B oard of Directors and Audit & Supervisory Board Members
The Juroku Financial Group, Inc. (as of June 30, 2022)

C onsolidated Balance SheetThe Juroku Financial Group, Inc. and Consolidated Subsidiaries

Yukio Murase
Representative Director
and Chairman

Naoki Ikeda
Representative Director
and President

Akihide Ishiguro
Director and Deputy
President

Yukiyasu Shiraki
Director

March 31, 2022

Millions of Yen

Thousands of
U.S. Dollars (Note 1)

ASSETS:

2022

2022

Cash and due from banks (Notes 6)
Trading securities (Notes 7 and 28)
Money held in trust (Note 8)
Securities (Notes 7, 9, 13, 14 and 28)
Loans and bills discounted (Notes 9, 14, 28 and 29)
Foreign exchanges (Notes 9 and 10)
Lease receivables and investments in leases (Note 9, 27)
Other assets (Notes 9, 11, 14, 28 and 30)
Premises and equipment (Note 12)
Goodwill
Intangible assets
Asset for retirement benefits for employees (Note 18)
Deferred tax assets (Note 26)
Customers’ liabilities for acceptances and guarantees (Note 9, 13)
Allowance for loan losses (Notes 3 and 28)
Total Assets¥2,135,695
115
11,612
1,459,223
4,521,824
8,861
54,544
114,829
58,313
3,646
3,758
14,220149
14,352(25,809)¥8,375,332$17,449,914
940
94,877
11,922,731
36,946,025
72,400445,657
938,222476,452
29,79030,705
116,186
1,218
117,264(210,875)$68,431,506¥6,225,291
14,000133,747
87,538
1,405,797
1,595
62,4886,172
815,332
6,408
14,352
7,972,728$50,864,376
114,388
1,092,794
715,238
11,486,208
13,032
510,565
50,42966
125,272
52,357
117,264
65,141,989

36,000294,142

61,807180
238,135

505,000
1,471
1,945,706(2,221)(18,147)

49,18912,4683,341
398,899
3,705
402,604¥8,375,332

401,904
101,871
27,2983,259,245
30,272
3,289,517$68,431,506

LIABILITIES AND EQUITY:

Yoshiaki Bito
Director

Hiroyuki Ota
Director

Liabilities:
Deposits (Notes 14, 15 and 28)
Negotiable certificates of deposit (Note 28)
Payables under repurchase agreements (Notes 14 and 28)
Payables under securities lending transactions (Note 14)
Borrowed money (Notes 14, 16 and 28)
Foreign exchanges (Note 10)
Other liabilities (Notes 17, 19, 27, 28 and 30)
Liability for retirement benefits for employees (Note 18)
Provision required under the Special Act
Deferred tax liabilities (Note 26)
Deferred tax liabilities for land revaluation surplus
Acceptances and guarantees (Note 13)
Total Liabilities
Commitments and Contingent Liabilities (Note 29)

32

Kikuo Asano
Director

Satoko Ito
Director

Naohiko Ishikawa
Director (Audit & Supervisory Committee Member)

Shinji Ishihara
Director (Audit & Supervisory Committee Member)

Satoe Tsuge
Director (Audit & Supervisory Committee Member)

Koichi Tokoro
Managing Executive Officer

Tsutomu Niimi
Managing Executive Officer

Hirokazu Kusui
Managing Executive Officer

Eiji Kodama
Executive Officer

Fumitaka Yoshimura
Executive Officer

Hirotaka Asai
Executive Officer

Tomoatsu Kaku
Executive Officer

Equity (Notes 20, 21 and 34):
Common stock:authorized, 46,000,000 shares in 2022;
issued, 37,924,134 shares in 2022
Capital surplus (Note 5)
Stock acquisition rights
Retained earnings
Treasury stock—at cost,
1,002,848 shares in 2022
Accumulated other comprehensive income:Unrealized gain on available-for-sale securities (Note 7)
Land revaluation surplus
Defined retirement benefit plans (Note 18)
Total
Noncontrolling interests
Total Equity
Total Liabilities and Equity
See notes to consolidated financial statements.

33

C onsolidated Statement of Income
The Juroku Financial Group, Inc. and Consolidated Subsidiaries

C onsolidated Statement of Changes in Equity
The Juroku Financial Group, Inc. and Consolidated Subsidiaries

Year Ended March 31, 2022

Millions of Yen

Thousands of
U.S. Dollars (Note 1)

2022

2022

Income:Interest on:
Loans and discounts
Securities
Other
Fees and commissions
Other operating income (Note 22)
Other income (Note 23)
Total income (Note 33)
Expenses:
Interest on:
Deposits
Borrowings and re-discounts
Payables under repurchase agreements
Other
Fees and commissions
Other operating expenses (Note 7)
General and administrative expenses (Note 24)
Allowance for loan losses
Other expenses (Note 25)
Total expenses
Income before Income Taxes
Income Taxes (Note 26):
Current
Deferred
Total Income Taxes
Net Income
Net Income Attributable to Noncontrolling Interests
Net Income Attributable to Owners of the Parent

Per Share of Common Stock (Notes 2.t and 32):

Yen
2022

¥ 38,333
14,1872,168
22,86932,156
7,654
117,367$313,204
115,916
17,714
186,854262,734
62,537
958,959

205
54
26
33
5,758
36,20744,5602,807
1,072
90,722
26,645

1,675
441
212
270
47,046295,833
364,082
22,9358,759
741,253
217,706

7,237
1,721
8,958
17,687496¥ 17,191

59,131
14,062
73,193
144,513
4,052$140,461¥460.45459.62120.00

Basic net income
Diluted net income
Cash dividends applicable to the year—common stock
See notes to consolidated financial statements.

U.S. Dollars
2022
$3.76
3.76
0.98

C onsolidated Statement of Comprehensive Income
The Juroku Financial Group, Inc. and Consolidated Subsidiaries

Net income
Other Comprehensive Loss (Note 31):
Unrealized loss on available-for-sale securities
Deferred loss on derivatives under hedge accounting
Defined retirement benefit plans
Total other comprehensive loss
Comprehensive Income
Total Comprehensive Income
Attributable to:
Owners of the parent
Noncontrolling interests
See notes to consolidated financial statements.

34

Year Ended March 31, 2022

Millions of Yen

Thousands of
U.S. Dollars (Note 1)

2022

2022

¥ 17,687$144,513(10,271)
(259)
(652)
(11,182)¥ 6,505(83,920)(2,116)(5,327)(91,363)$ 53,150¥ 6,178327$ 50,478
2,672

Year Ended March 31, 2022

Thousands

Millions of Yen

Outstanding
Number of Common
Stock
Shares ofCommon Stock

Balance at April 1, 2021
Changes due to share transfer, etc.
Purchase of shares of
consolidated subsidiaries
Sales of shares of
consolidated subsidiaries
Net income attributable toowners of the parent
Cash dividends, ¥105.00
per share on common stock
Transfer of land revaluation surplus
Purchase of treasury stock
Disposal of treasury stock
Net change in the year
Balance at March 31, 2022

Accumulated Other
Comprehensive Income
Stock
CapitalRetained Treasury
Surplus Acquisition Earnings
Stock Unrealized Gain Deferred Gain on Land
DefinedRightson Available Derivatives-for-sale
under Hedge Revaluation Retirement
Surplus Benefit Plans
Securities
Accounting

37,373—¥36,839(839)¥53,396
435¥169 ¥224,571
—
—

—

—

7,971

—

—

—

—

—

6

—

—

—

—

—

—

—

—

—

—

—
(462)
10
—
36,921————¥36,000——(1)—¥61,807¥3,993 ¥389,747
—
—

Total
Equity¥ 259—¥12,766
—

—

—

—

—

7,971

—

7,971

—

—

—

—

—

6

—

6

17,191

—

—

—

—

—

17,191—

17,191(3,925)

—

—

—

—

—

(3,925)—(3,925)——(1,116)—28—— (10,102)¥(2,221) ¥ 49,189

—
—
—
(259)
¥ —

—
—
—
(298)
¥12,468

—
298
—
—
—
—
11
—
¥180 ¥238,135¥(1,537) ¥ 59,291
404—

Noncontrolling
Interests

Total

—
298
—
(1,116)—27(652) (11,300)¥3,341 ¥398,899¥13,263 ¥403,010
—
—

—
298
—
(1,116)—27(9,558) (20,858)¥ 3,705 ¥402,604

Thousands of U.S. Dollars (Note 1)

CommonStock

Balance at April 1, 2021
Changes due to share transfer, etc.
Purchase of shares of
consolidated subsidiaries
Sales of shares of
consolidated subsidiaries
Net income attributable toowners of the parent
Cash dividends, $0.86
per share on common stock
Transfer of land revaluation surplus
Purchase of treasury stock
Disposal of treasury stock
Net change in the year
Balance at March 31, 2022

Accumulated Other
Comprehensive Income
Stock
CapitalRetained Treasury
Surplus Acquisition Earnings
Stock Unrealized Gain Deferred Gain on Land
DefinedRightson Available Derivatives-for-sale
under Hedge Revaluation Retirement
Surplus Benefit Plans
Securities
Accounting$300,997 $436,277(6,855)
3,554$1,381 $1,834,880——$(12,558) $484,443
3,301—$ 2,116 $104,306
—
—

Total

Noncontrolling
Interests

Total
Equity$32,625 $3,184,467 $108,367 $3,292,834
—
—
—
—

—

65,128

—

—

—

—

—

—

—

65,128—65,128

—

49

—

—

—

—

—

—

—

49

—

49

—

—

—

140,461

—

—

—

—

—

140,461—

140,461———(32,070)

—

—

—

—

—

(32,070)—(32,070)

—
—
—
—
—
(8)
—
—
$294,142 $505,000

—
2,435
—
—
—
—
90
—
$1,471 $1,945,706——(9,119)—229—— (82,539)$(18,147) $401,904

—
—
—
—
—
—
(2,116)(2,435)$ — $101,871

—
2,435
—
2,435
—
(9,119)—(9,119)—221—
221(5,327) (92,327) (78,095) (170,422)$27,298 $3,259,245 $ 30,272 $3,289,517

See notes to consolidated financial statements.

35

C onsolidated Statement of Cash Flows
The Juroku Financial Group, Inc. and Consolidated Subsidiaries

N otes to Consolidated Financial Statements
The Juroku Financial Group, Inc. and Consolidated Subsidiaries

Year Ended March 31, 2022

Millions of Yen

Thousands of
U.S. Dollars (Note 1)

OPERATING ACTIVITIES:

2022

2022

Income before income taxes
Adjustments for:
Income taxes—paid
Income taxes—refund
Depreciation
Interest income recognized on statements of income
Interest expense recognized on statements of income
Net loss on securities
Unrealized gain on derivatives
Net decrease in allowance for loan losses
Net increase in asset for retirement benefits for employees
Net decrease in liability for retirement benefits for employees
Net increase in provision required under the Special Act
Net increase in loans
Net increase in deposits
Net decrease in negotiable certificates of deposit
Net increase in borrowed money (excluding subordinated loans)
Net decrease in due from banks (excluding cash equivalents)
Net increase in call money and others
Net decrease in money held in trust
Net increase in payables under securities lending transactions
Net decrease in lease receivables and investments in leases
Interest income—cash basis
Interest expense—cash basis
Other—net
Total adjustments
Net cash provided by operating activities—(Forward)¥

26,645$

217,706(10,532)42
3,362(54,688)
318
4,305
(449)
(44)
(2,764)(25)
3(40,674)
152,818(14,100)
938,646
11,0897,047
700
57,866
2,673
55,204(371)(12,896)
1,097,530¥1,124,175(86,053)343
27,470(446,834)
2,598
35,174(3,669)(360)(22,584)(204)
25(332,331)
1,248,615(115,205)
7,669,303
90,60457,5785,720
472,800
21,840451,050(3,031)(105,368)
8,967,481$ 9,185,187(513,552)
489,717
109,124(1,691)(1,674)830(52)
82,702(4,196,029)
4,001,283
891,609(13,816)(13,678)
6,781
(425)
675,725

0(1,116)(2,928)(4,061)

0(9,118)(23,924)(33,181)

988

8,073

(7,117)(58,150)974

1,199,769
930,918¥2,130,687

9,802,836
7,606,160$17,408,996

INVESTING ACTIVITIES:
Purchases of securities
Proceeds from sales of securities
Proceeds from maturities of securities
Purchases of premises and equipment
Purchases of intangible assets
Proceeds from sales of premises and equipment
Other—net
Net cash provided by investing activities
FINANCING ACTIVITIES:
Proceeds from sales of treasury stock
Acquisition of treasury stock
Acquisition of treasury stock of subsidiaries (Note 5)
Dividends paid
Proceeds from changes in ownership interests in subsidiaries that
do not result in change in scope of consolidation (Note 5)
Net cash used in financing activities
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
ON CASH AND CASH EQUIVALENTS
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR (Note 6)
See notes to consolidated financial statements.

36

Year Ended March 31, 2022

1. BASIS OF PRESENTATION OF CONSOLIDATEDFINANCIAL STATEMENTS

The accompanying consolidated financial statements have been preparedin accordance with the provisions set forth in the Japanese Financial
Instruments and Exchange Act and its related accounting regulations
and the Enforcement Regulation for the Banking Law, and in accordance with accounting principles generally accepted in Japan (JapaneseGAAP), which are different in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to the consolidated financial statements issued domestically in order to present them in a form
that is more familiar to readers outside Japan.
The consolidated financial statements are stated in Japanese yen,
the currency of the country in which The Juroku Financial Group,
Inc. (the “Company”) is incorporated and operates. The translations ofJapanese yen amounts into U.S. dollar amounts are included solely forthe convenience of readers outside Japan and have been made at the rateof ¥122.39 to $1, the approximate rate of exchange at March 31, 2022.
Such translations should not be construed as representations that theJapanese yen amounts could be converted into U.S. dollars at that or any
other rate.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation
The consolidated financial statements as of March 31, 2022, include theaccounts of the Company and its nine significant subsidiaries, including
Juroku Bank, Ltd., Juroku Research Institute Co., Ltd., Juroku Card
Co., Ltd., Juroku Lease Co., Ltd., Juroku Densan Digital Service Co.,
Ltd., NOBUNAGA Capital Village Co., Ltd., Juroku Business Service
Co., Ltd., Juroku Credit Guarantee Co., Ltd., and Juroku Tokai Tokyo
Securities Co., Ltd. (“Juroku TT Securities”) (together, the “Group”).
Due to the establishment of NOBUNAGA Capital Village Co.,
Ltd., it is included in the scope of consolidation of Juroku Bank, Ltd.
from the fiscal year ended March 31, 2022. Since Juroku Bank, Ltd.,
became a wholly-owned subsidiary following the establishment of theCompany, the Juroku Bank., Ltd., and its consolidated subsidiaries areincluded in the scope of consolidation from the fiscal year ended March
31, 2022.
Under the control concept, those companies in which the Company,
directly or indirectly, is able to exercise control over operations are fully
consolidated.
Investments in ten unconsolidated subsidiaries are stated at cost. If
the equity method of accounting had been applied to the investments inthese companies, the effect on the accompanying consolidated financial
statements would not be material.
The excess of the cost of acquisition over the fair value of the net
assets of an acquired subsidiary at the date of acquisition is being amortized over a period of 20 years.
All significant intercompany balances and transactions have been
eliminated in consolidation. All material unrealized profits included in
assets resulting from transactions within the Group have been eliminated in consolidation.
The balance sheet date for all consolidated subsidiaries is the end of
March for each year, which is consistent with the balance sheet date of
the Group.

b. Business Combinations

Business combinations are accounted for using the purchase method.
Acquisition-related costs, such as advisory fees or professional fees, areaccounted for as expenses in the periods in which the costs are incurred.
If the initial accounting for a business combination is incomplete by theend of the reporting period in which the business combination occurs,
an acquirer shall report in its financial statements provisional amounts
for the items for which the accounting is incomplete. During the measurement period, which shall not exceed one year from the acquisition,
the acquirer shall retrospectively adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about
facts and circumstances that existed as of the acquisition date and thatwould have affected the measurement of the amounts recognized as ofthat date. Such adjustments shall be recognized as if the accounting forthe business combination had been completed at the acquisition date.
A parent’s ownership interest in a subsidiary might change if the parent
purchases or sells ownership interests in its subsidiary. The carrying
amount of noncontrolling interests is adjusted to reflect the change inthe parent’s ownership interest in its subsidiary while the parent retains
its controlling interest in its subsidiary. Any difference between the fairvalue of the consideration received or paid and the amount by which thenoncontrolling interests are adjusted is accounted for as capital surplus
as long as the parent retains control over its subsidiary.

c. Cash and Cash Equivalents

For the purpose of the consolidated statement of cash flows, cash and cash
equivalents represent cash and amounts due from the Bank of Japan.

d. Trading Securities

Trading securities are stated at fair value and the related unrealized gains
and losses are included in earnings. The cost of trading securities sold isdetermined based on the moving-average method.

e. Securities

Securities other than trading securities are classified and accounted for,depending on management’s intent, as follows: (1) held-to-maturity
debt securities, which are expected to be held to maturity with the positive intent and ability to hold to maturity, are reported at amortized costand (2) available-for-sale securities, which are not classified as held-tomaturity, are reported at fair value with unrealized gains and losses, netof applicable taxes, and are reported in a separate component of equity.
Non-marketable available-for-sale securities are stated at cost determined by the moving-average method.
For other-than-temporary declines in fair value, securities are reduced to net realizable value by a charge to income.
Securities included in money held in trust for trading purposes
are stated at fair value, and the related unrealized gains and losses areincluded in earnings. Securities included in money held in trust forother purposes are accounted for by the same method as the above (2)available-for-sale securities.

f. Premises and Equipment

Premises and equipment are stated at cost less accumulated depreciation. Depreciation of premises and equipment of the Company, except
for leased assets, is computed using the declining-balance method overthe estimated useful lives of the assets.
The range of useful lives is principally from 15 to 50 years forbuildings and from 4 to 20 years for other premises and equipment.
Depreciation of lease assets from finance lease transactions that do
not deem to transfer ownership of the leased property to the lessee iscomputed using the straight-line method over the leasing period. Residual values of lease assets are the guaranteed values determined in thelease contracts or zero for assets without such guaranteed value.
Under certain conditions, such as exchanges of premises and equipment for similar kinds and sales and purchases resulting from expropriation, Japanese tax laws permit companies to defer the profit arisingfrom such transactions by reducing the cost of the assets acquired or byproviding a special reserve in the equity section. The deferred gain on
premises and equipment resulting from the reduction of the cost of theassets acquired, which is taxable for tax purposes in the future, was ¥983
million ($8,032 thousand) as of March 31, 2022, respectively.

g. Long-Lived Assets

The Group reviews its long-lived assets for impairment whenever eventsor changes in circumstances indicate the carrying amount of an asset or
asset group may not be recoverable. An impairment loss is recognized
if the carrying amount of an asset or asset group exceeds the sum of theundiscounted future cash flows expected to result from the continued
use and eventual disposition of the asset or asset group. The impairment
loss would be measured as the amount by which the carrying amountof the asset exceeds its recoverable amount, which is the higher of the
discounted cash flows from the continued use and eventual dispositionof the asset or the net selling price at disposition.

h. Land Revaluation

Under the “Law of Land Revaluation,” the Company elected a one-timerevaluation of its consolidated subsidiary’s land operating as Bank to avalue based on real estate appraisal information as of March 31, 1998.

37

The resulting land revaluation surplus represents unrealized appreciation of land and is stated, net of income taxes, as a component ofequity. There was no effect on the consolidated statement of income.
Continuous readjustment is not permitted unless the land value subsequently significantly declines such that the amount of the decline invalue should be removed from the land revaluation surplus account andrelated deferred tax liabilities.
The carrying amount of the land after the above one-time revaluation exceeded the market value by ¥14,043 million ($114,740 thousand) as of March 31, 2022.

i. Intangible Assets

Amortization of intangible assets is calculated using the straight-line
method.
Amortization cost of software for internal use is calculated using thestraight-line method over the estimated useful life, principally, five years.

j. Allowance for Loan Losses

The Company’s consolidated subsidiaries implemented a self-assessment
system for its asset quality. The quality of all loans is assessed by the
related lending division with a subsequent audit by the asset audit
division in accordance with the Company’s policies and rules for selfassessment of asset quality.
The Company has established a credit rating system under which
the customers are classified into five categories such as “normal,” “caution,” “possible bankruptcy,” “virtual bankruptcy” and “legal bankruptcy.” The credit rating system is used for the self-assessment of asset
quality.
With respect to loans to customers who are likely to become bankrupt or to be closely monitored and caution loans with equivalent credit
risk, which are classified within normal and caution loans (hereinafter,“loans to customers who are likely to become bankrupt or to be closely
monitored, etc.”) the allowance for loan losses is calculated based on
the projected future losses for the following three years, whilst for otherloans, for the following one year. The projected future losses are calculated by group (i.e. residential loans and non-residential loans) for loans
to customers who are likely to become bankrupt or to be closely monitored, etc. and other loans, based on the loss ratios, which are based on
the average of actual past loss ratios for the past three years and one year,
respectively. For loans such as possible bankruptcy, the allowance forloan losses is calculated based on an amount deemed necessary to coverpossible losses on loans considering the customer’s solvency and otherfactors after the estimated fair value of the collateral real estate or guaranteed amount has been deducted. For loans such as virtual bankruptcy
or legal bankruptcy, the allowance for loan losses is calculated based
upon the loan amount after the estimated fair value of the collateral realestate or guaranteed amount has been deducted.
For loans to possible bankruptcy customers and customers who arelikely to become bankrupt or to be closely monitored, the discounted
cash flow method is applied to calculate the loss provision. In thesecircumstances, the reserve is determined as the difference between thebook value of the loan and the present value of future cash flows, which
are discounted using the contractual interest rate in the case that future
cash flows of the principal and interest can be reasonably estimated.

k. Liability for Retirement Benefits

The Company has a contributory funded defined benefit pension plan,
lump-sum payment severance plan for employees and defined contribution pension plan, and certain subsidiaries have lump-sum payment severance plans for employees and apply the simplified method to state theliability based on the amount that should be paid if employees retired at
the consolidated balance sheet date.
The liability for retirement benefits is based on projected benefit
obligations and plan assets at the end of the fiscal year. The projected
benefit obligations are attributed to periods on a benefit formula basis.
Past service costs are recognized in profit or loss as incurred over three
years within the expected average remaining service period of the employees. Actuarial gains and losses that are yet to be recognized in profit
or loss are recognized within equity (accumulated other comprehensive
income), after adjusting for tax effects and are recognized in profit orloss over 10 years no longer than the expected average remaining service
period of the employees, starting in the fiscal year following the occurrence of such differences.

38

Retirement benefits to directors and Audit & Supervisory Board
members of consolidated subsidiaries are provided at the amount thatwould be required if all directors and Audit & Supervisory Board members retired at the consolidated balance sheet date based on internal policies.

l. Stock Option

The cost of stock options is measured based at fair value on the date of
grant and is recognized as compensation expense over the vesting period
as consideration for receiving goods or services. In the consolidated balance sheet, the stock options are presented as stock acquisition rights as
a separate component of equity until exercised.

m. Leases

In regard to finance leases, sales and cost of sales are recognized whenlease payments are received.
All other leases are accounted for as operating leases.

n. Provision for Losses from Reimbursement of Inactive Accounts
The provision for losses from reimbursement of inactive accounts, which
are derecognized as liabilities under certain conditions, is provided forpossible losses on future claims of withdrawal based on historical reimbursement experience.

o. Provision for Contingent Losses

The Company provides a provision for contingent losses not coveredby other provisions in an amount deemed necessary based on estimatedlosses in the future.

p. Provision Required under the Special Act

The provision required under the Special Act is a financial instruments
transaction liability reserve for consolidated subsidiaries engaged infinancial instruments business, and is provided to prepare for losses arising from operational incidents incurred in relation to trading and othersecurities transactions. The amount of the provision is calculated pursuant to the provisions of Article 46-5 of the Financial Instruments andExchange Act and Article 175 of the Cabinet Office Order on Financial
Instruments Business.

q. Income Taxes

The provision for current income taxes is computed based on the pretax
income included in the consolidated statement of income. The asset andliability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and liabilities.
Deferred taxes are measured by applying currently enacted income tax
rates to the temporary differences.

r. Foreign Currency Transactions

Foreign currency assets and liabilities of the Group are translated into
yen equivalents at the exchange rates prevailing at the fiscal year end.

s. Derivatives and Hedging Activities

The Company uses a variety of derivative financial instruments.
Derivative financial instruments and foreign currency transactions
are classified and accounted for as follows: (1) all derivatives are recognized as either assets or liabilities and measured at fair value, and gains
or losses on the derivative transactions are recognized in the consolidated
statement of income, and (2) for derivatives used for hedging purposes,
if the derivatives qualify for hedge accounting because of high correlation and effectiveness between the hedging instruments and the hedged
items, gains or losses on the derivatives are deferred until maturity of
the hedged transactions.
The Company applies the deferral method of hedge accounting tohedges of interest rate risk associated with financial assets and liabilities
in accordance with “Accounting and Auditing Treatments on the Application of Accounting Standards for Financial Instruments in the Banking Industry” (JICPA Industry-specific Committees Practical Guideline
No. 24 issued by the Japanese Institute of Certified Public Accountants.
Under JICPA Industry-specific Committees Practical Guideline No. 24,
hedges to offset changes in fair value of fixed rate instruments (such as
securities) (fair value hedges) are applied by grouping hedging instruments and hedged items by their maturities. The assessment of hedge effectiveness is generally based on the consideration of interest rate indicesaffecting the respective fair values of the group of hedging instruments
and hedged items.

t. Per Share Information

Basic net income per share is computed by dividing net income attributable to common shareholders by the weighted-average numberof common shares outstanding for the period, retroactively adjusted forstock splits.
Diluted net income per share reflects the potential dilution that
could occur if securities were exercised or converted into common stock.
Diluted net income per share of common stock assumes full conversion of the outstanding convertible notes and bonds at the beginning of
the year (or at the time of issuance) with an applicable adjustment for
related interest expense, net of tax, and full exercise of outstanding warrants.
Cash dividends per share presented in the accompanying consolidated statement of income are dividends applicable to the respective years
including dividends to be paid after the end of the year, not retroactively
adjusted for a reverse stock split.

u. Changes in Accounting Policies

Application of Accounting Standards for Revenue Recognition
The Accounting Standard for Revenue Recognition (AccountingStandards Board of Japan (“ASBJ”) Statement No. 29, March 31, 2020)
has been applied from the beginning of the fiscal year ended March
31, 2022, and revenue will be recognized in the amount expected tobe received in exchange for the goods or services when control of thepromised goods or services is transferred to a customer. The impact of
this change on the consolidated financial statements is immaterial.
Application of Accounting Standards for Fair Value Measurement“Accounting Standard for Fair Value Measurement” (ASBJ Statement
No. 30, July 4, 2019; hereinafter referred to as the “Fair Value Measurement Accounting Standards”) has been applied from the beginningof the fiscal year ended March 31, 2022, and the Company has decided
to prospectively apply the new accounting policies stipulated in the
Fair Value Measurement Accounting Standards, etc. in accordance withthe transitional treatment set forth in Paragraph 19 of the Fair Value
Measurement Accounting Standards and Article 44-2 of the “AccountingStandard for Financial Instruments” (ASBJ Statement No. 10, July 4,2019). This change has no impact on the consolidated financial statements. In addition, in the note “FINANCIAL INSTRUMENTS AND
RELATED DISCLOSURES,” the Company has decided to make notes onmatters such as financial instruments categorized by fair value hierarchy.

v. New Accounting Pronouncements“Implementation Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Guidance No. 31, June 17, 2021)(1) Overview
The calculation of the fair value of investment trusts and the treatmentof notes as well as notes on the fair value of investments in associations,etc. whose equity interests are reported on the consolidated balance sheet
at a net amount were stipulated.
(2) Application date
The Company will apply the guidance from the beginning of the year
ending March 31, 2023.
(3) Impact of adoption
The Company is currently assessing the impact of adopting the above
guidance on the consolidated financial statements.

3. SIGNIFICANT ACCOUNTING ESTIMATES

Allowance for Loan Losses(1) Amount recorded on the consolidated financial statements in the year
ended March 31, 2022
Allowance for loan losses: ¥25,809 million ($210,875 thousand)(2) Information contributing to the understanding of details related tosignificant accounting estimates for certain items
1. Calculation method
The calculation method of allowance for loan losses is described in “Note
2.j, “Allowance for Loan Losses.”
2. Primary assumptionsa) The performance forecast of debtors, including those who prepare
management improvement plans, used to determine the debtor classification, estimate future cash flows related to the collection of the loan
principal and interest, is prepared based on assumptions derived fromavailable information.
Specifically, management improvement plans were developed basedon future performance forecasts, which include future sales forecast,prospect of future expense reduction, and future cash flow prospect,among others. Accordingly, the reasonableness and the feasibility of theplan are determined based on industry trends and individual management improvement plans of the debtors.
b) The effect of the spread of the new coronavirus disease on the economy is expected to continue over the next consolidated fiscal year considering the current situation of the infection. Although the extent of theeffect is expected to vary by each debtor, the determination of the debtor
classification, estimate of future cash flows related to the collection of
the loan principal and interest are based on the assumption that thecredit risk for loans and bills discounted originating from the Company’s
consolidated subsidiaries will be affected within the range of the above
assumptions. The above assumption has been changed from the one in
the previous fiscal year end, which stated that the effect of the spread of
the new coronavirus disease is expected to continue in the current fiscal
year for Juroku Bank, Ltd.
c) For loans other than those for which the discounted cash flow method
is applied, it is assumed that “normal” loans will incur approximately
the same amount of losses as those from previous years, “caution” loans
will incur approximately the same amount of losses as those from previous years and loans to customers who are likely to become bankrupt or
to be closely monitored, which are classified within normal and cautionloans, will incur approximately the same amount of losses as those fromprevious years.
3. Impact on the consolidated financial statements for the next fiscal year
If the assumptions used in the initial estimate changes due to changes
in the external environment, including the situation of the spread of
the new coronavirus disease, or the internal environment of the debtor,
among others, there is a possibility that the amount of allowance will increase or decrease due to changes in the debtor classification, fluctuationsof cash flow estimates or the occurrence of circumstances in which actual
bad debt losses differ from the initial assumption, which may result in asignificant impact on the consolidated financial statements.

4. CHANGES IN THE ACCOUNTING ESTIMATES

Change in the method of recording allowances for loan losses
Due to the spread of the new coronavirus disease, from the fiscal year
ended March 31, 2022, consolidated subsidiaries engaged in the banking business have determined that among caution loans other thanloans to customers who are likely to become bankrupt or to be closely
monitored, the credit risk has increased for loans to debtors who require
the equivalent support of loans to customers who are likely to becomebankrupt or to be closely monitored. Therefore, they have recorded expected losses equivalent to loans to customers who are likely to becomebankrupt or to be closely monitored for those loans. As a result of thischange in the estimate, allowance for loan losses at the end of the fiscal
year ended March 31, 2022 increased by ¥1,036 million ($8,465 thousand), and income before income taxes decreased by the same amount.

39

5. BUSINESS COMBINATIONS
For the Year Ended March 31, 2022

Establishment of a holding company through a sole share transfer
On October 1, 2021, the Company has become a holding company
through a sole share transfer of Juroku Bank, Ltd. The Company wasestablished with the aim of expanding business areas by entering new
businesses, etc., strengthening group collaboration through awarenessand behavior reform among executives and employees, optimizing theallocation of group management resources, strengthening auditing andsupervisory functions, and improving the speed of business execution.
The Company acquired all of the shares of the consolidated subsidiaries,
Juroku Research Institute Co., Ltd. and Juroku Computer Service Co.,
Ltd. (trade name was changed to Juroku Densan Digital Service Co.,
Ltd. on March 1, 2022), among the subsidiary shares held by Juroku
Bank, Ltd., which is a wholly-owned subsidiary of the Company, as of
October 1, 2021 through a transfer of shares from Juroku Bank, Ltd.,and these two companies are directly owned by the Company.
In addition, the Company acquired all of the shares of the consolidated subsidiaries, Ltd., Juroku Tokai Tokyo Securities Co., Ltd., Juroku
Card Co., Ltd., Juroku Lease Co., Ltd. and Nobunaga Capital Village
Co., Ltd., and all of the Company’s shares among the subsidiary shares
held by the Juroku Bank, Ltd. as of October 1, 2021 using the methodof receiving dividends in kind from the Juroku Bank, Ltd., and thesefour companies are directly owned by the Company. The Company’s
shares held by the Juroku Bank, Ltd. are allocated and issued with thesame number of the Company’s common shares to one treasury shareheld by the Juroku Bank, Ltd. at the time of the enforcement of theshare transfer and are promptly disposed of in accordance with the provisions of laws and regulations.
The transaction was accounted for as a transaction under common
control in accordance with ASBJ Statement No. 21, “Accounting Standard for Business Combinations” and ASBJ Guidance No. 10, “Guidance on Accounting Standard for Business Combinations and Business
Divestitures.”

Acquisition of Treasury Stock by Consolidated Subsidiaries

On October 1, 2021, the Company has acquired part of the treasury
stock which are owned by noncontrolling interests, in exchange for cashin the amount of ¥1,549 million ($12,657 thousand). This transaction was made to perform flexible implementation of capital measuresin response to changes in the business environment and strengthen thegovernance and increase profitability of the Juroku Card Co., Ltd. andJuroku Credit Guarantee Co., Ltd. The transaction was accounted for
as a transaction with noncontrolling interests in accordance with ASBJ
Statement No. 21, “Accounting Standard for Business Combinations”
and ASBJ Guidance No. 10, “Guidance on Accounting Standard forBusiness Combinations and Business Divestitures.” The Company has
recognized an increase of capital surplus in the amount of ¥4,005 million ($32,723 thousand) for the year ended March 31, 2022.

Acquisition of Treasury Stock by Consolidated Subsidiaries

On December 20, 2021, the Company has acquired part of the treasury
stock which are owned by noncontrolling interests, in exchange for cashin the amount of ¥1,379 million ($11,267 thousand). This transaction was made to perform flexible implementation of capital measuresin response to changes in the business environment and strengthen thegovernance and increase profitability of the Juroku Lease Co., Ltd. The
transaction was accounted for as a transaction with noncontrolling interests in accordance with ASBJ Statement No. 21, “Accounting Standard
for Business Combinations” and ASBJ Guidance No. 10, “Guidance on
Accounting Standard for Business Combinations and Business Divestitures.” The Company has recognized an increase of capital surplus in theamount of ¥3,966 million ($32,405 thousand) for the year ended March
31, 2022.

Sale of Stocks of Consolidated Subsidiary

At a meeting of the Board of Directors held on February 24, 2022, theCompany resolved to partially sell the shares of Juroku Computer Service Co., Ltd. (trade name was changed to Juroku Densan Digital Service
Co., Ltd. on March 1, 2022), a consolidated subsidiary of the Company,

40

to Densan System Holdings Co., Ltd., and partially sold the shares inexchange for cash on March 1, 2022. The aim of this transaction is
to contribute to the digitalization and promotion of DX in regional
companies and government and to the advancement of the Group’s DX
capabilities by combining the foundations and networks in the group’sbusiness areas with the capabilities of solution proposal of Densan System Holdings Co., Ltd. The transaction was accounted for as a transaction under common control in accordance with ASBJ Statement No. 21,“Accounting Standard for Business Combinations” and ASBJ GuidanceNo. 10, “Guidance on Accounting Standard for Business Combinations
and Business Divestitures.” The Company has recognized an increase ofcapital surplus in the amount of ¥6 million ($49 thousand) for the year
ended March 31, 2022.

6. CASH AND DUE FROM BANKS

Cash and due from banks as of March 31, 2022 consisted of the following:
Millions of Yen
2022
Cash
Due from banks
Total

Thousands of U.S.
Dollars
2022¥

61,604
2,074,091¥ 2,135,695$

503,342
16,946,572$17,449,914

A reconciliation between the cash and due from banks in the consolidated balance sheet and the cash and cash equivalents in the consolidated statement of cash flows for the year ended March 31, 2022 was asfollows:
2022

Thousands of
U.S. Dollars
2022¥2,135,695$17,449,914(5,008)(40,918)¥2,130,687$17,408,996

Millions of Yen

Cash and due from banks
Due from banksother than the Bank of Japan
Cash and cash equivalents

7. TRADING SECURITIES AND SECURITIES

Trading securities as of March 31, 2022 consisted of the following:
Millions of Yen
2022
Japanese government bonds
Japanese local government
bonds
Total

Thousands of U.S.
Dollars
2022

¥ 87

$711

28

229

¥115

$940

The Company records net valuation gains and losses as other operating
income and expenses, respectively. For the year ended March 31, 2022, theCompany recorded net valuation losses of ¥2 million ($16 thousand).
Securities as of March 31, 2022 consisted of the following:
2022

Thousands of U.S.
Dollars2022¥ 138,421
204,739$ 1,130,983
1,672,841

549,054

4,486,102

273,266
293,743¥ 1,459,223

2,232,748
2,400,057$ 11,922,731

Millions of Yen

Equity securities
Japanese government bonds
Japanese local government
bonds
Japanese corporate bonds
Other securities
Total

Unsecured loaned securities which borrowers have the right to sell or
pledge in the amount of ¥62,738 million ($512,607 thousand) as ofMarch 31, 2022 were included in Japanese government bonds.

Information regarding available-for-sale and held-to-maturity
securities as of March 31, 2022 was as follows:
March 31, 2022
Securities classified as:
Available-for-sale:
Equity securities
Debt securities
Other
Held-to-maturity—
debt securities

March 31, 2022
Securities classified as:
Available-for-sale:
Equity securities
Debt securities
Other
Held-to-maturity—
debt securities

Millions of Yen
Unrealized Unrealized
Gains
Losses

Cost

Unrealized gain on available-for-sale securities as of March 31, 2022
consisted of the following:¥ 45,695
971,548
287,099¥88,138
1,232
1,453

¥ 1,465
8,516
11,045¥132,368
964,264
277,50762,795281

216

62,860

Cost

Thousands of U.S. Dollars
Unrealized Unrealized
Fair
Gains
LossesValue$ 373,356
7,938,132
2,345,771$720,140
10,066
11,872513,073

2,296$11,970 $1,081,526
69,581 7,878,617
90,244 2,267,399
1,765

513,604

Proceeds from sales of available-for-sale securities for the year ended
March 31, 2022 consisted of the following:
March 31, 2022
Equity securities
Debt securities:
Japanese government bonds
Japanese local government
bonds
Japanese corporate bonds
Other
Total
March 31, 2022
Equity securities
Debt securities:
Japanese government bonds
Japanese local government
bonds
Japanese corporate bonds
Other
Total

2022

Thousands of U.S.
Dollars2022¥ 69,914
12(20,736)$ 571,240
98(169,426)

49,190401,912(1)(8)¥ 49,189$ 401,904

Millions of Yen

Fair
Value
Unrealized gain before
deferred tax on:
Available-for-sale securities
Money held in trust—other
Deferred tax liabilities
Unrealized gain on availablefor-sale securities before
interest adjustments
Noncontrolling interests
Unrealized gain on availablefor-sale securities

Unrealized gain before deferred tax on available-for-sale securities includes ¥490 million ($4,004 thousand) of revaluation gain on availablefor-sale securities as of March 31, 2022, which is held by an investment
limited partnership and similar groups.
Investments in and advances to subsidiaries and associated companies as of March 31, 2022 were ¥840 million ($6,863 thousand).

8. MONEY HELD IN TRUSTMillions of Yen
Proceeds
Realized Gains Realized Losses¥ 33,305¥ 6,643¥ 197
43,318196

151

16,13734

29

43,612339,947¥476,319

26
1,845¥ 8,744—
12,121¥12,498

Thousands of U.S. Dollars
Proceeds
Realized Gains Realized Losses$ 272,122$54,277$ 1,610
353,934

1,602

1,234

131,849278

237

356,336
2,777,572$3,891,813

212
15,075$71,444—
99,035$102,116

In addition, held-to-maturity securities amounting to ¥21 million($172 thousand) were reclassified as available-for-sale securities due to a
decline in the issuer’s credit worthiness as of March 31, 2022. The effectof these reclassifications on the accompanying consolidated financial
statements was immaterial.
Securities other than trading securities (excluding those securities
that do not have a market price and investments in partnerships) whose
fair value significantly declined below the acquisition cost and is considered not likely to be recovered are written down to their respective
fair value, which is recorded as the carrying amount on the consolidatedbalance sheets.
The fair value is deemed to have significantly declined if the yearend fair value declined by 30% or more from the acquisition cost for
securities issued by bankrupt borrowers, virtually bankrupt borrowers,
potentially bankrupt borrowers, and borrowers who are likely to becomebankrupt or to be closely monitored, and if the fair value declined by
50% or more from the acquisition cost for securities issued by normal
borrowers.
The impairment loss on available-for-sale equity securities for theyear ended March 31, 2022, was ¥33 million ($270 thousand), which
consisted of ¥17 million ($139 thousand) of equity securities and ¥16
million ($131 thousand) of debt securities.

Information regarding money held in trust for trading purposes as ofMarch 31, 2022 was as follows:
Carrying AmountThousands of U.S.
Millions of Yen
Dollars
2022
2022
Money held in trust classified
as trading purpose
Money held in trust—otherTotal¥ 6,000$49,024

5,612¥11,61245,853$94,877

9. LOANS AND BILLS DISCOUNTED

Loans and bills discounted as of March 31, 2022 consisted of the following:
Millions of Yen
2022
Bills discounted
Loans on bills
Loans on deeds
Overdrafts
OthersTotal¥

12,02688,196
4,078,798
337,839
4,965¥ 4,521,824

Thousands of U.S.
Dollars
2022$

98,260720,61433,326,236
2,760,348
40,567$ 36,946,025

Loans under the Banking Act and the Act on Emergency Measures for the
Revitalization of Financial Functions are as follows: Loans are corporate
bonds in “Securities” on the consolidated balance sheet (guaranteed forall or part of the redemption of the principal and payment of interest,
and the issuance of such bonds is limited to private placement of securities (Article 2, Paragraph 3 of the Financial Instruments and ExchangeAct).), loans and bills discounted, foreign exchange, accrued interest andadvance payments in “Other Assets”, etc., as well as securities recorded ineach account, such as customers’ liabilities for acceptances and guarantee,
and securities (limited to those under use leases or lease agreements) inthe case of lending of securities that are to be noted.

41Millions of Yen
2022
Loans under bankruptcy/
rehabilitation or similar
proceedings
Doubtful loans
Loans requiring management
Accruing loans past due
three months or more
Restructured loans
Normal loans
Total

¥

12,288

Thousands of U.S.
Dollars2022$

100,400

56,831
2,262

464,344
18,482

19

155

2,243
4,613,945¥ 4,685,326

18,327
37,698,709$ 38,281,935“Loans under bankruptcy/rehabilitation or similar proceedings” are loans
against borrowers who have fallen into bankruptcy due to reasons suchas the commencement of bankruptcy proceedings, the commencementof rehabilitation proceedings, or the application for the commencementof rehabilitation proceedings, and the commencement of rehabilitation
proceedings, as well as similar loans.
“Doubtful loans” are claims in which the debtor has not yet reacheda state of bankruptcy, but whose financial position and operating results
have deteriorated and there is a high possibility that the principal of
the receivables and interest cannot be collected in accordance with thecontract. Loans under bankruptcy/rehabilitation or similar proceedings
are excluded from doubtful loans.
“Accruing loans past due three months or more” are defined as loans
and bills discounted for which principal or interest is past due more than
three months from the date following the prescribed payment date. Loans
under bankruptcy/rehabilitation or similar proceedings and doubtful
loans are excluded from accruing loans past due three months or more.
“Restructured loans” are defined as loans and bills discounted inwhich the Company is providing financial support to a borrower by areduction of interest rates, deferral of interest payments, extension of
maturity dates, or reduction of the face or maturity amount of the debt
or accrued interest. Loans under bankruptcy/rehabilitation or similar
proceedings, doubtful loans and accruing loans past due three months ormore are excluded from restructured loans.
“Normal loans” are those that do not have any particular problems
with the financial position and operating results of the borrower andclassified other than loans under bankruptcy/rehabilitation or similar proceedings, doubtful loans, accruing loans past due three months or more
and restructured loans.
Bills discounted are accounted for as financing transactions in accordance with “Accounting and Auditing Treatments on the Application of Accounting Standards for Financial Instruments in the Banking
Industry” (JICPA Industry-specific Committees Practical Guideline No.
24) issued by the Japanese Institute of Certified Public Accountants. The
Bank has rights to sell or pledge accepted commercial bills discounted
and foreign bills of exchange bought without restrictions. The total fairvalue of commercial bills discounted and foreign bills of exchange bought
included in foreign exchanges as of March 31, 2022 were ¥12,363 million ($101,013 thousand).

Changes in Presentation

In accordance with the Cabinet Office Ordinance Partially Amending
the Enforcement Regulations of the Banking Act, etc. (Cabinet Office
Ordinance No. 3 of January 24, 2020) that came into effect on March 31,
2022, the classification of “risk management loans” under the Banking
Act is presented in accordance with the classification of disclosure loans
based on the Act on Emergency Measures for the Revitalization of Financial Functions.

42

10. FOREIGN EXCHANGES

Foreign exchanges as of March 31, 2022 consisted of the following:
Millions of Yen
2022
Assets:Due from foreign
correspondent accountForeign bills of exchange bought
Foreign bills of exchange receivable
Total
Liabilities:
Due to foreign correspondent accountForeign bills of exchange payable
Total

Thousands of U.S.
Dollars
2022¥7,952$64,973

337
572¥8,861

2,753
4,674$72,400¥1,165430¥1,595$ 9,519
3,513$13,032

11. OTHER ASSETS

Other assets as of March 31, 2022 consisted of the following:
2022

Thousands of U.S.
Dollars
2022

4,338
11,016
18,256
6,995
74,224¥ 114,829$ 35,444
90,007
149,163
57,153
606,455$ 938,222

Millions of Yen

Accrued income
Accounts receivable
Installment receivables
Derivative assets
Other
Total

¥

12. PREMISES AND EQUIPMENT

Premises and equipment as of March 31, 2022 consisted of the following:
2022

Thousands of
U.S. Dollars
2022¥43,437
10,576
3
4,297¥58,313$354,906
86,412
25
35,109$476,452

Millions of Yen

Land
Building
Construction in progress
Other
Total

The accumulated depreciation of premises and equipment as of March
31, 2022 amounted to ¥62,558 million ($511,137 thousand).

13. CUSTOMERS’ LIABILITIES FOR ACCEPTANCES AND
GUARANTEESAll contingent liabilities arising from acceptances and guarantees arereflected in acceptances and guarantees. As a contra account, the customers’ liabilities for acceptances and guarantees are presented as assets,
representing the Company’s right of indemnity from applicants.
The Enforcement Ordinance of the Banking Law was revised on
April 17, 2007, and effective from the fiscal years beginning on and after
April 1, 2006. The Company offsets customer’s liabilities for acceptanceand guarantees with acceptance and guarantees of ¥62,847 million($513,498 thousand) arising from guarantees of private placement securities as of March 31, 2022.

14. ASSETS PLEDGED

Assets pledged as collateral and their relevant liabilities as of March 31,
2022 were as follows:
2022

Thousands of
U.S. Dollars
2022¥ 884,605
1,187,313
94¥ 2,072,012$ 7,227,756
9,701,062
768$ 16,929,586¥ 105,140$

Millions of Yen
Assets pledged as collateral:
Securities
Loans and bills discounted
Other assets
Total
Relevant liabilities to above assets:
Deposits
Payables under repurchaseagreements
Payables under securities
lending transactions
Borrowed money
Total

133,747

859,057
1,092,794

87,538715,238

1,384,230¥ 1,710,655

11,309,993$13,977,082

Additionally, initial margins of futures markets, cash collateral received
for financial instruments liabilities, guarantee deposits and initial margins of Central Counterparty included in other assets were as follows:
2022

Thousands of U.S.
Dollars2022¥ 2,215$ 18,098

3,489

28,507

1,884

15,39336,345296,961¥43,933$ 358,959

Millions of Yen

Initial margins of future
markets
Cash collateral received forfinancial instruments liabilities
Guarantee deposits
Initial margins of Central
Counterparty
Total

Borrowed money and lease obligation as of March 31, 2022 consisted of
the following:
2022

Thousands of
U.S. Dollars
2022¥1,405,797$11,486,208——

Millions of Yen

Borrowings due serially to December 2026 with weighted averageinterest rates of 0.00% in 2022
Lease obligation

Weighted average interest rates of lease obligation are not represented
because the lease obligation is disclosed on the balance sheet without
deducting the interest portion which is included in the amount of thelease obligation.
Annual maturities of borrowings as of March 31, 2022 were as follows:
As of March 31, 2022
Year Ending March 31
2023
2024
2025
2026
2027
2028 and thereafter
Total

Millions of Yen¥1,227,702
113,770
62,475
1,435
415—¥1,405,797

Deposits as of March 31, 2022 consisted of the following:
2022

Thousands of U.S.
Dollars2022¥ 442,580
3,673,361
48,122
99,7901,892,701
68,737¥ 6,225,291$ 3,616,145
30,013,571
393,186
815,344
15,464,507
561,623$50,864,376

Millions of Yen

Thousands of
U.S. Dollars$10,031,065
929,569
510,458
11,725
3,391—$11,486,208

There was no lease obligation as of March 31, 2022.

17. OTHER LIABILITIESOther liabilities as of March 31, 2022 consisted of the following:
Millions of Yen

15. DEPOSITS

Current deposits
Ordinary deposits
Deposits at notice
Savings deposits
Time deposits
Other deposits
Total

16. BORROWED MONEY AND LEASE OBLIGATION

2022
Domestic exchange settlement
account, credit*
Income taxes payable
Accrued expenses
Deferred income
Derivative liabilities
Accounts payable
Other
Total

¥

158

3,005
1,168
17,496
10,674
7,382
22,605¥62,488

Thousands of
U.S. Dollars
2022
$

1,291

24,553
9,543
142,953
87,21360,315
184,697$ 510,565* The domestic exchange settlement account consisted of outstanding
remittance bills from other banks and/or collection bills for which theCompany has received notices for payment from other banks, whichhave not been settled.

43

18. RETIREMENT AND PENSION PLANS

The consolidated subsidiary engaged in banking business (the “Bank”),
has a contributory funded defined benefit pension plan, lump-sum payment severance plan for employees and defined contribution pension
plan. The Bank contributed certain assets to the employee retirement
benefit trust for its contributory funded defined benefit pension plan andthe assets in this trust are qualified as plan assets. Certain subsidiaries
other than above have lump-sum payment severance plans for employees and apply the simplified method to state the liability based on theamount that would be paid if employees retired at the consolidated balance sheet date.
(1) The changes in defined benefit obligation for the year ended March
31, 2022 were as follows:
2022

Thousands of
U.S. Dollars
2022¥41,803
1,491
141
99
(2,184)¥41,350$341,556
12,182
1,152
809(17,845)$337,854

Millions of Yen

Balance at beginning of year
Current service cost
Interest cost
Actuarial losses
Benefits paid
Balance at end of year

(2) The changes in plan assets for the year ended March 31, 2022 wereas follows:
2022

Thousands of
U.S. Dollars
2022¥47,992$392,123

1,440

11,766

919

7,509

695

5,678

(1,648)¥49,398(13,465)$403,611

Millions of Yen

Balance at beginning of year
Expected return on plan
assetsActuarial gains
Contributions from theemployer
Benefits paid
Balance at end of year

(3) Reconciliation between the liability recorded in the consolidated balance sheet and the balances of defined benefit obligation and plan assets
as of March 31, 2022 was as follows:
2022

Thousands of
U.S. Dollars
2022¥ 35,178$ 287,425(49,398)(14,220)(403,611)(116,186)

6,172

50,429¥ (8,048)$ (65,757)

Millions of Yen

Funded defined benefit
obligation
Plan assets
Unfunded defined benefit
obligation
Net asset arising from defined
benefit obligation

Millions of Yen
2022
Liability for retirement benefits
for employees
Asset for retirement benefits for
employees
Net asset arising from defined
benefit obligation

44¥

Thousands of
U.S. Dollars
2022

6,172

$ 50,429(14,220)(116,186)¥ (8,048)$ (65,757)(4) The components of net periodic benefit costs for the year ended
March 31, 2022 were as follows:
Thousands of
U.S. Dollars
2022

Millions of Yen
2022¥ 1,491
141(1,440)(282)(1,469)¥(1,559)

Service cost
Interest cost
Expected return on plan assets
Recognized actuarial gains
Past service cost
Net periodic benefit costs$ 12,182
1,152(11,766)(2,304)(12,002)$ (12,738)(5) Amounts recognized in other comprehensive income (before income
tax effect) in respect of defined retirement benefit plans for the year
ended March 31, 2022 were as follows:
Thousands of
U.S. Dollars
2022

Millions of Yen
2022¥(1,469)539¥ (930)

Past service cost
Actuarial gains
Total$ (12,002)
4,404$ (7,598)(6) Amounts recognized in accumulated other comprehensive income(before income tax effect) in respect of defined retirement benefit plans
as of March 31, 2022 were as follows:
Thousands of
U.S. Dollars
2022

Millions of Yen
2022
Unrecognized past service cost
Unrecognized actuarial gains
Total¥(1,836)(2,931)¥(4,767)$ (15,001)(23,948)$ (38,949)(7) Plan assets(a) Components of plan assets
Plan assets consisted of the following:2022
Debt investments
Equity investments
General account for life insurance
Others
Total

26%
44
17
13
100%

Note: The retirement benefit trust that contributed to the pension planis included in the plan assets and constitutes 20% of the total
plan assets as of March 31, 2022.
(b) Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined considering
the current and future asset portfolio and the long-term rates of return
which are expected currently and in the future from the variety of plan
assets in the asset portfolio.
(8) Assumptions used for the year ended March 31, 2022 were set forth
as follows:
2022
Discount rate:
Lump-sum payment
Pension plan
Expected rate of return onplan assets

19. ASSET RETIREMENT OBLIGATIONS

Asset retirement obligations are recognized for obligations of restoringleased buildings, such as branch premises, to their original state, basedon the real estate lease contracts and asbestos removal costs.
Asset retirement obligations are calculated based on the estimatedavailable periods of 4 to 47 years depending on the expected useful livesof buildings using discount rates from 0.000% to 2.461%.
The changes in asset retirement obligations, which are included inother liabilities, for the year ended March 31, 2022 were as follows:
Millions of Yen
2022
Balance at beginning of year
Reconciliation associatedwith passage of time
Balance at end of year

20. EQUITY

Thousands of
U.S. Dollars
2022

¥203

$1,658

4

33

¥207

$1,691

Japanese banks are subject to the Companies Act of Japan (the “CompaniesAct”). The significant provisions in the Companies Act that affect financial
and accounting matters are summarized below:
a. Dividends
Under the Companies Act, companies can pay dividends at any time
during the fiscal year, in addition to the year-end dividend upon resolution at the shareholders’ meeting. Additionally, for companies that meetcertain criteria, the Board of Directors may declare dividends (except
for dividends-in-kind) at any time during the fiscal year if the company
has prescribed so in its articles of incorporation. However, the Bank
cannot do so because it does not meet the criteria. Semiannual interim
dividends may also be paid once a year upon resolution by the Boardof Directors if the articles of incorporation of the company so stipulate.
The Companies Act provides certain limitations on the amounts available for dividends or the purchase of treasury stock. The limitation isdefined as the amount available for distribution to the shareholders, but
the amount of net assets after dividends must be maintained at no lessthan ¥3 million.
b. Treasury Stock and Treasury Stock Acquisition Rights
The Companies Act also provides for companies to purchase treasury
stock and dispose of such treasury stock by resolution of the Boardof Directors. The amount of treasury stock purchased cannot exceed
the amount available for distribution to the shareholders which isdetermined by a specific formula. Under the Companies Act, stockacquisition rights are presented as a separate component of equity. The
Companies Act also provides that companies can purchase both treasury
stock acquisition rights and treasury stock. Such treasury stock acquisition rights are presented as a separate component of equity or deducted
directly from stock acquisition rights.
Japanese Banking Law also provides that an amount equal to at least
20% of the aggregate amount of cash dividends and certain other cash
payments, which are made as an appropriation of retained earnings applicable to each fiscal period, shall be set aside as a legal reserve until the
total additional paid-in capital and legal reserve equals 100% of statedcapital. The amount of total additional paid-in capital and legal reservethat exceeds 100% of stated capital can be transferred to retained earnings by resolution of the shareholders, which may be available for dividends. The Juroku Bank, Ltd.’s legal reserve amount, which is included
in retained earnings, totals ¥20,155 million ($164,678 thousand) as ofMarch 31, 2022.

21. STOCK OPTIONSThe stock options outstanding as of March 31, 2022 are as follows:
Stock
OptionPersons
GrantedNumber of
Options
GrantedDate ofGrant

1st Stock
Option11 directors(Juroku
Bank, Ltd.)2,780 shares2013.7.23¥ 1 From October 1, 2021($0.01) to July 23, 2043

2nd Stock 11 directors(Juroku
Option Bank, Ltd.)6,240 shares2014.7.23¥ 1 From October 1, 2021($0.01) to July 23, 2044

3rd Stock
Option10 directors(Juroku
Bank, Ltd.)3,600 shares2015.7.23¥ 1 From October 1, 2021($0.01) to July 23, 2045

4th Stock
Option7 directors
8 executive
officers(Juroku
Bank, Ltd.)

5,200 shares2016.7.22¥ 1 From October 1, 2021($0.01) to July 22, 2046

5th Stock
Option7 directors
8 executive
officers(Juroku
Bank, Ltd.)

6,100 shares2017.7.21¥ 1 From October 1, 2021($0.01) to July 21, 2047

6th Stock
Option7 directors
9 executive
officers(Juroku
Bank, Ltd.)8,530 shares2018.7.23¥ 1 From October 1, 2021($0.01) to July 23, 2048

7th Stock
Option7 directors
9 executive
officers(Juroku
Bank, Ltd.)

13,100 shares2019.7.23¥ 1 From October 1, 2021($0.01) to July 23, 2049

8th Stock
Option6 directors
9 executive
officers(Juroku
Bank, Ltd.)

15,900 shares2020.7.22¥ 1 From October 1, 2021($0.01) to July 22, 2050

6 directors
3 executive
officers
9th Stock (the Company)
6 directors 29,470 shares
Option 12 executive
officers(Juroku
Bank, Ltd.)

2021.12.23¥ 1 From December 24, 2021($0.01) to December 23, 2051

Exercise
Price

Exercise
PeriodNote: The 1st to 8th Stock Option are the rights issued by the Company
to the holders of stock option rights issued by the Juroku Bank,
Ltd. due to the establishment of the Company through the sole
share transfer of the Juroku Bank, Ltd.

0.084%
0.382
3.000

The amount to be paid to defined contribution pension plan was ¥373
million ($3,048 thousand) for the year ended March 31, 2022.

45

The stock option activity is as follows:
1st Stock
Option2nd Stock
Option

3rd Stock
OptionYear Ended March 31, 2022
Non-vested
March 31, 2021—Outstanding
GrantedCanceled
VestedMarch 31, 2022—Outstanding

—
2,780
—
2,780
—

—
6,240
—
6,240
—

—
3,600
—
3,600
—

4th Stock 5th Stock
OptionOption(Shares)
—
5,200
—
5,200
—

—
6,100
—
6,100
—

Volatility of stock price (%):
Estimated remaining
outstanding period (years):
Estimated dividend (per share):

—
2,780
—
—
2,780

—
6,240
—
—
6,240

—
3,600
—
—
3,600

—
5,200
—
—
5,200

—
6,100
—
—
6,100

Exercise price¥ 1($0.01)——¥3,650($29.82)¥ 1($0.01)——¥3,200($26.15)¥ 1($0.01)——¥4,640($37.91)¥ 1($0.01)——¥2,390($19.53)¥ 1($0.01)——¥3,170($25.90)

Average stock price at exercise
Fair value price at grant date

6th Stock
Option7th Stock
Option8th Stock
Option

—
8,530
—
8,530
—

—
13,100—13,100——15,900—15,900——29,470—16,84012,630March 31, 2021—Outstanding
VestedExercised
Canceled
March 31, 2022—Outstanding

—
8,530
540
—
7,990

—
13,100710—
12,390—15,900790—
15,110—16,840——16,840Exercise price¥ 1($0.01)¥2,112($17.26)¥2,587($21.14)¥ 1($0.01)¥2,112($17.26)¥2,068($16.90)¥ 1($0.01)¥2,112($17.26)¥1,670($13.64)¥ 1($0.01)——¥1,748($14.28)

Fair value price at grant date

9.2

8.7

5.6

5.1

¥70
($0.57)0.484¥70($0.57)0.328¥70($0.57)(0.337)¥70($0.57)(0.052)

6th Stock 7th Stock 8th Stock 9th Stock
Option Option Option Option
32.072 32.063 31.476 34.594

Risk free interest rate (%):

4.3

4.2

3.6

4.3

¥70
($0.57)(0.116)¥70($0.57)(0.229)¥70($0.57)(0.153)¥100($0.82)(0.096)

22. OTHER OPERATING INCOME

Other operating income for the year ended March 31, 2022 consisted of
the following:
2022

Thousands of U.S.
Dollars2022¥ 1,730$ 14,135

24,811

202,7215,615¥32,156

45,878$ 262,734

Millions of Yen

Gains on sales of Japanese
government bonds and other
Income on lease transaction
and installment receivables
Other
Total

Millions of Yen
2022
Gain on sales of stock andother securities
Other
Total

Thousands of U.S.
Dollars
2022¥7,013$57,300

641¥7,654

5,237$62,537

24. GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses for the year ended March 31, 2022
consisted of the following:
2022

Thousands of U.S.
Dollars
2022¥18,359
4,706
21,495¥44,560$150,004
38,451
175,627$364,082

Millions of Yen

Note: For the 1st to 8th Stock Options, the fair valuation rate as of theinitial date granted by the Juroku Bank, Ltd. is described.
Salaries and wages
Commission fee
Other
Total

The Bank and its subsidiaries are subject to Japanese national and local
income taxes, which in the aggregate, resulted in a normal effective
statutory tax rate of approximately 29.92% for the year ended March
31, 2022.
The tax effects of significant temporary differences and tax loss carryforwards, which result in deferred tax assets and liabilities as of March
31, 2022 were as follows:
2022

Thousands of U.S.
Dollars2022¥ 6,672
6,671$ 54,514
54,506

1,851

15,124

1,274
2,102(8,435)
10,135

10,40917,175(68,919)
82,809(20,736)(169,425)(2,198)(17,959)(955)(7,803)(1,429)(25,318)¥ (15,183)(11,676)(206,863)$ (124,054)

Millions of Yen
Deferred tax assets:
Allowance for loan losses
Write-down of securities
Liability for retirement
benefits for employees
Depreciation
Other
Less: valuation allowance
Total
Deferred tax liabilities:
Unrealized gain on
available-for-sale securities
Net defined benefit asset
Gain on contribution ofavailable-for-sale securities to
employees’ retirement benefit trusts
Other
Total
Net deferred tax liabilities

A reconciliation between the normal effective statutory tax rate and theactual effective tax rate reflected in the accompanying consolidated statement of income for the year ended March 31, 2022 was as follows:
2022

23. OTHER INCOME

Other income for the year ended March 31, 2022 consisted of the following:

VestedAverage stock price at exercise

Volatility of stock price (%):
Estimated remaining
outstanding period (years):
Estimated dividend (per share):

5.9¥70($0.57)0.322

9th Stock
OptionYear Ended March 31, 2022
Non-vested
March 31, 2021—Outstanding
GrantedCanceled
VestedMarch 31, 2022—Outstanding

1st Stock 2nd Stock 3rd Stock 4th Stock 5th Stock
Option Option Option Option Option
30.795 30.872 30.851 29.674 31.781

Risk free interest rate (%):

VestedMarch 31, 2021—Outstanding
VestedExercised
Canceled
March 31, 2022—Outstanding

26. INCOME TAXESThe Assumptions Used to Measure the Fair Value of the Stock Option(1) Estimate method: Black-Scholes option pricing model(2) Main basic amount and the method of estimation

25. OTHER EXPENSE

Normal effective statutory tax rate
Expenses not deductible for income
tax purposes
Income not taxable for income tax
purposes
Per capita tax
Net change in valuation allowance
Elimination of dividend income
Consolidated adjustment for gains
on sale of shares of subsidiaries
Other—net
Actual effective tax rate

29.92%
1.12(20.81)
0.26
13.87
3.51
4.32
1.41
33.61%

27. LEASES

Finance Leases(Lessee)A subsidiary leases certain premises.
There was no rental expense including lease payments under thefinance leases for the year ended March 31, 2022.
(Lessor)A subsidiary leases certain equipment and other assets.
The net investments in leases as of March 31, 2022 were as follows:

Gross lease receivables
Unguaranteed residual values
Deferred interest income
Total

2022

46

Loss on sales of stock and othersecurities
Write-down of stock and othersecurities
Other
Total

¥ 461

Thousands of U.S.
Dollars
2022¥53,339
1,353(4,449)¥50,243$435,812
11,055(36,351)$410,516

Maturities of lease receivables for finance leases that were deemed totransfer ownership of the leased assets to the lessee are as follows:
As of March 31, 2022
Year Ending March 31
2023
2024
2025
2026
2027
2028 and thereafter
Total

Millions of Yen¥1,362
1,158
835
503
310
456
¥4,624

Thousands of
U.S. Dollars$11,128
9,462
6,822
4,110
2,533
3,726
$37,781

Maturities of investment in leases for finance leases that were deemed
not to transfer ownership of the leased assets to the lessee are as follows:
As of March 31, 2022
Year Ending March 31
2023
2024
2025
2026
2027
2028 and thereafter
Total

Millions of Yen¥14,992
12,489
9,687
6,786
4,231
5,154
¥53,339

Thousands of
U.S. Dollars$122,494
102,043
79,14855,446
34,57042,111$435,812

Operating Leases(Lessee)
The minimum rental commitments under noncancelable operatingleases as of March 31, 2022 were as follows:
Millions of Yen
2022
Due within one year
Due after one year
Total

¥ 241
1,430
¥ 1,671

Thousands of U.S.
Dollars2022$ 1,969
11,684$13,653(Lessor)
Expected future rental revenues under operating leases as of March 31,
2022 were as follows:

Other expense for the year ended March 31, 2022 consisted of the following:
Millions of Yen

2022

Thousands of U.S.
Dollars2022

Millions of Yen

Millions of Yen
2022
Due within one year
Due after one year
Total

¥ 474
598
¥ 1,072

Thousands of U.S.
Dollars2022$3,873
4,886$8,759$3,767

21

172

590
¥1,072

4,820$8,75947

28. FINANCIAL INSTRUMENTS AND RELATEDDISCLOSURES(1) Group Policy for Financial Instruments
The Group provides banking services and comprehensive financial services including a leasing business. The Group meets the needs of local
business through providing various products and services in the banking
services, lending services, trading of securities, securities investments
and other financial services such as a derivatives business.
In the core banking business, in addition to procurement throughthe acceptance of deposits, the Group raises funds through borrowings
and other means, manage loans with a focus on business loans and housing loans, and manage securities investment with a focus on bonds.
In this way, since the Group has financial assets and liabilities
mainly with interest rate fluctuations, the Group conducts comprehensive management of assets and liabilities (ALM) so that adverse effects
from interest rate fluctuations do not occur. As part of this, the Groupalso conducts derivative transactions.
(2) Nature and Extent of Risks Arising from Financial Instruments
The loans and bills discounted are to general business enterprises, individuals, and local public bodies, and there is a risk (credit risk) that thevalue of loaned money is reduced by financial deterioration of the borrower and a risk (interest risk) of losses due to changes in interest rates.
In securities, the Group holds domestic bonds, foreign securities,
stocks, investment trusts, and investment partnerships and so forth forinvestment purposes. Also, the Group holds certain domestic bonds
for held-to-maturity purposes. In trading securities, the Group holds
domestic bonds for trading. These items have interest risk, risk ofchanges in price, credit risk, and market liquidity risk. Market liquidity
risk represents the risk that market trades cannot be performed due tomarket turmoil and that the Group may suffer losses due to significantly
unfavorable financing conditions.
Deposits and borrowed money hold interest risk and cash flow risk
(liquidity risk). Cash flow risk refers to the risk that securing necessaryfinancing becomes difficult or significant unfavorable financing conditions result in recording of loss due to a mismatch of periods between
operations and financing and unexpected outflows of money. Derivativetransactions related to interest are comprised of interest-rate swap agreements, cap agreements, floor agreements, and interest futures.
Derivative transactions related to currency are comprised of exchange contracts, non-deliverable forwards (NDF), currency swap agreements, and currency option contracts. Derivative transactions related tosecurities are comprised of bond futures, options on bond futures, OTC
bond options, stock index futures, options on stock index futures, andindividual security options.
The Group utilizes derivative transactions to meet customer needs
and to control risk so that interest risk, risk of changes in prices, andforeign currency exchange risk are not excessive. In trading transactions,
the Group utilizes derivative transactions to earn a profit and to accumulate the know-how related to the transactions and understand market
trends.
The derivative transactions the Group utilizes are exposed to interest risk, currency exchange risk, the risk of change in prices, and credit
risk. In utilizing derivative transactions, the Group performs effective
covering of transactions to meet customers’ needs, and in trading transactions, the Group preliminarily establishes a risk limit to avoid exposing the Group to an excessive degree of market risk. Transactions suchas listed futures are exposed to limited credit risk and OTC transactions
such as interest swaps are assumed to have low risk since the counterparties are comprised of highly credible financial institutions and companies.
(3) Risk Management for Financial Instruments
Integrated risk
The Group defines integrated risk management policies and regulations,and strengthens integrated risk management to ensure the soundness ofmanagement.
The Group monitors various risks holistically including measurement by statistical methods and aims to control risks within the rangeof management vitality. Integrated risk is managed by the Group Risk
Supervisory Division and is reported generally quarterly to the Group
Risk Compliance Meeting and Group Risk Compliance Committee andgenerally semiannually to the Board of Directors’ meetings. Necessary
actions such as risk control are taken promptly.

48

Credit risk management
Credit risk refers to the risk of incurring losses due to a decrease or loss
in the value of assets as a result of deterioration in the financial situationof a creditor.
Regarding credit risk management, the Group defines a credit
rating system where the Group evaluates the degree of credit risk by
an integrated scale objectively and discusses countermeasures with theGroup companies as necessary in addition to monitoring the status ofcredit risk management at the Group companies and the risk of credit
concentration throughout the Group.
Market risk management (foreign exchange risk and interest rate risk)
Market risk refers to the risk that the value of assets and liabilities
will fluctuate due to fluctuations in various market risk factors such as
interest rates, foreign exchange rates, and stocks, and the risk of incurring losses due to fluctuations in the earnings generated from assets andliabilities.
Under integrated risk management, the consolidated subsidiaries
engaged in banking business semi-annually allocate risk capital to eachbusiness (deposit, loan, investment securities and other securities) andestablish a cap on the investment amount and a maximum loss amountand matter to be discussed (level of loss to be re-examined) and department in charge handles market transactions within these risk limits
expeditiously and effectively.
The Group holds financial instruments which are exposed to market
risks (e.g. interest rate risk, price-volatility risk and exchange risk) suchas loans and bills discounted, securities, deposits, negotiable deposits,
borrowed money and corporate bonds. To manage these market risks,
the Group calculates VaR, which is used for quantitative analysis.
The Group calculates VaR of yen-denominated bonds (including
private placement bonds), borrowed money and corporate bonds thatare exposed to interest rate risk by the variance-covariance method (sixmonths holding period with confidence interval of 99%, observation
period one year). The VaR of these financial instruments amounted to¥22,170 million ($181,142 thousand) in aggregate as of March 31,
2022.
The Group calculates VaR of investment securities that are exposed
to price-volatility risk by the variance-covariance method (six months
holding period with confidence interval of 99%, observation period oneyear). The VaR of these financial instruments amounted to ¥42,442 million ($346,777 thousand) in aggregate as of March 31, 2022.
In addition, the Group calculates VaR of securities, excluding investment securities, which are exposed to interest rate risk or the pricevolatility risk by the variance-covariance method (six months holding
period with confidence interval of 99%, observation period one year).
The VaR of these financial instruments amounted to ¥39,326 million($321,317 thousand) in aggregate as of March 31, 2022.
The Group compares VaR calculated by the formula with the actualfluctuation of realized gains and losses to verify that the calculated VaRreflects market risks with a high degree of accuracy.
However, VaR might not reflect market risks in circumstances suchas unforeseen wide fluctuations in market circumstances because VaRreflects a certain amount of market risks calculated statistically based on
historical fluctuation.
Liquidity risk management
Liquidity risk refers to cash flow risk and market liquidity risk. Cashflow risk refers to the risk of incurring losses due to a mismatch between
the investment and funding periods or an unexpected outflow of funds,
which makes it difficult to secure the necessary funds, or due to being
forced to raise funds at a significantly higher interest rate than usual.
Market liquidity risk refers to the risk of incurring losses due to the inability to trade in the market due to market turmoil or other factors or
being forced to trade at a significantly more disadvantageous price thanusual. The Company monitors the status of cash flow and liquidity risk
and matters affecting cash flow and has established a system to respondpromptly and accurately even if an unforeseen situation occurs.
(4) Financial Instruments Categorized by Fair Value Hierarchy
Fair values of financial instruments are calculated based on certain assumptions; therefore, fair values may vary according to the assumptions
used.

The amount recorded on the consolidated balance sheet, market value, the difference between these, and the market value for each level are as follows. Shares without market prices and investment in partnerships are not included in the following table.
The fair value of financial instruments is categorized into the following three levels according to the observability and significance of the inputs
used in making fair value measurements:
Level 1: Fair values measured by using observable inputs, i.e. quoted prices in active markets for assets or liabilities that are the subject of the measurement.
Level 2: Fair values measured by using observable inputs other than Level 1 inputs.
Level 3: Fair values measured by using unobservable inputs.
If multiple inputs are used that have a significant impact on the measurement of fair value, fair value is classified at the lowest level in the fair value
measurement among the levels to which each of these inputs belongs.
(a) Financial instruments measured at fair value:
March 31, 2022
Securities(available-for-sale securities)
Japanese equity securities
Japanese government bonds
Japanese local government
bonds
Japanese corporate bonds
Other securities
Total assets

Level 1Millions of Yen
Carrying Amount
Level 2
Level 3

¥ 318,463¥ 945,113¥ 28¥ 1,263,604

129,724
186,434

2,644
18,305——

132,368
204,739—

549,054—549,054—2,305¥ 318,463

210,443
164,667¥ 945,113

28
—
¥ 28

210,471
166,972¥ 1,263,604

Derivative transactions
Interest-related transaction
Currency-related transaction
Credit derivative transaction

—
—
—
—

¥ (3,664)
350(4,014)—¥ (15)
—
—
(15)

¥

Total

March 31, 2022
Securities(available-for-sale securities)
Japanese equity securities
Japanese government bonds
Japanese local government
bonds
Japanese corporate bonds
Other securities
Total assets(3,679)350(4,014)(15)

Thousands of U.S. Dollars
Carrying Amount
Level 1
Level 2
Level 3
Total
$2,602,034$7,722,142

1,059,923
1,523,278

21,603
149,563—4,486,101—
18,833$2,602,034

1,719,446
1,345,429$7,722,142

229
1,719,675—
1,364,262$ 229 $ 10,324,405

—
—
—
—

$ (29,937)
2,860(32,797)—$ (123) $
—
—
(123)

Derivative transactions
Interest-related transaction
Currency-related transaction
Credit derivative transaction$ 229 $ 10,324,405——

1,081,526
1,672,841—

4,486,101(30,060)
2,860(32,797)(123)(*1) Investment trusts to which the transitional measures stated in Paragraph 26 of the “Implementation Guidance on Accounting Standard for Fair
Value Measurement” (ASBJ Guidance No. 31, July 4, 2019) are not included in the above table. The amount of the investment trusts on the consolidated balance sheet is ¥110,535 million ($903,138 thousand).
(*2) Derivative transactions recorded in other assets and liabilities are presented collectively. Net receivables and liabilities arising from derivative transactions are presented in net amounts, and items that constitute net liabilities in total are presented in parentheses.
(b) Financial instruments other than those measured at fair value:
Cash and due from Banks, negotiable certificates of deposit, payables under repurchase agreements and payables under securities lending transactions
are settled in a short period of time, and the fair value approximates the carrying amount. Therefore, the notes are omitted.
Millions of Yen
Fair Value
March 31, 2022
Securities (held-to-maturity—debt securities)
Corporate bonds
Loans and bills discounted
Reserve for possible loan losses

Level 1

Level 2

Level 3——¥

Total assets

—
—

—
—

4,510,646¥ 4,573,506

Deposits
Borrowed money
Total liabilities———¥ 6,225,324
1,405,773¥ 7,631,097

—
—
—

Total

62,860¥Carrying Amount62,860Difference¥¥

4,510,646¥ 4,573,506

62,795
4,521,824(24,429)
4,497,395¥ 4,560,190¥ 6,225,324
1,405,773¥ 7,631,097¥ 6,225,291
1,405,797¥ 7,631,088¥

65

13,251¥13,316

¥

33
(24)
9

Thousands of U.S. Dollars
Fair Value
March 31, 2022
Securities (held-to-maturity—debt securities)
Corporate bonds
Loans and bills discounted
Reserve for possible loan losses

Level 1

Level 2

Level 3
513,604

Total$

513,604

Carrying Amount

Difference

$

$

$

—

—

$

Total assets

—
—

—
—

36,854,694$ 37,368,298

36,854,694$ 37,368,298

513,073
36,946,025(199,600)
36,746,425$ 37,259,498

Deposits
Borrowed money
Total liabilities———$ 50,864,646
11,486,012$ 62,350,658———$ 50,864,646
11,486,012$ 62,350,658$ 50,864,376
11,486,208$ 62,350,584

531

108,269$ 108,800

$

270
(196)
74

* Allowances for general doubtful accounts and allowances for individual doubtful accounts corresponding to loans are deducted.

49

(Note 1) Explanation of evaluation techniques used for the measurement ofmarket value and inputs related to the measurement of market value
AssetsSecurities
Securities whose unadjusted quoted prices in active markets are available are categorized as Level 1. This mainly includes listed stocks andgovernment bonds.
Securities whose quoted prices are not considered to be in active
markets due to low market transactions are categorized as level 2. This
mainly includes Japanese local government bonds and corporate bonds.
When the quoted price is not available, the fair value is measured byusing valuation techniques such as the discounted present value methodof future cash flows. The Company makes maximum use of observable
inputs for valuation techniques, which include TIBOR, prepayment
rate, credit spread, bankruptcy probability, and bankruptcy loss rate.
Securities whose fair values are measured by using significant unobservable inputs are categorized as Level 3.
Loans and Bills Discounted
The fair values of loans are measured by discounting the total amountof principal and interest at a discount rate that reflects credit risk, etc.
in the market interest rate for each type of loan, internal rating, andclassification based on period. For loans with variable interest rates, thefair value approximates the carrying value because it reflects the market
interest rate in the short term as long as the credit status of the borrower
has not changed significantly. In addition, as for loans to legally bankrupt borrowers, virtually bankrupt borrowers, and potentially bankrupt
borrowers, the fair value is calculated by deducting the allowance, whichis calculated based on the discounted present value of the estimatedfuture cash flow or the estimated collection of cash from collateral andguarantee, from the balance in the consolidated balance sheet date.
Therefore, the fair value approximates the carrying amount. The fairvalue is classified as a level 3 fair value.
Liabilities
Deposits
For demand deposits, the amount payable immediately on demand asof the consolidated balance sheet date is considered to be the fair value.
Time deposits are grouped by maturity lengths and their fair value iscalculated by discounting future cash flows with the market interest
rate. For the deposits and negotiable certificates of deposits with therepayment period within one year, the fair value approximates the carrying amount due to their short-term maturities. The fair value is classified as a level 2 fair value.
Borrowed Money
For borrowed money, the present value is calculated by discounting thetotal principal and interest of the borrowings divided into certain periods by the interest rate that is taken into account the remaining termof the borrowing and credit risk. For borrowed money with variableinterest rates, the fair value approximates the carrying value because it
reflects the market interest rate in the short term and the credit status of
the Company and its consolidated subsidiaries has not changed significantly since inception. Also, for borrowed money that mature within
one year, the fair value approximates the carrying amount due to its
short-term maturities. The fair value is classified as a level 2 fair value.
Derivatives
Derivatives whose unadjusted quoted prices in active markets are available are categorized as Level 1. This mainly includes transactions ofbond futures and interest rate futures.
However, since most derivatives transactions are over-the-countertransactions and there is no published quoted price, the fair value iscalculated using valuation techniques such as the discounted present
value method and the Black Scholes model according to the type oftransaction and the period until maturity. The main inputs used in thesevaluation techniques are interest rates, exchange rates, volatility, etc.
If unobservable inputs are not used or their effects are not significant,they are classified as Level 2, and include plain vanilla interest rate swap
transactions, foreign exchange contract transactions, etc. Derivatives
whose fair values are measured by using significant unobservable inputs
are categorized as level 3.

50(Note 2) Information about Level 3 of financial instruments measured at fairvalue(1) Quantitative information on significant unobservable inputs
Categories
Securities(available-for-salesecurities)
Corporate bonds

Valuationtechniques

Significant
Weighted
unobservable Scope of inputs average of
inputsinputs

Probability of
Discounted cash
4.7% - 33.6%
bankruptcy
flow method
Loss rate at the time(*1)
20.0% - 100.0%
of bankruptcy

24.5%
66.7%

(*1) For some corporate bonds, the estimated amount of loan losses iscalculated based on the estimated amount of collateral and guarantees, etc. and the fair value is the amount obtained by deducting
the estimated amount of loan losses from the corporate bond value.
(2) A reconciliation from the beginning balances to the ending balancesand gains or losses on valuation of financial assets and financial liabilities held at the end of the reporting period included in profit orloss for the period

March 31, 2022
Beginning balance
Profit or loss or othercomprehensive income forthe period
Recorded in profit or loss(*1)
Recorded in othercomprehensive income (*2)
Purchases, sales, issuances, andsettlements
Transfer into Level 3 (*3)
Transfer out of Level 3
Ending balance
Gains or losses on valuation offinancial assets and financial
liabilities held at the endof the reporting period
included in profit or loss forthe period (*1)

March 31, 2022
Beginning balance
Profit or loss or othercomprehensive income forthe period
Recorded in profit or loss(*1)
Recorded in othercomprehensive income (*2)
Purchases, sales, issuances, andsettlements
Transfer into Level 3 (*3)
Transfer out of Level 3
Ending balance
Gains or losses on valuation offinancial assets and financial
liabilities held at the endof the reporting period
included in profit or loss forthe period (*1)

Millions of Yen
Securities
Derivative
Available-for-saletransactions
Credit derivative
Corporate
Otherstransactions (*4)
bonds
¥ 181
¥ 4,002
—

(11)

—

¥(16)

2

(2)

—

(165)

(4,000)

—

21
—
¥ 28

—
—
—

—
—
¥(16)

¥

—

—

(90)

—

$ (131)

16

(16)

—

(1,348)(32,682)

—

172
—
229

—
—
—

—
—
$ (131)—$ (123)—$(Note4) Maturity Analysis for Financial Assets, Securities and Financial Liabilities with Contractual Maturities(3) A description of valuation processes used for fair value measurements
The risk management division of the Group has established policies andprocedures for measuring fair value, and each trading division measuresfair value following the policies and procedures. A risk management
division verifies whether the fair value obtained is measured using valid
valuation techniques and inputs as well as whether they are classified
into an appropriate level of the fair value hierarchy.
In measuring fair value, the Company uses a valuation model thatmost appropriately reflects the nature, characteristics and risks of each
asset. In addition, when using quoted prices obtained from third parties,
the Company verifies whether the prices are valid using appropriate
methods, such as confirming the valuation techniques and inputs usedand comparing them with the fair value of similar financial instruments.
(4) A narrative description of sensitivity of the fair value measurement
to changes in significant unobservable inputs
Significant unobservable inputs used in measuring the fair value of thecorporate bonds are probability of bankruptcy and loss rate at the timeof bankruptcy. Significant increases (decreases) in any of those inputs in
isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for probabilityof bankruptcy is accompanied by a directionally similar change in theassumption used for loss rate at the time of bankruptcy.

2,400

15,000135,000

54,0008,649

123,345

418,550200(Note 3) Securities, etc. that do not have a market price and investment in partnerships are as follows and are not included in “Securities (availablefor-sale securities)” in the table of financial instruments measured atfair value.
Carrying AmountThousands of U.S.
Dollars2022
2022

Millions of Yen¥(15)

Thousands of U.S. Dollars
Securities
Derivative
Available-for-saletransactions
Credit derivative
Corporate
Otherstransactions (*4)
bonds
$ 1,479$ 32,698—$(*1) Included in “Other operating income” and “Other operating expenses” in the Consolidated Statement of Income.
(*2) Included in the “Unrealized gain (loss) on available-for-sale securities” under “Other Comprehensive Income” in the Consolidated
Statement of Comprehensive Income.
(*3) These are privately placed guaranteed bonds held by the Bank, anddue to the significant deterioration in the credit condition of theissuer of the bonds, the holding classification of the bond has beenchanged from held -to-maturity to available-for-sale.
(*4) Net receivables, payables, profits and losses arising from derivatives
transactions are presented as net amounts, and items that constitutenet payables and losses in total are presented in parentheses.

Securities, etc. that do not have amarket price (*1, *2)
Investment in partnerships (*3)
Total

¥ 6,114$ 49,955

16,174¥22,288

132,151$182,106(*1) Securities, etc. that do not have a market price are not subject tofair value disclosure in accordance with Paragraph 5 of the “Implementation Guidance on Disclosures about Fair Value of Financial
Instruments” (ASBJ Guidance No. 19, March 31, 2020).
(*2) Impairment loss of ¥5 million ($41 thousand) is recorded for unlisted equity securities for the year ended March 31, 2022.
(*3) Investments in partnerships are not subject to fair value disclosurein accordance with Article 27 of the “Implementation Guidance on
Accounting Standard for Fair Value Measurement” (ASBJ Guidance
No. 31, July 4, 2019).

March 31, 2022
Securities:
Held-to-maturity securities:
Debt securities—
Japanese corporate bonds
Available-for-sale securities
with contractual maturities:
Debt securities:
Japanese government bonds
Japanese local
government bonds
Japanese corporate bonds
Other
Loans and bills discounted *Total

March 31, 2022
Deposits
Borrowed money
Total

March 31, 2022

Millions of Yen
Due after 1 Due after 5
Due in 1 YearDue after 10
Year through Years throughor Less
Years
5 Years
10 Years¥ 15,496 ¥

40,550 ¥6,607 ¥

142

14,67038,26850,139106,019
5,472
86,85642,534
138,813796,069 1,201,325
922,044 1,526,135¥ 842,756 ¥ 1,505,344 ¥ 1,574,874 ¥ 1,825,309
Millions of Yen
Due after 1 Due after 5
Due in 1 YearDue after 10
Year through Years throughor Less
Years
5 Years
10 Years¥5,762,350¥462,936¥5—
1,227,702
178,095——¥6,990,052¥641,031¥5—
Thousands of U.S. Dollars
Due after 1 Due after 5
Due in 1 YearDue after 10
Year through Years throughor Less
Years
5 Years
10 Years

Securities:
Held-to-maturity securities:
Debt securities—$ 126,612 $ 331,318 $ 53,983 $
1,160Japanese corporate bonds
Available-for-sale securities
with contractual maturities:
Debt securities:
Japanese government bonds
19,609122,559 1,103,031
441,213
Japanese local
70,668 1,007,803 3,419,806
1,634
government bonds
Japanese corporate bonds
119,863
312,672
409,666
866,239
Other
44,709709,666
347,528 1,134,186
Loans and bills discounted *6,504,363 9,815,549 7,533,655 12,469,442
Total$ 6,885,824 $12,299,567 $12,867,669 $14,913,874

March 31, 2022
Deposits
Borrowed money
Total

Thousands of U.S. Dollars
Due after 1 Due after 5
Due in 1 YearDue after 10
Year through Years throughor Less
Years
5 Years
10 Years$47,081,869 $3,782,466$41—
10,031,065 1,455,143——$57,112,934 $5,237,609$41—* Loans and bills discounted whose cash flows cannot be estimated, suchas “legal bankruptcy,” “virtual bankruptcy,” and “possible bankruptcy”
loans amounting to ¥66,403 million ($542,552 thousand) as of March
31, 2022 and loans and bills discounted with no contractual maturities, amounting to ¥9,849 million ($80,472 thousand) as of March 31,
2022 are not included.
Please see Note 16 for annual maturities of borrowed money.

51

29. COMMITMENTS AND CONTINGENT LIABILITIESCommitment line contracts on overdrafts and loans are agreements tomake loans to customers when they apply for borrowing up to a prescribed amount, as long as there is no violation of any condition in thecontracts.
The total amounts of unused open commitments as of March 31,
2022 were ¥1,307,876 million ($10,686,134 thousand). Multi-purpose
accounts included in the unused open commitments as of March 31,
2022 were ¥535,278 million ($4,373,544 thousand). The amounts ofunused commitments whose original contract terms were within one
year or unconditionally cancelable at any time as of March 31, 2022
were ¥1,227,145 million ($10,026,514 thousand).
Since many of these commitments are expected to expire without
being drawn upon, the total amount of unused commitments does notnecessarily represent actual future cash flow requirements. Many of thesecommitments have clauses enabling the Bank and certain subsidiaries toreject the loans to customers or reduce the contract amounts of commitment, in the event monetary conditions have changed and the Bank andcertain subsidiaries need to secure claims, or other considerable events
have occurred.
In addition, if necessary, the Bank and certain subsidiaries can request the customers to pledge collateral such as premises and securities
at the execution of the contracts. After execution, the Bank and certain
subsidiaries periodically evaluate the customers’ financial position based
upon the Bank’s internal policy, and take necessary measures to manage
the credit exposures, such as revising the terms of contracts or securing
the claims.

30. DERIVATIVE INFORMATIONThe Bank enters into swaps related to interest rates, foreign exchange
forward contracts, swap and option contracts related to currencies, overthe-counter bond options and stock index options contracts related tosecurities.
Derivative Transactions to Which Hedge Accounting Is Not Applied as ofMarch 31, 2022
March 31, 2022

Contract
AmountMillions of Yen
Contract
Unrealized
Amount Due Fair Value
Gains (Losses)
after One Year

Over-the-counter:
Interest-related contracts:
Interest rate swap:
Fixed rate receipt,¥ 10,320 ¥ 10,320
variable rate payment
Variable rate receipt,
10,320
10,320fixed rate payment
Over-the-counter:
Currency-related contracts:
Currency swap
282,396 282,396
Foreign exchange forward:
Sell
43,56583
Buy
20,946—
Currency option:
Sell
79,18053,384
Buy
81,12054,997
Other:
Sell
—
—
Buy
—
—
Over-the-counter:
Credit derivative contracts:
Credit default options
Sell
—
—
Buy
—
—
Credit default swap
Sell
—
—
Buy
711
711
Other:
Sell
—
—
Buy
—
—

52

¥

226
124

¥

226
124

(2,679)(1,612)(2,557)1,225(2,557)
1,225(4,195)
4,192

1,115
(377)

—
—

—
—

—
—

—
—

—
(15)

—
(15)

—
—

—
—

March 31, 2022
Over-the-counter:
Interest-related contracts:
Interest rate swap:
Fixed rate receipt,
variable rate payment
Variable rate receipt,
fixed rate payment
Over-the-counter:
Currency-related contracts:
Currency swap
Foreign exchange forward:
Sell
Buy
Currency option:
Sell
Buy
Other:Sell
Buy
Over-the-counter:
Credit derivative contracts:
Credit default options
Sell
Buy
Credit default swap
Sell
Buy
Other:Sell
Buy

Thousands of U.S. Dollars
Contract
Contract
Unrealized
Amount Due Fair Value
AmountGains (Losses)
after One Year$ 84,321$ 84,321$ 1,847$ 1,847

84,321

84,321

1,013

1,013

2,307,345

2,307,345(21,889)(13,171)355,952
171,141678—(20,892)
10,009(20,892)
10,009646,948662,799

436,179
449,359(34,276)
34,251

9,110(3,080)

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
5,809

—
5,809

—
(123)

—
(123)

—
—

—
—

—
—

—
—

Notes:
1. Derivative transactions are valued at market and the gains/losses arerecognized in the consolidated statement of income.
2. There were no transactions applicable for stock-related contracts,bond-related contracts, and commodities for the year ended March
31, 2022.
Derivative Transactions to Which Hedge Accounting Is Applied as of March
31, 2022
There were no derivative transactions to which hedge accounting is applied as of March 31, 2022.

31. COMPREHENSIVE INCOME

The components of other comprehensive loss for the year ended March
31, 2022 were as follows:
2022

Thousands of U.S.
Dollars
2022¥(18,050)$ (147,479)

Millions of Yen

Unrealized loss onavailable-for-sale securities:
Gains arising during the year
Reclassification adjustments
to profit or loss
Amount before income tax effect
Income tax effect
Total
Deferred loss on hedges:
Adjustments arising during the year
Reclassification adjustments
to profit or loss
Amount before income tax effect
Income tax effect
Total
Defined retirement benefit plans:
Adjustments arising during the year
Reclassification adjustments
to profit or loss
Amount before income tax effect
Income tax effectTotal
Total other comprehensive loss

3,447

28,164(14,603)
4,332(10,271)(119,315)
35,395(83,920)(124)(1,013)(245)(2,002)

(369)
110
(259)

(3,015)899(2,116)

821

6,708

(1,751)(14,307)

(930)
278
(652)
¥(11,182)(7,599)2,272(5,327)$ (91,363)

32. PER SHARE INFORMATION

a. Net Income per Share
Reconciliation of the differences between basic and diluted net income
per share (“EPS”) for the year ended March 31, 2022 was as follows:
Millions of Thousands of
Yen
U.S. Dollars
Yen
SharesNet Income
Attributable WeightedYear Ended March 31, 2022
EPS
to Owners of Average Shares
Parent
Net income attributable to¥17,191
owners of parent
Amount not attributable to—common shareholders
Basic EPS—Net income
available to common
17,19137,335 ¥460.45$3.76
shareholders
Effect of dilutive securities—
68
Stock acquisition rights
68
Diluted EPS—Net income for¥17,191
37,403 ¥459.62$3.76
computation

Since the Company was established on October 1, 2021 through a sole
share transfer, the average number of shares of its common stock during
the period from April 1, 2021 to September 30, 2021 prior to the establishment of the Company was calculated using the average number ofshares during the period of the Juroku Bank, Ltd., and it was calculatedusing the average number of shares of the Company during the period
from October 1, 2021 to March 31, 2022.
b. Net Assets per Share
Net assets per share as of March 31, 2022 were ¥10,799.18 ($88.24).
Net assets per share of common stock as of March 31, 2022 were
calculated based on the following:
2022

Thousands of U.S.
Dollars
2022¥402,604$3,289,517

180
3,705

1,471
30,272¥398,719$3,257,774

Millions of Yen

Total net assets
Deductions from total net assets:
Stock acquisition rights
Noncontrolling interests
Net assets attributable to common
stock at the end of the fiscal year
Number of shares of common stockat the end of the fiscal year used forthe calculation of net assets per share(shares in thousands)

36,92153

33. REVENUE RECOGNITION

35. SEGMENT INFORMATION

Disaggregation of revenue from contracts with customers
Information regarding disaggregation of revenue from contracts with customers for the year ended March 31, 2022 is as follows.
March 31, 2022
Interest income
Fees and commissions
Deposit and Lending Service
Foreign exchanges service
Securities-related service
Guarantee service
Credit card service
Other operating income
Other income
IncomeMarch 31, 2022
Interest income
Fees and commissions
Deposit and Lending Service
Foreign exchanges service
Securities-related service
Guarantee service
Credit card service
Other operating income
Other income
IncomeUnder ASBJ Statement No. 17, “Accounting Standard for Segment Information Disclosures” and ASBJ Guidance No. 20, “Guidance on AccountingStandard for Segment Information Disclosures,” an entity is required to report financial and descriptive information about its reportable segments.
Reportable segments are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components ofan entity about which separate financial information is available and such information is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance. Generally, segment information is required to be reported on the same basis as is usedinternally for evaluating operating segment performance and deciding how to allocate resources to operating segments.
a. Description of Reportable Segments(1) Method for determining the reportable segments
The Group’s reportable segments are those for which separate financial information is available and regular evaluation by the Group’s management isbeing performed in order to decide how resources are allocated among the Group.
The Group provides banking services-based comprehensive financial services and leasing business. The Group consists of two reportable segments:banking business and lease business.
(2) Types of products and services belonging to each reportable segment
The banking business is operated by the Juroku Bank, Ltd. and provides various services such as deposit-taking and lending services, trading securities,
securities investment, domestic exchange, foreign exchange, managing bonds, a derivatives business and other related businesses at headquarters andbranches of the Juroku Bank, Ltd. In addition, consolidated subsidiaries operate credit guarantee business and supplement the banking business.
The lease business is operated by Juroku Lease Co., Ltd. It provides leasing business to meet local customers’ needs.
(3) Matters regarding changes, etc. to the reporting segments
From the fiscal year ended March 31, 2022, in accordance with the establishment of the Company and the reorganization within the Group, thebusiness segment of Juroku Credit Guarantee Co., Ltd., which was previously included in “Other,” has been changed to “Banking”.

Millions of Yen

Banking¥54,588
18,590
3,288
4,054
2,836
1,993
—
4,425
9,087
¥86,690

Reportable Segment
Lease
¥ 195
—
—
—
—
—
—
26,3601,615¥28,170

Banking$446,017
151,891
26,86533,124
23,172
16,284—36,15574,246$708,309

Millions of U.S. Dollars
Reportable Segment
Lease
Total
$ 1,593$447,610—
151,891—
26,865—33,124—
23,172—
16,284——215,377
251,532
13,19687,442$230,166$938,475

Total¥ 54,783
18,590
3,288
4,054
2,836
1,993
—
30,785
10,702¥114,860

Other

Total

¥ 2,971
5,928
—
—
1,856
118
2,471
1,934
438
¥11,271¥ 57,754
24,518
3,288
4,054
4,692
2,111
2,471
32,719
11,140¥126,131

Other

Total

$24,275
48,435——
15,165964
20,19015,802
3,579$92,091$ 471,885
200,326
26,86533,12438,337
17,24820,190267,334
91,021$ 1,030,566

b. Methods of Measurement for the Amounts of Income, Profit, Assets and Other Items for Each Reportable Segment
The accounting policies of each reportable segment are consistent with those disclosed in Note 2, “Summary of Significant Accounting Policies.”c. Information about Income, Profit, Assets, Liabilities and Other Items
Millions of Yen*1. The above table also includes revenue based on the ASBJ statement No. 10 “Accounting Standards for Financial Instruments.”*2. “Other” refers to business segments that are not included in the reporting segment, such as financial instruments transactions, credit card service,
and computer-related service.
*3. The difference between the “total” amount in the above table and the amount recorded in the consolidated statement of income is mainly the elimination of intersegment transactions.

34. SUBSEQUENT EVENTSAppropriation of Retained Earnings

On May 12, 2022, the Board of Director resolved an appropriation ofretained earnings as follows:
Millions of Yen
Year-end cash dividends—¥70.00 ($0.57) per share oncommon stock¥2,584

Thousands of
U.S. Dollars$21,113

Establishment of a Subsidiary

At the Board of Directors meeting held on March 29, 2022, the Company resolved to establish a wholly-owned subsidiary of Kanda Machiokoshi Co., Ltd., and established the company on April 1, 2022.
1. Purpose of establishment
The Company has set forth the “Regional Commitment Strategy” as oneof the pillars of its management plan and has been working on improving the attractiveness of the region and supporting the resolution ofissues as priority measures.

The Company will establish a subsidiary within the Group thatplays a central role in regional revitalization as a banking company inother industries (*) to expand our business domains, further promotetotal design and consulting for regional revitalization, and contribute to
the fulfillment of our responsibilities for the sustainable growth of theregion and regional revitalization.
(*) Banking companies in other industries: A subsidiary of a bank holding company stipulated in Article 52-23, Paragraph 1, Item 14 of
the Banking Act
2. Overview of a subsidiary(1) Name
Kanda Machiokoshi Co., Ltd.,(2) Address
Kyowa No.2 Building, 6-11-1
Kandamachi, Gifu City
(3) Business description Consulting services related to regional
revitalization(4) Established
April 1, 2022
(5) Capital¥80 million ($654 thousand)(6) Major shareholders
The Juroku Financial Group, Inc.
and shareholding ratio
Music Securities Co., Ltd.

99%
1%

2022
Ordinary income:(1) Outside customers(2) Intersegment transactions
Total
Segment profit
Segment assets
Other:
Depreciation
Amortization of goodwill
Interest income
Interest expense
Allowance for loan losses
Increase in premises and equipment and intangible assets

Reportable Segment
Banking
Lease
Total
¥

Other

Total

Reconciliations Consolidated

84,313
2,377¥ 86,690¥ 26,941
8,305,412¥26,201
1,969¥28,170¥ 1,958
82,273¥ 110,514
4,346¥ 114,860¥ 28,899
8,387,685¥ 6,836
4,435¥ 11,271¥ 4,248336,250¥ 117,350
8,781¥ 126,131¥ 33,147
8,723,935—¥ (8,781)¥ (8,781)¥ (6,348)(348,603)¥ 117,350—¥ 117,350¥ 26,799
8,375,332

2,564
245
54,588
250
2,376
2,879

532
—
195
190
369
336

3,096
245
54,783
440
2,745
3,215

139
207
2,971
16
62
105

3,235
452
57,754
456
2,807
3,320

127
—
(3,066)
(138)
—
46

3,362
452
54,688
318
2,807
3,366

Thousands of U.S. Dollars
2022
Ordinary income:(1) Outside customers(2) Intersegment transactions
Total
Segment profit
Segment assets
Other:
Depreciation
Amortization of goodwill
Interest income
Interest expense
Allowance for loan losses
Increase in premises and equipment and intangible assets

Reportable Segment
Banking
Lease
Total
$

688,888
19,421$ 708,309$ 220,124
67,860,217
20,9492,002
446,017
2,043
19,413
23,523$214,078 $ 902,966
16,08835,509$230,166 $ 938,475$ 15,998 $ 236,122
672,220 68,532,437
4,347
—
1,593
1,552
3,015
2,745

25,296
2,002
447,610
3,595
22,42826,268

Other

Total

$

55,854 $ 958,820
36,23771,746$ 92,091 $ 1,030,566$ 34,709 $ 270,831
2,747,365 71,279,802
1,136
1,691
24,275131507
858

26,432
3,693
471,885
3,726
22,93527,126

Reconciliations Consolidated— $ 958,820$ (71,746)—$ (71,746) $ 958,820$ (51,867) $ 218,964(2,848,296) 68,431,506
1,038—(25,051)(1,128)—376

27,4703,693
446,834
2,598
22,93527,502

Notes:
1. Ordinary income represents total income less certain extraordinary income included in “Other income” in the accompanying consolidated statementof income.
2. “Other” includes business segments of financial instruments business, credit cards and computer services.
3. Reconciliations mainly represent elimination of intra-segment transactions.
4. Segment profit is adjusted to reconcile to income before income taxes less certain extraordinary items in the accompanying consolidated statement ofincome.
5. NOBUNAGA Capital Village Co., Ltd., newly established on April 1, 2021, and the Company newly established on October 1, 2021, are included
in “Other.”54

55

I ndependent Auditors’ Reportd. Associated Information(1) Information about services
2022
Ordinary income—Outside customers

Lending Service

2022
Ordinary income—Outside customers

Lending Service

Securities Services¥40,206¥22,930

Millions of Yen
Leasing¥26,066

Thousands of U.S. Dollars
Securities Services
Leasing$328,507$187,352$212,975

Other

Total

¥28,148¥117,350

Other

Total

$229,986$958,820(2) Geographical information(a) Operating Revenues
This information is not presented because the Group’s revenues in Japan account for more than 90% of revenues in the consolidated statement of income.
(b) Property and Equipment
This information is not presented because the Group’s property and equipment in Japan account for more than 90% of property and equipment in the
consolidated balance sheet.
(3) Information by major customer
This information is not presented because there are no customers for which income account for more than 10% of revenues in the consolidated statement of income.
(4) Information about impairment loss by reportable segment
There was no impairment loss by reportable segment for the year ended March 31, 2022.
(5) Information about goodwill and negative goodwill by reportable segment
2022
Amortization of goodwill
Goodwill at March 31, 2022
Gain on negative goodwill

Banking
¥ 245
2,141
—

Lease

2022
Amortization of goodwill
Goodwill at March 31, 2022
Gain on negative goodwill

Banking$ 2,002
17,493—Lease

Millions of Yen
Other
¥ 207
1,505

Elimination/Corporate
—
—
—

Total
¥ 452
3,646
—

Thousands of U.S. Dollars
Elimination/Corporate
Other—$ 1,691——
12,297
—
—
—
—

Total
$ 3,693
29,790————Note: “Other” represents goodwill related to the financial instruments business.

56

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