSHUDWLRQVZDVUHYDOXHGDWIDLUYDOXHDW0DUFK'XHWRWKHUHYDOXDWLRQODQGZDVDSSUHFLDWHGE\PLOOLRQWRPLOOLRQDW0DUFK
1HWXQUHDOL]HGJDLQZDVFODVVLILHGLQDVHSDUDWHFRPSRQHQWRIQHWDVVHWVQHWRIDSSOLFDEOHLQFRPHWD[HVDV´5HYDOXDWLRQUHVHUYHIRUODQGµDQGLQOLDELOLWLHVDV´'HIHUUHGWD[OLDELOLWLHVIRUODQGUHYDOXDWLRQµLQWKHDFFRPSDQ\LQJFRQVROLGDWHGEDODQFHVKHHWV8QGHUWKH/DZRQFHDIWHUWKH%DQN
UHYDOXHGWKHODQGLWLVQRWSHUPLWWHGWRUHYDOXHWKHODQG6XFKXQUHDOL]HGUHYDOXDWLRQORVVDW0DUFKZDVPLOOLRQ WKRXVDQG /RQJOLYHG$VVHWV
7KH*URXSUHFRJQL]HGLPSDLUPHQWORVVHVIRUWKH\HDUVHQGHG
0DUFKDVIROORZVArea

Principal
purposeof useClassification

Niigata Pref.

Branch offices
and other

Land and buildings

Niigata Pref.

Idle assets
and other

Land and buildings

Total

Millionsof YenThousands of
U.S. Dollars

 240$ 2,141



$

2

 242

20

$ 2,162

7KH%DQNSROLFLHVIRUDVVHWJURXSLQJDUHDVIROORZV,Q
SULQFLSOHJURXSLQJLVLPSOHPHQWHGDWWKHVPDOOHVWPDQDJHULDODFFRXQWLQJGLYLVLRQOHYHOLQGLYLGXDOEUDQFKRIILFHV*URXSLQJLVDOVRFDUULHGRXWDWWKHDVVHWOHYHOIRUDVVHWVVFKHGXOHGIRUGLVSRVDODQGIRULQDFWLYHDVVHWV7KHKHDGTXDUWHUVRSHUDWLRQFHQWHUVDQGZHOIDUHFHQWHUVZKLFKDUHDVVHWVUHODWHGWRWKH
HQWLUH'DLVKL%DQNDUHWUHDWHGDVFRPPRQDVVHWV
7KHUHFRYHUDEOHSULFHRIWKHDVVHWJURXSIRUWKLVFRQVROLGDWHG
ILVFDO\HDULVVHWDVWKHQHWVHOOLQJSULFHDQGLVPDLQO\FDOFXODWHGEDVHGRQWKHUHDOHVWDWHDSSUDLVDOYDOXH

$FFXPXODWHGGHSUHFLDWLRQ$FFXPXODWHGGHSUHFLDWLRQRI3URSHUW\SODQWDQGHTXLSPHQWZHUHPLOOLRQDVRI0DUFKDQGPLOOLRQ WKRXVDQG DVRI0DUFK

THE DAISHI BANK 2017 ANNUAL REPORT37

6HJPHQWLQIRUPDWLRQ
6HJPHQWLQIRUPDWLRQIRUWKH\HDUVHQGHG0DUFKDQGLVVKRZQLQWKHWDEOHVEHORZ
Millions of YenBanking

Leasing

Securities

Subtotal

OthersOperating income:External customers
Intersegment










  

²²

Total











  











Assets







Liabilities


































Operating profit

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

Total

Adjustment Consolidated



  





  

Millions of YenBanking

Leasing

Securities

Subtotal

OthersOperating income:External customers
Intersegment 








 (661)
(3,877) 
––

Total

 







  (4,538)

 









Assets 





Liabilities 





Operating profit

OthersDepreciation and amortization
Interest income
Interest expenses
Increase in tangible andintangible fixed assets

Total

Adjustment Consolidated(1,110)

   (54,103)

   (44,661)


























11(1,052)(129)









65

Thousands of U.S. Dollars

Banking

Leasing

Securities

Subtotal

OthersOperating income:External customers
Intersegment









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

  



––

Total











  













Assets







Liabilities










































Operating profit

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

38

THE DAISHI BANK 2017 ANNUAL REPORT

Total

Adjustment Consolidated



  





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





5HODWHGLQIRUPDWLRQ&XUUHQWFRQVROLGDWHGILVFDO\HDU IURP$SULOWR0DUFK
6HJPHQWLQIRUPDWLRQE\VHUYLFHMillions of Yen

Securities
Leasing
Investment

Loans

OthersTotal,QIRUPDWLRQRQDPRUWL]DWLRQRIJRRGZLOODQGXQDPRUWL]HGEDODQFHE\UHSRUWHGVHJPHQW
1RQHDYDLODEOH,QIRUPDWLRQRQJDLQRQQHJDWLYHJRRGZLOOE\UHSRUWHG
VHJPHQW
1RQHDYDLODEOH

Operating income:External customers  33,415  25,221  17,093  19,092  94,823

2WKHULQFRPH

Thousands of U.S. Dollars

Loans

Securities
Leasing
Investment

OthersTotal$ 224,808$ 170,183$ 845,204

Operating income:External customers $ 297,847$ 152,364

2WKHULQFRPHIRUWKH\HDUVHQGHG0DUFKDQG
FRQVLVWHGRIWKHIROORZLQJ6HJPHQWLQIRUPDWLRQE\ORFDWLRQ 2SHUDWLQJLQFRPH
6LQFHWKHRSHUDWLQJLQFRPHIRUH[WHUQDOFXVWRPHUVRI-DSDQLVPRUHWKDQRIWKHRSHUDWLQJLQFRPHRIWKH
FRQVROLGDWHGLQFRPHVWDWHPHQWVXFKLQIRUPDWLRQLVQRWGLVFORVHG
 7DQJLEOHIL[HGDVVHWV
6LQFHWKHDPRXQWRIWDQJLEOHIL[HGDVVHWVLQ-DSDQLVPRUHWKDQRIWKHWDQJLEOHIL[HGDVVHWVRIWKHFRQVROLGDWHG
EDODQFHVKHHWVXFKLQIRUPDWLRQLVQRWGLVFORVHG
6HJPHQWLQIRUPDWLRQE\PDLQFXVWRPHUV
6LQFHWKHRSHUDWLQJLQFRPHIRUVSHFLILFFXVWRPHUVLVOHVVWKDQRIWKHRSHUDWLQJLQFRPHRIWKHFRQVROLGDWHGLQFRPH
VWDWHPHQWVXFKLQIRUPDWLRQLVQRWGLVFORVHG
,QIRUPDWLRQRQLPSDLUPHQWORVVRIIL[HGDVVHWVE\UHSRUWHG
VHJPHQW&XUUHQWFRQVROLGDWHGILVFDO\HDU IURP$SULOWR0DUFK

Thousands of
U.S. Dollars

Millions of Yen

Reversal of allowance
for loan losses
Gain on sales of stocks
and other securities
Recoveries of written-off claims

Other

Total





$

217





32,3998,783
164,066

$ 205,466

2WKHUH[SHQVHV
2WKHUH[SHQVHVIRUWKH\HDUVHQGHG0DUFKDQG
FRQVLVWHGRIWKHIROORZLQJ
Thousands of
U.S. Dollars

Millions of Yen





Written-off of loans
Losses on sales of fixed assets
Losses on sales of stocks
and other securities

Losses on devaluation of stocks
and other securities
Impairment losses

Other




 1,29634$ 11,554
309

675

6,020

44
242
16,076399
2,162
143,292

Total

 18,369$ 163,738

Millions of Yen

Banking Leasing Securities Subtotal

Impairment
loss

 242

––

––

Others

Total

––

 242

OthersTotal––$ 2,162

 242

Thousands of U.S. Dollars

Banking Leasing Securities Subtotal

Impairment$ 2,162
loss

––

––

$ 2,162

THE DAISHI BANK 2017 ANNUAL REPORT

396WRFNRSWLRQV
6WRFNEDVHGFRPSHQVDWLRQH[SHQVHVZDVPLOOLRQ WKRXVDQG IRUWKHILVFDO\HDUHQGHG0DUFK
'HWDLOVVFDOHRIVWRFNRSWLRQVDQGFKDQJHV 6WRFNRSWLRQGHWDLOV
Number and type of
option holders

2010 Stock options
9 directors and 8 executive
officers of the Daishi Bank

2011 Stock options
8 directors and 10 executive
officers of the Daishi Bank

2012 Stock options
7 directors and 9 executive
officers of the Daishi Bank

2013 Stock options
8 directors and 8 executive
officers of the Daishi Bank

Number of stock options
by stock type

Daishi Bank common stock:465,400 stocks

Daishi Bank common stock:606,600 stocks

Daishi Bank common stock:597,600 stocks

Daishi Bank common stock:423,900 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

Number and type of
option holders

2014 Stock options
8 directors and 7 executive
officers of the Daishi Bank

2015 Stock options
8 directors and 7 executive
officers of the Daishi Bank

2016 Stock options
9 directors and 6 executive
officers of the Daishi Bank

Number of stock options
by stock type

Daishi Bank common stock:329,800 stocks

Daishi Bank common stock:249,100 stocks

Daishi Bank common stock:367,800 stocks

Date of grant

July 30, 2014

July 30, 2015

July 29,2016

Vesting conditions

None set

None set

None set

Vesting period

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

 6FDOHRIVWRFNRSWLRQVDQGFKDQJHV①1XPEHURIVWRFNRSWLRQV2010 Stock options

2011 Stock options

2012 Stock options

2013 Stock options

2014 Stock options

2015 Stock options

2016 Stock options

178,400

272,600

399,100

324,100

315,500

249,100²²

Granted

²²

²²

²²

²²

²²

²²

367,800

Forfeited

²²

²²

²²

²²

²²

²²

²²

Vested52,20073,000112,100

82,20076,00054,800²²

Unvested

126,200

199,600

287,000

241,900

239,500

194,300

367,800

²²

²²

²²

²²

²²

²²

²²

Vested52,20073,000112,100

82,20076,00054,800²²

Exercised

52,20073,000112,100

82,20076,00054,800²²

Forfeited

²²

²²

²²

²²

²²

²²

²²

Unexercised

²²

²²

²²

²²

²²

²²

²²

Prior to vesting (stocks)
At end of previous
consolidated fiscal year

After vesting (stocks)
At end of previous
consolidated fiscal year

② 8QLWSULFH

40

2010 Stock options

2011 Stock options

2012 Stock options

2013 Stock options

2014 Stock options

2015 Stock options

2016 Stock options

Exercising price (¥)

1

1

1

1

1

1

1

Avg. stock price at timeof exercising (¥)

322

322

322

322

322

322

²²

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

286

236

211

300

369

511

343

THE DAISHI BANK 2017 ANNUAL REPORT3URIRUPDFDOFXODWLRQRIWKHIDLUFDUU\LQJYDOXHSHUXQLWRIVWRFNRSWLRQV
7KHSURIRUPDFDOFXODWLRQRIWKHIDLUFDUU\LQJYDOXHSHUXQLWRIVWRFNRSWLRQVJUDQWHGLQWKHFXUUHQWFRQVROLGDWHGILVFDO\HDU
LVDVIROORZV $SSOLHGHYDOXDWLRQPHWKRG%ODFN6FKROHVPHWKRG
 0DLQEDVHQXPHULFDOYDOXHDQGSURIRUPDFDOFXODWLRQ2016 Stock options
Volatility of stock price
Expected remaining period

30.58%
2year

Expected dividend¥9 per share

Risk-free interest rate

△0.360%THE DAISHI BANK 2017 ANNUAL REPORT

41

Corporate Organization Directory Chart(As of March 31, 2016)

Group Strategy Planning Division
Secretariat
Planning Coordination Division
Public Relations Ofﬁce
System Integration Promotion Ofﬁce
Risk Supervision Division Coordination Division
Compliance Ofﬁce
General Meeting of Stockholders

ALM Ofﬁce
Business and Regional Revitalization Headquarters
Business Promotion Division
IT Innovation Promotion Ofﬁce
Credit Card Ofﬁce
Customer Relations Ofﬁce
Consulting Promotion Division
Shanghai Representative Ofﬁce
Call Center
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 Process Reengineering 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

42

THE DAISHI BANK 2017 ANNUAL REPORT

OfficeCorporate Data
Service Network

Board of Directors andAudit and Supervisory Committee
President
Fujio Namiki

Director and Exective Officer
Michiro Ueguri

Deputy President
Kosuke Sasaki

Director, Audit and Supervisory Committee Member
Nobuya Tanaka
Shinjiro Kawai

Senior Managing Director
Satoshi Hasegawa

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

Managing Directors
Takuya Watanabe
Keiji Miyazawa
Kiyofumi Obara
Kiminari Onuma
Jumatsu Eizuka

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 24, 2016)

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)

16,606

4.64

2. Nippon Life Insurance Company

10,261

2.87

3. Meiji Yasuda Life Insurance Company

10,159

2.84

Total

4. Employee’s stockholdings

9,008

2.52

Overseas

5. Tohoku Electric Power Co., Inc.

8,372

2.34

Shanghai

6. Daido Life Insurance Company

7,056

1.97

7. Sompo Japan Nipponkoa Insurance Inc.

6,884

1.92

8. Japan Trustee Services Bank, Ltd.（Trust Account 9）

6,728

1.88

9. CBNY DFA INTL SMALL CAP VALUE PORTFOLIO（Standing proxy: Citibank Japan Ltd.）

5,934

1.66

10. The Bank of Tokyo-Mitsubishi UFJ, Ltd.

5,889

1.64

1

(As of March 31, 2017)(As of March 31, 2017)

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 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 Management Consulting Co., Ltd.
1071-1, Higashiborimae-dori 7-bancho chuo-ku, Niigata 951-8066

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%

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%

Consulting business andventure capital

June 8, 1984

¥ 20 million

5%

Credit card business

March 1,1990¥ 30 million5%(As of March 31, 2017)

THE DAISHI BANK 2017 ANNUAL REPORT

43

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

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

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

44

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

Capital of 1 million yen

A complete view of the newly built Head Office in 19281943

1988 Began handling Japanese commercial paper

THE DAISHI BANK 2017 ANNUAL REPORT

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 withThe Hokuetsu Bank, Ltd.