The transactions pursuant to the share exchange described in this press release involve securities of a Japanesecompany. The share exchange is subject to disclosure requirements of Japan that are different from those of the UnitedStates. Financial information included in this document, if any, was excerpted from financial statements prepared inaccordance with foreign accounting standards that may not be comparable to the financial statements of United Statescompanies.
It may be difficult for you to enforce your rights and any claim you may have arising under the 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 be able to sue a Japanese company or its officers or directors in a Japanese court for violations of the 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 otherwise than under the shareexchange, 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
conflict or discrepancy between this document and the Japanese-language original, the Japanese-language original shallprevail in all respects.

January 20, 2023
To Whom It May Concern:
Company Name: The Hachijuni Bank, Ltd.
Representative: President, Masaki Matsushita
8359 (Tokyo Stock Exchange, Prime Market)
Co mp any Name: T he Nagano B ank, Ltd .
Representative: President, Hitoshi Nishizawa
8521 (Tokyo Stock Exchange, Standard Market)

Notice Regarding Final Agreement on Business Integration
between The Hachijuni Bank, Ltd. and The Nagano Bank, Ltd. through a Share Exchange
The Hachijuni Bank, Ltd. (Director and President Masaki Matsushita) (hereinafter, “Hachijuni Bank”) and The Nagano Bank,
Ltd. (President Hitoshi Nishizawa) (hereinafter, “Nagano Bank”; Hachijuni Bank and Nagano Bank are collectively referred
to as the “Banks”) announce that the respective meetings of the Board of Directors of the Banks held today in accordancewith the Basic Agreement executed on September 28, 2022, resolved to execute a business integration (hereinafter, the“Business Integration”) through a share exchange with Hachijuni Bank as the wholly-owning parent company and Nagano
Bank as the wholly-owned subsidiary (hereinafter, the “Share Exchange”) subject to obtaining approval by the Meeting of
the General Shareholders of Nagano Bank and the necessary permits and approvals by relevant authorities. The Banks haveexecuted a share exchange agreement (hereinafter, the “Share Exchange Agreement”) and a business integration agreement(hereinafter, the “Business Integration Agreement”) between the Banks as of today.
In addition, Nagano Bank has resolved to submit an agenda for the extraordinary meeting of the shareholders to be held on
March 24, 2023, on the revision of the Articles of Incorporation to delete the provisions concerning the record date for the
exercise of the voting rights (Please refer to the press release “Notice Regarding Establishment of Record Date for
Convocation of Extraordinary General Meeting of Shareholders and Partial Amendment to Articles of Incorporation” as oftoday by Nagano Bank for details).
1.

Background of the Business Integration
The Banks are regional banks with head offices located in Nagano Prefecture, each engaged in financial intermediation
function and developed with the regional community by maintaining a stable financial system and providing a broad
range of financial services.
Nagano Prefecture, where the Banks mainly operate the business, is surrounded by a majestic natural environment
created by three-thousander mountain ranges and clear rivers. Its economy is driven by manufacturers, including1

precision machinery, suited to abundant water resources and clean air. Moreover, it has various additional appeals thatdraw global attention, such as the rich tourist resources, regional culture that developed through a long history, andJapan’s No.1 prefecture in terms of longevity.
As the financial and economic environment surrounding the Banks is expected to become increasingly difficult due tothe contraction of interest rate spread between deposits and loans caused by the prolonged low-interest rate environment,
the Banks are expected to provide detailed functions and services, expand to new business fields; develop technologies
including for during and after the COVID-19 pandemic and for digitalization; and to respond to the transformation ofsocial structures such as decarbonization. The Banks believe that their role in the regional community will become
increasingly important.
Under this business environment, the Banks concluded that the best option for contributing to the development of
stakeholders of the Banks is to join forces under the shared mission of regional development to build a sound managementfoundation; reinforce the financial intermediation function; and establish a sustainable business model that matches thechange in customers’ needs and transformation of social structure, as stated in the press release “Notice Regarding Basic
Agreement on Business Integration between The Hachijuni Bank, Ltd. and The Nagano Bank, Ltd.” dated September 28,
2022. Consequently, the Banks have resolved to promote discussions and analysis toward the Business Integration on
June 1, 2023, based on mutual trust and equal footing, and have reached the final agreement today.
In addition, the Banks will promote discussion and review towards early merger after the effective date of the Share
Exchange to maximize the effect of the integration.
2.

Basic Principle and Purpose of the Business Integration
The Banks will promote the Business Integration under the assumption of equal footing, realize quick integration, andtransform into a bank that can grow with the region by combining the expertise, relationship, and human assets of the
Banks, and provide better value to the customers, region, shareholders, employees, etc.

3.

Expected Synergies from the Business Integration
The Banks will consider specific measures considering the following synergy effects for early achievement of the
purpose of the Business Integration:(1) Utilization of human capital and transformation of the corporate culture
The Banks will transform their corporate culture to enable a better response to the change of times, with maximum useof human capital that will be the driving force for the growth and development of the Banks, promote mutual resource
exchange, and optimal resource allocation to the areas of the business to be strengthened.
(2) Enhancement of financial intermediation functions and financial services
By combining the Banks’ expertise, information, and networks and utilizing the corporate group functions, the Banks
will promote the development and growth of the regional industries by strengthening relationship-based banking, corebusiness support, and actively providing risk money. In addition, the Banks will improve the convenience of settlementtransactions, asset formation, and use of loans; and provide services corresponding to their customers’ needs by
expanding digital channels and services.
(3) Enhancing expansion of business fields
The Banks will contribute to the further development of regional industries and improve residents’ quality of life byconcentrating the Banks’ human assets, information, and expertise to expand the new business fields that resolve regional
issues.
(4) Strengthening the business foundation
The Banks will build a sound business foundation that will enable continued contribution to the regional community byproviding stable functions and services, improving business efficiency through consolidation and abolition of
redundant branches, etc. streamlining and integrating headquarter organizations, and with shared systems andadministration, etc.

4.

Outline of the Business Integration(1) Schedule of the Business Integration2

September 28, 2022
January 20, 2023 (today)
January 20, 2023 (today)

Execution of the Basic Agreement (Banks)
Date of Resolution by the Board of Directors (Banks)
Execution of the Share Exchange Agreement and Business Integration
Agreement (Banks)
January 20, 2023 (today)
Date of Public Notice of the Record Date for the Extraordinary Meeting of
the Shareholders of Nagano Bank
February 4, 2023 (planned)
Record Date for the Extraordinary Meeting of the Shareholders of Nagano
Bank
March 24, 2023 (planned)
Extraordinary Meeting of the Shareholders of Nagano BankMay 29, 2023 (planned)
Last Trading Date for Shares of Nagano Bank
May 30, 2023 (planned)
Delisting of Nagano Bank
June 1, 2023 (planned)
Effective Date of the Share Exchange(Note 1) Implementation of the Business Integration requires procedures including approval under the Banking Act andpermits and approvals under the Act on Special Measures concerning Act on Prohibition of Private
Monopolization and Maintenance of Fair Trade to Maintain Provision of Fundamental Services Pertaining toRegional Motor Carrier Services for Ride-Sharing by General Passengers and Banking Business or filing with theJapan Fair Trade Commission. We will promptly disclose in case of any delay in the schedule of the Business
Integration in relation to various procedures.
(Note 2) The Share Exchange is expected to fall under cases where approval by the meeting of the shareholders ofHachijuni Bank is not required pursuant to the provisions of Article 796, Paragraph 2 of the Companies Act(Simplified Share Exchange).
(Note 3) The above schedule may be revised subject to discussion and agreement between the Banks where necessary to
promote the procedures concerning the Share Exchange or other reasons.
(2) Method of the Share Exchange
Hachijuni Bank will become the wholly-owning parent company, and Nagano Bank will become the wholly-owned
subsidiary after the share exchange. In addition, Hachijuni Bank is expected to adopt the simplified share exchange
procedure in accordance with the provisions of Article 796, Paragraph 2 of the Companies Act, and proceed withoutobtaining approval of the meeting of the shareholders while Nagano Bank is expected to obtain approval at theextraordinary meeting of the shareholders scheduled on March 24, 2023.
(3) Details of the Allotment in the Share Exchange
The Hachijuni Bank, Ltd.
The Nagano Bank, Ltd.
(Wholly-owning parent company after(Wholly-owned subsidiary after thethe share exchange)
share exchange)
Share Exchange Ratio
1
2.54
Number of shares to beissued for the Share
Common stock of Hachijuni Bank: 22,664,539 shares (planned)
Exchange(Note 1) The ratio of allotment of shares
For each share of common stock of Nagano Bank, 2.54 shares of common stock of Hachijuni Bank will beallotted. However, no shares will be allotted through the Share Exchange for the 152,000 shares of common
stock of Nagano Bank held by Hachijuni Bank (as of December 31, 2022).
(Note 2) Number of new shares to be issued by Hachijuni Bank in the Share Exchange (Planned)
Common stock of Hachijuni Bank: 22,664,539 shares (planned)
The number of common stocks stated above was calculated based on 9,259,356 shares considering the number
of issued and outstanding common stocks of Nagano Bank (9,258,856 shares) as of December 31, 2022 and the
500 shares of common stock under the assumption that all of the stock acquisition rights issued by Nagano Bank(a total of five rights) are to be exercised within 30 days from the day after such date of approval in accordancewith the provisions of the issuing guidelines, etc., and converted to 500 shares of common stock of Nagano Bank
subject to the approval of the Share Exchange by the Extraordinary Meeting of Shareholders of Nagano Bank tobe held on March 24, 2023. Provided, however, Nagano Bank plans to cancel all of its treasury shares no later
than the time immediately before the Share Exchange takes effect (hereinafter, the “Record Time”). Accordingly,
the treasury shares of Nagano Bank as of December 31, 2022 (184,309 shares) have been excluded from theabove calculation of issuance of new shares of Hachijuni Bank. Also, the 152,000 shares of common stock of

3

Nagano Bank held by Hachijuni Bank as of December 31, 2022 have been excluded from the above calculationof issuance of new shares of Hachijuni Bank.
The number of new shares to be allotted by Hachijuni Bank may change in case the number of treasury stocks
of Nagano Bank as of December 31, 2022 changes by the Record Time, including due to the exercise of the rightto request the purchase of shares by the shareholders of Nagano Bank.
(Note 3) Handling of shares less than one unit
When the Business Integration is consummated, shareholders of Nagano Bank who receive shares constituting
less than one unit (100 shares) of Hachijuni Bank (hereinafter, the “Shares Constituting Less Than One Unit”)
in the Share Exchange may not sell Shares Constituting Less Than One Unit on the Tokyo Stock Exchange Inc.
(hereinafter, the “Tokyo Stock Exchange”) or any other financial instruments exchange. Shareholders who will
own such Shares Constituting Less Than One Unit may request Hachijuni Bank to purchase the Shares
Constituting Less Than One Unit pursuant to the provisions of Article 192, Paragraph 1 of the Companies Act.
In addition, such shareholders may request Hachijuni Bank to sell the number of shares needed to constitute one
unit together with the Shares Constituting Less Than One Unit held by such a shareholder pursuant to theprovisions of Article 194, Paragraph 1 of the Companies Act and the Articles of Incorporation of Hachijuni
Bank, unless Hachijuni Bank does not have the number of treasury stock referred to in the request of sale.
(Note 4) Processing of fractional shares less than one stock
In case fractional shares are included in the number of shares of Hachijuni Bank to be allotted in the Share
Exchange, Hachijuni Bank shall deliver monies in the amount corresponding to such factional share to theshareholders of Nagano Bank who will receive such fractional shares, pursuant to the provisions of Article 234of the Companies Act and other relevant laws and regulations.
(4) Handling of stock acquisition rights and bonds with stock acquisition rights in conjunction with the Share Exchange
Upon the Share Exchange, subject to the approval of the Share Exchange by the Extraordinary Meeting of Shareholders
of Nagano Bank to be held on March 24, 2023, all of the stock acquisition rights issued by Nagano Bank (a total of fiverights) are to be exercised within 30 days from the day after such date of approval in accordance with the provisions of
the issuing guidelines, etc., and converted to 500 shares of common stock of Nagano Bank. Nagano Bank has not issued
bonds with stock acquisition rights.
(5) Handling of the dividend of surplus
The Banks agreed that Hachijuni Bank may pay a maximum of 40% consolidated dividend payout ratio (Hachijuni
Bank's consolidated net income per share for the fiscal year ending March 31, 2023 multiplied by 40% (rounded up to
the nearest yen) less 10 yen, which is Hachijuni Bank's interim dividend for the fiscal year ending March 31, 2023) per
share dividend of surplus to shareholders as of March 31, 2023, and that Nagano Bank may pay a maximum of 25 yen
per share dividend of surplus to shareholders as of March 31, 2023, and that the Banks may not pay a dividend of surplus
after today with any record date before the Effective Date of the Share Exchange. The Banks also agreed that Hachijuni
Bank will exercise its voting rights at the Annual Meeting of the General Shareholders of Nagano Bank scheduled to beheld in June 2023, which will be necessary for Nagano Bank to distribute the dividend of surplus to the shareholders ofNagano Bank as of March 31, 2023, as described above.
5.

Basis for the details of allotment in the Share Exchange(1) Basis and reason for the allotment
As stated in the above “1. Background of the Business Integration,” the Banks reached a basic agreement on promoting
discussions and analysis towards the Business Integration on September 28, 2022, and engaged in discussions and review
by the establishment of the Business Integration Committee to implementing the Business Integration with June 1, 2023
(planned) as the Effective Date of the Share Exchange.
As stated in below “(4) Measures to ensure fairness,” to secure the fairness of the compensation for the Share Exchange
and fairness of the Business Integration otherwise, Hachijuni Bank has selected Nomura Securities Co., Ltd. (hereinafter,“Nomura Securities”) as its third-party valuation institution, and Iwata Godo Attorneys and Counsellors at Law as thelegal advisor and commenced review of the Business Integration. As a result of careful discussion and review referencing
the share exchange ratio calculation report dated January 19, 2023, received from the third party valuation institution
Nomura Securities, and the legal advice by the legal advisor Iwata Godo Attorneys and Counsellors at Law, Hachijuni
Bank determined that implementing the Business Integration based on the Share Exchange Ratio stated in above “4. (3)4Details of the Allotment in the Share Exchange” is appropriate.
On the other hand, as stated in below “(4) Measures to ensure fairness,” to secure the fairness of the compensation for
the Share Exchange and fairness of the Business Integration otherwise, Nagano Bank has selected Daiwa Securities Co.
Ltd. (hereinafter, “Daiwa Securities”) as its third-party valuation institution, and Nagashima Ohno & Tsunematsu as its
legal advisor and commenced review of the Business Integration. As a result of careful discussion and review referencing
the share exchange ratio calculation report dated January 19, 2023, received from the third party valuation institution
Daiwa Securities, and the legal advice by the legal advisor Nagashima Ohno & Tsunematsu, Nagano Bank determinedthat implementing the Business Integration based on the Share Exchange Ratio stated in above “4. (3) Details of the
Allotment in the Share Exchange” is appropriate.
The Banks have comprehensively considered factors including the market price of the shares, financial status, and future
outlook based on the result of mutual due diligence referencing the results of calculation and analysis by the third-party
valuation institutions and advice by the legal advisors, and engaged in a series of careful negotiation and discussion on
the Share Exchange Ratio between the Banks. Consequently, the Banks have ultimately reached a decision that the Share
Exchange Ratio stated in the above “4. (3) Details of the Allotment in the Share Exchange” is appropriate, and agreed
on the Share Exchange Ratio in the Share Exchange with a resolution by the respective Board of Directors of the Banks
held today.
(2) Matters concerning the calculation(i)

The names of valuation institutions and their relations with the Banks

Nomura Securities and Daiwa Securities, who are the financial advisor (third-party valuation institutions) ofHachijuni Bank and Nagano Bank, respectively, are third-party valuation institutions independent from the Banks,
who do not fall under related parties and do not have a material conflict of interest that must be stated concerning
the Business Integration.
(ii)

Overview of the calculation

To ensure fairness of the calculation of the Share Exchange Ratio to be used for the Share Exchange, Hachijuni
Bank selected Nomura Securities, and Nagano Bank selected Daiwa Securities as the respective third-party valuation
institutions and separately requested the calculation and analysis of the Share Exchange Ratio.
Considering that the common stock of Hachijuni Bank is listed on the Tokyo Stock Exchange’s Prime Market andthe market price is available, Nomura Securities calculated the value of the common stock of Hachijuni Bank using
the average Market Share Price Analysis.
Nomura Securities calculated the value of the common stock of Nagano Bank by applying: (a) the average Market
Share Price Analysis considering that the common stock of Nagano Bank is listed on the Tokyo Stock Exchange’s
Standard Market and the market price is available; (b) the Comparable Companies Analysis considering that Nagano
Bank has multiple comparable listed companies to enable estimation of the value of its stock; and (c) the dividend
discount model method (hereinafter, the “DDM Analysis”) which analyzes the value of the stock by discounting the
profit attributable to shareholders after retained earnings, etc., necessary for maintaining the particular capital
structure to the present value using the cost of capital which is widely utilized for valuation of financial institutions,
to reflect the status of the future business activities to the valuation. Ranges for the Share Exchange Ratio calculatedwith the value of one common stock of Hachijuni Bank as “1” are as stated below:

1
2
3
4

Calculation method
Market Share Price Analysis(Reference Date 1)
Market Share Price Analysis(Reference Date 2)Comparable Companies Analysis
DDM Analysis

Range of Share Exchange Ratio
2.48 – 2.75
2.45 – 2.54
2.04 – 2.65
2.14 – 3.10

For the average Market Share Price Analysis, the business day before September 28, 2022 on which the executionof the Basic Agreement was announced, is set as the reference date for the calculation (hereinafter, “Reference Date
1” in this press release), and the closing price on Reference Date 1 and simple average of the closing price on trading
days for the period of five business days, one month, three months, and six months before Reference Date 1 havebeen applied. In addition, January 19, 2023, is also set as the reference date for the calculation (hereinafter,“Reference Date 2” in this press release), and the closing price on Reference Date 2 and simple average of the closing

5

price on trading days for the period of five business days, one month, three months, and six months before Reference
Date 2 have been applied.
Nomura Securities calculated the Share Exchange Ratio using the information provided by the Banks and publicly
available information under the assumption that such materials and information are all accurate and complete andhave not independently reviewed the accuracy or completeness of such information. In addition, independent
assessment, appraisal, or valuation have not been performed on the assets and liabilities (including contingent
liabilities) of the Banks and their associated companies (referring to “Associated Companies” as defined in Article
8, Paragraph 8 of the Regulation on Terminology, Forms, and Preparation Methods of Financial Statements;
hereinafter the same), including analysis and assessment of independent assets and liabilities, and no requests havebeen made to third party agencies for appraisal or evaluation. Nomura Securities’ Share Exchange Ratio calculationreflects information and economic conditions up to January 19, 2023. The financial forecasts by Nagano Bank
(including profit plans and other information) are based on Nagano Bank's future forecasts for the fiscal year ending
March 31, 2023 and thereafter, which incorporates various factors such as the business plan provided by Nagano
Bank and confirmed by Hachijuni Bank, interviews with Nagano Bank and publicly available information. The sole
purpose of Nomura Securities’ calculation is to be used as reference by the Board of Directors of Hachijuni Bank to
discuss the Share Exchange Ratio.
There are no fiscal years with a significant increase or decrease in profits in the future financial forecasts of Nagano
Bank for the period that Nomura Securities based its DDM Analysis valuation.
Daiwa Securities calculated the Share Exchange Ratio for the Banks by applying: (a) the Market Share Price
Analysis considering that the common stocks of Hachijuni Bank and Nagano Bank are listed on the Tokyo Stock
Exchange’s Prime Market and Standard Market, respectively, and the market price of the stocks are available; (b)the Comparable Companies Analysis considering that the Banks have multiple comparable listed companies toenable estimation of the value of stocks; and (c) the DDM Analysis to reflect the status of the future businessactivities to the valuation.
The results of the Share Exchange Ratio calculation using the above-stated valuation methods with the value of one
common stock of Hachijuni Bank as “1” are as stated below:

12
3

Calculation method
Market Share Price Analysis
Comparable Companies Analysis
DDM Analysis

Range of Share Exchange Ratio
2.45～2.54
1.68～2.51
2.41～3.23

For the Market Share Price Analysis, the date of the share exchange ratio calculation report, January 19, 2023,(Reference Date 2) was used as the reference date for the calculation, and the ratio was calculated using theclosing price of the shares on Reference Date 2, and the average closing prices for the periods of one, three, andsix months to Reference Date 2.
Daiwa Securities calculated the Share Exchange Ratio using the materials and information provided by the Banksand publicly available information as is in principle, assuming that all materials and information used for the analysis
and review were accurate and complete. Daiwa Securities have not independently reviewed the accuracy orcompleteness of such materials and information, and it is not obligated to do so. In addition, Daiwa Securities havenot performed an independent assessment, appraisal, or valuation on any assets and liabilities, including analysis
and evaluation of individual assets and liabilities (including but not limited to financial derivatives, off-balance sheet
assets and liabilities, and other contingent liabilities) of the Banks and their associated companies, including analysis
and assessment of independent assets and liabilities, and no requests have been made to third party agencies forassessment, appraisal or evaluation. Daiwa Securities have assumed that the business plans, financial forecasts, andother information concerning the future were prepared based on the best forecast and judgment at such time by therespective management of the Banks and in accordance with reasonable and appropriate procedures. With theconsent of Nagano Bank, Daiwa Securities have relied on the business plans, financial forecasts, and otherinformation concerning the future of Nagano Bank and Hachijuni Bank without independent review of the accuracy,
appropriateness, or feasibility of such information. Calculation of the Share Exchange Ratio by Daiwa Securities isbased on the financial, economic, and other situations as of January 19, 2023. A significant increase or decrease inprofits is not expected in the future business plans by the Banks underlying the DDM Analysis calculation by Daiwa
Securities.
(3) Prospect and reason for the delisting
If the Share Exchange is realized, Nagano Bank will become a wholly-owned subsidiary of Hachijuni Bank as of6the Effective Date (June 1, 2023, planned). Consequently, the common stocks of Nagano Bank are to be delisted by
May 30, 2023, pursuant to the Delisting Criteria of the Tokyo Stock Exchange.
On the other hand, the common stocks of the Hachijuni Bank, which will be the compensation for the Share
Exchange, are listed on the Tokyo Stock Exchange and continue to be available for trading on the Tokyo Stock
Exchange.
(4) Measures to ensure fairness
Hachijuni Bank has implemented the following measures to ensure fairness of the Business Integration:(i)

Obtaining a share exchange ratio calculation report by an independent third-party valuation institution
To ensure fairness of the Business Integration, Hachijuni Bank has selected Nomura Securities as its thirdparty valuation institution as stated in above “(1) Basis and reason for the allotment,” and obtained a shareexchange ratio calculation report to use as the basis of agreement on the Share Exchange Ratio to be applied
to the Share Exchange. Hachijuni Bank has engaged in negotiation and discussion with Nagano Bank
referencing the analysis and opinions of Nomura Securities as its third-party valuation institution, and at its
Board of Directors’ meeting held today, resolved to implement the Share Exchange with the Share Exchange
Ratio stated in above “4. (3) Details of the allotment in the Share Exchange.”
Hachijuni Bank has not obtained an opinion (fairness opinion) from Nomura Securities on the appropriatenessof the Share Exchange Ratio from a financial point of view.

(ii)

Advice from an independent law firm
Hachijuni Bank has obtained legal advice from Iwata Godo Attorneys and Counselors at Law, a legal advisor
independent from the Banks, on the decision-making methods, processes, and other procedures of Hachijuni
Bank concerning the Business Integration to ensure fairness and appropriateness of the decision-making of
the Board of Directors.

On the other hand, Nagano Bank has implemented the following measures to ensure fairness of the Business
Integration:(a) Obtaining a share exchange ratio calculation report by an independent third-party valuation institution
To ensure fairness of the Business Integration, Nagano Bank has selected Daiwa Securities as its third-party
valuation institution as stated in above “(1) Basis and reason for the allotment,” and obtained a share exchange
ratio calculation report to use as the basis of agreement on the Share Exchange Ratio to be applied to the
Share Exchange. Furthermore, Nagano Bank has engaged in negotiation and discussion with Hachijuni Bank
referencing the analysis and opinions of Daiwa Securities as its third-party valuation institution, and at its
Board of Directors’ meeting held today, resolved to implement the Share Exchange with the Share Exchange
Ratio stated in above “4. (3) Details of the allotment in the Share Exchange.”
Nagano Bank has not obtained an opinion (fairness opinion) from Daiwa Securities on the appropriatenessof the Share Exchange Ratio from a financial point of view.
(b) Advice from an independent law firm
Nagano Bank has obtained legal advice on its decision-making methods, processes, and other procedures ofNagano Bank concerning Business Integration from Nagashima Ohno & Tsunematsu, a legal advisor
independent from the Banks, to ensure fairness and appropriateness of the decision-making of the Board of
Directors.
(5) Measures to avoid conflicts of interest
Special measures have not been implemented as no specific conflicts of interest will arise from the Share Exchange
between Hachijuni Bank and Nagano Bank.
6.

Outline of the Parties to the Business Integration(1) Overview of the Companies

7Trade nameHead office address
Title and Name ofRepresentative
Description of business
CapitalEstablished
Number of issued
sharesFiscal Year
Total Assets(consolidated)
Net Assets(consolidated)
Balance of deposits(non-consolidated)
Outstanding balance ofloans (nonconsolidated)
Number of employees(consolidated)
Number of branches

Wholly-owning parent company after theshare exchange
The Hachijuni Bank, Ltd.
178-8 Ooaza Nakagosho Aza Okada,
Nagano-City(As of March 31, 2022)
Wholly-owned subsidiary after the shareexchange
The Nagano Bank, Ltd.
2-9-38 Nagisa, Matsumoto-City

President, Masaki Matsushita

President, Hitoshi Nishizawa

Banking52.2 billion yen
August 1, 1931

Banking13.0 billion yen
November 15, 1950

Common Stock: 511,103,000

Common Stock: 9,258,000

Year ending March 31

Year ending March 31

13,343.7 billion yen

1,267.2 billion yen

912.6 billion yen

50.0 billion yen

8,066.6 billion yen

1,073.8 billion

5,974.0 billion yen

647.8 billion yen

3,569

652

151
53
Capital
Hachijuni Bank owns 152,000 shares of Nagano Bank common
Relationshipstocks.
Human
Not applicable.
Relationship
Relationship of the BanksBusiness
None other than ordinary interbank transactions.
relationship
Status as Related
Not applicable.
Party
Major shareholders and The Master Trust Bank of
The Master Trust Bank of
13.58%
8.35%
their shareholding ratio Japan, Ltd. (Trust account)
Japan, Ltd. (Trust account)
Custody Bank of Japan, Ltd.
(Trust account)
Meiji Yasuda Life Insurance
Company(Standing proxy: Custody
Bank of Japan, Ltd.)
Nippon Life Insurance
Company (Standing proxy:
The Master Trust Bank ofJapan, Ltd.)STATE STREET BANKAND TRUST COMPANY
505223 (Standing proxy:
Mizuho Bank, Ltd.,
Settlement & Clearing
Services Division)
Shin-Etsu Chemical Co.,
Ltd.

3.95%

Nagano Bank Employee
Shareholding Association

6.97%

3.64%

Custody Bank of Japan, Ltd.
(Trust account)

4.19%

2.77%

Custody Bank of Japan, Ltd.
(Trust account No.4)

3.50%

2.76%

The Tochigi Bank, Ltd.

1.83%

2.41%

Kissei Pharmaceutical Co.,
Ltd.

1.83%

Showa Shoji Co., Ltd.

2.41%

Kankuro Ueshima

1.67%

MUFG Bank, Ltd.

2.07%

The Hachijuni Bank, Ltd.

1.67%

Aioi Nissay Dowa InsuranceCo., Ltd. (Standing proxy:

2.05%

DFA INTL SMALL CAP
VALUE PORTFOLIO

1.18%

8

Master Trust Company ofJapan, Ltd.)NORTHERN TRUST CO.
(AVFC) SUB A/C USLNON-TREATY (Standing
proxy: The Hong Kong andShanghai Banking
Corporation Limited, Tokyo
Branch, Custody Services
Dept.)(Standing proxy: Citibank
N.A., Tokyo Branch)

1.97%

Sompo Japan Insurance Inc.

1.12%

(2) Outline of performance for most recent three years (unit: million yen, unless otherwise stated)
The Hachijuni Bank, Ltd.
The Nagano Bank, Ltd.
Fiscal YearNet Assets (consolidated)
Total Assets(consolidated)
Net asset per share(yen)(consolidated)
Ordinary income(consolidated)
Gross operating profit(non-consolidated)
Net operating profit (nonconsolidated)Core business net
operating profit (nonconsolidated)
Ordinary income(consolidated)
Net profit attributable tothe parent company(consolidated)
Net income per share(yen)(consolidated)

FY2019FY2020

FY2021

748,432

909,694

912,698

51,10354,59750,074

10,470,547

12,160,638

13,343,796

1,140,580

1,165,410

1,267,229

1,512.45

1,850.68

1,856.25

5,633.59

5,998.49

5,492.29

163,637

152,604

151,349

22,852

21,89919,785

87,114

83,27481,754

11,466

11,689

11,14532,34030,37832,835

870

2,366

964

24,28428,472

28,917

2,467

3,445

1,617

33,44732,14738,047

2,172

1,799

1,917

22,07722,384

26,667

1,302

1,188

1,336

44.80

45.73

54.46

145.00131.83147.97

14.00

14.00

16.00

55.00

50.00

50.00

Dividend per share (yen)7.

FY2020

FY2021

Status after the Business Integration
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)

8.

FY2019Name
Address
Title and Name ofRepresentative
Description of business
CapitalFiscal YearNet Assets
Total Assets

Wholly-owning parent company after the share exchange
The Hachijuni Bank, Ltd.
178-8 Ooaza Nakagosho Aza Okada, Nagano-City
President, Masaki Matsushita
Banking52.2 billion yen
Year ending March 31
To be determined (details have not been determined at present)
To be determined (details have not been determined at present)

Outline of the accounting process
The accounting process for the Share Exchange falls under “acquisition” in the Accounting Standards for Business
Combinations, and the purchase method is expected to be applied with Hachijuni Bank as the acquiring entity andNagano Bank as the acquired entity. In addition, the amount of goodwill (or negative goodwill) to arise from the Share
Exchange is not determined as present and will be notified as soon as it becomes clear.

9.

OutlookAs a result of the Share Exchange, Nagano Bank is to become a consolidated subsidiary of Hachijuni Bank. The
impact, etc., on the consolidated earnings of Hachijuni Bank has yet to be determined. Occurrence of an event that9

requires announcement, such as the need for revision of financial forecasts, will be disclosed promptly.
10. Other
The execution of the Business Integration is subject to obtaining approval by the Meeting of the General Shareholders
of Nagano Bank for the Share Exchange Agreement and matters necessary for the Business Integration and on
obtaining the necessary permits and approvals by relevant authorities for implementing the Business Integration.
End of document(Reference) Consolidated earnings forecast for the current period and consolidated results for the preceding fiscal year
Hachijuni Bank (consolidated earnings forecast for the current period as announced on October 28, 2022)(unit: millions of yen)
Net profit attributable toOrdinary income
parent company(consolidated)(consolidated)
Earnings forecast for the current period
33,00023,000(Fiscal year ending March 31, 2023)
Consolidated results for the preceding year
38,047
26,667(Fiscal year ended March 31, 2022)
Nagano Bank (consolidated earnings forecast for the current period as announced on November 11, 2022)(unit: millions of yen)
Net profit attributable toOrdinary income
parent company(consolidated)(consolidated)
Earnings forecast for the current period
1,600
1,100
(Fiscal year ending March 31, 2023)
Consolidated results for the preceding year
1,917
1,336
(Fiscal year ended March 31, 2022)[Contact Information]
The Hachijuni Bank, Ltd.
The Nagano Bank, Ltd.

Planning and Coordination Department
General Planning Department

10

KimuraKobayashi

TEL 026-224-5512
TEL 0263-27-3312

The transactions pursuant to the share exchange described in this document involve securities of a Japanese company. The share exchange is subject to disclosure
requirements of Japan that are different from those of the United States. Financial information included in this document, if any, was excerpted from financial statements
prepared in accordance with foreign accounting standards that may not be comparable to the financial statements of United States companies.
It may be difficult for you to enforce your rights and any claim you may have arising under the 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 be able to sue a Japanese company or its officers or directors in a Japanese court forviolations of the 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 beaware that the issuer may purchase securities otherwise than under the share exchange, 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 conflict or discrepancy between this document
and the Japanese-language original, the Japanese-language original shall prevail in all respects.

Business Integration between Hachijuni
Bank and Nagano Bank

January 20, 2023

1

Table of Contents
1. Outline of the Business Integration
2. Background of the Business Integration

3. Basic Principle and Purpose of the Business Integration
4. Expected Synergies from the Business Integration2

1. Outline of the Business Integration
Hachijuni Bank and Nagano Bank (the “Banks”) will integrate business in June 2023 and promote
discussions and reviews towards early merger after the business integration.
 Format and Schedule of the Business Integration••

June 2023: Business integration(planned)

The Banks will execute the business integration(become a corporate group) on June 1, 2023,
through a share exchange with Hachijuni Bankas the wholly-owning parent company andNagano Bank as the wholly-owned subsidiary(Note).

The
Hachijuni
Bank, Ltd.

The Nagano
Bank, Ltd.

The Banks will promote discussions and reviews
with the basic policy to merge promptly after thebusiness integration.

(Note) Subject to obtaining the approval by the Meeting of theGeneral Shareholders of Nagano Bank and obtaining the necessary
permits and approvals by relevant authorities for implementing theBusiness Integration.

Early merger after the businessintegration (planned)

Surviving Bank
after Merger

The Hachijuni
Bank, Ltd.
Subsidiaries(12)

Subsidiaries(14)

The Nagano
Bank, Ltd.
Subsidiaries (2)January 20, 2023:

Execution of the Share Exchange Agreement andBusiness Integration Agreement
March 24, 2023 (planned): Extraordinary Meeting of the Shareholders ofNagano Bank
May 30, 2023 (planned): Delisting of Nagano Bank
June 1, 2023 (planned):
Business integration (become wholly-owned parent
and subsidiary) Share Exchange Ratio
For each share of common stock of Nagano Bank, 2.54 shares ofcommon stock of Hachijuni Bank will be allotted.
Share
Exchange
Ratio

The Hachijuni
Bank, Ltd.

The Nagano
Bank, Ltd.

1

2.54

3

2. Background of the Business Integration
As the financial and economic environment surrounding the Banks is expected to become increasingly difficult due to factors
including the prolonged low-interest rate environment, the Banks are expected to provide detailed functions and services,
expand to new business fields, and develop technologies suited during and after the COVID-19 pandemic and for
digitalization. Accordingly, the role of the Banks in the regional community will become increasingly important.
The Banks concluded that the best option for contributing to the advancement of stakeholders is to join forces under theshared mission of regional development to build a sound management foundation, reinforce financial intermediation
functions, and establish a sustainable business model. Therefore, the Banks agreed to execute the business integration.

Management Philosophy of the Banks

Change in Environment

 Change in demographics from thedecrease in birth rate and an aging
population
 Diversified needs of customers
due to the development of digitaltechnologies and decarbonization
The Nagano Bank, Ltd.
 Contraction of interest rate spread
Do our best for the happiness andbetween deposits and loans
prosperity of our customers, shareholders,caused by the prolonged lowand employeesinterest rate environment
 Change in a competitiveenvironment with entry from otherindustries
The Hachijuni Bank, Ltd.
Stick firmly to sound banking principles,
thereby contributing to the development of
the regional community

Expectations for the Banks Stable management
 Provision of detailed functions
and services
 Expansion to new business fields
 Corresponding to thetransformation of the social
structure during and after the
COVID-19 pandemic
 Support for GX and DX initiatives

The Banks with a common mission are to join forces to become anew banking group that can grow with the regional community4

3. Basic Principle and Purpose of the Business Integration
The Banks will promote Business Integration under the assumption of equal footing, realize quick integration,and combine the expertise, relationships, and human assets of the Banks to transform into a bank that can growwith the region by providing better value to customers, the regional community, shareholders, employees, etc.

Prompt integration of the Banks: “From competition to co-creation”

×Know-how

Relationships

Human
resources

×

Provide better value
Customers

Community

Shareholders

Employees,
etc.

54. Expected Synergies from the Business Integration (1)1Utilization of human capital and transformation of corporate culture
The Banks will transform their corporate culture to respond to the change of times, with maximum utilizationof human capital, the driver of our growth and development.

Utilization of human capital and transformation of corporate culture
Respond to changing times
Optimalresource
allocation

Early integration
Resource
exchange

Diversity&
Inclusion




Joint
eventsJoint
trainingTraining

Careerdevelopment

Attracting
talentInitiatives to integrate
human resources
Reallocation to growth areas
Workstyle reform /promotion of participation
by diverse human resources
Strengthening recruitment of
new and experienced hires
by enhancing the brandCorporate culturethat encourages
taking on challenges

Support for autonomous
Growth andcareer development
satisfaction
External training/secondment
to specialist areas
Grow with the
Human resource operation
with consideration to career regional communityand life planningBecome a new banking group6

4. Expected Synergies from the Business Integration (2)2Enhancement of financial intermediation functions and financial services
By combining the Banks’ expertise, data, and networks and utilizing the group functions, we will strengthen support for corebusiness and promote the development and growth of regional industries. In addition, the Banks will improve theconvenience of various services and provide services corresponding to their customers’ needs by expanding digital channels
and services.
The Hachijuni Bank, Ltd.

Utilize groupfunctions

The Nagano Bank, Ltd.

Provide financial
services

Utilize expertiseand networks of
the Banks

Corporate customers and business owners
 Provide financial services that contribute to regional industry vitalization
 Share management issues and support resolution/growth Support business succession and M&A, etc., according to the businesslifecycle

Provide diverse
consulting
products

Provideservices in new
business fields

Retail customers
 Support asset formulation suited to the life stage
 Support succession of important assets
 Provide lifestyle-supporting services, etc.

Development and growth of the regional community
 Support resolution of issues for the regional community, including with support for DX, GX, industry development, and support forentrepreneurship Resolve issues together with regional stakeholders in a comprehensive manner and co-create, etc.

7

4. Expected Synergies from the Business Integration (3)3Enhancing expansion of business fields
The Banks will contribute to the further development of regional industries and the improvement of residents’ quality of life
by consolidating our human assets, data, and expertise to enhance comprehensive financial services, while also
expanding new business fields that resolve regional issues.

Develop new business
ExpandDiversify
Regional trading companies
businessbusiness
fieldsElectricity businessTotal financial service
Management
Deepen lifestylesupport
DX/GX consulting
supporting business
Equity financeUtilize human capital
Provide fundamental services

Business succession /M&A
Life design support

Asset management

Utilization of
branches, etc.

Digital marketing84. Expected Synergies from the Business Integration (4)4Strengthening business foundation
The Banks will build a sound business foundation that will enable continued contribution to the regional community byproviding stable functions and services. This will be achieved through the promotion of improved business efficiency withthe consolidation and elimination of redundant branches, etc., streamlining and integration of headquarter organizations,and sharing of systems and administration, etc.

Optimize branch network
 Maintain
convenience Optimize
branchnetwork

Share administration and IT
 Integrate coresystems/subsystems
 Sharedadministrative
procedures

Promote digitalization

Consolidate headquarters andgroup functions
 Integrate
headquarterorganizations
 Consolidate
group functions

Improve business productivity and raise efficiency oforganizational operation

Allocate generated management resources to growth areas

Build sound management foundation that can continue contribution to regional community

9