2021.3

2021.3

Contents

Profile............................................................................................................... 1
Consolidated Financial Statements................................................................. 5
Corporate Information.................................................................................... 61

Profile
Innovative Action
Our Mission as a Regional Bank
Since its establishment in 1899, the Fukui Bank has remained firmly committed to sound management and growth in partnershipwith the regional community. The Bank owes its position today to the loyal support of its customers, shareholders, and otherstakeholders.
In October 2015, we established the Bank’s corporate philosophy of striving to cultivate and promote regional industry andachieving prosperous living conditions for the region’s population, and have been working together as the Fukui Bank Group forthe advancement of the region.
Recently, regional financial institutions have faced a continuation of uncertain prospects arising in the main from thecontinuing long-term policy by the government of monetary easing, banking market entries by other industries, shrinking
population in our regional base, the advancement of demographic aging, and the spread of the novel coronavirus. Conversely,
though, the development of the traffic network in Fukui—particularly of the Chubu-Jukan Expressway and with the extension of
the Hokuriku Shinkansen—is predicted to have a major positive impact on the business environment in the prefecture. In
response to this turbulent environment, the Bank declared the one-year period of fiscal 2021 to be “A term in which to improveorganizational capabilities in short order.” With the three themes of “Demonstrating consulting functions,” “Reforming work
processes,” and “Revolutionizing personnel development,” the Bank will contribute to the sustainable development of Fukui
Prefecture as well as gain a robust management foundation and construct a strong management culture.
Together, all employees and executive officers of the Fukui Bank Group will keep striving to fulfill the expectations of ourshareholders, customers, and members of the regional community. To this end, we would like to request your continued support
and patronage.

Corporate Governance
In June 2007, the Fukui Bank transitioned to a committee-based governance structure (nominating and other committees are
now in place). Characteristics of this organizational structure include strengthened governance structures through the separationof executive and supervisory functions, accelerated executive functions by delegating decision-making authority, and improved
management transparency by establishing three committees on which the majority of members are outside directors. As well as
having outside directors chair even those three committees, we are working to put in place comprehensive corporate
governance in line with the following fundamental principles.
(1) T he Fukui Bank will respect the rights held by all of its shareholders and will work to guarantee all shareholders are treatedequally.
(2) The Fukui Bank will pay consideration to how to benefit all of its stakeholders, including its shareholders, and, where
relevant, will strive to cooperate with said stakeholders.
(3) T he Fukui Bank will disclose all relevant information, including non-financial data, and will endeavor to guarantee corporate
information is transparent.
(4) The Fukui Bank will construct a system in which independent outside directors play a central role and, by utilizing thatsystem, will commit ourselves to improving the efficacy of our auditing capabilities in regards to overseeing the executionof duties by the board of directors.
(5) T he Fukui Bank, in order to increase corporate value in the medium to long term, and to achieve sustainable growth, will
undertake to carry out constructive dialogue with all of its shareholders.
The Bank will continue to further strengthen its corporate governance structure and provide a wide range of products andservices. This will allow it to fulfill its role as both an incorporated company and a regional financial institution. Going forward, theBank will continue to strive to be a financial institution that truly deserves your trust.

1

Consolidated Financial Highlights
The Fukui Bank, Ltd. and its consolidated subsidiaries

Thousands of
U.S. dollars

Millions of yen

For the Year:
Total income...................................................................
Total expenses...............................................................
Income before income taxes...............................................
Net income attributable to owners of parent..................
Net income per share of common stock.........................
At Year-end:
Deposits.........................................................................
Loans and bills discounted.............................................
Trading account securities..............................................
Securities.......................................................................
Total assets....................................................................
Total net assets..............................................................

2020

2021

Years ended March 31

2019

2021

¥

42,53638,2744,262
2,553
107.48¥40,87237,705
3,166
2,140
89.83

¥

41,651
37,2174,433
3,158
132.69¥2,774,895
1,790,164482
725,306
3,513,315¥

2,488,546
1,719,190
591
660,304
2,951,019¥

2,400,198
1,661,228
570
613,594
2,802,693$ 25,064,542
16,169,855
4,356
6,551,413
31,734,402

131,5221,233,924

136,607

123,759$384,216
345,71438,502
23,0670.97

Notes:
1. The U.S. dollar amounts represent translation of Japanese yen at the exchange rate of ¥110.71 per US$1.00 on March 31, 2021.
The inclusion of such dollar amounts is solely for convenience and is not intended to imply that Japanese yen have been or could be readily converted, realized, or settled
in U.S. dollars at this or any other exchange rate.
2: On October 1, 2017, the Bank implemented a consolidation of shares at the ratio of one share per 10 shares.
For the purposes of calculating the amount of net income per share of common stock for the period under review, the share consolidation is taken as having been implemented at the beginning of fiscal year ended March 31, 2017.

2

Financial & Economic Environments

Cash Flows

The Japanese economy in the first half of the period underreview moved into an extremely difficult situation due tothe implementation of strict public health measures, suchas restricting people from leaving home unnecessarily andpausing sales and production activities, to combat the spreadof COVID-19. In the latter half of the year, economic activities
restarted and this caused the economy to improve. The speedof these improvements was kept to a gentle pace, however,by the sense of caution engendered by the pandemic. While
it is predicted that the economy will continue to improve as
virus countermeasures and economic activities gain ground,the trend for restrictions aimed at COVID-19—and the degreeof impact they have on the economy—mean that this couldchange. As such, we find ourselves in very uncertain times.
As for the regional economy of Fukui Prefecture, thesituation continues to be difficult due to the pandemic. There
are signs, though, of improvements ahead with a steady returnto production and personal consumption activities. Expectations
are also high for the prefecture’s economic base as a highdegree of public investment continues, particularly focused on
work related to the extension of the Hokuriku Shinkansen to
Tsuruga. On the other hand, as the effects of the pandemic are
forecast to continue for the time being, the resulting economic
deceleration in the region—and the impact on corporate
activities and personal consumption—requires close attention.

Consolidated net cash flows rose by ¥483,845 million provided
by operating activities, ¥53,767 million was used in investing
activities, and ¥976 million used in financing activities. As
a result, cash and cash equivalents at the end of the year
were ¥903,247 million, which increased by ¥429,092 million
compared with the previous year.
Net cash provided by operating activities
Net cash provided by operating activities was ¥483,845 million.
Main factors behind the increase were income from an increasein deposits and borrowed money that exceeded expenditure,reflecting factors such as increased lending. Net cash provided
by operating activities was ¥383,979 million higher than in theprevious fiscal year.
Net cash used in investing activities
Net cash used in investing activities was ¥53,767 million.
The main factor behind the increase was expenditure for theacquisition of securities, which exceeded income from sales
and redemptions of securities. Net cash used in investing
activities was ¥3,778 million lower than in the previous fiscal
year.
Net cash used in financing activities
Net cash used in financing activities was ¥976 million, reflecting
the payment of dividends. Net cash used in financing activitieswas ¥2,238 million lower than in the previous fiscal year.

Consolidated Performance Review

Issues to Be Addressed

The consolidated results of the Bank and its five consolidated
subsidiaries in the period under review developed as follows.
Consolidated ordinary income increased by ¥1,651 million
from the previous year to ¥42,381 million mainly due to anincrease in gains from interest and dividends on securities andsales of stocks. Ordinary expenses increased by ¥830 million
from the previous year to ¥38,146 million mainly due to anincrease in losses on sales of government bonds.
As a result, ordinary profit increased by ¥821 million from theprevious year to ¥4,234 million. Net income attributable to ownersof the parent increased by ¥413 million from the previous year to¥2,553 million.
In terms of reportable segments, ordinary income frombanking operations increased by ¥1,210 million from the previous
year to ¥35,157 million. Segment profit increased by ¥803 million
from the previous year to ¥3,855 million. Ordinary income fromleasing operations decreased by ¥654 million from the previous
year to ¥7,144 million, while segment profit decreased by ¥974
million to ¥330 million. Ordinary income from “Others” outsideof the reportable segments decreased by ¥188 million to ¥644
million, and segment profit decreased by ¥207 million fromthe previous year to ¥41 million. Each amount above included
intersegment transactions.

The Bank and other regional financial institutions have been
facing increasingly uncertain prospects arising in the mainfrom the continuing long-term policy by the government ofmonetary easing, banking market entries by other industries,
shrinking population in our regional base and the advancementof demographic aging. In addition, under the widening impact of
COVID-19 spread on the regional economy, harsh conditions are
predicted to continue in the near term.
However, Fukui Prefecture will benefit from an improved traffic
network after the development of the Chubu-Jukan Expressway
and the extension of the Hokuriku Shinkansen into the prefecture,
which are expected to greatly change the business environment.
Clearly, this will also bring a diversity of risks and opportunities
for the Bank. With an eye on recovery and development of theregional economy post-pandemic, the Bank feels firmly that it will
be necessary to further demonstrate its consulting functions.
In fiscal 2021, the Bank must, in these trying times, work to
improve its organizational capabilities in a short timeframe. That is
why it is implementing a one-year, short-term management plan
entitled “Toward Realizing Our Corporate Philosophy (Chapter 2).”
One key concept behind the plan is an “Unchanging approach”
toward customers and the region, and the Bank will continue withactivities based on “Understanding business” and “Understanding
customers,” which the Bank is implementing in an integrated
manner. The other key concept is the “Evolving organization” of3the Group, which refers to efforts to bring about more sustainable
management through reforms to the Group’s organizational
structure and culture. These two key concepts form the basis forthe three themes and a sixteen-point action plan the Bank will
work to steadily implement. In that way, the Bank will contributeto the sustainable development of Fukui Prefecture as well as
gain a robust management foundation and construct a strong
management culture.
By working to advance the F-project (a comprehensive
collaborative project aimed at developing the regional economy)in conjunction with the Fukuho Bank, Ltd., the Bank will achieve
greater synergies as a group sooner and maximize the group’s
effectiveness.
Going forward, to work toward achieving the goals of thecorporate philosophy, its reason for being, the Fukui Bank Groupwill continue to concentrate its collective strengths, coordinate
and collaborate with relevant local organizations, and fulfill the
Bank’s central role in revitalizing Fukui Prefecture.

4

Consolidated Financial Statements
The Fukui Bank, Ltd. and its consolidated subsidiaries

Consolidated Balance Sheets
Thousands of
U.S. dollars

Millions of yen

2020

2021

March 31

Assets:Cash and due from banks (Notes 10 and 23)..........................................
Monetary claims bought..........................................................................
Trading account securities (Note 23).......................................................
Money held in trust (Note 25)...................................................................
Securities (Notes 3, 4, 10, 15, 23 and 24)................................................
Loans and bills discounted (Notes 5, 6, 7, 8, 9, 10, 11 and 23)................
Foreign exchange (Note 9).......................................................................
Other assets (Notes 10 and 27)...............................................................
Tangible fixed assets (Notes 12, 13, 14, 30 and 31)..................................
Intangible fixed assets ............................................................................
Deferred tax assets (Note 29)..................................................................
Customers’ liabilities for acceptances and guarantees (Note 15).............
Allowance for doubtful receivables (Note 23)...........................................
Total assets..........................................................................................
Liabilities:
Deposits (Notes 10 and 23).....................................................................
Call money and bills sold (Note 10)..........................................................
Payables under repurchase agreements (Notes 10 and 23)....................
Payables under securities lending transactions (Notes 10 and 23)..........
Borrowed money (Notes 10 and 23)........................................................
Foreign exchange....................................................................................
Other liabilities (Note 27 and 30)..............................................................
Provision for bonuses..............................................................................
Provision for directors’ bonuses..............................................................
Liability for retirement benefits (Note 28)..................................................
Provision for share-based compensation for executive officers...............
Provision for reimbursement of deposits.................................................
Provision for contingent losses................................................................
Provision for losses on earthquake-proofing measures...........................
Provision for point loyalty programs.........................................................
Provision for losses on guarantees..........................................................
Deferred tax liabilities (Note 29)...............................................................
Deferred tax liabilities for land revaluation (Note 12).................................
Acceptances and guarantees (Note 15)...................................................
Total liabilities.......................................................................................
Net assets (Note 20):
Capital stock...........................................................................................
Capital surplus.........................................................................................
Retained earnings...................................................................................
Treasury shares.......................................................................................
Total shareholders’ equity....................................................................
Valuation difference on available-for-sale securities (Note 26)..................
Deferred gains (losses) on hedges..........................................................
Revaluation reserve for land (Note 12).....................................................
Remeasurements of defined benefit plans...............................................
Total accumulated other comprehensive income.................................
Total net assets................................................................................
Total liabilities and net assets...........................................................

5

2021

¥

903,663
906
482
6,502
725,306
1,790,164
7,533
53,21530,294
264
935
8,567
(14,521)¥474,536
951
591
6,504
660,304
1,719,190
8,538
54,31627,758
310
2,772
8,953
(13,707)$

8,162,435
8,185
4,356
58,7336,551,413
16,169,855
68,052
480,672
273,6392,388
8,450
77,390(131,166)¥

3,513,315¥

2,951,019$

31,734,402¥

2,774,895—
71,947
8,673
475,895
99
24,604
229
8
5,373
166
228
183
312
66
70
2,957
2,426
8,567

¥

2,488,546
3,809
61,1588,090
217,183
195
30,109
228
8
5,405
144
272
212
452
54
—
0
2,435
8,953

$

25,064,542—
649,870
78,347
4,298,577
895
222,245
2,076
75
48,539
1,508
2,066
1,658
2,825
601
632
26,71821,914
77,390¥3,376,707¥

2,827,260$

30,500,478¥

17,965
5,972
89,132(617)
112,452
18,709(27)
5,471
124,155
136,607¥

17,965
5,972
87,758(844)
110,852
7,412
(1)
5,494
1
12,907
123,759$

162,275
53,946805,095(5,577)
1,015,739
168,995(248)
49,424
14
218,185
1,233,924¥

3,513,315¥

2,951,019$

31,734,402

Consolidated Statements of Operations
Thousands of
U.S. dollars

Millions of yen

2020

2021

For the years ended March 31

Income:Interest on loans and discounts...............................................................

¥

16,031¥2021

16,256$

144,806

Interest and dividends on securities........................................................

8,230

6,827

74,347

Other interest income..............................................................................

736

664

6,652

Fees and commissions............................................................................

7,666

7,995

69,252Other operating income...........................................................................

7,735

7,332

69,874

Other income (Note 16)...........................................................................

2,135

1,796

19,285

Total income........................................................................................

42,53640,872384,216

Expenses:
Interest on deposits.................................................................................

249

475

2,255

Interest on borrowings.............................................................................

(82)

712

(746)

Other interest expenses..........................................................................

80

290

731

Fees and commissions payments...........................................................

2,999

2,980

27,093

Other operating expenses.......................................................................

8,962

6,491

80,956

General and administrative expenses (Note 17).......................................

23,194

22,486

209,506

Other expenses (Note 18)........................................................................

2,869

4,269

25,919Total expenses.....................................................................................

38,27437,705

345,714

Income before income taxes

4,262

3,166

38,502

Income taxes—current (Note 29)

1,705

1,535

15,408

Income taxes—deferred (Note 29)
Net income

3

(781)

27

2,553

2,412

23,067

Net income attributable to non-controlling interests272—

Net income attributable to owners of parent

¥

2,553

¥

2,140

—
$

Yen

Net income per share of common stock (Note 34)¥

107.48¥23,067
U.S. dollars

89.83

$

0.97

Consolidated Statements of Comprehensive Income
Thousands of
U.S. dollars

Millions of yen

2020

2021

For the years ended March 31

Net income................................................................................................

¥

2,553

¥

2021

2,412

$

23,067

Other comprehensive income (loss) (Note 19).........................................
Valuation difference on available-for-sale securities.............................
Deferred gains (losses) on hedges.......................................................
Adjustments for retirement benefits.....................................................
Comprehensive income (loss)..................................................................
Comprehensive income (loss) attributable to owners of parent............

11,27011,296(25)(0)
13,824
13,824(6,731)(6,763)37(5)(4,318)(4,589)101,801
102,037(234)(2)
124,868
124,868

Comprehensive income attributable to non-controlling interests.........

—

270

—

6

Consolidated Statements of Changes in Net Assets
Previous fiscal year (From April 1, 2019 to March 31, 2020)(Millions of yen)

Accumulated othercomprehensive income

Shareholders’ equity

Balance at the start of the period

Capitalstock

SubValuation Deferred
Total ac- scription Non- Total net
RemeasureRecontrolling
Total difference on
gains valuation ments of de- cumulated rights to interests assets
Capital Retained Treasury
other com- sharessharehold- availablereserve
for
fined
benefit(losses)onsurplus earnings sharesers’ equity for-salelandplans prehensive
securities hedges
income17,9652,725 86,563(655) 106,598(1,204)(1,204)(1,204)

259

259

259

2,140

2,140

2,140

(539)
364

(539)
364

3,232

3,232

14,174

(39)

5,753

7

19,896228

4,798 131,522

Changes of items during theperiodDividends from surplus
Reversal of revaluation reserve
for land
Net income attributable toowners of parent
Purchase of treasury shares
Disposal of treasury shares
Change in ownership interest ofparent due to transactions with
non-controlling interests
Net changes of items otherthan shareholders’ equity

(539)
350

14
3,232

—

(6,761)

37

(259)

(5)

(6,988)(228)(4,798) (12,015)(4,798)

Total changes of items during theperiod

—

3,246

1,195

(188)

4,253

(6,761)

37

(259)

(5)

(6,988)(228)

Balance at the end of the period

17,965

5,972

87,758(844) 110,852

7,412

(1)

5,494

1

12,907—(7,762)— 123,759

Current fiscal year (From April 1, 2020 to March 31, 2021)(Millions of yen)

Accumulated othercomprehensive income

Shareholders’ equity

Balance at the start of the period

Capitalstock

SubValuation Deferred
Total ac- scription Non- Total net
Re- Remeasure- cumulated
controlling
Total difference onrights toassetsgains valuation ments of deCapital Retained Treasury
interests
othercomsharehold- availableshares
reservefor
finedbenefit(losses)onsurplus earnings sharesers’ equity for-salelandplans prehensive
securities hedges
income17,965

5,972

87,758(844) 110,852

7,412

(1)

5,494

1 12,907—— 123,759(1,203)(1,203)(1,203)

22

22

22

2,553

2,553

2,553

(1)
228

(1)
228

—

—

Changes of items during theperiodDividends from surplus
Reversal of revaluation reserve
for land
Net income attributable toowners of parent
Purchase of treasury shares
Disposal of treasury shares
Change in ownership interest ofparent due to transactions with
non-controlling interests
Net changes of items otherthan shareholders’ equity

(1)
228

0

11,296(25)(22)(0) 11,247——

11,247(0) 11,247——

12,8471—— 136,607

Total changes of items during theperiod

—

0

1,373

226

1,600

11,296(25)(22)

Balance at the end of the period

17,965

5,972

89,132(617) 112,452

18,709

(27)

5,471

7

24,155Current fiscal year (From April 1, 2020 to March 31, 2021)(Thousands of U.S. dollars)

Accumulated othercomprehensive income

Shareholders’ equity
Capitalstock

SubValuation Deferred
Total ac- scription Non- Total net
Re- Remeasure- cumulated
controlling
Total difference onrights toassetsgains valuation ments of deCapital Retained Treasury
other com- shares interests
sharehold- availablereserve
for
fined
benefit(losses)onsurplus earnings sharesfor-saleprehensive
ers’ equity
land
plans
securities hedges
incomeBalance at the start of the period 162,275 53,946 792,691(7,627) 1,001,285 66,957(14) 49,629

17 116,589—— 1,117,874

Changes of items during theperiodDividends from surplus
Reversal of revaluation reserve
for land
Net income attributable toowners of parent
Purchase of treasury shares
Disposal of treasury shares
Change in ownership interest ofparent to transactions with noncontrolling interests(10,868)(10,868)(10,868)

205

205

205

23,06723,06723,067

(10)
2,060

(10)
2,060

—

—

0

(10)
2,060

Net changes of items otherthan shareholders’ equity
Total changes of items during theperiodBalance at the end of the period

102,038

(234)

(205)

(3) 101,596—— 101,596

0 12,404

2,050 14,454 102,038

(234)

(205)

(3) 101,596—— 116,050

162,275 53,946 805,095(5,577) 1,015,739 168,995(248) 49,424

14 218,185—— 1,233,924—

8

Consolidated Statements of Cash Flows
Thousands of
U.S. dollars

Millions of yen

2020

2021

For the years ended March 31

Cash flows from operating activities
Income before income taxes.....................................................................
Depreciation..............................................................................................
Impairment loss.........................................................................................
Increase (decrease) in allowance for doubtful receivables.........................
Increase (decrease) in provision for bonuses.............................................
Increase (decrease) in provision for directors’ bonuses.............................
Increase (decrease) in liability for retirement benefits.................................
Increase (decrease) in provision for share-based compensation for executive officers....
Increase (decrease) in provision for reimbursement of deposits................
Increase (decrease) in provision for contingent losses...............................
Increase (decrease) in provision for losses on earthquake-proofing measures....
Increase (decrease) in provision for point card certificates.........................
Increase (decrease) in provision for losses on guarantees.........................
Gain on fund management........................................................................
Financing expenses...................................................................................
Loss (Gain) related to securities.................................................................
Loss (Gain) on money held in trust.............................................................
Foreign exchange losses (gains)................................................................
Loss (Gain) on disposal of non-current assets...........................................
Net decrease (increase) in loans and bills discounted................................
Net increase (decrease) in deposits...........................................................
Net increase (decrease) in borrowed money (excluding subordinated borrowings)...
Net decrease (increase) in due from banks (excluding deposit paid to Bank of Japan)....
Net decrease (increase) in call loans..........................................................
Net increase (decrease) in call money........................................................
Net increase (decrease) in payables under securities lending transactions...
Net decrease (increase) in trading account securities................................
Net decrease (increase) in foreign exchanges - assets..............................
Net increase (decrease) in foreign exchanges - liabilities...........................
Net decrease (increase) in lease receivables and investment assets.........
Proceeds from fund management.............................................................
Payments for finance.................................................................................
Other.........................................................................................................
Subtotal.................................................................................................
Income taxes paid.....................................................................................
Net cash provided by operating activities..............................................

¥

4,262
1,159
90
813
1
0
(31)
22
(43)
(28)
(139)
12
70
(24,998)
247
1,171
(55)
(6,565)
21(70,974)
286,349
258,711
(34)
45
6,979
583
108
1,004
(96)
451
25,504(434)
1,535
485,744(1,898)483,845

¥

3,166
1,048
97
612
0
(0)
112
144
(70)
13
—
10
—
(23,748)
1,478
(130)
(70)
2,992
165
(57,962)
88,34739,752(99)(132)
48,305(33,021)
(21)
831
5
(359)
24,364(1,475)6,501
100,858(991)
99,8662021$

38,502
10,474
820
7,350
11
2
(289)
203
(394)
(258)
(1,259)111
632(225,804)
2,239
10,578(503)(59,299)
190(641,081)
2,586,482
2,336,842(313)
409
63,047
5,269
984
9,068
(871)
4,074
230,376(3,920)13,8694,387,541(17,151)
4,370,390

Cash ﬂows from investing activities:
Purchase of securities...............................................................................
Proceeds from sale of securities................................................................
Proceeds from redemption of securities....................................................
Purchase of tangible ﬁxed assets..............................................................
Purchase of intangible ﬁxed assets............................................................
Proceeds from sales of tangible ﬁxed assets.............................................
Payments for asset retirement obligations.................................................
Net cash used in investing activities.......................................................

(231,825)
73,069109,527(4,561)(17)
44(5)(53,767)(214,826)
40,981
119,329(3,346)(7)
323—(57,545)(2,093,985)
660,012989,317(41,201)
(154)
404
(54)
(485,661)

Cash ﬂows from ﬁnancing activities:
Cash dividends paid..................................................................................
Cash dividends paid to non-controlling interests.......................................
Purchase of treasury shares......................................................................
Sale of treasury shares..............................................................................
Payments for purchase of stocks of subsidiaries (not affecting scope of consolidation)...
Net cash used in financing activities......................................................

(1,203)
—
(1)
228
—
(976)

(1,204)
(3)
(539)
364
(1,832)(3,214)(10,868)
—
(10)
2,060
—
(8,818)

Effect of exchange rate changes on cash and cash equivalents...........
Net increase (decrease) in cash and cash equivalents...........................
Cash and cash equivalents at beginning of year.....................................
Cash and cash equivalents at end of year (Note 21)................................

(9)429,092
474,154903,247

4
39,110435,044474,154(90)
3,875,821
4,282,856
8,158,677

9

¥

¥

$

Notes to the Consolidated Financial Statements
Years ended March 31, 2021 and 2020
1. Basis of presentation
The accompanying consolidated financial statements of The Fukui Bank, Ltd. (“the Bank”) and its consolidated subsidiaries havebeen prepared in accordance with the provisions set forth in the Financial Instruments and Exchange Law, its related accounting
regulation and the Banking Act of Japan, and in conformity with accounting principles and practices generally accepted in Japan(“Japanese GAAP”). Japanese GAAP are different in certain respects as to application and disclosure requirements of International
Financial Reporting Standards.
The accompanying consolidated financial statements are a translation of the audited consolidated financial statements of the Bank
which were prepared in accordance with Japanese GAAP and were filed with the applicable Local Finance Bureau of the Ministry of
Finance as required by the Financial Instruments and Exchange Law. In preparing the accompanying consolidated financial statements,
certain reclassifications and rearrangements have been made in the consolidated financial statements issued domestically in order topresent them in a form which is more familiar to readers outside Japan.
The consolidated financial statements are stated in Japanese yen. The translations of the Japanese yen amounts into U.S. dollars
are included solely for the convenience of readers, using the prevailing exchange rate at March 31, 2021, which was ¥110.71 to U.S.
$1.00. Such translations should not be construed as representations that the Japanese yen amounts have been, could have been, or
could in the future be, converted into U.S. dollars at this or any other rate of exchange.
2. Significant accounting policies and practices(1) Scope of consolidation
The consolidated financial statements as of March 31, 2021 include the accounts of the Bank and its five subsidiaries (“the Group”).
Under the control and influence concepts, those companies in which the Bank, directly or indirectly, is able to exercise control over
operations are fully consolidated.
( i ) Consolidated subsidiaries: Five companies
The Fukugin Lease Co., Ltd.
The Fukui Credit Guarantee Service Co., Ltd.
Fukui Card Co., Ltd.
The Fukui Net Co., Ltd.
The Fukui Capital & Consulting Co., Ltd.
( ii ) Unconsolidated subsidiaries: One company
Fukui Regional Revitalization Investment Limited Partnership
The accounts of the subsidiary have not been consolidated since its total assets, ordinary income, net income (loss), retained
earnings and accumulated other comprehensive income did not have a significant impact on the consolidated financial statements.
(2) Application of the equity method
Those companies over which the Group has the ability to exercise significant influence are accounted for by the equity method.
( i ) Unconsolidated subsidiaries accounted for by the equity methodNone( ii ) Affiliates accounted for by the equity methodNone(iii) Unconsolidated subsidiaries not accounted for by the equity method: One company
Fukui Regional Revitalization Investment Limited Partnership(iv) Affiliates not accounted for by the equity method: Two companies
Fukui Tourism Promotion Fund Investment Business Limited Partnership
Fukui Future Business Support Investment Limited Partnership
Investments in the affiliates are not accounted for by the equity method since their net income (loss), retained earnings attributable to
the Group did not have a significant impact on the consolidated financial statements.
(3) The Balance sheet date of consolidated subsidiaries( i ) The balance sheet dates of the consolidated subsidiaries are as follows:
March 31: Five companies

10(4) Significant accounting policies( i ) Trading account securities
Trading account securities are stated at fair value. Gains and losses realized on disposal and unrealized gains and losses frommarket value fluctuations are recognized as gains or losses in the period.
( ii ) Securities
A. Available-for-sale securities are in general stated at fair value (cost of sale calculated according to the moving-average method)
indicated according to market price at the consolidated balance sheet date.
Available-for-sale securities having no readily available market value are valued at cost using the moving-average method.
Unrealized gains (losses) on available-for-sale securities are reported as a component of net assets.
B. Securities constituting trust assets within money held in trust are valued using the same methods as those for the abovementioned A.
(iii) Derivatives
Derivatives are stated at fair value.
(iv) Depreciation and amortization methods
A. Tangible fixed assets (excluding lease assets)
Tangible fixed assets of the Bank are depreciated using the straight-line method.
Useful lives of major asset categories:
Buildings: 3–50 years
Others: 2–20 years
Tangible fixed assets of consolidated subsidiaries are depreciated mainly using the declining-balance method based on assets’estimated useful lives.
B. Intangible fixed assets (excluding lease assets)
Intangible fixed assets are amortized using the straight-line method. Software for internal use is amortized over the useful life
specified by the Bank and consolidated subsidiaries, generally 5 years.
C. Lease assets
Lease assets included within tangible fixed assets related to finance lease transactions that do not transfer ownership are
depreciated over the lease term using the straight-line method. For lease assets with a guaranteed residual value stated in theirlease agreements, the residual value is set at the guaranteed amount. Otherwise, the residual value is assumed to be zero.
( v ) Allowance for doubtful receivables
The Bank records allowance for doubtful receivables in accordance with internally established criteria for write-offs andallowance.
For claims against borrowers that have initiated special liquidation proceedings or other bankruptcy proceedings (“bankrupt
borrowers”) and against borrowers that are in substantially similar adverse condition (“substantially bankrupt borrowers”), theallowance is provided based on the amount of claims, net of the write-off stated below, deducted by the expected amount ofrecoveries from collateral and guarantees.
For claims against borrowers that have not yet initiated bankruptcy proceedings, but are very likely to become bankrupt in the
future (“potentially bankrupt borrowers”), the allowance is provided for the amount deemed necessary based on the overall
assessment of the borrowers’ solvency, and reduced by the amount expected to be collected through the disposal of collateralor execution of guarantees from the claims.
For claims against large borrowers with certain outstanding balances that are classified as potentially bankrupt borrowers,
restructured loan borrowers, or close-observation borrowers, the allowance is provided for the difference between the present valueof expected future cash flows discounted at the contractual interest rate prior to the loan restructuring and the carrying amount of theclaim, if future cash flows from collection of the principal and interest can be reasonably estimated (the “cash flow estimation method”).
For claims other than those stated above, the allowance is provided for expected loss amounts. These are calculated based on
the average actual loss ratios for the historical one-year or three-year loan loss records, using the lower limit of the average actual
loss ratios for the entire measurable period in order to reflect long-term economic fluctuations.
All claims are assessed at branches and credit supervision departments based on the criteria for self-assessment of asset quality.
The Risk Management Department, which is independent from the operating sections, monitors the results of such assessments.
For claims against bankrupt borrowers or substantially bankrupt borrowers with collateral or guarantees, the write-off amountis determined as the unrecoverable portion, the claims due from borrowers deducted by the amounts expected to be collected
through the disposal of collateral or through the execution of guarantees, and is directly deducted from the original balance ofclaims. The write-off amount was ¥9,750 million (U.S. $88,072 thousand) and ¥10,385 million for the fiscal year ended March 31,
2021 and 2020, respectively.
As for the consolidated subsidiaries, the allowance for doubtful receivables for general claims is provided based on the historicalloan-loss ratios, and the allowance for doubtful receivables for specific claims, such as possible uncollectible claims, is provided
based on the estimate of unrecoverable amount for each claim.

11

(vi) Provision for bonuses
Provision for bonuses is provided for payment of bonuses to employees, in the amount of estimated bonuses that are attributable
to the current fiscal year.
(vii) Provision for directors’ bonuses
Provision for directors’ bonuses is provided for payment of bonuses to directors, in the amount of estimated bonuses that are
attributable to the current fiscal year.
(viii) Provision for share-based compensation for executive officers
Provision for share-based compensation for executive officers is provided for issuance of shares to executive officers inaccordance with the performance-linked stock compensation plan.
(ix) Provision for reimbursement of deposits
Provision for reimbursement of deposits is provided for in order to meet depositor requests for reimbursement on deposits
already derecognized as liabilities, in the amount deemed necessary by estimating the losses corresponding to the expected
requests for reimbursements in the future.
(x ) Provision for contingent losses
Provision for contingent losses is provided for contingent losses associated with claims due to the implementation of a
responsibility-sharing system in the amount deemed necessary based on the estimated possible future losses.
( xi) Provision for losses on earthquake-proofing measures
Provision for losses on earthquake-proofing measures is provided for losses that arise associated with the earthquake proofing
of business premises in the amounts on reasonable estimates of their future incidence.
(xii) Provision for point loyalty programs
Provision for point loyalty programs, which is provided for the future use of points granted to customers under credit card points
programs, is calculated by converting outstanding points into a monetary amount and rationally estimating the amount that will
be redeemed in the future.
(xiii) Provision for losses on guarantees
Provision for losses on guarantees is provided for the repayment of borrowings of the “Fukui Bank Stock Holding Partnership
Exclusive Trust Account” established for the implementation of the “Trust-type Employee Share Ownership Incentive Plan,” in theamount of the estimated repayment.
(xiv) Liability for retirement benefits
In determining the retirement benefit obligations, the Bank adopts the benefit formula basis to attribute projected benefit
obligations to the period of the year-end. Past service cost and actuarial gains or losses are expensed using the following methods:
Past service cost: Past service cost is recognized using the straight-line method, over 5 years within the employees’ averageremaining service period at incurrence.
Actuarial differences: Actuarial differences are expensed using the straight-line method, over 5 years within the employees’
average remaining service period, commencing from the next fiscal year of incurrence.
(xv) Foreign currency translation
Foreign currency assets and liabilities are translated into yen at the rates prevailing at the consolidated balance sheet date.
(xvi) Accounting for lease transactions
Lessor side
Income arising from transactions of finance leases is recognized as sales and costs of goods sold when lease payments are collected.
(xvii) Hedge accounting
The method of hedge accounting related to managing foreign exchange risk is the deferral hedge method as specified in“Treatment for Accounting and Auditing of Application of Accounting Standard for Foreign Currency Transactions in Banking
Industry” (JICPA Industry Specific Committee Practical Guidance No. 25, October 8, 2020).
In evaluating the hedge effectiveness, hedging instruments such as currency swaps are used as a means of mitigating theforeign exchange risk arising from monetary claims and debts denominated in foreign currencies, which are the hedged items, inorder to verify that the foreign currency positions of such hedging instruments are in amounts equivalent to the corresponding
monetary claims and debts denominated in foreign currencies.
(xviii) Scope of cash and cash equivalents in the consolidated statement of cash flows
The balance of cash and cash equivalents in the consolidated statements of cash flows consist of cash and due from the Bankof Japan.
(xix) Income taxes
Income taxes comprise corporate, enterprise and inhabitant taxes. The Group recognizes tax effects of temporary differences
between the financial statement basis and the tax basis of assets and liabilities. The asset and liability approach is used torecognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences.
(xx) Accounting for consumption taxes
The Bank and its consolidated subsidiaries in Japan employ the tax exclusion method for consumption tax and local consumption

12

taxes, meaning that transaction amounts and consumption tax amounts are treated separately for accounting purposes.
However, non-deductible consumption taxes for purchase of property, plant and equipment are recognized as expenses for theyear of the purchase.
Significant accounting estimates
Items recorded in the consolidated financial statements for the fiscal year under based on accounting estimates that may have asignificant impact on the consolidated financial statements for the next fiscal year are as follows.
Allowance for doubtful receivables(1) Carrying amounts in consolidated financial statements for the current fiscal year
Thousands of
U.S. dollars

Millions of yen

2021

Allowance for doubtful receivables

¥

2021

14,521$

131,166

Of the amount above, the allowance for doubtful receivables recorded at the Bank was ¥13,107 million (U.S. $118,393 thousand).
Of this, the allowance for doubtful receivables for claims to corporations, including ¥955,179 million loans to corporations, was¥11,278 million, which accounts for the major balance. Hence, the following calculation method for the allowance for doubtfulreceivables has been set forth with respect to the Bank.
(2) Information on the nature of significant accounting estimates for identified items( i ) Method of calculation
The calculation method of the allowance for doubtful receivables is described “(v) Allowance for doubtful receivables” in“Significant accounting policies.”
For calculating the allowance for doubtful receivables, the borrowers are classified into five categories based on the internal
self-assessment criteria: “normal borrowers,” “borrowers requiring caution,” “potentially bankrupt borrowers,” “substantiallybankrupt borrowers,” and “bankrupt borrowers.” Allowance for doubtful receivables is provided for each category of claims
according to their assigned credit risk rating determined in accordance with the write-off and provisions policy.
The borrower categories are determined based on quantitative assessments using financial information of the borrowers, inconsideration of qualitative factors such as the outlook for business continuity and profitability, the appropriateness of thebusiness improvement plan, the financial support provided by other financial institutions, and the impact of COVID-19, including
industry specific factors.
Notably, if business restructuring is initiated by implementing financial support in line with a reasonable and feasible business
improvement plan, the borrower will be classified as borrowers requiring caution and claims will not constitute restructuredloans.
( ii ) Key assumptions
Key assumptions are “the business continuity and profitability outlook based on the characteristics of the specific industry
with respect to determining borrower categories, the viability of business improvement plans, and the financial support provided
by other financial institutions,” especially “prospects for future business recovery and business continuity resulting from areasonable and feasible business improvement plan.” These assumptions are assessed and individually set for each borrower.
Notably, as of the end of the current fiscal year, COVID-19 was continuing to spread and its effects were expected for theforeseeable future. However, although all industries are affected, it is assumed that the degree of impact on credit risk depends
on factors unique to individual companies. Based on these assumptions, the allowance for doubtful receivables is provided
using cash flow estimation method for claims without sufficient collaterals to financially week borrowers classified as potentiallybankrupt borrowers.
( iii ) Impact on consolidated financial statements for the next fiscal year
A change in the assumptions used in the initial estimates due to developments in COVID-19 and its impact on the economy
could have a significant impact, such as requiring an increase in the allowance for doubtful receivables on consolidated accounts
in the next fiscal year.

13Unapplied accounting standards and others
The following standard and guidance were issued but not yet adopted.
“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020)“Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30, March 26, 2021)(1) Overview
 The standard and guidance above provide comprehensive principles for revenue recognition. Under the standard andguidance, revenue is recognized by applying the following five steps:
Step 1: Identify contract(s) with.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the performance obligation in the contract.
Step 5: Recognize revenue when (or as) the entity satisfies.
(2) Effective date
 Effective from the beginning of the fiscal year ending March 31, 2022.
(3) Effects of the application of the standards
 The effects of the application of the standard are expected to be insignificant.
“Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019)“Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, July 4, 2019)“Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019)“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19, March 31, 2020)(1) Overview
 In order to enhance comparability with internationally recognized accounting standards, “Accounting Standard for Fair Value
Measurement” and “Implementation Guidance on Accounting Standard for Fair Value Measurement” (together, hereinafterreferred to as “Fair Value Accounting Standards”) were developed and guidance on methods measuring fair value was issued.
Fair Value Accounting Standards are applicable to the fair value measurement of the following item: Financial instruments in “Accounting Standard for Financial Instruments”
 Moreover, the “Implementation Guidance on Disclosures about Fair Value of Financial Instruments” was revised and notes
were established that included a breakdown of the content of each level of financial instruments’ fair value.
(2) Effective date
 Effective from the beginning of the fiscal year ending March 31, 2022.
(3) Effects of the application of the standards
 The effects of the application of the standard are expected to be insignificant.
Changes in presentation method
Adoption of “Accounting Standard for Disclosure of Accounting Estimates”
The Group and its subsidiaries adopted ASBJ Statement No. 31 “Accounting Standard for Disclosure of Accounting Estimates”(March 31, 2020) to the consolidated financial statements for the current consolidated fiscal year, and therefore significant accounting
estimates are disclosed in the note to the consolidated financial statements.
The note does not include information for the prior consolidated fiscal year in accordance with the transitional provision set out inparagraph 11 of the Accounting Standard.

14

Additional information
Transactions of delivering of the Bank’s own stock to employees, etc. through trusts(1) Trust-type Employee Share Ownership Incentive Plan The Bank introduced the “Trust-type Employee Share Ownership Incentive Plan” (the “Incentive Plan”) in order to provide theBank’s employees with incentives to increase the Bank’s corporate value over the mid-to-long term, and to improve the benefits
and welfare of the employees of the Bank by promoting asset formation of employees who buy and own shares of the Bank
through the Employee Stock Holdings.
 The Incentive Plan for all employees participating in the “Fukui Bank Employee Stock Holdings” (the “Employee Stock
Holdings”). For the implementation of the Incentive Plan, the Bank has established the “Fukui Bank Stock Holding Partnership
Exclusive Trust Account” (the “Trust”) at the trust bank. The accounting treatment of the trust agreement conforms to theprovisions of “Practical Solution on Transactions of Delivering the Bank’s Own Stock to Employees etc., through Trusts” (ASBJ
PITF No. 30 of March 26, 2015).
( i ) Overview of the transaction process
 The “Trust” buys a considerable number of the Bank shares that are expected to be acquired by the Employee Stock
Holdings during approximately five years. Subsequently, the Trust is to continuously transfer the Bank shares to the Employee
Stock Holdings, and if any gains on sales of shares remain in the Trust account at the Trust’s termination, such residual assets
are to be distributed to those who meet the requirements of eligible beneficiaries.
 The Bank is required to guarantee the Trust’s debts to acquire the Bank shares. When a decline in the Bank’s share priceincreases losses on sales of shares in the Trust account, and there are any outstanding debts remaining in the Trust accountat the Trust’s termination, the Bank will repay remaining debts in accordance with the guarantee contract.
(ii) Shares held by the Trust Shares held by the Trust are recorded as treasury stock in the net assets at their stated book value of the Trust account(excluding incidental cost amounts). The book value and the number of shares of treasury stock are ¥107 million (U.S. $968
thousand) and 46 thousand shares, respectively.
(iii) Book value of borrowings stated in accordance with the gross method ¥167 million (U.S. $1,509 thousand)(2) Board benefit trust Based on a resolution of the Compensation Committee on June 14, 2019, the Bank reviewed the compensation regulations
for executive officers, abolished the stock compensation-type stock option plan, and introduced a performance-linked stockcompensation plan using a trust (the “Plan”). The accounting treatment of the trust agreement adopt to the provisions of “Practical
Solution on Transactions of Delivering the Bank’s Own Stock to Employees etc., through Trusts” (ASBJ PITF No. 30 of March 26,2015).
( i ) Transaction outline
 The Plan consists of a stock compensation scheme under which a trust established with cash paid by the Bank (the“Trust”) acquires shares of the Bank. Shares corresponding to the points awarded to executive officers by the Bank will betransferred to executive officers through the Trust.
 Under the Plan, shares will be awarded to executive officers who have held office during the five fiscal years ending March
31, 2020, through March 31, 2024. As a rule, shares will be transferred to the executive officers at the time of their retirement.
(ii) Shares held by the Trust Shares held by the Trust are recorded as treasury stock in the net assets at their stated book value of the Trust account(excluding incidental cost amounts). The book value and the number of shares of treasury stock are ¥366 million (U.S. $3,313
thousand) and 200 thousand shares, respectively.

15

Notes to the Consolidated Balance Sheets
3. Total amount of capital held in non-consolidated subsidiaries and affiliates
Thousands of
U.S. dollars

Millions of yen

2020

2021

Investments in capital

¥

276

¥

2021

291

$

2,501

4. Securities lent under unsecured loan agreements (i.e. bond-lending transactions) are included as other securities under
the heading of securities. Amounts are as follows.
Thousands of
U.S. dollars

Millions of yen

2020

2021

¥

1,816

¥

2021

2,051

$

16,411

5. Loans and bills discounted include loans to borrowers in bankruptcy and other delinquent loans as follows.
Thousands of
U.S. dollars

Millions of yen

2020

2021

Loans to borrowers in bankruptcy
Other delinquent loans¥

729
24,385

¥

2021

770
26,486$

6,585
220,262

Loans to borrowers in bankruptcy are loans whose interest receivable, excluding loans that have been written off (“nonaccrualloans”), is not recorded for the reasons as prescribed in Paragraph 1, Items 3 and 4 of Article 96 of “Enforcement Ordinance for the
Corporation Tax Act” (Cabinet Order No. 97 of 1965). Such loans’ collection or repayment of principals or interests is not expected due
to delinquency in payment of principals or interests for a substantial period or other causes.
Other delinquent loans are nonaccrual loans other than (i) loans in bankruptcy proceedings and (ii) loans of which payments ofinterest are deferred in order to assist or facilitate the restructuring of borrowers’ businesses.
6. Loans and bills discounted include delinquent loans past due three months or over as follows.
Thousands of
U.S. dollars

Millions of yen

2020

2021

Delinquent loans past due three months or more

¥

19

¥

2021

153

$

177

Delinquent loans past due three months or more are those loans for which principal or interest payments are more than three months
past due (calculated from the day following the contractual payment date), excluding loans classified as loans to borrowers in bankruptcy
or other delinquent loans.
7. Loans and bills discounted include restructured loans as follows.
Thousands of
U.S. dollars

Millions of yen

2020

2021

Restructured loans

¥

1,181

¥

2021

518

$

10,669Restructured loans are those loans whose terms have been modified by reducing or waiving interest, granting interest payment
extensions, granting principal repayment extensions, forgiving debt, or otherwise providing some arrangements favorable to theborrower in order to assist or facilitate the restructuring of borrowers’ businesses, excluding those loans classified as loans to borrowers
in bankruptcy, other delinquent loans, or delinquent loans past due three months or more.
8. Loans to bankrupt borrowers, delinquent loans, delinquent loans past due three months or over, and restructured loans
amount to the following total.
Thousands of
U.S. dollars

Millions of yen

2020

2021

Total

¥

26,315¥27,9292021$

The amounts of loans above in Notes 5 through 8 are stated before deduction of allowance for doubtful receivables.

16

237,693

9. Bills discounted
Bills discounted are accounted for as financial transactions in accordance with the JICPA Industry Specific Committee Practical
Guidance No. 24, October 8, 2020. The Bank has the right to sell or pledge bills discounted and foreign exchange bills purchased
without restrictions. Their total face value is as follows.
Thousands of
U.S. dollars

Millions of yen

2020

2021

¥

4,539

¥

2021

8,530

$

41,005

10. Assets pledged
Thousands of
U.S. dollars

Millions of yen

2020

2021

2021

Assets pledged as collateral
Securities¥

Loans and bills discounted

353,344268,250$

3,191,620

81,892

3,210,995

31

—

287

708,865

350,142

6,402,902

21,128—71,947
8,673
475,728

17,733
3,809
61,1588,090
216,853

190,842—649,870
78,347
4,297,068

Other assets
Total
Corresponding liabilities to assets pledged as collateral
Deposits
Call money and bills soldPayables under repurchase agreements
Payables under securities lending transactions
Borrowed money¥

355,489

In addition to the foregoing, the following assets have been pledged as collateral for operating transactions, such as foreign exchange
contracts.
Thousands of
U.S. dollars

Millions of yen

2020

2021

Securities
Other assets¥—
25,311¥

100
25,343

2021$—
228,630

Other assets include security deposits in the amount stated below.
Thousands of
U.S. dollars

Millions of yen

2020

2021

Security deposits
Cash collateral for financial instruments etc.

¥

201
1,628

¥

213
1,437

2021

$

1,822
14,705

11. Overdraft facility agreements and commitment lines of credit
Overdraft facility agreements and commitment lines of credit are agreements to extend credit up to a prearranged amount at thecustomer’s request as long as the terms of the agreement have not been violated. The amounts of unutilized commitment balances
under such agreements are as follows.
Thousands of
U.S. dollars

Millions of yen

2020

2021

Unutilized loan commitment lines
Loans for which the term of the agreement is one year or less¥523,811510,811¥469,706
460,5412021$

4,731,384
4,613,961

The balance of unutilized credit will not necessarily affect the future cash flows of the Bank and the consolidated subsidiaries
because most of these agreements expire without being exercised. Most of these agreements contain clauses allowing the Bank andthe consolidated subsidiaries to reject requests for credit outright or reduce the credit limits due to changed financial circumstances,
the need to secure claims, or other reasonable causes. Besides requesting collateral, such as real estate or securities, as necessary
at the time of entering into the agreement, the Bank has also adopted other measures to keep its credit sound, such as periodicallyassessing the condition of customers’ businesses following the internal procedures and, if necessary, revising agreements.

1712. Revaluation reserve for land
Pursuant to the Law concerning Revaluation of Land (Law No. 34, promulgated March 31, 1998, the “Law”), land used for banking
operations was revalued. The tax-equivalent portion of this revaluation amount was recorded as “Deferred tax liabilities for land
revaluation” in liabilities and remainder as “Revaluation reserve for land” in net assets.
Revaluation date
March 31, 1998
Item 3, Article 3, of the Law establishes the evaluation method as that prescribed by Article 2, Paragraph 4 of the Enforcement
Ordinance of Law on Revaluation of Land (Enforcement Ordinance No. 119, promulgated March 31, 1998), and the amount of land
tax is calculated on the basis of the land tax amount specified under Article 16 of the Land-holding Tax Act, adjusted rationally inaccordance with the basis of calculation announced officially by the National Tax Agency.
Total difference between market value of land for banking operations revalued in accordance with Article 10 of the Law and thetotal book value of the land after such revaluation are as follows.
Thousands of
U.S. dollars

Millions of yen

2020

2021

¥

8,205

¥

8,251

2021

$

74,115

13. Accumulated depreciation on tangible fixed assets
Thousands of
U.S. dollars

Millions of yen

2020

2021

Accumulated depreciation¥

21,394¥20,8952021$

193,249

14. Fixed assets reduction entry
Thousands of
U.S. dollars

Millions of yen

2020

2021

Reduction entry(Consolidated reduction entry)

¥

3,359
(—)

¥

3,453
(—)

2021

$

30,348(—)

15. Acceptances and guarantees
The amounts of the bonds presented under “Securities” included guarantee obligations on corporate bonds that were placed
through private securities offerings (Article 2, Paragraph 3 of the Financial Instruments and Exchange Act) are as follows.
Thousands of
U.S. dollars

Millions of yen

2020

2021

¥

18

1,565

¥

1,237

2021

$

14,140Notes to the Consolidated Statements of Operations
16. Other income includes the following.
Thousands of
U.S. dollars

Millions of yen

2020

2021

Gains on sales of shares

¥

898

¥

2021

255

$

8,120

17. General and administrative expenses include the following.
Thousands of
U.S. dollars

Millions of yen

2020

2021

Salaries and allowances

¥

9,773

¥

2021

9,847

$

88,28018. Other expenses include the following.
Thousands of
U.S. dollars

Millions of yen

2020

2021

Losses on devaluation of shares
Losses on sales of shares

¥
¥

19

257
371

¥
¥

2021

92
675

$
$

2,326
3,357

Notes to the Consolidated Statements of Comprehensive Income
19. Reclassification adjustments and tax effects related to other comprehensive income
Thousands of
U.S. dollars

Millions of yen

2020

2021

Unrealized gains (losses) on available-for-sale securities
Gains (losses) arising during the year
Reclassification adjustments
Amount before tax effectTax effect
Total
Deferred gains (losses) on hedges
Gains (losses) arising during the year
Reclassification adjustments
Amount before tax effectTax effectTotal
Remeasurement of defined benefit plans
Gains (losses) arising during the year
Reclassification adjustments
Amount before tax effectTax effectTotal
Total other comprehensive income¥

20

17,245(1,156)
16,088(4,791)
11,296¥2021(9,123)(482)(9,605)
2,841(6,763)$

155,768(10,447)
145,321(43,283)
102,038

(37)
—
(37)
11
(25)

54
—
54
(16)
37

(337)
—
(337)
103
(234)

(0)
(0)
(0)
0
(0)
11,270

(3)
(4)
(8)
2
(5)
(6,731)

(2)
(2)
(4)
1
(3)
101,801

Notes to the Consolidated Statements of Changes in Net Assets
20. Changes in Net Assets
Under the Companies Law and the Banking Law of Japan, the following is provided: the entire amount of the issue price of sharesis required to be accounted for as capital, although a company may, by a resolution of its board of directors, account for an amountnot exceeding one-half of the issue price of the new shares as additional paid-in capital, which is included in capital surplus.
The Companies Law and the Banking Law provide that an amount equal to at least 20% of cash dividends shall be appropriated andset aside as a legal reserve until the total amount of legal reserve and additional paid-in capital equals 100% of common stock. The
legal reserve and additional paid-in capital may be used to eliminate or reduce a deficit by a resolution of the shareholders’ meeting or
may be capitalized by a resolution of the board of directors. On condition that the total amount of legal reserve and additional paid-in
capital remains equal to or exceeds 100% of common stock, they are available for distribution by a resolution of the shareholders’meeting. Legal reserve is included in retained earnings in the accompanying financial statements.
The maximum amount that the Bank can distribute as dividends is calculated based on the non-consolidated financial statementsof the Bank in accordance with the Companies Law.
Previous fiscal year (From April 1, 2019 to March 31, 2020)(Thousands of shares)(1) Classes and total number of shares issued including treasury shares
Number of shares
outstanding at the
beginning of the
fiscal year
Number of shares issued and outstanding
Common shares
24,144
Total
24,144
Treasury shares
Common shares
283
Total
283

Increase

Number of shares
outstanding at theend of the fiscal year

Decrease————

24,144
24,144

310
310

165
165

429
429

Remarks(Notes 1, 2, 3)

Notes:
1. The number of treasury shares includes shares of the Bank held by the employee stock ownership trust (249 thousand shares at the beginning of the fiscal year and 138
thousand shares at the end of the fiscal year) and shares held by the board benefit trust (zero shares at the beginning of the fiscal year and 210 thousand shares at theend of the fiscal year).
2. The number of treasury shares increased due to the acquisition of 210 thousand shares of the Bank by the board benefit trust, the acquisition of 100 thousand shares oftreasury shares, and the purchase of 0 thousand fractional share units.
3. T he number of treasury shares decreased by 111 thousand shares due to a transfer of the shares of the Bank held by the employee stock ownership trust to the
Stockholding Association, 53 thousand shares due to the exercise of stock options and 0 thousand shares due to requests for share purchases to supplement fractional
share units.

(2) Subscription rights to shares
Not applicable.

21

(3) Dividends( i ) Dividends paid in the fiscal year
(Resolution)

Type of share

Aggregate
amount ofdividends(Millions of yen)

Dividends
per share(Yen)

Record date

Effective date

May 10, 2019
Board of Directors

Commonshares602

25

March 31, 2019

May 31, 2019

November 8, 2019
Board of Directors

Commonshares601

25

September 30, 2019

December 4, 2019

Note: Total dividend amounts pursuant to the resolutions of the Board of Directors of May 10, 2019, and November 8, 2019, respectively include dividend amounts of ¥6 millionand ¥4 million paid to the employee stock ownership trust.

( ii ) Dividends with a record date during the fiscal year ended March 31, 2020, but whose effective date is after March 31, 2020, are as
follows:(Resolution)
May 8, 2020
Board of Directors

Type of share

Aggregate
amount ofdividends(Millions of yen)

Dividend
resources

Dividends
per share(Yen)

Record date

Effective date

601

Retainedearnings

25

March 31, 2020

May 29, 2020

CommonsharesNote: Total dividend amounts include ¥3 million in dividends paid to shares of the employee stock ownership trust and ¥5 million in dividends paid to shares of the board
benefit trust.

Current fiscal year (From April 1, 2020 to March 31, 2021)(Thousands of shares)(1) Classes and total number of shares issued including treasury shares
Number of shares
outstanding at the
beginning of the
fiscal year
Number of shares issued and outstanding
Common shares
24,144
Total
24,144
Treasury shares
Common shares
429
Total
429

Increase

Number of shares
outstanding at theend of the fiscal year

Decrease————

24,144
24,144

0
0

100
100

329
329

Remarks(Notes 1, 2, 3)

Notes:
1. The number of treasury shares includes shares of the Bank held by the employee stock ownership trust (138 thousand shares at the beginning of the fiscal year and 46
thousand shares at the end of the fiscal year) and shares held by the board benefit trust (210 shares at the beginning of the fiscal year and 200 thousand shares at the endof the fiscal year).
2. The number of treasury shares increased due to the purchase of 0 thousand fractional share units.
3. T he number of treasury shares decreased due to a transfer of 91 thousand shares of the Bank held by the employee stock ownership trust to the Stockholding
Association, an award of 9 thousand shares associated with the retirement of one executive officer based on the board benefit trust, and 0 thousand shares due torequests for share purchases to supplement fractional share units.

22

(2) Subscription rights to shares
Not applicable.

(3) Dividends( i ) Dividends paid in the fiscal year
Aggregate amount of dividends(Resolution)

Type of share(Millions of yen)(Thousands of
U.S. dollars)

Dividends
per share(Yen)

Record date

Effective date

May 8, 2020
Board of Directors

Commonshares

601

5,434

25

March 31, 2020

May 29, 2020

November 13, 2020
Board of Directors

Commonshares

601

5,434

25

September 30, 2020

December 3, 2020

Note: Total dividend amounts pursuant to the resolutions of the Board of Directors of May 8, 2020, and November 13, 2020, respectively include dividend amounts of ¥3
million ($31 thousand) and ¥2 million ($20 thousand) paid to the employee stock ownership trust and ¥5 million ($47 thousand) and ¥5 million ($45 thousand) to theboard benefit trust.

( ii ) Dividends with a record date during the fiscal year ended March 31, 2021, but whose effective date is after March 31, 2021, areas follows:(Resolution)

May 14, 2021
Board of Directors

Type of share

CommonsharesAggregate amount ofdividends(Millions ofyen)(Thousands of
U.S. dollars)

601

5,434

Dividend
resources

Dividends
per share(Yen)

Retainedearnings

25

Record date

Effective date

March 31, 2021

June 4, 2021

Note: Total dividend amounts include ¥1 million ($11 thousand) in dividends paid to shares of the employee stock ownership trust and ¥5 million ($45 thousand) in dividends
paid to shares of the board benefit trust.

23

Notes to the Consolidated Statement of Cash Flows
21. Reconciliation of cash and cash equivalents
The following table shows reconciliation between “Cash and cash equivalents” in the consolidated statements of cash flows and“Cash and due from banks” in the consolidated balance sheets as of March 31, 2021 and 2020.
Thousands of
U.S. dollars

Millions of yen

2020

2021

Cash and due from banks
Time deposits in other banks
Other deposits
Cash and cash equivalents¥

903,663(186)(229)
903,247¥2021

474,536(241)(139)
474,154$

8,162,435(1,688)(2,070)8,158,677

22. Lease Transactions(1) Finance lease transactions
Finance leases that do not transfer ownership( i ) As a lessee
A. Description of lease assets
a. Tangible fixed assets
Vehiclesb. Intangible fixed assets
None
B. Depreciation method for lease assets
Refer to “(iv) Depreciation and amortization methods” of “(4). Significant accounting policies” in 2. Significant accounting
policies and practices.
( ii ) As a lessor
This note is omitted, as the total amount is insignificant.
(2) Operating lease transactions
Total lease payments or receivables under non-cancelable operating lease transactions( i ) As a lessee
Thousand of
U.S. dollars

Millions of yen

2020

2021

Within one year
Over one year
Total

¥

1
2
4

¥

2021

1
4
5

$

13
25
38

( ii ) As a lessor
This note is omitted, as the total amount is insignificant.
(3) Sublease transactions
Amounts corresponding to sublease transactions stated on the consolidated sheet before deduction of interest were omitted due
to insignificant.

2423. Financial Instruments(1) Circumstances of financial instruments( i ) Policies for engagement with financial instruments
The Group is engaged in a variety of financial services centered on the banking businesses, such as deposit operations, lending
operations, and foreign exchange operations. Moreover, in order to acquire stable returns, the Group utilizes the funds of securities
on the investment side.
Furthermore, the Group engages in derivative transactions in order to respond to customers’ requests on risk hedging related
to foreign currency exchange as well as for use in asset liability management (ALM) for the appropriate management of theGroup’s own market risks, and as a measure for investing with partially mitigated risk. And the Group has determined not toengage in derivative transactions of a complex structure and speculative nature.
The operations of a number of consolidated subsidiaries of the Group include lease operations.
( ii ) Content and risks of financial instruments
Financial assets held by the Group, principally loans and bills discounted extended to domestic customers are exposed tocredit risk and market risk. Securities, principally debt securities, shares, and investment trusts, held by the Group are exposedto credit risk and market risk.
Financial liabilities held by the Group, principally deposits, are exposed to market risk. Call money and borrowed money heldby the Group are subject to market risk and liquidity risk of becoming unable to execute payment on due date, such as that theGroup cannot use the market under certain circumstances.
With regard to derivative transactions, the Group employs interest rate swaps in interest-related transactions, currency swaps,
currency options, and currency forwards in currency-related transactions. The Group is exposed to credit risk and market risk.
The hedge accounting is applied for certain currency swap transactions when they are employed in order to convert the currencyof financing (Japanese yen denominated) into the currency of fund management (foreign currency denominated). The Group
performs its hedge effective test through defining the financial claims and obligation as a hedged item and foreign currency swaps
as a hedging instrument, and checking that the hedging instruments of foreign currency position equivalent to the hedged items
exist.
( iii ) Risk management structure related to financial instruments
A. Credit risk management
Credit risk means the risk of suffering loss from a decrease or extermination of the value of assets (including off-balance items)of the Group by the deterioration in the creditworthiness of the obligor.
For the Group, credit risk is an unavoidable risk for the purposes of its business operations. The Group aims to create its
structure capable of controlling credit risk because the Group is fully aware of the necessity of rapid responsive action to suchrisk. Specifically, the Group has established the Credit concentration risk management standards and is working to identify andimprove upon such risk in order to avoid credit concentration risks and create balanced credit portfolios.
With regard to credit risk measurement, the Group assesses and analyzes its credit risk status according to credit rating,industry and region, and exercises risk-based quantitative management and control in accordance with the Risk capitalsystem.
B. Market risk management
Market risk means the risk of financial loss to the Group through changes in income and value of assets and liabilities held,
including off-balance items, due to fluctuations in various market risk factors, such as interest rates, exchange rates, equity
prices.
a. Risk management
Market risk mainly consists of interest risk, foreign exchange risk and price fluctuation.
The Group considers market risk as a constituent part of ALM. The Group intends to maintain an appropriate balance of risk
and return based on capital adequacy, profitability, trends of loan and deposit, the status of securities holdings.
Specifically, the management committee makes discussions concerning the status of comprehensive risk values, risk valuesof the market investment division, and quantitative interest rate risk of loans and deposits, as well as discussions of the
securities investment plan, which enables the Group to manage integrally the Group’s overall risk and market risk. The market
investment division establishes its position limits for entire securities and by type of security, and carries out market transaction
flexibly within them.
Additionally, the market risk management unit (middle office) is organizationally segregated from the front office operations
to maintain the segregation of duties, and conducts daily monitoring of the risk status.
The market risk management unit identifies quantitative market risk using Value at risk (VaR) for the securities, loans anddeposits accounts of banking operation, and conduct risk management and analysis.

25

b. Quantitative information concerning market risk
The variance-covariance method is used to calculate the Group’s market risk (VaR).
Notably, the holding period of net investment held in securities accounts has been changed from 1 year to 6 months.
Investment held in securities accounts
Holding period: 6 months; confidence level: 99.0%; observation period: 5 years
Policy investments held in securities accounts
Holding period: 1 year; confidence level: 99.0%; observation period: 5 years
Loans and deposits accounts
Holding period: 1 year; confidence level: 99.0%; observation period: 5 years
In the calculation of the amount of market risk (VaR) of loans and deposits accounts, the Group considers core deposits anduses an internal model approach to measure core deposits.
At the end of this fiscal year, the total amount of market risk (VaR) of the Group amounted to ¥33,658 million/$304,024
thousand (¥47,295 million at the previous fiscal year-end) and loans and deposit accounts totaled ¥22,431 million/$202,612
thousand (¥20,392 million at the previous fiscal year-end).
In order to verify the reliability of its methods for measuring market risk, the Group performs back testing by comparing VaR
calculated for securities accounts for a one-day holding period with the day-to-day declines in market value.
The back testing conducted for the year ended March 31, 2021, displayed one instance where actual losses exceeded VaR(similarly four instances were displayed in the previous fiscal year). The Group therefore believes that the market risk is being
captured by its market risk measurement methods with a sufficient level of accuracy.
However, VaR measures the market risk under a certain probability statistically calculated based on historical market
fluctuations, and capturing risks may not be captured in the event of extraordinarily rapid changes in market conditions.
C. Liquidity risk management relevant to fundraising
Liquidity risk comprises “cash management risk”, the risk of suffering loss when necessary funds cannot be secured or thefunds are forced to be raised only at an abnormally high interest rate, due to a period mismatch between investments andfunding, or due to unforeseeable fund outflows; “market liquidity risk”, the risk of suffering loss when transactions cannot takeplace due to market turmoil or can only be conducted at an abnormally inferior price; and “settlement risk”, the risk of suffering
loss when funds or assets cannot be received as planned through settlements with counterparties.
Liquidity risk refers to those three comprehensive risks, cash management risk, market liquidity risk, and settlement risk. The
Group considers controlling of cash management risk the important management issue since market liquidity risk andsettlement risk belong ultimately to cash management risk.
The Group conducts appropriate cash management and reporting to the executive officer in charge of the comprehensive
risk management division through management of the fund procurement structure, funding gaps between investments andprocurement, and liquidity reserves for Japanese yen and foreign denominated funds.
Specifically, the Group has defined categories rated as “normal,” “alert,” and “crisis” according to the status of cash
management and has determined subsets of management methods, reporting frameworks, and approval modes for eachcategory, managed by the organizationally independent front office, back office, and middle office with monitoring mutually.
(iv) Supplementary explanation concerning fair value of financial instruments
Fair Value of financial instruments is based on quoted prices in markets. If a quoted price is not available, a reasonably calculated
amount is used as fair value. Calculation of such amounts involves certain assumptions and may vary when different assumptions
are employed. Moreover, the notional amount of the derivative transactions referred to in the notes on “Derivative transactions”
does not reflect the market risks associated with the noted derivative transactions.

26

(2) Fair values of financial instruments
The carrying amounts on the consolidated balance sheets and fair values of financial instruments as of March 31, 2021 and 2020,
as well as the differences between these values are presented below. The financial instruments deemed immaterial, and unlisted
stocks whose fair values are extremely difficult to determine are excluded from the table (See Note 2).
Previous fiscal year (March 31, 2020)(Millions of yen)

(1) Cash and due from banks(2) Trading account securities
Securities for trading purposes(3) Securities
Available-for-sale securities(4) Loans and bills discounted
Allowance for doubtful receivables*1

Carrying amount
474,536

Fair value
474,536

591

591

—

657,356
1,719,190(13,429)
1,705,761
2,838,245
2,488,546
61,158217,183
2,766,887

657,356—

1,754,001
2,886,485
2,488,623
61,158217,183
2,766,965

48,24048,240
77
—
—
77

(113)
421
307

(113)
421
307

—
—
—

Total assets(1) Deposits(2) Payables under repurchase agreements(3) Borrowed money
Total liabilities
Derivative transactions*2
Not qualifying for hedge accounting
Qualifying for hedge accounting
Total derivative transactions

Difference*1: A general allowance for doubtful receivables and specific allowance for doubtful receivables are deducted from loans and bills discounted.
*2: Derivative transactions recorded in other assets and other liabilities are presented collectively.
Receivables and payables arising from derivative transactions are presented on a net basis, with items qualified as payables shown with brackets: ( )27—Current fiscal year (March 31, 2021)(Millions of yen)

(1) Cash and due from banks(2) Trading account securities
Securities for trading purposes(3) Securities
Available-for-sale securities(4) Loans and bills discounted
Allowance for doubtful receivables*1

Carrying amount
903,663

Fair value
903,663

482

482

—

721,8311,790,164(14,251)
1,775,912
3,401,890
2,774,895
71,947475,895
3,322,738

721,831—

1,827,350
3,453,327
2,774,949
71,947475,895
3,322,792

51,43751,437
54
—
—
54

(614)
211
(403)

(614)
211
(403)

—
—
—

Total assets(1) Deposits(2) Payables under repurchase agreements(3) Borrowed money
Total liabilities
Derivative transactions*2
Not qualifying for hedge accounting
Qualifying for hedge accounting
Total derivative transactions

Difference—*1: A general allowance for doubtful receivables and specific allowance for doubtful receivables are deducted from loans and bills discounted.
*2: Derivative transactions recorded in other assets and other liabilities are presented collectively.
Receivables and payables arising from derivative transactions are presented on a net basis, with items qualified as payables shown with brackets: ( )(Thousands of U.S. dollars)(1) Cash and due from banks(2) Trading account securities
Securities for trading purposes(3) Securities
Available-for-sale securities(4) Loans and bills discounted
Allowance for doubtful receivables*1

Carrying amount
8,162,435

Fair value
8,162,435

4,356

4,356

—

6,520,025
16,169,855(128,731)
16,041,124
30,727,940
25,064,542
649,870
4,298,577
30,012,989

6,520,025—

16,505,738
31,192,554
25,065,031
649,870
4,298,577
30,013,478

464,614464,614
489
—
—
489

(5,554)
1,910(3,644)(5,554)
1,910(3,644)———

Total assets(1) Deposits(2) Payables under repurchase agreements(3) Borrowed money
Total liabilities
Derivative transactions*2
Not qualifying for hedge accounting
Qualifying for hedge accounting
Total derivative transactions

Difference*1: A general allowance for doubtful receivables and specific allowance for doubtful receivables are deducted from loans and bills discounted.
*2: Derivative transactions recorded in other assets and other liabilities are presented collectively.
Receivables and payables arising from derivative transactions are presented on a net basis, with items qualified as payables shown with brackets: ( )28—Note 1: Calculation method of fair values of financial instruments
Assets(1) Cash and due from banks
The fair values of cash and due to banks without maturities are stated at their carrying amounts, because the carrying amountsof those instruments approximate the fair values. The fair values of cash and due to banks with maturities are stated at theircarrying amounts, because most of such transactions have short contractual terms (one year or less) and the carrying amountsof those instruments approximate the fair values.
The fair values of derivative-embedded instruments are determined based on prices quoted by the financial institutions.
(2) Trading account securities
The fair values of bonds and other securities held for dealing purposes are stated at quoted market prices or dealer/broker
quoted prices.
(3) Securities
The fair values of stocks are stated at quoted market prices or dealer/broker quoted prices. The fair values of investment trusts
are stated at published reference prices. The fair values of private placement bonds guaranteed by the Bank are calculated basedon the present value of expected future cash flows of principal redemptions and interest repayments discounted at the market
interest rate.
The notes regarding securities by their holding purpose are presented under the “Securities” section.
(4) Loans and bills discounted
The fair values of loans to bankrupt borrowers, substantially bankrupt borrowers or potentially bankrupt borrowers are essentiallyequivalent to the book value deducted by the allowance for possible loan losses as of the consolidated balance sheet datebecause their estimated collectible amount is based on either the present value of estimated future cash flows or the expectedamounts recoverable from the disposal of collateral and/or under guarantees.
The fair values of loans without maturities (as the amount of credit is limited to the value of the collateral or due to some otherspecial characteristics) are stated at their carrying amounts because their fair values are deemed to approximate the carrying
amounts in consideration of the expected repayment periods and the interest terms.
The fair values of loans other than mentioned above are stated at present values of expected future cash flows of principals andinterests discounted at the market interest rate.
Liabilities(1) Deposits
The fair values of demand deposits are determined at the amount that would have to be paid on demand at the consolidatedbalance sheet date (book value). The fair values of time deposits are determined based on the present value of future cash flows
by certain time periods discounted at the interest rate required for newly originated deposits.
(2) Payables under repurchase agreements
The fair values of payables under securities lending transactions with short contractual terms (one year or less) are stated attheir carrying amounts, because the carrying amounts of those instruments approximate the fair values.
(3) Borrowed money
The fair values of borrowed money with short contractual terms (one year or less) are stated at their carrying amounts, because
the carrying amounts of those instruments approximate the fair values.
The fair values of borrowed money with fixed interest rates are determined based on the present value of the total amount ofprincipal and interest by certain time periods discounted at the interest rate that would be presumably applied for similarborrowings.

29

Derivative transactions
The notes regarding fair values of derivatives are presented under the “Derivatives” section.
Note 2: The amounts of financial instruments on the consolidated balance sheets for which fair values are not reliably
determinable are as stated below, and such amounts are not included in the fair value information for financial
instruments presented in “Assets, (4) Available-for-sale Securities”.
Thousands of
U.S. dollars

Millions of yen

2020

2021

Unlisted stocks*1, *2
Investments in partnerships*3
Total

¥

1,439
2,035
3,475

¥

2021

1,463
1,484
2,947

$

13,002
18,387
31,389*1: Unlisted stocks are excluded from fair value disclosure because there are no quoted market prices, and therefore, there is no reliable measurement of fair value.
*2: During the previous fiscal year, no impairment loss was recognized against unlisted stocks.
During the current fiscal year, no impairment loss was recognized against unlisted stocks.
*3: Investments in certain partnerships whose assets consist of unlisted stocks and other financial instruments that are deemed extremely difficult to determine fair values
for are out of the scope of fair value disclosure.

Note 3: Redemption schedule of monetary claims and securities with maturities after March 31, 2021 and 2020
Previous fiscal year (March 31, 2020)(Millions of yen)

Within one
year
Due from banks
Securities

Over three
Over five
Over seven
Over one year
years to five years to seven years to ten
to three years
years
years
years

Over tenyears

444,252
102,788—
126,604—
117,907—45,495—96,550—92,272Available-for-sale securities withmaturities

102,788

126,604

117,90745,49596,55092,272Government bonds
Local government bonds
Short-term corporate bonds
Corporate bonds
Loans and bills discounted*
Total

27,40022,634—
16,399486,785
1,033,826

17,00018,274—36,715348,911475,515—
5,573—
47,557
217,688335,595—
1,751—
22,800129,090
174,585—
41,427—5,900
130,220
226,770

24,0008,046—
60,226
358,700
450,972* The balances exclude loans and bills discounted for debtors who are legally bankrupt, substantially bankrupt or likely to become bankrupt that are not expected to be collected,
amounting to ¥26,529 million and those without maturity, amounting to ¥21,265 million.

30

Current fiscal year (March 31, 2021)(Millions of yen)

Within one
year
Due from banks
Securities

Over three
Over five
Over seven
Over one year
years to five years to seven years to ten
to three years
years
years
years

Over tenyears

872,150
61,434—
118,928—
119,952—
56,990—169,854—
102,734

Available-for-sale securities withmaturities

61,434

118,928

119,952

56,990169,854

102,734

Government bonds
Local government bonds
Short-term corporate bonds
Corporate bonds
Loans and bills discounted*
Total

11,00010,550—16,558475,214
1,408,799

6,000
10,171—
42,217364,288483,217—6,501—
54,019231,369
351,322—
2,751—
19,500140,731
197,722

20,00055,027—7,400
152,396322,251

36,00011,930—51,823
381,764
484,499* The balances exclude loans and bills discounted for debtors who are legally bankrupt, substantially bankrupt or likely to become bankrupt that are not expected to be collected,
amounting to ¥24,500 million and those without maturity, amounting to ¥19,899 million.

Current fiscal year (March 31, 2021)(Thousands of U.S. dollars)Within one
year
Due from banks
Securities
Available-for-sale securtities withmaturities
Government bonds
Local government bonds
Short-term corporate bonds
Coroporate bonds
Loans and bills discounted*
Total

Over three
Over five
Over seven
Over one year
years to five years to seven years to ten
to three years
years
years
years

Over tenyears

7,877,793
554,918—
1,074,234—
1,083,484—
514,771—
1,534,233—
927,962

554,918

1,074,234

1,083,484

514,771

1,534,233

927,962

99,35995,301—
149,568
4,292,423
12,725,134

54,19691,874—
381,337
3,290,476
4,364,710—
58,725—487,941
2,089,871
3,173,355—
24,853—
176,136
1,271,176
1,785,947

180,652
497,039—
66,841
1,376,535
2,910,768

325,174
107,767—
468,100
3,448,331
4,376,293* The balances exclude loans and bills discounted for debtors who are legally bankrupt, substantially bankrupt or likely to become bankrupt that are not expected to becollected, amounting to $221,302 thousand and those without maturity, amounting to $179,740 thousand.

31

Note 4: Repayment schedule of interest-bearing liabilities after March 31, 2021 and 2020
Previous fiscal year (March 31, 2020)(Millions of yen)

Within one
year(1) Deposits*(2) Payables under repurchase agreements(3) Borrowed money
Total

2,384,875
61,158
115,517
2,561,551

Over three
Over five
Over seven
Over one year
years to five years to seven years to ten
to three years
years
years
years
92,323—60,466
152,789

8,137—
41,20049,337

1,739
—
—
1,739

1,469
—
—
1,469

Over ten
years
—
—
—
—

* The balance of demand deposits is included in “Within one year.”

Current fiscal year (March 31, 2021)(Millions of yen)

Within one
year(1) Deposits*(2) Payables under repurchase agreements(3) Borrowed money
Total

2,686,732
71,947
154,795
2,913,475

Over three
Over five
Over seven
Over one year
years to five years to seven years to ten
to three years
years
years
years
77,166—
148,900
226,066

8,750—
172,200
180,950

1,012
—
—
1,012

1,234
—
—
1,234

Over ten
years
—
—
—
—

* The balance of demand deposits is included in “Within one year.”

Current fiscal year (March 31, 2021)(Thousands of U.S. dollars)Within one
year(1) Deposits*(2) Payables under repurchase agreements(3) Borrowed money
Total

24,268,201
649,870
1,398,207
26,316,278

Over three
Over five
Over seven
Over one year
years to five years to seven years to ten
to three years
years
years
years
697,012—
1,344,956
2,041,968* The balance of demand deposits is included in “Within one year.”

32

79,036—
1,555,415
1,634,451

9,145
—
—
9,145

11,148——
11,148Over ten
years
—
—
—
—

24. Securities*1 In addition to the “Securities” presented in the consolidated balance sheets, the following information includes
securities classified as “Trading account securities.”*2 Information on “Shares in subsidiaries and affiliates” is stated in the notes to the financial statements.
(1) Securities for trading purposes
Thousands of
U.S. dollars

Millions of yen

2020

2021

Valuation difference reflected on the statements of operations

¥

(10)

¥

2021

(11)

$

(97)

(2) Securities-held-to-maturity
Previous fiscal year (March 31, 2020)
None
Current fiscal year (March 31, 2021)
None(3) Available-for-sale securities
Previous fiscal year (March 31, 2020)(Millions of yen)

Type

Securities for which carrying amountexceeds acquisition cost

Securities for which carrying amount
does not exceed acquisition cost

Stocks
Bonds
Government bonds
Local government
bonds
Short-term
corporate bonds
Corporate bonds
OthersForeign securities
Subtotal
Stocks
Bonds
Government bonds
Local government
bonds
Short-term
corporate bonds
Corporate bonds
OthersForeign securities
Subtotal

Carrying amount
22,276220,033
63,601

Acquisition cost
9,638
217,008
61,808Difference
12,6373,025
1,792

73,397

72,611

785

—

—

—

83,034
127,673
90,730369,983
7,747
139,655
6,986

82,588122,393
88,608349,040
9,680
140,477
7,058

446
5,280
2,122
20,943(1,933)(821)(71)

25,08425,182

(97)

—

—

—

107,584
139,969
81,025287,372
657,356

108,236
147,719
82,886
297,878
646,918(652)(7,750)(1,861)(10,505)
10,438Total

33

Current fiscal year (March 31, 2021)(Millions of yen)

Securities for which carrying amountexceeds acquisition cost

Securities for which carrying amount
does not exceed acquisition cost

Type
Stocks
Bonds
Government bonds
Local government
bonds
Short-term
corporate bonds
Corporate bonds
OthersForeign securities
Subtotal
Stocks
Bonds
Government bonds
Local government
bonds
Short-term
corporate bonds
Corporate bonds
OthersForeign securities
Subtotal

Carrying amount33,634
182,569
33,730Acquisition cost
12,075
180,41032,334

Difference
21,5582,159
1,396

44,272

43,877

395

—

—

—

104,567
198,239
127,675
414,443
4,345
179,846
40,714104,198
188,928
124,377
381,414
5,199
181,191
41,223

368
9,310
3,297
33,028(854)(1,345)(508)

52,852

53,122

(270)

—

—

—

86,279123,196
58,373
307,388
721,831

86,845
127,499
60,482
313,890695,305(566)(4,302)(2,108)(6,502)
26,526Type

Carrying amount
303,806
1,649,082
304,676

Acquisition cost
109,073
1,629,579
292,066

Difference
194,733
19,503
12,610399,893

396,325

3,568

—

—

—

944,513
1,790,618
1,153,244
3,743,506
39,252
1,624,478
367,756

941,188
1,706,517
1,123,455
3,445,169
46,968
1,636,633
372,354

3,325
84,101
29,789298,337(7,716)(12,155)(4,598)477,394

479,837(2,443)———

779,328
1,112,788
527,267
2,776,518
6,520,024

784,442
1,151,651
546,3142,835,252
6,280,421(5,114)(38,863)(19,047)(58,734)
239,603

Total
Current fiscal year (March 31, 2021)(Thousands of U.S. dollars)

Securities for which carrying amountexceeds acquisition cost

Securities for which carrying amount
does not exceed acquisition cost

Stocks
Bonds
Government bonds
Local government
bonds
Short-term
corporate bonds
Corporate bonds
OthersForeign securities
Subtotal
Stocks
Bonds
Government bonds
Local government
bonds
Short-term
corporate bonds
Corporate bonds
OthersForeign securities
Subtotal

Total

34

(4) Securities-held-to-maturity sold in the current fiscal year
Previous fiscal year (From April 1, 2019 to March 31, 2020)
None
Current fiscal year (From April 1, 2020 to March 31, 2021)
None(5) Available-for-sale securities sold in the current fiscal year
Previous fiscal year (From April 1, 2019 to March 31, 2020)(Millions of yen)Type
Stocks
Bonds
Government bonds
Local government bonds
Short-term corporate bonds
Corporate bonds
OthersForeign securities
Total

Amount sold
1,274
3,175
3,175
—
—
—
24,394
15,777
28,845

Total gain on sales
140
114
114
—
—
—
952
287
1,207

Total loss on sales
238
—
—
—
—
—
746
18
985

Total gain on sales
644
3
—
—
—
3
1,222
404
1,870

Total loss on sales
284
—
—
—
—
—
1,877
606
2,162

Current fiscal year (From April 1, 2020 to March 31, 2021)(Millions of yen)Type
Stocks
Bonds
Government bonds
Local government bonds
Short-term corporate bonds
Corporate bonds
OthersForeign securities
Total

Amount sold
3,205
1,203
—
—
—
1,203
38,054
27,41842,463Current fiscal year (From April 1, 2020 to March 31, 2021)(Thousands of U.S. dollars)

Type
Stocks
Bonds
Government bonds
Local government bonds
Short-term corporate bonds
Corporate bonds
OthersForeign securities
Total

Amount sold
28,95010,870———10,870343,736
247,660
383,556

35

Total gain on sales
5,823
30
—
—
—
30
11,0383,652
16,891

Total loss on sales
2,573
—
—
—
—
—
16,961
5,476
19,534

(6) Securities that changed their holding purpose
None(7) Impairment of securities
Securities other than trading securities, excluding securities whose fair values are not reliably determined, are treated as impaired
when their fair values have declined significantly from the acquisition cost, unless it is deemed that there is a possibility of a recovery
in the fair value. Such securities are recorded at their fair values in the consolidated balance sheets. The difference between theacquisition cost and the fair values is recognized as an impairment loss.
In the previous fiscal year, impairment loss was recognized in the amount of ¥92 million (all related to “Stocks”) .
In the current fiscal year, Impairment loss was recognized in the amount of ¥878 million ($7,935 thousand), of which ¥257 million($2,326 thousand) related to “Stocks” and ¥621 million (5,610 thousand) related to “Corporate bonds.”
The impairment of securities is recognized for all securities when the market value of the securities has fallen by 50% or morecompared with the acquisition cost, and for other securities when the market value of the securities has fallen by 30% or morecompared with the acquisition cost, unless it is deemed that there is a possibility of a recovery in the fair value in consideration of
past reduction rates over a specific period of time and financial conditions of issuing companies.

36

25. Money held in trust(1) Money held in trust for trading purposes
Previous fiscal year (March 31, 2020)
None
Current fiscal year (March 31, 2021)
None(2) Money held in trust held to maturity
Previous fiscal year (March 31, 2020)
None
Current fiscal year (March 31, 2021)
None(3) Other money held in trust (other than those for trading purposes or held to maturity)
Previous fiscal year (March 31, 2020)(Millions of yen)

Carrying
amountOther money held in trust

6,504

Acquisition
cost

Positivedifference

Difference

6,504

—

Negativedifference——

Note: The amount of “Difference” is the net of “Positive Difference” and “Negative Difference.”

Current fiscal year (March 31, 2021)(Millions of yen)

Carrying
amountOther money held in trust

6,502

Acquisition
cost

Positivedifference

Difference

6,502

—

Negativedifference——

Note: The amount of “Difference” is the net of “Positive Difference” and “Negative Difference.”

Current fiscal year (March 31, 2021)(Thousands of U.S. dollars)

Carrying
amountOther money held in trust

58,733Acquisition
cost

Positivedifference

Difference

58,733—

Negativedifference——

Note: The amount of “Difference” is the net of “Positive Difference” and “Negative Difference.”

26. Valuation differences on available-for-sale securities
The following table shows components of Valuation differences on available-for-sale securities in the consolidated balance sheets.
Thousands of
U.S. dollars

Millions of yen

2020

2021

Valuation differences
Securities
Deferred tax liability¥

Valuation differences on available-for-sale securities (before adjustment for
non-controlling interests)
Non-controlling interests
Valuation differences on available-for-sale securities

37

26,526
26,526(7,805)¥2021

10,43810,438(3,013)$

239,604
239,604(70,502)18,721

7,424

169,102

(11)

(11)

(107)

18,709

7,412

168,99527. Derivatives(1) Derivative transactions not qualifying for hedge accounting
Derivative transactions not qualifying for hedge accounting are grouped by the type of underlying transactions. The notionalamounts (or the amount equivalent to the principal specified in the contracts), the fair values, and the valuation differences as of theconsolidated balance sheet date, as well as the methods for determining such fair values are presented below. The notional amounts
do not reflect the market risk associated with the derivatives.
( i ) Interest-related transactions
Previous fiscal year (March 31, 2020)
None
Current fiscal year (March 31, 2021)
None( ii ) Currency-related transactions
Previous fiscal year (March 31, 2020)(Millions of yen)

Category

ListedOTC

Type
Currency futures
Sold
Purchased
Currency options
Sold
Purchased
Currency swaps
Forward exchange contracts
Sold
Purchased
Currency options
Sold
Purchased
OthersSold
Purchased
Total

Notional amounts(total)Notional amounts(over one year)

—
—

—
—

—
—

—
—

—
—
—

—
—
—

—
—
—

—
—
—

20,640
8,460

—
—

(33)
(80)

(33)
(80)

47,39447,394

32,77032,770(1,447)
1,447

1,291
(829)

—
—
−

—
—
−

—
—
(113)

—
—
348

Notes:
1. The transactions above are stated at their fair values and valuation differences are recorded in the consolidated statement of operations.
2. The fair values are calculated using the net present value method, etc.

38

Valuationdifference

Fair valueCurrent fiscal year (March 31, 2021)(Millions of yen)

Category

ListedOTC

Type
Currency futures
Sold
Purchased
Currency options
Sold
Purchased
Currency swaps
Forward exchange contracts
Sold
Purchased
Currency options
Sold
Purchased
OthersSold
Purchased
Total

Notional amounts(total)Notional amounts(over one year)

—
—

—
—

—
—

—
—

—
—
—

—
—
—

—
—
—

—
—
—

33,543
7,295

44
—

(781)
166

(781)
166

38,214
38,214

24,584
24,584(1,241)
1,241

930
(567)

—
—
−

—
—
−

—
—
(614)

—
—
(252)

Valuationdifference

Fair value

Notes:
1. The transactions above are stated at their fair values and valuation differences are recorded in the consolidated statement of operations.
2. The fair values are calculated using the net present value method, etc.

Current fiscal year (March 31, 2021)(Thousands of U.S. dollars)

Category

ListedOTC

Type
Currency futures
Sold
Purchased
Currency options
Sold
Purchased
Currency swaps
Forward exchange contracts
Sold
Purchased
Currency options
Sold
Purchased
OthersSold
Purchased
Total

Notional amounts(total)Notional amounts(over one year)

—
—

—
—

—
—

—
—

—
—
—

—
—
—

—
—
—

—
—
—

302,982
65,899400—(7,055)
1,501(7,055)
1,501

345,178
345,178

222,065
222,065(11,210)
11,2108,405(5,128)

—
—
−

—
—
−

—
—
(5,554)——(2,277)

Notes:
1. The transactions above are stated at their fair values and valuation differences are recorded in the consolidated statement of operations.
2. The fair values are calculated using the net present value method, etc.

39

Valuationdifference

Fair value

(iii) Stock-related transactions
Previous fiscal year (March 31, 2020)
None
Current fiscal year (March 31, 2021)
None(iv) Bond-related transactions
Previous fiscal year (March 31, 2020)
None
Current fiscal year (March 31, 2021)
None(v) Commodity-related transactions
Previous fiscal year (March 31, 2020)
None
Current fiscal year (March 31, 2021)
None(vi) Credit derivative transactions
Previous fiscal year (March 31, 2020)
None
Current fiscal year (March 31, 2021)
None

40

(2) Derivative transactions qualifying for hedge accounting
Derivative transactions qualifying for hedge accounting are grouped by the type of underlying transactions. The notional amounts(or the amount equivalent to the principal specified in the contracts) and the fair values as of the consolidated balance sheet date, as
well as the methods for determining such fair values are presented below. The notional amounts do not reflect the market risk
associated with the derivatives.
( i ) Interest-related transactions
Previous fiscal year (March 31, 2020)
None
Current fiscal year (March 31, 2021)
None( ii) Currency-related transactions
Previous fiscal year (March 31, 2020)(Millions of yen)Hedge
accountingTypemethodDeferralCurrency swaps
methodTotal

Major hedged item
Foreign-currency
denominated securities−

Notional amounts(total)Notional amounts(over one year)

10,883

10,883−

Fair value
421

−

421

Notes:
1. Deferred hedge accounting stipulated in Report No. 25 is applied, in principle.
2. The fair values are calculated using the net present value method, etc.

Current fiscal year (March 31, 2021)(Millions of yen)Hedge
accountingTypemethodDeferralCurrency swaps
methodTotal

Major hedged item
Foreign-currency
denominated securities−

Notional amounts(total)Notional amounts(over one year)

11,071

11,071−

Fair value
211

−

211

Notes:
1. Deferred hedge accounting stipulated in Report No. 25 is applied, in principle.
2. The fair values are calculated using the net present value method, etc.

Current fiscal year (March 31, 2021)(Thousands of U.S. dollars)Hedge
accountingTypemethodDeferralCurrency swaps
methodTotal

Major hedged item
Foreign-currency
denominated securities−

Notional amounts(total)Notional amounts(over one year)

100,000

100,000−

Notes:
1. Deferred hedge accounting stipulated in Report No. 25 is applied, in principle.
2. The fair values are calculated using the net present value method, etc.

41−

Fair value
1,910
1,910

(iii) Stock-related transactions
Previous fiscal year (March 31, 2020)
None
Current fiscal year (March 31, 2021)
None(iv) Bond-related transactions
Previous fiscal year (March 31, 2020)
None
Current fiscal year (March 31, 2021)
None

42

28. Retirement and pension plans(1) Outline of the retirement benefit plans
Dated April 1, 2005, the Bank obtained the permission to dissolve the corporate pension plan of the Bank from the Minister of
Health, Labour and Welfare and received approval for the terms and conditions of a corporate defined contribution pension plan, andtransferred a part of the lump-sum benefit program of the Bank and the corporate pension plan to a defined contribution pension
plan. As a result, the retirement benefits plan of the Bank has a dual structure consisting of a lump-sum benefit program and adefined contribution pension plan.
Notably, the Bank may pay additional retirement benefit payments with premium at the retirement, etc., of employees.
Additionally, a number of consolidated subsidiaries are members to the Smaller Enterprise Retirement Allowance Mutual Aid
Program.
(2) Defined benefit plans( i ) Reconciliation of retirement benefit obligations
Thousands of
U.S. dollars

Millions of yen

2020

2021

Retirement benefit obligations (opening balance)
Service cost-benefits earned during the fiscal year
Interest cost on projected benefit obligations
Actuarial differences
Retirement benefits paid
Past service cost
Other
Retirement benefit obligations (closing balance)

¥

¥

5,405
298
27
0
(358)
—
—
5,373

¥

¥

2021

5,293
308
26
3
(226)
—
—
5,405

$

$

48,8282,699
244
2(3,234)——
48,539( ii ) Reconciliation between closing balances of retirement benefit obligations and liabilities and assets for retirement benefits recordedin the consolidated balance sheet
Thousands of
U.S. dollars

Millions of yen

2020

2021

Net defined benefit liability
Net defined benefit asset
Net of liabilities and assets recorded in the consolidated balance sheet

¥
¥

5,373
—
5,373

¥
¥

2021

5,405
—
5,405

$
$

48,539—48,539(iii) Breakdown of retirement benefit expenses
Thousands of
U.S. dollars

Millions of yen

2020

2021

Service cost-benefits earned during the fiscal year
Interest cost on projected benefit obligations
Expected return on plan assets
Amortization of actuarial differences
Amortization of past service cost
Other
Retirement benefit expenses for defined benefit obligations

¥

¥

43

298
27
—
(0)
—
—
325

¥

¥

2021

308
26
—
(4)
—
—
330

$

$

2,700
244
—
(2)
—
—
2,942

(iv) Adjustments for retirement benefits
Details of adjustments for retirement benefits (before tax effects) are as follows.
Thousands of
U.S. dollars

Millions of yen

2020

2021

2021

Past service cost
Actuarial differences
Other

¥

—
(0)
—

¥

—
(8)
—

$

—
(4)
—

Total

¥

(0)

¥

(8)

$

(4)

(v) Accumulated adjustments for retirement benefits
The breakdown of accumulated adjustments for retirement benefits (before tax effects) is as follows.
Thousands of
U.S. dollars

Millions of yen

2020

2021

Unrecognized past service cost
Unrecognized actuarial differences
Other
Total

¥

¥

¥

—
(2)
—
(2)

2021

—
(2)
—
(2)

¥

$

—
(21)
—
(21)

$

(vi) Actuarial assumptions
The major assumptions used for calculating the actuarial gains and losses are as follows.
2020

2021

Discount rate
Expected rate of retirement benefits basis increase

0.5%
4.5%

0.5%
4.5%

Note: S ince the Bank has adopted the benefit formula basis for calculating retirement benefit obligation, the expected rate of salary increase is not taken into consideration.

(3) Defined-contribution pension plans
The required contribution amount for the defined contribution plans of the Bank and its consolidated subsidiaries was ¥65 million
in the previous fiscal year, and ¥65 million ($591 thousand) in the current fiscal year.

4429. Income Taxes(1) Deferred tax assets and liabilities
Millions of yen

Deferred tax assets
Allowance for doubtful receivables
Liability for retirement benefits
Devaluation of securities
Impairment loss on land
Depreciation
OthersSubtotal
Valuation allowance*
Total deferred tax assets
Deferred tax liabilities
Valuation difference on available-for-sale securities
Reserve for advanced depreciation of non-current assets
OthersTotal deferred tax liabilities
Net deferred tax assets (liabilities)

¥

6,704
1,636
878
812
783
1,183
11,999(6,028)5,971(7,805)(174)(13)(7,993)(2,022)¥Thousands of U.S. dollars

2020

2021

¥

2021

6,574
1,646
659
813
926
1,038
11,658(5,684)
5,974(3,013)(176)(12)(3,202)
2,771

¥

$

60,562
14,785
7,933
7,341
7,073
10,693
108,387(54,451)
53,936(70,502)(1,578)(124)(72,204)(18,268)$* The valuation allowance amount increased by ¥343 million ($3,106 thousand). This increase is mainly due to a ¥219 million ($1,979 thousand) increase in the Bank’svaluation allowance for devaluation of securities.

(2) Effective income tax rate
2020

2021

Statutory effective tax rate
(Adjustments)
Permanent differences such as entertainment expenses
Permanent differences such as dividend income
Change in the valuation allowance amount
Inhabitant tax on per capita basis
Others
Effective tax rate after adoption of tax effect accounting
30. Asset retirement obligations
Previous fiscal year (From April 1, 2019 to March 31, 2020)
This note is not provided due to its low materiality.
Current fiscal year (From April 1, 2020 to March 31, 2021)
This note is not provided due to its low materiality.
31. Investment and rental property
Previous fiscal year (From April 1, 2019 to March 31, 2020)
This note is not provided due to its low materiality.
Current fiscal year (From April 1, 2020 to March 31, 2021)
This note is not provided due to its low materiality.

45

30.46%

30.46%

0.78(2.61)
8.09
0.95
2.41
40.08%

1.31(1.30)(9.54)
1.29
1.58
23.80%

32. Segment information(1) Reportable segment information
The reportable segments of the Group are defined as operation segments for which discrete financial information is available andwhose operating results are regularly reviewed by executive corporate officers at management committee meetings to determine
resource allocation and to assess their performance.
The Group focuses on banking operations (including operations that supplement and strengthen banking operations such as credit
guarantee operations related to loans and credit card operations), also engages in lease operations and other operations related to
management of the Group. In order to strengthen these business areas at the core of banking operations, the Bank devises businessplans for and implements business activities in the individual banking operations conducted respectively at each group within head
office or in each area at banking offices, as well as at individual consolidated subsidiaries.
Operations of the Group are segmented into Banking and Leasing based on the operations of the Bank and its consolidated
subsidiaries.
Banking is comprised of banking operations such as deposit operations, lending operations, and domestic and foreign exchange
operations, as well as operations serving to supplement and strengthen banking operations such as credit guarantee operations andcredit card operations. Leasing consists of lease operations for industrial machinery, computers, and office equipment.
(2) Method for calculating income, profits or losses, assets, liabilities, and other items by reportable segment
The accounting policies for the reportable segments are the same as those presented under “Significant Accounting Policies andPractices.”46

(3) Income, profits or losses, assets, liabilities, and other items by reportable segment
Previous fiscal year (From April 1, 2019 to March 31, 2020)(Millions of yen)

Reportable segment
Leasing

Banking
Ordinary income
Unaffiliated customers
Intersegment
Total
Segment profits
Segment assets
Segment liabilities
OthersDepreciation
Interest income
Interest expenses

Others

Total

Total

33,756
191
33,9473,051
2,944,952
2,826,095

6,670
1,128
7,799
1,305
20,127
14,65240,426
1,319
41,746
4,356
2,965,079
2,840,748

302
530
833
248
1,731
1,240

40,7291,849
42,5794,605
2,966,811
2,841,989

1,068
23,330
1,477

3
480
56

1,071
23,810
1,534

3
1
—

1,075
23,812
1,534

—

—

—

0

0

Provision of allowance for doubtful accounts
Written-off of loans

2,436
502

18
0

2,454
502

—
—

2,454
502

Increase in tangible fixed assets andintangible fixed assets

3,348

0

3,349

10

3,359

Adjustment

Consolidated
financialstatement

Reversal of allowance for doubtfulreceivables(Millions of yen)

Ordinary income
Unaffiliated customers
Intersegment
Total
Segment profits
Segment assets
Segment liabilities
OthersDepreciation
Interest income
Interest expenses(0)(1,849)(1,849)(1,192)(15,791)(14,729)

40,729—40,7293,413
2,951,019
2,827,260

(26)
(63)
(55)

1,048
23,748
1,478

Reversal of allowance for doubtfulreceivables(0)—

Provision of allowance for doubtful accounts
Written-off of loans

(0)
—

2,454
502

Increase in tangible fixed assets andintangible fixed assets

—

3,359

Notes:
1. Ordinary income has been stated in place of net sales stated by non-financial firms. Adjustments for differences are stated with respect to the difference between
operating income and operating income stated on the consolidated statement of income.
2. “Others” is a segment other than reportable segment, including computer related services.
3. Adjustment amounts reflect elimination of inter-segment transactions, etc.
4. Segment income is adjusted to ordinary income stated in the consolidated statement of income.

47

Current fiscal year (From April 1, 2020 to March 31, 2021)(Millions of yen)

Reportable segment
Leasing

Banking
Ordinary income
Unaffiliated customers
Intersegment
Total
Segment profits
Segment assets
Segment liabilities
OthersDepreciation
Interest income
Interest expenses

Others

Total

Total

34,980176
35,157
3,855
3,507,327
3,375,881

7,088
55
7,144
330
19,063
13,36942,069232
42,301
4,185
3,526,391
3,389,251

314
330
644
41
1,601
1,081

42,383563
42,9464,226
3,527,992
3,390,332

1,144
24,527
247

6
521
51

1,150
25,049
298

5
0
—

1,156
25,049
298

—

1

1

—

1

Provision of allowance for doubtful accounts
Written-off of loans

1,413
586

—
—

1,413
586

—
—

1,413
586

Increase in tangible fixed assets andintangible fixed assets

4,532

67

4,599

6

4,606

Adjustment

Consolidated
financialstatement

Reversal of allowance for doubtfulreceivables(Millions of yen)

Ordinary income
Unaffiliated customers
Intersegment
Total
Segment profits
Segment assets
Segment liabilities
OthersDepreciation
Interest income
Interest expenses

(1)
(563)
(565)
8
(14,676)(13,624)

42,381—
42,381
4,234
3,513,315
3,376,707

3
(51)
(50)

1,159
24,998247

Reversal of allowance for doubtfulreceivables(1)—

Provision of allowance for doubtful accounts
Written-off of loans

1
—

1,415
586

Increase in tangible fixed assets andintangible fixed assets

(17)

4,588

Notes:
1. Ordinary income has been stated in place of net sales stated by non-financial firms. Adjustments for differences are stated with respect to the difference between
operating income and operating income stated on the consolidated statement of income.
2. “Others” is a segment other than reportable segment, including computer related services.
3. Adjustment amounts reflect elimination of inter-segment transactions.
4. Segment income is adjusted to ordinary income stated in the consolidated statement of income.

48

Current fiscal year (From April 1, 2020 to March 31, 2021)(Thousands of U.S. dollars)

Reportable segment
Leasing

Banking
Ordinary income
Unaffiliated customers
Intersegment
Total
Segment profits
Segment assets
Segment liabilities
OthersDepreciation
Interest income
Interest expenses

Others

Total

Total

315,9631,598
317,561
34,822
31,680,310
30,493,015

64,031504
64,535
2,986
172,196
120,763

379,994
2,102
382,096
37,80831,852,506
30,613,778

2,837
2,988
5,825
372
14,463
9,766

382,8315,090
387,921
38,18031,866,969
30,623,544

10,336
221,546
2,234

60
4,714
463

10,396226,260
2,697

47
6
—

10,443
226,266
2,697

—

14

14

—

14

Provision of allowance for doubtful accounts
Written-off of loans

12,771
5,295——

12,771
5,295——

12,771
5,295

Increase in tangible fixed assets andintangible fixed assets

40,939608

41,54758

41,605

Reversal of allowance for doubtfulreceivables(Thousands of U.S. dollars)

Adjustment
Ordinary income
Unaffiliated customers
Intersegment
Total
Segment profits
Segment assets
Segment liabilities
OthersDepreciation
Interest income
Interest expenses

Consolidated
financialstatement(14)(5,090)(5,104)74(132,567)(123,066)
—
31
(462)
(458)

382,817—382,817
38,25431,734,402
30,500,478

Reversal of allowance for doubtfulreceivables

(14)

—

Provision of allowance for doubtful accounts
Written-off of loans

16—

12,787
5,295

(162)

41,443

Increase in tangible fixed assets andintangible fixed assets

10,474
225,804
2,239

Notes:
1. Ordinary income has been stated in place of net sales stated by non-financial firms. Adjustments for differences are stated with respect to the difference between
operating income and operating income stated on the consolidated statement of income.
2. “Others” is a segment other than reportable segment, including computer related services.
3. Adjustment amounts reflect elimination of inter-segment transactions.
4. Segment income is adjusted to ordinary income stated in the consolidated statement of income.

49

Related information
Previous fiscal year (From April 1, 2019 to March 31, 2020)(1) Information by service(Millions of yen)

Lendingbusiness
Ordinary income from unaffiliatedcustomers

Securities trading
Leasing businessbusiness

18,360

8,029

6,670

Others

Total

7,669

40,729Notes:
1. The figures represent “Income” in substitution for net sales to be presented by companies in other industries.
2. Lending operations and securities trading operations are constituents of the reportable segment “Banking.” Other constituents of “Banking” are stated combined withordinary income of “Others” in this tabulation under “Others” stated in “Segment Information, (3). Amount of ordinary income, operating result, assets, liabilities, and otheritems.”(2) Geographic information( i ) Ordinary income
More than 90% of the Group’s income on the consolidated statement of operations for the fiscal years ended March 31, 2020 is
attributable to income from unaffiliated customers in Japan; accordingly, income by geographical area is not presented.
(ii) Tangible fixed assets
More than 90% of the Group’s tangible fixed assets on the consolidated balance sheets as of March 31, 2020 are located in Japan;
accordingly, tangible fixed assets by geographical area are not presented.
(3) Information about major customers
This information is not provided since no outside customers accounted for more than 10% of ordinary income of the Group.

Current fiscal year (From April 1, 2020 to March 31, 2021)(1) Information by services(Millions of yen)

Lendingbusiness
Ordinary income from unaffiliatedcustomers

17,589Securities trading
Leasing businessbusiness
10,095

7,088

Others

Total

7,607

42,381

Notes:
1. The figures represent “Income” in substitution for net sales to be presented by companies in other industries.
2. Lending operations and securities trading operations are constituents of the reportable segment “Banking.” Other constituents of “Banking” are stated combined withordinary income of “Others” in this tabulation under “Others” stated in “Segment Information, (3). Amount of ordinary income, operating result, assets, liabilities, and otheritems.”(Thousands of U.S. dollars)

Lendingbusiness
Ordinary income from unaffiliatedcustomers

158,882

Securities trading
Leasing businessbusiness
91,18864,031Others
68,716

Total
382,817

Notes:
1. The figures represent “Income” in substitution for net sales to be presented by companies in other industries.
2. Lending operations and securities trading operations are constituents of the reportable segment “Banking.” Other constituents of “Banking” are stated combined withordinary income of “Others” in this tabulation under “Others” stated in “Segment Information, (3). Amount of ordinary income, operating result, assets, liabilities, and otheritems.”

50

(2) Geographic information( i ) Ordinary income
More than 90% of the Group’s income on the consolidated statements of operations for the fiscal years ended March 31, 2021 is
attributable to income from unaffiliated customers in Japan; accordingly, income by geographical area is not presented.
(ii) Tangible fixed assets
More than 90% of the Group’s tangible fixed assets on the consolidated balance sheets as of March 31, 2021 are located in Japan;
accordingly, tangible fixed assets by geographical area are not presented.
(3) Information about major customers
This information is not provided since no outside customers accounted for more than 10% of ordinary income of the Group.
Information related to losses on impairment of fixed assets by reportable segment
This note is not provided due to its low materiality.
Information related to amortization of goodwill and unamortized balance of goodwill by reportable segment
Previous fiscal year (From April 1, 2019 to March 31, 2020)
None
Current fiscal year (From April 1, 2020 to March 31, 2021)
None
Information related to gain on negative goodwill by reportable segment
Previous fiscal year (From April 1, 2019 to March 31, 2020)
None
Current fiscal year (From April 1, 2020 to March 31, 2021)
None

51

33. Related party transactions(1) Transactions with related parties( i ) Transactions between the Group and related parties
A. Transactions between the Group and the parent company or major corporate shareholders
Previous fiscal year (From April 1, 2019 to March 31, 2020)
Not applicable.
Current fiscal year (From April 1, 2020 to March 31, 2021)
Not applicable.
B. Transactions between the Group and unconsolidated subsidiaries or affiliates
Previous fiscal year (From April 1, 2019 to March 31, 2020)
Not applicable.
Current fiscal year (From April 1, 2020 to March 31, 2021)
Not applicable.
C. Transactions between the Group and companies with the same parent or subsidiaries of the Group’s affiliates
Previous fiscal year (From April 1, 2019 to March 31, 2020)
Not applicable.
Current fiscal year (From April 1, 2020 to March 31, 2021)
Not applicable.
D. Transactions between the Group and directors and/or executive officers, or major individual shareholders
Previous fiscal year (From April 1, 2019 to March 31, 2020)

Type

Name
(company orindividual)

Immediate family
member ofcorporate officer

Kazuyuki Yuasa

Transaction
content

Transaction
amountLending of funds—

Percentage ofvoting rights, etc.,
held (held by the
related party)
DirectReal estateshareholdings—
leasing operations of the related party
0.00

Capital stock orequity(Millions of yen)

Location—

Account

Balance at theend of the period(Millions of yen)

Loans

131

Transaction terms and method of determination of transaction terms, etc.
Identical to terms used with general transaction counterparties.

52

Business line or
occupation

Relationshipwith therelated party—

Current fiscal year (From April 1, 2020 to March 31, 2021)

Type

Name
(company orindividual)

Immediate family
member ofcorporate officer

Kazuyuki Yuasa

Transaction
content

Transaction
amountLending of funds

Percentage ofvoting rights, etc.,
held (held by the
related party)
DirectReal estateshareholdings—
leasing operations of the related party
0.00

Capital stock orequity(Millions of yen)

Location—

Business line or
occupation

Balance at the end of the period
Account—(Millions of yen)(Thousand of U.S.
dollars)

120

1,086

Loans

Transaction terms and method of determination of transaction terms, etc.
Identical to terms used with general transaction counterparties.
(ii) Transactions between the Group’s consolidated subsidiaries and related parties.
Previous fiscal year (From April 1, 2019 to March 31, 2020)
There were no material transactions.
Current fiscal year (From April 1, 2020 to March 31, 2021)
There were no material transactions.
(2) Notes concerning the parent company or important affiliates
Previous fiscal year (From April 1, 2019 to March 31, 2020)
None
Current fiscal year (From April 1, 2020 to March 31, 2021)
None

53

Relationshipwith therelated party—

34. Per-share information
Yen

Net assets per share of common stock
Net income per share of common stock¥

U.S. dollars

2021

2020

5,736.08
107.485,218.59
89.83

¥

2021

51.81
0.97

$

Notes 1: Diluted net income per share of common stock in the current fiscal year is not stated as there are no dilutive shares.
2: The basis for calculation of net assets per share and net income per share is as follows.
(1) Net assets per share
Thousands of
U.S. dollars

Millions of yen

2020

2021

Net assets as reported
Less
Net assets attributable to common shares at the end of the period¥¥

136,607—
136,607¥¥

2021

123,759—
123,759

1,233,924—
1,233,924$$(Thousands of shares)
2020

2021
The number of shares of common stock outstanding

23,71523,815(2) Net income per share of common stockThousands of
U.S. dollars

Millions of yen

2020

2021

Net income per share of common stock
Net income attributable to owners of parent
Net income not attributable to common shareholders
Net income attributable to owners of parent related to common stock

¥

2,553
—
2,553

¥

¥
¥

2021

2,140
—
2,140

$
$

23,067—23,067(Thousands of shares)
2020

2021
Average number of shares of common stock outstanding

23,82423,758Notes 3: The Bank’s shares remaining in the employee stock ownership trust and the board benefit trust are recorded as treasury
shares, which are deducted from the number of shares outstanding at the end of the year when calculating the net assets per
share. They are also deducted from the average number of shares outstanding during the year when calculating the net
income per share.
(Thousands of shares)
2021
2020
Employee
Employee
Board benefit
Board benefit
stock ownerstock ownertrust
trust
ship trust
ship trust
Number of treasury shares outstanding at the end of the year,
deducted when calculating net assets per share

46

200

138

210

Average number of treasury shares outstanding during the year,
deducted when calculating net income per share

98

205

202

44

54

Subsequent events(Conclusion of a capital and business alliance agreement with The Fukuho Bank, Ltd.)The Bank and Fukuho Bank, Ltd. (“Fukuho Bank”) (Collectively, the Bank and Fukuho Bank are referred to as “the two Banks” in thefollowing), have discussed aiming to enter into a capital and business alliance agreement based on the agreement dated January 14,
2021. As a result, on May 14, 2021, the two Banks concluded a capital and business alliance agreement (the “Capital and Business
Alliance Agreement”) (The basic business alliance under this agreement is referred to as the “Capital and Business Alliance”). The
Bank has resolved to acquire a third-party allotment of common stock implemented by Fukuho Bank. As a result of this third-party
allotment, Fukuho Bank will become a consolidated subsidiary of the Bank. The details are as follows.
(1) Outline of the business combination( i ) Name of the acquired company and its business outline
Name

Business line

The Fukuho Bank, Ltd.

Banking( ii ) Reasons for the business combination
The Capital and Business Alliance is thought to enable the two Banks to secure appropriate capital so that they can continue
to provide financial intermediation functions in their operating region. It will also allow the two Banks to further accelerate anddeepen their business alliance, enabling the early realization and maximization of the effects of the synergy created between
the two Banks. Furthermore, the respective brands of the two Banks will also be maintained after the conclusion of the Capitaland Business Alliance, thereby enabling the two Banks to contribute to the further sustainable development of the regional
economy as financial groups leveraging their respective strengths in order to provide services of yet higher quality to customers,
which is the objective of the Capital and Business Alliance Agreement.
( iii ) Date of the business combination
October 1, 2021 (prospective)( iv ) Legal form of the business combination
Acquisition of shares for cash (Acquiring capital increase through third-party allotment)( v ) Company name after the business combination
Unchanged.
( vi ) Percentage of voting rights acquired
51.98% (prospective)(2) Acquisition cost and breakdowns by type of consideration
Consideration for acquisition

Cash and due from banks¥5,000 million$45,163 thousand

Total acquisition cost–

¥5,000 million$45,163 thousand

The capital increase through third-party allotment is based on the assumption that the Bank has acquired all 6 million shares of
the Class A Preferred Stock of Fukuho Bank held by the Resolution and Collection Corporation in exchange for cash, and hascompleted their cancellation of all shares of the Class A Preferred Stock. In addition, it is assumed that notification to the financial
authorities and the Japan Fair Trade Commission and approval will be obtained.
(Acquisition of treasury shares)
On June 11, 2021, the Board of Directors of the Bank resolved to acquire treasury shares pursuant to the provisions of Article 156 of
the Companies Act, applied by replacing terms pursuant to the provisions of Article 165, paragraph 3 of the Act.
(1) Reason for acquiring treasury shares
For the purpose of implementing flexible capital policies in response to changes in the business environment.
(2) Details of the acquisition( i ) Class of shares acquired: Shares of common stock of the Bank( ii ) Total number of shares acquired: 450,000 shares( iii ) Total acquisition price of the shares: ¥652,950,000( iv ) Acquisition date: June 14, 2021

55

Independent auditor’s report
To the Board of Directors of The Fukui Bank, Ltd.:
OpinionWe have audited the accompanying consolidated financial statements of The Fukui Bank, Ltd.(“theBank”) and its consolidated subsidiaries (collectively referred to as “the Group”), which comprise theconsolidated balance sheets as at March 31, 2021 and 2020, the consolidated statements ofoperations,comprehensive income, changes in net assets and cash flows for the years then ended, andnotes, comprising a summary of significant accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at March 31, 2021 and 2020, and its
consolidated financial performance and its consolidated cash flows for the years then ended inaccordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Auditof the Consolidated Financial Statements section of our report. We are independent of the Group inaccordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
Emphasis of Matter
As described in “Significant subsequent events,” on May 14, 2021, the Bank concluded a capital andbusiness alliance agreement between the Bank and Fukuho Bank, Ltd. (“Fukuho Bank”). Pursuant to theagreement, the Bank will acquire a third-party allotment of common stock implemented by FukuhoBank, and Fukuho Bank will become a consolidated subsidiary of the Bank.
Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in thecontext of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Reasonableness of the estimates of allowance for doubtful receivables for loans to corporations
The key audit matter

How the matter was addressed in our audit

56

The consolidated financial statements of the
Bank and its subsidiaries reported loans andbills discounted of ¥1,790,164 million(approximately 51% of consolidated total
assets) and allowance for doubtfulreceivables of ¥14,521 million in the
consolidated balance sheet. Of this loan
amount, the balance of loans to corporations
at the Bank, the consolidated parent
company, amounted to ¥955,179 million.
The allowance for doubtful receivables forclaims to corporations of the Bank was¥11,278 million, which accounts for a major
portion of the balance.
As described in Note 2, “Significant
accounting policies and practices (4)Significant accounting policies (ⅴ)
Allowance for doubtful receivables” and“Significant accounting estimates Allowance for doubtful receivables" to theconsolidated financial statements, the Bank
classifies borrowers into five categories
based on its internal self-assessment criteria:“normal borrowers,” “borrowers requiringcaution,” “potentially bankrupt borrowers,”“substantially bankrupt borrowers,” and“bankrupt borrowers.” Allowance for
doubtful receivables is provided for eachcategory of claims according to theirassigned credit risk rating determined inaccordance with the write-off and provisions
policy.
In the self-assessment, the borrower
categories of loans to corporations are
determined based on the quantitative
assessment by the self-assessment
management rating system which utilizes
financial information of the borrowers.
However, the borrower may be determined to
be in a different category, from thequantitative assessment above, based on
qualitative factors such as the outlook forbusiness continuity and profitability, theappropriateness of the business improvement
plan, the financial support provided by otherfinancial institutions, and the impact of

The primary procedures we performed to assess whether
the borrower category in estimating the allowance for
doubtful receivable for loans to corporations of theBank, the consolidated parent company, was reasonable
included the following:(1) Internal control testing
We tested the design and operating effectiveness ofcertain of the Bank’s internal controls relevant todetermining the borrower category in the selfassessment, which is the basis for calculating theallowance for doubtful receivables.
In this assessment, we focused our testing on thefollowing:






controls to appropriately establish the internal selfassessment criteria and the policy for write-offs andprovisions in compliance with the applicableaccounting standards;
controls to ensure the reliability of the financial
information of borrowers that were entered into theself-assessment rating management systems;
IT application controls over the determination of thequantitative credit rating; andcontrols over the determination of the borrower
category based on the internal self-assessment
criteria reflecting qualitative factors.

(2) Assessment of the reasonableness of the borrower
category of loans to corporations
In order to assess whether the borrower categories wereappropriately determined based on the self-assessment
criteria, among borrowers who were determined to be indifferent categories from the quantitative assessment
based on qualitative factors, we selected those borrowers
to which business improvement plans were designed
based on certain criteria, and primarily performed thefollowing procedures:assessed the documents reviewed by the Bank andinquired the rationale for its evaluation as to thereasonable and feasible of the business
improvement plan;evaluated the precision of the business improvement
plan by comparing the planned sales and profits ofthe business improvement plan in the previous fiscal
year with the actual result in the current year; andassessed, comprehensively, the feasibility of thebusiness improvement plan based on non-financial
information obtained from the Bank’s branches,such as the orders received and sales volumes of the57

COVID-19, taking into considerationindustry specific factors.
In particular, when assessing the credit riskof borrowers, taking into consideration theprospects for future business recovery andbusiness continuity resulting from areasonable and feasible business
improvement plan, management's subjective
judgment is involved and may have asignificant impact on the allowance for
doubtful receivables.

borrower, the financial support provided by otherfinancial institutions, and the impact of COVID-19,
taking into account the business environment
surrounding the borrower.

We, therefore, determined that ourassessment of the reasonableness ofdetermination of the borrower category inestimating the allowance for doubtfulreceivables for loans to corporations is themost significant in our audit of theconsolidated financial statements for thecurrent fiscal year, and accordingly, a key
audit matter.

Responsibilities of Management and the Audit Committee for the Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan.
The audit committee is responsible for overseeing the executive directors’and directorts’ performance of
their duties with regard to the design, implementation and maintenance of the Group’s financial reporting
process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guaranteethat an audit conducted in accordance with auditing standards generally accepted in Japan will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:58

Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express an opinion
on the effectiveness of the Group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting andbased on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group to cease
to continue as a going concern.



Evaluate whether the presentation and disclosures in the consolidated financial statements are inaccordance with accounting standards generally accepted in Japan, the overall presentation, structure
and content of the consolidated financial statements, including the disclosures, and whether the
consolidated financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.

We communicate with the audit committee regarding, among other matters, the planned scope and timingof the audit, significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the audit committee with a statement that we have complied with relevant ethicalrequirements regarding independence, and communicate with them all relationships and other mattersthat may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the audit committee, we determine those matters that were of mostsignificance in the audit of the consolidated financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulationprecludes public disclosure about the matter or when, in extremely rare circumstances, we determine thata matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.

Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2021 are presented solely for convenience. Our audit also included the translation of
yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis
described in Note 1 to the consolidated financial statements.

59Interest required to be disclosed by the Certified Public Accountants Act of Japan
We do not have any interest in the Group which is required to be disclosed pursuant to the provisions of
the Certified Public Accountants Act of Japan.
Kashiwagi, Katsuhiro
Designated Engagement Partner
Certified Public Accountant
Kutsuwada, Rumiko
Designated Engagement Partner
Certified Public Accountant
Ishibashi, Yuichi
Designated Engagement Partner
Certified Public Accountant
KPMG AZSA LLC
Osaka Office, Japan
August 31, 2021
Notes to the Reader of Independent Auditor’s Report:
This is a copy of the Independent Auditor’s Report and the original copies are kept separately by the
Bank and KPMG AZSA LLC.

60

Corporate Information

Directors and Executive Officers (as of June 30, 2021)
Director, President andRepresentative Statutory Executive Officer:

Masahiro Hayashi

Directors:

Director and Senior Managing Exective Officers: Toru Yuasa

Masatake Yoshida
Kazuhiro Uchikami＊
Masaru Nanbo＊
Yuko Mitsuya＊＊

Director and Senior Managing Exective Officers: Eiichi Hasegawa
Director and Managing Executive Officer:

Osamu Watanabe

Director and Managing Executive Officer:

Noriyuki Satake

Statutory Executive Officer:

Corporate Data (as of March 31, 2021)
Date of Establishment:
Number of Shares Issued and Outstanding:Paid-in Capital:
Number of Employees:

December 19, 1899
24,144 thousand shares
JPY17,965 million
1,349

Service Network (as of May 31, 2021)
Head Office:1-1, Junka 1-chome, Fukui 910-8660, Japan
Telephone: +81-776-24-2030

International Division:

1-1, Junka 1-chome, Fukui 910-8660, Japan
Telephone: +81-776-26-9841
Facsimile: +81-776-26-7605
SWIFT: FKUIJPJT

Number of Domestic Offices:

Fukui .................................. 76
Ishikawa ............................. 10
Toyama ................................ 4
Shiga .................................... 2
Tokyo .................................... 1
Aichi ...................................... 1
Kyoto .................................... 2
Osaka ................................... 1
Other..................................... 1
Total ................................... 98

Correspondent Banking Network:

34 countries
76 cities
137 banks

Consolidated Subsidiaries (as of June 30, 2021)
The Fukugin Lease Co., Ltd.
The Fukui Credit Guarantee Service Co., Ltd.
Fukui Card Co., Ltd.
The Fukui Capital & Consulting Co., Ltd.

The Fukui Net Co., Ltd.

61

Outside Directors

Shin Okada
Keisuke Yoshida
Yoshito Sawada
Yoshihito Kobayashi

THE FUKUI BANK, LTD.
1-1, Junka 1-chome, Fukui 910-8660, Japan
Telephone: +81-776-24-2030