Annual Securities Report“Yukashoken Hokokusho”(Excerpt)
For the fiscal years ended March 31, 2024 and 2023

FIDEA Holdings Co. Ltd.
and Subsidiaries

FIDEA Holdings Co. Ltd. and Subsidiaries
Consolidated Balance Sheets
March 31, 2024 and 2023

Millions of yen
2024
2023
Assets:Cash and due from banks (Notes 12, 22 and 26)
Monetary claims bought (Note 26)
Trading account securities (Notes 5 and 26)
Money held in trust (Note 26)
Securities (Notes 5, 6, 8, 12, 14 and 26)
Loans and bills discounted (Notes 7, 8, 12, 25 and 26)
Foreign exchange assets (Note 8)
Lease receivables and investments in leases
Tangible fixed assets (Note 9):
Buildings
Land
Lease assets
Construction in progress
Other tangible fixed assets
Intangible fixed assets:
Software
Goodwill
Other intangible fixed assets
Defined benefit asset (Note 13)
Deferred tax assets (Note 23)
Customers’ liabilities for acceptances and guarantees(Notes 8 and 25)
Other assets (Notes 8 and 12)
Allowance for loan losses (Notes 4 and 26)
Total assets¥

306,340
3,831
748
58,690732,875
1,867,032
1,258
8,557

¥

316,923
4,016
606
57,981
660,141
1,892,149
1,529
6,250

Thousands of
U.S. dollars(Note 1)2024$

2,023,381
25,303
4,940
387,648
4,840,653
12,331,783
8,309
56,519

11,169
7,214
7
2,229

11,901
7,246
11
1
2,156

73,77147,64846
14,722

1,580
132
2,569
3,553

1,708
14
137
1,299
4,346

10,435871
16,96823,467

19,35919,065

127,866

47,191(13,679)

46,203(13,841)

311,697(90,350)¥ 3,060,664¥ 3,019,852$ 20,215,746(Continued)
1

FIDEA Holdings Co. Ltd. and Subsidiaries
Consolidated Balance Sheets
March 31, 2024 and 2023

Millions of yen
2024
2023
Liabilities:
Deposits (Note 26)
Negotiable certificates of deposit (Note 26)
Payables under securities lending transactions(Notes 12 and 26)
Borrowed money (Notes 11, 12 and 26)
Foreign exchange liabilities
Provision for bonuses for directors and other officers
Defined benefit liability (Note 13)
Provision for reimbursement of deposits
Provision for contingent loss
Deferred tax liabilities (Notes 6 and 23)
Deferred tax liabilities for land revaluation (Note 10)
Acceptances and guarantees
Other liabilities (Note 11)

Thousands of
U.S. dollars(Note 1)2024

¥ 2,713,241
49,753¥ 2,663,710
63,680$ 17,921,010
328,619

88,76841,651

586,31487,700
40
42
472
22
429
14
382
19,35914,612116,000
44
42
750
58
386
12
385
19,06523,441

579,260
264
277
3,117
145
2,833
92
2,523
127,866
96,512

2,974,839

2,929,230

19,648,870

18,00018,167
57,665(63)
93,76918,00018,161
57,858(105)
93,914

118,890
119,993
380,878(416)
619,346(10,668)
413
866
1,288
(8,099)155(4,458)
(206)
850
412
(3,402)
109(70,462)
2,727
5,719
8,507
(53,494)
1,023

Total net assets

85,82490,621566,869

Total liabilities and net assets¥ 3,060,664¥ 3,019,852$ 20,215,746

Total liabilities
Net assets (Note 15):
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income:Unrealized gain (loss) on available-for-sale securities (Note 6)
Deferred loss on hedges
Revaluation reserve for land (Note 10)
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests

See notes to consolidated financial statements.

(Concluded)2

FIDEA Holdings Co. Ltd. and Subsidiaries
Consolidated Statements of Income
Years Ended March 31, 2024 and 2023
Thousands of
U.S. dollars(Note 1)
2024

Millions of yen
2024
2023
Income (Note 17):
Interest income:Interest on loans and discounts
Interest and dividends on securities
Other
Fees and commissions
Other operating income
Other income¥

Total income

19,081
9,448
113
9,055
5,685
6,561

¥

17,85914,282
223
8,628
7,539
2,903

$

126,030
62,404746
59,80837,54943,33549,94651,437

329,894

165
45
0
851
3,185
11,85923,884
3,109
3,746

116
168
0
156
3,365
13,80324,253
1,800
3,244

1,089
297
0
5,620
21,03678,328
157,754
20,53524,742

Total expenses

46,847

46,908309,425

Income before income taxes

3,099

4,528

20,468

Income taxes (Note 23):
Current
Deferred

1,135
740

997
249

7,496
4,887

1,875

1,247

12,384

1,223

3,281

8,077

44

15

290

Expenses:
Interest expenses:
Interest on deposits
Interest on payables under securities lending transactions
Interest on borrowings and rediscounts
Other
Fees and commissions
Other operating expenses
General and administrative expenses (Note 18)
Provision of allowance for loan losses (Note 4)
Other expenses (Notes 19 and 20)

Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent

¥

1,178

¥

3,266

Yen
Per share of common stock (Note 28):
Basic net income
Cash dividends applicable to the year
Note:

¥

Diluted net income is not shown since there are no dilutive shares.

See notes to consolidated financial statements.

3

65.20
75.00

$

7,780

U.S. dollars¥

179.19
75.00

$

0.43
0.49

FIDEA Holdings Co. Ltd. and Subsidiaries
Consolidated Statements of Comprehensive Income
Years Ended March 31, 2024 and 2023

Millions of yen
2024
2023
Net income¥

Other comprehensive income (Note 21):
Unrealized gain (loss) on available-for-sale securities
Deferred gain (loss) on hedges
Remeasurements of defined benefit plans
Total other comprehensive income

1,223

¥

(6,208)619
876(4,712)

3,281

Thousands of
U.S. dollars(Note 1)2024$

(14,776 )(2 )(9 )(14,788 )

8,077(41,003)
4,088
5,785
(31,122)

Comprehensive income¥(3,489)¥(11,506)$(23,044)

Total comprehensive income attributable to:
Owners of parent
Non-controlling interests¥(3,534)
45¥(11,521)14$(23,342)297

See notes to consolidated financial statements.

4

FIDEA Holdings Co. Ltd. and Subsidiaries
Consolidated Statements of Changes in Net Assets
Years Ended March 31, 2024 and 2023
Millions of yen
Shareholders’ equity

Balance as of April 1, 2022

Commonstock

CapitalsurplusRetainedearnings

Treasury
stock

¥

¥

¥

¥

18,000Cash dividends
Net income attributable to owners of parent
Acquisition of treasury stock
Sale of treasury stock
Cancellation of treasury stock
Change due to purchase of treasury stock ofconsolidated subsidiaries
Reversal of revaluation reserve for land
Net changes of items other thanshareholders’ equity

55,942(1,414)
3,266

(24)

¥

(5,553)
54
5,418

0(5,418)28
64

Balance as of March 31, 2023

18,00018,161

Cash dividends
Net income attributable to owners of parent
Acquisition of treasury stock
Sale of treasury stockReversal of revaluation reserve for land
Net changes of items other thanshareholders’ equity
Balance as of March 31, 2024

23,550Total
shareholders’equity57,858(105)(1,355)1,178
6¥

10,317

Deferred loss
on hedges¥

18,000¥18,167¥

57,665

¥

(63)

¥

914

¥

421

¥

11,449Noncontrollinginterests

Total
net assets¥¥ 109,233

314(1,414)
3,266(5,553)
55
-

28
64

28
64
(14,775)

(2)

(64 )

(9)

(14,851)(205)(15,057)(4,458)

(206)

850

412

(3,402)

109

90,621(1,355)
1,178
(12)
59
(16)

(1,355)
1,178
(12)
59
(16)
(6,210)¥(203)

Accumulated other comprehensive income
Total
Remeasureaccumulated
ments ofother
Revaluation
definedcomprehensive
reserve for land benefit plansincome(1,414)
3,266(5,553)
55-

93,914

(12)
53

(16)

97,468

Unrealized
gain (loss) on
available-forsale
securities¥

93,769¥ (10,668)

619
¥

413

16
¥

866

876
¥

1,288

(4,697)¥(8,099)45¥

155(4,652)¥85,824

Thousands of U.S. dollars (Note 1)
Shareholders’ equity

Balance as of March 31, 2023

Commonstock$ 118,890

Cash dividends
Net income attributable to owners of parent
Acquisition of treasury stock
Sale of treasury stockReversal of revaluation reserve for land
Net changes of items other thanshareholders’ equity
Balance as of March 31, 2024

Capitalsurplus$ 119,953

Retainedearnings$ 382,153

Treasury
stock
$
(693)

(8,949)7,780
39$ 118,890$ 119,993

(79)
350

(105)

$ 380,878

$

(416)

Total
shareholders’equity$ 620,303

Unrealized
gain (loss) on
available-forsale
securities$ (29,445)

Deferred loss
on hedges$(1,360)

Accumulated other comprehensive income
Total
Remeasureaccumulated
Revaluation
ments ofother
reserve fordefinedcomprehensive
land
benefit plansincome
$
5,614
$
2,721
$ (22,470)

Noncontrollinginterests$
719(8,949)
7,780
(79)
389
(105)

$ 619,346

Total
net assets$ 598,553(8,949)
7,780
(79)
389
(105)

(41,017)4,088$ (70,462) $2,727

See notes to consolidated financial statements.

5

105
$

5,719

$

5,785

(31,023)8,507$ (53,494)$

297(30,726)

1,023$ 566,869

FIDEA Holdings Co. Ltd. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended March 31, 2024 and 2023

Operating activities:
Income before income taxes
Adjustments for:
Income taxes—refund (paid)
Depreciation and amortization
Loss on impairment—fixed assets
Amortization of goodwill
Change in allowance for loan losses
Change in provision for bonuses for directors and other officers
Change in defined benefit asset
Change in defined benefit liability
Change in provision for reimbursement of deposits
Change in provision for contingent loss
Interest income
Interest expenses
Loss on securities—net
Gain on money held in trust—net
Foreign exchange gain—net
Loss on sale and disposal of fixed assets—net
Net change in loans and bills discounted
Net change in deposits
Net change in negotiable certificates of deposit
Net change in trading account securities
Net change in borrowed money, excluding subordinatedborrowings
Net change in due from banks, excluding due from Bank of Japan
Net change in call loans and bills bought
Net change in payables under securities lending transactions
Net change in foreign exchange assets
Net change in foreign exchange liabilities
Net change in lease receivables and investments in leases
Interest received
Interest paid
Other—net
Total adjustments
Net cash provided by (used in) operating activities —(Forward)

Millions of yen
2024
2023

Thousands of
U.S. dollars(Note 1)
2024

¥

$

3,099

¥

4,528

20,468

387
1,875
263
14
(161)
49
(289)
(36)
43
(28,643)
1,063
620
131
(10)
205
25,11749,531(13,926)(142)(2,628)
1,920
480
29
247
(2)
(197)
42
(68)
(73)
(32,365)
441
4,946
(338)
(7)
533
(180,009)
6,747
8,812
(16)

2,556
12,3841,737
92(1,063)323(1,908)(237)
284(189,187)
7,021
4,095
865
(66)
1,354
165,898
327,153(91,981)(937)(28,300)
1,071
184
47,116271(3)(2,306)28,147(925)(16,921)64,427(227,800)(1,828)(204)(11,173)433(14)(1,158)32,386(382)(7,820)(409,067)(186,922)
7,073
1,215
311,2021,789(19)(15,231)
185,911(6,109)(111,763)
425,541¥ 67,526¥ (404,539)$

446,010(Continued)

6

FIDEA Holdings Co. Ltd. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended March 31, 2024 and 2023
Thousands of
U.S. dollars(Note 1)
2024

Millions of yen
2024
2023
Net cash provided by (used in) operating activities —(Forward)
Investing activities:
Purchase of securities
Proceeds from sale of securities
Proceeds from maturity of securities
Increase in money held in trust
Decrease in money held in trust
Purchase of tangible fixed assets
Proceeds from sale of tangible fixed assets
Purchase of intangible fixed assets
Net cash provided by investing activities
Financing activities:
Repayment of lease obligations
Dividends paid
Purchase of treasury stock
Proceeds from sale of treasury stock
Purchase of treasury stock of subsidiaries
Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of year
Cash and cash equivalents at the end of year (Note 22)¥

67,526¥ (404,539)$

446,010(427,644)
230,971
123,521(1,000)
(886)
133
(609)
(75,514)(504,010)
317,768
193,459(7,000)
981
(616)
662
(331)
913

(2,824,597)
1,525,568
815,858(6,605)(5,852)878(4,022)(498,771)(166)(1,354)(12)(1,533)(80)(1,411)(5,553)
0(191)(7,235)(1,096)(8,943)(79)(10,125)

10(9,511)
312,037¥ 302,525

7(410,854)
722,891¥ 312,037

66(62,820)
2,061,010$ 1,998,183

See notes to consolidated financial statements.

(Concluded)

7

FIDEA Holdings Co. Ltd. and Subsidiaries
Notes to Consolidated Financial Statements
Years Ended March 31, 2024 and 2023
1. Basis of Presentation
FIDEA Holdings Co. Ltd. (the “Company”) is a holding company and conducts its operations through its
subsidiaries and affiliates. The Company was established as a joint holding company between The Shonai Bank,
Ltd. (“Shonai”) and The Hokuto Bank, Ltd. (“Hokuto”) on October 1, 2009 by way of a transfer of shares.
The accompanying consolidated financial statements have been prepared in accordance with the provisions set
forth in the Japanese Financial Instruments and Exchange Act and its related accounting regulations, the Ordinancefor the Enforcement of the Banking Act of Japan (the “Banking Act”) and the Companies Act of Japan (the“Companies Act”), and in conformity with accounting principles generally accepted in Japan, which are different
in certain respects as to application and disclosure requirements of International Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been madeto the consolidated financial statements issued domestically in order to present them in a form which is morefamiliar to readers outside Japan.
In preparing the accompanying consolidated financial statements, Japanese yen amounts are presented in millionsof yen by rounding down figures to the nearest million. As a result, the totals in yen in the accompanying
consolidated financial statements do not necessarily agree with the sums of the individual amounts.
The translation of yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside
Japan and has been made at ¥151.40 = U.S.$1.00, the exchange rate prevailing on March 31, 2024. This translation
should not be construed as a representation that yen can be converted into U.S. dollars at the above or any otherrate.
2. Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its 6 subsidiaries (collectively the“Group”) as of March 31, 2024 and 2023.
Under the control of influence concept, those companies in which the Company, directly or indirectly, is able toexercise control over operations are fully consolidated. The Company has 4 unconsolidated subsidiaries as ofMarch 31, 2024 and 2023.
All significant intercompany accounts and transactions have been eliminated in consolidation. All material
unrealized profit included in assets resulting from transactions within the Group is eliminated.
The excess of the acquisition cost over the underlying equity in the net assets of the consolidated subsidiaries
measured at fair value at their respective dates of acquisition is presented as “goodwill” and is amortized by thestraight-line method over a period of five years. Insignificant amounts of goodwill are fully charged to income in
the fiscal year when it is incurred.
The balance sheet dates of all 6 subsidiaries are March 31.
Those companies over which the Company has the ability to exercise significant influence, but does not control
are accounted for using the equity method. However, the Company has no affiliates to be accounted for using theequity method.

8

3. Significant Accounting Policies(1) Trading account securities
Trading account securities are stated at fair value as of the balance sheet date, and cost of trading accountsecurities sold is determined principally using the moving-average method.
(2) Securities
Non-trading securities are classified into two categories: held-to-maturity debt securities and available-forsale securities. Held-to-maturity debt securities are carried at amortized cost being determined by the movingaverage method. Available-for-sale securities are stated at fair value. Cost of sale of these available-for-salesecurities is principally determined using the moving-average method. Equity securities without market prices
are stated at cost determined by the moving-average method.
Unrealized gain or loss on available-for-sale securities is recorded under net assets, net of income taxes.
(3) Securities held in money trusts
Securities that are part of trust assets in independently managed money trusts with the primary purpose to
manage securities are stated at fair value as of the balance sheet date.
(4) Derivatives
Derivatives are stated at fair value.
(5) Tangible fixed assets
Depreciation of tangible fixed assets of the Group, except for lease assets, is calculated by the straight-line
method. The principal useful lives are as follows:
Buildings
Others5 to 50 years
4 to 20 years

The Group leases automated teller machines, etc. under finance lease arrangements as a lessee.
Lease assets under finance lease arrangements which do not transfer ownership of the lease assets to the lessee
are depreciated over the respective lease contract periods using the straight-line method with salvage values
defined in the lease contracts, otherwise with no residual value.
(6) Intangible fixed assets
Intangible fixed assets, except for lease assets, are amortized by the straight-line method. Amortization of thecost of software intended for internal use is calculated by the straight-line method based on a useful life
(principally five years) determined by the Group.
(7) Allowance for loan losses
Allowance for loan losses is provided by the consolidated banking subsidiaries and other major consolidated
subsidiaries in accordance with the prescribed standards.
(i) For claims on borrowers who have declared bankruptcy or have commenced special liquidation
proceedings or similar legal proceedings (the “bankrupt borrowers”), or borrowers who are not legallyor formally insolvent but are regarded as substantially in the same situation (the “virtually bankrupt
borrowers”), an allowance is generally provided based on the carrying amount of the claims, after thewrite-off stated below, net of the expected amount recoverable from collateral and guarantees.
For collateralized and guaranteed claims on the bankrupt borrowers or virtually bankrupt borrowers of
Hokuto and its certain consolidated subsidiaries, the amount of claims exceeding the estimated value ofcollateral and guarantees is deemed to be uncollectible and is charged off against the total amount ofoutstanding claims. These write-offs amounted to ¥14,381 million ($94,986 thousand) and ¥13,148
million for the years ended March 31, 2024 and 2023, respectively.
(ii) For claims on borrowers who are not currently bankrupt but are likely to become bankrupt (the“potentially bankrupt borrowers”), an allowance is provided at the amount deemed necessary based on
the overall solvency assessment of the borrowers and the amount of the claims, net of the expectedamount recoverable from collateral and guarantees (hereinafter the “unsecured amount”). In particular,

9a. For the unsecured amount, an allowance is provided based on the expected loan loss over the next
three years. The expected loan loss amount is determined based on the loan loss ratio, which isestimated by taking the average of historical loan loss ratio over a certain period of time based on theirpast loan loss experience over three years, with necessary adjustments such as future projections.
b. Of claims on above borrowers, as to claims on borrowers with certain amounts or more of theunsecured amount, the allowance estimated based on the expected loan loss as described in thepreceding paragraph is individually reviewed if the allowance is sufficient. Then as necessary, acollectible amount reasonably estimated based on the borrower’s financial status is deducted from theunsecured amount to provide the amount of the allowance.
(iii) For claims on borrowers with restructured loans, etc., an allowance is provided based on the expectedloan loss over the next three years. The expected loan loss amount is determined based on the loan loss
ratio, which is estimated by taking the average of historical loan loss ratio over a certain period of time
based on their past loan loss experience over three years, with necessary adjustments such as future
projections.
(iv) For other claims, an allowance is provided based on the expected loan loss over the next one year. The
expected loan loss amount is determined based on the loan loss ratio, which is estimated by taking the
average of historical loan loss ratio over a certain period of time based on their past loan loss experience
over one year, with necessary adjustments such as future projections.
(v) Allowances for loan losses of other consolidated subsidiaries are provided based on the historical loan
loss ratio.
All claims are assessed for the quality by the Asset Assessment Department with the cooperation by operating
offices in accordance with the Standards for Asset Self-Assessment, and then the assessment results areaudited by the Asset Audit Department which is independent from the Asset Assessment Department.
(8) Provision for bonuses for directors and other officers
Provision for bonuses for directors and other officers is provided for the payment of bonuses to directors andother officers at an estimated amount attributed to the current fiscal year.
(9) Provision for reimbursement of deposits
Provision for reimbursement of deposits is provided at an estimated amount of the future payments to be madefor reimbursement claims on deposits which were derecognized and credited from liability to income.
(10) Provision for contingent loss
Provision for contingent loss is provided at an estimated amount of the future payments to be made for a(11) Retirement benefits
The benefit formula method is used as a method of attributing expected retirement benefits to each period in
calculating retirement benefit obligation.
Past service costs are amortized by the straight-line method over a certain period (five years) within the
average remaining years of service of the eligible employees when such past service costs occur.
Actuarial gains and losses are amortized from the year following the year in which the gains and losses occur
by the straight-line method over a certain period of 10 to 13 years within the average remaining years ofservice of the eligible employees when such actuarial gains and losses occur.
Certain consolidated subsidiaries adopt the simplified method in calculating defined benefit liability andretirement benefit expenses. Under this method, the severance payment amount required at the fiscal yearend for voluntary termination is deemed as retirement benefit obligations.
(12) Recognition of significant revenue and expenses
Major performance obligations in major businesses related to revenue from contracts with customers of theCompany and its consolidated subsidiaries are providing services through deposits and loans operations,foreign exchange operations, securities-related operations, agency operations, custody/safe deposits
operations and other.
10

As to fees and commissions from ATM services, direct debit services (deposits and loans operations),
domestic and overseas remittance services (foreign exchange operations), underwriting public and corporate
bonds (securities-related operations) and sale of investment trusts and insurances (agency operations), a
performance obligation is satisfied and the revenue is recognized at a point in time when a transaction
occurs or a related service is provided. As to fees and commissions from services, such as safe-deposit box
fees (custody/safe deposit operations), for which a performance obligation is satisfied over the period inwhich the related service is provided, the revenue is recognized over the relevant period.
(13) Foreign currency translation
The assets and liabilities denominated in foreign currencies of the consolidated subsidiaries are translated into
Japanese yen at the exchange rates in effect at the balance sheet date.
For the translation difference of debt securities out of available-for-sale securities denominated in foreign
currencies, the translation difference related to changes in fair value is recognized as unrealized gain or loss
and other differences are recognized as foreign exchange gain or loss under other operating income or
expenses.
(14) Hedge accounting
Interest rate risk hedging
With respect to the hedge accounting for the interest rate risk arising from financial assets and liabilities of
the consolidated banking subsidiaries, the Group applies deferral hedge accounting, under which gain or loss
on derivatives are deferred until maturity of the hedged transactions, as stipulated in the Japanese Institute ofCertified Public Accountants (“JICPA”) Industry Committee Practical Guideline No. 24 (March 17, 2022).
With respect to hedging transactions to offset fluctuations of the market price, the effectiveness of hedging
transactions is assessed by specifying the hedged items such as deposits and loans and bills discounted andhedging instruments such as interest rate swaps after grouping these items by definite remaining maturity.
With respect to hedging transactions to offset fluctuations of market price of fixed-rate debt securities
classified as available-for-sale securities, hedged items are identified by each type of debt securities andinterest rate swaps are designated as hedging instruments. Since significant conditions concerning hedged
items and hedging instruments are substantially identical, the hedge is deemed highly effective and theassessment for the effectiveness is omitted. With respect to hedging transactions to fix cash flows, theeffectiveness of hedging is assessed by verifying the correlation of interest floating factors of hedged items
and hedging instruments.
Foreign exchange risk hedging
With respect to the hedge accounting for the foreign exchange risk arising from financial assets and liabilities
denominated in foreign currencies of the consolidated banking subsidiaries, the Group applies deferral hedge
accounting, under which gain or loss on derivatives are deferred until maturity of the hedged transactions, as
stipulated in the JICPA Industry Committee Practical Guideline No. 25 (October 8, 2020). Hedge effectivenessis assessed by comparing the amount of monetary assets and liabilities denominated in foreign currencies as
underlying hedged items with the corresponding foreign-currency amount of the respective hedging
instruments such as currency swaps and foreign exchange swaps entered into in order to hedge foreignexchange risk associated with monetary assets and liabilities denominated in foreign currencies.
In addition, in order to hedge foreign exchange risk of available-for-sale securities denominated in foreign
currencies except for debt securities, the fair value hedge is applied as portfolio hedging on the condition thatliabilities of spot and forward foreign exchange contracts exceeding the acquisition costs of the foreign
currency denominated securities on a basis of foreign currency exist, designating the issues of foreign currency
denominated securities to be hedged in advance.
Equity price fluctuation risk hedging
With respect to hedge accounting for the equity price fluctuation risk arising from equity securities out ofavailable-for-sale securities held by the consolidated banking subsidiaries, the Group applies deferral hedge
accounting for equity forward contracts and others as hedging instruments.
Hedge effectiveness is assessed by periodically comparing the aggregate amounts of price fluctuations orchanges in cash flows of underlying hedged items with those of corresponding hedging instruments, inprinciple, for the period from the beginning of the hedge and the point in time of evaluating hedge
effectiveness. However, if the material conditions of the hedged item and the hedging instrument are consistentand it is obvious that the hedge is highly effective, the assessment for the effectiveness is omitted.
11

(15) Cash and cash equivalents
In preparing the consolidated statements of cash flows, of cash and due from banks in the consolidated balance
sheets, cash and due from Bank of Japan (“BoJ”) are considered to be cash and cash equivalents.
(16) Accounting treatments and procedures applied in cases where relevant accounting standards areunclear(i) Regarding gain or loss on cancellation or redemption of investment trusts, when an aggregate amount on
investment trusts as a whole including interim distributions is a gain, the gain is recognized as interestand dividends on securities under interest income, and when it is a loss, the loss is recognized as loss onredemption of bonds under other operating expenses.
(ii) Expenses for the restricted stock compensation for the Company’s directors (excluding outside directors
and members of the Auditing Committee) and executive officers and the consolidated banking
subsidiaries’ directors (excluding outside directors and members of the Audit and Supervisory
Committee) and executive officers are measured at fair value of the Company’s share on the grant date.
The expenses are recognized as personnel expenses (general and administrative expenses) over theeligible service period.
4. Significant Accounting Estimates
The following summarizes items that are recognized in the current fiscal year’s consolidated financial
statements based on the accounting estimates and such estimates may give significant impacts on the
consolidated financial statements in the following fiscal year.
(1) Allowance for loan losses(i) Amount recognized in the consolidated financial statements in the current fiscal year

Allowance for loan losses¥

Millions of yen
2024
2023

Thousands of
U.S. dollars
2024

13,679$¥13,84190,350(ii) Information that contributes to an understanding of the nature of significant accounting estimates for theidentified items
a. Estimation method
It is described in Note “3. Significant Accounting Policies, (7) Allowance for loan losses.”b. Major assumptions
For estimating the allowance, it is particularly important to determine the borrower classification.
Major assumptions used for determining the borrower classification are “outlook for future
performance of borrowers,” which the Company assesses by each individual borrower based on theevaluation of each borrower’s ability to earn income, after comprehensively evaluating the qualitativeand quantitative information collected, including each borrower’s management performance, financial
status, lending terms, repayment status, and formulation and progress of a management improvementplan.
c. Impact on the consolidated financial statements in the following fiscal year
Since the major assumptions: “outlook for future performance of borrowers” involve uncertainty, there
is a risk to have a significant impact on determining the borrower classification if any changes occur inthe status of borrowers or the future economic environment. When the borrower classification changes,
there is a possibility that the allowance for loan losses in the consolidated financial statements in thefollowing fiscal year may increase or decrease.

12

5. Securities
Gain and loss from revaluation of trading account securities included in the consolidated statements of income was¥(1) million ($(6) thousand) and ¥(3) million for the years ended March 31, 2024 and 2023, respectively.
Securities at March 31, 2024 and 2023 consisted of the following:
Carrying
amountMarch 31, 2024
Securities whose carrying amount exceeds theiracquisition cost:
Available-for-sale securities:
Equity securities
Debt securities:
Japanese government bonds
Municipal bonds
Corporate bonds
Other
Subtotal
Securities whose carrying amount does not exceed
their acquisition cost:
Available-for-sale securities:
Equity securities
Debt securities:
Japanese government bonds
Municipal bonds
Corporate bonds
Other
Subtotal
Total¥

11,88465,244
5,024
22,032
38,18682,178¥ 159,307

¥

¥

¥

¥

Carrying
amount¥3,985
403,207
167,687
151,331
84,188172,405¥ 579,598¥ 738,906

Millions of yen
Acquisition
cost

¥

¥

Unrealized
gain (loss)

4,927
107,783
15,54546,033
46,20462,217¥ 174,928

¥

¥

¥

¥

4,642
307,129
89,343
141,21476,571
173,096¥ 484,867¥ 659,796

7,128
849
70
271
507
10,03418,012(214)(14,879)(6,251)(5,111)(3,516)(13,669)¥ (28,762)¥ (10,750)

10,056109,343
15,733
46,611
46,99968,924¥ 188,324

4,383
300,071
87,716
137,838
74,516
163,127¥ 467,582¥ 655,906

13¥

Unrealized
gain (loss)

19,012
66,093
5,094
22,304
38,694
92,213¥ 177,320

3,771
388,328
161,435
146,220
80,672
158,736¥ 550,836¥ 728,156

March 31, 2023
Securities whose carrying amount exceeds theiracquisition cost:
Available-for-sale securities:
Equity securities
Debt securities:
Japanese government bonds
Municipal bonds
Corporate bonds
Other
Subtotal
Securities whose carrying amount does not exceed
their acquisition cost:
Available-for-sale securities:
Equity securities
Debt securities:
Japanese government bonds
Municipal bonds
Corporate bonds
Other
Subtotal
Total

Millions of yen
Acquisition
cost

¥

5,129
1,560
187
577
794
6,706
13,396(258)(7,057)(1,626)(3,376)(2,054)(9,969)¥ (17,285)¥ (3,889)

CarryingamountMarch 31, 2024
Securities whose carrying amount exceeds theiracquisition cost:
Available-for-sale securities:
Equity securities
Debt securities:
Japanese government bonds
Municipal bonds
Corporate bonds
Other
Subtotal
Securities whose carrying amount does not exceed
their acquisition cost:
Available-for-sale securities:
Equity securities
Debt securities:
Japanese government bonds
Municipal bonds
Corporate bonds
Other
Subtotal
Total

Thousands of U.S. dollars
Acquisition
cost

Unrealized
gain (loss)$

125,574
436,545
33,645
147,318
255,574
609,068$ 1,171,202$

78,494
430,937
33,183
145,521
252,219542,787$ 1,052,225$ 47,080
5,607
462
1,789
3,348
66,274$ 118,969$$$

24,9072,564,914
1,066,281
965,785
532,840
1,048,454$ 3,638,282$ 4,809,484

26,321
2,663,190
1,107,575
999,544556,063
1,138,738$ 3,828,256$ 4,880,488(1,413)(98,276)(41,287)(33,758)(23,223)(90,284)$ (189,973)$ (71,003)

As of March 31, 2024 and 2023, ¥477 million ($3,150 thousand) and ¥500 million of capital investment inunconsolidated subsidiaries were included in the balance of securities, respectively. Further, as of March 31,
2024, ¥18,454 million ($121,889 thousand) of securities lent under secured loan agreement (securities lendingtransactions secured by collateral securities) is included in Japanese government bonds in securities.
Available-for-sale securities sold for the years ended March 31, 2024 and 2023 were as follows:
March 31, 2024
Equity securities
Debt securities:
Japanese government bonds
Municipal bonds
Corporate bonds
Other
Total

Sales proceeds¥
21,276
26,176
26,176
184,393¥ 231,846

Millions of yen
Realized gain
¥
4,513
66
66
2,658
¥
7,237

Realized loss
¥
622
74
74
5,692
¥
6,389

March 31, 2023
Equity securities
Debt securities:
Japanese government bonds
Municipal bonds
Corporate bonds
Other
Total

Sales proceeds¥
21,437104,120
69,442
34,122
556
188,562¥ 314,119

Millions of yen
Realized gain
¥
1,885
1,670
454
1,165
50
1,468
¥
5,024

Realized loss
¥
991
1,074
815
258
8,119
¥ 10,185

14

Thousands of U.S. dollars
Sales proceeds
Realized gain
Realized loss
$ 140,528$
29,808$4,108
172,892435
488
172,892435
488
1,217,919
17,556
37,595$ 1,531,347$
47,800$ 42,199

March 31, 2024
Equity securities
Debt securities:
Japanese government bonds
Municipal bonds
Corporate bonds
Other
Total
Write-down of securities

Non-trading securities, with the exception of equity securities without market prices or investments in partnerships,
whose fair value significantly declined compared with their acquisition cost and is not considered to be able torecover their acquisition cost, are written down to their respective fair value which is recorded as the carrying
amount on the consolidation balance sheet. The related loss on revaluation is charged to income for the year.
For the year ended March 31, 2024, no available-for sale securities were written down. For the year ended March
31, 2023, ¥34 million of available-for sale securities were written down. Of which, equity securities were ¥34
million.
The criteria for determining whether the fair value is “significantly declined” are as follows:(1) If the fair value as of the balance sheet date declines 50% or more compared to the acquisition cost, thedifference is recognized as write-down of securities.
(2) If the fair value as of the balance sheet date declines by 30% or more but less than 50% compared to theacquisition cost, write-down of securities is recognized for the securities which meets criteria of the Group after
considering the financial condition of the issuer and past trend of the market value for a certain period.
6. Unrealized Gain (Loss) on Available-for-Sale Securities
Unrealized gain (loss) on available-for-sale securities at March 31, 2024 and 2023 consisted of the following:

Unrealized gain (loss):
Available-for-sale securities
Deferred tax liabilities
Unrealized gain (loss) on available-for-sale securities
before adjustments by equity interest:
Non-controlling interests
Unrealized gain (loss) on available-for-sale securities¥¥

Millions of yen
2024
2023

Thousands of
U.S. dollars
2024(10,750)96(3,889)(554)$ (71,003)
634(4,444)(13)(4,458)(70,363)(92)$ (70,462)(10,653)(14)(10,668)¥¥

7. Bills Discounted
Bills discounted are accounted for as financial transactions rather than as purchased bills in accordance with JICPA
Industry Committee Practical Guideline No. 24 (March 17, 2022). The Group has the right to sell or pledge(repledge) such bills without any restrictions. These include commercial bills discounted. The total face value ofsuch financial transactions at March 31, 2024 and 2023 amounted to ¥2,930 million ($19,352 thousand) and ¥2,499
million, respectively.
Contracts for overdraft facilities and loan commitments are contracts under which the Group lends money tocustomers up to their prescribed limits at the customers’ request as long as there are no violations of any of theconditions in the contracts. The aggregate unutilized balances within the limits of these contracts totaled ¥288,274
million ($1,904,055 thousand) and ¥298,319 million at March 31, 2024 and 2023, respectively, including thecontracts whose contractual periods were either less than one year or revocable at any time, in the amount of¥260,991 million ($1,723,850 thousand) and ¥280,781 million, respectively.
15

Since many of these commitments expire without being fully utilized, the unutilized amounts do not necessarily
represent future cash commitments of the consolidated subsidiaries. Most of these contracts include provisions
which stipulate that the consolidated subsidiaries can reject customers’ requests or decrease the contract limits foran appropriate reason, such as a change in financial situation and preservation of claims. At the inception of thecontracts, they obtain collateral in the form of real estate, securities, and so forth, if deemed necessary. Subsequently,
they, based on its internal rules, perform periodic reviews of the customers’ business results and may take necessary
measures such as reconsidering the terms and conditions of the contracts and/or requiring additional collateral or
guarantees.
8. Claims to Be Disclosed Under the Financial Revitalization Act and the Banking Act
Claims to be disclosed under the Act on Emergency Measures for the Revitalization of the Financial Functions (the“Financial Revitalization Act”) are included in: corporate bonds (limited to those principal and interest are fully or partially secured and issued under
private placements as permitted in Article 2, paragraph 3 of the Financial Instruments and Exchange Act)
under “Securities,”
 “Loans and bills discounted,”
 “Foreign exchange assets,”
 Accrued interest and suspense payments under “Other assets,”
 “Customers’ liabilities for acceptances and guarantees” and securities when such securities are lending (limited to those under loan for use contracts or lease contracts).
The following table summarizes claims to be disclosed under the Financial Revitalization Act and the Baking Act.
Millions of yen
2024
2023
Claims against bankrupt or quasi-bankrupt
obligors
Doubtful claims
Claims past due for three months or more
Restructured claims
Total¥ 7,718
31,789838¥ 40,345¥

8,683
27,189891¥ 36,764

Thousands of
U.S. dollars
2024$ 50,977
209,966
5,535$ 266,479

Claims against bankrupt or quasi-bankrupt obligors present loans to obligors in bankruptcy procedures, includingcommencement of bankruptcy proceedings, reorganization proceedings and rehabilitation proceedings, and otherrelevant claims.
Doubtful claims present loans, other than claims against bankrupt or quasi-bankrupt obligors, for which the obligors
have not yet entered into bankruptcy, but their financial conditions and business performance have deteriorated,
and therefore, it is highly probable that the principal and interest cannot be collected in accordance with contracts.
Claims past due for three months or more represent loans on which the payment of principal and/or interest has notbeen received for three months or more from the day after the due date, and which are not classified as “claims
against bankrupt or quasi-bankrupt obligors” or “doubtful claims.”
Restructured claims are loans which have been restructured to facilitate or support the reconstruction of obligors
who are experiencing financial difficulties, with the intention of ensuring the recovery of the loans by providing
more flexible repayment terms for the obligors (such as reducing the rate of interest, suspending the payment ofprincipal/interest, forgiving debt, etc.) and loans which are not classified in any of the above categories.
The amounts of claims are before deducting allowance for loan losses.
9. Tangible Fixed Assets
At March 31, 2024 and 2023, accumulated depreciation of tangible fixed assets was ¥29,672 million ($195,984
thousand) and ¥29,179 million, respectively.
The amounts of advanced depreciation by reduction of carrying amount of assets as of and for the years ended
March 31, 2024 and 2023 were as follows:16

Thousands of
U.S. dollars
2024

Millions of yen
2024
2023
Balance as of the fiscal year-end
Amount applicable for the year

¥

957

¥

-

957

$

6,321

-

-

10. Revaluation of Land
In accordance with the “Act on Revaluation of Land” (Act No. 34 of March 31, 1998), land used for business
operations of Shonai was revalued as of the date indicated below. The excess of revaluation to carrying amount at
the time of revaluation, net of income taxes corresponding to the excess which are recognized as “Deferred tax
liabilities for land revaluation,” is stated as “Revaluation reserve for land” under net assets.
Date of revaluation: September 30, 1999
The method of revaluation of asset set forth in Article 3, paragraph 3 of the “Act on Revaluation of Land”:
Fair values are determined based on the land price registered in the book of taxation on land stipulated in Article
2-3 of the “Order for Enforcement of Act on Revaluation of Land” (the “Ordinance”) (Cabinet Order No. 119 ofMarch 31, 1998), with price adjustments by shape and time and the appraisal value by an independent real estateappraiser as provided by Article 2-5 of the Ordinance.
The difference between the total fair value of land used for business operations revalued pursuant to Article 10 of
the “Act on Revaluation of Land” and carrying amount after revaluation of the relevant land at March 31, 2024
and 2023 was ¥790 million ($5,217 thousand) and ¥858 million, respectively.
11. Borrowed Money and Lease Obligations
Borrowed money and lease obligations at March 31, 2024 and 2023 were as follows:
Millions of yen
2023
2024

Thousands of
U.S. dollars
2024

Averageinterest rate(%)

¥ 87,700¥ 116,000$ 579,260

0.00

Current portion of lease obligations

226

90

1,492

1.86

Lease obligations, less current
portion

729

292

4,815

2.17

Borrowed money

MaturityJul. 2024
throughJun. 2026
Aug. 2025
throughFeb. 2031

Notes: (1) Average interest rate is calculated based on the interests and the balances as of the balance sheet date by the weighted
average method.
(2) Of lease obligations, sublease obligations are accounted for at the amount equivalent to interest portion included in totallease payments. Thus, such obligations are excluded from calculating the average interest rate of lease obligations.
(3) Annual maturities of borrowed money and lease obligations within five years at March 31, 2024 are as follows:
Millions of yen

Borrowed money
Lease obligations

Due in one year
or less

Due after one
year through twoyears

Due after two
years throughthree years

Due after three
years throughfour years

Due after four
years throughfive years

¥

¥

¥

¥

¥

77,900
226

4,900
222

4,900
214

177

81

Thousands of U.S. dollars

Due in one year
or less

Borrowed money
Lease obligations$ 514,531
1,492

Due after one
year through twoyears

Due after two
years throughthree years

Due after three
years throughfour years

Due after four
years throughfive years

$

$

$

$

32,3641,466
17

32,364
1,413

1,169

535

Note: Lease obligations are included in “Other liabilities” in the accompanying consolidated balance sheet.

12. Assets Pledged
Assets pledged as collateral at March 31, 2024 and 2023 consisted of the following:Thousands of
U.S. dollars

Millions of yen
Securities

2024

2023

2024

¥ 176,763¥ 157,783$ 1,167,523

The liabilities secured by the above pledged assets at March 31, 2024 and 2023 consisted of the following:Thousands ofMillions of yen
U.S. dollars
Payables under securities lending transactions

2024

2023

¥ 88,768¥ 41,651

87,700116,000

Borrowed money

2024$

586,314579,260

In addition to the pledged assets listed above, the following assets are pledged as collateral of domestic exchangetransactions or as margins on futures contracts at March 31, 2024 and 2023:
Thousands of
U.S. dollars
2024

Millions of yen
2024
2023
Securities¥ 113,995¥ 99,3978

8

52

33,08232,000218,507

Cash and due from banks
Other assets$

752,939

Note: Other assets include guarantee deposits in the amount of ¥308 million ($2,034 thousand) and ¥294 million at March 31, 2024
and 2023, respectively.

13. Retirement Benefit Plans
The Company and its consolidated banking subsidiaries have a defined contribution plan as well as a corporate
pension plan and a lump-sum payment plan, as defined benefit plans. In addition, additional retirement allowance
may be paid to employees when they retire. Further, a retirement benefit trust is established for the lump-sum
payment plan of consolidated banking subsidiaries of the Company.
Each retirement benefit plan has adopted the point system under which certain points are given based on thefunctional classes and titles and employees are entitled to lump-sum payments based on the accumulated points atthe time of the termination multiplied by unit price by point.
Certain consolidated subsidiaries other than the consolidated banking subsidiaries have lump-sum payment plans
as defined benefit pension plans, and adopt the simplified method in calculating defined benefit liability andretirement benefit expenses.

18

Defined benefit pension plans(1) Reconciliation between retirement benefit obligations at beginning of year and end of year
Thousands ofMillions of yen
U.S. dollars
2024
Retirement benefit obligations at beginning of year
Service costs
Interest costs
Actuarial gains and losses arising during year
Retirement benefits paid¥

Retirement benefit obligations at end of year¥

10,381
375
44
(260)
(798)
9,741

2023
¥

¥

11,264
393
27
(390)
(913)
10,381

2024$$

68,5662,476
290(1,717)(5,270)64,339(2) Reconciliation between plan assets at beginning of year and end of year
Thousands of
U.S. dollars

Millions of yen
2024
Plan assets at beginning of year
Expected return on plan assets
Actuarial gains and losses
Contribution from employer
Retirement benefits paid¥

Plan assets at end of year¥

10,930
163
1,221
92
(569)
11,8382023¥¥

11,700
175
(268)
92
(769)
10,9302024$$

72,192
1,076
8,064
607
(3,758)78,190Note: Retirement benefit trust is included in plan assets.

(3) Reconciliation between retirement benefit obligations and plan assets at end of year and defined benefit
liability and defined benefit asset on the consolidated balance sheets
Thousands of
U.S. dollars

Millions of yen
2023

2024
Funded retirement benefit obligation
Plan assets
Unfunded retirement benefit obligation
Net balance of liability and asset recorded on the
consolidated balance sheets

¥

9,526
(11,838)(2,312)
215¥

10,159(10,930)
(770)
221

$

62,919(78,190)(15,270)
1,420¥(2,096)

¥

(549)

$

(13,844)

Thousands of
U.S. dollars

Millions of yen
Defined benefit liability
Defined benefit asset
Net balance of liability and asset recorded on the
consolidated balance sheets
Note: Retirement benefit trust is included in plan assets.

19

2024

¥

472
(2,569)¥750(1,299)$3,117(16,968)¥(2,096)

¥

(549)

$

(13,844)(4) Retirement benefit expenses and components thereofService costs
Interest costs
Expected return on plan assets
Amortization of actuarial gains and losses
Amortization of past service costs
Other
Retirement benefit expenses on defined benefit
plans

Millions of yen
2024
2023
¥
375
¥
393
44
27
(163)
(175)
42
53
(217)
(217)
18
18
¥

99

¥

100

Thousands of
U.S. dollars
2024
$
2,476
290
(1,076)277(1,433)
118$

653

Note: Retirement benefit expenses of the consolidated subsidiaries adopting the simplified method are collectively included in“Service costs.”(5) Components of items recorded in remeasurements of defined benefit plans in other comprehensive income,before tax, are as follows:
Thousands ofMillions of yen
U.S. dollars
2023
2024
2024
Past service costs
¥
(217)
¥
(217)
$
(1,433)
Actuarial gains and losses
175
10,072
1,525
¥
1,307
¥
(41)
$
8,632
Total
(6) Components of items recorded in remeasurements of defined benefit plans in accumulated othercomprehensive income, before tax, are as follows:
Thousands ofMillions of yen
U.S. dollars
2024
2023
2024
Unrecognized past service costs
¥
(217)
¥
(435)
$
(1,433)
Unrecognized actuarial gains and losses(137)(10,977)(1,662)¥ (1,879)¥(572)$ (12,410)
Total(7) Components of plan assets(i) Percentages to total plan by major category are as follows:
2024
32.3%
25.6
3.9
0.0
6.2
32.0
100.0%

Debt securities
Equity securities
Cash and deposits
Call loans
General account
Other
Total

2023
34.6%
26.8
3.5
0.0
6.7
28.4
100.0%

Note: 36.8% and 36.8% of the total plan assets consisted of the retirement benefit trust established for the lump-sum
payment plan as of March 31, 2024 and 2023, respectively.

(ii) Determination of expected long-term rate of plan assets
The expected long-term rate of return on plan assets is determined considering current and expecteddistribution of plan assets and current and expected long-term rate of return derived from various
components of plan assets.

20

(8) Actuarial assumptions at end of year
2024
0.53% - 0.92%
1.50%
2.10% - 2.40%

Discount rate
Expected long-term rate of return on plan assets
Expected rate of salary increase2023
0.31% - 0.63%
1.50%
2.10% - 2.40%

Defined contribution pension plans
The amounts to be contributed to the defined contribution pension plans of the Company and its consolidated
subsidiaries were ¥153 million ($1,010 thousand) and ¥157 million as of March 31, 2024 and 2023, respectively.
14. Contingent Liabilities
Guarantee liabilities for corporate bonds acquired through private offering (as defined in Article 2-3 of the Financial
Instruments and Exchange Act) among those classified as corporate bonds in “Securities” amounted to ¥36,116
million ($238,546 thousand) and ¥31,603 million at March 31, 2024 and 2023, respectively.
15. Shareholders’ Equity
Japanese banks are required to comply with the Banking Act and the Companies Act. The Companies Act stipulates
that neither additional paid-in capital nor the legal reserve is available for dividends, but that both may be used toreduce or eliminate a deficit. Under the Banking Act, an amount which is at least equal to 20% of the aggregate
amount of cash dividends and certain appropriations of retained earnings associated with cash outlays applicableto each fiscal period is to be appropriated to the legal reserve until the aggregate amount of the legal reserve andthe capital surplus account equals 100% of the amount of share capital. The Companies Act also provides that if
the aggregate amount of additional paid-in capital and the legal reserve exceeds 100% of the amount of sharecapital, the excess may be distributed to the shareholders either as a return of capital or as dividends subject to theapproval of the shareholders.
The maximum amount which the bank can distribute as dividends is calculated based on the non-consolidated
financial statements of the bank and in accordance with the Companies Act.
Movements in common stock, preferred stock and treasury stock during the years ended March 31, 2024 and 2023
are summarized as follows:
Number of shares (in thousands)
Increase
Decrease March 31, 2024
Ref.
April 1, 2023
Issued shares:
Common stock
18,142
18,142
Total
18,142
18,142
Treasury stock:
Common stock
81
8
41
48
(1), (2)
Total
81
8
41
48
Notes: (1) Increase in number of treasury stock of common stock is due to 7 thousand shares of request for purchase of less than one
unit and 0 thousand shares of acquisition of the restricted stock for free.
(2) Decrease in number of treasury stock of common stock is due to sale of shares as the restricted stock compensation.

Number of shares (in thousands)
Increase
Decrease March 31, 2023
April 1, 2022
Issued shares:
Common stock
Preferred stock class B
Total
Treasury stock:
Common stock
Preferred stock class B
Total

18,142
1,250
19,392

-

1,250
1,250

18,142
18,142

17
17

107
1,250
1,357

42
1,250
1,292

81
81

21

Ref.

(2), (3)Notes: (1) Decrease in number of issued shares of preferred stock class B is due to 1,250 thousand shares of cancellation of treasury
stock.
(2) Increase in number of treasury stock of common stock is due to 100 thousand shares of market purchase and 7 thousand
shares of request for purchase of less than one unit.
(3) Decrease in number of treasury stock of common stock is due to 42 thousand shares of sale as the restricted stockcompensation and 0 thousand shares of request for sale of less than one unit.
(4) Increase in number of treasury stock of preferred stock class B is due to 1,250 thousand shares of acquisition based on
the resolution at the Board of Directors’ meeting held on February 24, 2023. Decrease of 1,250 thousand shares is due tocancellation.

16. Stock Compensation
The restricted stock compensation plan
The Company has the restricted stock compensation plan for directors (excluding outside directors and membersof the Auditing Committee) and executive officers of the Company (collectively, the “Directors, etc. of theCompany”) and the directors (excluding outside directors and members of the Audit and Supervisory Committee)
and executive officers of the Company’s banking subsidiaries (collectively, the “Directors, etc. of the Company’sbanking subsidiaries”).
(1) Amount and account name of the restricted stock compensation
Thousands of
U.S. dollars

Millions of yen
2024
Personnel expenses(General and administrative expenses)

¥

58

2023
¥

2024
41

$

383

(2) Outline of the restricted stock compensation
Granted in July 2022
Director of the Company: two (Note1)
Executive officer of the Company: seven
Grantee (allottee)
Director of the Company’s banking subsidiaries: 12 (Note 2)
Executive officer of the Company’s banking subsidiaries: 12
Class and number of shares
Common stock of the Company: 42,600 shares
Date of grant
July 21, 2022
The period from the date of ordinary general meetings of shareholders of theCompany and the Company’s banking subsidiaries held in 2022 to the date of
Eligible service period
ordinary general meetings of shareholders of the Company and the Company’sbanking subsidiaries scheduled to be held in 2023.
The period from August 10, 2022, the date of sale of the Company’s shares, toRestriction period
the date on which the allottee resigns from any position of the Directors, etc. of
the Company or the Company’s banking subsidiaries.
The Company shall lift the restriction on transfer of all allotted shares held byan allottee as of the expiration of the restriction period on the condition that theallottee continues to be the Directors, etc. of the Company or the Company’sbanking subsidiaries from the commencement date of the restriction period tothe date of the first ordinary general meeting of shareholders of the Company(if the allottee is the Directors, etc. of the Company’s banking subsidiaries, thedate of the first ordinary general meeting of shareholders of the applicable
Conditions for liftingbanking subsidiary). However, if the allottee resigns from any position of the
Directors, etc. of the Company or the Company’s banking subsidiaries, forgood reasons approved by the Compensation Committee of the Company (ifthe allottee is the Directors, etc. of the Company’s banking subsidiaries, theBoard of Director of the applicable banking subsidiary), by the day before thefirst ordinary general meeting of shareholders of the Company (if the allottee isthe Directors, etc. of the Company’s banking subsidiaries, the day before the22Fair value on the grant datefirst ordinary general meeting of shareholders of the applicable banking
subsidiary) after the commencement date of the restriction period, the transfer
restriction of the allotted shares shall be lifted, as of the time immediately
following the resignation, with respect to the allotted shares determined asfollows: the number of months from July 2022 to the month including the dayon which the allottee resigns from the position of the Directors, etc. of theCompany or the Company’s banking subsidiaries, divided by 12, multiplied by
the number of the allotted shares held by the allottee as of such time (anyfraction less than one share resulting from the calculation shall be roundeddown).
¥1,289 ($8,513)

Notes: (1) Outside Directors and members of the Auditing Committee are excluded.
(2) Outside Directors and members of the Audit and Supervisory Committee are excluded.

Grantee (allottee)
Class and number of shares
Date of grantEligible service period

Restriction period

Conditions for lifting

Fair value on the grant date

Granted in July 2023
Director of the Company: three (Note1)
Executive officer of the Company: seven
Director of the Company’s banking subsidiaries: 9 (Note 2)
Executive officer of the Company’s banking subsidiaries: 17
Common stock of the Company: 41,500 shares
July 20, 2023
The period from the date of ordinary general meetings of shareholders of theCompany and the Company’s banking subsidiaries held in 2023 to the date ofordinary general meetings of shareholders of the Company and the Company’sbanking subsidiaries scheduled to be held in 2024.
The period from August 18, 2023, the date of sale of the Company’s shares, tothe date on which the allottee resigns from any position of the Directors, etc. of
the Company or the Company’s banking subsidiaries.
The Company shall lift the restriction on transfer of all allotted shares held byan allottee as of the expiration of the restriction period on the condition that theallottee continues to be the Directors, etc. of the Company or the Company’sbanking subsidiaries from the commencement date of the restriction period tothe date of the first ordinary general meeting of shareholders of the Company(if the allottee is the Directors, etc. of the Company’s banking subsidiaries, thedate of the first ordinary general meeting of shareholders of the applicablebanking subsidiary). However, if the allottee resigns from any position of the
Directors, etc. of the Company or the Company’s banking subsidiaries, forgood reasons approved by the Compensation Committee of the Company (ifthe allottee is the Directors, etc. of the Company’s banking subsidiaries, theBoard of Director of the applicable banking subsidiary), by the day before thefirst ordinary general meeting of shareholders of the Company (if the allottee isthe Directors, etc. of the Company’s banking subsidiaries, the day before thefirst ordinary general meeting of shareholders of the applicable banking
subsidiary) after the commencement date of the restriction period, the transfer
restriction of the allotted shares shall be lifted, as of the time immediately
following the resignation, with respect to the allotted shares determined asfollows: the number of months from July 2023 to the month including the dayon which the allottee resigns from the position of the Directors, etc. of theCompany or the Company’s banking subsidiaries, divided by 12, multiplied by
the number of the allotted shares held by the allottee as of such time (anyfraction less than one share resulting from the calculation shall be roundeddown).
¥1,442 ($9,524)

Notes: (1) Outside Directors and members of the Auditing Committee are excluded.
(2) Outside Directors and members of the Audit and Supervisory Committee are excluded.

23

(3) Changes in the number of the restricted stock
Granted in July
Granted in July
2022
2023
sharesMarch 31, 2023 - outstanding
42,600Granted
41,500Acquired for free (Note)
150
Lifted6,450
March 31, 2024 - outstanding
36,00041,500Note: If an allottee resigns from any position of the Directors, etc. of the Company or the Company’s banking subsidiaries, from thecommencement date of the restriction period to the day before the first ordinary general meeting of shareholders of theCompany (if an allottee is the Directors, etc. of the Company’s banking subsidiaries, the day before the first ordinary general
meeting of shareholders of the applicable banking subsidiary), the Company shall acquire allotted shares for free at the timeof resignation, unless there is any good reason approved by the Compensation Committee (if the allottee is the Directors, etc.
of the Company’s banking subsidiaries, the Board of Directors of the applicable banking subsidiary).
Furthermore, if there are any allotted shares not lifted, in accordance with provisions in the aforementioned conditions forlifting, at the time that restriction period is expired (the “time of expiration”), the Company shall acquire such shares for free
immediately after the time of expiration.

(4) Method to estimate fair value on the grant dateIn order to avoid arbitrariness, the Company estimates the fair value to be the closing price of the Company’scommon stock on the Tokyo Stock Exchange on the business day immediately preceding the date of resolution by
the Board of Directors’ meeting in connection with the grant of the restricted stock.
17. Revenue Recognition(1) Information on disaggregated revenue from contracts with customers
Millions of yen
2023
2024
Fees and commissions:
Deposits and loans operations
Foreign exchange operations
Securities-related operations
Agency operations
Custody/safe deposits operations
Other operations
Total
Other ordinary income
Ordinary income from contracts with customers
Ordinary income other than above (Note 1)

¥

1,927
1,348
74
3,791
57
1,305
¥ 8,504
1,805¥ 10,309
39,634

Ordinary income (Note 2)¥ 49,944

¥

1,911
1,382
68
3,441
59
1,242
¥ 8,105
1,902¥ 10,008
41,403¥ 51,411

Thousands of
U.S. dollars
2024$ 12,727
8,903
488
25,039376
8,619$ 56,169
11,922$ 68,091
261,783$ 329,881

Notes: (1) It mainly consists of transactions related to financial instruments included in the scope of ASBJ Statement No. 10“Accounting Standard for Financial Instruments,” lease transactions included in the scope of ASBJ Statement No. 13“Accounting Standard for Lease Transactions” and fees and commissions received on origination or acquisition offinancial instruments.
(2) “Ordinary income” is defined as income less certain special income included in the accompanying consolidated statements
of income.

(2) Information on basis of revenue from contracts with customers
Information on basis of revenue from contracts with customers is omitted since it is described in Note “3.
Significant Accounting Policies, (12) Recognition of significant revenue and expenses.”24

18. General and Administrative Expenses
General and administrative expenses for the years ended March 31, 2024 and 2023 included the following:
Millions of yen
2023
2024
¥ 10,357¥ 10,718
253
257
2,578
2,596

Salaries and allowances
Retirement benefit expenses
Outsourcing expenses

Thousands of
U.S. dollars
2024$ 68,408
1,671
17,027

19. Other Expenses
Other expenses for the years ended March 31, 2024 and 2023 included the following:
Millions of yen
2024
2023
¥ 2,152¥ 1,400

Loss on sale of equity securities, etc.

Thousands of
U.S. dollars
2024$ 14,214

20. Impairment Loss
For the years ended March 31, 2024 and 2023, with regard to assets from which cash flows declined due todecrease in income from operating activities, idle properties and assets which were determined to be sold, theCompany recognized the impairment loss by writing off the carrying amount of each asset to its respective
recoverable amount.
March 31, 2024
Category

Area

Main use

Description

Business assets

Within Akita
Prefecture

Banking office –four locations

Land andbuildings

Business assets

Within Yamagata
Prefecture

Banking office –six locations

Land andbuildings

Corporate assets

Within Yamagata
Prefecture

Corporate assets –one location

Buildings

Total

Impairment loss
Thousands of
U.S. dollars
Millions of yen
¥

¥

82

$

541

151

997

30

198

263

$

1,737

Impairment loss

March 31, 2023
Category

Area

Business assets

Within Akita
Prefecture

Banking office –four locations

Main use

Land andbuildings

Description

Business assets

Within Yamagata
Prefecture

Banking office –two locations

Land andbuildings

119

Corporate assets

Within Yamagata
Prefecture

Corporate assets –three locations

Land andbuildings

205

Idle assets

Within Yamagata
Prefecture

Idle assets –one location

Buildings

Total

Millions of yen
¥

147

7
¥

480

Banking offices of consolidated subsidiaries in the banking business are grouped by office which is the minimum
unit for management accounting purposes. Certain banking office group which operates in cooperation isconsidered as one unit, and banking offices located in the same building are also considered as one unit. For idle
assets and assets held for sale, each asset is considered as the minimum unit. Head office, administrative centersand others are considered as corporate assets since they contribute to generate future cash flows of multiple assets
or asset groups.
The Company and consolidated subsidiaries in other than the banking business are grouped by entity as a general
rule.
25

The recoverable amount of relevant asset group is measured at net selling price and calculated by deducting
estimated costs to sell from the amount which properly reflects the fair market value such as real estate appraisal
value or roadside land prices.
21. Other Comprehensive Income
Reclassification adjustments and income tax effect for each component of other comprehensive income for theyears ended March 31, 2024 and 2023 were as follows:
Thousands ofMillions of yen
U.S. dollars
2023
2024
2024
Unrealized gain (loss) on available-for-salesecurities:
Gain (loss) arising during the year¥
(6,166)¥ (23,664)$(40,726)
Reclassification adjustments
(693)
4,929
(4,577)
Before income tax effect(6,860)(18,735)(45,310)
Income tax effect
651
3,959
4,299
Unrealized gain (loss) on available-for(6,208)(14,776)(41,003)sale securities
Deferred gain (loss) on hedges:
Adjustments arising during the year
2,314
(3)
15,284
Reclassification adjustments(1,422)(9,392)
Before income tax effect
891
(3)
5,885
Income tax effect(271)
1(1,789)Deferred gain (loss) on hedges
619
(2)
4,088
Remeasurements of defined benefit plans:
Adjustments arising during the year
1,482
121
9,788
Reclassification adjustments
(174)
(163)
(1,149)Before income tax effect
1,307
(41)
8,632
Income tax effect(430)
32(2,840)Remeasurements of defined benefit plans
876
(9)
5,785
Total other comprehensive income¥ (14,788)$(31,122)¥(4,712)
22. Cash and Cash Equivalents
A reconciliation of cash and due from banks in the accompanying consolidated balance sheets to cash and cash
equivalents in the accompanying consolidated statements of cash flows at March 31, 2024 and 2023 is summarized
as follows:
Thousands ofMillions of yen
U.S. dollars
2024

2023

2024

Cash and due from banks
Due from banks (excluding due from BoJ)¥

306,340(3,815)¥ 316,923(4,886)$ 2,023,381(25,198)

Cash and cash equivalents¥

302,525¥ 312,037$ 1,998,183

23. Income Taxes
The tax effect of temporary differences which gave rise to significant portions of the deferred tax assets andliabilities at March 31, 2024 and 2023 consisted of the following:

26

Millions of yen
2024
2023
Deferred tax assets:
Allowance for loan losses
Unrealized gain (loss) on available-for-salesecurities
Defined benefit liability
Depreciation
Write-down of securities
Tax loss carryforwards
Other

¥

7,858

¥

3,299
1,477
603
186
152
1,137
14,715(9,764)Gross deferred tax assets
Valuation allowance

7,407

Thousands of
U.S. dollars
2024
$

1,750
1,612
616
171
503
1,256
13,319(7,546)51,902
21,789
9,755
3,982
1,228
1,003
7,509
97,192(64,491)

Total deferred tax assets

¥

4,951

¥

5,772

$

32,701

Deferred tax liabilities:
Unrealized gain (loss) on available-for-salesecurities
Other
Total deferred tax liabilities¥(14)(1,397)(1,412)

¥

(554)
(884)
(1,439)$(92)(9,227)(9,326)

Net deferred tax assets (liabilities)

¥

3,539

¥

4,333

$

23,375Reconciliation of the statutory tax rate to the effective tax rate for the years ended March 31, 2024 and 2023 isshown as below.
2024
2023
Normal effective statutory tax rate
30.58%
30.58%
Non-deductible expenses such as entertainment expenses
0.90
0.46
Non-taxable income such as dividend income(14.62)(15.14)Per capita inhabitant tax
1.50
1.03
Valuation allowance
24.44(7.61)
Consolidation adjustments
13.15
16.52
4.57
1.70
Other
60.52%
27.54%
Actual effective tax rate
24. Segment Information(1) Segment information
The Group has a single segment of banking business. Accordingly, segment information by reportable segment
is omitted.

27

(2) Related information
Information by service

March 31, 2024
Ordinary income from external customers

March 31, 2023
Ordinary income from external customers

March 31, 2024
Ordinary income from external customers

Lending¥ 19,155

Millions of yen
Securities
investment
Other¥ 16,686¥ 14,103¥

Lending¥ 18,014

Millions of yen
Securities
investment
Other¥ 19,573¥ 13,824

Total¥ 51,411

Lending$ 126,519

Thousands of U.S. dollars
Securities
investment
Other$ 110,211$ 93,150

Total$ 329,881

Total
49,944

Note: “Ordinary income” is defined as income less certain special income included in the accompanying consolidated
statements of income.

Geographic information(i) Ordinary income
Information about ordinary income by geographic area for the years ended March 31, 2024 and 2023 isomitted as ordinary income from external customers in Japan was more than 90% of ordinary income inthe consolidated statements of income.
(ii) Tangible fixed assets
Information about tangible fixed assets by geographic area as of March 31, 2024 and 2023 is omitted astangible fixed assets in Japan was more than 90% of “Tangible fixed assets” in the consolidated balance
sheets.
Information by major customer
Information by major customer for the years ended March 31, 2024 and 2023 is omitted since there was no
single external customer accounting for 10% or more of the consolidated ordinary income.

28

25. Related Party Transactions
Transactions between the Company’s consolidated subsidiaries and their directors and major shareholders as ofMarch 31, 2024 and 2023 and for the years then ended are as follows:
2024
Type

Companies,
etc. whose
voting rights
are owned by
the director(including thedirector oftheconsolidated
subsidiaries)
or his/her
relatives

Address

Akita Kubota
Co., Ltd.
Note (1)

Akita city,
Akita Pref.

¥60

Agricultural
machines
distributor

0.0% directly
heldLending¥114 million($752
thousand)

Loans andbills
discounted

Akita city,
Akita Pref.

¥40

Car
distributor

0.0% directly
heldLending¥1,048million($6,922
thousand)

Loans andbills
discounted¥1,140
million($7,529
thousand)Akita city,
Akita Pref.

¥36

Rental andlease ofvehicles

0.0% directly
heldLending¥540 million($3,566
thousand)

Loans andbills
discounted¥540 million($3,566
thousand)Akita city,
Akita Pref.

¥20

Amusement-

Lending¥40 million($264
thousand)

Loans andbills
discounted¥40 million($264
thousand)Lending¥882 million($5,825
thousand)

Loans andbills
discounted¥1,152
million($7,608
thousand)Guarantee forliabilities¥352 million($2,324
thousand)Customers’
liabilities for
acceptancesandguarantees¥403 million($2,661thousand)

Netz Toyota
Akita Co.,
Ltd.
Note (2)Toyota Renta
Lease Akita
Co., Ltd.
Note (2)ROYAL
CENTURY
GOLF CLUB
Note (3)OkuyamaBoring Co.,
Ltd.
Note (4)P.C. Cock
CenterCorporation
Note (5)HasebeArchitect
Corporation
Note (6)Yokote city,
Akita Pref.

¥40

Business

Ownershipsof votingrights (%)

Transaction
type

Transaction
amountAccount

Balance at
March 31,2024
¥273 million($1,803thousand)

Name

Capital(Millions ofyen)

0.0% directly
heldConstruction

Tsuruokacity,
Yamagata
Pref.

¥8

Road
transport-

Lending¥90 million($594
thousand)

Loans andbills
discounted¥90 million($594
thousand)Shonai Cho,
Yamagata
Pref.

¥3

Generalconstructor-

Lending¥20 million($132
thousand)

Loans andbills
discounted¥18 million($118
thousand)

Name

Address

Capital(Millions ofyen)

Business

Ownershipsof votingrights (%)

Transaction
type

Transaction
amountAccount

Balance at
March 31,
2023

Akita Kubota
Co., Ltd.
Note (1)

Akita city,
Akita Pref.

¥60

Agricultural
machines
distributor

0.0% directly
heldLending¥136 million

Loans andbills
discounted¥116 million

Akita city,
Akita Pref.

¥40

Car
distributor

0.0% directly
heldLending¥965 million

Loans andbills
discounted¥1,380 million

Akita city,
Akita Pref.

¥36

Rental andlease ofvehicles

0.0% directly
heldLending¥540 million

Loans andbills
discounted¥540 million

Akita city,
Akita Pref.

¥20

Amusement-

Lending¥40 million

Loans andbills
discounted¥40 million

Lending¥776 million

Loans andbills
discounted¥671 million¥247 million

Customers’
liabilities for
acceptancesandguarantees¥311 million

2023
Type

Companies,
etc. whose
voting rights
are owned by
the director(including thedirector oftheconsolidated
subsidiaries)
or his/her
relatives

Notes:

Netz Toyota
Akita Co.,
Ltd.
Note (2)Toyota Renta
Lease Akita
Co., Ltd.
Note (2)ROYAL
CENTURY
GOLF CLUB
Note (3)OkuyamaBoring Co.,
Ltd.
Note (4)

Yokote city,
Akita Pref.

¥400.0% directly
heldConstruction

Guarantee forliabilities(1) Akita Kubota Co., Ltd. is a subsidiary of Ishii Shoji Co., Ltd. Tadanari Ishii, who is a director of Hokuto which is a significant consolidated subsidiary of theCompany, and his relatives own the majority of voting rights of Ishii Shoji Co., Ltd.
(2) Tadanari Ishii, who is a director of Hokuto which is a significant consolidated subsidiary of the Company, his relatives and Ishii Shoji Co., Ltd. own the majorityof voting rights of Netz Toyota Akita Co., Ltd. Toyota Renta Lease Akita Co., Ltd. is a subsidiary of Netz Toyota Akita Co., Ltd.
(3) Tadanari Ishii, who is a director of Hokuto which is a significant consolidated subsidiary of the Company, and his relatives own the majority of voting rights of
ROYAL CENTURY GOLF CLUB.
(4) Kazuhiko Okuyama, a director and a member of Audit and Supervisory Committee of Hokuto which is a significant consolidated subsidiary of the Company, andhis relatives own the majority of voting rights of Okuyama Boring Co., Ltd.

29

(5) Hikaru Adachi is a director and audit & supervisory board member of Hokuto which is a significant consolidated subsidiary of the Company. His relative owns
the majority of voting rights of P.C. Cock Center Corporation.
(6) Tsukasa Kondo is a director and audit & supervisory board member of Shonai which is a significant consolidated subsidiary of the Company. His relative owns
the majority of voting rights of Hasebe Architect Corporation.
(7) The transactions are with Hokuto and Shonai, which are significant consolidated subsidiaries of the Company, and the trading conditions and policies are thesame as those of the transactions with general parties.
(8) The transaction amount is shown by the average balance.

There is no other related party transaction to be disclosed for the years ended March 31, 2024 and 2023.
26. Financial Instruments and Related Disclosures(1) Status of Financial Instruments(i) Policy on financial instruments
The Group is engaged in financial information services centering on banking business such as deposittaking and lending services for domestic corporate and individual customers and management of
securities such as debt and equity securities and investment trusts. The Group accepts risk as long as it
remains financially healthy and intends to improve its earning power in order to continue to conduct
these services.
The Group holds financial assets and liabilities exposed to the fluctuation risk of interest rates.
Accordingly, the Group conducts asset and liability management (ALM) and enters into derivativetransactions, if necessary, in order to avoid adverse effect by the interest-rate fluctuation.
(ii) Contents of financial instruments and their risks
Financial assets held by the Group mainly consist of loans and bills discounted to domestic corporate
and individual customers, which are exposed to credit risk arising from customers’ nonperformance ofcontractual obligations. In addition, securities, principally consisting of equity securities, debt securities,
investment trusts and investments in partnerships, are held for the purposes of net investment andstrategic investment. These financial assets are exposed to credit risk of issuers and fluctuation risk ofinterest rates and market prices.
Major financial liabilities, consisting of deposits and negotiable certificates of deposit, are principally
deposits accepted from domestic corporate and individual customers. They require attentions to liquidity
risk arising from concentrated cancellation of deposits, but most of those deposits are from individual
customers and accordingly, the risk is dispersed to small accounts. The liquidity risk is also controlled
by limiting the ratio of large deposit accounts to a certain level.
Derivative contracts which the Group enters into consist of interest rate swaps employed as part of ALM
and futures of debt securities held as available-for-sale securities, options, etc. These derivatives are notentered into for speculative purpose but mainly for hedging purposes.
(iii) Risk management system for financial instruments
The Group has established the “Basic Policy on Risk Management” and various risk control rules and asystem to conduct the risk management as follows:a. Credit risk management:
In accordance with the “Credit Policy” and “Credit Risk Management Rule,” for loans and bills
discounted, a credit control system has been established and maintained, including credit review by
individual contract, credit limit control, credit information control, internal ratings, retrospective
control including self-assessment, establishment of guaranty and security, countermeasures for problem
accounts, credit concentration risk management, etc. These credit controls are performed by the loan
departments in addition to each operating office, being reported to and discussed at the management
meetings on a regular basis. Furthermore, the status of credit control is examined by the internal audit
department.
b. Market risk management:
For market transactions, front office, middle office and back office, each of which is independent ofothers, are mutually controlled.

30

Interest rate risk management:
The Group manages the fluctuation risk of interest rates by ALM. In accordance with the “Market Risk
Management Rule,” the Group measures the exposure of interest rate risk, monitoring by gap analysis
and sensitivity analysis on a regular basis, and the monitoring results are reported to the management
meetings on a regular basis. In addition, the future countermeasures based on the analysis of current
status are discussed.
Foreign exchange risk management:
The Group manages foreign exchange risk, in accordance with the “Market Risk Management Rule,”by establishing total positions and loss limits or entering into hedging activities.
Price fluctuation risk management:
The Group manages price fluctuation risk in accordance with “Market Risk Management Rule.” Risk
exposures to securities are monitored for usage against the pre-set limit by the Risk Control Department
on a daily basis based on Value at Risk (VaR) and other risk indexes such as 10BVP and reported to the
management meetings.
Derivative transactions:With respect to derivative transactions, the Group segregates the duties of the departments responsible
for execution of transactions, verification of hedge effectiveness, and operation administration andconducts transactions under the management and control based on the handling rules.
Quantitative information about market risk:
Financial instruments not for trading purposes
The Group identifies and manages the market risk volume using VaR on a daily basis (monthly basiswith regard to interest rate risk volume of deposits, loans and bills discounted, etc.), since the Groupholds many financial instruments whose fair value fluctuates on a daily basis and such fluctuation
amount is greater than other risk categories. The market risk volume of the Group is controlled as thetotal amounts of market risk volume of Shonai and Hokuto which are the subsidiaries.
Market risk volume of the banking business of the Group at March 31, 2024 and 2023 and for the years
then ended was as follows:
Billions of yen
2024
As of thefiscal yearAverage
Maximum
Minimumend
Due from banks, loans andbills discounted and others
¥ 0.0
¥ 0.0
¥ 0.0
¥ 0.0
Securities:
35.2
39.6
31.1
31.1
Debt securities
14.2
16.8
10.7
10.7
Equity securities
3.7
5.4
2.6
4.6
Other
27.6
29.8
23.7
23.7
Billions of yen
2023

Due from banks, loans andbills discounted and others
Securities:
Debt securities
Equity securities
Other

Average

Maximum

Minimum

As of thefiscal yearend

¥

¥

¥

¥

31

0.0
31.8
11.6
3.9
23.0

0.0
38.1
19.4
4.9
29.7

0.0
27.1
6.8
2.4
19.1

0.0
37.8
19.2
3.1
29.7

Millions of U.S. dollars
2024

Due from banks, loans andbills discounted and others
Securities:
Debt securities
Equity securities
Other

Average

Maximum

Minimum

$

$

$

0.0
232.4
93.7
24.4
182.2

0.0
261.5
110.9
35.6
196.8

0.0
205.4
70.6
17.1
156.5

As of thefiscal yearend
$

0.0
205.4
70.6
30.3
156.5

(*1) VaR is measured in principle using the variance/co-variance method.
(*2) Holding period is assumed to be 60 business days for higher market liquidity financial instruments such as
Japanese government bonds, municipal bonds, listed equity securities (excluding strategic investments), etc., 250
business days for cross-holding shares of listed equity securities, and 125 or 250 business days for less market
liquidity financial instruments, due from banks, loans and bills discounted, etc.
(*3) 99 % is used for confidence interval, and 250 business days are used as extraction period of market data to measure
volatility.
(*4) The total amount does not agree with the sum of the individual amounts since correlation between the risk factorsof debt securities and equity securities is taken into account.
(*5) The current interest rate risk volume of deposits, loans and bills discounted, etc., represents decreasing interest
rate risk, not increasing interest rate risk. The increasing interest rate risk is managed as internal control. Therefore,
the interest rate risk volume of due from banks, loans and bills discounted and others is considered to be zero.

Within the Group, each banking subsidiary implements backtests comparing the VaR of one day holding
period measured by the model and the actual loss, in order to verify the accuracy of the measurement
model of the market risk volume concerning the VaR of securities.
The measurement model currently in use is deemed to capture the market risk on the reasonably
accurate basis. However, the Group will take conservative actions as necessary when VaR is expected
to increase due to an increase in volatility.
In implementing the risk management using the VaR, the following particular points are paid attentionto:(a) Quantitative information such as VaR of market risk is determined based on the statisticalassumptions and may result in a different value depending on the different assumptions andcalculation methods.
(b) Quantitative information such as VaR of market risk is a statistical value calculated based on theassumptions and not intended to estimate the maximum loss amount. Profit or loss is assumed to
exceed VaR on the frequency corresponding to the confidence interval.
(c) Future market conditions may differ significantly from the past.
Financial instruments for trading purposes are excluded from the scope of disclosure, since theoutstanding balance at any banking subsidiary is very insignificant and the materiality of effect on the
management is quite limited.
c. Liquidity risk management:
The Group sets limits on liquidity risk management and reports to the management meetings,
monitoring the results on a daily basis in accordance with the “Liquidity Risk Management Rule.”(iv) Supplementary explanation about fair value of financial instruments
As certain assumptions are used in calculating the fair value of financial instruments, the result of suchcalculation may vary if different assumptions are used.

32

(2) Fair value of financial instruments
The carrying amount, the fair value and their difference as of March 31, 2024 and 2023 were as follows. Note that
equity securities without market prices or investments in partnerships are not included in the following table (SeeNote 1 below). In addition, the disclosure of carrying amount, fair value and difference is omitted for cash and duefrom banks, monetary claims bought, foreign exchange assets and liabilities and payables under securities lendingtransactions since their fair value approximates their carrying amount due to short maturities.

March 31, 2024
Trading account securities:
Trading securities
Money held in trust
Securities (*1):
Available-for-sale securities
Loans and bills discounted:
Allowance for loan losses (*2)

Carrying amount¥748
58,690Millions of yen
Fair value¥

748
58,690Difference¥-

728,048-

Assets, total

728,048
1,867,032(13,392)
1,853,640¥ 2,641,127

1,859,297¥ 2,646,785

5,657
5,657

Deposits
Negotiable certificates of deposit
Borrowed money
Liabilities, total¥ 2,713,241
49,75387,700¥ 2,850,695¥ 2,713,216
49,75387,657¥ 2,850,628

¥

¥

¥

¥

Derivative transactions (*3):
To which hedge accounting is not applied
To which hedge accounting is applied
Derivative transactions, total

March 31, 2023
Trading account securities:
Trading securities
Money held in trust
Securities (*1):
Available-for-sale securities
Loans and bills discounted:
Allowance for loan losses (*2)

¥

[135]
295
159

Carrying amount¥

606
57,981

¥

[135]
295
159

¥

¥

¥

Millions of yen
Fair value¥

606
57,981¥

Assets, total

1,898,241¥ 2,612,493

Deposits
Negotiable certificates of deposit
Borrowed money
Liabilities, total¥ 2,663,710
63,680116,000¥ 2,843,390¥2,663,712
63,680115,956¥ 2,843,349

¥

¥

¥

¥

¥

33

[337]
236
[100]

655,663

¥

[337]
236
[100]

-

Difference

655,663
1,892,149(13,400)
1,878,749¥2,593,001

Derivative transactions (*3):
To which hedge accounting is not applied
To which hedge accounting is applied
Derivative transactions, total

(25)
(42)
(67)

-

¥
¥

¥

19,492
19,492
1
(43)
(41)
-

Thousands of U.S. dollars
Carrying amount
Fair value
Difference

March 31, 2024
Trading account securities:
Trading securities
Money held in trust
Securities (*1):
Available-for-sale securities
Loans and bills discounted:
Allowance for loan losses (*2)

$

4,940
387,648$

4,940
387,648$-

4,808,771-

Assets, total

4,808,771
12,331,783(88,454)
12,243,328$17,444,696

12,280,693$17,482,067

37,36437,364

Deposits
Negotiable certificates of deposit
Borrowed money
Liabilities, total$17,921,010
328,619579,260$18,828,896$17,920,845
328,619
578,976$18,828,454

$

$

$

$

Derivative transactions (*3):
To which hedge accounting is not applied
To which hedge accounting is applied
Derivative transactions, total

$

[891]
1,948
1,050

$

[891]
1,948
1,050

$

$

$

(165)
(277)
(442)
-

(*1) Securities include investment trusts whose net asset value is deemed as fair value by applying the treatment prescribed inparagraph 24-3 of the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No.
31, June 17, 2021). There are no investment trusts whose net asset value is deemed as fair value by applying the treatmentprescribed in paragraph 24-9.
(*2) General and specific allowances for loan losses corresponding to loans and bills discounted are deducted.
(*3) Assets and liabilities arising from derivative transactions are presented in net amounts, and net liabilities are shown in squareparentheses.

(Note 1) For equity securities without market prices and investments in partnerships, their carrying amount is asfollows. These financial instruments are not included in “Available-for-sale securities” of the fair value informationof financial instruments.
Thousands ofMillions of yen
U.S. dollars
2024
2023
2024
Unlisted equity securities (*1) (*2)
¥ 1,599¥ 1,618$ 10,561
Investments in partnerships (*3)
3,227
2,859
21,314(*1) The fair value of unlisted equity securities is not disclosed 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) The Company recognized write-down of unlisted equity securities in an amount of ¥13 million ($85 thousand) and ¥16 million
for the years ended March 31, 2024 and 2023, respectively.
(*3) The fair value of investments in partnerships is not disclosed in accordance with paragraph 24-16 of the “Implementation
Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, June 17, 2021).

34

(Note 2) Repayment schedule of monetary receivables and securities with contractual maturities subsequent toMarch 31, 2024
Millions of yen
Due after one

Due after three

Due after fiveDue after sevenDue in one

year throughyears throughyears throughyears throughMarch 31, 2024

year or lessthree years

five years

seven years

ten years

Due from banks (*1)

¥ 274,132¥¥¥

Monetary claims bought

3,831

-

42,85686,247--¥

Due after ten
years

-

¥

-

Securities:
Available-for-sale securities withmaturity:

88,701

100,163150,298

176,055

Japanese government bonds

5,000

2,000

-

34,00066,75063,500

Municipal bonds

20,81430,97632,50829,49625,20733,965

Corporate bonds

7,654

21,312

17,5826,735

550

68,524

Other

9,386

31,95838,60929,931

57,79010,066

270,229

331,766

290,150

180,227

183,760

523,311¥ 591,049¥ 418,013¥ 378,851¥ 280,391¥ 334,058¥ 699,367

Due after one

Due after three

Due after fiveDue after sevenDue in one

year throughyears throughyears throughyears throughDue after ten

March 31, 2024

year or lessthree years

five years

seven years

ten years

years

Due from banks (*1)

$ 1,810,647

$

$

$

Loans and bills discounted (*2)
Total

Thousands of U.S. dollars

Monetary claims bought

-

-

-

$

-

$

-

25,303

-

-

-

-

-

283,064

569,663585,871

661,578992,721

1,162,846

Securities:
Available-for-sale securities withmaturity:
Japanese government bonds

33,025

13,210-224,570

440,885

419,418

Municipal bonds

137,476

204,597

214,715

194,821

166,492

224,339

Corporate bonds

50,554

140,766

116,12944,484

3,632

452,602

Other

61,994211,083

255,013

197,694

381,704

66,486Loans and bills discounted (*2)

1,784,867

2,191,321

1,916,446

1,190,402

1,213,738

3,456,479

Total$ 3,903,890$ 2,760,984$ 2,502,318$ 1,851,988$ 2,206,459$ 4,619,332(*1) Due from banks without maturity is shown under “Due in one year or less.”(*2) Loans and bills discounted as of March 31, 2024 do not include ¥36,954 million ($244,081 thousand) of receivables such as those due frombankrupt, virtually bankrupt or potentially bankrupt borrowers since these are not certain when they can be collected or redeemed, and ¥50,632
million ($334,425 thousand) of receivables without maturity.

35

(Note 3) Repayment schedule of bonds payable, borrowed money and other interest-bearing liabilities subsequent
to March 31, 2024
Millions of yen
Due after

Due after

Due after one

three years

Due after fiveseven years

Due in one

year throughthrough five

years throughthrough ten

March 31, 2024

year or lessthree years

years

seven years

years

Deposits (*)¥ 2,394,102¥

Negotiable certificates of deposit

82,66749,753¥15,006¥-

Due after ten
years

¥

-

¥

-

-

-

-

-

-

Payables under securities lendingtransactions

88,768

-

-

-

-

-

Borrowed money

77,900

9,800

-

-

-

-

Total

¥ 2,610,524¥

92,467¥

15,006

¥

-

¥

-

¥

-

Thousands of U.S. dollars
Due after

Due after

Due after one

three years

Due after fiveseven years

Due in one

year throughthrough five

years throughthrough ten

Due after ten

March 31, 2024

year or lessthree years

years

seven years

years

years

Deposits (*)$15,813,091$

Negotiable certificates of deposit

546,017$

99,114

$

-

$

-

$

-

328,619

-

-

-

-

-

586,314

-

-

-

-

-

Payables under securities lendingtransactions
Borrowed money
Total

514,531$17,242,562

64,729$610,746$

99,114

$

-

$

-

$

-

(*) Demand deposits are shown under “Due in one year or less” of deposits.

(3) Fair value hierarchy of financial instruments
The Group classifies the fair value of financial instruments into three categories depending on whether inputs fora fair value measurement are observable or significant.
Level 1 fair value:
Fair value measured by using quoted prices in active markets as observable inputs
for assets or liabilities subject to a fair value measurement
Level 2 fair value:
Fair value measured by using observable inputs other than those for Level 1
Level 3 fair value:
Fair value measured by using unobservable inputs
When multiple inputs of different categories are used in measuring fair value, the Group classifies the fair value
into a category to which the lowest priority is assigned.

36

(i) Financial instruments measured at fair value in the consolidated balance sheets
Millions of yen
Fair value
March 31, 2024
Level 1
Level 2
Level 3
Money held in trust¥¥ 58,690¥
Securities:
Trading securities:
Japanese government bonds, Municipal bonds
748
Available-for-sale securities:
Japanese government bonds, Municipal bonds
166,530
168,524
Corporate bonds
83,265
36,101Equity securities
22,783Foreign securities
1,156
28,006
Investment trusts
35,120184,710
Derivative transactions:Interest rate related
2,036
Currency related
14
Assets, total¥ 225,591¥ 525,997¥ 36,101
Derivative transactions:Interest rate related
Currency related
Liabilities, total

March 31, 2023
Money held in trust
Securities:
Trading securities:
Japanese government bonds, Municipal bonds
Available-for-sale securities:
Japanese government bonds, Municipal bonds
Corporate bonds
Equity securities
Foreign securities
Investment trusts
Derivative transactions:Interest rate related
Currency related
Equity securities related
Assets, total
Derivative transactions:Interest rate related
Currency related
Liabilities, total

¥
¥

-

¥
¥

1,741
150
1,891

¥
¥

Total
¥ 58,690

748
335,055
119,366
22,78329,162219,8312,036
14¥ 787,690-¥¥

Millions of yen
Fair value
Level 2
Level 3
¥ 57,981¥-

Level 1
¥
-

1,741
150
1,891

Total
¥ 57,981

-

606

-

606

103,450
14,4391,154
21,509184,449
89,85356,452
148,652

31,662-287,899
121,516
14,43957,606
170,161¥ 140,553

433
358
20
¥ 538,808¥ 31,662

433
358
20
¥ 711,024

¥

¥

¥

-

¥

37

-

¥

134
779
913

-

¥
-

¥

-

¥

134
779
913

March 31, 2024
Money held in trust
Securities:
Trading securities:
Japanese government bonds, Municipal bonds
Available-for-sale securities
Japanese government bonds, Municipal bonds
Corporate bonds
Equity securities
Foreign securities
Investment trusts
Derivative transactions:Interest rate related
Currency related
Assets, total
Derivative transactions:Interest rate related
Currency related
Liabilities, total(*)

Level 1$-Thousands of U.S. dollars
Fair value
Level 2
Level 3
$ 387,648
$
-

Total
$ 387,648

-

4,940

-

4,940

1,099,933
150,482
7,635
231,968

1,113,104
549,966
184,980
1,220,013

238,447-

2,213,044
788,414150,482
192,615
1,451,988$1,490,033

13,44792$3,474,220$ 238,447

13,44792$ 5,202,708

$

$

$

$

-

$

$

11,499990
12,490-$$11,499990
12,490In the above tables as of March 31, 2024 and 2023, securities do not include investment trusts whose net asset value is deemedas fair value by applying the treatments prescribed in paragraph 24-3 and paragraph 24-9 of the “Implementation Guidance on
Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, June 17, 2021).
The carrying amount of investment trusts for which the treatment prescribed in paragraph 24-3 is applied is ¥1,848 million($12,206 thousand) and ¥4,040 million as of March 31, 2024 and 2023, respectively.
There are no investment trusts for which the treatment prescribed in paragraph 24-9 is applied.

(ii) Financial instruments other than those measured at fair value in the consolidated balance sheets
Millions of yen
Fair value
March 31, 2024
Level 1
Level 2
Level 3
Total
Loans and bills discounted¥¥ 223,506¥ 1,635,790¥ 1,859,297
Assets, total¥¥ 223,506¥ 1,635,790¥ 1,859,297
Deposits
Negotiable certificates of deposit
Borrowed money
Liabilities, total

March 31, 2023
Loans and bills discounted
Assets, total
Deposits
Negotiable certificates of deposit
Borrowed money
Liabilities, total¥-¥ 2,713,216
49,75387,657¥ 2,850,628-¥ 2,713,216
49,75387,657¥ 2,850,628¥¥-

Millions of yen
Fair value
Level 2
Level 3¥
¥ 1,898,241¥¥ 1,898,241

Total¥ 1,898,241¥ 1,898,241¥-¥ 2,663,712
63,680115,956¥ 2,843,349¥ 2,663,712
63,680115,956¥ 2,843,349¥

Level 1

¥

38

¥

¥

¥

¥

-

March 31, 2024
Loans and bills discounted
Assets, total
Deposits
Negotiable certificates of deposit
Borrowed money
Liabilities, total$$-

Thousands of U.S. dollars
Fair value
Level 2
Level 3
$ 1,476,261$ 10,804,425$ 1,476,261$ 10,804,425$-$ 17,920,845
328,619
578,976$ 18,828,454

Level 1

$

$

$

-

Total
$ 12,280,693$ 12,280,693$ 17,920,845
328,619
578,976$ 18,828,454(Note 1) Explanation of valuation techniques and inputs used for fair value measurement
AssetsMoney held in trust
For financial instruments that are invested as trust assets in an independently managed money trust with the primary
purpose of managing securities, the fair value is determined using the price at the exchange or the price presented
by the financial institutions with which they are transacted. The fair value is classified into Level 3 when the impact
from unobservable inputs is significant, otherwise it is classified into Level 2.
Trading securities and available-for-sale securities
Trading securities and available-for-sale securities for which unadjusted quoted prices in active markets areavailable are classified into Level 1 fair value. Such securities mainly include listed equity securities and Japanese
government bonds.
Even if available quoted prices are used, securities are classified into Level 2 when the relevant markets are notactive. Such securities mainly include municipal bonds and corporate bonds.
When quoted prices are not available, the fair value is measured by using valuation techniques such as the present
value technique discounting future cash flows. The Group makes maximum use of observable inputs in thevaluations. Inputs include TIBOR, government bond yield, conditional prepayment rates, credit spreads,
probability of default, loss given default and others. When significant unobservable inputs are used, the fair value
is classified into Level 3.
For investment trusts without transaction prices in the market, the net asset value is used as the fair value when
there are no restrictions that are significant enough for market participants to require consideration for risk on
cancellation or repurchase. They are classified into Level 2 fair value.
The footnote on securities by holding purposes is described in Note “5. Securities.”
Loans and bills discounted
For the loans and bills discounted with short remaining terms (within one year), the carrying amount is used as thefair value since the fair value approximates the carrying amount. For the loans and bills discounted without
predetermined maturity because of characteristics such as the loans and bills discounted being limited within theamount of the pledged assets, the carrying amount is used as the fair value since the fair value is deemed toapproximate the carrying amount considering the expected repayment term and interest rate conditions.
The fair value of loans and bills discounted with fixed interest rates, categorized by the type, internal rating andterm to maturity, is calculated by discounting the total of principal and interest using credit spreads by credit rating
and market interest rate.
The fair value of the loans and bills discounted with floating interest rates, categorized by the internal rating andterm to maturity, is calculated by discounting the total of principal and interest, basically until the interest maturity
date, using credit spreads by credit rating and market interest rate. Credit spreads are calculated by remaining term
based on accumulated default rate by credit rating and loss rate.
For loans and bills discounted due from bankrupt, virtually bankrupt or potentially bankrupt borrowers, loan losses
are estimated based on factors such as the expected amount to be collected from collaterals and guarantees. Since
the fair value of these items approximates the carrying amount net of the recorded amount of allowance for loan
losses, such carrying amount is used as the fair value.
39

The fair value is classified into Level 3 when the impact from unobservable inputs is significant, otherwise it isclassified into Level 2.
Liabilities
Deposits and Negotiable certificates of deposit
For demand deposits, the amount payable on demand as of the balance sheet date (i.e., the carrying amount) is usedas the fair value. The fair value of time deposit is measured at the present value calculated by discounting future
cash flows, grouping by certain maturity length. The discount rate used is the interest rate that would be applied to
newly accepted deposits. For deposits whose remaining term is short (within one year), the carrying amount is usedas the fair value since the fair value approximates the carrying amount. The said fair value is classified into Level
2.
Borrowed money
The fair value of borrowed money is measured by discounting the aggregate amount of principal and interest,
categorized by the term to maturity, at market rates. For borrowed money whose remaining term is short (within
one year), the carrying amount is used as the fair value since the fair value approximates the carrying amount.
The said fair value is classified into Level 2.
Derivative transactions
For derivative transactions, the fair value measured by using unadjusted quoted prices in active markets is classified
into Level 1, which includes those of bond futures and interest rate futures. However, the Group’s derivativetransactions are mostly over-the-counter (“OTC”) transactions for which quoted prices are not available. Thus, thefair value is measured by using valuation techniques such as option pricing models or the present discounted value
technique, depending on the type of transactions or the term to maturity. Major inputs used for the valuation
techniques are interest rates, foreign exchange rates, volatilities and other. Adjustments are made to prices basedon the credit risks of counterparties and the Group’s banks. When unobservable inputs are not used or the impact
is not significant, the fair value is classified into Level 2, and such transactions include interest rate swaps andforeign exchange forward contracts. When significant unobservable inputs are used, the fair value is classified into
Level 3.
(Note 2) Information on Level 3 fair value, of financial instruments measured at fair value in the consolidatedbalance sheets(1) Quantitative information on significant unobservable inputs
March 31, 2024
Securities:
Available-for-sale securities:
Corporate bonds
Private placement bonds

March 31, 2023
Securities:
Available-for-sale securities:
Corporate bonds
Private placement bonds

Valuationtechniques

Significant
unobservable inputs

Present value

Probability ofdefault
Loan recovery rate

Valuationtechniques

Significant
unobservable inputs

Present value

Probability ofdefault
Loan recovery rate
40

Range of inputs

Weightedaverage of
inputs

0.07% - 100.00%

0.65%

0.00% - 26.56%

26.49%

Range of inputs

Weightedaverage of
inputs

0.06% - 100.00%

1.78%

0.00% - 24.10%

23.76%

(2) Reconciliation from beginning balance to ending balance and valuation gain or loss recognized for the years
ended March 31, 2024 and 2023
Millions of yen

March 31, 2024

Beginning of
the year

Income or othercomprehensive income(“OCI”) recognized for thecurrent fiscal year
IncomeOCI (*1)

Purchase,sale, issuance
Reclassiand
fication tosettlement, net Level 3 (*2)

Reclassification fromLevel 3 (*3)

End of theyear

Valuation gain
(loss)(*4)

Securities:
Available-for-salesecurities:
Corporate bonds
Private placement
bonds

¥

31,662

¥

-

¥

(73)

¥ 4,512

¥

-

¥

-

¥

36,101¥-Millions of yen

March 31, 2023

Beginning of
the year

Income or othercomprehensive income(“OCI”) recognized for thecurrent fiscal year
IncomeOCI (*1)

Purchase,sale, issuance
Reclassiand
fication tosettlement, net Level 3 (*2)

Reclassification fromLevel 3 (*3)

End of theyear

Valuation gain
(loss)(*4)

Securities:
Available-for-salesecurities:
Corporate bonds
Private placement
bonds

¥

26,070

¥

-

¥

(41)

¥ 5,633

¥

-

¥

-

¥

31,662¥-Thousands of U.S. dollars

March 31, 2024

Beginning of
the year

Income or othercomprehensive income(“OCI”) recognized for thecurrent fiscal year
IncomeOCI (*1)

Purchase,sale, issuance
Reclassiand
fication tosettlement, net Level 3 (*2)

Reclassification fromLevel 3 (*3)

End of theyear

Valuation gain
(loss)(*4)

Securities:
Available-for-salesecurities:
Corporate bonds
Private placementbonds$ 209,128

$

-

$

(482)

$ 29,801

$

-

$

-

$ 238,447$-(*1) The amount is included in “Unrealized gain (loss) on available-for-sale securities” of “Other comprehensive income” in the
consolidated statements of comprehensive income.
(*2) It presents the reclassification from Level 2 fair value to Level 3 fair value. None for the years ended March 31, 2024 and 2023.
(*3) It presents the reclassification from Level 3 fair value to Level 2 fair value. None for the years ended March 31,2024 and 2023.
(*4) It presents valuation gain (loss) of financial assets or liabilities held at the consolidated balance sheet date, out of income
recognized for the current fiscal year.

(3) Fair value valuation procedures
Each division in charge performs a fair value measurement in accordance with the policies and procedures preparedby the risk management division of the Group. The measured fair value is verified by the independent valuation
division for the reasonableness of inputs and valuation techniques used for the measurement and appropriatenessof the level categories of the fair value. The verification result is reported to the risk management division every
period, and thus, the Group ensures the appropriateness of the policies and procedures of the fair value
measurement.
The fair value is measured using a valuation model that most appropriately reflects the nature, characteristics andrisk of each asset. In case where quoted prices obtained from third parties are used, the Group verifies thereasonableness of the prices by confirming the valuation techniques and inputs used and by applying appropriate
methods including comparison with the market prices of similar financial instruments.

41

(4) The impact on the fair value in case where any changes made to significant unobservable inputs
The significant unobservable inputs used in measuring the fair value of corporate bonds are probability of default
and recovery ratio. Significant increase (decrease) in probability of default results in significant decline (rise) in
the fair value, and significant increase (decrease) in recovery ratio. results in significant rise (decline) in the fairvalue. In general, changes in assumptions used for probability of default have reverse effects on assumptions used
for recovery ratio.
(Note 3) Reconciliation of investment trusts for which the treatment prescribed in paragraph 24-3 are applied frombeginning balance to ending balance
Millions of yen
2024

Beginning of the
year
¥

4,040

Income or other comprehensive
income (“OCI”) recognized for thecurrent fiscal year

Income¥OCI (*1)
-

¥

(151)

Purchase, saleand redemption,
net
¥

-

Net asset value
deemed as fair
value
¥

-

Net asset value
not deemed asfair value
¥

2,040

End of the year¥

Valuation gain
(loss) (*2)

1,848

¥

-

Millions of yen
2023

Beginning of the
year
¥

3,997

Income or other comprehensive
income (“OCI”) recognized for thecurrent fiscal year

Income¥OCI (*1)-¥

42

Purchase, saleand redemption,
net
¥

-

Net asset value
deemed as fair
value
¥

4,040

Net asset value
not deemed asfair value¥-

End of the year¥

Valuation gain
(loss) (*2)

4,040

¥

-

Thousands of U.S. dollars
2024

Beginning of theyear$

26,684

Income or other comprehensive
income (“OCI”) recognized for thecurrent fiscal year

Income$OCI (*1)
-

$

(997)

Purchase, saleand redemption,
net
$

-

Net asset value
deemed as fair
value
$

-

Net asset value
not deemed asfair value$

13,474End of the year$

Valuation gain
(loss) (*2)

12,206$-(*1) The amount is included in “Unrealized gain (loss) on available-for-sale securities” of “Other comprehensive income” in the
consolidated statement of comprehensive income.
(*2) It presents valuation gain (loss) of investment trusts held at the consolidated balance sheet date, out of income recognized forthe current fiscal year.
Breakdown of restrictions on cancellation or repurchase at the consolidated balance sheet dateThousands of U.S.
dollars

Millions of yen
2023

2024

Major restrictions on cancellation or repurchaseFor cancellation, a minimum of one month’s prior notice isrequired.

2024

Carrying amount
¥

1,848

¥

4,040

$

12,206

27. Derivatives
Derivative transactions to which hedge accounting is not appliedWith respect to derivatives to which hedge accounting is not applied, contract amount or notional principal, fairvalue and related valuation gain or loss by transaction type at the balance sheet date and calculation method of thefair value were as follows. Note that contract amounts do not represent the market risk exposure associated withthe derivative transactions.
Interest rate related derivatives
There was no interest rate related derivative at March 31, 2024.
42

Interest rate related derivatives at March 31, 2023 were as follows:
Millions of yen
Contract amount
Total

March 31, 2023

Over one year

Fair value

Valuation gain
(loss)¥¥¥¥OTC transactions:Interest rate swaps:
Receive floating / Pay fix

¥

4,500

¥ 4,500

Total

83
83

83
83

Note: Above transactions are stated at the fair value, and the related valuation gain (loss) are reported in the consolidated statements
of income.

Currency related derivatives
Currency related derivatives at March 31, 2024 and 2023 were as follows:
Millions of yen
Contract amountMarch 31, 2024
OTC transactions:
Forward foreign exchange contracts:
Sold
Total

Total

Over one year

¥ 26,944¥-

Fair value

Valuation gain
(loss)

¥
¥

¥
¥

(135)
(135)

(135)
(135)

Millions of yen
Contract amountMarch 31, 2023
OTC transactions:
Forward foreign exchange contracts:
Sold
Bought
Total

Total

Over one year

¥ 58,027
2,112

¥

-

Fair value

¥
¥

(462)
41
(420)

Valuation gain
(loss)

¥
¥

(462)
41
(420)

$
$

(891)
(891)

Thousands of U.S. dollars
Contract amountMarch 31, 2024
OTC transactions:
Forward foreign exchange contracts:
Sold
Total

Total

Over one year

$ 177,965$-

Fair value

$
$

(891)
(891)

Note: Above transactions are stated at the fair value, and the related valuation gain (loss) are reported in the consolidated statements
of income.

Derivative transactions to which hedge accounting is appliedWith respect to derivatives to which hedge accounting is applied, contract amount or notional principal and fairvalue at the balance sheet date by transaction type and hedge accounting method and calculation method of the fairvalue were as follows. Note that contract amounts do not represent the market risk exposure associated with thederivative transactions.

43Interest rate related derivatives
Interest rate related derivatives at March 31, 2024 and 2023 were as follows:
March 31, 2024

Millions of yen
Contract amount

Hedge accounting
methodDeferral hedge
accounting

Transaction typeInterest rate
swaps:
Receive floating/ Pay fix

Total

Over one year

¥ 143,185¥143,185

Major hedged item
Available-for-sale securities(Japanese government bonds)

Total
March 31, 2023

Fair value

¥
¥

295
295

Millions of yen
Contract amount

Hedge accounting
methodDeferral hedge
accounting

Transaction typeInterest rate
swaps:
Receive floating/ Pay fix

Major hedged item
Available-for-sale securities(Japanese government bonds)

¥

Total

Over one year

42,750¥ 42,750

Total
March 31, 2024

Fair value

¥
¥

216
216

Thousands of U.S. dollars
Contract amount

Hedge accounting
methodDeferral hedge
accounting

Transaction typeInterest rate
swaps:
Receive floating/ Pay fix

Total

Over one year

$ 945,739$945,739

Major hedged item
Available-for-sale securities(Japanese government bonds)

Total

Fair value

$
$

1,948
1,948

Note: In principle, the deferred hedge accounting is applied in accordance with the JICPA Industry Committee Practical Guideline
No. 24 (March 17, 2022).

Equity securities related derivatives
There was no equity securities related derivatives at March 31, 2024.
Equity securities related derivatives at March 31, 2023 were as follows:
March 31, 2023

Millions of yen
Contract amount

Hedge accounting
methodDeferral hedge
accounting

Transaction type
Equity forward
contracts:
Sold

Major hedged item
Available-for-sale securities(Equity securities)

¥

Total

Total

Over one year

1,607

¥

-

Fair value

¥
¥

20
20

Note: In principle, the deferred hedge accounting is applied in accordance with the JICPA Industry Committee Practical Guideline
No. 24 (March 17, 2022).

44

28. Amounts per Share
Amounts per share at March 31, 2024 and 2023 and for the years then ended are summarized as follows:Yen
Net assets
Net income:
Basic

¥

2024
4,734.81¥2023
5,011.71

65.20$

179.19U.S. dollars
2024
31,273.51
430.64

Notes: (1) Diluted net income is not shown since there are no dilutive shares.
(2) Net income per share—basic for the years ended March 31, 2024 and 2023 was calculated based on the following
information:
Thousands ofMillions of yen
U.S. dollars
2024
Net income attributable to owners of parent —basic:
Amounts not attributed to common stock shareholders
O/W, dividends for preferred stock based on the resolution at theBoard of Directors’ meeting
O/W, interim dividends for preferred stock
Net income attributable to common stock owners of parent
Average outstanding number of shares of common stock(Unit: thousand shares)

¥

¥

1,178
-

2023
¥
3,266
29

2024
$
7,780
-

1,178

29
3,237

7,780

18,082¥$

18,064(3) Net assets per share at March 31, 2024 and 2023 were calculated based on the following information:
Thousands ofMillions of yen
U.S. dollars
Total net assets
Amounts deducted from total net assets:
O/W, payment for preferred stock
O/W, dividends for preferred stock
O/W, non-controlling interests
Net assets attributable to common stock as of March 31, 2024 and2023
Number of shares of common stock as of March 31, 2024 and 2023
used to calculate net assets per share (Unit: thousand shares)

29. Subsequent Events
None to report.

45

¥

¥

2024
85,824
155
155

2023
¥ 90,621
109
109

2024
$ 566,869
1,023
1,023

85,669¥ 90,512$ 565,845

18,09318,06030. Non-Consolidated Financial Statements of Shonai Bank and Hokuto Bank as of March 31, 2024 and 2023
and for the Years Then Ended
The Shonai Bank, Ltd.
Non-Consolidated Balance Sheets
March 31, 2024 and 2023
Millions of yen
2024
2023
Assets:Cash and due from banks
Monetary claims bought
Trading account securities
Money held in trust
Securities
Loans and bills discounted
Foreign exchange assets
Tangible fixed assets:
Buildings
Land
Lease assets
Other tangible fixed assets
Intangible fixed assets:
Software
Other intangible fixed assets
Prepaid pension cost
Deferred tax assets
Customers’ liabilities for acceptances and guarantees
Other assets
Allowance for loan losses¥

Total assets

104,256
1,453
414
28,819369,129
969,723
675¥

148,972
1,611
414
27,860331,912948,205
798

Thousands of
U.S. dollars
2024$

688,612
9,597
2,734
190,350
2,438,104
6,405,039
4,458

7,109
4,379
3
899

7,598
4,421
8
989

46,95528,923
19
5,937

443
65
312
1,332
6,575
17,225(6,094)

515
65
182
1,439
5,843
16,231(7,021)

2,926
429
2,060
8,797
43,428
113,771(40,250)¥ 1,506,723¥ 1,490,048$

9,951,935(Continued)

46

The Shonai Bank, Ltd.
Non-Consolidated Balance Sheets
March 31, 2024 and 2023
Millions of yen
2024
2023
Liabilities:
Deposits
Negotiable certificates of deposit
Payables under securities lending transactions
Borrowed money
Foreign exchange liabilities
Provision for bonuses for directors and other officers
Provision for retirement benefits
Provision for reimbursement of deposits
Provision for contingent loss
Deferred tax liabilities for land revaluation
Acceptances and guarantees
Other liabilities

Thousands of
U.S. dollars
2024¥ 1,325,349
41,38837,001
33,400
36
15
71
4
194
382
6,575
4,739

¥ 1,306,463
47,304
14,976
48,500
24
15
148
14
227
385
5,843
7,565

$ 8,753,956
273,368
244,392
220,607
237
99
468
26
1,281
2,523
43,42831,301

1,449,159

1,431,467

9,571,723

8,500
20,30827,43456,242
(211)
667
866
1,321

8,500
20,30827,471
56,280
1,276
174
850
2,301

56,142
134,134
181,202371,479(1,393)
4,405
5,719
8,725

Total net assets

57,56458,581

380,211

Total liabilities and net assets¥ 1,506,723¥ 1,490,048$ 9,951,935

Total liabilities
Net assets:
Common stock
Capital surplus
Retained earnings
Total shareholders’ equity
Unrealized gain on available-for-sale securities
Deferred gain on hedges
Revaluation reserve for land
Total valuation and translation adjustments(Concluded)

47

The Shonai Bank, Ltd.
Non-Consolidated Statements of Income
Years Ended March 31, 2024 and 2023
Millions of yen
2024
2023
Income:Interest income:Interest on loans and discounts
Interest and dividends on securities
Interest income on interest rate swaps
Other
Fees and commissions
Other operating income
Other income¥

Total income

9,548
4,701
22
44
4,126
689
2,328

¥

9,001
7,548
100
3,888
2,148
1,691

Thousands of
U.S. dollars
2024$

63,06431,050145
290
27,2524,550
15,376

21,462

24,379141,756

139
1
3
0
413
4
2,220
4,367
11,174
1,836

82
1
158
0
111
(0)
2,315
5,869
11,434
2,550

918
6
19
0
2,727
26
14,663
28,84473,804
12,126

Total expenses

20,16022,523

133,157

Income before income taxes

1,302

1,855

8,599

105
541

534
(309)

693
3,573

646

224

4,266

Expenses:
Interest expenses:
Interest on deposits
Interest on negotiable certificates of deposit
Interest on payables under securities lending transactions
Interest on borrowings and rediscounts
Interest on interest rate swaps
Other
Fees and commissions
Other operating expenses
General and administrative expenses
Other expenses

Income taxes:
Current
Deferred
Total income taxes
Net income

¥

48

656

¥

1,630

$

4,332

The Hokuto Bank, Ltd.
Non-Consolidated Balance Sheets
March 31, 2024 and 2023

Assets:Cash and due from banks
Monetary claims bought
Trading account securities
Money held in trust
Securities
Loans and bills discounted
Foreign exchange assets
Tangible fixed assets:
Buildings
Land
Lease assets
Construction in progress
Other tangible fixed assets
Intangible fixed assets:
Software
Other intangible fixed assets
Prepaid pension cost
Deferred tax assets
Customers’ liabilities for acceptances and guarantees
Other assets
Allowance for loan losses

Millions of yen
2024
2023

Thousands of
U.S. dollars
2024

201,209944
334
29,871
363,652
915,197582

167,309967
191
30,121
328,120959,900
731$ 1,328,989
6,235
2,206
197,298
2,401,928
6,044,894
3,844

3,757
5,577
7
1,057

3,980
5,608
14
1
996

24,81536,836
46
6,981

835
61
586
2,444
12,80026,058(6,031)

1,020
61
521
2,694
13,237
26,109(5,246)

5,515
402
3,870
16,14284,544
172,113(39,834)¥ 1,558,945¥ 1,536,343$ 10,296,862¥

Total assets¥(Continued)
49

The Hokuto Bank, Ltd.
Non-Consolidated Balance Sheets
March 31, 2024 and 2023
Millions of yen
2024
2023
Liabilities:
Deposits
Negotiable certificates of deposit
Payables under securities lending transactions
Borrowed money
Foreign exchange liabilities
Provision for bonuses for directors and other officers
Provision for retirement benefits
Provision for reimbursement of deposits
Provision for contingent loss
Deferred tax liabilities for land revaluation
Acceptances and guarantees
Other liabilities

Thousands of
U.S. dollars
2024¥ 1,392,693
8,365
51,76754,300
4
19
291
17
235
768
12,8004,938¥ 1,362,004
16,375
26,67567,500
20
19
290
44
159
774
13,237
11,362$ 9,198,764
55,250341,922358,652
26
125
1,922
112
1,552
5,072
84,54432,615

1,526,201

1,498,464

10,080,587

12,50012,50016,86741,867(10,471)
(253)
1,601
(9,122)

12,50012,50017,392
42,392(5,748)(380)
1,615(4,512)

82,562
82,562
111,406
276,532(69,161)(1,671)
10,574(60,250)

Total net assets

32,74437,879216,274

Total liabilities and net assets¥ 1,558,945¥ 1,536,343$ 10,296,862

Total liabilities
Net assets:
Common stock
Capital surplus
Retained earnings
Total shareholders’ equity
Unrealized gain (loss) on available-for-sale securities
Deferred loss on hedges
Revaluation reserve for land
Total valuation and translation adjustments(Concluded)
50

The Hokuto Bank, Ltd.
Non-Consolidated Statements of Income
Years Ended March 31, 2024 and 2023

Income:Interest income:Interest on loans and discounts
Interest and dividends on securities
Interest income on interest rate swaps
Other
Fees and commissions
Other operating income
Other income

Millions of yen
2024
2023

Thousands of
U.S. dollars
2024

¥

$

Total income

9,599
4,713
9
37
4,485
444
4,179

¥

8,919
6,731
121
4,264
1,127
1,306

63,401
31,12959
244
29,623
2,932
27,602

23,46822,471

155,006

23
2
42
0
431
0
1,346
4,166
11,462
4,840

30
1
10
0
58
(15)
1,468
4,882
11,520
2,125

151
13
277
0
2,846
0
8,890
27,51675,706
31,968

Total expenses

22,31620,082

147,397

Income before income taxes

1,151

2,389

7,602

822
188

292
533

5,429
1,241

1,011

825

6,677

Expenses:
Interest expenses:
Interest on deposits
Interest on negotiable certificates of deposit
Interest on payables under securities lending transactions
Interest on borrowings and rediscounts
Interest on interest rate swaps
Other
Fees and commissions
Other operating expenses
General and administrative expenses
Other expenses

Income taxes:
Current
Deferred
Total income taxes
Net income

¥

51

139

¥

1,563

$

918