The transformation to a holding company structure described in this document involves securities of a Japanese company.
The offer is subject to disclosure requirements of Japan that are different from those of the United States. Financial statements
included in this document, if any, have been prepared in accordance with foreign accounting standards that may not becomparable to the financial statements of United States companies.
It may be difficult for you to enforce your rights or any claims you may have arising under U.S. federal securities laws, since
the issuer is located in Japan and some or all of its officers and directors reside outside of the United States. You may not beable to sue a Japanese company or its officers or directors in a Japanese court for violations of U.S. securities laws. It may
be difficult to compel a Japanese company and its affiliates to subject themselves to a U.S. court’s judgment.
You should be aware that the issuer may purchase securities other than in connection with the transformation to a holding company
structure, such as in the open market or through privately negotiated purchases.
This document has been translated from the Japanese-language original for reference purposes only. In the event of any conflictor discrepancy between this document and the Japanese-language original, the Japanese-language original shall prevail in all
respects.

Internet Disclosure for Notice of Convocation of the 116th
Annual General Meeting of Shareholders(Business Report)
1. Matters regarding the Bank’s share acquisition rights…
2. Basic policies regarding roles of persons controlling
decisions on financial and business policies……………
3. Systems for ensuring the appropriateness of businessactivities…………………………………………………
4. Matters regarding specified wholly-owned subsidiaries.

2
7
7

15
5. Matters regarding transactions with the parent company etc. 15
6. Other matters……………………………………………
15(Non-consolidated Financial Statements)
Non-consolidated Statements of Changes in Net Assets…
16
Notes to Non-consolidated Financial Statements………….
19(Consolidated Financial Statements)
Consolidated Statements of Changes in Net Assets……….
36
Notes to Consolidated Financial Statements………………
38(

April 1, 2021 toMarch 31, 2022)

The Shizuoka Bank, Ltd.
Pursuant to applicable laws and regulations and Article 16 of the Articles of Incorporation, the Bank
provides information on the matters listed above to shareholders by posting it on the Bank’s Internet
website (https://www.shizuokabank.co.jp/).
―1―

1. Matters regarding the Bank’s share acquisition rights(1) The Bank’s share acquisition rights held by the Bank’s company officers on the last day of the fiscal year
Outline of the contents of share acquisition rights(i) Name(ii) Date of allocation of shareacquisition rights(iii) No. of share acquisition rights(iv) Class and number of shares tobe acquired(v) Stock acquisition rights
exercise period(vi) Exercise price (per share)(vii) Conditions of exercise ofrights(i) Name(ii) Date of allocation of shareacquisition rights(iii) No. of share acquisition rights(iv) Class and number of shares tobe acquired(v) Stock acquisition rights
Director
exercise period(vi) Exercise price (per share)(vii) Conditions of exercise ofrights(i) Name(ii) Date of allocation of shareacquisition rights(iii) No. of share acquisition rights(iv) Class and number of shares tobe acquired(v) Stock acquisition rights
exercise period(vi) Exercise price (per share)(vii) Conditions of exercise ofrightsNo. of persons
holding shareacquisitionrightsThe 1st Series Share Acquisition Rights
July 27, 2007130 units
13,000 shares of common stock
From July 28, 2007 to July 27, 2032

1

¥1
The holder of these share acquisition rights shall be entitled
to exercise the rights only during the period from the datefollowing the date on which the holder no longer holds theoffice of director of the Bank until the date on which 10 days
have elapsed since that date.
The 2nd Series Share Acquisition Rights
July 18, 2008130 units
13,000 shares of common stock
From July 19, 2008 to July 18, 2033

1

¥1
The holder of these share acquisition rights shall be entitled
to exercise the rights only during the period from the datefollowing the date on which the holder no longer holds theoffice of director of the Bank until the date on which 10 days
have elapsed since that date.
The 3rd Series Share Acquisition Rights
July 24, 2009200 units
20,000 shares of common stock
From July 25, 2009 to July 24, 2034
¥1
The holder of these share acquisition rights shall be entitled
to exercise the rights only during the period from the datefollowing the date on which the holder no longer holds theoffice of director of the Bank until the date on which 10 days
have elapsed since that date.

―2―1Outline of the contents of share acquisition rights(i) Name(ii) Date of allocation of shareacquisition rights(iii) No. of share acquisition rights(iv) Class and number of shares tobe acquired(v) Stock acquisition rights
exercise period(vi) Exercise price (per share)(vii) Conditions of exercise ofrights(i) Name(ii) Date of allocation of shareacquisition rights(iii) No. of share acquisition rights(iv) Class and number of shares tobe acquired(v) Stock acquisition rights
Director
exercise period(vi) Exercise price (per share)(vii) Conditions of exercise ofrights(i) Name(ii) Date of allocation of shareacquisition rights(iii) No. of share acquisition rights(iv) Class and number of shares tobe acquired(v) Stock acquisition rights
exercise period(vi) Exercise price (per share)(vii) Conditions of exercise ofrightsNo. of persons
holding shareacquisitionrightsThe 4th Series Share Acquisition Rights
July 23, 2010270 units
27,000 shares of common stock
From July 24, 2010 to July 23, 2035

1

¥1
The holder of these share acquisition rights shall be entitled
to exercise the rights only during the period from the datefollowing the date on which the holder no longer holds theoffice of director of the Bank until the date on which 10 days
have elapsed since that date.
The 5th Series Share Acquisition Rights
July 22, 2011270 units
27,000 shares of common stock
From July 23, 2011 to July 22, 2036

1

¥1
The holder of these share acquisition rights shall be entitled
to exercise the rights only during the period from the datefollowing the date on which the holder no longer holds theoffice of director of the Bank until the date on which 10 days
have elapsed since that date.
The 6th Series Share Acquisition Rights
July 24, 2012
300 units
30,000 shares of common stock
From July 25, 2012 to July 24, 2037
¥1
The holder of these share acquisition rights shall be entitled
to exercise the rights only during the period from the datefollowing the date on which the holder no longer holds theoffice of director of the Bank until the date on which 10 days
have elapsed since that date.

―3―1Outline of the contents of share acquisition rights(i) Name(ii) Date of allocation of shareacquisition rights(iii) No. of share acquisition rights(iv) Class and number of shares tobe acquired(v) Stock acquisition rights
exercise period(vi) Exercise price (per share)(vii) Conditions of exercise ofrights(i) Name(ii) Date of allocation of shareacquisition rights(iii) No. of share acquisition rights(iv) Class and number of shares tobe acquired(v) Stock acquisition rights
Director
exercise period(vi) Exercise price (per share)(vii) Conditions of exercise ofrights(i) Name(ii) Date of allocation of shareacquisition rights(iii) No. of share acquisition rights(iv) Class and number of shares tobe acquired(v) Stock acquisition rights
exercise period(vi) Exercise price (per share)(vii) Conditions of exercise ofrightsNo. of persons
holding shareacquisitionrightsThe 7th Series Share Acquisition Rights
July 23, 2013220 units
22,000 shares of common stock
From July 24, 2013 to July 23, 2038

2

¥1
The holder of these share acquisition rights shall be entitled
to exercise the rights only during the period from the datefollowing the date on which the holder no longer holds theoffice of director of the Bank until the date on which 10 days
have elapsed since that date.
The 8th Series Share Acquisition Rights
July 22, 2014480 units
48,000 shares of common stock
From July 23, 2014 to July 22, 2039

4

¥1
The holder of these share acquisition rights shall be entitled
to exercise the rights only during the period from the datefollowing the date on which the holder no longer holds theoffice of director of the Bank until the date on which 10 days
have elapsed since that date.
The 9th Series Share Acquisition Rights
July 21, 2015
220 units
22,000 shares of common stock
From July 22, 2015 to July 21, 2040
¥1
The holder of these share acquisition rights shall be entitled
to exercise the rights only during the period from the datefollowing the date on which the holder no longer holds theoffice of director of the Bank until the date on which 10 days
have elapsed since that date.

―4―4Outline of the contents of share acquisition rights(i) Name(ii) Date of allocation of shareacquisition rights(iii) No. of share acquisition rights(iv) Class and number of shares tobe acquired(v) Stock acquisition rights
exercise period(vi) Exercise price (per share)(vii) Conditions of exercise ofrights(i) Name(ii) Date of allocation of shareacquisition rights(iii) No. of share acquisition rights(iv) Class and number of shares tobe acquired(v) Stock acquisition rights
Director
exercise period(vi) Exercise price (per share)(vii) Conditions of exercise ofrights(i) Name(ii) Date of allocation of shareacquisition rights(iii) No. of share acquisition rights(iv) Class and number of shares tobe acquired(v) Stock acquisition rights
exercise period(vi) Exercise price (per share)(vii) Conditions of exercise ofrightsNo. of persons
holding shareacquisitionrightsThe 10th Series Share Acquisition Rights
July 19, 2016
300 units
30,000 shares of common stock
From July 20, 2016 to July 19, 2041

4

¥1
The holder of these share acquisition rights shall be entitled
to exercise the rights only during the period from the datefollowing the date on which the holder no longer holds theoffice of director of the Bank until the date on which 10 days
have elapsed since that date.
The 11th Series Share Acquisition Rights
July 18, 2017330 units
33,000 shares of common stock
From July 19, 2017 to July 18, 2042

4

¥1
The holder of these share acquisition rights shall be entitled
to exercise the rights only during the period from the datefollowing the date on which the holder no longer holds theoffice of director of the Bank until the date on which 10 days
have elapsed since that date.
The 12th Series Share Acquisition Rights
July 17, 2018321 units
32,100 shares of common stock
From July 18, 2018 to July 17, 2043
¥1
The holder of these share acquisition rights shall be entitled
to exercise the rights only during the period from the datefollowing the date on which the holder no longer holds theoffice of director of the Bank until the date on which 10 days
have elapsed since that date.

―5―4Outline of the contents of share acquisition rights(i) Name(ii) Date of allocation of shareacquisition rights(iii) No. of share acquisition rights(iv) Class and number of shares tobe acquired
Director (v) Stock acquisition rights
exercise period(vi) Exercise price (per share)(vii) Conditions of exercise ofrightsNo. of persons
holding shareacquisitionrightsThe 13th Series Share Acquisition Rights
July 16, 2019340 units
34,000 shares of common stock
From July 17, 2019 to July 16, 2044

4

¥1
The holder of these share acquisition rights shall be entitled toexercise the rights only during the period from the datefollowing the date on which the holder no longer holds theoffice of director of the Bank until the date on which 10 days
have elapsed since that date.

(2) The bank’s share acquisition rights granted to employees during the fiscal year
Not applicable.
(3) Other important matters regarding share acquisition rights
An outline of the share acquisition rights attached to the Euro USD-denominated convertible bonds withshare acquisition rights subject to call due for maturity in 2023 (issued January 25, 2018) is as follows.
Date of resolution for issuance
No. of share acquisition rights
Class and number of shares to be acquired
Conversion price per share
Exercise period
Balance of bonds with share acquisition rights

January 9, 2018
3,000 units
21,620,063 shares of common stock
USD13.876
From February 8, 2018 to January 11, 2023
USD300,000 thousand―6―

2. Basic policies regarding roles of persons controlling decisions on financial andbusiness policies
The Bank has not established the basic policies as referred to in Article 118 of the Ordinance for
Enforcement of the Companies Act. However, the Bank manages itself based on the following policies at
all times so as to protect itself against any large-scale purchase of its shares intended to control decisions
on its financial and business policies.
(1) Increasing shareholder value
The Bank will strive to increase shareholder value through increasing income and through appropriate
capital policies, such as dividend policies.
(2) Enhancing corporate governance
The Bank will maintain and enhance systems for appropriate corporate governance by paying attention
to the design and operation of the Board of Directors and other management bodies.
(3) Maintaining good relationships with stakeholders
The Bank will strive to improve the recognition and reputation of the Bank in the market through IR
activities and other means and will endeavor to maintain appropriate communications and good
relationships with its shareholders, customers, employees, and other stakeholders.

3. Systems for ensuring the appropriateness of business activities
Regarding the designing of a system for ensuring compliance of directors’ execution of duties with law
and the Articles of Incorporation and other systems for ensuring the appropriateness of business operations
by the Bank and those by the company group consisting of the Bank and its subsidiaries (the “Group”)(the “Internal Control Systems”), the Bank has resolved the Basic Policy Regarding the Design of Internal
Control Systems at the Board of Directors and works on the design on the Internal Control Systems.
(1) Basic attitude in developing the Internal Control Systems(a) The Group has long considered compliance with corporate ethics to be a crucial issue in management,
and has established a corporate governance system. In order to fulfill its corporate social responsibility,
the Group will work on the development of the Internal Control Systems and will endeavor to operatethese systems appropriately, through constantly working on the following measures and maintaining
and enhancing the corporate governance system and compliance readiness (i.e., compliance withethical laws and regulations).
(2) Systems for ensuring the compliance of directors’ and employees’ execution of duties with law and the
Articles of Incorporation(Corporate philosophy and Ethical Charter)(a) The Bank’s corporate philosophy is positioned as a guideline for all activities in the Group. In
addition, an Ethical Charter has been established as a basic policy for compliance. All executives andemployees of the Group will comply with the corporate philosophy and the Ethical Charter.
(Board of Directors and directors)(b) The Board of Directors will operate the Bank pursuant to the Board of Directors’ Regulations, make―7―

decisions on the execution of business operations, and supervise directors’ execution of their duties.
Each director will comply with applicable laws and regulations and the Articles of Incorporation, as
well as resolutions of the General Meeting of Shareholders, and will faithfully execute their duties as
directors.
(c) The Bank has voluntarily established the Committee of Administrative Supervision for the purposeof separating the supervision and execution of management. The committee will supervise the Bank’s
execution division to maintain and enhance corporate governance.
(d) By inviting outside directors, the Bank will strive to reflect external perspectives on management
decision making and to enhance the supervisory function of the Board of Directors.
(e) The Bank has established the Internal Audit Division supervised by the Committee of Administrative
Supervision. Checks by the Internal Audit Division will ensure the appropriateness and effectivenessof internal control in the Group.
(The Bank’s Audit and Supervisory Board and its members)(f) The Bank is a company with company auditors. The Bank’s company auditors, i.e., Audit &Supervisor Board members, audit the duties of directors.
(Compliance policy and operating systems for compliance)(g) The Group will maintain and enhance its compliance readiness by considering compliance a crucial
issue in management and basing all risk management activities on compliance. The Group will also
strive to break contact with anti-social forces and the like as a priority in terms of compliance.
(h) The Bank’s Board of Directors decides a Compliance Program for each fiscal year. In addition, theBank’s Compliance Committee supervises specific compliance-related measures and deliberates onimportant compliance-related matters, and reports the details of these activities to the Board of
Directors.
(i) The Bank has established the Basic Risk Management Regulations, which lay down the organizations,roles, procedures, etc. related to compliance and risk management in the Group. The Bank’s
department supervising compliance (the “Compliance Management Department”) establishedpursuant to the same regulations will supervise the maintenance and enhancement of compliancereadiness in the Group.
(j) The Bank has established and will appropriately operates an internal reporting system which allows
all executives and employees of the Group to report any illegal acts, etc. occurring in the Group to
the Compliance Management Department, attorneys’ offices, etc. through any of the prescribed
procedures.
(3) Systems for storing and managing information on directors’ execution of duties at the Bank(a) The Bank’s information assets related to directors’ execution of duties are managed appropriately
pursuant to the provisions of applicable laws and regulations and internal regulations.
(4) Regulations and other systems for managing the risk of loss
(Policy for risk management)(a) The Group regards the enhancement of the risk management systems as one of the crucial issues inmanagement, and will strive to stably increase income while maintaining soundness.
(Operating systems for risk management)(b) The Board of Directors decides risk management policy in the business plan for each fiscal term.
The Committee for Integrated Risk and Budget Management decides measures against risks and―8―reports the details of the decisions to the Board of Directors.
(c) The Bank’s risk management department established pursuant to the Basic Risk Management
Regulations (the “Risk Management Department”) will supervise the maintenance and enhancementof the Group’s risk management systems.
(d) The emergency countermeasures guidelines contain, among other things, measures to be taken in theevent of occurrence of risks and proactive measures against risks, which will minimize damage andmaintain and enhance the business continuity systems.
(5) Systems for ensuring the efficiency of the execution of directors’ duties(a) The Board of Directors holds regular meetings and also meets whenever necessary. The Bank has
also established the Executive Committee and other decision-making bodies to which the Board of
Directors delegates authority to make decisions and which deliberate on important matters related tothe execution of operations.
(b) The Group has established an executive officer system and has specified in relevant regulations who
are authorized to approve, and who are responsible for, the execution of duties based on decisions
made by the Board of Directors. This will build appropriate and effective internal management
systems and realize the efficient execution of duties.

―9―(6) Systems for reporting matters regarding the execution of duties of the Bank’s subsidiaries’ directors to
the Bank and other systems for ensuring the appropriateness of business operations in the Group(a) The appropriateness of the Group’s operations is ensured by managing operations of the Group
companies pursuant to the Group Company Management Regulations and other relevant regulations
and by appointing the Bank’s full-time Audit & Supervisory Board members as part-time Audit &Supervisory Board members of Group companies and appointing the Bank’s general managers as
Group companies’ part-time directors in charge of what they are in charge of at the Bank.
(b) The Bank receives business performance reports from other Group companies on a quarterly basis
and reports their business results to the Board of Directors. The Group Representative Management
Liaison Meeting, which consists of representatives of the Bank and other Group companies and holds
regular meetings, receives from the Group companies reports of the status of execution of theiroperations and strives to solve the Group’s business challenges.
(c) The Group company management department conducts planning and coordination related to the
management of operations of the Group companies. In addition, as for the Group companies’
operations requiring cross-sectional management, the appropriate and efficient management of these
operations is secured by specifying, in the Group Company Management Regulations and other rules,
the Bank’s departments which are in charge of Group companies and those which are in charge of
those operations, and by requesting necessary reports from Group companies, among other things.
(d) By complying with the arm’s length rule set forth in the Banking Act, the Group will prevent thesoundness of bank management from being compromised through acts involving conflicts of interest
between the Bank and other Group companies. In addition, the Group companies will develop
appropriate compliance readiness and risk management systems by establishing their own basic risk
management regulations and other rules and compliance programs through their respective boards of
directors according to their respective sizes, business categories, etc., based on the Basic Risk
Management Regulations established by the Bank’s Board of Directors.
(e) The Bank will assign persons in charge of risk management, internal audit, etc. to Group companies
where necessary, according to the Group companies’ respective sizes, business categories, etc.
(f) The Bank’s Internal Audit Division conducts audits, etc. of Group companies to find out the statusof management of their operations pursuant to the Internal Audit Regulations. Systems will be
designed in which major findings of internal audits will be reported without delay to the Bank’s
representative directors, Board of Directors, and Audit & Supervisory Board members and which willallow appropriate monitoring of, among other things, the status of improvement at audited
departments related to findings of internal audits. The Bank will also strive to improve the audit
environment of the whole Group so that the Internal Control Systems will be designed appropriately
through the execution of audit duties by the Bank’s Audit and Supervisory Board members and otherGroup companies’ equivalents.
(g) The Bank will establish internal control policies and plans for financial reporting pursuant to theinternal control regulations on financial reporting and will ensure the reliability of financial reports
in the Group through appropriately applying those policies and plans.
(7) Matters regarding employees assigned to assist the duties of the Bank’s Audit & Supervisory Board
members in cases where they request the appointment of such employees, matters regarding theindependence of these employees from the Bank’s directors, and matters regarding the ensuring of theeffectiveness of instructions to these employees from the Bank’s Audit & Supervisory Board members―10―(a) The Office of the Audit and Supervisory Board Members has been established as a body to assist the
Audit and Supervisory Board members. Personnel necessary to execute its duties is assigned to theoffice. The independence of the Office of the Audit and Supervisory Board Members from the Boardof Directors, the business execution division, and the Internal Audit Division is secured by setting
forth the office as a body independent from the execution of operations in the Division of Duties
Regulations and by establishing a system in which the above personnel follows instructions and orders
exclusively from Audit and Supervisory Board members.
(8) Systems for the Bank’s directors and employees to report to the Bank’s Audit & Supervisory Board
members, systems for the Bank’s subsidiaries’ directors, Audit & Supervisory Board Members, andemployees or persons who received a report from any of these directors, Audit & Supervisory Board
Members or employees to report to the Bank’s Audit & Supervisory Board members, other systems
relating to reporting to the Bank’s Audit & Supervisory Board members, and systems for ensuring that
persons who made any of the above reports will not receive disadvantageous treatment by reason of
making such report(a) The Bank’s directors and employees will promptly provide a report on the execution of their duties
if requested to do so by the Bank’s Audit & Supervisory Board members, will provide a report to the
Audit & Supervisory Board members where necessary, and will report without delay any informationthat has or will have a significant impact on bank management to the Audit & Supervisory Board
members.

―11―

(b) The Group companies’ directors and employees will promptly provide a report on the execution of
their duties if requested to do so by the Bank’s Audit & Supervisory Board members, will provide areport to the Bank’s Audit & Supervisory Board Members where necessary through the Bank’s Group
company management department or any other department in charge or otherwise, and will report
without delay any information that has or will have a significant impact on their company’s
management to the Audit & Supervisory Board members.
(c) Where the Bank’s Audit & Supervisory Board member has received a report from a director or any
other person, such member will report it to the Audit & Supervisory Board.
(9) Procedures for advance payment or reimbursement of expenses incurred in the execution of the Bank’s
Audit & Supervisory Board’s duties, and other matters regarding policies on the disposal of expenses
or debts incurred in the execution of those duties(a) If the Bank is requested by an Audit & Supervisory Board member to make an advance payment or
the like of expenses under Article 388 of the Companies Act, the Bank will promptly dispose of theexpenses or debts unless the Bank finds that the expenses or debts for which the request is made are
not necessary for the execution of such member’s duties.
(b) In order to pay expenses, etc. incurred in the execution of the Audit & Supervisory Board members’
duties, the Bank will, during semi-annual budgeting, secure a budget necessary for the execution of
the Audit & Supervisory Board members’ duties according to a request from the Office of the Audit& Supervisory Board Members.
(10) Other systems for ensuring effective audits by the Bank’s Audit & Supervisory Board members(a) Based on the auditing standards for Audit & Supervisory Board members established by the Audit& Supervisory Board, the Bank will create an audit environment where audits by the Audit &Supervisory Board members are conducted in an appropriate, smooth, and effective manner.
(b) In order to ensure the neutrality and independence of the audit system, the Bank will respect the
Audit & Supervisory Board members’ opinions and will strive to further enhance the audit function.
(c) The Audit & Supervisory Board members and the Audit & Supervisory Board will ensure theeffectiveness of audits by the Audit & Supervisory Board members by regularly providing a forum
for exchanging information with the Accounting Auditor, the Internal Audit Division, the ComplianceManagement Department, the Risk Management Department, etc.
<Overview of the status of operation of the Internal Control Systems>
Regarding the improvement of the Internal Control Systems pursuant to the above basic policies, theBank strives to improve and appropriately operate the Internal Control Systems by regularly checking
them at the departments in charge of relevant operations and reporting the results thereof to the Board of
Directors.
An overview of the status of operation of the Internal Control Systems pursuant to the basic policies forthe current (the 116th) fiscal year is as follows.
(1) Compliance readiness(Board of Directors and directors)(a) The Board of Directors has operated the Internal Control Systems appropriately pursuant to the Boardof Directors Regulations and held eleven regular meetings and one extraordinary meeting.
―12―

(b) The Committee of Administrative Supervision, the Nomination & Remuneration Committee, and
the Advisory Board, whose members include the four outside directors, each held four meetings. In
addition, with due respect for the purpose and spirit of the Corporate Governance Code, five
discussion meetings for independent officers were held to provide a forum for free exchange of
opinions between outside directors and outside Audit & Supervisory Board members who have beenregistered as independent officers with Tokyo Stock Exchange Inc. Furthermore, one discussion
meeting was held between the independent officers and the representative directors.
(Compliance policy and operating systems for compliance)(c) The Board of Directors decided a Compliance Program for each fiscal year and received a report on
the progress and status of achievement of the program on a quarterly basis.
(d) The Compliance Committee deliberated on, among other things, the occurrence of complianceviolations and breaking contact with anti-social forces, and provided monthly reports to the Board of
Directors.
(e) The Compliance and Risk Management Department, which is the Compliance Management
Department, has worked on the prevention of violations and the maintenance and enhancement of thecompliance system by monitoring through integrated management of compliance-related information.
Compliance Officers and officers responsible for the management of risk-bearing products have been
assigned to the Compliance and Risk Management Department and have provided guidance to the
Bank’s branch offices and have conducted monitoring, through on-site checks.
(f) The Compliance Policy has been established in implementing the Ethical Charter, so that the Group’s
officers and employees will work on their routine tasks by keeping compliance in mind as something
more familiar. Portable Compliance Policy Cards have been distributed to the Group’s officers andemployees so that they can be read through by these officers and employees whenever appropriate.
(g) On a semi-annual basis, the Compliance and Risk Management Department has summarized andreported to the Compliance Committee the usage of the Opinion Box, which is an internal reporting
system of the Group, and the status of response to opinions received through the Opinion Box.
(2) Risk management systems(a) The Board of Directors has decided risk management policy in the Group business plan for the fiscal
term, and has received quarterly reports on the occurrence of risks and the status of risk management.
(b) The Committee for Integrated Risk and Budget Management has decided measures against risks that
occurred and has provided monthly reports to the Board of Directors.
(c) The Compliance and Risk Management Department as the Risk Management Department has madecomprehensive decisions on issues in managing various risks and has improved or sophisticated therisk management systems where necessary.
(d) The measures to be taken in the event of occurrence of risks, proactive measures against risks, andother matters specified in the emergency countermeasures guidelines have been reviewed
continuously according to changes in the internal and external environments, such as earthquakes,
volcanic eruptions, infectious disease, terrorism, and cyberattacks. Efforts have been made to ensure
the effectiveness of the business continuity systems through various training drills.
(3) Systems for ensuring the efficiency of the execution of directors’ duties(a) Meetings were held of the Executive Committee (28 meetings), the Committee for Integrated Risk
and Budget Management (12 meetings), and the Compliance Committee (12 meetings), which are―13―

decision-making bodies to which the Board of Directors delegates authority to make decisions. The
details of deliberation at these meetings were reported to the Board of Directors in the form ofbusiness execution report.
(4) Systems for ensuring the appropriateness of the Group’s business activities(a) The Group Representative Management Liaison Meeting, which consists of representatives of the
Bank and other Group companies, has held eight regular meetings, and has striven to solve theGroup’s business challenges.
(b) The Corporate Planning Department, which is the Group company management department, hasreceived business performance reports from other Group companies on a quarterly basis and has
regularly reported their business results to the Board of Directors.
(c) The Group companies have conducted such discussions and provided such reports as are necessary
for the bank-related departments pursuant to the Group Company Management Regulations, etc.
(d) The Compliance and Risk Management Department has summarized and reported to the Compliance
Committee the status of compliance with the arm’s length rule on a semi-annual basis.
(5) Internal audit system(a) The Audit Department, which is the Internal Audit Division, has established, and obtained the Boardof Directors’ approval of, a medium-term internal audit plan and the internal audit plan for each fiscal
year and has conducted internal audits of the headquarters, Group companies, branch offices, etc.
(b) The audit results have been reported to the directors and the Audit & Supervisory Board membersin the form of audit report and have also been reported to the Board of Directors on a quarterly basis
in the form of internal audit results-related report.
(c) The Internal Audit Results Discussion Committee has held monthly meetings for the purpose ofreviewing internal audit results, making proposals for guidance to remedy problems found during
internal audits, and following up remedial measures and the status and timing of remediation atrelevant departments.
(d) The Audit Department has conducted internal audits of Group companies pursuant to the Internal
Audit Regulations and the Group Company Management Regulations, and has conducted internal
audits of four companies.
(6) Ensuring effective audits by the Audit & Supervisory Board members(a) Full-time staff members have been assigned to the Office of the Audit and Supervisory Board
Members to secure appropriate personnel.
(b) At the Bank, the full-time Audit & Supervisory Board members have received various reports fromthe departments in charge of the relevant operations by attending meetings of the Executive
Committee and other important meetings.
(c) The Internal Audit Division, the Compliance Management Department, and the Risk Management
Department have reported the status of internal audit, compliance, and risk management by providing
a forum for exchanging opinions with the Audit & Supervisory Board members on a regular basis.
(d) The Bank’s full-time Audit & Supervisory Board members have been appointed as part-time Audit& Supervisory Board members of Group companies and have received reports on matters regarding
the execution of Group companies’ operations by attending meetings of the Board of Directors, etc.
of Group companies.
(e) The Corporate Planning Department as the Group company management department has checked
the status of reporting to the Bank’s full-time Audit & Supervisory Board members through checking
minutes of meetings of the Group companies’ Boards of Directors.
―14―

4. Matters regarding specified wholly-owned subsidiaries
Not applicable.

5. Matters regarding transactions with the parent company etc.
Not applicable.

6. Other matters
Not applicable.

―15―

Non-consolidated Statement of Changes in Net Assets forthe 116th Fiscal Year (April 1, 2021 to March 31, 2022)(Millions of Yen)

Shareholders’ Equity
Capital Surplus

Capital Stock
Balance at the beginning ofcurrent period
Cumulative effects of changes
in accounting policies
Restated balance

Legal Capital Surplus

Retained Earnings

Total Capital Surplus

Legal Retained Earnings

90,84554,88454,884

90,84590,84554,88454,884

90,845――――90,84554,88454,884

90,845

Changes of items during theperiodDividends of surplus
Provision of reserve foradvanced depreciation of
noncurrent assets
Reversal of reserve foradvanced depreciation of
noncurrent assets
Reversal of reserve for
special depreciation
Provision of special reserve
ProfitPurchase of treasury stock
Disposal of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes of items during
the period
Balance at the end of current
period―16―

Shareholders’ Equity
Retained Earnings
Other Retained Earnings

Balance at the beginning ofcurrent period
Cumulative effects of changes
in accounting policies
Restated balance

Reserve forAdvanced
Depreciation of
Noncurrent
AssetsReserveforSpecialDepreciati
on

3,105

6

SpecialReserve

Total Retained
Earnings

Treasury
Stock

Total
Shareholders’Equity△20,371798,482

55,466673,124

△610

△610

54,856

672,513△15,088△15,088△15,088

6

△6

―

―

△94

94

―

―

6

―

―

△5,000――36,12036,1203,105

6

523,700

Retained
Earnings
Brought
Forward523,700△610△20,371797,872

Changes of items during theperiodDividends of surplus
Provision of reserve foradvanced depreciation of
noncurrent assets
Reversal of reserve foradvanced depreciation of
noncurrent assets
Reversal of reserve for
special depreciation△6

Provision of special reserve

5,000

ProfitPurchase of treasury stock
Disposal of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes of items during
the period
Balance at the end of current
period36,120△8,759△8,759

△6

△6

100

94

△87

△6

5,000

16,12021,025△8,65812,366

3,017―

528,700

70,976

693,539△29,030

810,238―17―

Valuation and Translation Adjustments

Balance at the beginning ofcurrent period
Cumulative effects of changes
in accounting policies
Restated balance

Valuation Difference
on Available-for-Sale
Securities

Deferred Gains or
Losses on Hedges

Total Valuation andTranslation
Adjustments

Share Acquisition
RightsTotal Net Assets

230,470△141

230,329330

1,029,142

230,470△141

230,329330

1,028,532△610

Changes of items during theperiod△15,088

Dividends of surplus
Provision of reserve foradvanced depreciation of
noncurrent assets
Reversal of reserve foradvanced depreciation of
noncurrent assets
Reversal of reserve for
special depreciation

―

―
―
―

Provision of special reserve
Profit36,120Purchase of treasury stock△8,759

Disposal of treasury stock94

Net changes in items otherthan shareholders’ equity
Total changes of items during
the period
Balance at the end of current
period△36,104

330△35,773△12△35,786△36,104

330△35,773△12△23,419

194,366

189

194,555318

1,005,112―18―

Notes to Non-consolidated Financial Statements
Amounts less than one million yen have been rounded down.
SIGNIFICANT ACCOUNTING POLICIES
1. Transactions for trading purposes“Transactions for trading purposes” (the purpose of seeking to capture gains arising from short-term fluctuations ininterest rates, currency exchange rates or market prices of securities, and other market-related indices or from gaps amongmarkets) are recorded on a trade-date basis in “Trading assets” and “Trading liabilities” on the non-consolidated balance
sheets. Profits and losses on transactions for trading purposes are recorded in “Trading income” and “Trading expenses,”
respectively, in the non-consolidated statements of income.
Trading securities and monetary claims purchased for trading purposes recorded in these accounts are stated at market
value at the end of fiscal year, and trading-related financial derivatives are stated at the amounts that would be settled ifthey were terminated at the end of the fiscal year.
Trading income and trading expenses include the interest received and interest paid, etc. during the fiscal year, the gains
or losses resulting from changes in the value of securities, monetary claims and the like between the end of the previous
fiscal year and the end of the current fiscal year and the gains or losses resulting from changes in the value of financial
derivatives between the end of the previous fiscal year and the end of the current fiscal year, assuming they were terminatedand settled at the end of the fiscal year.
For financial derivatives, the market values are calculated on the basis of net assets or liabilities after offsetting financial
assets and liabilities associated with specific credit risk.
2. Securities(1) Held-to-maturity debt securities, which are expected to be held to maturity with the positive intent and ability to hold tomaturity, are stated at amortized cost computed using the moving average method (straight-line method). Stocks ofsubsidiaries and subsidiary corporations, etc. and those of affiliated corporations, etc. are valued at cost using themoving average method. Available-for-sale securities, which are not classified as either trading account securities orheld-to-maturity debt securities, are stated at fair value, in which cost of securities sold is calculated primarily by themoving average method. Stocks and the like without market prices are stated at cost as determined by the moving
average method.
The valuation difference on available-for-sale securities is booked directly to net assets.
(2) Securities constituting trust assets in money held in trust are valued by the same method as described in 2 (1) above.
3. Derivative transactions
Derivative transactions (excluding transactions for trading purposes) are valued at market value.
The market values are calculated on the basis of net assets or liabilities after offsetting financial assets and liabilities
associated with specific credit risk.
4. Method of depreciation of fixed assets(1) Tangible fixed assets (excluding lease assets)
Depreciation of tangible fixed assets is computed mainly using the declining-balance method, except that depreciationof structures acquired on and after April 1, 2016 is computed mainly using the straight-line method. The useful lives
for tangible fixed assets are as follows:
Buildings:
3 to 50 years
Equipment:
2 to 20 years―19―(2) Intangible fixed assets (excluding lease assets)
Amortization of intangible fixed assets is computed using the straight-line method. Internal-use softwaredevelopment costs are amortized using the straight-line method over the estimated useful life at the Bank (five years).
(3) Lease assets
Lease assets among tangible fixed assets involved in finance lease transactions, in which ownership of the leaseproperty is not deemed to be transferred to the lessee, are depreciated using the straight-line method in which the leaseterm is used as the useful life. The residual value is zero or the guaranteed value if specified in the lease contracts.
5. Translation of foreign currencies
Assets and liabilities which are payable or receivable in foreign currencies and accounts of overseas branches aretranslated into Japanese yen primarily at the exchange rates prevailing at the non-consolidated balance sheet date, except
for the stocks of subsidiaries whose value is translated into Japanese yen at the exchange rates in prevailing at the time ofacquisition.
6. Allowance for losses(1) Allowance for loan losses
Allowance for loan losses is provided according to the internally prescribed standards for amortization and allowanceand the following categories of borrowers:
Legal bankruptcy:
Borrowers who are legally or formally bankrupt, such as bankruptcy or special liquidation.
Virtual bankruptcy:
Borrowers virtually in the same situation as legal bankruptcy.
Caution:Borrowers who must be managed with caution due to problems with lending conditions or repayment performanceand due to sluggish or unstable business conditions.
Management required:
Borrowers in the “caution” category all or part of whose loans require management (i.e., restructured loans andloans past due for three months or more).
Normal:Borrowers who are recognized as having good business conditions and no particular financial problems.
(i) For loans to borrowers classified as legal bankruptcy or virtual bankruptcy, the Bank fully provides the amount ofloans net of estimated amounts collectible from collateral and guarantees.
(ii) For borrowers with certain loan amounts classified as virtual bankruptcy, if cash flows from collection of principals
and interests can be reasonably estimated, the Bank provides the difference between the present value of these cash
flows discounted at the initial contractual rates and the book values of loans (the DCF method). For other loans, ageneral allowance is provided in the amount calculated by applying (a) the expected loss ratio, which is calculated
by determining the loss ratio based on the average value of the actual loan loss ratio over a certain period in the pastand by adjusting the loss ratio considering future projections, to (b) the amount of loans net of estimated amounts
collectible from collateral and guarantees.
(iii) For borrowers with certain loan amounts classified as caution or management required, the Bank provides anallowance for loan losses using the DCF method if cash flows from collection of principals and interests can bereasonably estimated.

―20―

(iv) For loans to borrowers classified as normal, caution and management required, an allowance is provided based on
the expected loss ratio, which is calculated by determining the loss ratio based on the average value of the actual loan
loss ratio over a certain period in the past and by adjusting the loss ratio considering future projections.
Notes: 1. Grouping in calculating loss ratio
In calculating loss ratio, borrowers are divided into consumer loan borrowers and business-lending
borrowers. Business-lending borrowers are classified into two categories of normal (upper normal andlower normal), three categories of caution (upper caution, lower caution, and management required), andone category of legal bankruptcy, for a total of seven categories.
2. A certain period of time in which the expected loss amount is expected in the future
Allowance for loan losses is recorded based on anticipation of the expected loss ratio for the period
corresponding to the average remaining period of receivables (the average remaining period is seven years
for consumer loan borrowers, among business loan borrowers of (iv) above, about three to five years for“normal,” about three years for “caution,” and about four years for “management required” and “possible
bankruptcy” of (ii) above).
3. Revision of expected loss ratio due to future prospects, etc.
In the current non-consolidated fiscal year, the expected loss ratio has been revised for “management
required,” but the impact on allowance for loan losses is minor.
Pursuant to the internal rules for self-assessment of assets, all loans have been assessed by the relevant businessdepartments, and the results of the assessment have been reviewed by the asset audit department, which is independentof the relevant business departments.
(2) Allowance for investment losses
The allowance for investment losses is provided at the amount deemed necessary to cover future possible losses oninvestments by taking into consideration the financial status of the investments and other factors.
(3) Provision for retirement plans
The provision for retirement plan is provided at the amount necessary to cover retirement benefits to employees,
based on the expected amounts of retirement benefit obligations and pension assets at the end of the current fiscal year.
In calculating pension benefit obligations, expected benefit payments are attributed to the periods up to the end of thecurrent fiscal year on a benefit formula basis. Actuarial gains and losses are treated as follows:
Actuarial gains and losses:
Actuarial gains and losses are treated as gains and losses, respectively, in the fiscal year following the fiscal year
in which they arise, in an amount proportionally divided using the straight-line method over a fixed number ofyears (10 years) that is within the average number of years of remaining service of employees at the time thedifferences emerge each fiscal year.
(4) Provision for retirement benefits to directors
The provision for retirement benefits to directors is provided for the payments that have occurred up to the end of the
fiscal year to pay for retirement benefits to directors.
(5) Provision for losses from reimbursement of inactive accounts
The provision for losses from reimbursement of inactive accounts, which are derecognized as liabilities under certain
conditions, is provided at the amount deemed necessary to cover estimated possible losses on future claims ofwithdrawal based on historical reimbursement experience.
(6) Provision for contingent losses
The provision for contingent losses is provided for the estimated future payments of contributions to credit guarantee
corporations pursuant to the internally prescribed standards for amortization and allowance.

―21―

(7) Provision for point program
The provision for the point program is provided at the amount deemed necessary to cover the reasonably estimatedfuture usage of points given to credit card customers.
7. Hedge accounting(1) Hedge against interest rate risk
Transactions to hedge against interest rate risk associated with the financial assets and liabilities are accounted forusing deferral hedge accounting as stipulated in the Japanese Institute of Certified Public Accountants (JICPA) Industry
Committee Practical Guideline No. 24, March 17, 2022, “Accounting and Auditing Treatments on the Application of
Accounting Standards for Financial Instruments in the Banking Industry.” Regarding the effectiveness of a hedging
relationship under fair value hedging, a portfolio of hedged items, such as deposits or loans with common maturities, ismatched with a group of hedging instruments, such as interest rate swaps, which offset the effect of fair value
fluctuations of the hedged items by identified maturities and are designated as a hedge of the portfolio. The effectivenessof the fair value hedge is assessed by each group. Also, the effectiveness of a cash flow hedge is assessed on the basisof the correlation between the base interest rate index of the hedged cash flow and that of the hedging instrument.
In case of certain assets and liabilities, special hedging treatment is applied for interest rate swaps.
(2) Hedge against foreign exchange fluctuation risk
Deferral hedge accounting is applied to hedges against foreign exchange fluctuation risks associated with foreign
currency-denominated monetary assets and liabilities, stipulated in the JICPA Industry Committee Practical Guideline
No. 25, October 8, 2020, “Accounting and Auditing Treatments of Accounting Treatments on Foreign Currency
Transactions in the Banking Industry.” The effectiveness of currency swap transactions, exchange swap transactions,and similar transactions hedging foreign exchange risks of monetary assets and liabilities denominated in foreign
currencies is assessed by comparison of the foreign currency position of the hedged monetary assets and liabilities andthat of the hedging instruments.
In order to hedge the foreign exchange risk of foreign currency-denominated available-for-sale securities (except
bonds), the Bank applies the “general method,” using market value hedges subject to certain conditions, namely thedesignation in advance of foreign currency-denominated securities to be hedged, and the existence in foreign currencyof a spot-forward liability in excess of the acquisition cost of the relevant foreign currency-denominated securities.

―22―

CHANGES IN ACCOUNTING POLICIES(Application of accounting standards for revenue recognition)
The “Accounting Standards for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020; the “ASRR”) andrelated rules have been applied since the beginning of the current fiscal year. Pursuant to the ASRR, the Bank has recognizedrevenue at the time of transfer of control over promised goods or services to the customer in the amount expected to bereceived by the Bank in exchange for those goods or services.
As a result, the point in time at which certain fees and commissions are recognized as revenue has been changed fromthe time of receipt to the time of provision of goods or services.
Pursuant to the transitional treatment set forth in the proviso of Paragraph 84 of the ASRR, the ASRR and related rules
have been applied starting from the balance at the beginning of the current fiscal year, by reflecting, in retained earnings at
the beginning of the current fiscal year, the cumulative impact of applying these new accounting policies retrospectively
from the beginning of the current fiscal year. However, using the method set forth in Paragraph 86 of the ASRR, these new
accounting policies have not been applied retrospectively to contracts for which substantially all of the revenue wasrecognized in accordance with the treatment that had prevailed before the beginning of the current fiscal year. In addition,using the method set forth in item (1) of the second sentence of Paragraph 86 of the ASRR, all changes in contracts that
occurred before the beginning of the current fiscal year have undergone accounting treatment based on the contractual
conditions after reflecting all changes in the contracts, and the cumulative impact of these changes has been reflected inretained earnings at the beginning of the current fiscal year.
The results indicate that the impact of the changes described above is minor for the current fiscal year.
(Application of accounting standards for fair value measurement)
The “Accounting Standards for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019; the “ASFVM”) andrelated rules have been applied since the beginning of the current fiscal year. Pursuant to Paragraph 8 of the ASFVM, thefair value adjustment method used to determine the fair value in derivative transactions has been revised to maximize theuse of observable inputs estimated from derivatives and others traded in the market. This revision was made as a result of
the application of the ASFVM and related rules. Pursuant to the transitional treatment set forth in the second sentence ofParagraph 20 of the ASFVM, the Bank has reflected, in retained earnings at the beginning of the current fiscal year, thecumulative impact of applying these new accounting policies retrospectively from the beginning of the current fiscal year.
As a result, retained earnings decreased by ¥531 million, trading assets by ¥28 million, other assets by ¥730 million,
trading liabilities by ¥1 million, other liabilities by ¥0 million, deferred tax liabilities by ¥226 million, and net assets per
share by 92 sen, each at the beginning of the current fiscal year.

―23―

SIGNIFICANT ACCOUNTING ESTIMATES
1. Recording of allowance for loan losses(1) Amounts recorded in the financial statements for the current fiscal year
Allowance for loan losses¥47,481 million(2) Other information that helps users of financial statements to understand the details of significant accounting estimates ofidentified items(i) Calculation method
The calculation method of allowance for loan losses is listed in “6. Allowance for losses” of “SIGNIFICANTACCOUNTING POLICIES.”(ii) Main assumptionsa) There are concerns over the impact of the economic slowdown caused by the spread of COVID-19 on the repayment
ability of borrowers. However, an allowance for loan losses has been calculated on the assumption that the national
and local governments’ economic measures and financial institutions’ support will prevent any significant impact
on the categories or other aspects of borrowers. There have been no significant changes in the assumptions about
the impact of COVID-19 from those described under the heading “SIGNIFICANT ACCOUNTING ESTIMATES”
in the non-consolidated financial statements for the previous fiscal year.
b) Assumptions have been made on future forecasts, such as sales forecasts, cost reduction estimates, and expecteddebt repayments, in the business plan used to determine borrowers’ categories and to estimate future cash flows
using the cash flow estimate method. The future forecasts in the business plan, such as sales forecasts, cost reduction
estimates, and expected debt repayments have been determined based on the impact of COVID-19 and on the market
growth potential and price trends in the industries to which borrowers belong.
(iii) Impact on the financial statements for the next fiscal year
If the original assumptions for estimates change because of changes in the management environment for borrowers,
including the situation of COVID-19, the allowance for loan losses may fluctuate due to changes in borrowers’
categories, cash flow estimates or expected loss ratio, with potential significant impact on the financial statements forthe next fiscal year.

―24―Notes(Non-consolidated Balance Sheets)
1. Total stocks and investments in subsidiaries and associated companies ¥60,318 million
2. Claims under the Banking Act and the Act on Emergency Measures for the Revitalization of the Financial Functions are
as follows. Claims include: (i) claims recorded in the following accounts on the non-consolidated balance sheets: bonds(but only if the Bank guarantees all or part of the redemption of their principal and the payment of interest and if they
were issued by private placement (Article 2, Paragraph (3) of the Financial Instruments and Exchange Act)) in“Securities,” “Loans and bills discounted,” “Foreign exchanges,” accrued interest and suspense payments in “Other
assets,” and “Customers’ liabilities for acceptance and guarantees”; and (ii) if the Bank has granted loans of securities
that are presented in notes, those securities (but only those that are on loan under a loan-for-use agreement or leaseagreement).
(Millions of Yen)
Claims provable in rehabilitation from15,408bankruptcy and equivalents
Doubtful claims
68,885Loans past due for three months or more
353
Restructured loans
13,777
Total
98,424“Claims provable in rehabilitation from bankruptcy and equivalents” include: claims against borrowers whosebusiness has failed due to such grounds as those for filing a petition for commencement of bankruptcy, reorganization or
rehabilitation proceedings; and claims similar to those described above.
“Doubtful claims” include claims (i) which are against borrowers whose business has not failed but whose financial
condition and business performance have deteriorated, and (ii) whose principal and interest are unlikely to be collectible
as per the contracts, and (iii) which do not fall under claims provable in rehabilitation from bankruptcy and equivalents.
“Loans past due for three months or more” include loans for which payments of principal or interest are delinquent by
three months or more, as calculated from the day following the contracted payment date, but do not include claims
provable in rehabilitation from bankruptcy and equivalents or doubtful claims.
Restructured loans include loans for which certain arrangements have been made in favor of the borrower, such as
reducing or eliminating interest payments, deferring principal repayments or writing off a portion of the loan, with thegoal of assisting in the reconstruction of, or providing support to, the borrower’s business, but do not include claims
provable in rehabilitation from bankruptcy and equivalents, doubtful claims or loans past due for three months or more.
The amounts of loans given above are amounts before deduction of allowance for loan losses.
(Changes in the Presentation Method)
In response to the Cabinet Order Partially Amending the Regulation for Enforcement of the Banking Act (Cabinet
Order No. 3 of January 24, 2020) coming into effect on March 31, 2022, the classification and other details of “riskmanagement loans” under the Banking Act are now presented in accordance with the classification and other details of
non-performing loans under the Act on Emergency Measures for the Revitalization of the Financial Functions.
3. In accordance with the JICPA Industry Committee Practical Guidelines No. 24, bills discounted are treated as financialtransactions. The Bank has the rights to sell, pledge or re-pledge these commercial bills and foreign exchange bills
without restrictions. The face values of these bills are ¥18,439 million.

―25―

4. Assets pledged as collateral are as follows:(Millions of Yen)
Assets pledged as collateral:
Trading assets
2,999
Securities
1,104,080
Loans and bills discounted
817,620
Other assets
96,766
Relevant liabilities to above assets:
Deposits
45,865
Payables under repurchase agreements
296,764
Payables under securities lending transactions
72,701
Borrowed money
1,325,129
In addition to the above, the Bank has provided ¥19,821 million in securities, ¥5,750 million in other assets, and ¥244
million in due from banks as collateral for foreign exchange settlements and certain other transactions and as security for
futures transactions, respectively.
Other assets include guarantee deposits and cash collateral paid to central counterparty in the amounts of ¥1,872
million and ¥60,800 million, respectively.
5. Overdraft agreements and agreements for loan commitments are agreements under which the Bank pledges to lend funds
up to a certain limit when applications for advances of loans are received from customers, provided there are no violationsof the terms written in the agreements. The balances of loans undisbursed under these agreements are ¥1,872,905 million.
Of these loans, those due within one year are ¥1,746,941 million.
Many of these agreements terminate without loans being disbursed, and thus the balance of loans as yet undisbursed
will not necessarily affect the future cash flow of the Bank. The Bank can refuse to advance loans and reject applications
that have been received or can reduce the maximum amounts under the agreements for reasonable reasons, such aschanges in the financial situation and preservation of credit. In addition, at the time the agreements are entered into,borrowers may, when necessary, be required to provide collateral, such as real estate or securities, and after theagreements have been signed, the state of the borrower’s business and other factors may be assessed regularly inaccordance with prescribed in-house procedures. Moreover, agreements can be revised, if necessary, and steps, such as
the formulation of measures to preserve credit, may be taken.
6. Accumulated depreciation of tangible fixed assets¥111,363 million
7. Advanced depreciation of tangible fixed assets¥9,025 million
8. The amount of the Bank’s liabilities for guarantees on corporate bonds included in securities, which were issued byprivate placement (Article 2, Paragraph (3) of the Financial Instruments and Exchange Act) is ¥30,088 million.
9. The principal amount of trusts with principal-guaranteed features is ¥198 million in money trusts.
10. Total monetary claims receivable from subsidiaries and associated companies¥78,832 million
11. Total monetary liabilities payable to subsidiaries and associated companies¥94,633 million(Non-consolidated Statements of Income)
1. Income from transactions with subsidiaries and associated companies (Millions of Yen)
Total income from fund management transactions
2,762
Total fees and commissions
1,004
Total trading income
397
Total other ordinary income and other income from163
current transactions―26―

Expenses for transactions with subsidiaries and associated companies (Millions of Yen)
Total expenses for financing transactions
101
Total fees and commissions payments
1,005
Total other ordinary expenses and other expenses for
6,137
current transactions
Other transactions with subsidiaries and associated companies (Millions of Yen)
Purchases of assets
10,416
2. For the current fiscal year, impairment losses have been recorded for four sales branch areas and one idle asset in
Shizuoka Prefecture.
In calculating impairment losses, sales branches are in principle recognized in units of sales branch area (with theprefecture being divided into certain geographical areas based on the complementarity of cash flow), while idle assets
and assets held for sale are recognized individually.
For the asset group for which an impairment loss has been recorded, there is no longer a prospect of recovering theinvestment due to a decrease in operating cash flow, falling land prices, or decisions to integrate branches, among otherthings. Therefore, its carrying amount has been reduced to the recoverable amount, and the amount of the reduction (¥634
million, including ¥409 million in land, ¥80 million in building, and ¥145 million in other tangible fixed assets) has beenrecognized as an impairment loss and included in extraordinary losses.
The recoverable amount is the higher of the net selling price or the value in use. If the net selling price is used, it iscalculated by deducting the estimated disposal cost from the evaluation based on the real estate appraisal standards andother rules. If the value in use is used, it is calculated by discounting future cash flows at the rate of 3.0%.

―27―

3. Related-party transactions(1) Subsidiaries and subsidiary corporations, etc. and affiliated corporations, etc.
Category

Company Name

Voting Rights
Ownership Ratio

Relationship withRelated Party

Description ofTransactions

Subsidiary

Shizugin
CreditGuaranty Co.,Ltd.

Guaranteeing the Guaranteeing the Bank’s
Bank’s loans, etc.
loans, etc.
The Bank directly Concurrent
Collecting
the Bank’s
owns 100.00%
appointment ofloans, etc. by fulfilling
the Bank’s
guarantees
officers(Millions of Yen)
Amount ofTransaction

Account Balance at
Item
End of Year2,344,288

―

―

981

―

―

Business conditions and policy on deciding business conditions
Shizugin Credit Guaranty Co., Ltd. has provided guarantees for the Bank’s loans. Guarantee fees have been paid by loan debtors directly tothe company as well as by the Bank in the amount of ¥3,075 million after receipt by the Bank as part of loan interest.
Guarantee conditions are determined for each product by taking into account the credit risk, etc. associated with the guaranteed loans.

(2) Officers, major individual shareholders, etc.
Category

Name orCompany
Name

Close relative ofa director of
Shizuoka Bank

Makizo Iio

Close relative ofa director of
Shizuoka Bank

Kiyokawa
Building
Eiichiro
Kiyokawa(Millions of Yen)

Voting Rights
Ownership Ratio

Relationship withRelated Party

Description ofTransactions

Amount ofTransaction

―

―

Loans

(average balance)
13

Loans andbills
discounted

―

―

Loans

(average balance)
163

Loans andbills
discounted

162

―

Loans

(average balance)
501

Loans andbills
discounted

498

―

Loans

(average balance)
208

Loans andbills
discounted

206

―

Loans

(average balance)
1,240

Loans andbills
discounted

1,170

0.00% of theBank’s voting
rights are held
directlyCompany inwhich majority
voting rights are
Park View Assetheld by director―
Co., Ltd.
or close relativeof a director of
Shizuoka Bank
Company inwhich majority
voting rights are
Kiyokawa
held by director―
Corporation
or close relativeof a director of
Shizuoka Bank
Company inwhich majority
0.00% of thevoting rights are
Kiyokawa Real Bank’s voting
held by director
Estate Co., Ltd. rights are heldor close relative
directlyof a director of
Shizuoka Bank

Account Balance at
Item
End of YearBusiness conditions and policy on deciding business conditions- Related-party transactions stated above are subject to conditions equivalent to those for transactions with general customers.
- The balance at the end of the year is not reported for Mr. Makizo Iio due to his passing away during the fiscal year.
- As for Park View Asset Co., Ltd., the relevant officer left office on June 18, 2021, due to which the balance at the end of the month of his
departure is reported instead of the balance at the end of the year.

―28―

(Non-consolidated Statements of Changes in Net Assets)
Classes and number of treasury stock(Thousands of Shares)
Number of Shares Number of Shares Number of Shares Number of Shares
at Beginning of
Increased in
Decreased in
at End of Current
Description
Current Fiscal Year Current Fiscal Year Current Fiscal Year
Fiscal Year
Treasury stock
Common stock
Total

21,08621,086

10,00010,000106
10630,98030,980(Note) 1 & 2

Notes: 1. The 10,000 thousand shares increase in treasury stock is due to acquisition of treasury shares, among other causes.
2. The 106 thousand shares decrease in treasury stock includes, among others, 90 thousand shares disposed of as restricted share-based
compensation and 15 thousand shares for which stock options were exercised.

(Securities)
Securities include “Japanese government bonds,” “Local government bonds,” “Corporate bonds,” “Corporate stocks,”
and “Other securities” as listed on the balance sheet, as well as “Trading securities” and “Other trading assets.”
1. Trading securities (as of March 31, 2022)

Trading securities

Valuation Difference Included in Profit and Loss for Current Fiscal Year (Millions ofYen)△4

2. Held-to-maturity debt securities (as of March 31, 2022)
Type
Securities whose fair value
exceeds carrying value
Securities whose fair value
does not exceed carrying
value
Total

Corporate bonds
Subtotal
Corporate bonds

Carrying Value(Millions of Yen)――
68,904

Fair Value(Millions of Yen)――
68,861

Difference(Millions of Yen)――
△42

68,904

68,861△42

68,904

68,861△42

Subtotal

3. Stocks of subsidiaries and subsidiary corporations, etc. and stocks of affiliated corporations, etc. (as of March 31, 2022)
Carrying Value(Millions of Yen)
Stocks of subsidiaries andsubsidiary corporations, etc.
Stocks of affiliated corporations,
etc.
Total

Fair Value(Millions of Yen)

Difference(Millions of Yen)

―

―

―

13,43335,09021,656

13,43335,09021,656―29―

Note: Carrying value of stocks and the like without market prices on the non-consolidated balance sheets that are not included in theabove table

Carrying Value (Millions of Yen)
Stocks of subsidiaries andsubsidiary corporations,etc.
Stocks of affiliatedcorporations, etc.

46,173711―30―

4. Available-for-sale securities (as of March 31, 2022)
Type

Available-for-salesecurities whose carrying
value exceeds acquisition
cost

Available-for-salesecurities whose carrying
value does not exceed
acquisition cost

Stocks
Bonds
Japanesegovernment bonds
Localgovernment bonds
Corporate bonds
OthersForeign bonds
Subtotal
Stocks
Bonds
Japanesegovernment bonds
Localgovernment bonds
Corporate bonds
OthersForeign bonds
Subtotal

Carrying Value(Millions of Yen)
383,849
275,984

Acquisition Cost
(Millions of Yen)
95,275275,087

Difference(Millions of Yen)
288,573896

159,965

159,886

78

40,57340,462

110

75,445
143,243
21,498803,0762,133
877,236

74,739129,067
21,439499,4312,667
884,749706
14,17659
303,645△534△7,512

440,414444,654△4,240156,028

157,242△1,214

280,794
483,854392,131
1,363,224
2,166,301

282,851505,205
409,977
1,392,622
1,892,053△2,057△21,351△17,845△29,398
274,247

Total

Note: Carrying value of stocks and the like without market prices and investments in partnerships on the non-consolidated balance
sheets that are not included in the above table

Unlisted stocks
Investments inpartnerships

Carrying Value (Millions of Yen)
5,115
16,345Investments in partnerships are not subject to disclosure of fair value, pursuant to Paragraph 27 of the Implementation Guidance on AccountingStandard for Fair Value Measurement (ASBJ Guidance No. 31, July 4, 2019).

5. Held-to-maturity debt securities sold during the current fiscal year (April 1, 2021 to March 31, 2022)
Not applicable.

―31―

6. Available-for-sale securities sold during the current fiscal year (April 1, 2021 to March 31, 2022)
Proceeds from Sales(Millions of Yen)
Stocks
Bonds
Japanese government
bonds
Local government bonds
Corporate bonds
OthersForeign bonds
Total

4,178
974,924

Total Amount of Gains on Total Amount of Losses on
Sales
Sales
(Millions of Yen)
(Millions of Yen)
2,686
0
2,566
8,560

902,889

1,343

8,559

25,795
46,2391,278,992
924,235
2,258,094

179
1,043
13,385
2,839
18,637―024,42819,64432,989―32―

7. Impairment of securities
Marketable available-for-sale securities (excluding stocks and the like without market prices and investments inpartnerships) whose fair value has significantly declined in comparison with their acquisition cost and whose fair valueof is not likely to recover to their acquisition cost are carried at fair value on the non-consolidated balance sheet and are
written down and accounted for as impairment losses.
There are no impairment losses on marketable available-for-sale equity securities for the current fiscal.
The Bank recognizes securities as having significantly declined when their fair value is more than 30% below theiracquisition cost on the non-consolidated balance sheet date.
(Money Held in Trust)
1. Money held in trust classified as held-for-trading (as of March 31, 2022)
Not applicable.
2. Money held in trust classified as held-to-maturity (as of March 31, 2022)

Money held in trustclassified as heldto-maturity

Carrying Value(Millions of
Yen)

Fair Value(Millions of
Yen)

4,800

4,801

Money Held in
Money Held in Trust
Trust Classified as Classified as Held-toHeld-to-maturity maturity Whose Fair
Whose Fair Value
Value Does Not
Exceeds Carrying
Exceed Carrying
Value
Value
(Millions of Yen)
(Millions of Yen)

Difference(Millions of
Yen)

1

1

―

Note: “Money Held in Trust Classified as Held-to-Maturity Whose Fair Value Exceeds Carrying Value” and “Money Held in Trust Classified
as Held-to-Maturity Whose Fair Value Does Not Exceed Carrying Value” are a breakdown of the “Difference.”

3. Money held in trust classified as available-for-sale (as of March 31, 2022)

Carrying Value Acquisition Cost
(Millions of(Millions of
Yen)
Yen)

Money held in trustclassified
asavailable-for-sale

100,000

Difference(Millions of
Yen)

Money Held inTrust Classified as
Available-for-sale
Whose Carrying
Value Exceeds
Acquisition Cost
(Millions of Yen)

Money Held inTrust Classified as
Available-for-sale
Whose Carrying
Value Does Not
Exceed Acquisition
Cost(Millions of Yen)

―

―

―

100,000

Note: Money held in trust classified as available-for-sale is jointly managed money trust.

―33―

(Tax Effect Accounting)A breakdown of deferred tax assets and deferred tax liabilities by major cause is as follows:(Millions of Yen)
Deferred tax assets
Allowance for loan losses
13,443
Provision for retirement plans
5,495
Redemption of securities
5,897
Others
10,339Subtotal deferred tax assets
35,175
Valuation allowance△6,826
Total deferred tax assets
28,349Deferred tax liabilities
Valuation difference on available-for-sale△79,881
securities
Gains on contribution of securities to△5,079retirement benefit trust
Securities returned from retirement benefit△2,724trust
Others△2,832
Total deferred tax liabilities△90,517
Net deferred tax liabilities△62,168(Per Share Information)
Net assets per share
Profit per share¥1,781.08¥63.57(Stock Options)
Relevant information is found in the Notes to the consolidated financial statements.

―34―

(Reference)

Trust Assets Balance Sheet(as of March 31, 2022)(Millions of Yen)
AssetsSecurities
Due from bank accountCash and due from banks
Total
Notes:

1.
2.
3.

AmountLiabilities
Money trusts

9
198
686
894

Amount
894

Total

894

Amounts less than one million yen have been rounded down.
The balance of assets in common trusts managed by other companies is ¥5 million.
Details of trusts with principal-guaranteed features are as shown in the table below.

Trusts with Principal-guaranteed Features(as of March 31, 2022)
Money deposited
AssetsDue from bank account
Total
Note:

(Millions of Yen)
AmountLiabilities
Principal
Others
Total

198
198

Amounts less than one million yen have been rounded down.

―35―

Amount198
0198

Consolidated Statements of Changes in Net Assets forthe 116th Fiscal Year (April 1, 2021 to March 31, 2022)(Millions of Yen)
Shareholders’ Equity

Capital Stock
Balance at the beginning of current
periodCumulative effects of changes
in accounting policies
Restated balance

90,845

Capital Surplus

Retained Earnings

Treasury Stock54,884

743,157△20,371△662
90,84554,884742,495

Total
Shareholders’Equity868,516△662△20,371867,853

Changes of items during the period
Dividends of surplus

Net income attributable toowners of the parent△15,088△15,088

41,635

41,635△8,759△8,759

△6

100

94

Purchase of treasury stock
Disposal of treasury stock
Net changes in items other thanshareholders’ equity
Total changes of items during theperiodBalance at the end of current period――

26,540△8,65817,881

90,84554,884

769,036△29,030

885,735

Accumulated Other Comprehensive Income

Balance at the beginning of current
periodCumulative effects of changes
in accounting policies
Restated balance

Valuation
Difference on
Available-for-Sale
Securities

Deferred Gains or
Losses on Hedges

Foreign Currency
Translation
Adjustments

DefinedRetirement Benefit
Plans

Total Accumulated
Other
Comprehensive
Income231,196

△98

1,212

2,800

235,111

231,196

△98

1,212

2,800

235,111△37,479

322

3,013

△163

△34,306△37,479

322

3,013

△163

△34,306

193,717

223

4,226

2,637

200,804

Changes of items during the period
Dividends of surplus

Net income attributable toowners of the parent
Purchase of treasury stock
Disposal of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes of items during theperiodBalance at the end of current
period―36―

Non-controlling Interests

Share Acquisition Rights
Balance at the beginning of current
periodCumulative effects of changes
in accounting policies
Restated balance

330

1,419

Total Net Assets
1,105,378
△662

330

1,419

1,104,715

Changes of items during the period△15,088

Dividends of surplus

Net income attributable toowners of the parent

41,635Purchase of treasury stock△8,759

Disposal of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes of items during theperiodBalance at the end of current
period

94
△12

△30

△34,350△12△30△16,468

318

1,388

1,088,247―37―

Notes to Consolidated Financial Statements
Amounts less than one million yen have been rounded down.
The definitions of “subsidiary,” “subsidiary corporation, etc.,” and “affiliated corporation, etc.” are as set forth in Article 2,
Paragraph (8) of the Banking Act and Article 4-2 of the Order for Enforcement of the Banking Act.
POLICIES FOR PREPARING CONSOLIDATED FINANCIAL STATEMENTS
1. Matters regarding the scope of consolidation(1) Consolidated subsidiaries and subsidiary corporations, etc.: 13 companies
Companies: Shizugin Management Consulting Co., Ltd.
Shizugin Lease Co., Ltd.
Shizugin IT Solution Co., Ltd.
Shizugin Credit Guaranty Co., Ltd.
Shizugin DC Card Co., Ltd.
Shizuoka Capital Co., Ltd.
Shizugin TM Securities Co., Ltd.
Shizugin General Service Co., Ltd.
Shizugin Mortgage Service Co., Ltd.
Shizugin Business Create Co., Ltd.
Shizugin Heartful Co., Ltd.
Shizuoka Bank(Europe)S.A.
Shizuoka Liquidity Reserve Limited(2) Non-consolidated Subsidiaries and Subsidiary Corporations, etc.: 16 companies
Major companies: The 5th Shizuoka Small and Medium-sized Enterprises Support Investment Limited Partnership
The non-consolidated subsidiaries and subsidiary corporations, etc. have been excluded from the scope of consolidation
because, considering their assets, ordinary profit, profit/loss (in amounts proportional to the Bank’s equity interests),
retained earnings (in amounts proportional to the Bank’s equity interests), accumulated other comprehensive income(in amounts proportional to the Bank’s equity interests), and so on, the significance of their operations is low enoughto allow their exclusion from the scope of consolidation without hindering reasonable judgment on the financial
conditions and business performance of the company group.
2. Matters regarding application of the equity method(1) Equity-method non-consolidated subsidiaries and subsidiary corporations, etc.
None(2) Equity-method affiliated corporations, etc.: 3 companies
Companies: Shizugin Saison Card Co., Ltd.
Monex Group, Inc.
Commons Asset Management, Inc.
(3) Non-equity-method non-consolidated subsidiaries and subsidiary corporations, etc.: 16 companies
Major companies: The 5th Shizuoka Small and Medium-sized Enterprises Support Investment Limited Partnership(4) Non-equity-method affiliated corporations, etc.: 2 companies
Major companies: Shizuoka Business Succession and Business Continuity Support Fund Investment Limited
Partnership
The non-equity-method non-consolidated subsidiaries and subsidiary corporations, etc. and affiliated corporations, etc.
have been excluded from the equity method of accounting because, considering their profit/loss (in amounts
proportional to the Bank’s equity interests), retained earnings (in amounts proportional to the Bank’s equity interests),
accumulated other comprehensive income (in amounts proportional to the Bank’s equity interests), and so on, their
exclusion from the equity method of accounting has no significant impact on the consolidated financial statements.

―38―

MATTERS REGARDING ACCOUNTING POLICIES
1. Transactions for trading purposes“Transactions for trading purposes” (the purpose of seeking to capture gains arising from short-term fluctuations ininterest rates, currency exchange rates or market prices of securities, and other market-related indices or from gaps amongmarkets) are recorded on a trade-date basis in “Trading assets” and “Trading liabilities” on the non-consolidated balance
sheet. Profits and losses on transactions for trading purposes are recorded in “Trading income” and “Trading expenses,”
respectively, in the consolidated statements of income.
Trading securities and monetary claims purchased for trading purposes recorded in these accounts are stated at fairvalue at the end of the fiscal year, and trading-related financial derivatives are stated at the amounts that would be settled
if they were terminated at the end of the fiscal year.
Trading income and trading expenses include the interest received and interest paid, etc. during the fiscal year, the gains
or losses resulting from changes in the value of securities, monetary claims and the like between the end of the previous
fiscal year and the end of the current fiscal year and the gains or losses resulting from changes in the value of financial
derivatives between the end of the previous fiscal year and the end of the current fiscal year, assuming they were terminatedand settled at the end of the fiscal year.
For financial derivatives, the market values are calculated on the basis of net assets or liabilities after offsetting financial
assets and liabilities associated with specific credit risk.
2. Securities(1) Held-to-maturity debt securities, which are expected to be held to maturity with the positive intent and ability to hold tomaturity, are stated at amortized cost computed using the moving average method (straight-line method). Availablefor-sale securities, which are not classified as either trading account securities or held-to-maturity debt securities, arestated at fair value, in which cost of securities sold is calculated primarily by the moving average method. Stocks andthe like without market prices are stated at cost as determined by the moving average method.
The valuation difference on available-for-sale securities is booked directly to net assets.
(2) Securities constituting trust assets in money held in trust are valued by the same method as described in 2 (1) above.
3. Derivative transactions
Derivative transactions (excluding transactions for trading purposes) are valued at market value.
The market values are calculated on the basis of net assets or liabilities after offsetting financial assets and liabilities
associated with specific credit risk.
4. Method of depreciation of fixed assets(1) Tangible fixed assets (excluding lease assets)
Depreciation of the Bank’s tangible fixed assets is computed mainly using the declining-balance method, except that
depreciation of structures acquired on and after April 1, 2016 is computed mainly using the straight-line method. The
useful lives for tangible fixed assets are as follows:
Buildings:
3 to 50 years
Equipment:
2 to 20 years
Depreciation of tangible fixed assets of the Bank’s consolidated subsidiaries and subsidiary corporations, etc. iscomputed mainly using the declining-balance method on an income tax basis.
(2) Intangible fixed assets (excluding lease assets)
Amortization of intangible fixed assets is computed using the straight-line method. Internal-use software development
costs are amortized using the straight-line method over the estimated useful life prescribed by the Bank and its
consolidated subsidiaries and subsidiary corporations, etc. (five years).

―39―

(3) Lease assets
Lease assets among tangible fixed assets involved in finance lease transactions, in which ownership of the leaseproperty is not deemed to be transferred to the lessee, are depreciated using the straight-line method in which the leaseterm is used as the useful life. The residual value is zero or the guaranteed value if specified in the lease contracts.
5. Allowance for loan losses
The Bank’s allowance for loan losses is provided according to the internally prescribed standards for amortization andallowance and the following categories of borrowers:
Legal bankruptcy:
Borrowers who are legally or formally bankrupt, such as bankruptcy or special liquidation.
Virtual bankruptcy:
Borrowers virtually in the same situation as legal bankruptcy.
Caution:Borrowers who must be managed with caution due to problems with lending conditions or repayment performanceand due to sluggish or unstable business conditions.
Management required:
Borrowers in the “caution” category all or part of whose loans require management (i.e., restructured loans andloans past due for three months or more).
Normal:Borrowers who are recognized as having good business conditions and no particular financial problems.
(i) For loans to borrowers classified as legal bankruptcy or virtual bankruptcy, the Bank fully provides the amount ofloans net of estimated amounts collectible from collateral and guarantees.
(ii) For borrowers with certain loan amounts classified as virtual bankruptcy, if cash flows from collection of principals
and interests can be reasonably estimated, the Bank provides the difference between the present value of these cash
flows discounted at the initial contractual rates and the book values of loans (the DCF method). For other loans, ageneral allowance is provided in the amount calculated by applying (a) the expected loss ratio, which is calculated
by determining the loss ratio based on the average value of the actual loan loss ratio over a certain period in the pastand by adjusting the loss ratio considering future projections, to (b) the amount of loans net of estimated amounts
collectible from collateral and guarantees.
(iii) For borrowers with certain loan amounts classified as caution or management required, the Bank provides anallowance for loan losses using the DCF method if cash flows from collection of principals and interests can bereasonably estimated.
(iv) For loans to borrowers classified as normal, caution and management required, an allowance is provided based on
the expected loss ratio, which is calculated by determining the loss ratio based on the average value of the actual loan
loss ratio over a certain period in the past and by adjusting the loss ratio considering future projections.
Notes: 1. Grouping in calculating loss ratio
In calculating loss ratio, borrowers are divided into consumer loan borrowers and business-lending
borrowers. Business-lending borrowers are classified into two categories of normal (upper normal andlower normal), three categories of caution (upper caution, lower caution, and management required), andone category of legal bankruptcy,
for a total of seven categories.

―40―2. A certain period of time in which the expected loss amount is expected in the future
Allowance for loan losses is recorded based on anticipation of the expected loss ratio for the period
corresponding to the average remaining period of receivables (the average remaining period is seven years
for consumer loan borrowers, among business loan borrowers of (iv) above, about three to five years for“normal,” about three years for “caution,” and about four years for “management required” and “possible
bankruptcy” of (ii) above).
3. Revision of expected loss ratio due to future prospects, etc.
In the current consolidated fiscal year, the expected loss ratio has been revised for “management required,”but the impact on allowance for loan losses is minor.
Pursuant to the internal rules for self-assessment of assets, all loans have been assessed by the relevant businessdepartments, and the results of the assessment have been reviewed by the asset audit department, which is independent of
the relevant business departments.
As for the allowance for loan losses of consolidated subsidiaries and subsidiary corporations, etc., the allowance forlosses associated with normal borrowers is provided at the amount deemed necessary based on the actual loan loss ratio
in the past, etc., whereas the allowance for losses associated with borrowers with bankruptcy concerns and certain otherborrowers is provided at the expected uncollectible amounts after the recoverability of individual claims have been taken
into account.
6. Allowance for investment losses
The allowance for investment losses is provided at the amount deemed necessary to cover future possible losses oninvestments by taking into consideration the financial status of the investments and other factors.
7. Provision for retirement benefits to directors
The provision for retirement benefits to directors is provided for the payments that have occurred up to the end of the
fiscal year to pay for retirement benefits to directors.
8. Provision for losses from reimbursement of inactive accounts
The provision for losses from reimbursement of inactive accounts, which are derecognized as liabilities under certain
conditions, is provided at the amount deemed necessary to cover estimated possible losses on future claims of withdrawal
based on historical reimbursement experience.
9. Provision for contingent losses
The provision for the Bank’s contingent losses is provided for the estimated future payments of contributions to credit
guarantee corporations pursuant to the internally prescribed standards for amortization and allowance.
10. Provision for point program
The provision for the point program is provided at the amount deemed necessary to cover the reasonably estimatedfuture usage of points given to credit card customers.
11．Reserves under special laws
Reserves under special laws are financial instruments transaction liability reserves as referred to in Article 46-5,
Paragraph (1) of the Japanese Financial Instruments and Exchange Act. These reserves are provided at the amountcalculated by the Bank’s domestic consolidated subsidiaries pursuant to Article 175 of the Cabinet Office Order on
Financial Instruments Business, in order to cover losses caused by accidental losses from securities or derivatives
transactions, etc.
12．Accounting treatment of retirement benefits
In calculating pension benefit obligations, expected benefit payments are attributed to the periods up to the end of thecurrent consolidated fiscal year on a benefit formula basis. Actuarial gains and losses are treated as follows:
Actuarial gains and losses:
Actuarial gains and losses are treated as gains and losses, respectively, in the consolidated fiscal year following theconsolidated fiscal year in which they arise, in an amount proportionally divided using the straight-line method
over a fixed number of years (generally 10 years) that is within the average number of years of remaining service―41―

of employees at the time the differences emerge each consolidated fiscal year.
Some consolidated subsidiaries and subsidiary corporations, etc. apply the non-actuarial method that assumes theamount required for voluntary resignation at the end of the current fiscal year to be projected benefit obligation incomputing retirement benefit liability and retirement benefit expenses.
13. Translation of foreign currencies
The Bank’s assets and liabilities which are payable or receivable in foreign currencies and accounts of overseas branches
are translated into Japanese yen primarily at the exchange rates prevailing at the consolidated balance sheet date.
Assets and liabilities of the consolidated subsidiaries and subsidiary corporations, etc. which are payable or receivablein foreign currencies are translated into Japanese yen at the exchange rates at their respective balance sheet dates, etc.
14．Leases
For financing leases in which the Bank is the lessor, sales and cost of sales are accounted for when lease payments arereceived.
15．Significant hedge accounting(1) Hedge against interest rate risk
Transactions to hedge against interest rate risk associated with financial assets and liabilities of the Bank areaccounted for using deferral hedge accounting as stipulated in the Japanese Institute of Certified Public Accountants(JICPA) Industry Committee Practical Guideline No. 24, March 17, 2022, “Accounting and Auditing Treatments on
the Application of Accounting Standards for Financial Instruments in the Banking Industry.” Regarding theeffectiveness of a hedging relationship under fair value hedging, a portfolio of hedged items, such as deposits or loans
with common maturities, is matched with a group of hedging instruments, such as interest rate swaps, which offset theeffect of fair value fluctuations of the hedged items by identified maturities and are designated as a hedge of the portfolio.
The effectiveness of the fair value hedge is assessed by each group. Also, the effectiveness of a cash flow hedge isassessed on the basis of the correlation between the base interest rate index of the hedged cash flow and that of thehedging instrument.
In case of certain assets and liabilities, special hedging treatment is applied for interest rate swaps.
(2) Hedge against foreign exchange fluctuation risk
Deferral hedge accounting is applied to hedges against foreign exchange fluctuation risks associated with foreign
currency-denominated monetary assets and liabilities of the Bank, stipulated in the JICPA Industry Committee Practical
Guideline No. 25, October 8, 2020, “Accounting and Auditing Treatments of Accounting Treatments on Foreign
Currency Transactions in the Banking Industry.” The effectiveness of currency swap transactions, exchange swap
transactions, and similar transactions hedging foreign exchange risks of monetary assets and liabilities denominated inforeign currencies is assessed by comparison of the foreign currency position of the hedged monetary assets andliabilities and that of the hedging instruments.
In order to hedge the foreign exchange risk of foreign currency-denominated available-for-sale securities (except
bonds), the Bank applies the “general method,” using market value hedges subject to certain conditions, namely thedesignation in advance of foreign currency-denominated securities to be hedged, and the existence in foreign currencyof a spot-forward liability in excess of the acquisition cost of the relevant foreign currency-denominated securities.

―42―

CHANGES IN ACCOUNTING POLICIES(Application of accounting standards for revenue recognition)
The “Accounting Standards for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020; the “ASRR”) andrelated rules have been applied since the beginning of the current fiscal year. Pursuant to the ASRR, the Bank has recognizedrevenue at the time of transfer of control over promised goods or services to the customer in the amount expected to bereceived by the Bank in exchange for those goods or services.
As a result, the point in time at which certain fees and commissions are recognized as revenue has been changed fromthe time of receipt to the time of provision of goods or services.
Pursuant to the transitional treatment set forth in the proviso of Paragraph 84 of the ASRR, the ASRR and related rules
have been applied starting from the balance at the beginning of the current consolidated fiscal year, by reflecting, in retained
earnings at the beginning of the current consolidated fiscal year, the cumulative impact of applying these new accounting
policies retrospectively from the beginning of the current consolidated fiscal year. However, using the method set forth inParagraph 86 of the ASRR, these new accounting policies have not been applied retrospectively to contracts for which
substantially all of the revenue was recognized in accordance with the treatment that had prevailed before the beginning of
the current consolidated fiscal year. In addition, using the method set forth in item (1) of the second sentence of Paragraph
86 of the ASRR, all changes in contracts that occurred before the beginning of the current consolidated fiscal year haveundergone accounting treatment based on the contractual conditions after reflecting all changes in the contracts, and thecumulative impact of these changes has been reflected in retained earnings at the beginning of the current consolidated fiscal
year.
The results indicate that the impact of the changes described above is minor for the current consolidated fiscal year.
(Application of accounting standards for fair value measurement)
The “Accounting Standards for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019; the “ASFVM”) andrelated rules have been applied since the beginning of the current consolidated fiscal year. Pursuant to Paragraph 8 of the
ASFVM, the fair value adjustment method used to determine the fair value in derivative transactions has been revised tomaximize the use of observable inputs estimated from derivatives and others traded in the market. This revision was madeas a result of the application of the ASFVM and related rules. Pursuant to the transitional treatment set forth in the second
sentence of Paragraph 20 of the ASFVM, the Bank has reflected, in retained earnings at the beginning of the current
consolidated fiscal year, the cumulative impact of applying these new accounting policies retrospectively from the beginningof the current consolidated fiscal year.
As a result, retained earnings decreased by ¥531 million, trading assets by ¥28 million, other assets by ¥730 million,
trading liabilities by ¥1 million, other liabilities by ¥0 million, deferred tax liabilities by ¥226 million, and net assets per
share by 92 sen, each at the beginning of the current consolidated fiscal year.

―43―

SIGNIFICANT ACCOUNTING ESTIMATES
1. Recording of allowance for loan losses(1) Amounts recorded in the consolidated financial statements for the current consolidated fiscal year
Allowance for loan losses¥53,382 million(2) Other information that helps users of consolidated financial statements to understand the details of significant accounting
estimates of identified items(i) Calculation method
The calculation method of allowance for loan losses is listed in “5. Allowance for losses” of “MATTERSREGARDING ACCOUNTING POLICIES.”(ii) Main assumptionsa) There are concerns over the impact of the economic slowdown caused by the spread of COVID-19 on the repayment
ability of borrowers. However, an allowance for loan losses has been calculated on the assumption that the national
and local governments’ economic measures and financial institutions’ support will prevent any significant impact
on the categories or other aspects of borrowers. There have been no significant changes in the assumptions about
the impact of COVID-19 from those described under the heading “SIGNIFICANT ACCOUNTING ESTIMATES”
in the consolidated financial statements for the previous consolidated fiscal year.
b) Assumptions have been made on future forecasts, such as sales forecasts, cost reduction estimates, and expecteddebt repayments, in the business plan used to determine borrowers’ categories and to estimate future cash flows
using the cash flow estimate method. The future forecasts in the business plan, such as sales forecasts, cost reduction
estimates, and expected debt repayments have been determined based on the impact of COVID-19 and on the market
growth potential and price trends in the industries to which borrowers belong.
(iii) Impact on the consolidated financial statements for the next consolidated fiscal year
If the original assumptions for estimates change because of changes in the management environment for borrowers,
including the situation of COVID-19, the allowance for loan losses may fluctuate due to changes in borrowers’
categories, cash flow estimates or expected loss ratio, with potential significant impact on the consolidated financial
statements for the next consolidated fiscal year.

―44―Notes(Consolidated Balance Sheets)
1. Claims under the Banking Act and the Act on Emergency Measures for the Revitalization of the Financial Functions are
as follows. Claims include: (i) claims recorded in the following accounts on the consolidated balance sheets: bonds (butonly if the Bank guarantees all or part of the redemption of their principal and the payment of interest and if they were
issued by private placement (Article 2, Paragraph (3) of the Financial Instruments and Exchange Act)) in “Securities,”“Loans and bills discounted,” “Foreign exchanges,” accrued interest and suspense payments in “Other assets,” and“Customers’ liabilities for acceptance and guarantees”; and (ii) if the Bank has granted loans of securities that arepresented in notes, those securities (but only those that are on loan under a loan-for-use agreement or lease agreement).
(Millions of Yen)
Claims provable in rehabilitation from
17,425bankruptcy and equivalents
Doubtful claims
68,961Loans past due for three months or more
353
Restructured loans
13,777
Total
100,517“Claims provable in rehabilitation from bankruptcy and equivalents” include: claims against borrowers whosebusiness has failed due to such grounds as those for filing a petition for commencement of bankruptcy, reorganization or
rehabilitation proceedings; and claims similar to those described above.
“Doubtful claims” include claims (i) which are against borrowers whose business has not failed but whose financial
condition and business performance have deteriorated, and (ii) whose principal and interest are unlikely to be collectible
as per the contracts, and (iii) which do not fall under claims provable in rehabilitation from bankruptcy and equivalents.
Loans past due for three months or more include loans for which payments of principal or interest are delinquent by
three months or more, as calculated from the day following the contracted payment date, but do not include claims
provable in rehabilitation from bankruptcy and equivalents or doubtful claims.
Restructured loans include loans for which certain arrangements have been made in favor of the borrower, such as
reducing or eliminating interest payments, deferring principal repayments or writing off a portion of the loan, with thegoal of assisting in the reconstruction of, or providing support to, the borrower’s business, but do not include claims
provable in rehabilitation from bankruptcy and equivalents, doubtful claims or loans past due for three months or more.
The amounts of loans given above are amounts before deduction of allowance for loan losses.
(Changes in the Presentation Method)
In response to the Cabinet Order Partially Amending the Regulation for Enforcement of the Banking Act (Cabinet
Order No. 3 of January 24, 2020) coming into effect on March 31, 2022, the classification and other details of “riskmanagement loans” under the Banking Act are now presented in accordance with the classification and other details of
non-performing loans under the Act on Emergency Measures for the Revitalization of the Financial Functions.
2. In accordance with the JICPA Industry Committee Practical Guidelines No. 24, bills discounted are treated as financialtransactions. The Bank has the rights to sell, pledge or re-pledge these commercial bills and foreign exchange bills
without restrictions. The face values of these bills are ¥18,439 million.
3. Assets pledged as collateral are as follows:(Millions of Yen)
Assets pledged as collateral:
Trading assets
2,999
Securities
1,104,080―45―

Loans and bills discounted
817,620
Other assets
96,766
Relevant liabilities to above assets:
Deposits
45,865
Payables under repurchase agreements
296,764
Payables under securities lending transactions
72,701
Borrowed money
1,325,129
In addition to the above, the Bank has provided ¥19,821 million in securities, ¥5,750 million in other assets, and ¥244
million in due from banks as collateral for foreign exchange settlements and certain other transactions and as security for
futures transactions, respectively.
Other assets include guarantee deposits (¥1,943 million), cash collateral paid for financial instruments (¥9,631 million),and cash collateral paid to central counterparty (¥60,800 million).
4. Overdraft agreements and agreements for loan commitments are agreements under which the Bank pledges to lend funds
up to a certain limit when applications for advances of loans are received from customers, provided there are no violationsof the terms written in the agreements. The balances of loans undisbursed under these agreements are ¥1,850,675 million.
Of these loans, those due within one year are ¥1,729,933 million.
Many of these agreements terminate without loans being disbursed, and thus the balance of loans as yet undisbursed
will not necessarily affect the future cash flow of the Bank or its consolidated subsidiaries or subsidiary corporations,etc. The Bank and its subsidiaries and subsidiary corporations, etc. can refuse to advance loans and reject applications
that have been received or can reduce the maximum amounts under the agreements for reasonable reasons, such aschanges in the financial situation and preservation of credit. In addition, at the time the agreements are entered into,borrowers may, when necessary, be required to provide collateral, such as real estate or securities, and after theagreements have been signed, the state of the borrower’s business and other factors may be assessed regularly inaccordance with prescribed in-house procedures. Moreover, agreements can be revised, if necessary, and steps, such as
the formulation of measures to preserve credit, may be taken.
5. Accumulated depreciation of tangible fixed assets ¥119,521 million
6. Advanced depreciation of tangible fixed assets¥9,033 million
7. The amount of liabilities for guarantees on corporate bonds included in securities, which were issued by private placement(Article 2, Paragraph 3 of the Financial Instruments and Exchange Act) is ¥30,088 million.
8. The principal amount of trusts with principal-guaranteed features is ¥198 million in money trusts.
(Consolidated Statements of Income)For the current consolidated fiscal year, the Bank has recorded impairment losses for four sales branch areas and one idle
asset in Shizuoka Prefecture.
In calculating impairment losses, sales branches are in principle recognized in units of sales branch area (with theprefecture being divided into certain geographical areas based on the complementarity of cash flow), while idle assets andassets held for sale are recognized individually.
For the asset group for which an impairment loss has been recorded, there is no longer a prospect of recovering theinvestment due to a decrease in operating cash flow, falling land prices, or decisions to integrate branches, among otherthings. Therefore, its carrying amount has been reduced to the recoverable amount, and the amount of the reduction (¥634
million, including ¥409 million in land, ¥80 million in building, and ¥145 million in other tangible fixed assets) has beenrecognized as an impairment loss and included in extraordinary losses.
The recoverable amount is the higher of the net selling price or the value in use. If the net selling price is used, it iscalculated by deducting the estimated disposal cost from the evaluation based on the real estate appraisal standards andother rules. If the value in use is used, it is calculated by discounting future cash flows at the rate of 3.0%.

―46―

(Consolidated Statements of Changes in Net Assets)
1. Classes and number of issued shares and classes and number of treasury stock(Thousands of Shares)
Number of Shares Number of Shares Number of Shares
Number of Shares
at Beginning of
Increased in
Decreased in
at End of Current
Current
Current
Current
Consolidated Fiscal
Consolidated Fiscal Consolidated Fiscal Consolidated Fiscal
Year
Year
Year
Year
Issued shares
Common stock
Total
Treasury stock
Common stock
Total

595,129595,129――――595,129595,129

21,08621,086

10,00010,000106
10630,98030,980Description(注)1、2

Notes: 1. The 10,000 thousand shares increase in treasury stock is due to acquisition of treasury shares, among other causes.
2. The 106 thousand shares decrease in treasury stock includes, among others, 90 thousand shares disposed of as restricted share-based
compensation and 15 thousand shares for which stock options were exercised.

2. Share Acquisition Rights

CategoryBankType of Share
Acquisition Rights

Class of Shares
under Share
Acquisition
RightsNumber of Shares under Share Acquisition Rights Balance at End
of Current
Current Consolidated
At Beginning
At End ofConsolidated
Fiscal Yearof Current
Current
Fiscal Year
Consolidated
Consolidated(Millions of
Increase Decrease
Fiscal Year
Fiscal Year
Yen)

Share Acquisition
Rights in the form ofstock options
Total

―47―

―

318

―

318

3. Dividends(1) Cash dividends paid during the current consolidated fiscal year
(Resolution)
Annual General Meetingof Shareholders held on
June 18, 2021
Boardof
Directors’
meeting held on November
8, 2021
Total

Class of
Stock

Total Amountof Dividends(Millions of
Yen)

Cash
Dividend per
Share (Yen)Record Date

Effective Date

Common
stock

8,036

14

March 31, 2021

June 21, 2021

Common
stock

7,051

12.5

September 30,
2021

December 10,
2021

15,088(2) Of the dividends whose record date falls within the current consolidated fiscal year, those dividends whose effective
date falls after the last date of the current consolidated fiscal year
As a proposal to be submitted to the Annual General Meeting of Shareholders scheduled for June 17, 2022, a dividend
for common stock has been proposed with the following details:(i) Total amount of dividends¥7,615 million(ii) Cash dividend per share¥13.5(iii) Record date
March 31, 2022(iv) Effective dateJune 20, 2022
The dividend is planned to be paid from retained earnings.

―48―

(Financial Instruments)
1. Information on financial instruments(1) Policy for financial instruments
The Group provides comprehensive financial services, centering on banking, along with leasing and financial
instruments trading. Its base of operations is Shizuoka Prefecture.
The Bank, the core business operator of the Group, provides a range of financial instruments, including deposits inJapanese yen, deposits in foreign currencies, Japanese government bonds, investment trusts, and personal pension
insurance. It also provides stable financing for customers in the region through loans to individuals and lending
operations for small and medium enterprises.
(2) Details of financial instruments and related risks
The financial assets of the Group consist primarily of loans and bills discounted to domestic customers and securities,
including bonds and equity securities.
The loans and bills discounted are exposed to credit risk arising from potential default by borrowers. As about 60%of the loans and bills discounted are for customers in Shizuoka Prefecture, credit-related losses could occur on a large
scale if the regional economic environment changes negatively or if a severe earthquake occurs.
The Group holds securities, such as debt securities (bonds), equity securities, and investment trusts under its
investment policy focused on the safety and liquidity of the investment. These securities are exposed to risks of market
price fluctuations associated with the credit standing of issuers and interest rate changes. If the prices of equity
securities and other securities held decline, impairment losses or valuation losses could adversely affect the operating
results and financial standing of the Group.
Financial liabilities consist primarily of deposits from domestic customers and funds raised in the call market. If theGroup loses its credit status because of downgrades or other factors or if the market environment deteriorates,
conditions for financing could worsen or transactions could be constrained.
The Group enters into derivative transactions for customer needs of hedging exchange rates or interest rates, andfor asset and liability management (ALM) or hedging individual transactions to appropriately manage the market risksof the Group. The Group also conducts short-term trading transactions.
Derivatives mainly include interest rate swaps, currency swaps, and bond futures and are exposed to market riskthat could cause losses in association with changes in interest rate markets and foreign exchange markets, as well as
credit risk (counterparty risk), that is, the risk of default on the initial contract due to the bankruptcy of the counterpartyor other factors. Between financial assets and financial liabilities, there are interest rate risks associated withmismatches of interest rates and terms.
(3) Risk management systems for financial instruments(i) Integrated risk management system
Under the Basic Risk Management Regulations that stipulate the Group’s basic risk management policy, theGroup has established a basic framework, including an organizational structure for defining and managing risks andspecific procedures for risk management.
To ensure a balance between profitability and financial soundness, the Group has introduced a management
system based on a risk capital allocation at the core of integrated risk management.
The risk capital allocation is a system for avoiding excessive risk taking by setting risk limits below which theGroup will be able to withstand losses on its own. This system allocates core regulatory capital to each operational
department or section and controls risk so that if market, credit or other risks emerge, losses will be contained within
the range of shareholders’ equity.

―49―

(ii) Credit risk management system
Credit risk is the risk of incurring losses when collecting loans and bills discounted becomes difficult because of
the worsening of borrowers’ financial conditions.
The Credit Risk Management Group of the Compliance and Risk Management Department manages all credit
risks associated with the Group’s operations both in Japan and overseas in order to ensure the soundness of theGroup’s loan asset portfolio. The Bank’s borrower credit rating system, which is an essential part of its credit risk
management, together with other internal rating systems, is operated by the Credit Planning Group of the BusinessSupport Department, designed and supervised by the Credit Risk Management Group, which is independent fromthe credit department (i.e., the Business Support Department), and verified for appropriateness of the system by the
Risk Management Group of the Compliance and Risk Management Department. This structure has been designed
such that the internal credit rating system will function appropriately through mutual checks and balances between
these three groups.
In addition, the Audit Department checks whether credit risk management is conducted appropriately inaccordance with the relevant rules, through such means as validation of the self-assessment process.
The Credit Risk Management Group uses statistical methods to quantify latent credit risks intrinsic to the Bank’s
entire loan portfolio. This enables the Bank to accurately assess the scale of potential risk, monitor any concentrationof loans to particular large-scale borrowers or specific industries, and thus control the portfolio to avoid excessive
credit risk.
The Bank’s credit risk management status, together with the status of market risk management and liquidity risk
management described below, is reported through monthly meetings of the Committee for Integrated Risk andBudget Management, which is chaired by the president, as well as through other channels of management.
(iii) Market risk management system
Market risk is the risk of incurring losses in association with changes in the prices of financial assets and liabilities
that are caused by changes in interest rates, stock prices, and foreign exchange rates.
The Group controls the degree of market risks within a certain range by setting limits about risk capital allocations,
unrealized profits and losses, position, and sensitivity, and so on.
The Bank has established ALM hedge criteria for transactions in banking accounts, especially deposits, loans andbills discounted, and investment securities to control the degree of market risk within a certain range. The Business
Strategy Planning and ALM Group of the Corporate Planning Department discusses ALM hedge policies based on
the status of interest rate risks and interest rate outlook at meetings of the Committee for Integrated Risk and Budget
Management.
The Bank has established a system of checks and balances in the market division by strictly separating trading
departments and administration departments and by setting up an independent risk management department. The
Audit Department, which is independent of departments subject to audit, checks the effectiveness of this system ofchecks and balances between the three departments.
(iv) Liquidity risk management system
There are two types of liquidity risk: (1) financing risk, which is the risk of not being able to secure needed funds
as a result of worsening market conditions and other factors, or incurring losses due to being forced to raise funds
at much higher interest rates than usual; and (2) market liquidity risk, which is the risk of not being able to tradefinancial instruments, such as bonds, because of market turmoil or other factors or incurring losses due to being
forced to trade financial instruments at far less favorable prices than usual.
The Bank has established a system of checks and balances by setting up fund management departments forfinancing in Japanese yen and in foreign currencies, and a liquidity risk management department that is independent―50―

of the fund management departments. The Treasury Department’s Fund and Foreign Exchange Group, which is oneof the fund management departments, controls amounts raised in markets within a range of amounts permitted to
be raised so as to prevent excessive fund-raising in markets, and seeks stable financing, considering market
circumstances. The Risk Management Group, which is the liquidity risk management department, assesses thestability of the asset and liability structure, including the status of the holding of liquid assets, and monitors thefinancing position and the status of management by the fund management departments.
To deal promptly with unforeseeable circumstances, the Group has classified financing management inemergencies into four phases -- Phase 1 (prevention), Phase 2 (caution needed), Phase 3 (concern over liquidity),and Phase 4 (lack of liquidity) --, and has appointed authorized personnel and countermeasures for each phase inadvance.
To manage market liquidity risk, the liquidity risk management department monitors the holding of liquid assets
on a timely basis, and the front office chooses assets to be managed after taking into account their liquidity and sets
limits by issue and by term.
(4) Supplementary explanation of the fair values of financial instruments
The fair values of financial instruments include values based on market prices. If there are no market prices, values
are reasonably calculated. As these fair values are calculated based on certain assumptions, fair values could differ if
different assumptions are used for calculation.
2. Fair values of financial instruments and a breakdown by level of the fair values of financial instruments
The carrying values and fair values of financial instruments, the difference between these values, and their fair values
by level are as follows.
Please note that the table below does not include: (i) investment trusts subject to the transitional measures set forthin Paragraph 26 of the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ
Guidance No. 31, July 4, 2019; the “Fair Value Measurement Implementation Guidance”); (ii) stocks or others without
quoted market prices; or (iii) investments in partnerships subject to the transitional measures set forth in Paragraph 27 of
the Fair Value Measurement Implementation Guidance (see (1)*1 and Note 3 below). Account items whose carrying
values are of law significance have been omitted.
The fair values of financial instruments are classified into the following three levels based on the observability andsignificance of inputs used in the measurement of fair value.
Level 1 fair value: Fair value measured using, among observable inputs for fair value measurement, quoted prices ofidentical assets or liabilities in active markets.
Level 2 fair value: Fair value measured using observable fair value inputs other than those for fair value measurement
used in Level 1.
Level 3 fair value: Fair value measured using unobservable inputs for fair value measurements.
If using two or more inputs that significantly affect the measurement of fair value, the fair value is classified into thelevel of lowest priority in fair value measurement among the levels to which those inputs belong.

―51―

(1) Financial instruments carried at fair value on the consolidated balance sheet(Millions of Yen)
Category
Trading assets
Trading securities
Japanese government bonds
Local government bonds
Corporate bonds
StocksOthersForeign bonds
Securities
Available-for-sale securities (*1)
Japanese government bonds
Local government bonds
Corporate bonds
StocksOthersForeign bonds
Total assets
Derivative transactions (*2)(*3)(*4)
Interest rate-related
Currency-related
Stock-related
Bond-related
Total derivative transactions

Carrying Value
Level 1

Level 2

Level 3

Total

62
62
―
―
―
―
―

10,469
―
533
9,936
―
―
―

―
―
―
―
―
―
―

10,532
62
533
9,936
―
―
―

1,024,344
600,379――
382,363
41,602
41,602
1,024,407

836,983―
196,601
216,780
4,912
418,688418,595
847,452

139,484――
139,459―25―
139,484

2,000,812
600,379
196,601
356,239387,275
460,315
460,197
2,011,345

―
―
―
―
―

1,632
△9,722――△8,089

―
―
―
―
―

1,632
△9,722――△8,089(*1) The table above does not include investment trusts subject to the transitional measures set forth in Paragraph 26 of the Fair Value Measurement
Implementation Guidance.
These investment trusts are carried at ¥164,632 million on the consolidated balance sheet.
(*2) The total of all derivative transactions recorded in trading assets and liabilities and other assets and liabilities.
Net claims and liabilities arising from derivative transactions are presented in net amounts. Net negative amounts are marked with a triangle(Δ).
Transactions subject to special hedging treatment of interest rate swaps are valued together with the hedged transactions, and have thus been
excluded from derivative transactions.
(*3) Of the derivative transactions, those subject to hedge accounting are carried at △¥14,638million on the consolidated balance sheet.
(*4) These transactions include, among others, interest rate swaps designated as hedging instruments to reduce market fluctuation risk or foreignexchange fluctuation risk associated with loans to be hedged against. Deferred hedge accounting.is applied to these transactions. The Practical
Solution on the Treatment of Hedge Accounting for Financial Instruments that Reference LIBOR (ASBJ PITF No. 40, March 17, 2022) is applied
to these hedging relationships.

―52―

(2) Financial instruments other than those carried at fair value on the consolidated balance sheet
Notes have been omitted for cash and due from banks, call loans and bills bought, call money and bills sold, payables
under repurchase agreements, and payables under securities lending transactions, as the fair values of these financial
instruments approximate their carrying values due to short payment terms.
(Millions of Yen)
Category
Securities
Held-to-maturity
Japanese government
bonds
Local
government
bonds
Corporate bonds
OthersForeign bonds
Loans and bills discounted
Allowance for loan
losses (*)

Fair Value
Level 1

Level 2

Level 3

Total

Carrying Value

Difference―

10,796

68,861

79,65879,726

△67

―

―

―

―

―

―

―

9,231

―

9,231

9,252

△20

―
―

1,565
―

68,861―70,426―70,473
―

△46
―

―

―

―

―

―
9,502,197―△48,817――

9,467,153

9,467,153

9,453,380

13,772

Total assets―

10,796

9,536,014

9,546,811

9,533,106

13,705

Deposits
Negotiable certificates ofdepositBorrowed money―

11,400,009―

11,400,009

11,399,949

60―

157,266―

157,266

157,266

0―

1,329,879

34,044

1,363,924

1,364,889△965

Total liabilities―

12,887,155

34,044

12,921,200

12,922,105△905(*) General and individual allowances for losses are excluded from the corresponding loans and bills discounted.

―53―Note 1: Description of the valuation techniques and inputs used in fair value measurement
AssetsTrading assets
The fair values of trading assets are classified into Level 1 if their unadjusted quoted prices in active markets areavailable. These trading assets primarily include Japanese government bonds. If the market is not active, the fair valuesof trading assets are classified into Level 2 even if their published quoted prices are used. These trading assets primarily
include local government bonds and corporate bonds.
Securities
The fair values of securities are classified into Level 1 if their unadjusted quoted prices in active markets are available.
These securities primarily include listed stocks and Japanese government bonds. If the market is not active, the fairvalues of securities are classified into Level 2 even if their published quoted prices are used. These securities primarily
include local government bonds and corporate bonds. The fair values of securitized products (beneficial interests intrust) are classified into Level 3, because these fair values are measured based on prices obtained from third parties,
and significant unobservable inputs are used to calculate these prices. The fair values of private placement bonds areclassified into Level 3, because these fair values are measured by discounting at a discount rate commensurate withthe bonds’ internal rating, remaining term, and coverage ratio, and the discount rate is a significant unobservable input.
Stock acquisition rights are calculated using valuation techniques such as the option valuation model. Major inputs
include probability of listing. Since probability of listing is an unobservable input, the fair value of share acquisitionrights is classified into Level 3.
Loans and bills discounted
The fair values of loans and bills discounted are measured at their present values, which are calculated separately
for different categories created based on types and internal ratings of loans and bills discounted, the status of theircollateral and guarantees, and their periods, by discounting the future cash flows of the principal and interest at theinterest rate expected for similar new loans or at a discount rate calculated by reflecting credit risk, expense rate, etc.
on market interest rate. The fair values of floating-rate loans and bills discounted are measured at their carrying values,
because their fair values approximate carrying values if the borrowers’ credit status has not changed significantly since
disbursement, as they quickly reflect market interest rates. As for claims against borrowers classified as legal
bankruptcy, virtual bankruptcy or caution, since the loan loss estimates have been calculated based on, among otherthings, the amounts expected to be recoverable from collateral and guarantees, the fair values of these claims
approximate their carrying values minus the amount of allowance for loan losses on the consolidated balance sheet atthe end of the fiscal year. The remaining amounts are deemed to be their fair values. These fair values are all classified
into Level 3, since the discount rate is unobservable.

―54―

Liabilities
Deposits and Negotiable Certificates of Deposit
As for demand deposits payable immediately on demand at the end of the fiscal year, the amounts payable are
deemed to be their fair values. The fair values of time deposits and negotiable certificates of deposit are measured attheir discounted present value, which is calculated by classifying them based on their periods and discounting thefuture cash flows at the interest rate to be used when accepting new deposits. The fair values of deposits with shortterms (up to one year) or floating interest rates are measured at their carrying values, since their fair values approximate
carrying values. These fair values are classified into Level 2.
Borrowed money
The fair value of borrowed money is measured at its present value, which is calculated by classifying the borrowed
money based on its period and by discounting the future cash flows at the interest rate expected for similar new
borrowings. Floating rate-borrowed money reflects market interest rates in short periods, and the credit standing of the
Bank and its consolidated subsidiaries has not significantly changed since disbursement. The fair value of floating rateborrowed money is therefore considered to approximate the carrying value and is deemed equal to the carrying value.
The fair value of borrowed money with short terms (up to one year) is measured at its carrying value, since its fairvalue approximate carrying value. This fair value is classified into Level 3 if any significant unobservable input is usedin its measurement, or otherwise into Level 2.
Derivative Transactions
The fair values of derivative transactions are classified into Level 1 if their unadjusted quoted prices in active markets
are available. These derivative transactions primarily include bonds futures. However, since most derivatives are overthe-counter transactions without published quoted prices, their fair values are measured using valuation techniquessuch as the present value technique and the option valuation model depending on the type of transaction and thematurity period. The main inputs used in those valuation techniques are interest rate, exchange rate, and volatility,
among others. In addition, price adjustments are made based on the credit risk of the counterparty and that of the Bank.
The fair values of these transactions are classified into Level 2 if no unobservable inputs are used or if the effect of theunobservable inputs used is insignificant. These transactions primarily include interest rate swaps and forward
exchange contracts.
Note 2: Information on financial instruments carried at Level 3 fair value on the consolidated balance sheet(1) Quantitative information on significant unobservable inputs (March 31, 2022)
Category

Valuation TechniqueSignificant
Unobservable Input

Range of Input

Weighted Average of
Input

Present value
technique

Discount rates

0.2%～1.7%

0.5%

Option valuation
model

Probability of listing

50.0%

50.0%

Securities
Corporate bonds
Private placement
bonds
Other
Stock
acquisitionrights―55―

(2) Reconciliation between opening and closing balances and loss/gain on valuation recognized in profit/loss(March 31, 2022)(Millions of Yen)
Profit/Loss or Other
Loss/Gain on
Comprehensive
Valuation ofIncomeNet
Financial
Balance
Transfers
Purchases, Transfers
Assets/Liabilitie
atfromBalance at
Recorded
Sales,
into Levels Recorded in
Beginni
Level 3End ofin Other
Issues and3 FairLoss/Profit andRecorde
ng of
Fair
Year
CompreSettleValue
Held on the
d in
Year
Value
hensivements
Consolidated
Profit/L
IncomeBalance Sheet
oss
(*)
Date
Securities
Available-for-salesecurities
Private placement
30,289―1,194――
31,430―△53
bonds
Securitized
products
8,709
99,704――
108,028―△3△381(beneficial
interests in trust
Stock acquisition
―
―
25
―
―
25
―
△0
rights(*) Included in “Gain on fund management” in the consolidated statements of income.

(3) Description of process of fair value measurement
The Group has established policies and procedures for fair value measurement in middle departments and back-end
departments. Once a fair value is measured, verification is performed of: the validity of the valuation techniques andinputs used in the measurement of the fair value; and the appropriateness of the classification of the fair value.
In calculating fair values, valuation models are used that most appropriately reflect the nature, characteristics andrisks of the individual assets. Furthermore, when quoted prices obtained from a third party are used, the validity ofthese prices are verified by such appropriate methods as checking the valuation techniques and inputs being used and/or
comparing the resulting fair values with fair values of similar financial instruments.
(4) Description of the impact of changes in significant unobservable inputs on fair values
The significant unobservable inputs used in the measurement of fair values of securitized products (beneficial
interests in trust) are probability of default, loss given default, and prepayment rate. Significant increase (or decrease)in probability of default or loss given default will result in significant decrease (or increase) in fair values, whereas
significant change in prepayment rate will result in significant decrease (or increase) in fair values, depending on the
structure of the financial instrument.
The significant unobservable input used in the measurement of fair values of private placement bonds is discountrate. The discount rate is calculated according to the internal rating of the issuer, the remaining term, and the coverage
ratio. Significant increase (decrease) in discount rate will result in significant decrease (increase) in fair values.
Probability of listing is the significant unobservable input used to calculate the fair value of share acquisition rights.
A significant increase (decrease) in probability of listing will result in a significant increase (decrease) in fair value.

―56―

Note 3: Stocks and others without quoted market prices and investments in partnerships are carried as follows on the
consolidated balance sheet. They are not included in “Available-for-sale securities” in the financial statements
disclosed under the heading, “Fair values of financial instruments and a breakdown by level of the fair values offinancial instruments” above.
(Millions of Yen)
Category

Carrying Value

Unlisted stocks (*1) (*2)

6,874Investments in partnerships and others (*3)

67,641(*1) Unlisted stocks are not included in the disclosure of fair value in accordance with Paragraph 5 of the “Implementation Guidance on
Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19, March 31, 2020).
(*2) The impairment losses on unlisted stocks for the current consolidated fiscal year were ¥123 million.
(*3) Investments in partnerships and others principally include investment partnerships. These are not included in the disclosure of fair value
in accordance with Paragraph 27 of the “Implementation Guidance on Disclosures about Fair Value of Financial Instruments
These investments in partnerships and others include the investments in non-consolidated subsidiaries of ¥2,572 million, among
others.

―57―

(Tax Effect Accounting)A breakdown of deferred tax assets and deferred tax liabilities by major cause is as follows:(Millions of Yen)
Deferred tax assets
Allowance for loan losses
15,197Retirement benefit liability
5,000
Redemption of securities
4,190
Others10,876
Subtotal deferred tax assets
35,265
Valuation allowance△5,091
Total deferred tax assets
30,173
Deferred tax liabilities
Valuation difference on available-for-sale△80,229securities
Gains on contribution of securities to△5,079retirement benefit trust
Securities returned from retirement benefit△2,724trust
Others△2,833
Total deferred tax liabilities△90,867
Net deferred tax liabilities△60,693(Per Share Information)
Net assets per share
Net income attributable to owners of the parent¥1,925.98¥73.27―58―

(Stock Options)
1. Amount of expenses and account items related to stock options for the current consolidated fiscal year
Not applicable.
2. Details of stock options, volume of stock option activity, and changes thereto(1) Details of stock options
2007 Stock2008 Stock2009 Stock2010 Stock2011 Stock
OptionOptionOptionOptionOptionCategory and number
8 directors of the
8 directors of
8 directors of
8 directors of
8 directors ofof persons grantedBank
the Bank
the Bank
the Bank
the Bank
Number of stock
67,00066,00089,000100,000
100,000
options by share classcommon shares common shares common shares common shares common shares(Note)
Date of grantVesting conditions
Requisite service period
Exercise period

Category and numberof persons granted
Number of stock
options by share class(Note)
Date of grantVesting conditions
Requisite service period
Exercise period

July 27, 2007

July 18, 2008

July 24, 2009

July 23, 2010

July 22, 2011

No vesting
conditions
No requisite
service period
From July 28,
2007 to July 27,2032

No vesting
conditions
No requisite
service period
From July 19,
2008 to July 18,2033

No vesting
conditions
No requisite
service period
From July 25,
2009 to July 24,2034

No vesting
conditions
No requisite
service period
From July 24,2010 to July 23,2035

No vesting
conditions
No requisite
service period
From July 23,
2011 to July 22,20362012 Stock
Option8 directors of theBank2013 Stock
Option8 directors of
the Bank

2014 Stock
Option8 directors of
the Bank

2015 Stock
Option7 directors of
the Bank

2016 Stock
Option7 directors of
the Bank

100,000
common shares

88,000common shares

92,000common shares

37,000common shares

50,000common shares

July 24, 2012

July 23, 2013

July 22, 2014

July 21, 2015

July 19, 2016

No vesting
conditions
No requisite
service period
From July 25,
2012 to July 24,2037

No vesting
conditions
No requisite
service period
From July 24,
2013 to July 23,2038

No vesting
conditions
No requisite
service period
From July 23,
2014 to July 22,2039

No vesting
conditions
No requisite
service period
From July 22,2015 to July 21,2040

No vesting
conditions
No requisite
service period
From July 20,
2016 to July 19,
2041

―59―

Category and numberof persons granted
Number of stock
options by share class(Note)
Date of grantVesting conditions
Requisite service period
Exercise period

2017 Stock
Option7 directors of theBank2018 Stock
Option7 directors of
the Bank

2019 Stock
Option7 directors of
the Bank

50,000common shares

50,000common shares

50,000common shares

July 18, 2017

July 17, 2018

July 16, 2019No vesting
conditions
No requisite
service period
From July 19,
2017 to July 18,2042

No vesting
conditions
No requisite
service period
From July 18,
2018 to July 17,2043

No vesting
conditions
No requisite
service period
From July 17,
2019 to July 16,2044

Note: Number of stock options has been converted and stated as number of shares.

―60―

(2) Volume of stock option activity and changes thereto- Number of stock options
2007 Stock2008 Stock
OptionOptionBefore vesting
At end of previous
consolidated fiscal――
year
Granted――Forfeited――
Vested――Yet to be vested――
After vesting
At end of previous
consolidated fiscal
13,000 shares
13,000 shares
year
Vested――Exercised――
Forfeited――
Yet to be exercised
13,000 shares
13,000 shares2012 Stock
OptionBefore vesting
At end of previous
consolidated fiscal
year
GrantedForfeited
VestedYet to be vested
After vesting
At end of previous
consolidated fiscal
year
VestedExercised
Forfeited
Yet to be exercised

2013 Stock
Option2009 Stock
Option2010 Stock
Option2011 Stock
Option

―

―

―

―
―
―
―

―
―
―
―

―
―
―
―

20,000 shares

27,000 shares

27,000 shares―――
20,000 shares―――
27,000 shares―――
27,000 shares2014 Stock
Option2015 Stock
Option2016 Stock
Option

―

―

―

―

―

―
―
―
―

―
―
―
―

―
―
―
―

―
―
―
―

―
―
―
―

30,000 shares

22,000 shares

48,000 shares

22,000 shares

30,000 shares―――
30,000 shares―――
22,000 shares―――
48,000 shares―――
22,000 shares―――
30,000 shares―61―

2017 Stock
OptionBefore vesting
At end of previous
consolidated fiscal
year
GrantedForfeited
VestedYet to be vested
After vesting
At end of previous
consolidated fiscal
year
VestedExercised
Forfeited
Yet to be exercised2018 Stock
Option2019 Stock
Option

―

―

―

―
―
―
―

―
―
―
―

―
―
―
―

38,000 shares

37,700 shares

38,500 shares―
5,000 shares―
33,000 shares―
5,600 shares―
32,100 shares―
4,500 shares―
34,000 shares―62―

- Unit price information2007 Stock
OptionExercise price¥1
Average share price at―
exercise
Fair unit value on grant¥1,153date (Note)2012 Stock
OptionExercise price
Average share price at
exercise
Fair unit value on grant
date (Note)2009 Stock
Option2010 Stock
Option2011 Stock
Option

¥1

¥1

¥1

¥1

―

―

―

―

¥1,057

¥875

¥704

¥709

2013 Stock
Option2014 Stock
Option2015 Stock
Option2016 Stock
Option

¥1

¥1

¥1

¥1

¥1

―

―

―

―

―

¥743

¥1,135¥1,079¥1,351¥730

2017 Stock
OptionExercise price
Average share price at
exercise
Fair unit value on grant
date (Note)2008 Stock
Option2018 Stock
Option2019 Stock
Option

¥1

¥1

¥1

¥883

¥883

¥883

¥899

¥888

¥733

Note: Fair unit value has been converted and stated as value per share.

―63―