October 1, 2016
Company name: Mebuki Financial Group, Inc.
Representative: Kazuyoshi Terakado, President(Code number: 7167 First Section,
Tokyo Stock Exchange)
Foundation of “Mebuki Financial Group, Inc.” andFormulation of Medium-term Management Plan

“Mebuki Financial Group, Inc.” (President: Kazuyoshi Terakado) was established today as a wholly-owningparent company of The Joyo Bank, Ltd. (President: Kazuyoshi Terakado)("Joyo”) and The Ashikaga Bank,
Ltd. (President: Masanao Matsushita)(“Ashikaga”).
In addition, Mebuki Financial Group, Inc. formulated the Medium-term Management Plan starting from
October 2016 through March 2019 and we hereby inform you as follows:

Description
1. Overview of Mebuki Financial Group, Inc.
(1) Company name: Mebuki Financial Group, Inc.
(2) Representatives: Director, President: Kazuyoshi Terakado (Director, President of Joyo)
Director, Executive Vice President: Masanao Matsushita (Director, President of
Ashikaga)(3) Location of headquarters: 7-2, Yaesu 2-chome, Chuo-ku, Tokyo(4)Location of head office:Mito Office:5-5, Minami-machi 2-chome, Mito, Ibaraki

Utsunomiya Office: 1-25, Sakura 4-chome, Utsunomiya, Tochigi(5) Nature of Business: Management and operation of banks and other companies that Mebuki Financial
Group, Inc. may have as subsidiaries under the Banking Act and any and all businesses
incidental or related thereto(6) Amount of capital: 117.4 billion yen(7) Stock Exchange: First Section of Tokyo Stock Exchange2. Directors

Director and President

Kazuyoshi Terakado

Responsibilities(Department in charge)
General Matters

Director and Executive Vice
President

Masanao Matsushita

General Matters(currently, President of
Ashikaga)

Director

Eiji Murashima

In charge of Corporate
Management (Basel Office)(currently, Managing
Director of Joyo)

Director

Kiyoshi Kato

Director

Ritsuo Sasajima(currently, Executive
Managing Director of
Ashikaga)(currently, Managing
Director of Joyo)

Director

Kazuyuki Shimizu

Director

Hidebumi Nishino

In charge of Regional
Revitalization (Regional
Revitalization Department)
In charge of Corporate
Planning (Corporate
Planning Department)
In charge of Corporate
Management (Corporate
Management Department)
In charge of Regional
Revitalization

Director(Audit and Supervisory Committee
Member)Director(Audit and Supervisory Committee
Member)Director(Audit and Supervisory Committee
Member)Director(Audit and Supervisory Committee
Member)Director(Audit and Supervisory Committee
Member)Yoshiaki Terakado(former, Corporate Auditorof Joyo)

Kunihiro Ono(former, Director of
Ashikaga)

Ryuzaburo Kikuchi(former, Outside Director of
Joyo)

Title

Name

Other
(currently, President ofJoyo)(currently, Managing
Director of Ashikaga)(currently, Managing
Executive Officer of Joyo)

Toru Nagasawa(currently, a representative
lawyer of Nagasawa Law
Offices)
Takashi Shimizu(currently, a professor of
Graduate School of
Accountancy, Waseda
University)(Note)Ryuzaburo Kikuchi, Toru Nagasawa and Takashi Shimizu, each as a Director (Audit and Supervisory Committee
Member), are Directors who are Outside Directors as defined in Article 2, item (xv) of the Companies Act.

3. The Medium-term Management Plan
With regard to the Medium-term Management Plan, please see attachment “Foundation of
Mebuki Financial Group, Inc. and Formulation of Medium-term Management Plan” (Japaneseversion only).

End

Inquiries regarding this matter:
Corporate Planning Department Sasaki & Mimura

Tel: 029-300-2605

First Medium-Term Group Business Plan
(Plan Period: October 1, 2016 to March 31, 2019)Table of Contents
I. Founding of Mebuki Financial GroupII. Basic strategies for business integration

1.

1.
2.
3.
4.

2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.

Background and objectives of businessintegration
Ideals reflected in the holding company's nameand logo
Profile of the holding company
Size and market of the new group
Member companies of the new group
Group philosophy and vision
Targets for realization of the vision
Increasing value for stakeholders
New group management structure andgovernance
Organizational structure of the new group
The new group's basic integration strategies
Overview of integration synergies
Initiatives and measures related to integration
synergies
Initiatives, events, and promotions for Day 180of the new group

Combined ingenuity for regional revitalization
Expansion of comprehensive financial services
Expansion of area and channels
Innovative operations and development of the
new group's business management structure

III. Group performance targets
1. Targets for Mebuki Financial Group
2. Targets for Joyo Bank and Ashikaga Bank
(including synergies)

Reference: Relationship of Joyo Bank andAshikaga Bank

1

I. Founding of Mebuki Financial Group2

1. Background and objectives of business integration
Responding to changes in the external environment, we will pursue continued growth along with our customers
and the region, making the most of the large market shares and strengths of both banks in a large economic zoneof Ibaraki and Tochigi Prefectures combined, with growing high-speed infrastructure networks.
Changes in theexternal
environment

 Transportation infrastructure is growing in the region, including the Kita-Kanto Expressway, Ken-O Expressway, Bullet train, Tsukuba Express, Ibaraki Airport, and Portof Ibaraki.
 Financial institutions are engaged in fierce competition amid concerns about contracting regional economies due to demographic changes including a shrinking
population, low birth rate, aging and the financing surplus.
 Industrial and social structures are changing due to increasing economic globalization and technical innovations in IT and other fields.
 With entrants from other industries and the rise of FinTech, the competitive environment is changing as the scope of financial services becomes broader.

Strengths of Joyo BankRegion andbusiness base(Ibaraki andTochigi)Population: About 3 million people
No. 1 in Japan in number and area of factory
locationsNo. 2 in agricultural production
Balance of primary, secondary, and tertiaryindustries
Transportation network linking the region with theTokyo area
Airports and harbors• Formation of a wide area network with a total of 332 branches(336 including offices abroad), covering not only Ibaraki andTochigi, but also Miyagi, Fukushima, Chiba, Saitama, Gunma,
Tokyo and OsakaConsulting services with attention to detailSupport system for the automotive and aircraft
industry, agribusiness, tourism, etc.

• Expansion of comprehensive, high-quality financial services
that meet the needs of our customers• Sharing of expertise in specialized areas

Advanced marketing methods (online marketing,
etc.)



Low-cost operations• More advanced marketing through data enhancement• Operational efficiencies

High level of equity capital

Low expense ratio• Strategic use of capital• Cost savings through common, joint, and integrated
administrative systems

Operations• High potential as a leading region for business location, in avery large economic zone that is also near growth areas• Potential for broad business base expansion opportunities
through local and regional revitalization

Impressive regional market share with 111 branchesin Tochigi
17 branches in Saitama, 15 in Gunma, 8 in Ibaraki,and 1 in Fukushima
1 office in Tokyo and 1 overseas officeStrong relationships with local governmentsPopulation: About 2 million people
No. 7 in Japan in number of factory locations; No. 3
in area of factory locations
Wealth of tourism resources
Balance of primary, secondary, and tertiaryindustries
Transportation network linking the region with theTokyo area

Main benefits of business integration

Project to create a new east-west industrial axis in northern Kanto (Metropolitan Area Regional Plan)

The only one-stop financial service provider in bothregions
Support system for manufacturing companies,
agribusiness, etc. and startup support systemFinances









Products andservicesImpressive regional market share with 145 branches
in Ibaraki
10 branches in Fukushima, 8 in Tochigi, 6 in Chiba, 3
in Saitama, and 1 in Miyagi
5 branches in Tokyo, 1 in Osaka, and 3 overseas
offices
Strong relationships with local governments
Trade contacts with leading Tokyo corporations



ChannelsStrengths of Ashikaga Bank





3

2. Ideals reflected in the holding company's name and logo

Mebuki Financial Group, Inc.
Name:

Idealsreflected in
the name

Logo(Japanese name: 株式会社 めぶきフィナンシャルグループ)
Note: Ashikaga Holdings Co., Ltd. has changed its name to the above.

The Japanese word mebuki, or "green shoots, " conveys an image of new leaves budding on tree branches.
This word is used in the group's name to express its approach of drawing on the knowledge and creativity ofeach of its companies to create fresh ideas and new value. The name Mebuki expresses our wish to create
new energy and value in local communities and pursue sustainable growth along with these communities.

[Brand logo design concept]
The brand's distinctive logo design shows three fresh young leaves
sprouting, expressing an image of vibrant life and growth. The Mebuki
Financial Group is symbolically portrayed as firmly rooted in thecommunity, constantly creating new value and developing apromising future.
[Colors in the logo]
The main color is "assuring blue," a distinctive shade which
represents wisdom and trust. This is combined with "growing green, "a youthful color which represents growth and the future.
4

3. Profile of the holding company
Location of headquarters (registered address)

Capital7-2, Yaesu 2-chome, Chuo-ku, Tokyo

117.4 billion yen

Note: The headquarters of Ashikaga Holdings Co., Ltd. has moved to the above
address. The locations of the headquarters of subsidiary banks Joyo Bank andAshikaga Bank are unchanged.

Number of directors and employees:
Head office locations

135 (12 directors and 123 employees)［Mito Head Office］
5-5, Minami-machi 2-chome, Mito, Ibaraki Prefecture［Utsunomiya Head Office］
1-25, Sakura 4-chome, Utsunomiya, Tochigi Prefecture
Note: The head office functions of Mebuki Financial Group, Inc. are performed byfull-time officers and employees, as well as concurrent officers andemployees of Joyo Bank and Ashikaga Bank, and located in Mito (Ibaraki
Prefecture) and Utsunomiya (Tochigi Prefecture).

Integration date (share exchange)
October 1, 2016

Fiscal year
April 1 to March 31

Representatives
President
Kazuyoshi Terakado (currently President of Joyo Bank)
Executive Vice President
Masanao Matsushita (currently President of Ashikaga Bank)

Stock exchange listing
Tokyo Stock Exchange
Note: The trading name was changed from Ashikaga Holdings to Mebuki
Financial Group.

The Holding Company has appointed 12 directors, including its representative directors.
Three are outside directors.

5

4. Size and market of the new group
Impressive share of its core market, Ibaraki and Tochigi
Prefectures, near the greater Tokyo region

Size of Mebuki Financial Group

Share of deposits
Total assets:

15,324.2 billion yen

Securities:

Share of loans

Balance of
deposits:

909.1 billion yen

Employees:

35.4%

45.1%

51.1%

6,607 people

Branches:
13,298.4 billion yen

Share of loans

4,033.6 billion yen
32.6%

Net assets:

Share of deposits(Based on a December 2015 special edition of Kinyu Journal)(as of June 30, 2016;
including sub-branches)

332 locations

Tochigi Prefecture
Outstanding loans: 10,144.7 billion yen

Rank1(Information as of March 31, 2016;
consolidated totals for both banks)

Name of bank
The Bank of Yokohama, Ltd. and HIGASHI NIPPONBANK, Ltd. (two banks)

Total assets(trillion yen)

Gunma
Prefecture

17.5

2

Fukuoka Financial Group, Inc. (three banks)

16.4

3

Mebuki Financial Group, Inc. (two banks)

15.3

Companies:

29,245

Households:

82

Branches :119Companies:

30,614

Branches:

15

SaitamaPrefecture

13.3

5

Hokuhoku Financial Group, Inc.

11.6

6

THE SHIZUOKA BANK, LTD.

11.1

7

Yamaguchi Financial Group, Inc.

10.4

8

The Joyo Bank, Ltd.

9.3

Population: Unit is 1 million
people. *1

9THE NISHINIPPON CITY BANK, LTD.

9.1

Households: Unit is 10,000
households. *1

8.9

Ashikaga Holdings Co., Ltd

6.1(As of March 31, 2016)

IbarakiPrefecture
Population:

2.97

Households:

120

Population:

7.32

Companies:

34,895

Households:

316

Branches :153

Companies:

86,578Branches :20

Tokyo Population:

13.41

Households:

688

Companies *2
Branches *3

21

80

2.00

The Chiba Bank, Ltd.

Kyushu Financial Group, Inc.

1.99

Households:
Population:

4

10

Population:

Companies:

272,754

Branches :6

Population:

6.26

Households:

277

Companies:

64,606

Chiba Branches :Prefecture

6*1: Basic Resident Register, January 1, 2016
*2: Economic Census for Business Frame ofJapan, 2014
*3: Number of offices as of June 30, 20166

5. Member companies of the new group
Customers
Offering high-quality comprehensive financial services

Bankingbusiness

Leasingbusiness

Branches including headquarters
Sub-branches
Overseas representative offices

Otherbusinessareas

Branches including headquarters
Sub-branches
Overseas representative offices

104
49
1

Ashikaga Credit Guarantee Co., Ltd. (leasing
division)

The Joyo Lease Co., Ltd.
Sales departments including at headquarters

Securities
business

150
29
3

10

The Joyo Securities Co., Ltd.
Branches
Representative offices

2
3

The Joyo Computer Service Co., Ltd. (outsourced computation services)

Ashikaga Credit Guarantee Co., Ltd. (credit guarantee services)

The Joyo Credit Guarantee Co., Ltd. (credit guarantee services)

Ashigin Research Institute, Ltd. (research and consulting services)

The Joyo Credit Co., Ltd. (credit card services)

Ashigin Card Co., Ltd. (credit card services)

The Joyo Business Service Co., Ltd. (outsourced office services)
The Joyo Industrial Research Institute, Ltd. (consulting services)
The Joyo Equipment Management Co., Ltd. (real estate rental management services)
The Joyo Cash Service Co., Ltd. (ATM maintenance and management services)

As of September 30, 2016

7

6. Group philosophy and visionGroupphilosophy
and vision

Together with local communities, we will continue to build a more prosperous future by providing
high-quality comprehensive financial services.
The ingenuity of the entire group will be combined to contribute to sustainable growth in communities. We will build a better future together
with local communities, seeking solutions to challenges that affect these communities by providing high-quality comprehensive financial
services.

Vision of the new group (strategic goals)
The group's philosophical structure and basic approach of the new group's activities

Building the region's future as a comprehensive
financial service group
The new financial group will maintain andpromote the relationships with customers andlocal communities as well as the deep
understanding of local communities that bothbanks have developed over the years. At thesame time, the group will use its wide-area
network to expand its zone of economic
interactions, expand the scale and scope ofcomprehensive financial services that it offers,
and grow along with communities by promoting
the development of local industries, therevitalization of local economies, and thecreation of new markets.

MissionContributing to local communities
by developing and growing together
VisionExpanding into more areas of business, more regions, and a greater scale as an open
financial group

Growthdrivers

Using our network
to promote local
economic growth:

Developing andoffering advanced
services:

Building therevenue basethrough integration:

We will draw on our
wide-area network,
which includes major
corporations in the
Metropolitan area, toincrease the flows ofcommerce, information,
and B2B exchanges.

We will develop andpromote advanced
financial services
based on IT and interindustry collaboration.

Our revenue base will
be strengthened bystreamlining operations
and strategicallyreallocating businessresources.

ValuesUnderpinnings

Training
professionals:
Our training will enable
employees to respondprofessionally tocomplex and diverse
financial needs with anunderstanding of thelocal communities.

One-stop comprehensive financial services including leasing, securities,
researching functions, and IT services
Solid trust relationships with local communities
Regional financial institutions with the top market shares

87. Targets for realization of the vision
Second medium-term group business plan
(FY 2019 to FY 2021)
First medium-term group business plan
(2nd half of FY 2016 to FY 2018)

Producing solid results and upshifting for the nextstage of growth
FY 2021 (for reference)

Getting the new group on the right track to success

FY 2018
Consolidated
net income[The vision]
Building the region's
future as acomprehensive financial
service group

Consolidated
net income

About 64 billion yen

Consolidated
ROE

Over 6%

Consolidated
capitaladequacy ratio

Over 10.5%

About 47 billion yen

Consolidated
ROE

Over 5%

Consolidated
capitaladequacy ratio

10% level

About 15 billion yen

Developing systems and other infrastructure
Top line synergy*
Cost saving synergy

About 5 billion yen

Reverse synergy (system
migration costs)(depreciation for initial costs tobe completed in FY 2024)

2nd half of FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021※ Top line synergy: After deducting
the increased costs related to top
line increases.

98. Increasing value for stakeholders
The new financial group will maintain and promote the relationships with customers and local communities as well as
the deep understanding of local communities that both banks have developed over the years. At the same time, the groupwill use its wide-area network to expand its zone of economic interactions, expand the scale and scope of comprehensive
financial services that it offers, and grow along with communities by promoting the development of local industries,
revitalization of local economies, and creation of new markets.
Business resources as basis for improved value

Value for stakeholders

Corporate
customers

In addition to the financial intermediary functions facilitated by both banks:
 Providing wide range of opportunities for business interactions
 Suggestions and catalysts for business creation and growth Detailed advice and thorough support for realization of growth Wider-area network of employees, information, customer base, etc.
 Strong connections with customers and communities of Ibaraki andTochigi
 Ample means for raising capital and expertise in comprehensive
financial services

Individual
customers

 Welcoming and convenient banking environment
 Advice and support in every stage of life Optimal solutions based on long-term relationships

 Impressive network of branch offices and product lineup Appropriate and timely information for every stage of life
 Sophisticated, expert financial concierge services

Shareholders

 Improved corporate value and ROE on the medium to long term Shareholder returns (stable dividends and shareholder benefit plan) Prompt and appropriate information disclosure and explanations






Employees

 Rewarding work for employees that embodies care about theircommunities More opportunities to play active roles
 Improved skills and growth through personnel exchanges

 Joint training for penetration of the new group's philosophy
 Execution of strategies based on deep understanding of local
communities Mutual personnel exchanges and various types of joint planning

Local
communities More economic exchange opportunities that can contribute to regional
revitalization, e.g. exchanges between Ibaraki and Tochigi, and withother areas near these prefectures
 Fitting proposals that will empower communities, including advice on
the number of business locations in the region and promoting
residence in the region

 Strong connections with local governments and other public institutions in
Ibaraki and Tochigi
 Ability to coordinate with important partners for economic interactions
 Programs to promote the creation of new industries and support forbusiness growth and core company development in the region

Revenues as a result of synergy
Performance evaluations of holding company directors will reflect ROE
Appropriate corporate governance structure that uses outside directors
Comprehensive investor relations10

9. New group management structure and governance
The integrated holding company will take the lead in intragroup collaboration to map out the new financialgroup's management policies and strategies and maximize synergy. It will also play a role in improving the overall
group's corporate value through corporate management for each company.
Management structure of the new group

Mebuki Financial Group (holding company)

 Since both banks will need to implement important
strategies, each bank will also appoint multiple outside
directors. A corporate governance committee, consisting
mainly of outside directors of the holding company and thebanks, will be established as an advisory organ for theholding company's board of directors. With roles such as
nominating director candidates, deliberating directors'
compensation, and group governance evaluation, thiscommittee will enhance the effectiveness of corporate
governance. Executive sessions composed only of outside
directors will also be held as a means of exchanging
information and impressions among the outside directors,
for the sake of actively incorporating diverse views in theholding company.

General Meeting of
Shareholders

Board of Directors

Accounting auditor
Collaboration

Corporate
GovernanceCommittee

Audit and Supervisory
Committee
Questionsand advice

Compliance
Committee

Audit and Supervisory Committee Office

Management
Meeting

ALM / Risk
Management
Committee
Group Strategy
Committee

Corporate Planning
Division

Banking
Subsidiaries

 As a company with an audit and supervisory committee, theintegrated holding company will appoint multiple outside
directors for transparency and fairness in decision-making
as well as a high level of audit and supervisory capabilities.
By delegating most authority for operational decisions to its
board of directors, which will represent the knowledge andexpertise of both banks, the holding company will ensure
speed and decisiveness in decision-making and business
operations.

Corporate Management
Division

Company with audit andsupervisory committee

Regional Revitalization
Division

Audit Division

Company with audit andsupervisory committee

11

The holding company will provide business guidance, management, and supervision for the banking subsidiaries,
while corporate management for the other subsidiaries will be conducted through the group banks. This approach
will ensure appropriate corporate management and governance for the new group as a whole.
Governance of the new group

Guidance, management, and supervision

 Each bank will collaborate closely with the other as members of
the new financial group, while maintaining their unique qualities todeepen the relationships that each has cultivated with local
communities. Both banks will pursue business expansion based on
the group's management policies and strategies, and will take thelead in drawing on group synergies to promote revitalization of theregional economy.
 Like the holding company, both group banks are companies with
an audit and supervisory committee as their organizational design.
This transition occurred in June 2016. Each bank appoints outside
directors (three per bank) who have specialized knowledge andare familiar with regional affairs.
 For subsidiaries of the banks without direct investment by theholding company, corporate management will be provided by thebanks which invest directly in those subsidiaries, and the holding
company will provide management as appropriate for the situation.
This approach ensures appropriate and efficient corporate
management as well as highly effective governance for the overall
group.

Consultation and reporting

Board of Directors

Accounting Auditor
Collaboration

Corporate GovernanceCommittee

Audit and Supervisory
Committee

Questionsand advice[Joyo Bank]
Executive Council[Ashikaga Bank]Management
Council

All divisions in headquarters
Guidance, management, and supervision

Consultation and reporting

The Joyo Lease

The Joyo Securities

Ashikaga Credit Guarantee

The Joyo Computer Service

The Joyo Credit Guarantee

Ashigin Card

The Joyo Credit

The Joyo Business Service

Ashigin Research Institute

The Joyo Industrial Research

The Joyo Equipment
Management

The Joyo Cash Service

1210. Organizational structure of the new group
For efficient and effective organizational management in the new group, each unit in the holding company will
collaborate appropriately with related units at the banking subsidiaries.
Organizational structure of the new group
 The corporate management organization andoperational management organization of the holding
company are responsible for the corporate
management of subsidiaries. From a strategic
standpoint, their role is to improve the corporate valueof subsidiaries and the overall group through activities
such as formulating group strategies, allocating
human resources and business resources, monitoringbusiness activities, risk management, and internal
auditing.

Corporate Planning DivisionCorporate
Planning andCorporate
Management

Corporate Management
DivisionManagement Planning
Division

Tokyo Liaison OfficePublic Relations Office

Corporate Risk
Management Division

Risk Management
Division
Compliance Management
Division

Functions maintained and performed by four units of
the holding company
 Formulating group strategies and setting strategic goals
 Developing business resource and risk allocation
policies based on strategies
 Developing capital policies based on strategies andrisk-taking policies
 Monitoring and evaluation of subsidiaries' businessactivities
 Developing the risk management structure andcompliance structure of the overall group Oversight of the group's financial and tax affairs, andtimely and appropriate information disclosure Constructive dialogue with shareholders and capital
markets
 Taking the lead in intragroup collaboration programs
and strategy development aimed at wide-area regional
revitalization
 Internal audits (including maintenance andmanagement of internal audit quality for subsidiaries)

Corporate Planning
Division

Business

Personnel Division

Personnel Division

General Affairs Division

General Affairs OfficeBusiness Management
Division

Business Promotion
Division

Business Promotion
Division

Business Planning
Division

In-house Training Office

Retail Business OfficeConsulting Business
Division
Personal Loan Business
Division

Regional Revitalization
Division

Regional Partnership
Division

Solution Business
Division

Government and Municipal
Business Division

Regional Development
Division

Credit Examination
Division

Loan supervision
Division
Credit Supervision
Division I
Credit Supervision
Division II

Reviews andFinancingOperational Innovation
Division

Operation Planning
Division

Operation Management
Division
Computer System
Division

Operation Support
Division
IT Planning and
Administration Division

Global Markets
and Market
Operation

Markets Administration
and International Division
Treasury and Securities
Division

Treasury and Securities
Division

Auditing

Corporate Audit DivisionInternal Audit Division

Operational
Innovation and
Administrative
Systems

Audit DivisionInternational and Treasury
Administration Division1311. The new group's basic integration strategies
As a key player in regional revitalization, the new financial group will take action to develop local industries and to createand stimulate markets by expanding its comprehensive financial services and making use of its wide-area network. In
addition, the new group will implement operational innovations to ensure appropriate allocation and training of personnel
and build structures for highly efficient operations and appropriate management, pursuing sustainable growth together withlocal communities.

[1] Combined
ingenuity forregional
revitalization[2] Expansion ofcomprehensive financial
services[3] Expansion ofarea andchannels

 Making use of its expanded base and network due tointegration, the new group will cooperatively deploy a wide
range of support measures based on the industry
characteristics of its primary sales bases, and will contribute toregional revitalization and stimulation by bringing together all
the ingenuity of the new group.

 By organically integrating its functions, the new group will seek
to improve quality and expand scale and scope, providing onestop services with greater added value in response todiversifying customer needs.
 To pursue a wide range of synergies, the new group willconsider ways to share expertise and integrate its operations
in securities investment while considering developments inderegulation and other changes.

[4] Innovative
operations[5] Developmentof the newgroup'scorporate
management
structure By unifying and integrating its administrative systems, the
new group will reduce costs and improve services tocustomers, strengthening its business resources andcontributing to regional revitalization.
 The new group will improve services to customers byinvesting in systems such as FinTech for new areas andgrowth fields.

 The new group will implement effective governance to reap
the benefits of integration, building management structuresthat are appropriate for the size and characteristics of bothbanks.
 The new group will enhance risk management, improvefinancial intermediary functions, and develop frameworks
including an internal audit system for sound operations andefficient achievement of management objectives.

 The entire group will optimize its business resources and seek
to further expand its wide-area network in order to provide
greater convenience to customers while promoting regional
revitalization and stimulation.
 With an enhanced database due to business integration,marketing will be improved in order to strengthen directchannels, including online and ATM marketing, thereby
providing timely information and financial services to morecustomers.

1412. Overview of integration synergies
Basic integration
strategy[1] Combined
ingenuity forregional
revitalization:

Individual customers

Corporate customers

Collaboration to promote residence
and attract non-resident visitors

Compared with FY2015

Public sector customers

Wide-area business matching services, shared use of coordinators for industry
creation, and support for business expansion(FY 2021)
Support for wide-area collaboration

Increase in loan balance due
to synergy

Support for developing a "golden route" tourist itinerary in collaboration with the regional tourist industry
Investing and creating collaborative
businesses in the food, agricultural,and tourism industries

Stepping up involvement to resolve
challenges of local communities

Collaboration in the fund business

Sharing support expertise in public
property management+ 700 billion yen

Providing leasing and securities services in more areas

Using FinTech, etc. to improvecustomer service

Shared use of research institutes and other group companies

Sharing expertise for better asset
operation proposals

Improved arrangements in M&A,
syndicated loans, and derivatives
Joint development of diverse,
convenient products and services(loans and credit)

Streamlining administrative affairs;
shared use of services

Sharing market investment expertise
Considering integrated securities
investment based on deregulation

Support for companies expanding
overseas

Sharing expertise on workplace sales

Larger scale andscope

Top line and cost saving
synergies+ About 15 billion yen

Cooperation in cross-border loans

Jointly improving EBM and other marketing
Streamlining credit and collateral appraisal operations

Shifting personnel to sales andstrategy areas

Unifying interbank fees to attract more settlement customers
Opening branches in growth areas and expanding regional economic interaction opportunities[3] Expansion ofarea andchannels

Synergy targets

Attracting businesses, comprehensive support for new entrant companies, and job creation

Promoting wide-area
regional revitalization[2] Expansion ofcomprehensive
financial services:

Other customers

Collaborating to enhance directchannels

Sharing expertise on branch design and management for a quality branch network with lower costs

Branches: About 15 new branches tobe opened (including leasing andsecurities offices)

Shared use of overseas networks (and possibly changing overseas offices into
branches)[4] Innovative
operations

Optimizing businessresources (streamlining
head and branch offices
and staff reallocation)[5] Group
management

Improving the credit risk management system

Cost savings throughsystem integration

Integrating administrative
procedures; sharing andintegrating head office
operations

Joint procurement for lower
property expenses

Developing an appropriate audit structure for the
new group

About 150 employees

Sharing expertise to further
promote BPR

Promoting human resource exchanges and joint
training

15

13. Initiatives and measures related to integration synergies
Type ofsynergy

Corporate
loans

Deposited
assetsMajor measures

2nd half of
FY2016FY2017FY2018



Stepping up efforts for syndicated loans
Expanding lease transactions (and possible
integration of The Joyo Lease and theleasing divisions of Ashikaga Credit
Guarantee)
Enhanced matching functions



Sharing sales expertise
Shared use of The Joyo Securities



Developing portfolios with stable earnings
structure on the medium to long term
Effective use of market division personnel toenhance securities investment capabilities

1.2 billion yen

FY2019FY2020

FY2021

1.3 billion yen

2.9 billion yen

1 billion yen

2.3 billion yen

2 billion yen

Securities

Businessstrategies

Opening new branches
Improved staffing in key areas
Measures for overlapping areas

0.7 billion yen

3.5 billion yen

Joint development for improved productcapabilities
Area cards at both banks
Cross-selling to mortgage borrowers

0.9 billion yen

1.9 billion yen

Unifying product specifications
Joint development of new products
Use of AI in reviews and marketing

0.4 billion yen

1.8 billion yenSharing foreign currency deposit products
and expertise
Stepping up cross-border loan efforts
Stronger measures to support overseas
business development

0.3 billion yen

0.7 billion yenIncreased costs due to new branches and
top line increases-1.1 billion yen-1.9 billion yenReduction in system-related costs
Reduction of other nonpersonnel expenses

1.1 billion yen

3.4 billion yenKey system migration costs, costs of
discontinuing redundant systems, etc.
(depreciation for initial costs to be completed
in FY 2024)-0.7 billion yen-1.4 billion yen

Decrease in goodwill amortization costs, etc.

3.6 billion yen

4.1 billion yen

Unsecuredloans

Housing loans

International
operations

Cost increases
Cost
reductions



Reverse synergy
FinancialsynergyNote: Figures from "Corporate loans" to "Reverse synergy" are pretax. Figures for "financial synergy" are after tax.

Top line and cost
reduction synergies:+ about 15 billion yen

Top line synergy:+ 13.2 billion yen

1614. Initiatives, events, and promotions for Day 180 of the new group
Action item

Measures

Channels

EventsRegional
revitalization

Campaigns

Individual
customers

Corporate
customers

Schedule

 The transfer fee between the two banks will be lowered to the inter-bank rate for teller transactions, ATM transactions(card, cash), and online banking transactions.

From October
2016

Shared use of ATMs fordeposits Customers who have a card from either bank will be able to deposit money using the other bank's ATMs.

From October
2016

Securities

 About 13 branches with full-time financial consultants (FC) of Ashikaga Bank will begin intermediary services for products
carried by Joyo Securities.

From October
2016

Leasing Ashikaga Bank will begin offering auto leases from The Joyo Lease.

From October
2016

Joint fund To commemorate the business integration, we will launch an investment trust with stock of companies with ties to Ibaraki
Prefecture and Tochigi Prefecture, to be sold at both banks.

November 22,
2016

Projects to support local
products

 We will conduct a test marketing event with consumer evaluators to promote improvement and development of special
products using local resources (Taste Improvement Product Fair in Mito).
 We will host business discussion events as a way of helping makers of specialty products using local resources expand
sales to food businesses, while also supporting buyers in product purchasing (Tasty Connections Food Festival in
Utsunomiya).

Business contest

 We will hold business plan contests and business planning seminars to support business expansion and honor local
business plans for innovative and creative excellence.

From December
2016

Forum of manufacturingfirms

 To support local manufacturing firms, we will hold a forum for manufacturing companies, co-sponsored by Joyo Bank andAshikaga Bank, with invited participants from Germany and Taiwan.

February 22, 2017

Campaign for depositedassets We will award gifts of prefectural products by lottery to customers who have invested or deposited at least 200,000 yen in
investment trusts, foreign currency deposits, or yen time deposits. (To support and publicize local businesses in eachprefecture, the gifts of prefectural products will be from Tochigi Prefecture for customers of Joyo Bank, and from Ibaraki
Prefecture for customers of Ashikaga Bank.)

From October
2016

Group
companies

Deposited
assetsSummary

Lowering transfer fee
between both banks tointer-branch rate

October 12, 2016
November 22,
2016

Discounted rates for car
 We will offer discounted interest rates for car loans and educational loans.
loans and educational loans

From October
2016

Campaign to sign up new
corporate internet banking
customers

 Customers who sign up for corporate internet banking will get a discount on the signup fee and monthly fees for threemonths.

From October
2016

Think tank seminars

 Regional information and corporate trends, etc. will be communicated at seminars by the research institutes of both banks.
From October
Members of either research institutes can participate in the other's seminars at the member rate. The goal is to attract new
2016
members and expand economic exchange.

17II. Basic Integration strategies18

1. Combined ingenuity for regional
revitalization19

(1) Support for wide-area collaboration
We will use our networks in Ibaraki, Tochigi, and the Tokyo area to provide the kind of support for wide-area regional collaborationthat is not available from one bank alone.
Human resources will be allocated in the following four areas as a priority: [1] promoting utilization of the wide-area network; [2]industry development and business creation; [3] support for regional branding; and [4] collaboration with local governments.
The banks will also draw on the new group's expertise and networks, including the 30,000 main customers of the two banks, tosupport higher added value through consulting services aimed at increasing sales and profitability for our customers.
Support for wide-area collaboration

Focused activities
Promoting utilization of the wide-area network

Local governments

Tochigi
Prefecture Improved coordination capabilities
 Wider-area of business matching Collaboration with external experts

Various economic
organizations
Industry development and business creation

IbarakiPrefecture
Universities andresearch institutions

Licensed professional
services

Resolving
challenges of
localcommunities

 Joint planning to support industry development andbusiness creation
 Use of technology coordinators
 Supporting expansion into the Tokyo market oroverseas Attracting and retaining businesses Business contests

Support for regional branding Investing and creating collaborative businesses in
the food, agricultural, and tourism industries
 Supporting new product development using local
resources
Supporting regional
revitalization at its main sales
bases in Tochigi and beyond

Supporting regional revitalization
at its main sales bases in Ibaraki
and beyond

Collaboration with local governments
 Revitalization of local shopping streets Proposing ways to promote relocation andresidence20

(2) The new Regional Revitalization Division
The new group will draw together the group's ingenuity for regional revitalization, linking regions, businesses, technologies, andservices with the kind of outstanding coordination capabilities that can only result from the integration of leading regional banks. With
expanded bases and networks due to this integration, the group will pursue regional revitalization through the accumulated andshared resources of both banks, identifying regional resources and technologies that have untapped potential and cooperatively
developing a wide range of support measures based on the characteristics of local industries.
The Regional Revitalization Division will be established at the holding company to play this role. The Division will consolidate theingenuity of group companies and the region to develop plans and proposals concerning wide-area regional revitalization, promotecollaboration among group companies, and oversee group-wide initiatives for regional revitalization.
The new group's organizational structures related to regional revitalization
Regional
Revitalization
Division

Regional Revitalization Division

Collaboration
Regional Development
Division
Solution Business
Division

Regional Partnership
Division

Collaboration

Collaboration

Regional
revitalizationrelated units atbanking
subsidiaries

Technology
coordinators

Development of group-wide regional revitalization strategiesManagement of collaborative measures among group companies



Planning and implementation (leadership) based on the group's regional revitalization
strategiesCollaboration between both banks for regional revitalization[Examples of joint measures] Industry development from a wide-area perspective, coupled with appropriate,
multifaceted assessment of companies' technical and business capabilities Support for developing a "golden route" tourist itinerary in collaboration with the regional
tourist industry
 Supporting town planning to promote residence and attract non-resident visitors

Shared use of technology coordinators (experts at the regional partnership division of
Joyo Bank)Appropriate matching and evaluation of companies' technical strengths, etc.

Implementing the group's regional revitalization measuresSupporting the promotion of Comprehensive Regional Strategies by local governments

Technology coordinators
Shared use
Sales offices
Sales offices

Sales offices21

2. Expansion of comprehensive financial services

22

(1) Providing one-stop financial services
Drawing together the new group's capabilities toexpand comprehensive financial services
Through organic integration of the group's
banking, leasing, securities, IT, and researching
functions, we will seek to improve quality andexpand scale and scope, providing one-stop
financial services with greater added value in
response to diversifying customer needs.

[Expanded target area for securities
functions]×[Contacts with generations of people
and companies]

Asset sales
The Joyo Securities

Offering advanced financial concierge
services to support asset building,investment, and succession

Research
Institutes

Leasing
The Joyo Lease
Ashikaga Credit Guarantee(leasing department)

The Joyo Industrial
Research InstituteAshigin Research InstituteOne-stop financial
functions[Information of Ibaraki Prefecture andsurrounding areas]×[Information of Tochigi Prefecture andsurrounding areas][Expanded target area for leasing
functions]×[Locally based networks and thenecessary structures and expertise forsales to businesses]

Providing a broad scope of wide-areabusiness information, and offering
consulting services and opportunities forexchange in new fields

Settlement
The Joyo Credit
Ashigin Card

[Impressive regional share]×[Economies of scale through integration]
Better solutions for an increased flow ofcapital into the region

IT solutions

Detailed advice and thorough support forbusiness growth

The Joyo Computer Service
Ashigin Research Institute[IT planning and development
capabilities]
×[Consulting expertise]
Shared use of the IT firms of both banks toprovide solutions that help customers achieve
greater efficiency

23

(2) Specific measures for one-stop financial services
Leasing and securities operations will be expanded to ensure that we can provide outstanding, enhanced comprehensive financial
services through combined group capabilities. During the first medium-term period, we will consider transitioning the related leasing
and securities companies into directly owned subsidiaries of the holding company.
Expansion of leasing

Expansion of securities[1] New leasing offices
Three offices may be added.
[2] Schedule
October 2016: Conclusion of leasing intermediation agreements with
Ashikaga Bank and The Joyo Lease (October 2016) andcommencement of auto lease intermediary services
2017:
Integration of The Joyo Lease and the leasing division of
Ashikaga Credit Guarantee, and establishment of new sales
offices[1] New securities offices
Two offices may be added.
[2] Schedule
October 2016: About 13 branches with full-time financial consultants (FC) of
Ashikaga Bank will begin intermediary services with The Joyo
Securities.
April 2017:
Expansion to all branches

Transitioning the related leasing and securities companies into subsidiaries
At the time of integration

Restructuring

After restructuring

Leasing subsidiary

The Joyo Securities

The Joyo Lease

Ashikaga Credit Guarantee(leasing department)

During the first medium-term period, we willconsider integrating The Joyo Lease with theleasing division of Ashikaga Credit Guarantee andtransitioning them into a subsidiary of the holding
company.

Securities
subsidiary

During the first mediumterm period, we willconsider transitioning
The Joyo Securities into
a subsidiary of theholding company.

24

(3) Expanding comprehensive financial services for corporate customers
We will develop and provide advanced financial services that use IT and cross-industry collaboration to meet the diverse
needs of corporate customers at every stage of their business, from startup and growth to maturity and succession.

Loans

Asset sales

Strengths of Joyo Bank

Strengths of Ashikaga Bank

Benefits of business integration

Ability to propose comprehensive
financial solutions including use of
its leasing subsidiary

Expertise in providing solutions

Improved capacity for handling projects
through joint arrangements

Technical assessment expertise

Expertise in support for corporate
revitalization

Group use of leasing subsidiary

Use of its securities subsidiary

Corporate insurance sales
capabilities

Use of securities subsidiary for an expanded
product lineup

Enhanced expertise in promotion methods,
credit screening, etc.

Special products for entrepreneurs

Consulting

Startup
supportBusiness
matching andsupport forcompanies
expandingoverseas

Abilities incoordination
andtechnical
assessmentof localcompanies

Expertise in supporting
agricultural businesses

Wide range of convenientfinancing services

Appropriate asset formation forstable business management andgrowthEnhanced expertise in startup support
Improved discernment and discovery ofbusiness potential

Wealth of contacts with major
corporations, universities, research
institutions, etc.

Improved services for customers

Customer baseof manufacturing
companies

Wealth of contacts with thetourism industry

Providing crowdfunding

Increased opportunities forcollaboration and startup support
services that make full use of local
resources

More opportunities for collaboration with
universities, research institutions, etc.
Better coordination capabilities,
manufacturing technology assessment
capabilities, and increased accuracy and rateof matching

Sales channel expansion andmerchandise procurement in linewith the customer's growth vision

Enhanced consulting functions: Educational
content for corporations, support for IT
initiatives, administrative rationalization, etc.

Developing rational and efficientindirect operations, etc. according
to the stage of growth

Customer base (high regional shares)

Sharedservices

Occupational networks

High quality payment collection
systemUse of research institutes and IT subsidiaries

Business
succession
and M&A

Settlement

Networks of collaboration with experts

Expanded services for business succession

Volume of potential information collection

Enhanced M&A functions and intragroupmatching

High level of productdevelopment capabilities

Customization capabilities tomeet customer needs

Using increased settlement data, etc. to provide
a wide range of settlement services

Facilitating well-planned businesssuccession

Wide range of convenient
settlement services

25

(4) Expanding comprehensive financial services for individual customers
We will propose and provide appropriate products and services for individual customers through accurate and timely
identification of their wide-ranging needs at each stage of life, based on improvements including more advanced eventbased marketing (EBM) and the use of AI.

Loans
Unsecuredloans

Strengths of Ashikaga Bank

Product lineup and housing
plans in cooperation with
communities and businesses

Capabilities for proposals and sales
using high value-added products

Cross-selling expertise formortgage borrowers

Expertise in planning andpromotion of internet-based
products

Marketing expertise

Products using the ATM channel

Penetration and high rate of useof workplace-specific websites

Risk taking abilities, including
the use of outside agencies

Use of securities subsidiary

Asset management
consulting

Proposing methods for asset
formation using reserves

Use of advanced proposal tools

Ability to offer sophisticatedinvestment proposals bydedicated experts

Initial training system for new
hires

Consulting for affluent customers (exclusive staff members)

Settlement

Impressive number ofcustomers whose main bank is
Joyo, high rate of credit card
utilization, credit franchise share

Credit card with benefits for use
in the local communities

Benefits of business integration

Improved services for customers

Expanded product lineup(including internet products)
through joint development
Cooperative, advanced PR
methods

Joint development of highly
competitive products (includingloans requiring no face-to-facemeetings)

Use of securities subsidiary foran expanded product lineup
Increased capacity forinvestment proposals; quickly
bringing front staff up to speedConsideration of asset
management based on investment
trust sales capabilities
Enhanced consulting system for
affluent customers, withaccumulated and shared expertise

Wider-area regional priority
network by adding more credit
card franchises

More sophisticated marketing and combined proposal capabilities

Housingloans

Strengths of Joyo Bank

Wide range of
convenientfinancing
services

Proposingproducts andservices withappropriate
timing to meetcustomerneeds
Advanced EBM,
use of AI, etc.

Appropriate,
life cycle based
asset formation
andsuccession

Wide range of
convenient
settlement
services26

3. Expansion of area and channels

27

(1) Summary of measures related to expansion of area and channels
We will endeavor to expand the customer base and broaden and stimulate the economic interaction zone (corporate interactions inflows of commerce, information, and funds) by optimizing business resources, developing a wide-area network, and strengthening
direct channels.

Miyagi（1）

 Utilizing personnel and other resources freed up by reallocation
 Opening new branches in growth areas to expand economic
interaction opportunities
 Opening branches to expand group functions
 Using the agency bank system
 Shared use of overseas networks

Tochigi（119）
Ibaraki（153）
Saitama（20）
Tokyo （6）Strengthening direct channels

Chiba
（6）

ShanghaiHong Kong
Osaka
（1）

Singapore Streamlining the head office and sales offices Reallocating employees to enhance consulting functions andimprove service quality

Developing a wide-area network

Fukushima
（11）

Gunma
（15）

Optimizing business resources

New York
Overseas（4）(Total of 336 bases including overseas locations; as of June 30, 2016)

 Cooperatively enhancing marketing with EBM and othertechniques, and providing timely information and financial
services Sharing informational expertise in the use of online andtelemarketing channels to improve the supply of informationand meet customers' needs
 Cooperatively using online, ATM, and other non-face-to-facechannels to improve products and services

Reallocating about
150 employees

Opening about 15
new branches(including leasing
and securities
branches)

Increasing customer
contacts

Expanding the customer base;broadening and stimulating the economic interaction zone28

(2) Approach to new branches and key areas
We will endeavor to optimize group-wide business resources and further develop wide-area networks forcustomer convenience and regional revitalization and stimulation.
We will use the human resources freed up by business integration to strengthen market exploration anddevelopment and to promote and stimulate economic interactions between the explored areas and the coremarket.
Priority areas for new branches: Network to promote economic
interaction from north to south and east to west

Potential areas for new branches
Perspectives for consideration

Capturing growth potential→ Increasing profit

Branch network expansion→ Strengthening the business baseCriteria for new branch candidate areas
Increasing population (low degree of
population decline)
Increasing number of businessestablishments

Fukushima Airport

Adjacent to existing branches (nearby)
Along the railway lines where existing
branches are located(Anticipated areas)
Northwestern Chiba, southern Saitama, northern and southern Tokyo,
and areas along the Tsukuba Express line
* Northwestern Chiba and southern Saitama:
Candidate areas will be examined in terms of future population, outlook of deposits andlending, and network formation.
* Northern and southern Tokyo:
Candidate areas will be examined in terms of market size and relationships with the coremarket.

Ibaraki Port

Ibaraki Airport

Legend:Ashikaga Bank
branches
Joyo Bank
branches
Tsukuba Express

Kashima Port

Shinkansen
NaritaInternational
AirportExpressways

Chiba PortTokyo International Airport29

Reference: Summary of business strategies
Through business integration of the two banks, we will increase comprehensive financial services, expand ourarea and channels, and consolidate the new group's ingenuity for the sake of regional revitalization and stimulation.
In this way, together with local communities, we will build a better future as a key player in regional revitalization.

Based on increasing comprehensive financial services and expanding area andchannels, we will draw together the new group's ingenuity to pursue market
creation through the identification of regional resources and technologies thathave untapped potential, as well as expansion of business and financial
interactions between regions.

[1] Consolidation of
ingenuity forregional
revitalization⇒ Development of support for wide-area regional collaboration; stronger
matching through the shared use of coordinators; joint fundestablishment, etc.

We will respond accurately to increasingly advanced customer needs andexpand comprehensive financial services to provide value to our customers by
sharing the strengths of both banks and consolidating the new group's ingenuity.
⇒ Enhancement of consulting functions; expanded opportunities for leasing
and securities offerings; involvement with FinTech; more advanced
marketing; considering integrated operation of securities based on
deregulation, etc.

By strengthening and expanding networks and contact points with enlarging
core markets and growth regions, we will pursue expansion and diversification inindustrial development, creation of new businesses, and expansion of financial
service business areas.

[2] Expansion ofcomprehensive
financial services[3] Expansion ofarea and channels⇒ Optimization of business resources, further wide-area network
development, enhancement of direct channels, etc.

30

4. Innovative operations and development of the
new group's corporate management structure31(1) Summary of operational strategies
We will promote integration, joint use, and collaboration in administrative work and systems to reduce costs and free up
personnel. By shifting the resulting business resources to growth areas and sharing expertise, we will construct a highquality business operation system.
Consolidation and integration of systems and infrastructure
Systemrelated
streamlining

Through the consolidation and integration of core systems, distributed systems, networks, etc., we will reduce development
costs as well as maintenance and other operational costs while diverting the cost savings for uses such as investment in new
fields and new systems.
We will offer better services to our customers at lower cost through the effective use of IT.

 Integration with Chance (IBM),
which is used by Joyo Bank, isbeing considered as the basic
policy for core systems. The
target date for integration is
January 2020.

Cooperative and shared administrative procedures.
 The personnel freed up by collaboration and shared use in centralized administration and administrative procedures ofbranches. will be reassigned to growth areas and growth fields.

Streamlining ofadministrativework We will optimize administrative procedures, etc. to improve administrative efficiency and quality.

Reduction of nonpersonnel expenses
 We will reduce nonpersonnel expenses and improve management efficiency through optimization of in-bank mail, based on
the proximity of both banks' areas, joint purchasing for economies of scale through integration, and other measures.

Further promotion of BPR (Business Process Re-engineering) We will further promote BPR by sharing the expertise developed by both banks to accelerate the reorganization of businessprocesses.

BPR andoptimization of
branchmanagement

 By optimizing business processes, we will improve customer satisfaction, enhance business efficiency, and make the work
more rewarding for employees.

 ATM management, in-bankmail and cash transport, andoperations for issuing ATM
cards, etc. will becollaborative and shared.
 The target for cost savings is¥1.1 billion in FY 2018 and¥3.4 billion in FY 2021.

 Business process reengineering (BPR) will be
pursued in branch reception
navigation, e-learning,
succession navigation,
electronic receipts at tablet
terminals, etc.

Optimization of branch management
 We will share the expertise developed by both banks for enhanced efficiency and labor saving in the internal affairs ofbranches, resulting in lower-cost operations.
 By optimizing branch management, we will reduce costs and improve business at branches.

Systems for reducing costs, freeing
up personnel, and improving thequality of operational management32

(2) Summary of corporate management strategies
Along with regional revitalization and stimulation, we will exploit the economies of scale due to integration to develop an
effective governance system and establish an appropriate corporate management system suited to one of Japan's leadinggroups of regional financial institutions.
Ensuring advanced audit and supervisory functions, quick and decisive decision-making
functions and business execution functions
Ensuring aneffective
governancesystem to attainintegration
objectives

 The holding company is organized as a company with an Audit and Supervisory Committee to ensure transparency and fairness in decision-making by
the Board of Directors as well as advanced audit and supervisory functions, establishing a system that is capable of quick and decisive decision-making
and business execution.
 Since both banks will need to implement important strategies, multiple outside directors who have specialized knowledge and are familiar with the local
community will be appointed, and a Corporate Governance Committee, consisting mainly of outside directors of the holding company and the banks,
will be established as a means of actively incorporating the diverse views of outside directors.
 A group strategy committee will be established at the holding company to gather the knowledge and expertise of both banks, plan strategies forresponding promptly and accurately to changes in the surrounding environment based on local circumstances, and facilitate the penetration of suchstrategies within the new group.

Establishing and enhancing an appropriate risk management system
Establishing andenhancing anappropriate risk
management
system In pursuing integration of various risk management systems at the banks based on business integration, the new group will establish an appropriate,
effective, and efficient risk management system in light of the scale and characteristics of both banks.
 The credit risk management system of the overall group will be enhanced through such means as transitioning to the basic internal rating methods ofthe holding company and Ashikaga Bank, endeavoring to further facilitate financial intermediary functions.

Establishing an appropriate internal audit system.
Establishing anappropriate
internal audit
system, etc. for the
new group A proper and efficient internal audit system, which will contribute to sound corporate management and the efficient attainment of management
objectives at the new group, will be established through cooperation and appropriate organizational allocation by the internal audit units of the holding
company and subsidiary banks.
 We will seek to develop an appropriate internal governance system that includes a capable internal audit system with close collaboration between the
Audit and Supervisory Committee and internal audit units.

33

(3) Risk management system
We will use unified measures to determine various risks arising from the business operations of subsidiaries andestablish an appropriate risk management system to help improve corporate value while ensuring sound management of
the overall group.
 Organization and structures:
At the holding company, the Board of Directors and the Asset/Liability Management (ALM) and Risk Management Committee will receive periodic reports on risk status from the Corporate
Management Division and provide the necessary instructions. The ALM and Risk Management Committee will consist of all executive directors, general managers and managers of Corporate
Planning Division and Corporate Management Division, and the general manager of the Basel Unit of the Corporate Management Division. Directors who are full-time members of the Audit andSupervisory Committee and the managers and executive manager of the Audit Division will also attend committee meetings to ensure an appropriate framework for auditing and supervision.

ALM and Risk Management
Committee

Decisions for implementation of important
operations; analysis, assessment, anddeliberation of matters for improvement

Comprehensive risk
management unit (Corporate
Management Division)

Measurement, assessment,
reporting, etc. of risks for the groupoverallMarket risk

Liquidity risk

[Types of risk]
Strategic risk

Credit risk

Corporate Management Division andCorporate Planning DivisionCorporate Management Division

Ashikaga Bank
Board of Directors

Audit and Supervisory
Committee

Key bodies in risk management[Joyo Bank][1] ALM Committee[2] Risk Management
Committee, etc.

[Ashikaga Bank][1] Management Meeting[2] ALM Meeting[3] Credit Portfolio Meeting, etc.

[Joyo Bank]
Comprehensive
risk management
unit[Ashikaga Bank]
Corporate Risk
Management
Division
Auditing Market risk management, liquidity risk management, andoperational risk management:
In the management of other types of risk as well, theexpertise of both banks will be shared and utilized todevelop a risk management framework that is suitable
for the new group's equity capital.

Verifying theappropriateness andeffectiveness of the risk
management system

Instructions (establishment of risk
management system, etc.)

Reporting and consultations (risk status andresponse policies)
Joyo Bank

Operational risk

Internal audit division

Audit and Supervisory
Committee

Board of Directors[Types of risk]
Strategic risk

Credit risk

Market risk

Liquidity risk

Operational risk

Internal audit division Credit risk management:
The rating system developed by Joyo Bank under the
FIRB approach will be introduced at Ashikaga Bank as
well, and the group banks will implement credit risk
management under a shared rating and selfassessment system. (The new system is to be
implemented in the first half of FY 2017.)

Mebuki Financial Group

Auditing

 Comprehensive risk management:
Risk assessments in each risk category of the newgroup will be analyzed from a comprehensive standpointand compared against the group's consolidated capitalin order to maintain a suitable capital adequacy ratio.
The categories for risk measurement, assessment, andmonitoring will be unified across the group, andstandardization will also be pursued with regard to therisk measurement methods and parameters ofsubsidiary companies.

Responsible units in each risk category

Branches, headquarters, and group companies

34III. Group performance targets

351. Targets for Mebuki Financial GroupFirst Medium-Term Group Business Plan
(Plan period: October 1, 2016 to March 31, 2019)36

(1) Mebuki FG business objective indicators
Preconditions for objectives
 In FY 2015, the impact of the consumption tax increase had mostly subsided, and company earnings were positive, and these factors seemed to signal an improved businessclimate. However, concerns about an economic slowdown in China and other developing countries, as well as a downturn in business confidence on the part of companies
due to the strong yen and lower share prices after the start of the year, generally took the wind out of the economy’s sails.
 In the future, an economic recovery in the domestic economy is anticipated over the medium to long term as a result of the effect of the negative interest rate policy introducedby the Bank of Japan in February 2016, as well as the demand for equipment investment in anticipation of the Tokyo Olympics and Paralympics in 2020. However, the risk ofa downturn in the overseas business climate due to the decision by Great Britain to leave the EU and other factors, as well as declining consumer confidence and thepossibility that the result of various policies may not meet expectations, means that there is still a risk that the domestic economy may be pushed downward.
 Based on this perception of the economic environment, a common economic scenario was established at both banks and used as the precondition for business planning.

Mebuki FG business objective indicators
 The disappearance of gains on sales of stocks and bonds and the effect ofnegative interest rates will be covered by the incorporation of the synergistic
effect, and consolidated net income are expected to be approximately 47
billion yen for FY 2018 and 64 billion yen for FY 2021.
 The consolidated ROE is expected to be 5% or more for each fiscal year. The
target for FY 2021 is 6% or more.
 The consolidated capital adequacy ratio is expected to be in the mid-10%
level. The target for FY 2021 is 10.5% or greater.
 The goal for OHR is appropriate control of the increase in investment
expenses resulting from the merger, and the target for FY 2021 is the upper
50% level.

Business objective indicator
Consolidated net income(as compared to FY 2015*)

FY 2018(Reference) FY 2021

Approximately 47 billion yen(- 6.5 billion yen)

Approximately 64 billion yen(+ 10.5 billion yen)

Consolidated ROE

5% or more

6% or more

Consolidated capital
adequacy ratio

mid-10% level

10.5% or more

Approximately 60%

Upper 50% level

OHR (combined value forbanks)* Comparison with FY 2015: Comparison with FY 2015 “Joyo Bank Ltd. + Ashikaga Holdings
consolidated earnings”

37

(2) Mebuki FG performance targets plan(billion yen)

[Mebuki FG consolidated ((1) + (2))]
PlannedActual performance(Joyo Bank consolidated
First medium-term group
Reference: next period+ Ashikaga Holdings
business plan (latter FY
plan
consolidated)2016 - )FY 2015

FY 2018

Consolidated net income

53.5

FY 2021 - FY2015

FY 202146.6

64.1

Consolidated ROE

5.1%

6.2%

Consolidated capital adequacy ratio

10.4%

10.5%

[Total for both banks / Profit and Loss Statement andmajor indicators]

10.6(billion yen)

[Combined non-consolidated BS of both banks ataverage balance]

PlannedActualperformance

FY 2015

PL

Total for both banks (non-consolidated)

Gross business profit

First medium-term groupbusiness plan (latter FY
2016 - )Reference: next periodplan

FY 2018

FY 2021

FY 2021 - FY
2015

195.8

193.6

214.2

18.4

Core gross business profit

187.4

192.0

211.6

24.3

Net interest income

158.0

152.0

166.0

8.0

Net fees and commissions

30.4

36.5

41.8

Other / net trading income(After partial direct writeoffs)
Average balance of loans
and bills discounted

Actual performanceFirst medium-term groupbusiness plan (latter FY
2016 - )Reference: next periodplan

FY 2015

FY 2018

FY 2021

FY 2021 - FY
2015

9,981.3

11,113.9

12,486.7

2,505.4(〃 local companies)

2,911.2

3,269.9

3,777.8

866.7

11.4

(〃 unsecured loans)

109.8

175.7

242.5

132.7

(〃 foreign currency andnon-resident yen loans)

-1.1

3.6

3.9

4.9

8.4

1.6

2.6

-5.9

Expenses

115.2

119.0

118.9

3.7

Net business income

80.6

74.6

95.3

14.7

(Core net business income)

72.0

73.1

92.7

20.7

Credit-related costs

4.6

7.7

8.6

4.0

Gains (losses) on stocks andother securities

7.2

1.0

2.0

-5.2

Gains (losses) on bonds(billion yen)

Planned

109.3

200.1

261.0

151.7

Yield

1.204%

1.061%

1.079%-0.125%

Securities

3,712.3

3,709.1

3,703.2

-9.1

Yield

1.235%

1.271%

1.366%

0.131%

Total assets

15,011.7

15,925.4

16,986.7

1,975.0

Yield

1.126%

1.042%

1.095%-0.031%

Deposits / NCD

13,281.3

14,058.2

15,049.6

1,768.3

Other

-0.7

-1.8

-0.2

0.5

Ordinary profit

82.5

66.2

88.5

6.0

Non-consolidated net income

58.6

45.7

61.1

2.5

Yield

0.036%

0.031%

0.042%

0.006%

Consolidated net income(1) *

61.2

50.1

66.8

5.6

Total debt / equity

15,011.7

15,925.4

16,986.7

1,975.0

OHR

58.9%

61.5%

55.5%

-3.3%

Ratio of fees and commissions, etc.
to gross business profit

Yield

0.074%

0.087%

0.118%

0.044%

15.0%

20.7%

21.3%

6.3%

Consolidated adjustment with Mebuki FG (2) *

-7.7

-3.6

-2.7

Guideline* (1) Consolidated net income is noted as “Joyo Bank consolidated net income + Ashikaga Bank consolidated net income ”.
* (2) Major enumerated items: negative goodwill for FY 2016 (estimate as of March 31, 2016), and FG interest cost, amortization of PPA etc. for other fiscal years.

38(3) Mebuki FG capital policy / dividend policy
Capital policy
 The capital adequacy ratio will be maintained at
the mid-10% level. The target for FY 2021 will be
10.5% or greater.

(billion yen)

10.5% or greater

Mid-10% level

950

11.0%
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%

900
850
800
750
700
FY 2016

FY 2021

CapitalDividend policy
 Stable dividends will be provided based on aconsideration of the need to ensure a balance
between securing the capital for growth as a newgroup and returning profits to shareholders.
 The year-end dividend planned for FY 2016 will be
6.5 yen, a figure that includes a 1 yencommemorative dividend for the new group.

FY 2018
Capital ratio

FY 2015
EntityDividend policy
12 yen per share + 1 yencommemorative dividend

Joyo Bank

Ashikaga Holdings(Note)FY 2016

9 yen per share + 1 yencommemorative dividendInterim dividend (Note)
Joyo Bank

Year-end dividend
Mebuki Financial Group

6.00 yen
Ashikaga Holdings
5.50 yen

6.50 yen(FY 2016 year-end dividend includes
1 yen commemorative dividend)

The interim dividend for FY 2016 will be provided separately to shareholders by Joyo Bank and Ashikaga Holdings at the end of
September 2016.
As a result of the share exchange, shareholders of Joyo Bank who held shares prior to September 30, 2016 will hold Mebuki FG
shares that are equivalent to the number of Joyo Bank shares x 1.17. Converted based on the former Joyo Bank shares, this will
be a dividend for 2016 equivalent to 13.6 yen per share (6 yen interim dividend + 6.5 yen year-end dividend x 1.17)

Shareholder special benefits In order to contribute to recovery and growth on thepart of both customers and the region, local
specialties and tourism will be provided ascomplimentary gifts. The goal of the new group will
be to provide a return to shareholders through thestimulation of the local economy.

Approximate monetary value ofgift

Current no. of items *1,000 shares - less than 5,000 shares

2,500 yen123

5,000 shares - less than 10,000 shares

4,000 yen95

10,000 shares or more

6,000 yen98

No. of shares held

* Products by Ashikaga Bank business partners, primarily in Tochigi Prefecture, will be added as items.

39

2. Joyo Bank / Ashikaga Bank plan(including synergy)40(1) Overview of Joyo Bank medium-term business plan
［13th medium-term business plan - Planning period: October 1, 2016 - March 31, 2019］
Goal“Best partner bank” that co-creates new value
Create a brighter future and new value through various collaborations with the local community and share passion[Basic strategies]
 Work to improve corporate management• Reconstruct revenue management structure• Implement advanced risk management (symptom
management)• Ensure thorough understanding of the importance ofcomplianceＨ Conduct ongoing and enhanced training of personnel
who can accommodate various customer needs, in order
to increase sales capabilities and earnings potential• Improve personnel capabilities and increase organizational
capacity and earnings potential (foster professional groups,
promote diversity and expand opportunities for activity,
promote work-life balance, increase productivity)

 Take collaborative capabilities to a new level[1][5]
Collaborative
Improved corporate capabilities
management
Stage 2.0
[4]
Increased
personnel
capabilities[2]
Increased total
financial services
capabilities[3]
Updating ofbusiness and clerical
processes

 Use IT in branches and external sales services to build an efficient and effective
business structure Provide seamless channels that can accommodate changes in customer behavior• Make effective use of IT to perform a fundamental review of business processes in order to free up branch employee’s time
• Improve consulting capabilities by devising new outside sales styles and using customer data analysis• Offer non-face-to-face contracting customer services to improve customer convenience• Create seamless channels by quickly and efficiently resolving common consultations through utiliazation of AI, robo-advisorsetc., by making effective use of online branches, and by conducting promotions through social media• Provide advanced customer behavior analysis (using Big Data) to foresee changing customer needs in advance• Deploy mechanisms laterally to other regions in pursuit of the advantages ofscale provided by operating in a larger area
• Achieve project implementation through a consortium that combines multiple
functions in order to accommodate CCRC, DMO and other new frameworks• Make effective use of tourist promotion, public properties and other local
resources in order to accommodate the increased nonresident population• Promote industrial development by expanding collaboration and developing
evolved solutions to meet increasingly advanced company needs

 Provide thorough customer-oriented consulting in order to expand thecustomer base and develop new business transactions
 Increase market investment capabilities as earnings capacity that will
increase the ability to provide comprehensive financial services[Corporate]• Provide the consulting needed for growth and problem resolution, based oncompany characteristics and distribution channels• Increase one-stop financial services such as leasing and securities• Expand partnerships and partners in order to support overseas expansion[Retail]• Promote cross-selling and ‘“deep cultivation” of transactions as an starting point
for housing loan business• Actively incorporate functions and services provided by outside entities• Do fiduciary duty (thorough offering of investment opportunities in accordancewith stage of life and customer attributes)

41

(2) Joyo Bank performance targets
Business objective indicators
 Revenue structure reform (increased ratio of fees and commissions)and lending structure reform (increased lendings to local companies
and unsecured loans) will be promoted in order to increase the topline.
 Efforts will also be promoted to firmly establish the achievements ofthe cost reduction project pursued in the previous midterm plan, andto further reform the cost structure.
 Subsidiary earnings will be expanded through mutual use of lease
functions and securities functions by Joyo Bank and Ashikaga Bank.
PL / major indicators

FY 2018
Core net business profit〃 comparison with FY 2015
(Net business profit)
Net income
OHR
Capital adequacy ratio(Reference) FY 2021

Approximately 40 billion yen+ approximately 4.5 billion yen(approximately 41 billion yen)
Approximately 24 billion yen
Approximately 60%
Approximately 11%(Below, consolidation assumes existing consolidated subsidiaries)
Consolidated net income
Consolidated ROE
Consolidated capital adequacy ratio(billion yen)

Approximately 28 billion yen
37 billion yen or more
Secure mid 5% level through FY 2021
Mid 11% level
12% or more

Combined non-consolidated BS at averagebalance

PlannedGross business profit
Core gross business profit

Approximately 49 billion yen+ approximately 13.4 billion yen(51 billion yen or more)
32 billion yen or more
Approximately 57%
Approximately 11%(billion yen)

PlannedActualperformance

13th medium-termbusiness plan (latter
FY 2016 - )Reference: next
period plan

FY 2015

FY 2018

FY 2021

FY 2021 FY 2015

111.5

110.0

119.8

8.3

103.9

109.0

117.8

13.9

Net interest income
Loan-deposit difference(including foreign
currency)
Securities, etc.

89.9

86.2

91.6

1.8

Actualperformance

13th medium-termbusiness plan (latter
FY 2016 - )Reference: next
period plan

FY 2015

FY 2018

FY 2021

FY 2021 FY 2015

Average balance of loans
and bills discounted

5,808.3

6,583.9

7,295.7

1,487.4(〃 local companies)

1,475.6

1,650.9

1,918.3

442.8(〃 unsecured loans)

69.4

98.1

127.1

57.7

(〃 foreign currency andnon-resident yen loans)

100.0

180.0

228.0

128.0

Yield

1.144%

1.032%

1.046%-0.098%

63.9

65.6

72.2

8.3

26.0

20.7

19.4

-6.5

Net fees and commissions

15.5

19.8

22.9

7.4

Other / net trading income

-1.5

2.9

3.2

4.7

Securities

2,564.2

2,347.3

2,174.5-389.7Yield

1.128%

1.124%

1.163%

0.035%

Total assets

8,970.7

9,540.7

10,030.8

1,060.1

7.6

1.0

2.0

-5.6

Expenses （▲）

Gains (losses) on bonds

68.2

68.9

68.7

0.5

Net business income

43.3

41.1

51.0

7.8

(Core net business income)

35.6

40.1

49.0

13.4

Yield

1.087%

0.995%

1.019%-0.068%

4.8

5.4

5.9

1.1

Deposits / NCD

7,877.7

8,420.0

9,065.0

1,187.3

Credit-related costs （▲）
Gains (losses) on stocks andother securities
Other

4.7

1.0

2.0

-2.7

Yield

0.032%

0.028%

0.046%

0.014%

-0.5

-1.9

-0.3

0.2

Total debt / equity

8,970.7

9,540.7

10,030.8

1,060.1

Ordinary profit

42.7

34.8

46.8

4.1

Non-consolidated net income

27.8

24.0

32.2

4.4

Yield

0.085%

0.091%

0.106%

0.020%

Consolidated net income

31.0

27.8

37.1

6.0

42

(3) Overview of Ashikaga Bank medium-term business plan
［Medium-term business plan “Ashigin Way” Planning period: April 1, 2016 - March 31, 2019］
Strengthen core capabilities and use the benefits of business integration to contribute toGoalregional revitalization
A bank whose core strength is to be the main bank in the region, one that grows together with the region.

[Basic strategies]

 Concentrated investment to build competitive advantage• Improve personnel capabilities (train consulting personnel andmanagement personnel, improve the basic capabilities of young
employees, stimulate the organization)• Improve productivity (build an even lower-cost clericalorganization, improve the productivity of sales departments)• Improve branch and channel functions (promote the creation ofomni-channels in order to improve contact with customers)• Advanced marketing (provide appropriate products and services
that accommodate needs and important life events)• Advanced revenue management (maximization of revenue
through advancement of profit margin management)• Advanced credit management (prevention of default events)

 Expansion of securities portfolio through appropriate risktaking[5]Strategies foradvancement ofmanagement
functions[4]
Securities
strategies• Investment strategies (build portfolios that are less affected bymarket fluctuations, ensure stable revenues by accumulating
securities, improve investigation and analysis capabilities throughintegration in order to expand into new investment categories)• Procurement strategies (diversification of foreign currency
procurement through currency basis swaps, etc.)[1]
Retail banking
strategies

 Relationship-based approach: Increased asset management sales to
wealthy and quasi-wealthy customers centering on senior citizens, andbuilding of inheritance business• Advanced consulting through private banking group• Evolution of asset management sales, one of the bank’s strengths (increasedtransactions with senior citizens, increased client assets through proposals fordiversified investment, increased insurance consulting sales, use of groupsecurities companies)• Active deployment of asset management sales (one of the bank’s strengths) in
the Saitama area

 Function-based approach: Increased transactions through pursuit of“accessibility” and “convenience”[2]
Corporate banking
strategies[3]
Strategies tostimulate the local
economy Stimulation of the local economy through efforts to nurture local corebusinesses and increase the number of workplaces in the region, inorder to grow together with the region• Nurture local core businesses based on viability assessment (support for company founding and second stage ofdevelopment, support for sales channel expansion, support for business succession and M&A, support forcorporate revitalization, support for nurturing of growth industries, support for globalization)• “Regional revitalization” in cooperation with local governments in the region (invitation of companies, discouraging
companies from moving out of the region, sixth-order industrialization support, support for stimulation of tourist
spots, setting up of regional revitalization funds)• Involvement in social capital development (support for setting up of PFI for companies in the prefecture, meeting ofinvestment needs for redevelopment)• Efficient promotion through Internet transactions, EBM and other mechanisms
and proposals• Increased unsecured loans (pursuit of customer convenience and expanded
product line) Relationship-based approach : Assist client core business andbusiness succession based on viability assessment, and increase fee
business through consulting• Properly assess customer project details and growth potential, support businesssuccession and M&A, conduct business matching, use leasing companies in thegroup, provide support for overseas deployment, offer guidance on improving
finances and so on, in order to achieve local company growth Function-based approach : Efficient sales promotion to SMEs
• Invest in specialized products for SMEs (especially smaller ones)• Increase efficiency of external sales activities* Retail banking strategies and corporate banking strategies areformulated from the standpoint of the relationship-based approach andthe function-based approach.
Relationship-based approach : Consulting and viability assessment
Function-based approach : Pursuit of accessibility and convenience43

(4) Ashikaga Bank performance targets
Business objective indicators
 Assist client core business and improve management based on viability
assessment, strengthen efforts in growth fields, provide advanced
consulting and achieve synergies to increase the top line.
 Expand the securities investment portfolio through appropriate risk-taking
in order to build stable and sustainable earnings capabilities.
 Meet client needs through the use of lease functions and securities
functions.

PL / major indicators

Core net business profit〃 comparison with FY 2015
(Net business profit)
Net income
OHR
Capital adequacy ratio

FY 2018(Reference) FY 2021

Approximately 33 billion yen- approximately 3.5 billion yen(approximately 33.5 billion yen)
Approximately 22 billion yen
Approximately 60%
8% or more

Approximately 43.5 billion yen+ approximately 7 billion yen(approximately 44 billion yen)
Approximately 29 billion yen
Approximately 55%
Mid 8% level(Below, consolidation assumes existing consolidated subsidiaries)
Consolidated net income
Consolidated ROE
Consolidated capital adequacy ratio(billion yen)

Approximately 22.5 billion yen
Mid 6% level
Mid 8% level

Combined non-consolidated BS at averagebalance

PlannedGross business profit
Core gross business profit“Ashigin Way”

Reference: next
period plan

FY 2015

FY 2018

FY 2021

FY 2021 FY 2015

83.6

94.4

10.1

83.5

83.0

93.9

10.4

Net interest income
Loan-deposit difference(including foreign
currency)
Securities, etc.

68.1

65.8

74.4

6.3

Net fees and commissions
Gains (losses) on bonds

51.4

47.9

56.1

4.7

16.7

17.8

18.3

1.6

14.9

16.6

18.9

4.0

0.4

0.6

(billion yen)

PlannedActualperformance

84.3

Other / net trading income

29.5 billion yen or more
Mid 7% level
Approximately 9%

Actualperformance“Ashigin Way”

Reference: next
period plan

FY 2015

FY 2018

FY 2021

FY 2021 FY 2015

Average balance of loans
and bills discounted

4,173.0

4,530.1

5,191.0

1,018.0(〃 local companies)

1,435.6

1,619.1

1,859.5

423.9(〃 unsecured loans)

40.4

77.6

115.5

75.1

(〃 foreign currency andnon-resident yen loans)

9.3

20.1

33.0

23.7

Yield

1.287%

1.103%

1.124%-0.163%

1,148.1

1,361.7

1,528.7

380.6

0.6

0.2

Securities
Yield

1.474%

1.526%

1.655%

0.181%

Total assets

6,041.0

6,384.7

6,955.9914.9

1.185%

1.111%

1.206%

0.021%

0.8

0.6

0.6

-0.2

Expenses （▲）

47.0

50.1

50.2

3.2

Net business income

37.3

33.5

44.3

7.0

(Core net business income)

36.4

32.9

43.7

7.3

Yield

-0.2

2.3

2.7

2.9

Deposits / NCD

5,403.6

5,638.2

5,984.6

581.0

2.5

0.0

0.0

-2.5

Yield

0.042%

0.036%

0.037%-0.005%

Total debt / equity

6,041.0

6,384.7

6,955.9

914.9

Yield

0.057%

0.081%

0.136%

0.079%

Credit-related costs （▲）
Gains (losses) on stocks and othersecurities
Other

-0.2

0.1

0.1

0.3

Ordinary profit

39.8

31.4

41.7

1.9

Non-consolidated net income

30.8

21.7

28.9

-1.9

Consolidated net income

30.1

22.3

29.7

-0.4

44

45

Reference: Relationship between Joyo Bank andAshikaga Bank

46

Reference: Relationship between Joyo Bank and Ashikaga Bank
Since their founding, both banks have had deep ties with one another through Kawasaki Bank and Jin Kameyama (whocame from Kawasaki Bank).

Kawasaki Bank1875

In 1875, the founder, Hachiemon Kawasaki, apurveyor of commerce of the Mito clan,
expanded into Tokyo and established the
Kawasaki-gumi.
In 1878, Tokiwa Bank, the forerunner of Joyo Bank, wasfounded as The 62nd National Bank.

1878

1880

In 1880, the name was changed to Kawasaki
Bank, and the bank became a private bank thatformed the core of the Kawasaki Zaibatsu(business conglomerate).

1883
Reconstruction aid

In 1883, when The 62nd National Bank faced a crisis inwhich it was ordered to suspend business activities (due toviolations of the Articles of Incorporation and numerous
management deficiencies discovered as a result of a
Finance Ministry investigation), Hachiemon Kawasaki, thefounder of Kawasaki Bank, moved to reconstruct the bank,and the situation was resolved. This was the beginning of therelationship with Kawasaki Bank.

1895

1903
President brought in

1919

Business alliance

In 1903, when The Mito 62nd Bank (name changed from The
62nd Bank) encountered management difficulties, Kichibei
Kamiya, who was the manager of the Mito branch of
Kawasaki Bank, was brought in as president, andsubsequently the bank began again under a different name:Tokiwa Bank.

[Founding of Ashikaga Bank (1895)]
In 1895, in order to ensure smooth financing for the local
textile industry, Ashikaga Bank was founded as a result of
the strong desire of the local population. Mantaro Ogino(then 24 years of age), who was the chief secretary of the
Ashikaga Friendship Association (Ashikaga Yuai Gidan) thatwas formed by local youth volunteers, was appointed thefounding president.
In 1919, immediately after the end of World War I, forming an
alliance with the major city banks in the metropolitan area
was an important issue for Ashikaga Bank. At the request of
Ashikaga Bank, a business alliance was achieved with
Kawasaki Bank. Kawasaki Bank became the largest
shareholder, and Hiroshi Takanashi was dispatched to serveas executive director.
Note: At the time, Kawasaki Bank was already allied with
Tokiwa Bank, the predecessor of Joyo Bank. Due to thegreat demand for funds that accompanied the growth of
Ryomo textile industry regions, Ashikaga Bank had
increased its lending, and the bank was frequently faced withinsufficient funds. The alliance with Kawasaki Bank isthought to have been a turning point for the expansion of its
business operations.

47

Kawasaki Bank

1919

Kameyama brought in

1927

In 1927, Kawasaki Bank merged with The
100th Bank (Daihyaku Bank) (centered on
Koshaku Ikeda of the Tottori clan; Rokuro Hara
and Kinzaburo Kawasaki (later called
Hachiemon KAWASAKI the second.) andZenjiro Yasuda and others became thefounders of The 100th National Bank), which
was in difficult straits at the time, and the namewas changed to Kawasaki Daihyaku Bank.

1928

1930
Kameyama brought in1935

Kameyama becomepresident

1936

The Kawasaki Daihyaku Bank acquired
Kawasaki Savings Bank and Tokyo Savings
Bank, and at that time the name was changed
to Daihyaku Bank (at the time, it was the 7thlargest bank following Sanwa, Sumitomo,
Daiichi, Yasuda, Mitsui and Mitsubishi).

1943

Mitsubishi Bank conducted an absorption-typemerger of Daihyaku Bank.

In September 1919, Jin Kameyama, who would later become
the founding president of Joyo Bank, was sent from
Kawasaki Bank to be the assistant manager of the mainbranch of Ashikaga Bank. There he worked to modernize thebank’s administrative structure and promote bank mergers. .
In addition, Kameyama who worked tirelessly to achieve amerger with the Utsunomiya Commercial Bank became thebeachhead for the expansion of Ashikaga Bank into
Utsunomiya.
In 1928, Kameyama was appointed executive director of
Ashikaga Bank, and he served at Ashikaga Bank for 10
years until he stepped down in July 1929.
In June 1930, Tokiwa Bank merged with Yamahachi Bank.
Director Jin Kameyama, who at the time had been
dispatched from Kawasaki Bank to both Tokiwa Bank andYamahachi Bank, was appointed president of Tokiwa Bankin November of that year.
[Founding of Joyo Bank (1935)]
In 1935, Tokiwa Bank merged with The 50th Bank, resulting
in the founding of the present-day Joyo Bank. Jin Kameyama,
the president of Tokiwa Bank, was appointed to become thefounding president.

48

For inquiries regarding this matter:

Corporate Planning Division, Mebuki Financial Group, Inc.
TEL.

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http://www.mebuki-fg.co.jp/[Note]
This reference has been prepared for informational purposes only. It is not intended to solicit the purchase of specific negotiable securities
and so on.
This reference (in whole or in part) is subject to change or revision without notice.
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