Annual Report
THE JUROKU BANK,LTD.

2013

F inancial Highlights (Consolidated)
PROFILEThe Juroku Bank, Ltd. and Subsidiaries

Year Ended March 31, 2013

The Juroku Bank, Ltd., has its business base in Gifu and Aichi prefectures, theThousands of
U.S.Dollars

Millions of Yen

industrial center of the Chubu region of Japan. During the over 130 years since its
founding in 1877, it has played a pivotal role as a leading financial institution in its

2013

2012

2013

Total income¥119,614¥129,319$1,271,813

Total expenses

103,155

105,947

1,096,810

Net income

23,181

11,941

246,475

Cash dividends

2,676

2,616

28,452

Total assets¥5,667,799¥5,488,038$60,263,679

Loans and bills discounted

3,646,732

3,722,144

38,774,397

Securities

1,471,984

1,458,761

15,651,079

Deposits

5,001,048

4,881,023

53,174,354

Total equity

313,373282,8433,331,983

Net cash provided by operating activities¥193,858¥106,235$2,061,223

Net cash provided by investing activities

25,439(142,721)

270,484

Net cash used in financing activities(17,026)(21,725)(181,031)

Cash and cash equivalents, end of year

328,030

125,735

3,487,826

For the Fiscal Yeararea.
We will continue to follow our philosophy of “serving our community by fulfilling
our social mission as a financial institution.” We will also pursue reforms by staying
open-minded, managing our operations rationally and steadily, creating a strong
management style through stronger earnings power, and improving our personnel
and organization.
The head office of the Bank is located in Gifu prefecture. The Bank has 157 domestic
branch offices, mainly in Gifu and Aichi prefectures, as well as representative offices
in Hong Kong and Shanghai. On a consolidated basis, as of the end of March 2013,

At Year-End

the Bank had total deposits of ¥5,001 billion (US$53,174 million), total assets of¥5,668 billion (US$60,264 million), and a capital ratio of 11.27% according todomestic standards.

Head Office

Cash Flows

CONTENTS
1 Financial Highlights (Consolidated)

15 Consolidated Statement of Income

2 Message from the President

15 Consolidated Statement of Comprehensive Income

3 Management Strategy

16 Consolidated Statement of Changes in Equity

9 Non-Performing Loans

17 Consolidated Statement of Cash Flows

10 Contribution to the Regional Economy and Community

18 Notes to Consolidated Financial Statements

12 Board of Directors and Audit & Supervisory Board Members

36 Independent Auditors’ Report

12 Organization Chart

37 Corporate Data

13 Financial Review

37 Affiliates

14 Consolidated Balance Sheet

38 Directory

Note: Amounts stated in United States dollars have been computed, solely for convenience, at the rate of ¥94.05 = US$1, the approximate rate of exchange at March 31, 2013.

Forward-Looking Statement
This annual report contains certain forward-looking statements. Those forward-looking statements are subject to risks and uncertainties, and Juroku
Bank’s actual results may differ from those described in the forward-looking statements. We are under no obligation, and expressly disclaim any
obligation, to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise.

1

F inancial Highlights (Consolidated)
PROFILEThe Juroku Bank, Ltd. and Subsidiaries

Year Ended March 31, 2013

The Juroku Bank, Ltd., has its business base in Gifu and Aichi prefectures, theThousands of
U.S.Dollars

Millions of Yen

industrial center of the Chubu region of Japan. During the over 130 years since its
founding in 1877, it has played a pivotal role as a leading financial institution in its

2013

2012

2013

Total income¥119,614¥129,319$1,271,813

Total expenses

103,155

105,947

1,096,810

Net income

23,181

11,941

246,475

Cash dividends

2,676

2,616

28,452

Total assets¥5,667,799¥5,488,038$60,263,679

Loans and bills discounted

3,646,732

3,722,144

38,774,397

Securities

1,471,984

1,458,761

15,651,079

Deposits

5,001,048

4,881,023

53,174,354

Total equity

313,373282,8433,331,983

Net cash provided by operating activities¥193,858¥106,235$2,061,223

Net cash provided by investing activities

25,439(142,721)

270,484

Net cash used in financing activities(17,026)(21,725)(181,031)

Cash and cash equivalents, end of year

328,030

125,735

3,487,826

For the Fiscal Yeararea.
We will continue to follow our philosophy of “serving our community by fulfilling
our social mission as a financial institution.” We will also pursue reforms by staying
open-minded, managing our operations rationally and steadily, creating a strong
management style through stronger earnings power, and improving our personnel
and organization.
The head office of the Bank is located in Gifu prefecture. The Bank has 157 domestic
branch offices, mainly in Gifu and Aichi prefectures, as well as representative offices
in Hong Kong and Shanghai. On a consolidated basis, as of the end of March 2013,

At Year-End

the Bank had total deposits of ¥5,001 billion (US$53,174 million), total assets of¥5,668 billion (US$60,264 million), and a capital ratio of 11.27% according todomestic standards.

Head Office

Cash Flows

CONTENTS
1 Financial Highlights (Consolidated)

15 Consolidated Statement of Income

2 Message from the President

15 Consolidated Statement of Comprehensive Income

3 Management Strategy

16 Consolidated Statement of Changes in Equity

9 Non-Performing Loans

17 Consolidated Statement of Cash Flows

10 Contribution to the Regional Economy and Community

18 Notes to Consolidated Financial Statements

12 Board of Directors and Audit & Supervisory Board Members

36 Independent Auditors’ Report

12 Organization Chart

37 Corporate Data

13 Financial Review

37 Affiliates

14 Consolidated Balance Sheet

38 Directory

Note: Amounts stated in United States dollars have been computed, solely for convenience, at the rate of ¥94.05 = US$1, the approximate rate of exchange at March 31, 2013.

Forward-Looking Statement
This annual report contains certain forward-looking statements. Those forward-looking statements are subject to risks and uncertainties, and Juroku
Bank’s actual results may differ from those described in the forward-looking statements. We are under no obligation, and expressly disclaim any
obligation, to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise.

1

M essage from the President

M anagement Strategy
In the final year of
The 12th Medium-term Management Plan
FY2013 will mark the final year of “The 12th Medium-Term
Management Plan ~ Take-off towards the Glorious Tomorrow,”which was formulated in light of the merger with The Gifu
Bank, Ltd.
Under this management plan, we are setting up a long-term
vision for the Bank as “The No.1 bank in the Tokai Region,”“The bank that bridges Gifu prefecture and Aichi prefecture,”and “The bank that contributes to the regional economy andcommunity,” which shall be fulfilled along with enhancement ofour corporate value through accelerating the implementation of
our growth strategies and early materialization of the maximum
effect of management integration with The Gifu Bank, Ltd.

The “New Juroku Bank”
strives to enhance
corporate value

Hakumi Horie President

Looking at the operating environment for financial institu-

The Gifu Bank, Ltd., and amidst ongoing initiatives to in-tions, despite signs of economic recovery, demand for capitalcrease profitability, strengthen its compliance function andinvestment has been slow to recover, and compounded withreinforce our management base, we intend to concentrate our

prolonged low interest rates and intensified competition, theefforts in achieving the goals of the plan. In particular, theearnings environment continues to be harsh and the reinforce-

Bank has recognized compliance, which serves as the basis ofment of profitability has become a priority task. Moreover, as

customer trust, to be the foundation of all operations, and each

we prepare for the application of Basel III, new capital ad-

employee will be committed to raising the standard of ethics

equacy regulations, we will be called on to further enhance theand to further strengthening the systems of internal control

Bank’s financial soundness and to solidify the trust placed in us

and compliance system.

by our customers.
Under such circumstances, the Bank merged with The

encouragement of all our stakeholders.

banks at the same time as planned, has been able to make a
fresh start as the “New Juroku Bank.”
FY2013 will mark the final year of “The 12th MediumTerm Management Plan ~ Take-off towards the Glorious
Tomorrow,” which was formulated in light of the merger with

2

July 2013
Hakumi Horie
President

FY2013 Year-end Targets

Sustainability andexpandability ofcustomer base

Deposit balance¥5,000 billion

Strengthening of
earnings capability

Core banking
profit¥25 billion

Streamlining ofmanagement

OHR (Overhead
Ratio; expenses
as a percentage
of gross businessprofit)Lower than 67%

Tier I capital
ratio

7.5% or more

Ratio of credit
cost to total
loans

Lower than 0.25%

I look forward to receiving the continued support and

Gifu Bank, Ltd., and upon eliminating and consolidating
existing branch offices and integrating the systems of the two

Numerical Targets

Improvement offinancial soundness

Based on this plan, we will be able to respond more effectively
to problems that the Bank faces. Details are outlined below.

We will be committed to implementing thefollowing basic strategies under the management plan, in an effort to effectively overcome
the challenges that surround the Group.

Basic Strategies•Reinforcement of Management BaseIn order to realize the growth strategies to be pursued after themerger with The Gifu Bank, Ltd., we will be committed tobuilding a stable management base by improving the qualityof capital while enhancing the soundness of assets through thereinforcement of core tier I capital based on the strengthening of
earnings capability while ensuring security and provision commensurate with the risks concerned.
•Pursuit of the Regional Strategies for Aichi and Gifu Prefectures Envisaging the Post-merger Situation
We will further deepen the relationship with customers by the
deployment of distribution channels that suit each market, alongwith the reinforcement of products and services that meet thecustomer needs, whereby we will promote ourselves to be chosen
by customers as their main bank.
In Aichi prefecture, we will conduct proactive marketing
activities including further focus on retail business and establishment of new distribution channels, while expanding business
transactions with new customers, in an effort to be the “community-oriented” Bank.
In Gifu prefecture on the other hand, we will focus on deepening business relationship with existing customers to establishrock-solid basis of business transactions, while creating easy-touse channels.
•Early Materialization of Cost Synergy and Its Maximization
As a result of having concurrently eliminated and consolidated
existing branch offices and integrated the systems and administration of the two banks at the time of merger with The Gifu
Bank, Ltd. as planned, we have been successful in the early materialization of the initially anticipated cost synergy. We intend
to utilize the management resources generated as a result of themerger and maximize the effects of management integration.
•Enhancement of Management Control Structure
We will be committed to enhancing management control
structure including the strengthening of various risk management systems to flexibly deal with changes in financial businessenvironment, along with further reinforcement of compliancewith laws and regulations and customer protection that serve as
the basis of customer trust.
•Consolidation of Corporate Culture and Human Resources
between the Two Banks
We will endeavor to amalgamate corporate culture and humanresources between the Bank and The Gifu Bank, Ltd. whiledeveloping a framework in which the employees will be able tooffer financial services with the highest corporate morale under
the constructive competitive environment between the employeesof the two banks.
•Promotion of Community-based Financial Services andFlexible Facilitation of Finance
We will be committed to adequately and actively providing
financial intermediation functions in line with the conditionsof the customers and to facilitating financing, while engaged incommunity-based operation with community-based financial
services defined as one of the Bank’s core management strategies,
in an effort to fulfill our responsibility as a regional financial
institution.

3

M essage from the President

M anagement Strategy
In the final year of
The 12th Medium-term Management Plan
FY2013 will mark the final year of “The 12th Medium-Term
Management Plan ~ Take-off towards the Glorious Tomorrow,”which was formulated in light of the merger with The Gifu
Bank, Ltd.
Under this management plan, we are setting up a long-term
vision for the Bank as “The No.1 bank in the Tokai Region,”“The bank that bridges Gifu prefecture and Aichi prefecture,”and “The bank that contributes to the regional economy andcommunity,” which shall be fulfilled along with enhancement ofour corporate value through accelerating the implementation of
our growth strategies and early materialization of the maximum
effect of management integration with The Gifu Bank, Ltd.

The “New Juroku Bank”
strives to enhance
corporate value

Hakumi Horie President

Looking at the operating environment for financial institu-

The Gifu Bank, Ltd., and amidst ongoing initiatives to in-tions, despite signs of economic recovery, demand for capitalcrease profitability, strengthen its compliance function andinvestment has been slow to recover, and compounded withreinforce our management base, we intend to concentrate our

prolonged low interest rates and intensified competition, theefforts in achieving the goals of the plan. In particular, theearnings environment continues to be harsh and the reinforce-

Bank has recognized compliance, which serves as the basis ofment of profitability has become a priority task. Moreover, as

customer trust, to be the foundation of all operations, and each

we prepare for the application of Basel III, new capital ad-

employee will be committed to raising the standard of ethics

equacy regulations, we will be called on to further enhance theand to further strengthening the systems of internal control

Bank’s financial soundness and to solidify the trust placed in us

and compliance system.

by our customers.
Under such circumstances, the Bank merged with The

encouragement of all our stakeholders.

banks at the same time as planned, has been able to make a
fresh start as the “New Juroku Bank.”
FY2013 will mark the final year of “The 12th MediumTerm Management Plan ~ Take-off towards the Glorious
Tomorrow,” which was formulated in light of the merger with

2

July 2013
Hakumi Horie
President

FY2013 Year-end Targets

Sustainability andexpandability ofcustomer base

Deposit balance¥5,000 billion

Strengthening of
earnings capability

Core banking
profit¥25 billion

Streamlining ofmanagement

OHR (Overhead
Ratio; expenses
as a percentage
of gross businessprofit)Lower than 67%

Tier I capital
ratio

7.5% or more

Ratio of credit
cost to total
loans

Lower than 0.25%

I look forward to receiving the continued support and

Gifu Bank, Ltd., and upon eliminating and consolidating
existing branch offices and integrating the systems of the two

Numerical Targets

Improvement offinancial soundness

Based on this plan, we will be able to respond more effectively
to problems that the Bank faces. Details are outlined below.

We will be committed to implementing thefollowing basic strategies under the management plan, in an effort to effectively overcome
the challenges that surround the Group.

Basic Strategies•Reinforcement of Management BaseIn order to realize the growth strategies to be pursued after themerger with The Gifu Bank, Ltd., we will be committed tobuilding a stable management base by improving the qualityof capital while enhancing the soundness of assets through thereinforcement of core tier I capital based on the strengthening of
earnings capability while ensuring security and provision commensurate with the risks concerned.
•Pursuit of the Regional Strategies for Aichi and Gifu Prefectures Envisaging the Post-merger Situation
We will further deepen the relationship with customers by the
deployment of distribution channels that suit each market, alongwith the reinforcement of products and services that meet thecustomer needs, whereby we will promote ourselves to be chosen
by customers as their main bank.
In Aichi prefecture, we will conduct proactive marketing
activities including further focus on retail business and establishment of new distribution channels, while expanding business
transactions with new customers, in an effort to be the “community-oriented” Bank.
In Gifu prefecture on the other hand, we will focus on deepening business relationship with existing customers to establishrock-solid basis of business transactions, while creating easy-touse channels.
•Early Materialization of Cost Synergy and Its Maximization
As a result of having concurrently eliminated and consolidated
existing branch offices and integrated the systems and administration of the two banks at the time of merger with The Gifu
Bank, Ltd. as planned, we have been successful in the early materialization of the initially anticipated cost synergy. We intend
to utilize the management resources generated as a result of themerger and maximize the effects of management integration.
•Enhancement of Management Control Structure
We will be committed to enhancing management control
structure including the strengthening of various risk management systems to flexibly deal with changes in financial businessenvironment, along with further reinforcement of compliancewith laws and regulations and customer protection that serve as
the basis of customer trust.
•Consolidation of Corporate Culture and Human Resources
between the Two Banks
We will endeavor to amalgamate corporate culture and humanresources between the Bank and The Gifu Bank, Ltd. whiledeveloping a framework in which the employees will be able tooffer financial services with the highest corporate morale under
the constructive competitive environment between the employeesof the two banks.
•Promotion of Community-based Financial Services andFlexible Facilitation of Finance
We will be committed to adequately and actively providing
financial intermediation functions in line with the conditionsof the customers and to facilitating financing, while engaged incommunity-based operation with community-based financial
services defined as one of the Bank’s core management strategies,
in an effort to fulfill our responsibility as a regional financial
institution.

3

Corporate Governance
Basic Policy
At Juroku Bank, we believe that retaining the trust of our stakeholders by conducting all of our activities in a sound manner isvital to our role as a financial institution. Therefore, we place thehighest priority on building a solid organizational structure andestablishing systems that continually reinforce corporate governance.
In association with the entry into effect of the Companies
Act, we established a Basic Policy related to the Establishmentof an Internal Control System at a meeting of the Board of
Directors held on May 24, 2006. Board meetings held on September 20, 2007, February 26, 2009, and September 21, 2011
adopted resolutions to partially amend this policy. In this way,
we have developed a system to ensure the appropriate executionof our business and have refined our system. Under this basic
policy, we will pursue initiatives to enhance corporate governance.

With respect to the risk control system, we have establishedthe ALM Committee, Operational Risk Management Committee and Compliance Committee. These committees discuss risk
management issues both on a regular basis and when necessary.
At these meetings, the appropriateness of operations is reviewed
and risk management is applied to minimize loss due to unforeseen circumstances. During the term under review, the ALM
and Compliance committees both met at least once a month.
Moreover, in May 2013, we established the Operational Risk
Management Committee with the aim of strengthening the internal control system over operational risks. We have also signed
consultation agreements with three lawyers, who provide advice
on legal matters and perform a variety of legal checks whennecessary.
The Bank’s accounts are audited by the independent auditing firm Deloitte Touche Tohmatsu LLC (as of June 30, 2013).
This firm provides accurate audits on the basis of appropriate
information disclosure.
Going forward, we will work to further enhance our corporate governance standards and ensure the soundness of our
ethical conduct and financial position.

Progress Thus Far
The Board of Directors comprises 11 members who deliberate and decide matters stipulated in laws and regulations andimportant management issues, and monitor the conduct of business operations by each director.
Under the Managing Directors Committee structure, authorized by the Board of Directors, the president, senior managing
directors and managing directors are able to quickly decide on
important matters affecting the daily conduct of business operations.
The Audit & Supervisory Board Comprises four Audit &Supervisory Board Members, including two Outside Audit &Supervisory Board Members and two Standing Audit & Supervisory Board Members. To support the Audit & Supervisory Board
Members, we have established the Audit & Supervisory Board
Members’ Office, which monitors the execution of business operations objectively and ensures appropriate auditing functions.
With regard to internal controls, the Audit & Inspection Division conducts internal audits, and at least once per year seeks
outside opinions regarding the development and management of
the internal control system. Based on these objective opinions,
we work to further improve the internal control system. Moreover, to reinforce the compliance system, we have established awhistle-blower system and have improved the effectiveness ofthe system by using an external lawyer as the point of contact.

4

Basic Policy on Strengthening Internal Control System
We are currently making efforts to build an internal control
system based on the policies described below.
1. 	System to ensure that, in the execution of their duties,
directors comply with all relevant laws, ordinances,
regulations, and the Bank’s Articles of Incorporation
Our Basic Policy establishes the Bank’s commitment to serve
local communities by fulfilling its mission as a financial institution, and to seek business growth through sound practices
founded on a broad and rational perspective.
To implement this policy, directors of the Bank are responsible for the establishment of ethical standards and a compliancepolicy, and for ensuring that business is conducted in accordancewith these standards and that laws, ordinances, and the Articles of Incorporation are adhered to. In addition, directors are
responsible for steadfastly confronting any anti-social forces thatpose a threat to social order and safety; thereby directors consolidate a system to sever all ties to these forces.
2. 	System for storage and management of information
related to the directors’ execution of their duties
To ensure efficient verification of proper business practices, regulations will be created and followed on the handling and control
of information and documents related to business operations (in-cluding electronic records); adherence to these regulations will
be monitored, and regulations will be revised when necessary.
In addition, a system will be established to enable directors
and Audit & Supervisory Board Members to view this information and the relevant documents when necessary.
3. 	Risk management regulations(1) Risk management is positioned as an important duty toensure the soundness and safety of business, and regulations related to each type of risk, including a Comprehensive Risk Management Policy, will be established, and efforts will be made toappropriately improve the measurement, evaluation, and management of risk by following these regulations. An independent
third party will regularly evaluate the Bank’s management ofmajor risks, and the Bank will continually work to improve risk
management level evaluations.
(2) In addition to designating one department to comprehensively manage risk, individual departments will be made specifically responsible for each category of risk, ensuring effective risk
management. In addition, an organizational structure will beestablished, including an ALM Committee, chaired by the director in charge of the department responsible for comprehensive
risk management. Risk management reports will be made to theBoard of Directors on a regular basis, or as necessary.
(3) The following are risks to be managed. When new risksarise, a department to handle them will be promptly establishedby the Board of Directors.
1) credit risk, 2) market risk, 3) liquidity risk, 4) operationalrisk, and 5) other risks that could have a serious impact on the
Bank’s business.
4. 	System to ensure the efficient execution of directors’ duties(1) Duties will be executed centered on the Basic Policy and an
Action Plan. A Medium-Term Management Plan will be created, and guidelines based on this plan will be established foreach six-month period.
(2) Progress made in implementing these plans will be reported
to the Board of Directors in a timely manner, and steps will betaken in response as needed.
(3) Items that should be taken up by the Board of Directors will
be clearly stated in regulations such as the Board of Directors
Regulations, and important items will be discussed by the Managing Directors Committee, which comprises managing directors or above, to ensure that issues are sufficiently examined. In
addition, Regulations on Decision-Making Authority Related toOperations will stipulate the appropriate delegation of authority to subordinates based on such factors as the importance ofthe operation, making the directors’ execution of duties more
efficient.

5. 	System to ensure that the execution of employees’ duties complies with laws, ordinances, and the Articles ofIncorporation(1) In addition to positioning compliance with laws and ordinances as one of our most important business responsibilities
and establishing regulations such as the Code of Ethics andCompliance Policy, the Bank will establish a department toprovide overall control. In addition, a Compliance Committee,
chaired by the director responsible for the department undertaking overall control, will be created, and this committee will betasked with handling compliance-related issues.
(2) An in-house system will be created for reporting violationsof laws and ordinances and other compliance-related issues, anda whistle-blower system that employs an independent lawyer
to receive reports will be maintained. Efforts will be made toprevent or promptly detect problems such as violations of laws.
6. 	System to ensure appropriate operations of the corporategroup, which is composed of related companies, including affiliates(1) An internal auditing agreement will be concluded with affiliates, and operations are audited by the Internal Audit Department of the Bank to ensure proper business operations by
the corporate group, which is centered on the Bank. Operations
at affiliates will be audited through various activities, including
appointing officers of the Bank as Audit & Supervisory Board
Member serving on a non-regular basis of affiliates and having
them attend Board of Directors meetings of affiliates.
(2) The directors of the Bank and presidents of affiliates will
exchange opinions at least once every six months to prevent
problems such as inappropriate transactions between the Bankand its affiliates.
(3) When engaging in transactions with affiliates and other entities, steps will be taken to verify that the terms of the transaction conform to the arms-length principle.
(4) A whistle-blower system will be established at the Bankand all affiliates, making it possible for parties such as affiliate
employees to make reports or seek advice.
(5) A system will be created to ensure the reliability of thefinancial reporting of the Group, centered on the Bank.
7. 	Items related to employees whose assignment to assist
them in their duties is requested by the Audit & Supervisory Board Members of the Bank
An Audit & Supervisory Board Members’ Office will be createdto assist the Audit & Supervisory Board Members in the performance of their duties, and at least one full-time employee will
be assigned to work in that office. Upon obtaining the opinionsof the Audit & Supervisory Board, decisions will be made on thepositions and qualifications of employees to be assigned to engage in this work, and a roster of such employees will be created.

5

Corporate Governance
Basic Policy
At Juroku Bank, we believe that retaining the trust of our stakeholders by conducting all of our activities in a sound manner isvital to our role as a financial institution. Therefore, we place thehighest priority on building a solid organizational structure andestablishing systems that continually reinforce corporate governance.
In association with the entry into effect of the Companies
Act, we established a Basic Policy related to the Establishmentof an Internal Control System at a meeting of the Board of
Directors held on May 24, 2006. Board meetings held on September 20, 2007, February 26, 2009, and September 21, 2011
adopted resolutions to partially amend this policy. In this way,
we have developed a system to ensure the appropriate executionof our business and have refined our system. Under this basic
policy, we will pursue initiatives to enhance corporate governance.

With respect to the risk control system, we have establishedthe ALM Committee, Operational Risk Management Committee and Compliance Committee. These committees discuss risk
management issues both on a regular basis and when necessary.
At these meetings, the appropriateness of operations is reviewed
and risk management is applied to minimize loss due to unforeseen circumstances. During the term under review, the ALM
and Compliance committees both met at least once a month.
Moreover, in May 2013, we established the Operational Risk
Management Committee with the aim of strengthening the internal control system over operational risks. We have also signed
consultation agreements with three lawyers, who provide advice
on legal matters and perform a variety of legal checks whennecessary.
The Bank’s accounts are audited by the independent auditing firm Deloitte Touche Tohmatsu LLC (as of June 30, 2013).
This firm provides accurate audits on the basis of appropriate
information disclosure.
Going forward, we will work to further enhance our corporate governance standards and ensure the soundness of our
ethical conduct and financial position.

Progress Thus Far
The Board of Directors comprises 11 members who deliberate and decide matters stipulated in laws and regulations andimportant management issues, and monitor the conduct of business operations by each director.
Under the Managing Directors Committee structure, authorized by the Board of Directors, the president, senior managing
directors and managing directors are able to quickly decide on
important matters affecting the daily conduct of business operations.
The Audit & Supervisory Board Comprises four Audit &Supervisory Board Members, including two Outside Audit &Supervisory Board Members and two Standing Audit & Supervisory Board Members. To support the Audit & Supervisory Board
Members, we have established the Audit & Supervisory Board
Members’ Office, which monitors the execution of business operations objectively and ensures appropriate auditing functions.
With regard to internal controls, the Audit & Inspection Division conducts internal audits, and at least once per year seeks
outside opinions regarding the development and management of
the internal control system. Based on these objective opinions,
we work to further improve the internal control system. Moreover, to reinforce the compliance system, we have established awhistle-blower system and have improved the effectiveness ofthe system by using an external lawyer as the point of contact.

4

Basic Policy on Strengthening Internal Control System
We are currently making efforts to build an internal control
system based on the policies described below.
1. 	System to ensure that, in the execution of their duties,
directors comply with all relevant laws, ordinances,
regulations, and the Bank’s Articles of Incorporation
Our Basic Policy establishes the Bank’s commitment to serve
local communities by fulfilling its mission as a financial institution, and to seek business growth through sound practices
founded on a broad and rational perspective.
To implement this policy, directors of the Bank are responsible for the establishment of ethical standards and a compliancepolicy, and for ensuring that business is conducted in accordancewith these standards and that laws, ordinances, and the Articles of Incorporation are adhered to. In addition, directors are
responsible for steadfastly confronting any anti-social forces thatpose a threat to social order and safety; thereby directors consolidate a system to sever all ties to these forces.
2. 	System for storage and management of information
related to the directors’ execution of their duties
To ensure efficient verification of proper business practices, regulations will be created and followed on the handling and control
of information and documents related to business operations (in-cluding electronic records); adherence to these regulations will
be monitored, and regulations will be revised when necessary.
In addition, a system will be established to enable directors
and Audit & Supervisory Board Members to view this information and the relevant documents when necessary.
3. 	Risk management regulations(1) Risk management is positioned as an important duty toensure the soundness and safety of business, and regulations related to each type of risk, including a Comprehensive Risk Management Policy, will be established, and efforts will be made toappropriately improve the measurement, evaluation, and management of risk by following these regulations. An independent
third party will regularly evaluate the Bank’s management ofmajor risks, and the Bank will continually work to improve risk
management level evaluations.
(2) In addition to designating one department to comprehensively manage risk, individual departments will be made specifically responsible for each category of risk, ensuring effective risk
management. In addition, an organizational structure will beestablished, including an ALM Committee, chaired by the director in charge of the department responsible for comprehensive
risk management. Risk management reports will be made to theBoard of Directors on a regular basis, or as necessary.
(3) The following are risks to be managed. When new risksarise, a department to handle them will be promptly establishedby the Board of Directors.
1) credit risk, 2) market risk, 3) liquidity risk, 4) operationalrisk, and 5) other risks that could have a serious impact on the
Bank’s business.
4. 	System to ensure the efficient execution of directors’ duties(1) Duties will be executed centered on the Basic Policy and an
Action Plan. A Medium-Term Management Plan will be created, and guidelines based on this plan will be established foreach six-month period.
(2) Progress made in implementing these plans will be reported
to the Board of Directors in a timely manner, and steps will betaken in response as needed.
(3) Items that should be taken up by the Board of Directors will
be clearly stated in regulations such as the Board of Directors
Regulations, and important items will be discussed by the Managing Directors Committee, which comprises managing directors or above, to ensure that issues are sufficiently examined. In
addition, Regulations on Decision-Making Authority Related toOperations will stipulate the appropriate delegation of authority to subordinates based on such factors as the importance ofthe operation, making the directors’ execution of duties more
efficient.

5. 	System to ensure that the execution of employees’ duties complies with laws, ordinances, and the Articles ofIncorporation(1) In addition to positioning compliance with laws and ordinances as one of our most important business responsibilities
and establishing regulations such as the Code of Ethics andCompliance Policy, the Bank will establish a department toprovide overall control. In addition, a Compliance Committee,
chaired by the director responsible for the department undertaking overall control, will be created, and this committee will betasked with handling compliance-related issues.
(2) An in-house system will be created for reporting violationsof laws and ordinances and other compliance-related issues, anda whistle-blower system that employs an independent lawyer
to receive reports will be maintained. Efforts will be made toprevent or promptly detect problems such as violations of laws.
6. 	System to ensure appropriate operations of the corporategroup, which is composed of related companies, including affiliates(1) An internal auditing agreement will be concluded with affiliates, and operations are audited by the Internal Audit Department of the Bank to ensure proper business operations by
the corporate group, which is centered on the Bank. Operations
at affiliates will be audited through various activities, including
appointing officers of the Bank as Audit & Supervisory Board
Member serving on a non-regular basis of affiliates and having
them attend Board of Directors meetings of affiliates.
(2) The directors of the Bank and presidents of affiliates will
exchange opinions at least once every six months to prevent
problems such as inappropriate transactions between the Bankand its affiliates.
(3) When engaging in transactions with affiliates and other entities, steps will be taken to verify that the terms of the transaction conform to the arms-length principle.
(4) A whistle-blower system will be established at the Bankand all affiliates, making it possible for parties such as affiliate
employees to make reports or seek advice.
(5) A system will be created to ensure the reliability of thefinancial reporting of the Group, centered on the Bank.
7. 	Items related to employees whose assignment to assist
them in their duties is requested by the Audit & Supervisory Board Members of the Bank
An Audit & Supervisory Board Members’ Office will be createdto assist the Audit & Supervisory Board Members in the performance of their duties, and at least one full-time employee will
be assigned to work in that office. Upon obtaining the opinionsof the Audit & Supervisory Board, decisions will be made on thepositions and qualifications of employees to be assigned to engage in this work, and a roster of such employees will be created.

58. 	Ensuring the independence of the above employees fromdirectors
The appointment, transfer, and evaluation of employees who assist the Audit & Supervisory Board Members in their duties will
be subject to the approval of the Audit & Supervisory Board.
9. 	System for directors and employees to report to Audit& Supervisory Board Members and a system for otherreports to Audit & Supervisory Board Members
Officers shall submit reports and provide information in response to requests from the Audit & Supervisory Board or individual Audit & Supervisory Board Members. The following are
the main topics of the reports and information to be provided.
(1) Department activities related to creating the Bank’s internal
control system(2) Activities of the Bank’s affiliates(3) Matters that may inflict a significant loss on the Bank and its
affiliates(4) Significant accounting policies and standards and changes tothem(5) Content of disclosed earnings, projections, and other important disclosure materials(6) Serious violations of the laws and ordinances(7) Operation of the whistle-blower system and notifications(8) Circulation of documents such as draft proposals and theminutes of important conference/committee meetings(9) Other items deemed necessary by the Audit & Supervisory
Board Members
10. System to ensure effective audits by Audit & Supervisory Board Members
The representative director will regularly meet and cooperatewith the Audit & Supervisory Board Members to ensure theeffectiveness of audits, and will regularly exchange opinions on
management problems and progress in auditing to ensure highaccuracy.

Compliance System
Recognizing that the survival of financial institutions depends
on trust, we put top priority on earning the firm trust of thegeneral public. To this end, we embrace high corporate ethicalstandards and promote extensive awareness of the importance oflegal compliance. Accordingly, in April 2012, we newly set up
a legal office within the Compliance Management Division inorder to enhance our compliance system. With the support of
the new section, we are equipped with an appropriate structure
to comply, more than ever, with social requirements.
We are further strengthening our compliance system underour 12th Medium-Term Management Plan through policies
which are designed to:61) Earn the firm trust of the general public through themaintenance of high corporate ethical standards andawareness of the importance of legal compliance;
2) Promote awareness of the crucial importance of compliance among our staff; and3) Raise standards of compliance rigor still higher.
To further enhance the compliance system that we have built
to date, we formulate and implement a compliance programeach fiscal year. All departments hold monthly study meetings
to foster knowledge of legal issues and increase compliancerelated awareness. We have also prepared curriculums related tocompliance for individual training programs in order to boost
the knowledge and awareness of compliance among our employees. In addition, each department conducts periodic self-checks
according to its specific responsibilities. This is part of ourinitiative to ingrain a compliance-oriented corporate culture.

Organizational Structure
Compliance Committee
Chaired by the managing director in charge of the ComplianceManagement Division and consisting of general managers fromrelevant divisions, the Compliance Committee examines, discusses, and issues directives concerning matters of compliance.

Compliance Management Division
As the entity responsible for overseeing compliance, the Compliance Management Division promotes compliance programs
and serves as the secretariat for the Compliance Committee.

Inspection Section(Audit and Inspection Division)
The section conducts audits and other investigations related tothe compliance conditions in each division.

Compliance at Each Division
Compliance officers are appointed in each of the divisions tocheck the day-to-day compliance of those divisions.

Customer Protection Management System
The Bank set up a Customer Protection Management Policyin September 2007 to develop and establish a system to ensure
customer protection. Under the Customer Protection Management Policy, we have clearly stated protection measures that we

had taken as part of compliance and risk management. We arefocusing more heavily on customer-oriented management. The
purpose of the policy is to improve the protection and convenience of customers through the following initiatives:(i)	Providing appropriate information and explanations on
products and services for customers(ii)	Responding properly to requests, consultation, inquiries
and complaints from customers(iii) Appropriately managing customer information(iv) Properly managing outsourced operations(v)	Properly managing of conflicts of interest so avoid unfair
detriment to the interests of our customers

In addition, to ensure that our risk management mechanisms function effectively with regard to sections within theGroup subject to auditing (the Bank’s head office divisions,branches and consolidated affiliates), regular, planned, on-site
audits of such departments are carried out by staff of the Audit
and Inspection Division, which is independent from business
operation departments. In this way the Bank verifies the effectiveness of its risk management systems.

Basic Policy of Risk Management(12th Medium-Term Management Plan)•Risk Management

Information Security, Management of Customer
Information
In line with the top priority that we assign to ensuring the confidentiality of our customers’ personal data, information security
risk is addressed by the Bank’s Information Security Management Rules. We have publicly announced our Declaration of
Personal Information Protection (Privacy Policy).
As stipulated in the aforementioned Security Management
Rules, we have also appointed a chief information officer at theBank’s headquarters and an information officer in each department and branch. We are making every effort to educate employees to bolster their awareness of security issues so that we
can ensure the maximum degree of protection for customer data
in daily operations.

Risk Management
The importance of risk management has grown as the risks
confronting financial institutions have become more complex
and diverse. Recognizing risk management as crucial for safe
and sound operations, we have established “Basic Policy of Risk
Management” contained in our 12th Medium-Term Management Plan. In addition, we have established Comprehensive
Risk Management Policy and other policies and rules relating
to risk management that enable an appropriate and prompt
response to various types of risk.
We have established the Risk Management Division to stepup our commitment in this area. We aim to further strengthen
our risk management system through use of the PDCA cycle,
by laying down policy (planning), creating internal rules andorganizations (doing), assessing results of these measures (checking) and making improvements where needed (acting).

1

Implement appropriate risk management to ensure thatrisk taking is handled in line with the Bank’s financial
strength.

2

Enhance the ability of risk analysis to support appropriate risk-taking.

3

Development of risk management system in compliancewith capital adequacy regulation.

4

Strengthen credit risk management.

Comprehensive Risk Management
The Bank has formulated a comprehensive risk management
framework by determining a Comprehensive Risk Management
Policy and Rules.
The Bank’s risk management does not stop at managing
various risks individually, but extends a step ahead to control
the total amount of risks to keep it within the range of TierI-based distributable capital, through the risk quantification using statistical methods, thereby enforcing a comprehensive risk
management aiming at ensuring soundness of management.
We adopt a flexible approach to required responses by getting the current state of such comprehensive risks checked by
the ALM Committee, which has monthly meetings and reports
directly to the Board of Directors.

Credit Risk
To appropriately adapt to changes in the credit risk in relation
to assets held by the Bank, and to ensure stable profitability andmaintain sound operations, we conduct management appropri-78. 	Ensuring the independence of the above employees fromdirectors
The appointment, transfer, and evaluation of employees who assist the Audit & Supervisory Board Members in their duties will
be subject to the approval of the Audit & Supervisory Board.
9. 	System for directors and employees to report to Audit& Supervisory Board Members and a system for otherreports to Audit & Supervisory Board Members
Officers shall submit reports and provide information in response to requests from the Audit & Supervisory Board or individual Audit & Supervisory Board Members. The following are
the main topics of the reports and information to be provided.
(1) Department activities related to creating the Bank’s internal
control system(2) Activities of the Bank’s affiliates(3) Matters that may inflict a significant loss on the Bank and its
affiliates(4) Significant accounting policies and standards and changes tothem(5) Content of disclosed earnings, projections, and other important disclosure materials(6) Serious violations of the laws and ordinances(7) Operation of the whistle-blower system and notifications(8) Circulation of documents such as draft proposals and theminutes of important conference/committee meetings(9) Other items deemed necessary by the Audit & Supervisory
Board Members
10. System to ensure effective audits by Audit & Supervisory Board Members
The representative director will regularly meet and cooperatewith the Audit & Supervisory Board Members to ensure theeffectiveness of audits, and will regularly exchange opinions on
management problems and progress in auditing to ensure highaccuracy.

Compliance System
Recognizing that the survival of financial institutions depends
on trust, we put top priority on earning the firm trust of thegeneral public. To this end, we embrace high corporate ethicalstandards and promote extensive awareness of the importance oflegal compliance. Accordingly, in April 2012, we newly set up
a legal office within the Compliance Management Division inorder to enhance our compliance system. With the support of
the new section, we are equipped with an appropriate structure
to comply, more than ever, with social requirements.
We are further strengthening our compliance system underour 12th Medium-Term Management Plan through policies
which are designed to:61) Earn the firm trust of the general public through themaintenance of high corporate ethical standards andawareness of the importance of legal compliance;
2) Promote awareness of the crucial importance of compliance among our staff; and3) Raise standards of compliance rigor still higher.
To further enhance the compliance system that we have built
to date, we formulate and implement a compliance programeach fiscal year. All departments hold monthly study meetings
to foster knowledge of legal issues and increase compliancerelated awareness. We have also prepared curriculums related tocompliance for individual training programs in order to boost
the knowledge and awareness of compliance among our employees. In addition, each department conducts periodic self-checks
according to its specific responsibilities. This is part of ourinitiative to ingrain a compliance-oriented corporate culture.

Organizational Structure
Compliance Committee
Chaired by the managing director in charge of the ComplianceManagement Division and consisting of general managers fromrelevant divisions, the Compliance Committee examines, discusses, and issues directives concerning matters of compliance.

Compliance Management Division
As the entity responsible for overseeing compliance, the Compliance Management Division promotes compliance programs
and serves as the secretariat for the Compliance Committee.

Inspection Section(Audit and Inspection Division)
The section conducts audits and other investigations related tothe compliance conditions in each division.

Compliance at Each Division
Compliance officers are appointed in each of the divisions tocheck the day-to-day compliance of those divisions.

Customer Protection Management System
The Bank set up a Customer Protection Management Policyin September 2007 to develop and establish a system to ensure
customer protection. Under the Customer Protection Management Policy, we have clearly stated protection measures that we

had taken as part of compliance and risk management. We arefocusing more heavily on customer-oriented management. The
purpose of the policy is to improve the protection and convenience of customers through the following initiatives:(i)	Providing appropriate information and explanations on
products and services for customers(ii)	Responding properly to requests, consultation, inquiries
and complaints from customers(iii) Appropriately managing customer information(iv) Properly managing outsourced operations(v)	Properly managing of conflicts of interest so avoid unfair
detriment to the interests of our customers

In addition, to ensure that our risk management mechanisms function effectively with regard to sections within theGroup subject to auditing (the Bank’s head office divisions,branches and consolidated affiliates), regular, planned, on-site
audits of such departments are carried out by staff of the Audit
and Inspection Division, which is independent from business
operation departments. In this way the Bank verifies the effectiveness of its risk management systems.

Basic Policy of Risk Management(12th Medium-Term Management Plan)•Risk Management

Information Security, Management of Customer
Information
In line with the top priority that we assign to ensuring the confidentiality of our customers’ personal data, information security
risk is addressed by the Bank’s Information Security Management Rules. We have publicly announced our Declaration of
Personal Information Protection (Privacy Policy).
As stipulated in the aforementioned Security Management
Rules, we have also appointed a chief information officer at theBank’s headquarters and an information officer in each department and branch. We are making every effort to educate employees to bolster their awareness of security issues so that we
can ensure the maximum degree of protection for customer data
in daily operations.

Risk Management
The importance of risk management has grown as the risks
confronting financial institutions have become more complex
and diverse. Recognizing risk management as crucial for safe
and sound operations, we have established “Basic Policy of Risk
Management” contained in our 12th Medium-Term Management Plan. In addition, we have established Comprehensive
Risk Management Policy and other policies and rules relating
to risk management that enable an appropriate and prompt
response to various types of risk.
We have established the Risk Management Division to stepup our commitment in this area. We aim to further strengthen
our risk management system through use of the PDCA cycle,
by laying down policy (planning), creating internal rules andorganizations (doing), assessing results of these measures (checking) and making improvements where needed (acting).

1

Implement appropriate risk management to ensure thatrisk taking is handled in line with the Bank’s financial
strength.

2

Enhance the ability of risk analysis to support appropriate risk-taking.

3

Development of risk management system in compliancewith capital adequacy regulation.

4

Strengthen credit risk management.

Comprehensive Risk Management
The Bank has formulated a comprehensive risk management
framework by determining a Comprehensive Risk Management
Policy and Rules.
The Bank’s risk management does not stop at managing
various risks individually, but extends a step ahead to control
the total amount of risks to keep it within the range of TierI-based distributable capital, through the risk quantification using statistical methods, thereby enforcing a comprehensive risk
management aiming at ensuring soundness of management.
We adopt a flexible approach to required responses by getting the current state of such comprehensive risks checked by
the ALM Committee, which has monthly meetings and reports
directly to the Board of Directors.

Credit Risk
To appropriately adapt to changes in the credit risk in relation
to assets held by the Bank, and to ensure stable profitability andmaintain sound operations, we conduct management appropri-7

N on-Performing Loansately with reference to our Credit Risk Management Policies
and Credit Risk Management Rules.
In order to objectively determine a borrower company’s
credit state and its capacity to repay loans, we perform a credit
rating system in a timely manner and reflect the result of thecredit rating in our credit risk management. More specifically,
we endeavor to maintain a sound asset base by implementing
our own assessment of loan assets and by making appropriate
provision for possible loan losses and write-offs based on thecredit rating system.
The credit rating system enables a quantification of the credit risk, eliminates concentration of risk with particular borrowers or industries, and further ensures profits that are balanced bycredit costs, and thereby enables the Bank to improve its credit
portfolio.
Regarding examination of loan applications, we have clearly
separated the sales promotion and credit screening functions
and undertake strict reviews and management under a policyof screening by borrower business sector. Individual cases arescreened by verifying various aspects including the use of funds,
income and expenditure plans, and investment outcomes, and by
carefully examining a borrower’s resources and plans for repayment.

Market Risk
We manage market risk through the Bank’s Market Risk Management Policies and, as specific rules, Market Risk Management Rules.
The Risk Management Division manages interest rate risk
related to deposits and loans, as well as the risk associated withsecurities, derivatives and other markets. Our current positions,
unrealized gains/losses and risk indicators such as BPV and VaR
are measured and evaluated on a daily or monthly basis andreported to management. From the perspective of managing assets and liabilities together, we hold monthly ALM Committee
meetings, forecast interest rates, stock prices and exchange rates,
as a set of measures to enable an appropriate response to risk.

Liquidity Risk
We manage liquidity risk through our Liquidity Risk Management Policies and Liquidity Risk Management Rules and regard
stable cash flows as the primary objective. Moreover, we havein place a system (Liquidity Risk Contingency Plan) that can
respond to a wide variety of circumstances promptly and appropriately.

8

Operational Risk
We have drawn up an Operational Risk Management Policies
and Operational Risk Management Rules, with separate provisions for administrative risk, system risk, legal risk, personnel
risk, fixed asset risk and reputational risk. We implement necessary measures for required responses by getting the current
management status of such risks checked regularly by the
Operational Risk Management Committee and is reported to
the Board of Directors. For the important categories of administrative and system risk, we have drawn up the following subpolicies and procedures.

The Bank provides information about the status of its assets inthree different ways. First, we conduct self assessment to calculate appropriate write-offs and reserves by classifying borrowers
according to their financial soundness. Second, disclosure basedon “The Financial Reconstruction Law” is used to classify prob-

Asset Self-Assessment / Assets Disclosed under the Financial Reconstruction Law /Risk-Monitored Loans under the Banking Law (as of March 31, 2013)(Non-consolidated)
Asset Self-Assessment
For all assets【Administrative Risk】

We manage administrative risk through our own Administrative Risk Management Policies and Administrative Risk Management Rules. While adapting to the growing diversificationand complexity of banking operations, our administration has
become more rigorous in an effort to retain and strengthen thetrust of our customers.

【System Risk】

System risk is managed through the Bank’s System Risk Management Policies and System Risk Management Rules. We haveestablished a framework that swiftly responds to system failure
through our Computer System Failure Action Rules and Center
Failure Rules.
To prepare for contingencies that cannot be dealt with using our conventional risk management mechanisms, we havecompiled a Business Continuity Plan, and have taken measuresthat would enable us to continue major business operations evenunder emergency conditions.
At Juroku Bank, we recognize the importance of integrated
risk management, and we will continue working to enhance thesophistication of our risk management system.

lem assets. Third, we disclose the value of Risk-Monitored Loans
based on the Banking Law, which excludes non-loan assets suchas foreign exchange, accrued interest and advance payments.

Borrower category
Balances of credits
Legallybankrupt borrowers

3.1
[1.0]

Virtuallybankrupt borrowers

14.5
[7.9]

Potentiallybankrupt borrowers

115.8

I

Classification
II
III

IV

2.4

0.7

—
(0.1)

—
(2.1)

—
(1.3)

—
(6.6)

11.2

3.3

16.9

Others*1

662.0

Normal borrowers

2,914.6

61.8

25.8

28.3
(20.9)

17.6
[8.8]

7.3

10.2

Classification

Loan balances

Bankrupt loans

2.9
[0.9]

Non-accrual loans

129.9[123.3]

Past due loans(3 months or more)

1.0

Restructured loans

12.0

Total

146.0
[137.4]100.0%

115.8

66.6

20.9

75.5%

Substandard loans*3

13.1

4.7

0.8

41.5%

78.7

31.9

75.4%

Sub-total

4.2

12.7

242.8

419.2

146.5
[137.8]

Normal assets

3,580.3
2,914.6

Total

3,726.9[3,718.1]

Bankrupt andquasi-bankrupt assets

Billions of Yen
Risk-monitored loans
Loans only
(no other type of credit included)

Doubtful assets

Borrowers requiringcautionSubstandard
borrowers

Assets disclosed under the Financial Reconstruction Law
and coverage of the claims
For all claims
Classification
Portion of claims
Reserves
Coverage ratio
Balances of claims
secured*2

3,236.9 461.7

28.3(22.4)—(8.8)*1 Borrowers requiring caution, excluding substandard borrowers*2 Portion of claims secured by collateral or guarantees

Ratio of disclosed claims under the Financial Reconstruction
Law (subtotal) to total credits
Figures in brackets are those after application of partial charge-offs(direct deduction).
3.9%[3.7%]

Ratio of risk-monitored loans to total
loans
Figures in brackets are those after application of partial charge-offs (direct
deduction).
3.9%[3.7%]

Total

3,726.9[3,718.1]*3 Substandard claims consist of loans only.

Notes:
1. Amounts in asset self-assessment and claims disclosed under
the Financial Reconstruction Law and the coverage of claims arerounded to the nearest 100 million yen. Amounts in risk-monitored loans are rounded down to the nearest 100 million yen.
Figures for ratios are rounded down to the first decimal place.

3. Amounts in asset self-assessment are those after deduction of
specific reserves for possible loan losses, and the amounts inparentheses are specific reserves for each classification.
4. The Bank does not implement partial charge-offs (direct deduction). If partial charge-offs were implemented, relevant figures
would decline to the figures shown in brackets.

2. All credit items = Loans + Customers’ liabilities for acceptancesand guarantees + Bonds issued through private placements covered by guarantees of the Bank + Foreign exchanges + Suspense
payments with a similar nature to loans + Accrued interest.

9

N on-Performing Loansately with reference to our Credit Risk Management Policies
and Credit Risk Management Rules.
In order to objectively determine a borrower company’s
credit state and its capacity to repay loans, we perform a credit
rating system in a timely manner and reflect the result of thecredit rating in our credit risk management. More specifically,
we endeavor to maintain a sound asset base by implementing
our own assessment of loan assets and by making appropriate
provision for possible loan losses and write-offs based on thecredit rating system.
The credit rating system enables a quantification of the credit risk, eliminates concentration of risk with particular borrowers or industries, and further ensures profits that are balanced bycredit costs, and thereby enables the Bank to improve its credit
portfolio.
Regarding examination of loan applications, we have clearly
separated the sales promotion and credit screening functions
and undertake strict reviews and management under a policyof screening by borrower business sector. Individual cases arescreened by verifying various aspects including the use of funds,
income and expenditure plans, and investment outcomes, and by
carefully examining a borrower’s resources and plans for repayment.

Market Risk
We manage market risk through the Bank’s Market Risk Management Policies and, as specific rules, Market Risk Management Rules.
The Risk Management Division manages interest rate risk
related to deposits and loans, as well as the risk associated withsecurities, derivatives and other markets. Our current positions,
unrealized gains/losses and risk indicators such as BPV and VaR
are measured and evaluated on a daily or monthly basis andreported to management. From the perspective of managing assets and liabilities together, we hold monthly ALM Committee
meetings, forecast interest rates, stock prices and exchange rates,
as a set of measures to enable an appropriate response to risk.

Liquidity Risk
We manage liquidity risk through our Liquidity Risk Management Policies and Liquidity Risk Management Rules and regard
stable cash flows as the primary objective. Moreover, we havein place a system (Liquidity Risk Contingency Plan) that can
respond to a wide variety of circumstances promptly and appropriately.

8

Operational Risk
We have drawn up an Operational Risk Management Policies
and Operational Risk Management Rules, with separate provisions for administrative risk, system risk, legal risk, personnel
risk, fixed asset risk and reputational risk. We implement necessary measures for required responses by getting the current
management status of such risks checked regularly by the
Operational Risk Management Committee and is reported to
the Board of Directors. For the important categories of administrative and system risk, we have drawn up the following subpolicies and procedures.

The Bank provides information about the status of its assets inthree different ways. First, we conduct self assessment to calculate appropriate write-offs and reserves by classifying borrowers
according to their financial soundness. Second, disclosure basedon “The Financial Reconstruction Law” is used to classify prob-

Asset Self-Assessment / Assets Disclosed under the Financial Reconstruction Law /Risk-Monitored Loans under the Banking Law (as of March 31, 2013)(Non-consolidated)
Asset Self-Assessment
For all assets【Administrative Risk】

We manage administrative risk through our own Administrative Risk Management Policies and Administrative Risk Management Rules. While adapting to the growing diversificationand complexity of banking operations, our administration has
become more rigorous in an effort to retain and strengthen thetrust of our customers.

【System Risk】

System risk is managed through the Bank’s System Risk Management Policies and System Risk Management Rules. We haveestablished a framework that swiftly responds to system failure
through our Computer System Failure Action Rules and Center
Failure Rules.
To prepare for contingencies that cannot be dealt with using our conventional risk management mechanisms, we havecompiled a Business Continuity Plan, and have taken measuresthat would enable us to continue major business operations evenunder emergency conditions.
At Juroku Bank, we recognize the importance of integrated
risk management, and we will continue working to enhance thesophistication of our risk management system.

lem assets. Third, we disclose the value of Risk-Monitored Loans
based on the Banking Law, which excludes non-loan assets suchas foreign exchange, accrued interest and advance payments.

Borrower category
Balances of credits
Legallybankrupt borrowers

3.1
[1.0]

Virtuallybankrupt borrowers

14.5
[7.9]

Potentiallybankrupt borrowers

115.8

I

Classification
II
III

IV

2.4

0.7

—
(0.1)

—
(2.1)

—
(1.3)

—
(6.6)

11.2

3.3

16.9

Others*1

662.0

Normal borrowers

2,914.6

61.8

25.8

28.3
(20.9)

17.6
[8.8]

7.3

10.2

Classification

Loan balances

Bankrupt loans

2.9
[0.9]

Non-accrual loans

129.9[123.3]

Past due loans(3 months or more)

1.0

Restructured loans

12.0

Total

146.0
[137.4]100.0%

115.8

66.6

20.9

75.5%

Substandard loans*3

13.1

4.7

0.8

41.5%

78.7

31.9

75.4%

Sub-total

4.2

12.7

242.8

419.2

146.5
[137.8]

Normal assets

3,580.3
2,914.6

Total

3,726.9[3,718.1]

Bankrupt andquasi-bankrupt assets

Billions of Yen
Risk-monitored loans
Loans only
(no other type of credit included)

Doubtful assets

Borrowers requiringcautionSubstandard
borrowers

Assets disclosed under the Financial Reconstruction Law
and coverage of the claims
For all claims
Classification
Portion of claims
Reserves
Coverage ratio
Balances of claims
secured*2

3,236.9 461.7

28.3(22.4)—(8.8)*1 Borrowers requiring caution, excluding substandard borrowers*2 Portion of claims secured by collateral or guarantees

Ratio of disclosed claims under the Financial Reconstruction
Law (subtotal) to total credits
Figures in brackets are those after application of partial charge-offs(direct deduction).
3.9%[3.7%]

Ratio of risk-monitored loans to total
loans
Figures in brackets are those after application of partial charge-offs (direct
deduction).
3.9%[3.7%]

Total

3,726.9[3,718.1]*3 Substandard claims consist of loans only.

Notes:
1. Amounts in asset self-assessment and claims disclosed under
the Financial Reconstruction Law and the coverage of claims arerounded to the nearest 100 million yen. Amounts in risk-monitored loans are rounded down to the nearest 100 million yen.
Figures for ratios are rounded down to the first decimal place.

3. Amounts in asset self-assessment are those after deduction of
specific reserves for possible loan losses, and the amounts inparentheses are specific reserves for each classification.
4. The Bank does not implement partial charge-offs (direct deduction). If partial charge-offs were implemented, relevant figures
would decline to the figures shown in brackets.

2. All credit items = Loans + Customers’ liabilities for acceptancesand guarantees + Bonds issued through private placements covered by guarantees of the Bank + Foreign exchanges + Suspense
payments with a similar nature to loans + Accrued interest.

9

C ontribution to the Regional Economy and Community
Activities to Revitalize the Regional
EconomyInitiatives to Facilitate Financing
The Bank views the facilitation of regional financing as its mostimportant duty and this is expressed in its basic philosophy of“serving our community by fulfilling our social mission as a financial institution.” Therefore, the Bank has actively responded
to its customers’ demands in relation to their needs for funds orreview of the conditions for borrowing.
The Bank has enhanced its management system through theprovision of a Financing Facilitation Meeting that was established in the headquarters during December 2009 to respondattentively to the variety of requests we receive from customers
including small-and medium-sized businesses and customers
who have mortgage loans.
Although the SME Financing Facilitation Act expired at
the end of March 2013, we intend to maintain our basic stancetoward facilitation of financing and will strive to provide a
prompt, accurate and suitable response and thereby enable the
Bank to function as a proactive financial intermediary in its
role as a regional financial institution for further facilitation offinancing.

Environmental Conservation Activities
The Juroku Bank not only engages in its own environmental
conservation activities but also supports the various environmental activities of its customers.
 Handling Eco-Friendly Financial Products
The Bank promotes financial assistance for environmentallyconscious companies. As part of its commitment, the Bank deals
with the Juroku Eco-Rating Loan Scheme (commenced in December 2010) and Juroku Eco Private Placement Bonds (fromMarch 2011). In addition to the above eco-friendly products,
the Bank extends the loan, Every Support 21, with the aim ofsupporting customers to address environmental issues.

Juroku Bank’s Support for Overseas Business
Development Hosting Overseas Business Seminars
In December 2012, we hosted the “Overseas Expansion Support
Seminar (M&A Utilization and Risk Management)” and the“SME Overseas Expansion Support Forum in Chubu,” which wasco-sponsored by the Small and Medium Enterprise Agency andthe Chubu Bureau of Economy, Trade and Industry. In February
2013, we hosted the “China Business Seminar for Automobile
Parts Manufacturers.” As an increasing number of our customers actively pursue overseas expansion against the backdrop of ashrinking domestic market, we coordinated with related agencies and cooperating businesses to provide information on suchmatters as the future of risk management and business expansion for Japanese companies.

 Hosting “Japan-China Monozukuri Business Talks Forum@ Shenzhen 2012”
In December 2012, the Bank, jointly with a number of Japaneseregional banks and local governments, held an inverse trade fairin Shenzhen, China, designed to support Japanese companies
operating in China in their creation of excellent products andservices. We provided our customers seeking suppliers of raw
materials and contract manufacturers in the Huanan region ofChina with opportunities for fruitful business negotiations.

 Held “Myanmar Economics Study Mission” and “Myanmar Investment and Expansion Seminar”
The Bank held a “Seminar and Local Economics Study” forcustomers who are interested in doing business in Myanmar. By
inspecting an industrial park that was scheduled to be developed
and factories of companies already operating in Myanmar during
the local study tour, participants were able to obtain valuable
information including that on the local investment climate, financial situation and the entry status of Japanese companies into
the Myanmar market. In November 2012, the Bank became thefirst regional bank to conclude a business cooperation agreementwith Ayeyarwady Bank, a major private bank in Myanmar.

Bases for Interregional Collaboration for Overseas Business Support
The Bank: Hong Kong, San-In Godo Bank: Dalian,
Hiroshima Bank: Bangkok (Thailand), Hokkoku Bank: Singapore

Korea

DalianChina

Business cooperation: Shinhan Bank Japan( Japanese subsidiary of Shinhan Bank)

Shanghai Representative Office(3 employees)
Business cooperation:
Bank of Communications, Bank of China,
Industrial and Commercial Bank of China

Hong Kong

India

Business cooperation:
State Bank of India

Thailand

VietnamHong Kong Representative Office(3 employees)

Business cooperation: KASIKORNBANK(2 dispatched officers)

Business cooperation: Australia and New Zealand Banking Group
Secondment: JETRO Ho Chi Minh
(1 dispatched officer)

MyanmarBusiness cooperation:
Ayeyarwady Bank

10

 Commencement of “Juroku Overseas Support and Network Services”
As an increasing number of our customers find the need to
expand their businesses into emerging countries, risks associatedwith such overseas business development are also on the rise.
Moreover, the needs for consultation and information gathering are also becoming increasingly diverse. In light of suchcircumstances, the Bank, starting from February 2013, launched“Juroku Overseas Support and Network Services,” a free membership service that utilizes its domestic and overseas networks(overseas representative offices, overseas cooperating financial
institutions, insurance companies, consulting firms, etc.), in
addition to its conventional support for overseas business development. We intend to reinforce our support for the overseas
business development of our customers by providing even more
timely and enhanced support services.

Singapore

Indonesia

Business cooperation: Bank Negara Indonesia(1 dispatched officer)

11

C ontribution to the Regional Economy and Community
Activities to Revitalize the Regional
EconomyInitiatives to Facilitate Financing
The Bank views the facilitation of regional financing as its mostimportant duty and this is expressed in its basic philosophy of“serving our community by fulfilling our social mission as a financial institution.” Therefore, the Bank has actively responded
to its customers’ demands in relation to their needs for funds orreview of the conditions for borrowing.
The Bank has enhanced its management system through theprovision of a Financing Facilitation Meeting that was established in the headquarters during December 2009 to respondattentively to the variety of requests we receive from customers
including small-and medium-sized businesses and customers
who have mortgage loans.
Although the SME Financing Facilitation Act expired at
the end of March 2013, we intend to maintain our basic stancetoward facilitation of financing and will strive to provide a
prompt, accurate and suitable response and thereby enable the
Bank to function as a proactive financial intermediary in its
role as a regional financial institution for further facilitation offinancing.

Environmental Conservation Activities
The Juroku Bank not only engages in its own environmental
conservation activities but also supports the various environmental activities of its customers.
 Handling Eco-Friendly Financial Products
The Bank promotes financial assistance for environmentallyconscious companies. As part of its commitment, the Bank deals
with the Juroku Eco-Rating Loan Scheme (commenced in December 2010) and Juroku Eco Private Placement Bonds (fromMarch 2011). In addition to the above eco-friendly products,
the Bank extends the loan, Every Support 21, with the aim ofsupporting customers to address environmental issues.

Juroku Bank’s Support for Overseas Business
Development Hosting Overseas Business Seminars
In December 2012, we hosted the “Overseas Expansion Support
Seminar (M&A Utilization and Risk Management)” and the“SME Overseas Expansion Support Forum in Chubu,” which wasco-sponsored by the Small and Medium Enterprise Agency andthe Chubu Bureau of Economy, Trade and Industry. In February
2013, we hosted the “China Business Seminar for Automobile
Parts Manufacturers.” As an increasing number of our customers actively pursue overseas expansion against the backdrop of ashrinking domestic market, we coordinated with related agencies and cooperating businesses to provide information on suchmatters as the future of risk management and business expansion for Japanese companies.

 Hosting “Japan-China Monozukuri Business Talks Forum@ Shenzhen 2012”
In December 2012, the Bank, jointly with a number of Japaneseregional banks and local governments, held an inverse trade fairin Shenzhen, China, designed to support Japanese companies
operating in China in their creation of excellent products andservices. We provided our customers seeking suppliers of raw
materials and contract manufacturers in the Huanan region ofChina with opportunities for fruitful business negotiations.

 Held “Myanmar Economics Study Mission” and “Myanmar Investment and Expansion Seminar”
The Bank held a “Seminar and Local Economics Study” forcustomers who are interested in doing business in Myanmar. By
inspecting an industrial park that was scheduled to be developed
and factories of companies already operating in Myanmar during
the local study tour, participants were able to obtain valuable
information including that on the local investment climate, financial situation and the entry status of Japanese companies into
the Myanmar market. In November 2012, the Bank became thefirst regional bank to conclude a business cooperation agreementwith Ayeyarwady Bank, a major private bank in Myanmar.

Bases for Interregional Collaboration for Overseas Business Support
The Bank: Hong Kong, San-In Godo Bank: Dalian,
Hiroshima Bank: Bangkok (Thailand), Hokkoku Bank: Singapore

Korea

DalianChina

Business cooperation: Shinhan Bank Japan( Japanese subsidiary of Shinhan Bank)

Shanghai Representative Office(3 employees)
Business cooperation:
Bank of Communications, Bank of China,
Industrial and Commercial Bank of China

Hong Kong

India

Business cooperation:
State Bank of India

Thailand

VietnamHong Kong Representative Office(3 employees)

Business cooperation: KASIKORNBANK(2 dispatched officers)

Business cooperation: Australia and New Zealand Banking Group
Secondment: JETRO Ho Chi Minh
(1 dispatched officer)

MyanmarBusiness cooperation:
Ayeyarwady Bank

10

 Commencement of “Juroku Overseas Support and Network Services”
As an increasing number of our customers find the need to
expand their businesses into emerging countries, risks associatedwith such overseas business development are also on the rise.
Moreover, the needs for consultation and information gathering are also becoming increasingly diverse. In light of suchcircumstances, the Bank, starting from February 2013, launched“Juroku Overseas Support and Network Services,” a free membership service that utilizes its domestic and overseas networks(overseas representative offices, overseas cooperating financial
institutions, insurance companies, consulting firms, etc.), in
addition to its conventional support for overseas business development. We intend to reinforce our support for the overseas
business development of our customers by providing even more
timely and enhanced support services.

Singapore

Indonesia

Business cooperation: Bank Negara Indonesia(1 dispatched officer)

11

B oard of Directors and Audit & Supervisory Board Members

F inancial Review

The Juroku Bank, Ltd. (as of June 30, 2013)

Business Environment

President

Hakumi Horie
During the fiscal year under review, the Japanese economy followed a recovery path, thanks to increased exports to the U.S.,in addition to strong automobile production reflecting the effects of the eco-car subsidy and demand related to earthquake
restoration activities. In the latter half of the year, the economy
softened somewhat as a result of the deceleration of the emerging economies including China, in the wake of the European
debt crisis, as well as the effects of deteriorating of Japan-China
relations. However, hopes of economic recovery were raised once
again in response to “Abenomics,” the economic policies of the
Abe administration and the ensuing deprecation of the yen andrising stock prices.
Likewise, in Gifu and Aichi prefectures, the Bank’s business bases, production increased, mainly in automobile-related
field, the area’s primary industry, and despite a slight slowdown
toward the latter half of the fiscal year, positive signs of recovery
were discernible, similar to that in the rest of the country.

Senior Managing Director

Yukio Murase
Managing Directors

Toshiro Hori
Fumihiko Miura
Naoki Ikeda
Hakumi Horie
President

Directors

Hiroyuki Ota
Kunisaku Muto
Kenji Mori
Takeyoshi Asai
Kimio Hirose
Akira Yamada
Standing Audit & Supervisory Board Members

Takashi Okada
Kunihiko Mori
Outside Audit & Supervisory Board Members

Toshihiro Nakaya
Masahiro Hori

Yukio Murase
Senior Managing Director

Toshiro HoriManaging Director

Fumihiko Miura
Managing Director

Naoki Ikeda
Managing Director

O rganization Chart
The Juroku Bank, Ltd. (as of June 30, 2013)

General Meeting of
Shareholders

Audit & Supervisory
Board Members
Audit & Supervisory
Board

Board of Directors

Executive
Committee

12

Audit & Supervisory Board Members’ Office
Audit and Inspection Division
Secretariat
Personnel DivisionCorporate Planning DivisionMarketing Supervision Division
Retail Marketing DivisionCorporate Marketing DivisionInternational and Securities Division
Hong Kong Representative Office
Shanghai Representative Office
Credit Supervision Division
Enterprise Support Division
General Affairs Division
Operations Administration Division
Risk Management Division
Compliance Management Division
Head Office
Nagoya Main Office
Domestic Branches (155)

Performance
On September 18, 2012, the Bank conducted an absorptiontype merger with its consolidated subsidiary, The Gifu Bank,
Ltd. Under these conditions, the Bank’s consolidated results forthe fiscal year under review were as follows:
In conjunction with the merger with The Gifu Bank, Ltd.,the Bank, starting from the fiscal year under review, has madecertain changes to the categories of business segments presented
as reportable segments. The comparisons and analyses of the
fiscal year under review are based on the categories of segments
after the changes.
Ordinary income from banking operations decreased by¥11,670 million to ¥91,186 million (US$970 million), mainly
due to a decrease in interest income reflecting the decrease in interest on loans and discounts as well as the decrease in net gain
on securities. Ordinary expenses decreased by ¥1,862 million to¥80,868 million (US$860 million), due to a decrease in interest
expense reflecting the decrease in interest on deposits in addition
to the decrease in net loss on securities. Ordinary profit declinedby ¥9,808 million to ¥10,318 million (US$110 million).
In the leasing business, ordinary income decreased by ¥823
million to ¥20,719 million (US$220 million), while ordinary expenses decreased by ¥622 million to ¥19,176 million(US$204 million) and ordinary profit decreased by ¥201 million to ¥1,543 million (US$16 million). In other businesses,
including the credit card business and credit guarantee business,ordinary income decreased by ¥16 million to ¥5,503 million(US$59 million), while ordinary expenses decreased by ¥18
million to ¥3,720 million (US$40 million) and ordinary profit
increased by ¥2 million to ¥1,783 million (US$19 million).

As a result, ordinary income on a consolidated basis decreased by ¥12,453 million to ¥115,801 million (US$1,231
million) and ordinary expenses decreased by ¥2,443 million to¥102,191 million (US$1,087 million), while ordinary profit
decreased by ¥10,010 million to ¥13,610 million (US$145
million). Net income increased by ¥11,240 million to ¥23,181
million (US$246 million) as a result of reporting gain on negative goodwill recorded in connection with the merger with The
Gifu Bank, Ltd. under extraordinary income, and a decrease inincome taxes reflecting the reporting of deferred tax assets relating to temporary differences, which were moved over from The
Gifu Bank, Ltd.

Financial Position
In relation to balance of deposits, while striving to procure stable, long-term funds at low cost through various sales activities
such as special campaigns, the Bank also worked to strengthen
its lineup of investment products, particularly for individuals.
These included investment trusts, government bonds, pension insurance, and whole life insurance as a positive response
to diversified asset management needs. As a result, our balance of deposits as of March 31, 2013 came to ¥5,001.0 billion(US$53,174 million).
In lending activities, the Bank responded actively to demand
for funds from local enterprises. Along with this, we worked
actively to provide mortgage loans and other financing to individuals and funds to local government entities. As a result, ourbalance of loans as of March 31, 2013 came to ¥3,646.7 billion(US$38,774 million).
With regard to securities, in addition to underwriting andpurchasing central and local government bonds, while closely
watching market conditions, the Bank engaged in bond andother securities transactions in order to efficiently manage funds.
As a result, our balance of securities as of March 31, 2013 cameto ¥1,472.0 billion (US$15,651 million).
Year-end unrealized gain on available-for-sale securities cameto ¥45,997 million (US$489 million).
Net cash provided by operating activities amounted to¥193,858 million (US$2,061 million), an increase of ¥87,623
million from the previous term, mainly as a result of an increasein deposits. Net cash provided by investing activities amounted
to ¥25,439 million (US$270 million), an increase of ¥168,160
million from the previous term, mainly as a result of an increase in proceeds from maturities of securities. Net cash usedin financing activities amounted to ¥17,026 million (US$181
million), a decrease of ¥4,699 million from the previous term,
mainly as a result of an increase in proceeds from issuance ofsubordinated bonds. As a result, the closing balance of cash andcash equivalents increased by ¥202,295 million during the term
under review, to ¥328,030 million (US$3,488 million).

13

B oard of Directors and Audit & Supervisory Board Members

F inancial Review

The Juroku Bank, Ltd. (as of June 30, 2013)

Business Environment

President

Hakumi Horie
During the fiscal year under review, the Japanese economy followed a recovery path, thanks to increased exports to the U.S.,in addition to strong automobile production reflecting the effects of the eco-car subsidy and demand related to earthquake
restoration activities. In the latter half of the year, the economy
softened somewhat as a result of the deceleration of the emerging economies including China, in the wake of the European
debt crisis, as well as the effects of deteriorating of Japan-China
relations. However, hopes of economic recovery were raised once
again in response to “Abenomics,” the economic policies of the
Abe administration and the ensuing deprecation of the yen andrising stock prices.
Likewise, in Gifu and Aichi prefectures, the Bank’s business bases, production increased, mainly in automobile-related
field, the area’s primary industry, and despite a slight slowdown
toward the latter half of the fiscal year, positive signs of recovery
were discernible, similar to that in the rest of the country.

Senior Managing Director

Yukio Murase
Managing Directors

Toshiro Hori
Fumihiko Miura
Naoki Ikeda
Hakumi Horie
President

Directors

Hiroyuki Ota
Kunisaku Muto
Kenji Mori
Takeyoshi Asai
Kimio Hirose
Akira Yamada
Standing Audit & Supervisory Board Members

Takashi Okada
Kunihiko Mori
Outside Audit & Supervisory Board Members

Toshihiro Nakaya
Masahiro Hori

Yukio Murase
Senior Managing Director

Toshiro HoriManaging Director

Fumihiko Miura
Managing Director

Naoki Ikeda
Managing Director

O rganization Chart
The Juroku Bank, Ltd. (as of June 30, 2013)

General Meeting of
Shareholders

Audit & Supervisory
Board Members
Audit & Supervisory
Board

Board of Directors

Executive
Committee

12

Audit & Supervisory Board Members’ Office
Audit and Inspection Division
Secretariat
Personnel DivisionCorporate Planning DivisionMarketing Supervision Division
Retail Marketing DivisionCorporate Marketing DivisionInternational and Securities Division
Hong Kong Representative Office
Shanghai Representative Office
Credit Supervision Division
Enterprise Support Division
General Affairs Division
Operations Administration Division
Risk Management Division
Compliance Management Division
Head Office
Nagoya Main Office
Domestic Branches (155)

Performance
On September 18, 2012, the Bank conducted an absorptiontype merger with its consolidated subsidiary, The Gifu Bank,
Ltd. Under these conditions, the Bank’s consolidated results forthe fiscal year under review were as follows:
In conjunction with the merger with The Gifu Bank, Ltd.,the Bank, starting from the fiscal year under review, has madecertain changes to the categories of business segments presented
as reportable segments. The comparisons and analyses of the
fiscal year under review are based on the categories of segments
after the changes.
Ordinary income from banking operations decreased by¥11,670 million to ¥91,186 million (US$970 million), mainly
due to a decrease in interest income reflecting the decrease in interest on loans and discounts as well as the decrease in net gain
on securities. Ordinary expenses decreased by ¥1,862 million to¥80,868 million (US$860 million), due to a decrease in interest
expense reflecting the decrease in interest on deposits in addition
to the decrease in net loss on securities. Ordinary profit declinedby ¥9,808 million to ¥10,318 million (US$110 million).
In the leasing business, ordinary income decreased by ¥823
million to ¥20,719 million (US$220 million), while ordinary expenses decreased by ¥622 million to ¥19,176 million(US$204 million) and ordinary profit decreased by ¥201 million to ¥1,543 million (US$16 million). In other businesses,
including the credit card business and credit guarantee business,ordinary income decreased by ¥16 million to ¥5,503 million(US$59 million), while ordinary expenses decreased by ¥18
million to ¥3,720 million (US$40 million) and ordinary profit
increased by ¥2 million to ¥1,783 million (US$19 million).

As a result, ordinary income on a consolidated basis decreased by ¥12,453 million to ¥115,801 million (US$1,231
million) and ordinary expenses decreased by ¥2,443 million to¥102,191 million (US$1,087 million), while ordinary profit
decreased by ¥10,010 million to ¥13,610 million (US$145
million). Net income increased by ¥11,240 million to ¥23,181
million (US$246 million) as a result of reporting gain on negative goodwill recorded in connection with the merger with The
Gifu Bank, Ltd. under extraordinary income, and a decrease inincome taxes reflecting the reporting of deferred tax assets relating to temporary differences, which were moved over from The
Gifu Bank, Ltd.

Financial Position
In relation to balance of deposits, while striving to procure stable, long-term funds at low cost through various sales activities
such as special campaigns, the Bank also worked to strengthen
its lineup of investment products, particularly for individuals.
These included investment trusts, government bonds, pension insurance, and whole life insurance as a positive response
to diversified asset management needs. As a result, our balance of deposits as of March 31, 2013 came to ¥5,001.0 billion(US$53,174 million).
In lending activities, the Bank responded actively to demand
for funds from local enterprises. Along with this, we worked
actively to provide mortgage loans and other financing to individuals and funds to local government entities. As a result, ourbalance of loans as of March 31, 2013 came to ¥3,646.7 billion(US$38,774 million).
With regard to securities, in addition to underwriting andpurchasing central and local government bonds, while closely
watching market conditions, the Bank engaged in bond andother securities transactions in order to efficiently manage funds.
As a result, our balance of securities as of March 31, 2013 cameto ¥1,472.0 billion (US$15,651 million).
Year-end unrealized gain on available-for-sale securities cameto ¥45,997 million (US$489 million).
Net cash provided by operating activities amounted to¥193,858 million (US$2,061 million), an increase of ¥87,623
million from the previous term, mainly as a result of an increasein deposits. Net cash provided by investing activities amounted
to ¥25,439 million (US$270 million), an increase of ¥168,160
million from the previous term, mainly as a result of an increase in proceeds from maturities of securities. Net cash usedin financing activities amounted to ¥17,026 million (US$181
million), a decrease of ¥4,699 million from the previous term,
mainly as a result of an increase in proceeds from issuance ofsubordinated bonds. As a result, the closing balance of cash andcash equivalents increased by ¥202,295 million during the term
under review, to ¥328,030 million (US$3,488 million).

13

C onsolidated Balance SheetThe Juroku Bank, Ltd. and Consolidated Subsidiaries

C onsolidated Statement of Income
The Juroku Bank, Ltd. and Consolidated Subsidiaries

March 31, 2013

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

ASSETS:Cash and due from banks (Notes 4 and 23)
Call loans (Note 23)
Trading securities (Notes 5 and 23)
Money held in trust (Notes 6 and 23)
Securities (Notes 5, 12 and 23)
Loans and bills discounted (Notes 7 and 23)
Foreign exchanges (Notes 7 and 8)
Lease receivables and investments in leases (Notes 12 and 22)
Other assets (Notes 9 and 12)
Premises and equipment (Notes 2.h and 10)
Goodwill
Intangible assets
Deferred tax assets (Note 21)
Customers’ liabilities for acceptances and guarantees (Note 11)
Reserve for possible loan losses (Note 23)
Total Assets

2013

2012

2013

¥328,715
60,0001,230
10,6201,471,984
3,646,732
5,712
40,56339,96366,018
4,343
6,190
3,360
25,733(43,364)¥5,667,799¥129,096—
1,718
10,6201,458,761
3,722,144
4,814
40,83951,61867,569
4,587
6,788
4,982
27,437(42,935)¥5,488,038$3,495,109
637,959
13,078112,919
15,651,079
38,774,397
60,734431,292
424,910
701,946
46,17865,81635,726273,610(461,074)$60,263,679¥5,001,048
131,760—
48,91572,314380
10,00045,12910,41936
8,692
25,7335,354,426¥4,881,023
8,400
50,00063,92682,988842
15,00053,462
12,1371,228
8,752
27,437
5,205,195$53,174,354
1,400,957—
520,096
768,889
4,040
106,326
479,841
110,781383
92,419273,61056,931,696

36,83936,839391,696

LIABILITIES AND EQUITY:
Liabilities:
Deposits (Notes 12, 13 and 23)
Negotiable certificates of deposit (Note 23)
Call money (Note 12)
Payables under securities lending transactions (Notes 12 and 23)
Borrowed money (Notes 12, 14 and 23)
Foreign exchanges (Note 8)
Bonds (Note 15)
Other liabilities (Notes 16 and 18)
Liability for retirement benefits (Note 17)
Deferred tax liabilities (Note 21)
Deferred tax liabilities for land revaluation surplus (Note 2.h)
Acceptances and guarantees (Note 11)
Total Liabilities

Year Ended March 31, 2013

Commitments and Contingent Liabilities (Notes 22 and 24)

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
Income:Interest on:
Loans and discounts
Securities
Other
Fees and commissions
Other operating income (Note 5)
Gain on sale of securities
Gain on negative goodwill (Notes 3 and 29)
Other income
Total Income
Expenses:
Interest on:
Deposits
Borrowings and re-discounts
Other
Fees and commissions
Other operating expenses (Note 5)
General and administrative expenses
Provision for possible loan losses
Impairment loss on long-lived assets
Loss on abolishment of retirement benefit plan and the others (Note 17)
Other expenses (Note 20)
Total Expenses
Income before Income Taxes and Minority Interests
Income Taxes (Note 21):
Current
Deferred
Total Income Taxes
Net Income before Minority Interests
Minority Interests in Net Income
Net Income

2013

2013

2012

¥55,920
14,708220
15,58824,957
2,014
3,670
2,537
119,614¥59,217
16,001274
15,56625,410
8,706
1,061
3,084
129,319$594,577
156,385
2,339
165,742265,359
21,41439,022
26,975
1,271,813

5,109
960
157
5,649
20,53160,157
5,326
609
—
4,657
103,155
16,459

6,124
1,429
141
5,848
21,12464,369
—
309
957
5,646
105,947
23,37254,322
10,207
1,669
60,064
218,300
639,628
56,6296,475—
49,516
1,096,810
175,003

1,678(10,019)(8,341)24,8001,619¥23,181

2,150
7,354
9,504
13,8681,927¥11,941

17,842(106,528)(88,686)
263,689
17,214$246,475

Yen
Per Share of Common Stock (Notes 2.q and 27):2013
¥61.7055.96
7.00

Basic net income
Diluted net income
Cash dividends applicable to the year
See notes to consolidated financial statements.

U.S. Dollars
2013

2012

$0.66
0.60
0.07

¥31.9425.88
7.00

Equity (Notes 19 and 28):
Common stock:authorized, 460,000,000 shares;
issued, 379,241,348 shares in 2013 and 2012
Preferred stock:authorized, 20,000,000 shares;
issued, 20,000,000 shares in 2013
Capital surplus
Retained earnings
Treasury stock - at cost:

5,516,641 shares in 2013 and 5,490,087 shares in 2012
Accumulated other comprehensive income
Unrealized gain on available-for-sale securities (Note 5)
Land revaluation surplus (Note 2.h)
Total
Minority interests
Total Equity
Total Liabilities and Equity
See notes to consolidated financial statements.

14

C onsolidated Statement of Comprehensive Income
The Juroku Bank, Ltd. and Consolidated Subsidiaries

47,816
148,804

27,817
128,186

508,410
1,582,180(1,515)(1,509)(16,108)

45,997
13,619291,560
21,813313,373¥5,667,799

25,37813,732
230,443
52,400282,843¥5,488,038

489,069
144,806
3,100,053
231,930
3,331,983$60,263,679

Year Ended March 31, 2013

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
2013
Net income before minority interests
Other comprehensive income (Note 26):
Unrealized gain on available-for-sale securities
Land revaluation surplus
Total other comprehensive income
Comprehensive income
Total comprehensive income attributable to:
Owners of the parent
Minority interests
See notes to consolidated financial statements.

2012

2013

¥24,800¥13,868$263,689

20,724—
20,724¥45,524

11,9801,247
13,227¥27,095

220,351—
220,351$484,040¥43,800
1,724¥25,122
1,973$465,710
18,33015

C onsolidated Balance SheetThe Juroku Bank, Ltd. and Consolidated Subsidiaries

C onsolidated Statement of Income
The Juroku Bank, Ltd. and Consolidated Subsidiaries

March 31, 2013

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

ASSETS:Cash and due from banks (Notes 4 and 23)
Call loans (Note 23)
Trading securities (Notes 5 and 23)
Money held in trust (Notes 6 and 23)
Securities (Notes 5, 12 and 23)
Loans and bills discounted (Notes 7 and 23)
Foreign exchanges (Notes 7 and 8)
Lease receivables and investments in leases (Notes 12 and 22)
Other assets (Notes 9 and 12)
Premises and equipment (Notes 2.h and 10)
Goodwill
Intangible assets
Deferred tax assets (Note 21)
Customers’ liabilities for acceptances and guarantees (Note 11)
Reserve for possible loan losses (Note 23)
Total Assets

2013

2012

2013

¥328,715
60,0001,230
10,6201,471,984
3,646,732
5,712
40,56339,96366,018
4,343
6,190
3,360
25,733(43,364)¥5,667,799¥129,096—
1,718
10,6201,458,761
3,722,144
4,814
40,83951,61867,569
4,587
6,788
4,982
27,437(42,935)¥5,488,038$3,495,109
637,959
13,078112,919
15,651,079
38,774,397
60,734431,292
424,910
701,946
46,17865,81635,726273,610(461,074)$60,263,679¥5,001,048
131,760—
48,91572,314380
10,00045,12910,41936
8,692
25,7335,354,426¥4,881,023
8,400
50,00063,92682,988842
15,00053,462
12,1371,228
8,752
27,437
5,205,195$53,174,354
1,400,957—
520,096
768,889
4,040
106,326
479,841
110,781383
92,419273,61056,931,696

36,83936,839391,696

LIABILITIES AND EQUITY:
Liabilities:
Deposits (Notes 12, 13 and 23)
Negotiable certificates of deposit (Note 23)
Call money (Note 12)
Payables under securities lending transactions (Notes 12 and 23)
Borrowed money (Notes 12, 14 and 23)
Foreign exchanges (Note 8)
Bonds (Note 15)
Other liabilities (Notes 16 and 18)
Liability for retirement benefits (Note 17)
Deferred tax liabilities (Note 21)
Deferred tax liabilities for land revaluation surplus (Note 2.h)
Acceptances and guarantees (Note 11)
Total Liabilities

Year Ended March 31, 2013

Commitments and Contingent Liabilities (Notes 22 and 24)

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
Income:Interest on:
Loans and discounts
Securities
Other
Fees and commissions
Other operating income (Note 5)
Gain on sale of securities
Gain on negative goodwill (Notes 3 and 29)
Other income
Total Income
Expenses:
Interest on:
Deposits
Borrowings and re-discounts
Other
Fees and commissions
Other operating expenses (Note 5)
General and administrative expenses
Provision for possible loan losses
Impairment loss on long-lived assets
Loss on abolishment of retirement benefit plan and the others (Note 17)
Other expenses (Note 20)
Total Expenses
Income before Income Taxes and Minority Interests
Income Taxes (Note 21):
Current
Deferred
Total Income Taxes
Net Income before Minority Interests
Minority Interests in Net Income
Net Income

2013

2013

2012

¥55,920
14,708220
15,58824,957
2,014
3,670
2,537
119,614¥59,217
16,001274
15,56625,410
8,706
1,061
3,084
129,319$594,577
156,385
2,339
165,742265,359
21,41439,022
26,975
1,271,813

5,109
960
157
5,649
20,53160,157
5,326
609
—
4,657
103,155
16,459

6,124
1,429
141
5,848
21,12464,369
—
309
957
5,646
105,947
23,37254,322
10,207
1,669
60,064
218,300
639,628
56,6296,475—
49,516
1,096,810
175,003

1,678(10,019)(8,341)24,8001,619¥23,181

2,150
7,354
9,504
13,8681,927¥11,941

17,842(106,528)(88,686)
263,689
17,214$246,475

Yen
Per Share of Common Stock (Notes 2.q and 27):2013
¥61.7055.96
7.00

Basic net income
Diluted net income
Cash dividends applicable to the year
See notes to consolidated financial statements.

U.S. Dollars
2013

2012

$0.66
0.60
0.07

¥31.9425.88
7.00

Equity (Notes 19 and 28):
Common stock:authorized, 460,000,000 shares;
issued, 379,241,348 shares in 2013 and 2012
Preferred stock:authorized, 20,000,000 shares;
issued, 20,000,000 shares in 2013
Capital surplus
Retained earnings
Treasury stock - at cost:

5,516,641 shares in 2013 and 5,490,087 shares in 2012
Accumulated other comprehensive income
Unrealized gain on available-for-sale securities (Note 5)
Land revaluation surplus (Note 2.h)
Total
Minority interests
Total Equity
Total Liabilities and Equity
See notes to consolidated financial statements.

14

C onsolidated Statement of Comprehensive Income
The Juroku Bank, Ltd. and Consolidated Subsidiaries

47,816
148,804

27,817
128,186

508,410
1,582,180(1,515)(1,509)(16,108)

45,997
13,619291,560
21,813313,373¥5,667,799

25,37813,732
230,443
52,400282,843¥5,488,038

489,069
144,806
3,100,053
231,930
3,331,983$60,263,679

Year Ended March 31, 2013

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
2013
Net income before minority interests
Other comprehensive income (Note 26):
Unrealized gain on available-for-sale securities
Land revaluation surplus
Total other comprehensive income
Comprehensive income
Total comprehensive income attributable to:
Owners of the parent
Minority interests
See notes to consolidated financial statements.

2012

2013

¥24,800¥13,868$263,689

20,724—
20,724¥45,524

11,9801,247
13,227¥27,095

220,351—
220,351$484,040¥43,800
1,724¥25,122
1,973$465,710
18,33015

C onsolidated Statement of Changes in Equity
The Juroku Bank, Ltd. and Consolidated Subsidiaries

The Juroku Bank, Ltd. and Consolidated Subsidiaries

Year Ended March 31, 2013

Thousands

Accumulated Other
Comprehensive Income
CommonStockCapitalSurplusRetained
Earnings

Treasury
Stock

UnrealizedLand
Gain on
Revaluation
Available-for-sale Surplus
Securities

Total

Minority
Interests

Total
EquityOperating Activities:—¥36,839¥27,824¥118,816¥(1,529)¥13,444¥12,550¥207,944¥51,635¥259,579

Net income

—

—

—

—

11,941———

11,941—

11,941

Cash dividends, ¥7.00 per share

—

—

—

—

(2,616)———(2,616)—(2,616)

Transfer of land revaluation surplus

—

—

—

—

65

—

—

—

65

—

65

Purchase of treasury stock

(135)

—

—

—

—

(34)

—

—

(34)

—

(34)

Disposal of treasury stock

110

—

—

(7)

(20)

54

—

—

27

—

27

Net change in the year

—

—

—

—

—

—

11,934

1,182

13,116765

13,881

373,751—

36,83927,817

128,186(1,509)25,37813,732

230,443

52,400282,843

Net income

—

—

—

—

23,181———

23,181—

23,181

Cash dividends, ¥7.00 per share

—

—

—

—

(2,676)———(2,676)—(2,676)

Transfer of land revaluation surplus

—

—

—

—

113

—

—

—

113

—

113

Purchase of treasury stock

(41)

—

—

—

—

(12)

—

—

(12)

—

(12)

Disposal of treasury stock

15

—

—

(1)

—

6

—

—

5

—

5

Increase by merger—

20,000—20,000————20,000—20,000Net change in the year

—

—

—

—

—

—

20,619(113)

20,506(30,587)(10,081)373,725

20,000¥36,839¥47,816¥148,804¥(1,515)¥45,997¥13,619¥291,560¥21,813¥313,373

Balance at March 31, 2013

Thousands of U.S. Dollars (Note 1)

Balance at March 31, 2012

CapitalSurplusRetained
Earnings$391,696$295,768 $1,362,956

Treasury
Stock

UnrealizedLand
Gain on
Revaluation
Available-for-sale Surplus
Securities$(16,045) $269,835

Minority
Interests

Total$146,007 $2,450,217

Total
Equity$557,150 $3,007,367

Net income——

246,475———

246,475—

246,475

Cash dividends, $0.07 per share——(28,452)———(28,452)—(28,452)

Transfer of land revaluation surplus

—

—

1,201

—

—

—

1,201

—

1,201

Purchase of treasury stock

—

—

—

(127)

—

—

(127)

—

(127)

Disposal of treasury stock

—

(11)

—

64

—

—

53

—

53

Increase by merger—

212,653

—

—

—

—

212,653—

212,653———

219,234(1,201)

218,033(325,220)(107,187)

Net change in the year
Balance at March 31, 2013
See notes to consolidated financial statements.

—$391,696$508,410 $1,582,180$(16,108) $489,069

Income before income taxes and minority interests
Adjustments for:
Income taxes - paid
Income taxes - refund
Depreciation
Impairment loss on long-lived assets
Interest income recognized on statements of income
Interest expense recognized on statements of income
Gain on change in equity
Net gain on securities
Unrealized loss on derivatives
Net increase (decrease) in reserve for possible loan losses
Net (decrease) increase in liability for retirement benefits
Net decrease (increase) in loans
Net increase in deposits
Net increase in negotiable certificates of deposit
Net decrease in due from banks (excluding cash equivalents)
Net (increase) decrease in call loans
Net (decrease) increase in call money
Net decrease in payables under securities lending transactions
Net decrease in lease receivables and investments in leases
Interest income - cash basis
Interest expense - cash basis
Other - net
Total adjustments
Net cash provided by operating activities

2013

2012

2013

¥16,459¥23,372$175,003(2,501)
103
4,316
609
(70,848)6,226(82)(2,351)124
429(1,718)75,412120,024
123,360
2,676(60,000)(50,000)(15,010)276
73,378(5,796)(21,228)
177,399
193,858(1,242)
260
5,832
309
(75,492)
7,694—(5,270)71(8,637)2,075(157,899)
131,436
2,053
638
56,66350,000(6,965)465
76,608(13,380)
17,644
82,863106,235(26,592)
1,095
45,8906,475(753,301)
66,198(872)(24,997)
1,318
4,561
(18,267)
801,829
1,276,172
1,311,643
28,453(637,959)(531,632)(159,596)
2,935
780,202(61,627)(225,708)
1,886,220
2,061,223(369,204)
152,519
246,657(2,222)(1,519)363(1,155)25,439(371,677)
173,850
60,141(1,842)(3,384)252(61)(142,721)(3,925,614)
1,621,680
2,622,616(23,626)(16,151)
3,860(12,281)
270,484

8,000(10,000)
10,000(15,000)
4(12)(7,000)(3,018)(17,026)24
202,295
125,735¥328,030—(4,000)—(15,000)27(34)—(2,718)(21,725)(3)(58,214)
183,949¥125,735

85,061(106,326)
106,326(159,490)
43(128)(74,428)(32,089)(181,031)
255
2,150,931
1,336,895$3,487,826

Investing Activities:

Accumulated Other
Comprehensive Income
CommonStock

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

373,776

Balance at March 31, 2012

Year Ended March 31, 2013

Millions of Yen

Outstanding Outstanding
Number of
Number of
Shares ofShares ofCommon Stock Preferred Stock

Balance at April 1, 2011

C onsolidated Statement of Cash Flows$144,806 $3,100,053$231,930 $3,331,983

Purchases of securities
Proceeds from sales of securities
Proceeds from maturities of securities
Purchases of premises and equipment
Purchases of intangible assets
Proceeds from sales of premises and equipment
Other - net
Net cash provided by investing activities
Financing Activities:
Proceeds from subordinated loans
Repayment of subordinated loans
Issuance of subordinated bonds
Redemption of subordinated bonds
Proceeds from sales of treasury stock
Acquisition of treasury stock
Acquisition of treasury stock of subsidiaries
Dividends paid
Net cash used in financing activities
Foreign Currency Translation Adjustments on Cash and Cash Equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents, Beginning of Year
Cash and Cash Equivalents, End of Year (Note 4)
See notes to consolidated financial statements.

16

17

C onsolidated Statement of Changes in Equity
The Juroku Bank, Ltd. and Consolidated Subsidiaries

The Juroku Bank, Ltd. and Consolidated Subsidiaries

Year Ended March 31, 2013

Thousands

Accumulated Other
Comprehensive Income
CommonStockCapitalSurplusRetained
Earnings

Treasury
Stock

UnrealizedLand
Gain on
Revaluation
Available-for-sale Surplus
Securities

Total

Minority
Interests

Total
EquityOperating Activities:—¥36,839¥27,824¥118,816¥(1,529)¥13,444¥12,550¥207,944¥51,635¥259,579

Net income

—

—

—

—

11,941———

11,941—

11,941

Cash dividends, ¥7.00 per share

—

—

—

—

(2,616)———(2,616)—(2,616)

Transfer of land revaluation surplus

—

—

—

—

65

—

—

—

65

—

65

Purchase of treasury stock

(135)

—

—

—

—

(34)

—

—

(34)

—

(34)

Disposal of treasury stock

110

—

—

(7)

(20)

54

—

—

27

—

27

Net change in the year

—

—

—

—

—

—

11,934

1,182

13,116765

13,881

373,751—

36,83927,817

128,186(1,509)25,37813,732

230,443

52,400282,843

Net income

—

—

—

—

23,181———

23,181—

23,181

Cash dividends, ¥7.00 per share

—

—

—

—

(2,676)———(2,676)—(2,676)

Transfer of land revaluation surplus

—

—

—

—

113

—

—

—

113

—

113

Purchase of treasury stock

(41)

—

—

—

—

(12)

—

—

(12)

—

(12)

Disposal of treasury stock

15

—

—

(1)

—

6

—

—

5

—

5

Increase by merger—

20,000—20,000————20,000—20,000Net change in the year

—

—

—

—

—

—

20,619(113)

20,506(30,587)(10,081)373,725

20,000¥36,839¥47,816¥148,804¥(1,515)¥45,997¥13,619¥291,560¥21,813¥313,373

Balance at March 31, 2013

Thousands of U.S. Dollars (Note 1)

Balance at March 31, 2012

CapitalSurplusRetained
Earnings$391,696$295,768 $1,362,956

Treasury
Stock

UnrealizedLand
Gain on
Revaluation
Available-for-sale Surplus
Securities$(16,045) $269,835

Minority
Interests

Total$146,007 $2,450,217

Total
Equity$557,150 $3,007,367

Net income——

246,475———

246,475—

246,475

Cash dividends, $0.07 per share——(28,452)———(28,452)—(28,452)

Transfer of land revaluation surplus

—

—

1,201

—

—

—

1,201

—

1,201

Purchase of treasury stock

—

—

—

(127)

—

—

(127)

—

(127)

Disposal of treasury stock

—

(11)

—

64

—

—

53

—

53

Increase by merger—

212,653

—

—

—

—

212,653—

212,653———

219,234(1,201)

218,033(325,220)(107,187)

Net change in the year
Balance at March 31, 2013
See notes to consolidated financial statements.

—$391,696$508,410 $1,582,180$(16,108) $489,069

Income before income taxes and minority interests
Adjustments for:
Income taxes - paid
Income taxes - refund
Depreciation
Impairment loss on long-lived assets
Interest income recognized on statements of income
Interest expense recognized on statements of income
Gain on change in equity
Net gain on securities
Unrealized loss on derivatives
Net increase (decrease) in reserve for possible loan losses
Net (decrease) increase in liability for retirement benefits
Net decrease (increase) in loans
Net increase in deposits
Net increase in negotiable certificates of deposit
Net decrease in due from banks (excluding cash equivalents)
Net (increase) decrease in call loans
Net (decrease) increase in call money
Net decrease in payables under securities lending transactions
Net decrease in lease receivables and investments in leases
Interest income - cash basis
Interest expense - cash basis
Other - net
Total adjustments
Net cash provided by operating activities

2013

2012

2013

¥16,459¥23,372$175,003(2,501)
103
4,316
609
(70,848)6,226(82)(2,351)124
429(1,718)75,412120,024
123,360
2,676(60,000)(50,000)(15,010)276
73,378(5,796)(21,228)
177,399
193,858(1,242)
260
5,832
309
(75,492)
7,694—(5,270)71(8,637)2,075(157,899)
131,436
2,053
638
56,66350,000(6,965)465
76,608(13,380)
17,644
82,863106,235(26,592)
1,095
45,8906,475(753,301)
66,198(872)(24,997)
1,318
4,561
(18,267)
801,829
1,276,172
1,311,643
28,453(637,959)(531,632)(159,596)
2,935
780,202(61,627)(225,708)
1,886,220
2,061,223(369,204)
152,519
246,657(2,222)(1,519)363(1,155)25,439(371,677)
173,850
60,141(1,842)(3,384)252(61)(142,721)(3,925,614)
1,621,680
2,622,616(23,626)(16,151)
3,860(12,281)
270,484

8,000(10,000)
10,000(15,000)
4(12)(7,000)(3,018)(17,026)24
202,295
125,735¥328,030—(4,000)—(15,000)27(34)—(2,718)(21,725)(3)(58,214)
183,949¥125,735

85,061(106,326)
106,326(159,490)
43(128)(74,428)(32,089)(181,031)
255
2,150,931
1,336,895$3,487,826

Investing Activities:

Accumulated Other
Comprehensive Income
CommonStock

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

373,776

Balance at March 31, 2012

Year Ended March 31, 2013

Millions of Yen

Outstanding Outstanding
Number of
Number of
Shares ofShares ofCommon Stock Preferred Stock

Balance at April 1, 2011

C onsolidated Statement of Cash Flows$144,806 $3,100,053$231,930 $3,331,983

Purchases of securities
Proceeds from sales of securities
Proceeds from maturities of securities
Purchases of premises and equipment
Purchases of intangible assets
Proceeds from sales of premises and equipment
Other - net
Net cash provided by investing activities
Financing Activities:
Proceeds from subordinated loans
Repayment of subordinated loans
Issuance of subordinated bonds
Redemption of subordinated bonds
Proceeds from sales of treasury stock
Acquisition of treasury stock
Acquisition of treasury stock of subsidiaries
Dividends paid
Net cash used in financing activities
Foreign Currency Translation Adjustments on Cash and Cash Equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents, Beginning of Year
Cash and Cash Equivalents, End of Year (Note 4)
See notes to consolidated financial statements.

16

17

N otes to Consolidated Financial Statements
The Juroku Bank, Ltd. and Consolidated Subsidiaries

Year Ended March 31, 2013

1. Basis of Presentation of Consolidated Financial Statements

The accompanying consolidated financial statements have been preparedin accordance with the provisions set forth in the Japanese Financial
Instruments and Exchange Act and its related accounting regulations
and the Enforcement Regulation for the Banking Law, and in conformity with accounting principles generally accepted in Japan (“Japanese
GAAP”), which are different in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards(“IFRS”).
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to the consolidated
financial statements issued domestically in order to present them in aform which is more familiar to readers outside Japan.
The consolidated financial statements are stated in Japanese yen, thecurrency of the country in which The Juroku Bank, Ltd. (the “Bank”) is
incorporated and operates. The translations of Japanese yen amounts into
U.S. dollar amounts are included solely for the convenience of readers
outside Japan and have been made at the rate of ¥94.05 to $1, the approximate rate of exchange at March 31, 2013. Such translations should
not be construed as representations that the Japanese yen amounts could
be converted into U.S. dollars at that or any other rate.

2. Summary of Significant Accounting Policies
a. Consolidation

The consolidated financial statements as of March 31, 2013 include theaccounts of the Bank and its eight (eleven in 2012) significant subsidiaries, including Juroku Business Service Co., Ltd., Juroku DC Card Co.,
Ltd., Juroku JCB Co., Ltd., Juroku Lease Co., Ltd., Juroku Computer
Service Co., Ltd., Juroku Credit Guarantee Co., Ltd., Juroku CapitalCo., Ltd., and The Gifugin Hosho Services Co., Ltd. (together, the“Group”).
The Gifu Bank, Ltd., Juroku DC Card Co., Ltd. and The Gifugin
Business Service Co., Ltd. are excluded from consolidation because The
Gifu Bank., Ltd. and Juroku DC Card Co., Ltd. were merged with theBank, and The Gifugin Business Service Co., Ltd. was liquidated.
Under the control concept, those companies in which the Bank,
directly or indirectly, is able to exercise control over operations are fully
consolidated.
Investments in two (two in 2012) unconsolidated subsidiaries arestated at cost. If the equity method of accounting had been applied tothe investments in these companies, the effect on the accompanying
consolidated financial statements would not be material.
The excess of the cost of acquisition over the fair value of the net
assets of an acquired subsidiary at the date of acquisition is being amortized over a period of 20 years.
All significant intercompany balances and transactions have been
eliminated in consolidation. All material unrealized profits included in
assets resulting from transactions within the Group have been eliminated in consolidation.

b. Business Combination

In October 2003, the Business Accounting Council issued a Statementof Opinion, “Accounting for Business Combinations”, and in December
2005, the ASBJ issued ASBJ Statement No.7, “Accounting Standard
for Business Divestitures” and ASBJ Guidance No.10, “Guidance for
Accounting Standard for Business Combinations and Business Divestitures.” The accounting standard for business combinations allowed
companies to apply the pooling of interests method of accounting only
when certain specific criteria were met such that the business combination was essentially regarded as a uniting-of-interests. For businesscombinations that did not meet the uniting-of-interests criteria, thebusiness combination was considered to be an acquisition and the purchase method of accounting was required. This standard also prescribed
the accounting for combinations of entities under common control andfor joint ventures.
In December 2008, the ASBJ issued a revised accounting standard for business combinations, ASBJ Statement No. 21, “AccountingStandard for Business Combinations.” Major accounting changes under
the revised accounting standard are as follows: (1) The revised standard

18

requires accounting for business combinations only by the purchasemethod. As a result, the pooling of interests method of accounting is nolonger allowed. (2) The previous accounting standard required researchand development costs to be charged to income as incurred. Under therevised standard, in-process research and development costs (IPR&D)
acquired in the business combination are capitalized as an intangible
asset. (3) The previous accounting standard provided for a bargain
purchase gain (negative goodwill) to be systematically amortized over a
period not exceeding 20 years. Under the revised standard, the acquirer
recognizes the bargain purchase gain in profit or loss immediately on
the acquisition date after reassessing and confirming that all of the assets
acquired and all of the liabilities assumed have been identified after a review of the procedures used in the purchase price allocation. The revised
standard was applicable to business combinations undertaken on or after
April 1, 2010.

c. Cash and cash equivalents

For the purpose of the consolidated statement of cash flows, cash andcash equivalents represent cash and amounts due from the Bank ofJapan.

d. Trading securities

Trading securities are stated at fair value and the related unrealized gains
and losses are included in earnings. The cost of trading securities sold isdetermined based on the moving-average method.

e. Securities

Securities other than trading securities are classified and accounted for,depending on management’s intent, as follows: 1) held-to-maturity debt
securities, which are expected to be held to maturity with the positive
intent and ability to hold to maturity, are reported at amortized costand 2) available-for-sale securities, which are not classified as held-tomaturity, are reported at fair value with unrealized gains and losses, netof applicable taxes, reported in a separate component of equity. Nonmarketable available-for-sale securities are stated at cost determined by
the moving-average method.
For other than temporary declines in fair value, securities are reduced to net realizable value by a charge to income.
Securities included in money held in trust for trading purposes
are stated at fair value, and the related unrealized gains and losses areincluded in earnings.

f. Premises and equipment

Premises and equipment are stated at cost less accumulated depreciation.
Depreciation of premises and equipment of the Bank, except for leased
assets, is computed by the declining-balance method over the estimateduseful lives of the assets. Depreciation of premises and equipment of theconsolidated subsidiaries, except for leased assets, is computed principally by the same method as the Bank.
The range of useful lives is principally from 15 to 50 years forbuildings and from 4 to 20 years for other premises and equipment.
Effective April 1, 2012, as a result of the revision of Japanese corporate tax law, the Bank and its consolidated subsidiaries changed theirdepreciation method for premises and equipment acquired on or after
April 1, 2012 to the method stipulated under the revised corporate tax
law.
As a result, consolidated operating income, and income before
income taxes and minority interests for the year ended March 31, 2013,both increased by ¥39 million ($415 thousand).
Depreciation of leased assets under finance leases is computed by thestraight-line method over the lease period.
Under certain conditions, such as exchanges of premises andequipment for similar kinds and sales and purchases resulting fromexpropriation, Japanese tax laws permit companies to defer the profit
arising from such transactions by reducing the cost of the assets acquiredor by providing a special reserve in the equity section. The deferred gainon premises and equipment by reducing the cost of the assets acquired,
which is taxable for tax purposes in the future, was ¥2,939 million($31,249 thousand) and ¥3,073 million as of March 31, 2013 and 2012,
respectively.

g. Long-lived assets

The Group reviews its long-lived assets for impairment whenever eventsor changes in circumstances indicate the carrying amount of an asset
or asset group may not be recoverable. An impairment loss would berecognized if the carrying amount of an asset or asset group exceeds thesum of the undiscounted future cash flows expected to result from thecontinued use and eventual disposition of the asset or asset group. The
impairment loss would be measured as the amount by which the carrying amount of the asset exceeds its recoverable amount, which is thehigher of the discounted cash flows from the continued use and eventual
disposition of the asset or the net selling price at disposition.

h. Land revaluation

Under the “Law of Land Revaluation”, the Bank elected a one-timerevaluation of its own-use land to a value based on real estate appraisal
information as of March 31, 1998.
The resulting land revaluation surplus represents unrealized appreciation of land and is stated, net of income taxes, as a component ofequity. There was no effect on the consolidated statement of income.
Continuous readjustment is not permitted unless the land value subsequently declines significantly such that the amount of the decline invalue should be removed from the land revaluation surplus account andrelated deferred tax liabilities.
The carrying amount of the land after the above one-time revaluation exceeded the market value by ¥21,166 million ($225,051 thousand)as of March 31, 2013.

i. Intangible assets

Amortization of intangible assets is calculated by the straight-line
method.
Amortization cost for software for internal use is calculated by thestraight-line method over the estimated useful life, principally, five
years.

j. Reserve for possible loan losses

The Bank implemented a self-assessment system for its asset quality.
The quality of all loans is assessed by the related lending division witha subsequent audit by the asset audit division in accordance with theBank’s policies and rules for self-assessment of asset quality.
The Bank has established a credit rating system under which thecustomers are classified into five categories such as “normal,” “caution,”“possible bankruptcy,” “virtual bankruptcy” and “legal bankruptcy.” Thecredit rating system is used for the self-assessment of asset quality.
For normal and caution loans, the reserve for possible loan losses
is calculated based on actual past loss ratios. For loans such as possible
bankruptcy, the reserve for possible loan losses is calculated based on an
amount deemed necessary to cover possible losses on loans considering
the customer’s solvency and other factors, after the estimated fair valueof the collateral real estate or guaranteed amount has been deducted.
For loans such as virtual bankruptcy or legal bankruptcy, the reserve forpossible loan losses is calculated based upon the loan amount after theestimated fair value of the collateral real estate or guaranteed amount
has been deducted.
For loans to possible bankruptcy customers, if the exposure to a customer after deducting the estimated value of the collateral or guaranteedamount exceeds a certain amount, the discounted cash flow method isapplied for reserve provision, under which the reserve is determined as
the difference between the book value of the loan and its present valueof future cash flows discounted using the contractual interest rate in thecase that future cash flows of the principal and interest can be reasonably
estimated.
Reserve for possible loan losses of consolidated subsidiaries isprovided based on historical loan loss experience and estimated collectability of specific claims.

k. Liability for retirement benefits

The Bank has a contributory funded defined benefit pension plan andlump-sum payment severance plan for employees and certain subsidiaries have lump-sum payment severance plans for employees. Also, theBank and certain subsidiaries have lump-sum severance payment plansfor directors and Audit & Supervisory Board members.

The liability for retirement benefits is provided based on projected
benefit obligations and plan assets at the end of the fiscal year. Any
actuarial differences are amortized by the straight-line method mainly
over ten years within the average of employees’ remaining service period,
starting in the fiscal year following the occurrence of such differences.
Retirement benefits to directors and Audit & Supervisory Board
members of the Group are provided at the amount that would be
required if all directors and Audit & Supervisory Board members retired
at the balance sheet date.

l. Leases

In March 2007, the ASBJ issued ASBJ Statement No.13, “AccountingStandard for Lease Transactions,” which revised the previous accounting
standard for lease transactions. The revised accounting standard for leasetransactions was effective for fiscal years beginning on or after April 1,
2008.
(As lessee)
Under the previous accounting standard, finance leases that were deemed
to transfer ownership of the leased property to the lessee were capitalized. However, other finance leases were permitted to be accounted for
as operating lease transactions if certain “as if capitalized” information
was disclosed in the note to the lessee’s financial statements. The revised
accounting standard requires that all finance lease transactions to becapitalized to recognize lease assets and lease obligations in the balance
sheet. In addition, the revised accounting standard permits leases which
existed at the transition date and do not transfer ownership of the leased
property to the lessee to continue to be accounted for as operating leasetransactions with certain “as if capitalized” information disclosed in thenotes to the lessee’s financial statements.
The Group applied the revised accounting standard effective April
1, 2008. In addition, the Bank continues to account for leases which
existed at the transition date and do not transfer ownership of the leased
property to the lessee as operating lease transactions.
(As lessor)
Under the previous accounting standard, finance leases that were deemed
to transfer ownership of the leased property to the lessee were treatedas sales. However, other finance leases were permitted to be accounted
for as operating lease transactions if certain “as if sold” information wasdisclosed in the notes to the lessor’s financial statements. The revised
accounting standard requires that all finance leases that are deemed totransfer ownership of the leased property to the lessee to be recognized
as lease receivables and all finance leases that are not deemed to transfer
ownership of the leased property to the lessee to be recognized as investments in leases. The Group applied the revised accounting standard
effective April 1, 2008. For the finance lease contracts which existed
on adoption and did not transfer ownership of the leased property to
the lessee, the appropriate carrying amount of the leased assets (after
deducting accumulated depreciation) at adoption is used as the beginning value of the investments in leases. Interest revenues of these financelease contracts existed at the adoption are calculated by the straight-line
method over the remaining lease period as accepted by ASBJ GuidanceNo. 16, “Guidance on Accounting Standard for Lease Transaction,”. As aresult of this treatment, income before income taxes and minority interests is ¥316 million ($3,360 thousand) and ¥432 million larger than thesame calculated using the new standards for the contracts existed at the
adoption for the years ended March 31, 2013 and 2012, respectively.
All other leases are accounted for as operating leases.

m. Bonuses to directors and Audit & Supervisory Board members
Bonuses to directors and Audit & Supervisory Board members are accrued at the end of the year to which such bonuses are attributable.

n. Income taxes

The provision for current income taxes is computed based on the pretax
income included in the consolidated statement of income. The asset andliability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and liabilities.
Deferred taxes are measured by applying currently enacted tax laws to
the temporary differences.

19

N otes to Consolidated Financial Statements
The Juroku Bank, Ltd. and Consolidated Subsidiaries

Year Ended March 31, 2013

1. Basis of Presentation of Consolidated Financial Statements

The accompanying consolidated financial statements have been preparedin accordance with the provisions set forth in the Japanese Financial
Instruments and Exchange Act and its related accounting regulations
and the Enforcement Regulation for the Banking Law, and in conformity with accounting principles generally accepted in Japan (“Japanese
GAAP”), which are different in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards(“IFRS”).
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to the consolidated
financial statements issued domestically in order to present them in aform which is more familiar to readers outside Japan.
The consolidated financial statements are stated in Japanese yen, thecurrency of the country in which The Juroku Bank, Ltd. (the “Bank”) is
incorporated and operates. The translations of Japanese yen amounts into
U.S. dollar amounts are included solely for the convenience of readers
outside Japan and have been made at the rate of ¥94.05 to $1, the approximate rate of exchange at March 31, 2013. Such translations should
not be construed as representations that the Japanese yen amounts could
be converted into U.S. dollars at that or any other rate.

2. Summary of Significant Accounting Policies
a. Consolidation

The consolidated financial statements as of March 31, 2013 include theaccounts of the Bank and its eight (eleven in 2012) significant subsidiaries, including Juroku Business Service Co., Ltd., Juroku DC Card Co.,
Ltd., Juroku JCB Co., Ltd., Juroku Lease Co., Ltd., Juroku Computer
Service Co., Ltd., Juroku Credit Guarantee Co., Ltd., Juroku CapitalCo., Ltd., and The Gifugin Hosho Services Co., Ltd. (together, the“Group”).
The Gifu Bank, Ltd., Juroku DC Card Co., Ltd. and The Gifugin
Business Service Co., Ltd. are excluded from consolidation because The
Gifu Bank., Ltd. and Juroku DC Card Co., Ltd. were merged with theBank, and The Gifugin Business Service Co., Ltd. was liquidated.
Under the control concept, those companies in which the Bank,
directly or indirectly, is able to exercise control over operations are fully
consolidated.
Investments in two (two in 2012) unconsolidated subsidiaries arestated at cost. If the equity method of accounting had been applied tothe investments in these companies, the effect on the accompanying
consolidated financial statements would not be material.
The excess of the cost of acquisition over the fair value of the net
assets of an acquired subsidiary at the date of acquisition is being amortized over a period of 20 years.
All significant intercompany balances and transactions have been
eliminated in consolidation. All material unrealized profits included in
assets resulting from transactions within the Group have been eliminated in consolidation.

b. Business Combination

In October 2003, the Business Accounting Council issued a Statementof Opinion, “Accounting for Business Combinations”, and in December
2005, the ASBJ issued ASBJ Statement No.7, “Accounting Standard
for Business Divestitures” and ASBJ Guidance No.10, “Guidance for
Accounting Standard for Business Combinations and Business Divestitures.” The accounting standard for business combinations allowed
companies to apply the pooling of interests method of accounting only
when certain specific criteria were met such that the business combination was essentially regarded as a uniting-of-interests. For businesscombinations that did not meet the uniting-of-interests criteria, thebusiness combination was considered to be an acquisition and the purchase method of accounting was required. This standard also prescribed
the accounting for combinations of entities under common control andfor joint ventures.
In December 2008, the ASBJ issued a revised accounting standard for business combinations, ASBJ Statement No. 21, “AccountingStandard for Business Combinations.” Major accounting changes under
the revised accounting standard are as follows: (1) The revised standard

18

requires accounting for business combinations only by the purchasemethod. As a result, the pooling of interests method of accounting is nolonger allowed. (2) The previous accounting standard required researchand development costs to be charged to income as incurred. Under therevised standard, in-process research and development costs (IPR&D)
acquired in the business combination are capitalized as an intangible
asset. (3) The previous accounting standard provided for a bargain
purchase gain (negative goodwill) to be systematically amortized over a
period not exceeding 20 years. Under the revised standard, the acquirer
recognizes the bargain purchase gain in profit or loss immediately on
the acquisition date after reassessing and confirming that all of the assets
acquired and all of the liabilities assumed have been identified after a review of the procedures used in the purchase price allocation. The revised
standard was applicable to business combinations undertaken on or after
April 1, 2010.

c. Cash and cash equivalents

For the purpose of the consolidated statement of cash flows, cash andcash equivalents represent cash and amounts due from the Bank ofJapan.

d. Trading securities

Trading securities are stated at fair value and the related unrealized gains
and losses are included in earnings. The cost of trading securities sold isdetermined based on the moving-average method.

e. Securities

Securities other than trading securities are classified and accounted for,depending on management’s intent, as follows: 1) held-to-maturity debt
securities, which are expected to be held to maturity with the positive
intent and ability to hold to maturity, are reported at amortized costand 2) available-for-sale securities, which are not classified as held-tomaturity, are reported at fair value with unrealized gains and losses, netof applicable taxes, reported in a separate component of equity. Nonmarketable available-for-sale securities are stated at cost determined by
the moving-average method.
For other than temporary declines in fair value, securities are reduced to net realizable value by a charge to income.
Securities included in money held in trust for trading purposes
are stated at fair value, and the related unrealized gains and losses areincluded in earnings.

f. Premises and equipment

Premises and equipment are stated at cost less accumulated depreciation.
Depreciation of premises and equipment of the Bank, except for leased
assets, is computed by the declining-balance method over the estimateduseful lives of the assets. Depreciation of premises and equipment of theconsolidated subsidiaries, except for leased assets, is computed principally by the same method as the Bank.
The range of useful lives is principally from 15 to 50 years forbuildings and from 4 to 20 years for other premises and equipment.
Effective April 1, 2012, as a result of the revision of Japanese corporate tax law, the Bank and its consolidated subsidiaries changed theirdepreciation method for premises and equipment acquired on or after
April 1, 2012 to the method stipulated under the revised corporate tax
law.
As a result, consolidated operating income, and income before
income taxes and minority interests for the year ended March 31, 2013,both increased by ¥39 million ($415 thousand).
Depreciation of leased assets under finance leases is computed by thestraight-line method over the lease period.
Under certain conditions, such as exchanges of premises andequipment for similar kinds and sales and purchases resulting fromexpropriation, Japanese tax laws permit companies to defer the profit
arising from such transactions by reducing the cost of the assets acquiredor by providing a special reserve in the equity section. The deferred gainon premises and equipment by reducing the cost of the assets acquired,
which is taxable for tax purposes in the future, was ¥2,939 million($31,249 thousand) and ¥3,073 million as of March 31, 2013 and 2012,
respectively.

g. Long-lived assets

The Group reviews its long-lived assets for impairment whenever eventsor changes in circumstances indicate the carrying amount of an asset
or asset group may not be recoverable. An impairment loss would berecognized if the carrying amount of an asset or asset group exceeds thesum of the undiscounted future cash flows expected to result from thecontinued use and eventual disposition of the asset or asset group. The
impairment loss would be measured as the amount by which the carrying amount of the asset exceeds its recoverable amount, which is thehigher of the discounted cash flows from the continued use and eventual
disposition of the asset or the net selling price at disposition.

h. Land revaluation

Under the “Law of Land Revaluation”, the Bank elected a one-timerevaluation of its own-use land to a value based on real estate appraisal
information as of March 31, 1998.
The resulting land revaluation surplus represents unrealized appreciation of land and is stated, net of income taxes, as a component ofequity. There was no effect on the consolidated statement of income.
Continuous readjustment is not permitted unless the land value subsequently declines significantly such that the amount of the decline invalue should be removed from the land revaluation surplus account andrelated deferred tax liabilities.
The carrying amount of the land after the above one-time revaluation exceeded the market value by ¥21,166 million ($225,051 thousand)as of March 31, 2013.

i. Intangible assets

Amortization of intangible assets is calculated by the straight-line
method.
Amortization cost for software for internal use is calculated by thestraight-line method over the estimated useful life, principally, five
years.

j. Reserve for possible loan losses

The Bank implemented a self-assessment system for its asset quality.
The quality of all loans is assessed by the related lending division witha subsequent audit by the asset audit division in accordance with theBank’s policies and rules for self-assessment of asset quality.
The Bank has established a credit rating system under which thecustomers are classified into five categories such as “normal,” “caution,”“possible bankruptcy,” “virtual bankruptcy” and “legal bankruptcy.” Thecredit rating system is used for the self-assessment of asset quality.
For normal and caution loans, the reserve for possible loan losses
is calculated based on actual past loss ratios. For loans such as possible
bankruptcy, the reserve for possible loan losses is calculated based on an
amount deemed necessary to cover possible losses on loans considering
the customer’s solvency and other factors, after the estimated fair valueof the collateral real estate or guaranteed amount has been deducted.
For loans such as virtual bankruptcy or legal bankruptcy, the reserve forpossible loan losses is calculated based upon the loan amount after theestimated fair value of the collateral real estate or guaranteed amount
has been deducted.
For loans to possible bankruptcy customers, if the exposure to a customer after deducting the estimated value of the collateral or guaranteedamount exceeds a certain amount, the discounted cash flow method isapplied for reserve provision, under which the reserve is determined as
the difference between the book value of the loan and its present valueof future cash flows discounted using the contractual interest rate in thecase that future cash flows of the principal and interest can be reasonably
estimated.
Reserve for possible loan losses of consolidated subsidiaries isprovided based on historical loan loss experience and estimated collectability of specific claims.

k. Liability for retirement benefits

The Bank has a contributory funded defined benefit pension plan andlump-sum payment severance plan for employees and certain subsidiaries have lump-sum payment severance plans for employees. Also, theBank and certain subsidiaries have lump-sum severance payment plansfor directors and Audit & Supervisory Board members.

The liability for retirement benefits is provided based on projected
benefit obligations and plan assets at the end of the fiscal year. Any
actuarial differences are amortized by the straight-line method mainly
over ten years within the average of employees’ remaining service period,
starting in the fiscal year following the occurrence of such differences.
Retirement benefits to directors and Audit & Supervisory Board
members of the Group are provided at the amount that would be
required if all directors and Audit & Supervisory Board members retired
at the balance sheet date.

l. Leases

In March 2007, the ASBJ issued ASBJ Statement No.13, “AccountingStandard for Lease Transactions,” which revised the previous accounting
standard for lease transactions. The revised accounting standard for leasetransactions was effective for fiscal years beginning on or after April 1,
2008.
(As lessee)
Under the previous accounting standard, finance leases that were deemed
to transfer ownership of the leased property to the lessee were capitalized. However, other finance leases were permitted to be accounted for
as operating lease transactions if certain “as if capitalized” information
was disclosed in the note to the lessee’s financial statements. The revised
accounting standard requires that all finance lease transactions to becapitalized to recognize lease assets and lease obligations in the balance
sheet. In addition, the revised accounting standard permits leases which
existed at the transition date and do not transfer ownership of the leased
property to the lessee to continue to be accounted for as operating leasetransactions with certain “as if capitalized” information disclosed in thenotes to the lessee’s financial statements.
The Group applied the revised accounting standard effective April
1, 2008. In addition, the Bank continues to account for leases which
existed at the transition date and do not transfer ownership of the leased
property to the lessee as operating lease transactions.
(As lessor)
Under the previous accounting standard, finance leases that were deemed
to transfer ownership of the leased property to the lessee were treatedas sales. However, other finance leases were permitted to be accounted
for as operating lease transactions if certain “as if sold” information wasdisclosed in the notes to the lessor’s financial statements. The revised
accounting standard requires that all finance leases that are deemed totransfer ownership of the leased property to the lessee to be recognized
as lease receivables and all finance leases that are not deemed to transfer
ownership of the leased property to the lessee to be recognized as investments in leases. The Group applied the revised accounting standard
effective April 1, 2008. For the finance lease contracts which existed
on adoption and did not transfer ownership of the leased property to
the lessee, the appropriate carrying amount of the leased assets (after
deducting accumulated depreciation) at adoption is used as the beginning value of the investments in leases. Interest revenues of these financelease contracts existed at the adoption are calculated by the straight-line
method over the remaining lease period as accepted by ASBJ GuidanceNo. 16, “Guidance on Accounting Standard for Lease Transaction,”. As aresult of this treatment, income before income taxes and minority interests is ¥316 million ($3,360 thousand) and ¥432 million larger than thesame calculated using the new standards for the contracts existed at the
adoption for the years ended March 31, 2013 and 2012, respectively.
All other leases are accounted for as operating leases.

m. Bonuses to directors and Audit & Supervisory Board members
Bonuses to directors and Audit & Supervisory Board members are accrued at the end of the year to which such bonuses are attributable.

n. Income taxes

The provision for current income taxes is computed based on the pretax
income included in the consolidated statement of income. The asset andliability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and liabilities.
Deferred taxes are measured by applying currently enacted tax laws to
the temporary differences.

19

o. Foreign currency transactions

Foreign currency assets and liabilities of the Group are translated into
yen equivalents at the exchange rates prevailing at the fiscal year end.

p. Derivatives and hedging activities

The Bank uses a variety of derivative financial instruments.
Derivative financial instruments and foreign currency transactions
are classified and accounted for as follows: (1) all derivatives are recognized as either assets or liabilities and measured at fair value, and gains
or losses on the derivative transactions are recognized in the income
statement and (2) for derivatives used for hedging purposes, if thederivatives qualify for hedge accounting because of high correlation andeffectiveness between the hedging instruments and the hedged items,
gains or losses on the derivatives are deferred until maturity of thehedged transactions.
The interest rate swaps which qualify for hedge accounting andmeet specific matching criteria are not remeasured at market value but
the differential paid or received under the swap agreements are recognized and included in interest expense or income. All other derivatives
are recognized as either assets or liabilities and measured at fair value
and gains or losses on derivative transactions are recognized in the consolidated statement of income.

q. Per share information

Basic net income per share is computed by dividing net income available
to common shareholders by the weighted-average number of commonshares outstanding for the period, retroactively adjusted for stock splits.
Diluted net income per share reflects the potential dilution that
could occur if securities were exercised or converted into common stock.
Diluted net income per share of common stock assumes full conversionof the outstanding convertible notes and bonds at the beginning of
the year (or at the time of issuance) with an applicable adjustment for
related interest expense, net of tax, and full exercise of outstanding warrants.
Cash dividends per share presented in the accompanying consolidated statement of income are dividends applicable to the respective years
including dividends to be paid after the end of the year.

r. Accounting Changes and Error Corrections

In December 2009, the ASBJ issued ASBJ Statement No. 24, “Accounting Standard for Accounting Changes and Error Corrections,” and ASBJ
Guidance No. 24, “Guidance on Accounting Standard for Accounting
Changes and Error Corrections.” Accounting treatments under thisstandard and guidance are as follows: (1) Changes in Accounting Policies—When a new accounting policy is applied following a revision ofan accounting standard, the new policy is applied retrospectively unlessthe revised accounting standard includes specific transitional provisions, in which case the entity shall comply with the specific transitional
provisions. (2) Changes in Presentation—When the presentation offinancial statements is changed, prior-period financial statements arereclassified in accordance with the new presentation. (3) Changes in Accounting Estimates—A change in an accounting estimate is accounted
for in the period of the change if the change affects that period only, andis accounted for prospectively if the change affects both the period of
the change and future periods. (4) Corrections of Prior-Period Errors—
When an error in prior-period financial statements is discovered, thosestatements are restated.

s. New Accounting Pronouncements

Accounting Standard for Retirement Benefits—On May 17, 2012, the
ASBJ issued ASBJ Statement No. 26, “Accounting Standard for Retirement Benefits,” and ASBJ Guidance No. 25, “Guidance on AccountingStandard for Retirement Benefits,” which replaced the “AccountingStandard for Retirement Benefits” that had been issued by the BusinessAccounting Council in 1998 with an effective date of April 1, 2000,
and the other related practical guidance, and followed by partial amendments from time to time through 2009.
Major changes are as follows:(a) Treatment in the balance sheet
Under the current requirements, actuarial gains and losses and priorservice costs that are yet to be recognized in profit or loss are not recog-

20

nized in the balance sheet, and the difference between retirement benefit
obligations and plan assets (hereinafter, “deficit or surplus”), adjusted bysuch unrecognized amounts, is recognized as a liability or asset.
Under the revised accounting standard, actuarial gains and losses
and prior service costs that are yet to be recognized in profit or loss shallbe recognized within equity (accumulated other comprehensive income),
after adjusting for tax effects, and any resulting deficit or surplus shallbe recognized as a liability (liability for retirement benefits) or asset (asset for retirement benefits).
(b) Treatment in the statement of income and the statement of comprehensive income
The revised accounting standard does not change how to recognize
actuarial gains and losses and prior service costs in profit or loss. Thoseamounts would be recognized in profit or loss over a certain period nolonger than the expected average remaining working lives of the employees. However, actuarial gains and losses and prior service costs that
arose in the current period and have not yet been recognized in profit orloss shall be included in other comprehensive income and actuarial gains
and losses and prior service costs that were recognized in other comprehensive income in prior periods and then recognized in profit or loss inthe current period shall be treated as reclassification adjustments.
(c) Amendments relating to the method of attributing expected
benefits to periods and relating to the discount rate and expected futuresalary increases
The revised accounting standard also made certain amendments relating
to the method of attributing expected benefits to periods and relating to
the discount rate and expected future salary increases.
This accounting standard and the guidance for (a) and (b) above are
effective for the end of annual periods beginning on or after April 1,
2013, and for (c) above are effective for the beginning of annual periods
beginning on or after April 1, 2014 or for the beginning of annual periods beginning on or after April 1, 2015, subject to certain disclosuresin March 2015, both with earlier application being permitted fromthe beginning of annual periods beginning on or after April 1, 2013.
However, no retrospective application of this accounting standard toconsolidated financial statements in prior periods is required.
The Bank expects to apply the revised accounting standard for (a)and (b) above from the end of the annual period beginning on April 1,2013 and for (c) above from the beginning of the annual period beginning on April 1, 2014. The Bank is in the process of measuring theeffects of applying the revised accounting standard in future applicable
periods.

3. Business Combination
For the year ended March 31, 2013
Acquisition of Treasury Stock by a Consolidated Subsidiary

On May 10, 2012, The Gifu Bank, Ltd. (hereinafter “Gifu Bank”), a
consolidated subsidiary of the Bank, acquired treasury stock owned byminority shareholders in exchange for cash in the amount of ¥6,999 million ($74,417 thousand) to improve the efficiency of the capital and tominimize the cost for obtaining capital. The treasury stock was cancelledon the date of acquisition.
The Group accounted for this transaction as a transaction withminority shareholders pursuant to ASBJ Statement No. 21, “Accounting Standard for Business Combinations” and ASBJ Guidance No. 10,“Guidance on Accounting Standard for Business Combinations andBusiness Divestitures” issued on December 26, 2008.
The Group recognized a gain from negative goodwill of ¥778
million ($8,272 thousand) arising from the transaction, since the acquisition cost from minority shareholders was lower than the decrease inminority interests.

Acquisition of Additional Shares of a Subsidiary

On May 28, 2012, the Bank acquired additional shares of Juroku Lease
Co., Ltd., a consolidated subsidiary of the Bank, owned by minority
shareholders in exchange for cash in the amount of ¥1,120 million($11,908 thousand) to strengthen the governance through the change incapital structure of the Group.

The Bank accounted for this transaction as a transaction withminority shareholders pursuant to ASBJ Statement No. 21, “Accounting Standard for Business Combinations” and ASBJ Guidance No. 10,“Guidance on Accounting Standard for Business Combinations andBusiness Divestitures” issued on December 26, 2008.
The Bank recognized a gain from negative goodwill of ¥765 million($8,134 thousand) arising from the transaction, since the acquisition
cost from minority shareholders was lower than the decrease in minority
interests.

Merger of the Bank and a Subsidiary

On April 27, 2012, the Bank entered into an agreement on a merger
condition (hereinafter “the Agreement”) with Gifu Bank and the Bank,
The Bank of Tokyo-Mitsubishi UFJ, Ltd. (hereinafter “BTMU”), a
holder of Class 5 preferred stock issued by Gifu Bank, upon the approvalby the Board of Directors of the Bank for the purpose of merging Gifu
Bank (hereinafter “the Merger”) effective September 18, 2012 under thecondition that this proposal were approved by the general shareholders’meeting and class shareholders’ meeting of the Bank and relevant authorities stipulated by the applicable laws and regulations.
On May 14, 2012, the Bank entered into a merger contract (hereinafter “the Merger Contract”) with Gifu Bank with the approval from theBoard of Directors’ meeting held on that date.
The Merger Contract was approved by the general shareholders’meeting and class shareholders’ meeting attended by the commonshareholders held on June 22, 2012, and the Bank and Gifu Bank weremerged effective on September 18, 2012.
1. Summary of the Transaction(1) Name of the entities and description of their business
Name of the entity
Business Description

Acquirer(Surviving Entity)
The Juroku Bank, Ltd.
Banking

Acquiree(Absorbed Entity)
The Gifu Bank, Ltd.
Banking(2) Acquisition Date
September 18, 2012
(3) Legal Form of Acquisition
Absorption-type merger; the Bank as a surviving entity and Gifu
Bank as an absorbed entity(4) Name of the Entity after Business Combination
The Juroku Bank, Ltd.
(5) Others
 Purpose of the business combination
On September 28, 2010, Gifu Bank and BTMU entered into theBusiness Integration Agreement and the Bank and Gifu Bank entered into the Share Exchange Agreement, under which Gifu Bank
became a wholly-owned subsidiary of the Bank. On December 22,
2010, Gifu Bank became a consolidated subsidiary after acquisition and cancellation of the first series of Class 1 preferred stock ofGifu Bank. Thereafter, Gifu Bank issued Class 5 preferred stock to
BTMU. Since then, the Bank and Gifu Bank has promoted various
initiatives to secure sustainable growth of the corporate value of
the Group, contribute to the stabilization of the regional financesystem and stimulate the regional economy.
The Bank announced upon the conclusion of the above
Business Integration Agreement that the Bank will merge Gifu
Bank in middle to late September 2012 after improving businessefficiency of Gifu Bank. Since the progress of Gifu Bank’s businessefficiency is being made, the Bank merged Gifu Bank on September 18, 2012 as initially scheduled.
 Schedule of the business combination
Public notice on the effective date of class shareholders’ meeting
Friday, March 16, 2012
Effective date of general shareholders’ meeting and classshareholders’ meeting by common shareholders
Saturday, March 31, 2012
Board of Directors’ meeting to approve the Agreement
Friday, April 27, 2012Conclusion of the Agreement
Friday, April 27, 2012
Board of Directors’ meeting to approve the Merger Contract
Monday, May 14, 2012Conclusion of the Merger Contract
Monday, May 14, 2012
General shareholders’ meeting and class shareholders’ meetingby common shareholders
Friday, June 22, 2012
Effective date of the Merger
Tuesday, September 18, 2012
(Note) The management of the Bank requested the Bank’s shareholders to approve the Merger because there was a possibility thatthe Bank would record loss on merger depending on the operating
results of Gifu Bank for the period ended the effective date of the
Merger. In addition, since the Bank issued Class 1 preferred stockin exchange for Class 5 preferred stock of Gifu Bank in conjunction
with the Merger, the Bank became an entity with class shares. Since
the Bank was required to make amendments to the Articles ofIncorporation to issue preferred shares, the Bank held the class shareholders’ meeting to be attended by common shareholders regarding
the approval of the Merger Contract.
Even though Gifu Bank was not required to obtain an approval
from the shareholders’ meeting pursuant to the provision stipulated by the first section of the article No. 784 of the Companies
Act; however, Gifu Bank held a class shareholders’ meeting by thecommon shareholders, a class shareholders’ meeting by the Class 4
preferred shareholders and a class shareholders’ meeting by the Class
5 preferred shareholders concerning the approval of the Merger Contract.
2. Summary of the Accounting Treatment
The Bank accounted for this transaction as a combination of entities
under common control and a transaction with minority shareholders
in accordance with ASBJ Statement No. 21, “Accounting Standard forBusiness Combinations” and ASBJ Guidance No. 10, “Guidance on
Accounting Standard for Business Combinations and Business Divestitures”.
3. Cost incurred by the acquiree and description of the cost

Acquisition cost
Expenses incurred
for acquisition
Total cost incurred

Fair value of theBank’s Class 1
stock issued on
acquisition dateExpenses foradvisory, etc.

Millions of Yen

Thousands of
U.S. Dollars¥20,000$212,652

95

1,010

¥20,095$213,662

4. Distribution of shares by class of shares related to the Merger, calculation methods and the number of shares issued(1) Distribution of shares by class of shares
 Common stock:
The Bank held 100% of the common stock issued by Gifu Bank anddid not issue new shares, nor pay any amount of money due to theMerger.
 Class 4 preferred shares
The Bank held 100% of the Class 4 preferred shares issued by Gifu
Bank and did not issue new shares, nor pay any amount of money
due to the Merger.
 Class 5 preferred shares
The Bank issued 0.9 share of the Class 1 preferred shares for one
Class 5 preferred shares issued by Gifu Bank due to the Merger. The
terms and conditions of the Class 1 preferred shares of the Bank are
identical with those of the Class 5 preferred shares of Gifu Bank.
(2) Calculation method of distribution of shares
Pursuant to the contents of the Business Integration Agreement on
September 28, 2010, the Bank, Gifu Bank and BTMU discussed the21

o. Foreign currency transactions

Foreign currency assets and liabilities of the Group are translated into
yen equivalents at the exchange rates prevailing at the fiscal year end.

p. Derivatives and hedging activities

The Bank uses a variety of derivative financial instruments.
Derivative financial instruments and foreign currency transactions
are classified and accounted for as follows: (1) all derivatives are recognized as either assets or liabilities and measured at fair value, and gains
or losses on the derivative transactions are recognized in the income
statement and (2) for derivatives used for hedging purposes, if thederivatives qualify for hedge accounting because of high correlation andeffectiveness between the hedging instruments and the hedged items,
gains or losses on the derivatives are deferred until maturity of thehedged transactions.
The interest rate swaps which qualify for hedge accounting andmeet specific matching criteria are not remeasured at market value but
the differential paid or received under the swap agreements are recognized and included in interest expense or income. All other derivatives
are recognized as either assets or liabilities and measured at fair value
and gains or losses on derivative transactions are recognized in the consolidated statement of income.

q. Per share information

Basic net income per share is computed by dividing net income available
to common shareholders by the weighted-average number of commonshares outstanding for the period, retroactively adjusted for stock splits.
Diluted net income per share reflects the potential dilution that
could occur if securities were exercised or converted into common stock.
Diluted net income per share of common stock assumes full conversionof the outstanding convertible notes and bonds at the beginning of
the year (or at the time of issuance) with an applicable adjustment for
related interest expense, net of tax, and full exercise of outstanding warrants.
Cash dividends per share presented in the accompanying consolidated statement of income are dividends applicable to the respective years
including dividends to be paid after the end of the year.

r. Accounting Changes and Error Corrections

In December 2009, the ASBJ issued ASBJ Statement No. 24, “Accounting Standard for Accounting Changes and Error Corrections,” and ASBJ
Guidance No. 24, “Guidance on Accounting Standard for Accounting
Changes and Error Corrections.” Accounting treatments under thisstandard and guidance are as follows: (1) Changes in Accounting Policies—When a new accounting policy is applied following a revision ofan accounting standard, the new policy is applied retrospectively unlessthe revised accounting standard includes specific transitional provisions, in which case the entity shall comply with the specific transitional
provisions. (2) Changes in Presentation—When the presentation offinancial statements is changed, prior-period financial statements arereclassified in accordance with the new presentation. (3) Changes in Accounting Estimates—A change in an accounting estimate is accounted
for in the period of the change if the change affects that period only, andis accounted for prospectively if the change affects both the period of
the change and future periods. (4) Corrections of Prior-Period Errors—
When an error in prior-period financial statements is discovered, thosestatements are restated.

s. New Accounting Pronouncements

Accounting Standard for Retirement Benefits—On May 17, 2012, the
ASBJ issued ASBJ Statement No. 26, “Accounting Standard for Retirement Benefits,” and ASBJ Guidance No. 25, “Guidance on AccountingStandard for Retirement Benefits,” which replaced the “AccountingStandard for Retirement Benefits” that had been issued by the BusinessAccounting Council in 1998 with an effective date of April 1, 2000,
and the other related practical guidance, and followed by partial amendments from time to time through 2009.
Major changes are as follows:(a) Treatment in the balance sheet
Under the current requirements, actuarial gains and losses and priorservice costs that are yet to be recognized in profit or loss are not recog-

20

nized in the balance sheet, and the difference between retirement benefit
obligations and plan assets (hereinafter, “deficit or surplus”), adjusted bysuch unrecognized amounts, is recognized as a liability or asset.
Under the revised accounting standard, actuarial gains and losses
and prior service costs that are yet to be recognized in profit or loss shallbe recognized within equity (accumulated other comprehensive income),
after adjusting for tax effects, and any resulting deficit or surplus shallbe recognized as a liability (liability for retirement benefits) or asset (asset for retirement benefits).
(b) Treatment in the statement of income and the statement of comprehensive income
The revised accounting standard does not change how to recognize
actuarial gains and losses and prior service costs in profit or loss. Thoseamounts would be recognized in profit or loss over a certain period nolonger than the expected average remaining working lives of the employees. However, actuarial gains and losses and prior service costs that
arose in the current period and have not yet been recognized in profit orloss shall be included in other comprehensive income and actuarial gains
and losses and prior service costs that were recognized in other comprehensive income in prior periods and then recognized in profit or loss inthe current period shall be treated as reclassification adjustments.
(c) Amendments relating to the method of attributing expected
benefits to periods and relating to the discount rate and expected futuresalary increases
The revised accounting standard also made certain amendments relating
to the method of attributing expected benefits to periods and relating to
the discount rate and expected future salary increases.
This accounting standard and the guidance for (a) and (b) above are
effective for the end of annual periods beginning on or after April 1,
2013, and for (c) above are effective for the beginning of annual periods
beginning on or after April 1, 2014 or for the beginning of annual periods beginning on or after April 1, 2015, subject to certain disclosuresin March 2015, both with earlier application being permitted fromthe beginning of annual periods beginning on or after April 1, 2013.
However, no retrospective application of this accounting standard toconsolidated financial statements in prior periods is required.
The Bank expects to apply the revised accounting standard for (a)and (b) above from the end of the annual period beginning on April 1,2013 and for (c) above from the beginning of the annual period beginning on April 1, 2014. The Bank is in the process of measuring theeffects of applying the revised accounting standard in future applicable
periods.

3. Business Combination
For the year ended March 31, 2013
Acquisition of Treasury Stock by a Consolidated Subsidiary

On May 10, 2012, The Gifu Bank, Ltd. (hereinafter “Gifu Bank”), a
consolidated subsidiary of the Bank, acquired treasury stock owned byminority shareholders in exchange for cash in the amount of ¥6,999 million ($74,417 thousand) to improve the efficiency of the capital and tominimize the cost for obtaining capital. The treasury stock was cancelledon the date of acquisition.
The Group accounted for this transaction as a transaction withminority shareholders pursuant to ASBJ Statement No. 21, “Accounting Standard for Business Combinations” and ASBJ Guidance No. 10,“Guidance on Accounting Standard for Business Combinations andBusiness Divestitures” issued on December 26, 2008.
The Group recognized a gain from negative goodwill of ¥778
million ($8,272 thousand) arising from the transaction, since the acquisition cost from minority shareholders was lower than the decrease inminority interests.

Acquisition of Additional Shares of a Subsidiary

On May 28, 2012, the Bank acquired additional shares of Juroku Lease
Co., Ltd., a consolidated subsidiary of the Bank, owned by minority
shareholders in exchange for cash in the amount of ¥1,120 million($11,908 thousand) to strengthen the governance through the change incapital structure of the Group.

The Bank accounted for this transaction as a transaction withminority shareholders pursuant to ASBJ Statement No. 21, “Accounting Standard for Business Combinations” and ASBJ Guidance No. 10,“Guidance on Accounting Standard for Business Combinations andBusiness Divestitures” issued on December 26, 2008.
The Bank recognized a gain from negative goodwill of ¥765 million($8,134 thousand) arising from the transaction, since the acquisition
cost from minority shareholders was lower than the decrease in minority
interests.

Merger of the Bank and a Subsidiary

On April 27, 2012, the Bank entered into an agreement on a merger
condition (hereinafter “the Agreement”) with Gifu Bank and the Bank,
The Bank of Tokyo-Mitsubishi UFJ, Ltd. (hereinafter “BTMU”), a
holder of Class 5 preferred stock issued by Gifu Bank, upon the approvalby the Board of Directors of the Bank for the purpose of merging Gifu
Bank (hereinafter “the Merger”) effective September 18, 2012 under thecondition that this proposal were approved by the general shareholders’meeting and class shareholders’ meeting of the Bank and relevant authorities stipulated by the applicable laws and regulations.
On May 14, 2012, the Bank entered into a merger contract (hereinafter “the Merger Contract”) with Gifu Bank with the approval from theBoard of Directors’ meeting held on that date.
The Merger Contract was approved by the general shareholders’meeting and class shareholders’ meeting attended by the commonshareholders held on June 22, 2012, and the Bank and Gifu Bank weremerged effective on September 18, 2012.
1. Summary of the Transaction(1) Name of the entities and description of their business
Name of the entity
Business Description

Acquirer(Surviving Entity)
The Juroku Bank, Ltd.
Banking

Acquiree(Absorbed Entity)
The Gifu Bank, Ltd.
Banking(2) Acquisition Date
September 18, 2012
(3) Legal Form of Acquisition
Absorption-type merger; the Bank as a surviving entity and Gifu
Bank as an absorbed entity(4) Name of the Entity after Business Combination
The Juroku Bank, Ltd.
(5) Others
 Purpose of the business combination
On September 28, 2010, Gifu Bank and BTMU entered into theBusiness Integration Agreement and the Bank and Gifu Bank entered into the Share Exchange Agreement, under which Gifu Bank
became a wholly-owned subsidiary of the Bank. On December 22,
2010, Gifu Bank became a consolidated subsidiary after acquisition and cancellation of the first series of Class 1 preferred stock ofGifu Bank. Thereafter, Gifu Bank issued Class 5 preferred stock to
BTMU. Since then, the Bank and Gifu Bank has promoted various
initiatives to secure sustainable growth of the corporate value of
the Group, contribute to the stabilization of the regional financesystem and stimulate the regional economy.
The Bank announced upon the conclusion of the above
Business Integration Agreement that the Bank will merge Gifu
Bank in middle to late September 2012 after improving businessefficiency of Gifu Bank. Since the progress of Gifu Bank’s businessefficiency is being made, the Bank merged Gifu Bank on September 18, 2012 as initially scheduled.
 Schedule of the business combination
Public notice on the effective date of class shareholders’ meeting
Friday, March 16, 2012
Effective date of general shareholders’ meeting and classshareholders’ meeting by common shareholders
Saturday, March 31, 2012
Board of Directors’ meeting to approve the Agreement
Friday, April 27, 2012Conclusion of the Agreement
Friday, April 27, 2012
Board of Directors’ meeting to approve the Merger Contract
Monday, May 14, 2012Conclusion of the Merger Contract
Monday, May 14, 2012
General shareholders’ meeting and class shareholders’ meetingby common shareholders
Friday, June 22, 2012
Effective date of the Merger
Tuesday, September 18, 2012
(Note) The management of the Bank requested the Bank’s shareholders to approve the Merger because there was a possibility thatthe Bank would record loss on merger depending on the operating
results of Gifu Bank for the period ended the effective date of the
Merger. In addition, since the Bank issued Class 1 preferred stockin exchange for Class 5 preferred stock of Gifu Bank in conjunction
with the Merger, the Bank became an entity with class shares. Since
the Bank was required to make amendments to the Articles ofIncorporation to issue preferred shares, the Bank held the class shareholders’ meeting to be attended by common shareholders regarding
the approval of the Merger Contract.
Even though Gifu Bank was not required to obtain an approval
from the shareholders’ meeting pursuant to the provision stipulated by the first section of the article No. 784 of the Companies
Act; however, Gifu Bank held a class shareholders’ meeting by thecommon shareholders, a class shareholders’ meeting by the Class 4
preferred shareholders and a class shareholders’ meeting by the Class
5 preferred shareholders concerning the approval of the Merger Contract.
2. Summary of the Accounting Treatment
The Bank accounted for this transaction as a combination of entities
under common control and a transaction with minority shareholders
in accordance with ASBJ Statement No. 21, “Accounting Standard forBusiness Combinations” and ASBJ Guidance No. 10, “Guidance on
Accounting Standard for Business Combinations and Business Divestitures”.
3. Cost incurred by the acquiree and description of the cost

Acquisition cost
Expenses incurred
for acquisition
Total cost incurred

Fair value of theBank’s Class 1
stock issued on
acquisition dateExpenses foradvisory, etc.

Millions of Yen

Thousands of
U.S. Dollars¥20,000$212,652

95

1,010

¥20,095$213,662

4. Distribution of shares by class of shares related to the Merger, calculation methods and the number of shares issued(1) Distribution of shares by class of shares
 Common stock:
The Bank held 100% of the common stock issued by Gifu Bank anddid not issue new shares, nor pay any amount of money due to theMerger.
 Class 4 preferred shares
The Bank held 100% of the Class 4 preferred shares issued by Gifu
Bank and did not issue new shares, nor pay any amount of money
due to the Merger.
 Class 5 preferred shares
The Bank issued 0.9 share of the Class 1 preferred shares for one
Class 5 preferred shares issued by Gifu Bank due to the Merger. The
terms and conditions of the Class 1 preferred shares of the Bank are
identical with those of the Class 5 preferred shares of Gifu Bank.
(2) Calculation method of distribution of shares
Pursuant to the contents of the Business Integration Agreement on
September 28, 2010, the Bank, Gifu Bank and BTMU discussed the21

distribution ratio of the preferred shares of Gifu Bank, taking into
consideration that the shareholders of Gifu Bank consisted of only twoshareholders, the Bank and BTMU, and that the Bank holds 100% of
voting rights of Gifu Bank. As a result of the discussion, the Bank, Gifu
Bank and BTMU agreed that 1) the identical terms and conditions of
the Class 5 preferred stock issued by Gifu Bank will be used for theClass 1 preferred stock to be newly issued by the Bank, and 2) the Bank
will issue 0.9 shares of the Class 1 preferred stock of the Bank for one
Class 5 preferred stock issued by Gifu Bank, taking into account that nomarket price exists for the Class 5 preferred stock, and the stock value ofGifu Bank.
(3) Number of Shares
Under this Merger, 20 million shares of Class 1 preferred stock were
issued.
5. Amount of negative goodwill recorded
Since the total of fair value of the Bank’s Class 1 preferred stock issued
on acquisition date and the expenses incurred for the Merger was lower
than the decrease in minority interest, the Bank recorded gain fromnegative goodwill of ¥2,127 million ($22,616 thousand) from theMerger.

For the year ended March 31, 2012

On April 26 and 28, 2011, the Bank acquired additional shares ofJuroku Capital Co., Ltd., which is a consolidated subsidiary, owned byminority shareholders in exchange for cash in the amount of ¥39 million
to strengthen the governance through the change of capital structure of
the company.
The Bank accounted for this transaction as a transaction withminority shareholders pursuant to ASBJ Statement No. 21, “Accounting Standard for Business Combinations” and ASBJ Guidance No. 10,“Guidance on Accounting Standard for Business Combinations andBusiness Divestitures” issued on December 26, 2008.
The Bank recognized a gain from negative goodwill of ¥1,061
million arising from the transaction, since the acquisition cost of thesubsidiary’s shares from minority shareholders was lower than the decreased amount of minority interests.

4. Cash and Due from Banks

Cash and due from banks as of March 31, 2013 and 2012 consisted of
the following:

2013

2012

Thousands of
U.S. Dollars
2013¥51,179
277,536¥328,715¥64,795
64,301¥129,096$544,168
2,950,941$3,495,109

Millions of Yen

Cash
Due from banks
Total

A reconciliation between the cash and due from banks on the consolidated balance sheet and the cash and cash equivalents on the consolidated
statement of cash flows for the years ended March 31, 2013 and 2012
was as follows:
Millions of Yen
2013
Cash and due from banks
Due from banksother than the Bank of Japan
Cash and cash equivalents

22

2012

Thousands of
U.S. Dollars
2013¥328,715¥129,096$3,495,109(685)(3,361)(7,283)¥328,030¥125,735$3,487,826

5. Trading Securities and Securities

Trading securities as of March 31, 2013 and 2012 consisted of the following:Thousands of
U.S. Dollars
2013

Millions of Yen
2013

2012

¥1,21416¥1,230¥1,712
6¥1,718National government bonds
Local government bonds$12,908170$13,078

The Bank records net valuation gains and losses as other operating
income and expenses, respectively. For the years ended March 31, 2013
and 2012, the Bank recorded net valuation gains of ¥5 million ($53
thousand) and net valuation losses of ¥0 million, respectively.
Securities as of March 31, 2013 and 2012 consisted of the following:Thousands of
U.S. Dollars
2013

Millions of Yen
2013
Equity securities
National government bonds
Local government bonds
Corporate bonds
Other securities
Total

2012

¥108,045 ¥95,874
612,195
627,612306,533
307,599
315,213306,116
129,998
121,560¥1,471,984 ¥1,458,761$1,148,804
6,509,250
3,259,256
3,351,547
1,382,222$15,651,079

Information regarding available-for-sale and held-to-maturity securities
as of March 31, 2013 and 2012 was as follows:
March 31, 2013
Securities classified as:
Available-for-sale:
Equity securities
Debt securities
Other
Held-to-maturity:
Debt securities

March 31, 2012
Securities classified as:
Available-for-sale:
Equity securities
Debt securities
Other
Held-to-maturity:
Debt securities

March 31, 2013
Securities classified as:
Available-for-sale:
Equity securities
Debt securities
Other
Held-to-maturity:
Debt securities

Millions of Yen
Unrealized Unrealized
Gains
LossesCost¥64,784
1,163,153
121,626¥38,357
30,456
4,453

40,478343¥3,403 ¥ 99,738
147 1,193,462
371 125,708
108

Millions of Yen
Unrealized Unrealized
Gains
Losses

Cost

Fair
Value

40,713

Fair
Value

Proceeds from sales of available-for-sale securities for the year ended
March 31, 2013 consisted of the following:
March 31, 2013
Equity securities
Debt securities:
National government bonds
Local government bonds
Corporate bonds
Other
Total

March 31, 2012
Equity securities
Debt securities:
National government bonds
Local government bonds
Corporate bonds
Other
Total

March 31, 2013
Equity securities
Debt securities:
National government bonds
Local government bonds
Corporate bonds
Other
Total

Millions of Yen
Proceeds
Realized Gains Realized Losses¥4,617¥1,213¥424
89,006
12,91912,92922,713¥142,184

2,357
570
189
1,295
¥5,624

Millions of Yen
Proceeds
Realized Gains Realized Losses¥15,458¥8,027¥2,58385,7491,226
15,59844,445¥162,476

1,498
27
239
2,035
¥11,826¥24,141
20,2502,425

46,416368

Cost¥4,570 ¥87,384
413 1,194,911
3,561
116,365
227

46,557

Thousands of U.S. Dollars
Unrealized Unrealized
Fair
Gains
LossesValue$ 688,825
12,367,390
1,293,206$407,836
323,828
47,347430,3883,647$36,183 $ 1,060,478
1,564 12,689,654
3,945 1,336,608
1,148

432,887

26
—
223
1,825
¥4,657

Thousands of U.S. Dollars
Proceeds
Realized Gains Realized Losses$49,091$12,897$4,508946,369
137,363
137,469
241,500$1,511,792

25,061
6,061
2,010
13,769$59,798

—
—
585
2,998
$8,091

In addition, held-to-maturity securities amounting to ¥302 million($3,211 thousand) and ¥500 million were reclassified as available-forsale securities due to a decline of the issuer’s credit worthiness as ofMarch 31, 2013 and 2012.
The impairment losses on available-for-sale equity securities forthe years ended March 31, 2013 and 2012, were ¥247 million ($2,626
thousand) (consisting of equity securities ¥145 million ($1,542 thousand) and corporate bonds ¥102 million ($1,084 thousand)) and ¥ 32
million (consisting of corporate bonds), respectively.
Unrealized gain on available-for-sale securities as of March 31, 2013
and 2012 consisted of the following:
Millions of Yen¥67,813
1,175,074
117,501

—
—
55
282
¥761

Unrealized gain before deferred
tax on:Available-for-sale securities
Deferred tax liabilities
Unrealized gain on availablefor-sale securities before
interest adjustments
Minority interest
Unrealized gain on
available-for-sale securities

Thousands of
U.S. Dollars
2013

2013

2012

¥70,103(23,806)¥38,992(13,419)$745,380(253,121)

46,29725,573492,259

(300)

(195)

(3,190)¥45,997¥25,378$489,069

Unrealized gain on available-for-sale securities includes ¥758 million($8,060 thousand) and ¥719 million of revaluation gain on availablefor-sale securities as of March 31, 2013 and 2012, which are held by
investment limited partnership and similar groups.

6. Money Held in Trust

Information regarding money held in trust for trading purposes as ofMarch 31, 2013 and 2012 was as follows:
Carrying AmountMillions of Yen

Thousands of
U.S. Dollars
2013

2013

2012

¥6,000¥6,000$63,796

4,620¥10,620

4,620¥10,620

49,123$112,919

Money held in trust classified
as trading purpose
Money held in trust-otherTotal

7. Loans and Bills Discounted

Loans and bills discounted as of March 31, 2013 and 2012 consisted of
the following:
Millions of Yen
2013
Bills discounted
Loans on bills
Loans on deeds
Overdrafts
OthersTotal

2012¥32,691 ¥39,008
171,438
199,7422,981,407
486,239457,179
5,110
4,017 2,992,045¥3,646,732 ¥3,722,144

Thousands of
U.S. Dollars
2013$347,592
1,822,839
31,700,234
4,861,021
42,711$38,774,397“Nonaccrual loans”, which include loans to borrowers in bankruptcy andpast due loans, are defined as loans upon which the Bank has discontinued the accrual of interest income. Borrowers are generally placed on
nonaccrual status when substantial doubt is deemed to exist as to theultimate collectability of either the principal or interest and if the loans
are past due for a certain period of time or for other reasons.
“Loans to borrowers in bankruptcy” represent nonaccrual loans
to debtors who are legally bankrupt, which is defined in Article 96,
Paragraph 1, Subparagraphs 3 and 4 of Enforcement Ordinance for the
Corporate Tax Law. Loans to borrowers in legal bankruptcy as of March
31, 2013 and 2012 were ¥3,928 million ($41,765 thousand) and ¥6,283
million, respectively.
“Past due loans” are nonaccrual loans other than loans to borrowers
in bankruptcy and loans of which interest payments are deferred inorder to assist the financial recovery of a debtor in financial difficulty.
Past due loans as of March 31, 2013 and 2012 were ¥131,887 million($1,402,307 thousand) and ¥113,545 million, respectively.
“Accruing loans past due three months or more” are defined as loans
on which principal or interest is past due more than three months. Loansclassified as loans to borrowers in bankruptcy and past due loans are
excluded from accruing loans past due three months or more. Accruingloans past due three months or more as of March 31, 2013 and 2012were ¥1,039 million ($11,047 thousand) and ¥255 million, respectively.
“Restructured loans” are defined as loans in which the Group is providing financial support to a borrower by a reduction of interest rates,
deferral of interest payments, extension of maturity dates, or reductionof the face or maturity amount of the debt or accrued interest. Loansclassified as loans to borrowers in bankruptcy, past due loans and accruing loans past due three months or more are excluded from restructuredloans. Restructured loans as of March 31, 2013 and 2012 were ¥12,095
million ($128,602 thousand) and ¥17,540 million, respectively.
The total amount of loans to borrowers in bankruptcy, past dueloans, accruing loans past due three months or more and restructuredloans as of March 31, 2013 and 2012 were ¥148,949 million($1,583,721 thousand) and ¥137,623 million, respectively.
Bills discounted are accounted for as financing transactions inaccordance with “Treatment of Accounting and Auditing in Applying Accounting Standard for Financial Instruments in the Banking
Industry” issued by the Japanese Institute of Certified Public Accountants. The Bank has rights to sell or pledge accepted commercial bills
discounted and foreign bills of exchange bought without restrictions.

23

distribution ratio of the preferred shares of Gifu Bank, taking into
consideration that the shareholders of Gifu Bank consisted of only twoshareholders, the Bank and BTMU, and that the Bank holds 100% of
voting rights of Gifu Bank. As a result of the discussion, the Bank, Gifu
Bank and BTMU agreed that 1) the identical terms and conditions of
the Class 5 preferred stock issued by Gifu Bank will be used for theClass 1 preferred stock to be newly issued by the Bank, and 2) the Bank
will issue 0.9 shares of the Class 1 preferred stock of the Bank for one
Class 5 preferred stock issued by Gifu Bank, taking into account that nomarket price exists for the Class 5 preferred stock, and the stock value ofGifu Bank.
(3) Number of Shares
Under this Merger, 20 million shares of Class 1 preferred stock were
issued.
5. Amount of negative goodwill recorded
Since the total of fair value of the Bank’s Class 1 preferred stock issued
on acquisition date and the expenses incurred for the Merger was lower
than the decrease in minority interest, the Bank recorded gain fromnegative goodwill of ¥2,127 million ($22,616 thousand) from theMerger.

For the year ended March 31, 2012

On April 26 and 28, 2011, the Bank acquired additional shares ofJuroku Capital Co., Ltd., which is a consolidated subsidiary, owned byminority shareholders in exchange for cash in the amount of ¥39 million
to strengthen the governance through the change of capital structure of
the company.
The Bank accounted for this transaction as a transaction withminority shareholders pursuant to ASBJ Statement No. 21, “Accounting Standard for Business Combinations” and ASBJ Guidance No. 10,“Guidance on Accounting Standard for Business Combinations andBusiness Divestitures” issued on December 26, 2008.
The Bank recognized a gain from negative goodwill of ¥1,061
million arising from the transaction, since the acquisition cost of thesubsidiary’s shares from minority shareholders was lower than the decreased amount of minority interests.

4. Cash and Due from Banks

Cash and due from banks as of March 31, 2013 and 2012 consisted of
the following:

2013

2012

Thousands of
U.S. Dollars
2013¥51,179
277,536¥328,715¥64,795
64,301¥129,096$544,168
2,950,941$3,495,109

Millions of Yen

Cash
Due from banks
Total

A reconciliation between the cash and due from banks on the consolidated balance sheet and the cash and cash equivalents on the consolidated
statement of cash flows for the years ended March 31, 2013 and 2012
was as follows:
Millions of Yen
2013
Cash and due from banks
Due from banksother than the Bank of Japan
Cash and cash equivalents

22

2012

Thousands of
U.S. Dollars
2013¥328,715¥129,096$3,495,109(685)(3,361)(7,283)¥328,030¥125,735$3,487,826

5. Trading Securities and Securities

Trading securities as of March 31, 2013 and 2012 consisted of the following:Thousands of
U.S. Dollars
2013

Millions of Yen
2013

2012

¥1,21416¥1,230¥1,712
6¥1,718National government bonds
Local government bonds$12,908170$13,078

The Bank records net valuation gains and losses as other operating
income and expenses, respectively. For the years ended March 31, 2013
and 2012, the Bank recorded net valuation gains of ¥5 million ($53
thousand) and net valuation losses of ¥0 million, respectively.
Securities as of March 31, 2013 and 2012 consisted of the following:Thousands of
U.S. Dollars
2013

Millions of Yen
2013
Equity securities
National government bonds
Local government bonds
Corporate bonds
Other securities
Total

2012

¥108,045 ¥95,874
612,195
627,612306,533
307,599
315,213306,116
129,998
121,560¥1,471,984 ¥1,458,761$1,148,804
6,509,250
3,259,256
3,351,547
1,382,222$15,651,079

Information regarding available-for-sale and held-to-maturity securities
as of March 31, 2013 and 2012 was as follows:
March 31, 2013
Securities classified as:
Available-for-sale:
Equity securities
Debt securities
Other
Held-to-maturity:
Debt securities

March 31, 2012
Securities classified as:
Available-for-sale:
Equity securities
Debt securities
Other
Held-to-maturity:
Debt securities

March 31, 2013
Securities classified as:
Available-for-sale:
Equity securities
Debt securities
Other
Held-to-maturity:
Debt securities

Millions of Yen
Unrealized Unrealized
Gains
LossesCost¥64,784
1,163,153
121,626¥38,357
30,456
4,453

40,478343¥3,403 ¥ 99,738
147 1,193,462
371 125,708
108

Millions of Yen
Unrealized Unrealized
Gains
Losses

Cost

Fair
Value

40,713

Fair
Value

Proceeds from sales of available-for-sale securities for the year ended
March 31, 2013 consisted of the following:
March 31, 2013
Equity securities
Debt securities:
National government bonds
Local government bonds
Corporate bonds
Other
Total

March 31, 2012
Equity securities
Debt securities:
National government bonds
Local government bonds
Corporate bonds
Other
Total

March 31, 2013
Equity securities
Debt securities:
National government bonds
Local government bonds
Corporate bonds
Other
Total

Millions of Yen
Proceeds
Realized Gains Realized Losses¥4,617¥1,213¥424
89,006
12,91912,92922,713¥142,184

2,357
570
189
1,295
¥5,624

Millions of Yen
Proceeds
Realized Gains Realized Losses¥15,458¥8,027¥2,58385,7491,226
15,59844,445¥162,476

1,498
27
239
2,035
¥11,826¥24,141
20,2502,425

46,416368

Cost¥4,570 ¥87,384
413 1,194,911
3,561
116,365
227

46,557

Thousands of U.S. Dollars
Unrealized Unrealized
Fair
Gains
LossesValue$ 688,825
12,367,390
1,293,206$407,836
323,828
47,347430,3883,647$36,183 $ 1,060,478
1,564 12,689,654
3,945 1,336,608
1,148

432,887

26
—
223
1,825
¥4,657

Thousands of U.S. Dollars
Proceeds
Realized Gains Realized Losses$49,091$12,897$4,508946,369
137,363
137,469
241,500$1,511,792

25,061
6,061
2,010
13,769$59,798

—
—
585
2,998
$8,091

In addition, held-to-maturity securities amounting to ¥302 million($3,211 thousand) and ¥500 million were reclassified as available-forsale securities due to a decline of the issuer’s credit worthiness as ofMarch 31, 2013 and 2012.
The impairment losses on available-for-sale equity securities forthe years ended March 31, 2013 and 2012, were ¥247 million ($2,626
thousand) (consisting of equity securities ¥145 million ($1,542 thousand) and corporate bonds ¥102 million ($1,084 thousand)) and ¥ 32
million (consisting of corporate bonds), respectively.
Unrealized gain on available-for-sale securities as of March 31, 2013
and 2012 consisted of the following:
Millions of Yen¥67,813
1,175,074
117,501

—
—
55
282
¥761

Unrealized gain before deferred
tax on:Available-for-sale securities
Deferred tax liabilities
Unrealized gain on availablefor-sale securities before
interest adjustments
Minority interest
Unrealized gain on
available-for-sale securities

Thousands of
U.S. Dollars
2013

2013

2012

¥70,103(23,806)¥38,992(13,419)$745,380(253,121)

46,29725,573492,259

(300)

(195)

(3,190)¥45,997¥25,378$489,069

Unrealized gain on available-for-sale securities includes ¥758 million($8,060 thousand) and ¥719 million of revaluation gain on availablefor-sale securities as of March 31, 2013 and 2012, which are held by
investment limited partnership and similar groups.

6. Money Held in Trust

Information regarding money held in trust for trading purposes as ofMarch 31, 2013 and 2012 was as follows:
Carrying AmountMillions of Yen

Thousands of
U.S. Dollars
2013

2013

2012

¥6,000¥6,000$63,796

4,620¥10,620

4,620¥10,620

49,123$112,919

Money held in trust classified
as trading purpose
Money held in trust-otherTotal

7. Loans and Bills Discounted

Loans and bills discounted as of March 31, 2013 and 2012 consisted of
the following:
Millions of Yen
2013
Bills discounted
Loans on bills
Loans on deeds
Overdrafts
OthersTotal

2012¥32,691 ¥39,008
171,438
199,7422,981,407
486,239457,179
5,110
4,017 2,992,045¥3,646,732 ¥3,722,144

Thousands of
U.S. Dollars
2013$347,592
1,822,839
31,700,234
4,861,021
42,711$38,774,397“Nonaccrual loans”, which include loans to borrowers in bankruptcy andpast due loans, are defined as loans upon which the Bank has discontinued the accrual of interest income. Borrowers are generally placed on
nonaccrual status when substantial doubt is deemed to exist as to theultimate collectability of either the principal or interest and if the loans
are past due for a certain period of time or for other reasons.
“Loans to borrowers in bankruptcy” represent nonaccrual loans
to debtors who are legally bankrupt, which is defined in Article 96,
Paragraph 1, Subparagraphs 3 and 4 of Enforcement Ordinance for the
Corporate Tax Law. Loans to borrowers in legal bankruptcy as of March
31, 2013 and 2012 were ¥3,928 million ($41,765 thousand) and ¥6,283
million, respectively.
“Past due loans” are nonaccrual loans other than loans to borrowers
in bankruptcy and loans of which interest payments are deferred inorder to assist the financial recovery of a debtor in financial difficulty.
Past due loans as of March 31, 2013 and 2012 were ¥131,887 million($1,402,307 thousand) and ¥113,545 million, respectively.
“Accruing loans past due three months or more” are defined as loans
on which principal or interest is past due more than three months. Loansclassified as loans to borrowers in bankruptcy and past due loans are
excluded from accruing loans past due three months or more. Accruingloans past due three months or more as of March 31, 2013 and 2012were ¥1,039 million ($11,047 thousand) and ¥255 million, respectively.
“Restructured loans” are defined as loans in which the Group is providing financial support to a borrower by a reduction of interest rates,
deferral of interest payments, extension of maturity dates, or reductionof the face or maturity amount of the debt or accrued interest. Loansclassified as loans to borrowers in bankruptcy, past due loans and accruing loans past due three months or more are excluded from restructuredloans. Restructured loans as of March 31, 2013 and 2012 were ¥12,095
million ($128,602 thousand) and ¥17,540 million, respectively.
The total amount of loans to borrowers in bankruptcy, past dueloans, accruing loans past due three months or more and restructuredloans as of March 31, 2013 and 2012 were ¥148,949 million($1,583,721 thousand) and ¥137,623 million, respectively.
Bills discounted are accounted for as financing transactions inaccordance with “Treatment of Accounting and Auditing in Applying Accounting Standard for Financial Instruments in the Banking
Industry” issued by the Japanese Institute of Certified Public Accountants. The Bank has rights to sell or pledge accepted commercial bills
discounted and foreign bills of exchange bought without restrictions.

23

The total fair value of commercial bills discounted and foreign bills of
exchange bought included in foreign exchanges as of March 31, 2013
and 2012 were ¥34,407 million ($365,837 thousand) and ¥39,956 million, respectively.

12. Assets Pledged

Assets pledged as collateral and their relevant liabilities as of March 31,
2013 and 2012 were as follows:

8. Foreign Exchanges

Foreign exchanges as of March 31, 2013 and 2012 consisted of the following:
Millions of Yen
Assets:Due from foreign correspondentaccount
Foreign bills of exchangeboughtForeign bills of exchange
receivable
Total
Liabilities:
Due to foreign correspondentaccount
Foreign bills of exchange payable
Total

Thousands of
U.S. Dollars
2013

2013

2012

¥2,927¥2,356$31,122

1,716

945

18,246

1,069

1,513

11,366¥5,712¥4,814$60,734

¥303

¥639

$3,222

77

203

818

¥380

¥842

$4,040

2013

2012

Thousands of
U.S. Dollars
2013¥138,951¥240,952$1,477,416

1,818

3,129

19,33077¥140,84648¥244,129819$1,497,565¥112,102—¥117,085
50,000$1,191,940—

48,91563,926520,096

16,460¥177,477

30,362¥261,373

175,013$1,887,049

Millions of Yen
Assets pledged as collateral:
Securities
Lease receivables andinvestments in leases
Other assets
Total
Relevant liabilities to above assets:
Deposits
Call money
Payables under securities
lending transactions
Borrowed money
Total

In addition, the following assets were pledged or deposited with respect
to foreign exchange settlements and derivatives as of March 31, 2013
and 2012:

2013

2012

Thousands of
U.S. Dollars
2013¥81,8848¥81,892¥109,328
11¥109,339$870,643
85$870,728

Millions of Yen

9. Other Assets

Other assets as of March 31, 2013 and 2012 consisted of the following:
Millions of Yen

Accrued income
Accounts receivable
Installment receivables
Derivative assets
Other
Total

2013

2012

¥6,604
8,508
8,627
6,358
9,866
¥39,963¥7,541
8,605
8,215
13,835
13,422¥51,618

Thousands of
U.S. Dollars
2013$70,218
90,46391,72867,602
104,899$424,910

Securities
Other assets
Total

Millions of Yen

Land
Building
Construction in progress
Other
Total

2013

2012

¥46,542
13,227198
6,051¥66,018¥48,299
13,400249
5,621¥67,569

Thousands of
U.S. Dollars
2013$494,864
140,638
2,105
64,339$701,946

The accumulated depreciation of premises and equipment as of March
31, 2013 and 2012 amounted to ¥64,849 million ($689,516 thousand)and ¥70,108 million, respectively.

11. Customers’ Liabilities for Acceptances and Guarantees

All contingent liabilities arising from acceptances and guarantees arereflected in acceptances and guarantees. As a contra account, the customers’ liabilities for acceptances and guarantees are presented as assets,
representing the Bank’s right of indemnity from applicants.
The Enforcement Ordinance of the Banking Law was revised on
April 17, 2007 and effective from the fiscal years beginning on andafter April 1, 2006. The Bank offset customer’s liabilities for acceptanceand guarantees with acceptance and guarantees of ¥41,014 million($436,087 thousand) and ¥47,195 million arising from guarantees ofprivate placement securities as of March 31, 2013 and 2012, respectively.

24Year Ending March 31

Millions of Yen

2014
2015
2016
2017
2018
2019 and thereafter
Total¥24,397
6,807
5,327
4,409
2,124
29,250¥72,314

13. Deposits

Deposits as of March 31, 2013 and 2012 consisted of the following:
Millions of Yen
2013
Current deposits
Ordinary deposits
Deposits at notice
Savings deposits
Time deposits
Other deposits
Total

2012

¥ 316,830 ¥308,458
1,915,866 1,888,110
44,70339,023
97,075103,025
2,562,978 2,471,047
63,59671,360¥5,001,048 ¥4,881,023

Thousands of
U.S. Dollars
2013$ 3,368,740
20,370,718
475,311
1,032,164
27,251,228
676,193$53,174,354

Year Ending March 31

Thousands of
U.S. Dollars
$ 489
489
489
489
489
351
$2,796

Millions of Yen

2014
2015
2016
2017
2018
2019
Total

¥ 46
46
46
46
46
33
¥263

Thousands of
U.S. Dollars
2013

Millions of Yen

Unsecured Yen subordinatedbonds due September 2017
Unsecured Yen subordinatedbonds due December 2022 (*)
Total

2012
—

¥15,000—¥10,000—$106,326¥10,000¥15,000$106,326(*) The interest rates of the bonds are 1.01% for the period from December 22, 2012 to December 21, 2017 and six-month Euroyen Liborplus 2.20% for the period from December 22, 2017 to December 21,
2022.

16. Other Liabilities

2013

2012

¥72,314¥82,988$768,889

263

308

2,796

Weighted average interest rates of lease obligation are not represented
because lease obligation is disclosed on the balance sheet without
deducting interest portion which is included in the amount of leaseobligation.

Projected benefit obligation
Fair value of plan assets
Unrecognized actuarial loss
Net liability

2013

2012

¥48,494(35,700)(2,807)¥9,987¥50,394(32,131)(6,556)¥11,707

Thousands of
U.S. Dollars
2013

2013
¥

2012
27

790
8,194
9,862
2,715
6,540
5,879
11,122¥45,129

¥

16

1,573
8,053
9,912
2,495
13,885
6,233
11,295¥53,462

$

287

8,400
87,124
104,859
28,86869,53762,509118,257$479,841(*) The domestic exchange settlement account consisted of outstanding
remittance bills from other banks and/or collection bills for which the
Bank has received notices for payment from other banks which have notbeen settled.

$515,619(379,585)(29,846)$106,188

The components of net periodic retirement benefit costs for the years
ended March 31, 2013 and 2012 were as follows:
Thousands of
U.S. Dollars
2013

Service cost
Interest cost
Expected return on plan assets
Recognized actuarial loss
Loss on abolishment of retirement
benefit plan and the others
Net periodic retirement costs

2013

2012

¥1,508
957
(817)
1,122

¥1,463
968
(797)
1,679

$16,034
10,175(8,687)
11,930—957—¥2,770¥4,270$29,452

The Bank recorded the estimated loss on abolishment of retirement benefit plan for terminating the retirement plan in September 2012 for oneof the subsidiaries for the year ended March 31, 2012. The loss consistsof ¥617 million of estimated termination expense and ¥340 million of
estimated premium severance pay.
Assumptions used for the years ended March 31, 2013 and 2012,were set forth as follows:
2013

2012

Straight-line
method
2.0%
3.0%
10 years

Straight-line
method2.0 %3.0 %10 years

Other liabilities as of March 31, 2013 and 2012 consisted of the following:

Domestic exchange settlement
account, credit (*)
Income taxes payable
Accrued expenses
Deferred income
Employees’ deposits
Derivative liabilities
Accounts payable
Other
Total

Thousands of
U.S. Dollars
2013

Millions of Yen

Millions of Yen

2013

Borrowed money and lease obligation as of March 31, 2013 and 2012
consisted of the following:Thousands of
U.S. Dollars
2013

The Bank and certain subsidiaries have severance payment plans for employees, directors and Audit & Supervisory Board members. Under mostcircumstances, employees terminating their employment are entitled toretirement benefits determined based on the rate of pay at the time oftermination, years of service and certain other factors. If the termination
is involuntary, caused by retirement at the mandatory retirement age ordeath, or certain other causes, the employee is entitled to greater payments than in the case of voluntary termination.
The liability for retirement benefits for directors and Audit &Supervisory Board members as of March 31, 2013 and 2012 was ¥432
million ($4,593 thousand) and ¥430 million, respectively. The retirement benefits for directors and Audit & Supervisory Board members arepaid subject to the approval of the shareholders.
The liability for retirement benefits for employees as of March 31,
2013 and 2012 consisted of the following:

Bonds as of March 31, 2013 and 2012 consisted of the following:

Millions of Yen

Millions of Yen

17. Retirement and Pension Plans

15. Bonds

14. Borrowed Money and Lease Obligation

Borrowings due serially to
September 2022 with weighted
average interest rates of 1.02%
in 2013 and 0.97% in 2012
Lease obligation

Thousands of
U.S. Dollars$259,405
72,376
56,64046,87922,584
311,005$768,889

Borrowings include subordinated borrowings of the Bank, whichamounted to ¥29,000 million ($308,347 thousand) and ¥31,000 million as of March 31, 2013 and 2012.
Annual maturities of lease obligation as of March 31, 2013 were as
follows:

Deposits included in other assets as of March 31, 2013 and 2012 were¥2,285 million ($24,296 thousand) and ¥2,581 million, respectively.

10. Premises and Equipment

Premises and equipment as of March 31, 2013 and 2012 consisted of
the following:

Annual maturities of borrowings as of March 31, 2013 were as follows:

Periodic recognition ofprojected benefit obligation
Discount rate
Expected rate of return on plan assets
Recognition period of actuarial gain/loss

18. Asset Retirement Obligations

The changes in asset retirement obligations, which are included in otherliabilities, for the year ended March 31, 2013 and 2012 were as follows:
Thousands of
U.S. Dollars
2013

Millions of Yen
2013
Balance at beginning of year
Reconciliation associated withpassage of time
Decrease due to fulfillment ofasset retirement obligations
Balance at end of year

2012

¥284

¥281

$3,020

11

18

117

(95)

(15)

(1,010)

¥200

¥284

$2,12725

The total fair value of commercial bills discounted and foreign bills of
exchange bought included in foreign exchanges as of March 31, 2013
and 2012 were ¥34,407 million ($365,837 thousand) and ¥39,956 million, respectively.

12. Assets Pledged

Assets pledged as collateral and their relevant liabilities as of March 31,
2013 and 2012 were as follows:

8. Foreign Exchanges

Foreign exchanges as of March 31, 2013 and 2012 consisted of the following:
Millions of Yen
Assets:Due from foreign correspondentaccount
Foreign bills of exchangeboughtForeign bills of exchange
receivable
Total
Liabilities:
Due to foreign correspondentaccount
Foreign bills of exchange payable
Total

Thousands of
U.S. Dollars
2013

2013

2012

¥2,927¥2,356$31,122

1,716

945

18,246

1,069

1,513

11,366¥5,712¥4,814$60,734

¥303

¥639

$3,222

77

203

818

¥380

¥842

$4,040

2013

2012

Thousands of
U.S. Dollars
2013¥138,951¥240,952$1,477,416

1,818

3,129

19,33077¥140,84648¥244,129819$1,497,565¥112,102—¥117,085
50,000$1,191,940—

48,91563,926520,096

16,460¥177,477

30,362¥261,373

175,013$1,887,049

Millions of Yen
Assets pledged as collateral:
Securities
Lease receivables andinvestments in leases
Other assets
Total
Relevant liabilities to above assets:
Deposits
Call money
Payables under securities
lending transactions
Borrowed money
Total

In addition, the following assets were pledged or deposited with respect
to foreign exchange settlements and derivatives as of March 31, 2013
and 2012:

2013

2012

Thousands of
U.S. Dollars
2013¥81,8848¥81,892¥109,328
11¥109,339$870,643
85$870,728

Millions of Yen

9. Other Assets

Other assets as of March 31, 2013 and 2012 consisted of the following:
Millions of Yen

Accrued income
Accounts receivable
Installment receivables
Derivative assets
Other
Total

2013

2012

¥6,604
8,508
8,627
6,358
9,866
¥39,963¥7,541
8,605
8,215
13,835
13,422¥51,618

Thousands of
U.S. Dollars
2013$70,218
90,46391,72867,602
104,899$424,910

Securities
Other assets
Total

Millions of Yen

Land
Building
Construction in progress
Other
Total

2013

2012

¥46,542
13,227198
6,051¥66,018¥48,299
13,400249
5,621¥67,569

Thousands of
U.S. Dollars
2013$494,864
140,638
2,105
64,339$701,946

The accumulated depreciation of premises and equipment as of March
31, 2013 and 2012 amounted to ¥64,849 million ($689,516 thousand)and ¥70,108 million, respectively.

11. Customers’ Liabilities for Acceptances and Guarantees

All contingent liabilities arising from acceptances and guarantees arereflected in acceptances and guarantees. As a contra account, the customers’ liabilities for acceptances and guarantees are presented as assets,
representing the Bank’s right of indemnity from applicants.
The Enforcement Ordinance of the Banking Law was revised on
April 17, 2007 and effective from the fiscal years beginning on andafter April 1, 2006. The Bank offset customer’s liabilities for acceptanceand guarantees with acceptance and guarantees of ¥41,014 million($436,087 thousand) and ¥47,195 million arising from guarantees ofprivate placement securities as of March 31, 2013 and 2012, respectively.

24Year Ending March 31

Millions of Yen

2014
2015
2016
2017
2018
2019 and thereafter
Total¥24,397
6,807
5,327
4,409
2,124
29,250¥72,314

13. Deposits

Deposits as of March 31, 2013 and 2012 consisted of the following:
Millions of Yen
2013
Current deposits
Ordinary deposits
Deposits at notice
Savings deposits
Time deposits
Other deposits
Total

2012

¥ 316,830 ¥308,458
1,915,866 1,888,110
44,70339,023
97,075103,025
2,562,978 2,471,047
63,59671,360¥5,001,048 ¥4,881,023

Thousands of
U.S. Dollars
2013$ 3,368,740
20,370,718
475,311
1,032,164
27,251,228
676,193$53,174,354

Year Ending March 31

Thousands of
U.S. Dollars
$ 489
489
489
489
489
351
$2,796

Millions of Yen

2014
2015
2016
2017
2018
2019
Total

¥ 46
46
46
46
46
33
¥263

Thousands of
U.S. Dollars
2013

Millions of Yen

Unsecured Yen subordinatedbonds due September 2017
Unsecured Yen subordinatedbonds due December 2022 (*)
Total

2012
—

¥15,000—¥10,000—$106,326¥10,000¥15,000$106,326(*) The interest rates of the bonds are 1.01% for the period from December 22, 2012 to December 21, 2017 and six-month Euroyen Liborplus 2.20% for the period from December 22, 2017 to December 21,
2022.

16. Other Liabilities

2013

2012

¥72,314¥82,988$768,889

263

308

2,796

Weighted average interest rates of lease obligation are not represented
because lease obligation is disclosed on the balance sheet without
deducting interest portion which is included in the amount of leaseobligation.

Projected benefit obligation
Fair value of plan assets
Unrecognized actuarial loss
Net liability

2013

2012

¥48,494(35,700)(2,807)¥9,987¥50,394(32,131)(6,556)¥11,707

Thousands of
U.S. Dollars
2013

2013
¥

2012
27

790
8,194
9,862
2,715
6,540
5,879
11,122¥45,129

¥

16

1,573
8,053
9,912
2,495
13,885
6,233
11,295¥53,462

$

287

8,400
87,124
104,859
28,86869,53762,509118,257$479,841(*) The domestic exchange settlement account consisted of outstanding
remittance bills from other banks and/or collection bills for which the
Bank has received notices for payment from other banks which have notbeen settled.

$515,619(379,585)(29,846)$106,188

The components of net periodic retirement benefit costs for the years
ended March 31, 2013 and 2012 were as follows:
Thousands of
U.S. Dollars
2013

Service cost
Interest cost
Expected return on plan assets
Recognized actuarial loss
Loss on abolishment of retirement
benefit plan and the others
Net periodic retirement costs

2013

2012

¥1,508
957
(817)
1,122

¥1,463
968
(797)
1,679

$16,034
10,175(8,687)
11,930—957—¥2,770¥4,270$29,452

The Bank recorded the estimated loss on abolishment of retirement benefit plan for terminating the retirement plan in September 2012 for oneof the subsidiaries for the year ended March 31, 2012. The loss consistsof ¥617 million of estimated termination expense and ¥340 million of
estimated premium severance pay.
Assumptions used for the years ended March 31, 2013 and 2012,were set forth as follows:
2013

2012

Straight-line
method
2.0%
3.0%
10 years

Straight-line
method2.0 %3.0 %10 years

Other liabilities as of March 31, 2013 and 2012 consisted of the following:

Domestic exchange settlement
account, credit (*)
Income taxes payable
Accrued expenses
Deferred income
Employees’ deposits
Derivative liabilities
Accounts payable
Other
Total

Thousands of
U.S. Dollars
2013

Millions of Yen

Millions of Yen

2013

Borrowed money and lease obligation as of March 31, 2013 and 2012
consisted of the following:Thousands of
U.S. Dollars
2013

The Bank and certain subsidiaries have severance payment plans for employees, directors and Audit & Supervisory Board members. Under mostcircumstances, employees terminating their employment are entitled toretirement benefits determined based on the rate of pay at the time oftermination, years of service and certain other factors. If the termination
is involuntary, caused by retirement at the mandatory retirement age ordeath, or certain other causes, the employee is entitled to greater payments than in the case of voluntary termination.
The liability for retirement benefits for directors and Audit &Supervisory Board members as of March 31, 2013 and 2012 was ¥432
million ($4,593 thousand) and ¥430 million, respectively. The retirement benefits for directors and Audit & Supervisory Board members arepaid subject to the approval of the shareholders.
The liability for retirement benefits for employees as of March 31,
2013 and 2012 consisted of the following:

Bonds as of March 31, 2013 and 2012 consisted of the following:

Millions of Yen

Millions of Yen

17. Retirement and Pension Plans

15. Bonds

14. Borrowed Money and Lease Obligation

Borrowings due serially to
September 2022 with weighted
average interest rates of 1.02%
in 2013 and 0.97% in 2012
Lease obligation

Thousands of
U.S. Dollars$259,405
72,376
56,64046,87922,584
311,005$768,889

Borrowings include subordinated borrowings of the Bank, whichamounted to ¥29,000 million ($308,347 thousand) and ¥31,000 million as of March 31, 2013 and 2012.
Annual maturities of lease obligation as of March 31, 2013 were as
follows:

Deposits included in other assets as of March 31, 2013 and 2012 were¥2,285 million ($24,296 thousand) and ¥2,581 million, respectively.

10. Premises and Equipment

Premises and equipment as of March 31, 2013 and 2012 consisted of
the following:

Annual maturities of borrowings as of March 31, 2013 were as follows:

Periodic recognition ofprojected benefit obligation
Discount rate
Expected rate of return on plan assets
Recognition period of actuarial gain/loss

18. Asset Retirement Obligations

The changes in asset retirement obligations, which are included in otherliabilities, for the year ended March 31, 2013 and 2012 were as follows:
Thousands of
U.S. Dollars
2013

Millions of Yen
2013
Balance at beginning of year
Reconciliation associated withpassage of time
Decrease due to fulfillment ofasset retirement obligations
Balance at end of year

2012

¥284

¥281

$3,020

11

18

117

(95)

(15)

(1,010)

¥200

¥284

$2,12725

19. Equity

Japanese banks are subject to the Companies Act of Japan (the “Companies Act”). The significant provisions in the Companies Act that affectfinancial and accounting matters are summarized below:(a) Dividends
Under the Companies Act, companies can pay dividends at any time
during the fiscal year in addition to the year-end dividend upon resolution at the shareholders’ meeting. For companies that meet certain
criteria, the Board of Directors may declare dividends (except for
dividends-in-kind) at any time during the fiscal year if the company
has prescribed so in its articles of incorporation. However, the Bank
cannot do so because it does not meet the criteria. Semiannual interim
dividends may also be paid once a year upon resolution by the Boardof Directors if the articles of incorporation of the company so stipulate.
The Companies Act provides certain limitations on the amounts available for dividends or the purchase of treasury stock. The limitation isdefined as the amount available for distribution to the shareholders, but
the amount of net assets after dividends must be maintained at no lessthan ¥3 million.
(b) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury
stock and dispose of such treasury stock by resolution of the Board of
Directors. The amount of treasury stock purchased cannot exceed theamount available for distribution to the shareholders which is determined by specific formula. Under the Companies Act, stock acquisitionrights are presented as a separate component of equity. The Companies
Act also provides that companies can purchase both treasury stock acquisition rights and treasury stock. Such treasury stock acquisition rights
are presented as a separate component of equity or deducted directlyfrom stock acquisition rights.
Other than above, the Japanese Banking Law provided that an
amount at least equal to 20% of the aggregate amount of cash dividends
and certain other cash payments which are made as an appropriation ofretained earnings applicable to each fiscal period shall be set aside as alegal reserve until the total additional paid-in capital and legal reserve
equals 100% of stated capital. The amount of total additional paid-in
capital and legal reserve which exceeds 100% of stated capital can betransferred to retained earnings by resolution of the shareholders, which
may be available for dividends. The Bank’s legal reserve amount, whichis included in retained earnings, totals ¥20,155 million ($214,301 thousand) and ¥20,155 as of March 31, 2013 and 2012, respectively.

20. Other Expenses

Other expenses for the years ended March 31, 2013 and 2012 consistedof the following:Thousands of
U.S. Dollars
2013

Millions of Yen

Write-down of stocks andother securities
Loss on sales ofstocks and other securities
Write-down of loans
Loss on sales of loans
Loss on dispositions ofpremises and equipment
Other
Total

21. Income Taxes

2013

2012

¥176

¥143

$1,871

521

3,726

5,540

85
2,092

28
735

904
22,243

355

47

3,775

1,428
¥4,657967¥5,64615,183$49,516

The Bank and its subsidiaries are subject to Japanese national and local
income taxes which, in the aggregate, resulted in normal effective statutory tax rate of approximately 37% and 40% for the years ended March
31, 2013 and 2012.

26

The tax effects of significant temporary differences and tax loss carryforwards, which result in deferred tax assets and liabilities as of March
31, 2013 and 2012 were as follows:
Millions of Yen
Deferred tax assets:
Reserve for possible loan losses
Tax loss carryforwards
Liability for retirement benefits
Write-down of securities
Depreciation
Other
Less: Valuation allowance
Total
Deferred tax liabilities:
Unrealized gain on
available-for-sale securities
Gain on contribution ofavailable-for-sale securities to
employees’ retirement benefit trusts
Other
Total
Net deferred tax assets

No. 13 effective April 1, 2008 and continued to account for such leases
as operating lease transactions. Pro forma information of leased assets
whose lease inception was before March 31, 2008 was as follows:

Thousands of
U.S. Dollars
2013

2013

2012

¥12,705
9,595
5,679
2,959
2,166
3,188
(7,295)28,997¥12,284
10,516
6,601
3,388
2,512
3,766
(20,054)
19,013$135,088
102,020
60,383
31,462
23,03033,897(77,565)
308,315(23,807)(13,419)(253,131)(1,184)(1,184)(12,589)(682)(25,673)¥3,324(656)(15,259)¥3,754(7,252)(272,972)$ 35,343

Millions of Yen
2013
Acquisition cost
Accumulated depreciation
Net leased assets

2012

¥209
(161)
¥48

Normal effective statutory tax rate
Expenses not deductible for income tax purposes
Income not taxable for income tax purposes
Per capita tax
Net change in valuation allowance
Reduction in year-end deferred tax
assets (liabilities) due to tax-rate
Gain on negative goodwill
The effect of variance with the future
effective statutory tax rate which will
be applied after the taxable period of
the new tax reform laws
Other – net
Actual effective tax rate

2013

2012

37.18%
0.62(2.41)
0.57(81.94)39.76%
0.45(1.78)
0.40(4.97)—

7.43(8.29)(1.80)

3.03

—

0.56
(50.68)%1.17
40.66%

22. Leases

Finance leases(Lessee)A subsidiary leases certain premises.
Total rental expense including lease payments under the financeleases for the years ended March 31, 2013 and 2012 was ¥31 million($330 thousand) and ¥44 million, respectively.

Pro forma information of leased assets whose lease inception was
before March 31, 2008
ASBJ Statement No.13, “Accounting Standard for Lease Transactions”, requires that all finance lease transactions be capitalized torecognize lease assets and lease obligations in the balance sheet. However, the ASBJ Statement No. 13 permits leases that do not ownershiptransfer of the leased assets to the lessee and whose lease inception was
before March 31, 2008 to continue to be accounted for as operating leasetransactions if certain “as if capitalized” information is disclosed in thenotes to the financial statements. The Group applied ASBJ Statement$2,222(1,712)$510

Obligations under finance leases as of March 31, 2013 and 2012 were as
follows:
Millions of Yen
2013

Reconciliations between the normal effective statutory tax rate and theactual effective tax rate reflected in the accompanying consolidated statement of operations for the years ended March 31, 2013 and 2012 wereas follows:

¥229
(149)
¥ 80

Thousands of
U.S. Dollars
2013

Due within one year
Due after one year
Total

2012

¥30
18
¥48

¥32
48
¥80

Thousands of
U.S. Dollars
2013
$319
191
$510

*The amounts of obligations under finance leases include the imputed
interest expense portion.
Depreciation expense, which was not reflected in the accompanying
consolidated statement of income, was computed by the straight-line
method with useful lives being equal to the lease period and all residual
values at zero. Depreciation expense for the years ended March 31, 2013
and 2012 was ¥31 million ($330 thousand) and ¥44 million, respectively.
(Lessor)A subsidiary leases certain equipment and other assets.
The net investments in leases as of March 31, 2013 and 2012 wereas follows:
Millions of Yen

Gross lease receivables
Unguaranteed residual values
Deferred interest income
Total

2013

2012

¥41,341966(4,341)¥37,966¥42,351746(4,663)¥38,434

Thousands of
U.S. Dollars
2013$439,564
10,271(46,156)$403,679

Maturities of lease receivables for finance leases that were deemed totransfer ownership of the leased assets to the lessee are as follows:Year Ending March 31
2014
2015
2016
2017
2018
2019 and thereafter
Total

Millions of Yen
¥ 749
641
534
432
226
425
¥3,007

Thousands of
U.S. Dollars$ 7,964
6,816
5,678
4,593
2,403
4,518
$31,972

Maturities of investment in leases for finance leases that were deemed
not to transfer ownership of the leased assets to the lessee are as follows:Year Ending March 31

Millions of Yen

2014
2015
2016
2017
2018
2019 and thereafter
Total¥12,259
9,397
7,125
5,069
3,131
4,360
¥41,341

Thousands of
U.S. Dollars$130,346
99,91575,75853,89733,291
46,357$439,564

Operating leases(Lessee)
The minimum rental commitments under noncancellable operatingleases as of March 31, 2013 and 2012 were as follows:
Millions of Yen

Due within one year
Due after one year
Total

2013

2012

¥194
1,988
¥2,182¥238
2,980¥3,218

Thousands of
U.S. Dollars
2013$2,063
21,137$23,200(Lessor)
Expected future rental revenues under operating leases as of March 31,
2013 and 2012 were as follows:
Millions of Yen
2013
Due within one year
Due after one year
Total

¥284
590
¥874

2012
¥159
250
¥409

Thousands of
U.S. Dollars
2013$3,020
6,273$9,293

23. Financial Instruments and Related Disclosures(1) Group policy for financial instruments
The Group provides banking services and comprehensive financial
services including leasing business. The Group meets the needs of local
business through providing various products and services in the banking
services, lending services, securities investments and other financial services such as derivatives business. The Group has aligned its operation
into local personnel and businesses and fund from deposits from customers, which are low cost and stable. The Group also funds by borrowing.
As for loans and bills discounted in the money management system,
the Group finances local companies based on their capital demands andindividuals mainly for home mortgage. As its main resources are bankdeposits from customers, the Group tries to ensure the soundness of theassets through appropriate credit decisions and credit rating by understanding the current credit status and managing the credit portfolio toprevent concentrations in specific customers or industries. In marketablesecurities, considering the nature that it is an excess fund management
relating to lending services and its responsibility as a bank to provide
settlement services, the Group focuses on running a fund based on
public bonds, which is superior in security and liquidity. To build up a
portfolio that is less subject to rising interest rates, the Group invests inrisk assets such as securities whose values are expected to be less correlated with bonds.
The Group performs the derivative transactions to fund and invest
capitals to meet the various needs of its customers as well as to meet its
own needs. In trading transactions, the Group avoids taking excessive
risk by restricting the type of transactions and limiting the volume.
Also, the Group will not trade a particular investment if its fair value isvolatile compared to the same of the underlying assets (i.e. high leverage-effect transaction).
(2) Nature and extent of risks arising from financial instruments
The loans and bills discounted are to general business enterprises, individuals, and local public bodies, and there is a risk (credit risk) that thevalue of loaned money is reduced by financial deterioration of the borrower and a risk (interest risk) of losses due to changes in interest rates.
In marketable securities, the Group holds domestic bonds which arecomprised mainly of public bonds such as government bonds and local
government bonds, foreign securities, which are comprised of mainly US
Treasury, stocks, investment trusts, and investment partnerships and soforth for investment purposes. Also, the Group holds certain domestic
bonds for held-to-maturity purposes. These items have interest risk,
risk of changes in price, credit risk, and market liquidity risk. Market
liquidity risk represents the risk that market trades cannot be performed
due to market turmoil and that the Group may suffer losses due tosignificantly unfavorable financing conditions.

27

19. Equity

Japanese banks are subject to the Companies Act of Japan (the “Companies Act”). The significant provisions in the Companies Act that affectfinancial and accounting matters are summarized below:(a) Dividends
Under the Companies Act, companies can pay dividends at any time
during the fiscal year in addition to the year-end dividend upon resolution at the shareholders’ meeting. For companies that meet certain
criteria, the Board of Directors may declare dividends (except for
dividends-in-kind) at any time during the fiscal year if the company
has prescribed so in its articles of incorporation. However, the Bank
cannot do so because it does not meet the criteria. Semiannual interim
dividends may also be paid once a year upon resolution by the Boardof Directors if the articles of incorporation of the company so stipulate.
The Companies Act provides certain limitations on the amounts available for dividends or the purchase of treasury stock. The limitation isdefined as the amount available for distribution to the shareholders, but
the amount of net assets after dividends must be maintained at no lessthan ¥3 million.
(b) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury
stock and dispose of such treasury stock by resolution of the Board of
Directors. The amount of treasury stock purchased cannot exceed theamount available for distribution to the shareholders which is determined by specific formula. Under the Companies Act, stock acquisitionrights are presented as a separate component of equity. The Companies
Act also provides that companies can purchase both treasury stock acquisition rights and treasury stock. Such treasury stock acquisition rights
are presented as a separate component of equity or deducted directlyfrom stock acquisition rights.
Other than above, the Japanese Banking Law provided that an
amount at least equal to 20% of the aggregate amount of cash dividends
and certain other cash payments which are made as an appropriation ofretained earnings applicable to each fiscal period shall be set aside as alegal reserve until the total additional paid-in capital and legal reserve
equals 100% of stated capital. The amount of total additional paid-in
capital and legal reserve which exceeds 100% of stated capital can betransferred to retained earnings by resolution of the shareholders, which
may be available for dividends. The Bank’s legal reserve amount, whichis included in retained earnings, totals ¥20,155 million ($214,301 thousand) and ¥20,155 as of March 31, 2013 and 2012, respectively.

20. Other Expenses

Other expenses for the years ended March 31, 2013 and 2012 consistedof the following:Thousands of
U.S. Dollars
2013

Millions of Yen

Write-down of stocks andother securities
Loss on sales ofstocks and other securities
Write-down of loans
Loss on sales of loans
Loss on dispositions ofpremises and equipment
Other
Total

21. Income Taxes

2013

2012

¥176

¥143

$1,871

521

3,726

5,540

85
2,092

28
735

904
22,243

355

47

3,775

1,428
¥4,657967¥5,64615,183$49,516

The Bank and its subsidiaries are subject to Japanese national and local
income taxes which, in the aggregate, resulted in normal effective statutory tax rate of approximately 37% and 40% for the years ended March
31, 2013 and 2012.

26

The tax effects of significant temporary differences and tax loss carryforwards, which result in deferred tax assets and liabilities as of March
31, 2013 and 2012 were as follows:
Millions of Yen
Deferred tax assets:
Reserve for possible loan losses
Tax loss carryforwards
Liability for retirement benefits
Write-down of securities
Depreciation
Other
Less: Valuation allowance
Total
Deferred tax liabilities:
Unrealized gain on
available-for-sale securities
Gain on contribution ofavailable-for-sale securities to
employees’ retirement benefit trusts
Other
Total
Net deferred tax assets

No. 13 effective April 1, 2008 and continued to account for such leases
as operating lease transactions. Pro forma information of leased assets
whose lease inception was before March 31, 2008 was as follows:

Thousands of
U.S. Dollars
2013

2013

2012

¥12,705
9,595
5,679
2,959
2,166
3,188
(7,295)28,997¥12,284
10,516
6,601
3,388
2,512
3,766
(20,054)
19,013$135,088
102,020
60,383
31,462
23,03033,897(77,565)
308,315(23,807)(13,419)(253,131)(1,184)(1,184)(12,589)(682)(25,673)¥3,324(656)(15,259)¥3,754(7,252)(272,972)$ 35,343

Millions of Yen
2013
Acquisition cost
Accumulated depreciation
Net leased assets

2012

¥209
(161)
¥48

Normal effective statutory tax rate
Expenses not deductible for income tax purposes
Income not taxable for income tax purposes
Per capita tax
Net change in valuation allowance
Reduction in year-end deferred tax
assets (liabilities) due to tax-rate
Gain on negative goodwill
The effect of variance with the future
effective statutory tax rate which will
be applied after the taxable period of
the new tax reform laws
Other – net
Actual effective tax rate

2013

2012

37.18%
0.62(2.41)
0.57(81.94)39.76%
0.45(1.78)
0.40(4.97)—

7.43(8.29)(1.80)

3.03

—

0.56
(50.68)%1.17
40.66%

22. Leases

Finance leases(Lessee)A subsidiary leases certain premises.
Total rental expense including lease payments under the financeleases for the years ended March 31, 2013 and 2012 was ¥31 million($330 thousand) and ¥44 million, respectively.

Pro forma information of leased assets whose lease inception was
before March 31, 2008
ASBJ Statement No.13, “Accounting Standard for Lease Transactions”, requires that all finance lease transactions be capitalized torecognize lease assets and lease obligations in the balance sheet. However, the ASBJ Statement No. 13 permits leases that do not ownershiptransfer of the leased assets to the lessee and whose lease inception was
before March 31, 2008 to continue to be accounted for as operating leasetransactions if certain “as if capitalized” information is disclosed in thenotes to the financial statements. The Group applied ASBJ Statement$2,222(1,712)$510

Obligations under finance leases as of March 31, 2013 and 2012 were as
follows:
Millions of Yen
2013

Reconciliations between the normal effective statutory tax rate and theactual effective tax rate reflected in the accompanying consolidated statement of operations for the years ended March 31, 2013 and 2012 wereas follows:

¥229
(149)
¥ 80

Thousands of
U.S. Dollars
2013

Due within one year
Due after one year
Total

2012

¥30
18
¥48

¥32
48
¥80

Thousands of
U.S. Dollars
2013
$319
191
$510

*The amounts of obligations under finance leases include the imputed
interest expense portion.
Depreciation expense, which was not reflected in the accompanying
consolidated statement of income, was computed by the straight-line
method with useful lives being equal to the lease period and all residual
values at zero. Depreciation expense for the years ended March 31, 2013
and 2012 was ¥31 million ($330 thousand) and ¥44 million, respectively.
(Lessor)A subsidiary leases certain equipment and other assets.
The net investments in leases as of March 31, 2013 and 2012 wereas follows:
Millions of Yen

Gross lease receivables
Unguaranteed residual values
Deferred interest income
Total

2013

2012

¥41,341966(4,341)¥37,966¥42,351746(4,663)¥38,434

Thousands of
U.S. Dollars
2013$439,564
10,271(46,156)$403,679

Maturities of lease receivables for finance leases that were deemed totransfer ownership of the leased assets to the lessee are as follows:Year Ending March 31
2014
2015
2016
2017
2018
2019 and thereafter
Total

Millions of Yen
¥ 749
641
534
432
226
425
¥3,007

Thousands of
U.S. Dollars$ 7,964
6,816
5,678
4,593
2,403
4,518
$31,972

Maturities of investment in leases for finance leases that were deemed
not to transfer ownership of the leased assets to the lessee are as follows:Year Ending March 31

Millions of Yen

2014
2015
2016
2017
2018
2019 and thereafter
Total¥12,259
9,397
7,125
5,069
3,131
4,360
¥41,341

Thousands of
U.S. Dollars$130,346
99,91575,75853,89733,291
46,357$439,564

Operating leases(Lessee)
The minimum rental commitments under noncancellable operatingleases as of March 31, 2013 and 2012 were as follows:
Millions of Yen

Due within one year
Due after one year
Total

2013

2012

¥194
1,988
¥2,182¥238
2,980¥3,218

Thousands of
U.S. Dollars
2013$2,063
21,137$23,200(Lessor)
Expected future rental revenues under operating leases as of March 31,
2013 and 2012 were as follows:
Millions of Yen
2013
Due within one year
Due after one year
Total

¥284
590
¥874

2012
¥159
250
¥409

Thousands of
U.S. Dollars
2013$3,020
6,273$9,293

23. Financial Instruments and Related Disclosures(1) Group policy for financial instruments
The Group provides banking services and comprehensive financial
services including leasing business. The Group meets the needs of local
business through providing various products and services in the banking
services, lending services, securities investments and other financial services such as derivatives business. The Group has aligned its operation
into local personnel and businesses and fund from deposits from customers, which are low cost and stable. The Group also funds by borrowing.
As for loans and bills discounted in the money management system,
the Group finances local companies based on their capital demands andindividuals mainly for home mortgage. As its main resources are bankdeposits from customers, the Group tries to ensure the soundness of theassets through appropriate credit decisions and credit rating by understanding the current credit status and managing the credit portfolio toprevent concentrations in specific customers or industries. In marketablesecurities, considering the nature that it is an excess fund management
relating to lending services and its responsibility as a bank to provide
settlement services, the Group focuses on running a fund based on
public bonds, which is superior in security and liquidity. To build up a
portfolio that is less subject to rising interest rates, the Group invests inrisk assets such as securities whose values are expected to be less correlated with bonds.
The Group performs the derivative transactions to fund and invest
capitals to meet the various needs of its customers as well as to meet its
own needs. In trading transactions, the Group avoids taking excessive
risk by restricting the type of transactions and limiting the volume.
Also, the Group will not trade a particular investment if its fair value isvolatile compared to the same of the underlying assets (i.e. high leverage-effect transaction).
(2) Nature and extent of risks arising from financial instruments
The loans and bills discounted are to general business enterprises, individuals, and local public bodies, and there is a risk (credit risk) that thevalue of loaned money is reduced by financial deterioration of the borrower and a risk (interest risk) of losses due to changes in interest rates.
In marketable securities, the Group holds domestic bonds which arecomprised mainly of public bonds such as government bonds and local
government bonds, foreign securities, which are comprised of mainly US
Treasury, stocks, investment trusts, and investment partnerships and soforth for investment purposes. Also, the Group holds certain domestic
bonds for held-to-maturity purposes. These items have interest risk,
risk of changes in price, credit risk, and market liquidity risk. Market
liquidity risk represents the risk that market trades cannot be performed
due to market turmoil and that the Group may suffer losses due tosignificantly unfavorable financing conditions.

27

Deposits and borrowed money hold interest risk and cash flow risk
(liquidity risk). Cash flow risk means the risk that securing necessaryfinancing becomes difficult or significant unfavorable financing conditions result in recording of loss due to a mismatch of periods between
operations and financing and unexpected outflows of money. Derivativetransactions related to interest are comprised of interest-rate swap agreements, cap agreements, floor agreements, and interest option contracts.
Derivative transactions related to currency are comprised of exchange contracts, non-deliverable forwards (NDF), currency swap
agreements, and currency option contracts. Derivative transactions
related to securities are comprised of bond futures, options on bondfutures, OTC bond options, stock future transactions and individual
security options.
The Group utilizes derivative transactions to meet customer needs
and to control risk so that interest risk, risk of changes in prices, andforeign currency exchange risk are not excessive. In trading transactions,
the Group performs derivative transactions to earn a profit and to accumulate know-how of the transactions and understand market trends.
The derivative transactions the Group utilizes have interest risk,
currency exchange risk and the risk of change in prices. In derivativetransactions, the Group performs effective covering transactions to meetcustomers’ needs and in trading transactions, the Group preliminarily
establishes a risk limit to avoid exposing the Group to too much market
risk. Transactions in the market such as options have limited credit
risk and OTC transactions like interest swaps are assumed to have lowrisk since the counterparties are comprised of highly credible financial
institutions and companies.
The interest rate swaps on deposits which qualify for hedge accounting and meet specific matching criteria are not remeasured at market
values but the differential paid or received under the swap agreements is
recognized and included in interest expense or income.
(3) Risk management for financial instruments
Integrated Risk
The Group defines integrated risk management policies and regulations,and strengthens integrated risk management to ensure the soundness ofmanagement.
The Group monitors various risks holistically including measurement by statistical methods and tries to control risks within the rangeof management vitality. Specifically, the Group allocates risk capitalto credit risk, market risk, and operational risk based on Value at Risk(“VaR”) calculations according to assumptions about the market fluctuation rate and its half year business plan. In each operation division, theGroup tries to control risk and obtain returns within the range of risk
capital. Integrated risk is managed by the risk management department
and is reported at the monthly ALM committee and Board of Directors
meetings. Necessary actions like risk control are taken promptly.
Credit Risk Management
The Group defines credit risk management policy and rules such as
credit risk management regulation to understand, manage and take actions on credit risk appropriately.
First of all, in screening requests for loans, the Group clearly
separates the credit department from the operating department and
the Group performs strict examination by the type of business. Also,
the Group analyzes if repayment resources are ensured and reasonably
secured on individual loans based on the purpose of the loan, businessplans and investment effects.
For portfolio management, the Group tries to improve credit portfolio by preventing concentrations in particular customers or industries
and by ensuring profits to meet credit costs.
In addition, in order to improve credit risk, the Group supports toimprove management and business restructuring for customers experiencing difficult business conditions.
Regarding credit risk management, the Group defines a credit
rating system where the Group evaluates the degree of credit risk by an
integrated scale objectively and makes arrangements to reevaluate credit
ratings close to fiscal year end or when there are any changes in credit
status.

28

As for the level of credit risk and degree of concentration of credit
granting, the risk controlling department manages, reports monthly to
the ALM committee and management and discusses necessary actions.
Market risk management (foreign exchange risk and interest rate risk)
The Group considers interest risk, currency risk and the risk of change
in prices as the main market risks and institutes a market risk management policy to manage the risks properly to avoid a reduction in thevalue of assets and losing credit. The Group also institutes market risk
management regulations according to the market risk management policy to clarify the identification of market risk, the role of the department
in charge the method of evaluation and monitoring and the methods forcontrolling and reducing market risk.
Under integrated risk management, the Group allocates risk capitalto each business (deposit, loan, investment securities and other securities) and establishes a cap on the investment amount and a maximum
loss amount and matters to be discussed (level of loss to be re-examined).
The Group handles market transactions within these risk limits expeditiously and effectively. With regard to these risks, the risk controlling
department manages and reports monthly to the ALM committee andmanagement and discusses necessary actions.
Regarding derivative transactions, the Group follows internal regulations and policies. The market-risk-management department (middle
office) and office-work department (back office) manage and monitor thebalance, fair value, profit and loss and measurement of risk of the transactions and report to top-management and risk controlling department
regularly to ensures mutual supervision of risks. Especially in tradingtransactions, the market-risk-management department (middle office)manages the positions, measurement of risk and application for loss cut
rule closely.
The Group holds financial instruments which are exposed to market
risks (e.g. interest-rate risk, price-volatility risk and exchange risk) suchas loans and bills discounted, securities, deposits, borrowed money andcorporate bonds. To manage these market risks, the Group calculates
VaR, which is used for quantitative analysis.
The Group calculates VaR of private placement bonds, borrowed
money and corporate bonds which are exposed to interest-rate risk by
the variance-covariance method (six months holding period with confidence interval of 99%, observation period one year). The VaR of thesefinancial instruments amounted to ¥14,837 million ($157,757 thousand) and ¥7,707 million in aggregate as of March 31, 2013 and 2012
respectively.
The Group calculates VaR of investment securities which areexposed to price-volatility risk by the variance-covariance method (sixmonths holding period with confidence interval of 99%, observation
period one year). The VaR of these financial instruments amounted to¥26,998 million ($287,060 thousand) and ¥23,906 million in aggregate
as of March 31, 2013 and 2012, respectively.
In addition, the Group calculates VaR of securities, excluding
investment securities, which are exposed to interest-rate risk or the pricevolatility risk by the variance-covariance method (six months holding
period with confidence interval of 99%, observation period one year).
The VaR of these financial instruments amounted to ¥17,261 million($183,530 thousand) and ¥21,588 million in aggregate as of March 31,
2013 and 2012, respectively.
The Group compares VaR calculated by the formula with the actualfluctuation of realized gains and losses to verify that the calculated VaRreflects market risks with a high degree of accuracy.
However, VaR might not reflect market risks in circumstances suchas unimaginable wide fluctuations in market circumstances because VaRreflects a certain amount of market risks calculated statistically based on
historical fluctuation.
Liquidity risk management
As to liquidity risk, the Group defines liquidity risk management policies and liquidity risk management regulations, and tries to manage
stable cash flow. Also, to be prepared for unforeseeable circumstances,
the Group defines a contingency plan for liquidity risks and addresses
them in a timely manner.

(4) Fair values of financial instruments
Fair values of financial instruments are based on quoted prices in active
markets. If quoted prices are not available, other rational valuation techniques are used instead. Please see Note 25 for the detail of the fair valueof derivatives. Fair values are calculated based on certain assumptions,
therefore fair values may vary according to the assumptions used.
(a) Fair value of financial instruments
Millions of Yen
March 31, 2013
Cash and due from banks
Call loans
Trading securities
Money held in trust
Securities
Held-to-maturity securities
Available-for-sale securities
Loans and bills discounted
Less: Reserve for possible
loan losses
Loans and bills discounted – net
Total
Deposits
Negotiable certificates of deposit
Payables under securities
lending transactions
Borrowed money
Total
Derivatives not applied hedge
accounting

Carrying
Amount¥328,715
60,0001,230
10,62040,4781,418,908
3,646,732

Fair Value¥328,715
60,0001,230
10,62040,713
1,418,908

Unrealized
Gains/(Losses)
—
—
—
—
¥

235
—

(40,617)3,606,115¥5,466,066¥5,001,048
131,760

3,633,183¥5,493,369¥5,005,512
131,760

27,068¥27,303¥(4,464)—

48,915

48,915—72,314¥5,254,037

72,689¥5,258,876(375)¥(4,839)¥(120)

¥

(120)

—

Millions of Yen
March 31, 2012
Cash and due from banks
Trading securities
Money held in trust
Securities
Held-to-maturity securities
Available-for-sale securities
Loans and bills discounted
Less: Reserve for possible
loan losses
Loans and bills discounted – net
Total
Deposits
Negotiable certificates of deposit
Payables under securities
lending transactions
Borrowed money
Total
Derivatives not applied hedge
accounting

Carrying
Amount¥129,096
1,718
10,620

Unrealized
Gains/(Losses)¥129,154
¥58
1,718
—
10,620—46,416
1,398,660
3,722,144

46,557
1,398,660

141—

3,711,493¥5,298,202¥4,885,528
8,400

27,982¥28,181¥(4,505)—

Fair Value(38,633)
3,683,511¥5,270,021¥4,881,023
8,400
63,92663,926—82,988¥5,036,337

82,783¥5,040,637

205¥(4,300)¥(50)

¥

(50)

—

March 31, 2013
Cash and due from banks
Call loans
Trading securities
Money held in trust
Securities
Held-to-maturity securities
Available-for-sale securities
Loans and bills discounted
Less: Reserve for possible
loan losses
Loans and bills discounted – net
Total
Deposits
Negotiable certificates of deposit
Payables under securities
lending transactions
Borrowed money
Total
Derivatives not applied hedge
accounting

Thousands of U.S. Dollars
Carrying
Unrealized
Fair Value
AmountGains/(Losses)$3,495,109 $3,495,109—
637,959
637,959—
13,07813,078—112,919
112,919—
430,388
15,086,751
38,774,397

432,887
15,086,751$ 2,499—

38,342,531 38,630,335$58,118,735 $58,409,038$53,174,354 $53,221,818
1,400,957
1,400,957

287,804$290,303$(47,464)—(431,866)

520,096

520,096—

768,889
772,876$55,864,296 $55,915,747(3,987)$(51,451)$(1,276) $

(1,276)—

AssetsCash and due from banks
The carrying amount of cash and due from banks with no maturities
represents the fair value because the fair value approximates such carrying amount. The carrying amount of cash and due from banks withmaturities represents the fair value because the interest rates are floatingor they have short-term maturities and the fair value approximates suchcarrying amount.
For due from banks in which derivatives are embedded, the fairvalue is determined based on the prices quoted by the financial institutions from which they are purchased.
Call loans
Contract terms of call loans are short (within 1 year). Therefore, thecarrying amount represents the fair value because the fair value approximates such carrying amount.
Trading securities
For securities such as bonds that are held for trading, the fair value isdetermined based on the prices quoted by the exchange or the financial
institutions from which these securities are purchased.
Money held in trust
For securities that are part of trust property in an independently managed monetary trust with the primary purpose to manage securities, thefair value of equity securities is determined based on the prices quoted
by the exchange and the fair value of bonds is determined based on theprices quoted by the exchange or the financial institutions from which
they are purchased. For money held in trust due to the securitization of
credited loans, the carrying amount represents the fair value because thetrust assets consist of ordinary deposits. Information on money held in
trust by classification is included in Note 6, “Money Held in Trust”.
Securities
The fair value of equity securities is determined based on the prices
quoted by the exchange and the fair value of bonds is determined basedon the prices quoted by the exchange or the financial institutions fromwhich they are purchased. The fair value of investment trusts is determined based on the publicly available price.
For privately placed guaranteed bonds held by the Bank, the fairvalue is determined based on the present value of expected future cash
flows, which is adjusted to reflect default risk, amounts to be collected29

Deposits and borrowed money hold interest risk and cash flow risk
(liquidity risk). Cash flow risk means the risk that securing necessaryfinancing becomes difficult or significant unfavorable financing conditions result in recording of loss due to a mismatch of periods between
operations and financing and unexpected outflows of money. Derivativetransactions related to interest are comprised of interest-rate swap agreements, cap agreements, floor agreements, and interest option contracts.
Derivative transactions related to currency are comprised of exchange contracts, non-deliverable forwards (NDF), currency swap
agreements, and currency option contracts. Derivative transactions
related to securities are comprised of bond futures, options on bondfutures, OTC bond options, stock future transactions and individual
security options.
The Group utilizes derivative transactions to meet customer needs
and to control risk so that interest risk, risk of changes in prices, andforeign currency exchange risk are not excessive. In trading transactions,
the Group performs derivative transactions to earn a profit and to accumulate know-how of the transactions and understand market trends.
The derivative transactions the Group utilizes have interest risk,
currency exchange risk and the risk of change in prices. In derivativetransactions, the Group performs effective covering transactions to meetcustomers’ needs and in trading transactions, the Group preliminarily
establishes a risk limit to avoid exposing the Group to too much market
risk. Transactions in the market such as options have limited credit
risk and OTC transactions like interest swaps are assumed to have lowrisk since the counterparties are comprised of highly credible financial
institutions and companies.
The interest rate swaps on deposits which qualify for hedge accounting and meet specific matching criteria are not remeasured at market
values but the differential paid or received under the swap agreements is
recognized and included in interest expense or income.
(3) Risk management for financial instruments
Integrated Risk
The Group defines integrated risk management policies and regulations,and strengthens integrated risk management to ensure the soundness ofmanagement.
The Group monitors various risks holistically including measurement by statistical methods and tries to control risks within the rangeof management vitality. Specifically, the Group allocates risk capitalto credit risk, market risk, and operational risk based on Value at Risk(“VaR”) calculations according to assumptions about the market fluctuation rate and its half year business plan. In each operation division, theGroup tries to control risk and obtain returns within the range of risk
capital. Integrated risk is managed by the risk management department
and is reported at the monthly ALM committee and Board of Directors
meetings. Necessary actions like risk control are taken promptly.
Credit Risk Management
The Group defines credit risk management policy and rules such as
credit risk management regulation to understand, manage and take actions on credit risk appropriately.
First of all, in screening requests for loans, the Group clearly
separates the credit department from the operating department and
the Group performs strict examination by the type of business. Also,
the Group analyzes if repayment resources are ensured and reasonably
secured on individual loans based on the purpose of the loan, businessplans and investment effects.
For portfolio management, the Group tries to improve credit portfolio by preventing concentrations in particular customers or industries
and by ensuring profits to meet credit costs.
In addition, in order to improve credit risk, the Group supports toimprove management and business restructuring for customers experiencing difficult business conditions.
Regarding credit risk management, the Group defines a credit
rating system where the Group evaluates the degree of credit risk by an
integrated scale objectively and makes arrangements to reevaluate credit
ratings close to fiscal year end or when there are any changes in credit
status.

28

As for the level of credit risk and degree of concentration of credit
granting, the risk controlling department manages, reports monthly to
the ALM committee and management and discusses necessary actions.
Market risk management (foreign exchange risk and interest rate risk)
The Group considers interest risk, currency risk and the risk of change
in prices as the main market risks and institutes a market risk management policy to manage the risks properly to avoid a reduction in thevalue of assets and losing credit. The Group also institutes market risk
management regulations according to the market risk management policy to clarify the identification of market risk, the role of the department
in charge the method of evaluation and monitoring and the methods forcontrolling and reducing market risk.
Under integrated risk management, the Group allocates risk capitalto each business (deposit, loan, investment securities and other securities) and establishes a cap on the investment amount and a maximum
loss amount and matters to be discussed (level of loss to be re-examined).
The Group handles market transactions within these risk limits expeditiously and effectively. With regard to these risks, the risk controlling
department manages and reports monthly to the ALM committee andmanagement and discusses necessary actions.
Regarding derivative transactions, the Group follows internal regulations and policies. The market-risk-management department (middle
office) and office-work department (back office) manage and monitor thebalance, fair value, profit and loss and measurement of risk of the transactions and report to top-management and risk controlling department
regularly to ensures mutual supervision of risks. Especially in tradingtransactions, the market-risk-management department (middle office)manages the positions, measurement of risk and application for loss cut
rule closely.
The Group holds financial instruments which are exposed to market
risks (e.g. interest-rate risk, price-volatility risk and exchange risk) suchas loans and bills discounted, securities, deposits, borrowed money andcorporate bonds. To manage these market risks, the Group calculates
VaR, which is used for quantitative analysis.
The Group calculates VaR of private placement bonds, borrowed
money and corporate bonds which are exposed to interest-rate risk by
the variance-covariance method (six months holding period with confidence interval of 99%, observation period one year). The VaR of thesefinancial instruments amounted to ¥14,837 million ($157,757 thousand) and ¥7,707 million in aggregate as of March 31, 2013 and 2012
respectively.
The Group calculates VaR of investment securities which areexposed to price-volatility risk by the variance-covariance method (sixmonths holding period with confidence interval of 99%, observation
period one year). The VaR of these financial instruments amounted to¥26,998 million ($287,060 thousand) and ¥23,906 million in aggregate
as of March 31, 2013 and 2012, respectively.
In addition, the Group calculates VaR of securities, excluding
investment securities, which are exposed to interest-rate risk or the pricevolatility risk by the variance-covariance method (six months holding
period with confidence interval of 99%, observation period one year).
The VaR of these financial instruments amounted to ¥17,261 million($183,530 thousand) and ¥21,588 million in aggregate as of March 31,
2013 and 2012, respectively.
The Group compares VaR calculated by the formula with the actualfluctuation of realized gains and losses to verify that the calculated VaRreflects market risks with a high degree of accuracy.
However, VaR might not reflect market risks in circumstances suchas unimaginable wide fluctuations in market circumstances because VaRreflects a certain amount of market risks calculated statistically based on
historical fluctuation.
Liquidity risk management
As to liquidity risk, the Group defines liquidity risk management policies and liquidity risk management regulations, and tries to manage
stable cash flow. Also, to be prepared for unforeseeable circumstances,
the Group defines a contingency plan for liquidity risks and addresses
them in a timely manner.

(4) Fair values of financial instruments
Fair values of financial instruments are based on quoted prices in active
markets. If quoted prices are not available, other rational valuation techniques are used instead. Please see Note 25 for the detail of the fair valueof derivatives. Fair values are calculated based on certain assumptions,
therefore fair values may vary according to the assumptions used.
(a) Fair value of financial instruments
Millions of Yen
March 31, 2013
Cash and due from banks
Call loans
Trading securities
Money held in trust
Securities
Held-to-maturity securities
Available-for-sale securities
Loans and bills discounted
Less: Reserve for possible
loan losses
Loans and bills discounted – net
Total
Deposits
Negotiable certificates of deposit
Payables under securities
lending transactions
Borrowed money
Total
Derivatives not applied hedge
accounting

Carrying
Amount¥328,715
60,0001,230
10,62040,4781,418,908
3,646,732

Fair Value¥328,715
60,0001,230
10,62040,713
1,418,908

Unrealized
Gains/(Losses)
—
—
—
—
¥

235
—

(40,617)3,606,115¥5,466,066¥5,001,048
131,760

3,633,183¥5,493,369¥5,005,512
131,760

27,068¥27,303¥(4,464)—

48,915

48,915—72,314¥5,254,037

72,689¥5,258,876(375)¥(4,839)¥(120)

¥

(120)

—

Millions of Yen
March 31, 2012
Cash and due from banks
Trading securities
Money held in trust
Securities
Held-to-maturity securities
Available-for-sale securities
Loans and bills discounted
Less: Reserve for possible
loan losses
Loans and bills discounted – net
Total
Deposits
Negotiable certificates of deposit
Payables under securities
lending transactions
Borrowed money
Total
Derivatives not applied hedge
accounting

Carrying
Amount¥129,096
1,718
10,620

Unrealized
Gains/(Losses)¥129,154
¥58
1,718
—
10,620—46,416
1,398,660
3,722,144

46,557
1,398,660

141—

3,711,493¥5,298,202¥4,885,528
8,400

27,982¥28,181¥(4,505)—

Fair Value(38,633)
3,683,511¥5,270,021¥4,881,023
8,400
63,92663,926—82,988¥5,036,337

82,783¥5,040,637

205¥(4,300)¥(50)

¥

(50)

—

March 31, 2013
Cash and due from banks
Call loans
Trading securities
Money held in trust
Securities
Held-to-maturity securities
Available-for-sale securities
Loans and bills discounted
Less: Reserve for possible
loan losses
Loans and bills discounted – net
Total
Deposits
Negotiable certificates of deposit
Payables under securities
lending transactions
Borrowed money
Total
Derivatives not applied hedge
accounting

Thousands of U.S. Dollars
Carrying
Unrealized
Fair Value
AmountGains/(Losses)$3,495,109 $3,495,109—
637,959
637,959—
13,07813,078—112,919
112,919—
430,388
15,086,751
38,774,397

432,887
15,086,751$ 2,499—

38,342,531 38,630,335$58,118,735 $58,409,038$53,174,354 $53,221,818
1,400,957
1,400,957

287,804$290,303$(47,464)—(431,866)

520,096

520,096—

768,889
772,876$55,864,296 $55,915,747(3,987)$(51,451)$(1,276) $

(1,276)—

AssetsCash and due from banks
The carrying amount of cash and due from banks with no maturities
represents the fair value because the fair value approximates such carrying amount. The carrying amount of cash and due from banks withmaturities represents the fair value because the interest rates are floatingor they have short-term maturities and the fair value approximates suchcarrying amount.
For due from banks in which derivatives are embedded, the fairvalue is determined based on the prices quoted by the financial institutions from which they are purchased.
Call loans
Contract terms of call loans are short (within 1 year). Therefore, thecarrying amount represents the fair value because the fair value approximates such carrying amount.
Trading securities
For securities such as bonds that are held for trading, the fair value isdetermined based on the prices quoted by the exchange or the financial
institutions from which these securities are purchased.
Money held in trust
For securities that are part of trust property in an independently managed monetary trust with the primary purpose to manage securities, thefair value of equity securities is determined based on the prices quoted
by the exchange and the fair value of bonds is determined based on theprices quoted by the exchange or the financial institutions from which
they are purchased. For money held in trust due to the securitization of
credited loans, the carrying amount represents the fair value because thetrust assets consist of ordinary deposits. Information on money held in
trust by classification is included in Note 6, “Money Held in Trust”.
Securities
The fair value of equity securities is determined based on the prices
quoted by the exchange and the fair value of bonds is determined basedon the prices quoted by the exchange or the financial institutions fromwhich they are purchased. The fair value of investment trusts is determined based on the publicly available price.
For privately placed guaranteed bonds held by the Bank, the fairvalue is determined based on the present value of expected future cash
flows, which is adjusted to reflect default risk, amounts to be collected29

from collateral and guarantees and guarantee fees, and discounted at aninterest rate based on the market interest rate as of the date of evaluation
with certain adjustments.
Information on securities by classification is included in Note 5,“Trading securities and Securities”.
Loans and bills discounted
For loans with variable interest rates, the carrying amount represents thefair value as the fair value approximates such carrying value as it reflects
the market interest rate in the short term as long as the credit status of
the borrower has not changed significantly. For loans with fixed interest
rates, the fair value is calculated by bundling the type of loans and theinternal credit rating using the expected future cash flows, which arediscounted by the risk free rate and certain management costs. As forcertain consumer loans such as home mortgages, fair value is calculatedby discounting the total loan principal with the same rate as a similarloan. Also, for consumer loans that mature within one year, the carrying amount represents the fair value as the fair value approximates suchcarrying value. In addition, as for loans to legally bankrupt borrowers,
virtually bankrupt borrowers, and potentially bankrupt borrowers, thefair value is calculated by deducting the allowance, which is calculated
based on the present value of the estimated future cash flow or theestimated collection of cash from collateral and guarantee, from thebalance in the consolidated balance sheet date. Therefore, the book value
approximates the fair value. Regarding loans which do not have repayment terms because the outstanding amount of the loan is limited to thevalue of collateral assets, the carrying amount represents the fair value as
the fair value approximates such carrying amount according to estimatedrepayment periods and conditions of interest.
Liabilities
Deposits and negotiable certificates of deposit
For demand deposits, the amount payable on demand as of the consolidated balance sheet date (i.e., the carrying amount) is considered tobe the fair value. For variable rate time deposits, the carrying amountrepresents the fair value as the fair value approximates such carrying
amount because the market interest rate is reflected in such deposits
within a short time period. Fixed rate time deposits are grouped bycertain maturity lengths. Their fair value is calculated by discounting
future cash flows with the same interest rate as that of accepted new
deposits. For the deposits and negotiable certificates of deposits with therepayment period within 2 year, the carrying amount represents the fairvalue because the fair value approximates the carrying amount.
Payable under securities of deposits
For payables under securities of deposit, the contract term is short(within 1 year). Therefore, the carrying amount represents the fair value
because the fair value approximates such carrying amount.
Borrowed money
For borrowed money with variable interest rates, the carrying amountrepresents the fair value as the fair value approximates such carrying
value as it reflects the market interest rate in the short term as longas the credit rating of the Bank and its subsidiaries has not changed
significantly. For borrowed money with fixed interest rates, the fair value
is calculated by discounting the total of the principal by the rate whichreflects the credit risks of the Group. In addition, for short term borrowed money (within 1 year), the carrying amount represents the fairvalue as the fair value approximates such carrying value.

30

Derivatives
Information regarding the fair value for derivatives is included in Note 25.
(b) Financial instruments whose fair value cannot be reliably determined
Carrying amountThousands of
U.S. Dollars
2013

Millions of Yen

Unlisted equity securities
Investments in unconsolidated
subsidiaries
Others
Total

2013

2012

¥ 8,307¥8,490

940

1,003

9,995

3,351
¥12,598

4,192¥13,685

35,631$133,951$88,325(5) Maturity analysis for financial assets, securities and financial liabilities with contractual maturities

March 31, 2013

Millions of Yen
Due after One Due after Five
Due in One
Due after
Year through Years throughYear or LessTen Years
Five Years
Ten Years¥ 277,536———
60,000———Cash and due from banks
Call loans
Securities:
Held-to-maturity securities:
Debt securities:
10,529 ¥ 28,468 ¥ 1,481
Corporate bonds
Available-for-sale securities
with contractual maturities:
Debt securities:
National government bonds
117,000
164,958
298,700
Local government bonds
9,274
177,849
107,529
Corporate bonds
19,977148,299
44,869Other
5,592
66,571
29,561Loans and bills discounted (*1)
994,607 1,072,767
604,237
Total¥1,494,515 ¥1,658,912 ¥1,086,377

March 31, 2013
Deposits
Negotiable certificates of deposit
Payables under securities
lending transactions
Total

March 31, 2013—

¥ 12,000—
54,213
19,575797,184¥882,972

Millions of Yen
Due after One Due after Five
Due in One
Due after
Year through Years throughYear or LessTen Years
Five Years
Ten Years¥4,249,616¥743,274¥8,158—
131,760———
48,915———¥4,430,291¥743,274¥8,158—

Thousands of U.S. Dollars
Due after One Due after Five
Due in One
Due after
Year through Years throughYear or LessTen Years
Five Years
Ten Years$2,950,941———
637,959———

Cash and due from banks
Call loans
Securities:
Held-to-maturity securities:
Debt securities:
111,951 $ 302,690 $15,747—
Corporate bonds
Available-for-sale securities
with contractual maturities:
Debt securities:
National government bonds 1,244,019 1,753,939 3,175,970 $ 127,592
Local government bonds
98,607 1,891,005 1,143,317—
Corporate bonds
212,408 1,576,810
477,076
576,427
Other
59,458707,826
314,312208,134
Loans and bills discounted (*1) 10,575,300 11,406,348 6,424,636 8,476,172
Total$15,890,643 $17,638,618 $11,551,058 $9,388,325

Thousands of U.S. Dollars
Due after One Due after Five
Due in One
Due after
March 31, 2013
Year through Years throughYear or LessTen Years
Five Years
Ten Years
Deposits$45,184,646 $7,902,967$86,741—
Negotiable certificates of deposit
1,400,957———
Payables under securities
520,096———lending transactions
Total$47,105,699 $7,902,967$86,741—(*1) Loans and bills discounted whose cash flow cannot be estimatedsuch as “legal bankruptcy,” “vitrtual bankruptcy,” and “possible bankruptcy” loans amounting to ¥133,163 million ($1,415,875 thousand)and loans and bills discounted with no contractual maturities amounting to ¥44,774 million ($476,066 thousand) are not included.
Please see Note 14 for annual maturities of borrowed money.

24. Commitments and Contingent Liabilities

Commitment line contracts on overdrafts and loans are agreements tomake loans to customers when they apply for borrowing up to a prescribed amount, as long as there is no violation of any condition in thecontracts.
The total amounts of unused open commitments as of March 31,
2013 and 2012 were ¥1,387,611 million ($14,753,971 thousand) and¥1,347,714 million, respectively. Multi-purpose accounts includedin the unused open commitments as of March 31, 2013 and 2012 are¥752,265 million ($7,998,565 thousand) and ¥678,315 million, respectively. The amounts of unused commitments whose original contract
terms were within one year or unconditionally cancellable at any time
as of March 31, 2013 and 2012 were ¥1,377,322 million ($14,644,572
thousand) and ¥1,337,309 million, respectively.
Since many of these commitments are expected to expire without
being drawn upon, the total amount of unused commitments does notnecessarily represent actual future cash flow requirements. Many of thesecommitments have clauses enabling the Bank and certain subsidiaries toreject the loans to customers or reduce the contract amounts of commitment, in the event monetary conditions have changed and the Bank andcertain subsidiaries need to secure claims, or other considerable events
have occurred.
In addition, if necessary, the Bank and certain subsidiaries can request the customers to pledge collateral such as premises and securities
at the execution of the contracts. After execution, the Bank and certain
subsidiaries periodically evaluate the customers’ financial position based
upon the Bank’s internal policy, and take necessary measures to manage
the credit exposures, such as revising the terms of contracts or securing
the claims.

25. Derivative Information

The Bank enters into swap, future, cap and floor agreements related
to interest rates, foreign exchange forward contracts, swap and option
contracts related to currencies, bond futures, bond futures options, overthe-counter bond options, stock futures, stock futures options and stock
option contracts related to securities. In addition, the Bank has credit
derivatives embedded in compound instruments.

Derivative transactions to which hedge accounting is not applied at
March 31, 2013 and 2012

March 31, 2013
Over-the-counterinterest-related contracts:
Interest rate swap:
Fixed rate receipt,
variable rate payment
Variable rate receipt,
fixed rate payment
Over-the-countercurrency-related contracts:
Currency swap
Foreign exchange forward:
Sell
Buy
Currency option:
Sell
Buy
Other:Sell
Buy

March 31, 2012
Over-the-counterinterest-related contracts:
Interest rate swap:
Fixed rate receipt,
variable rate payment
Variable rate receipt,
fixed rate payment
Over-the-countercurrency-related contracts:
Currency swap
Foreign exchange forward:
Sell
Buy
Currency option:
Sell
Buy
Other:Sell
Buy

Contract
AmountMillions of Yen
Contract
Unrealized
Amount due Fair Value
Gains/(Losses)
after One Year¥ 1,604¥ 1,221

¥ 52

¥52

1,604

1,221

(35)

(35)

80,17558,938129

129

26,376
11,77419—(1,015)681(1,015)681

90,032
90,62353,94153,518(5,109)
5,156

3,169
(2,279)

507
421

220
178

(48)
71

(48)
71

Contract
AmountMillions of Yen
Contract
Unrealized
Amount due Fair Value
Gains/(Losses)
after One Year¥2,195¥2,195

¥60

¥60

2,195

2,195

(38)

(38)

127,694

77,787247

247

20,14010,043

247
—

(572)
172

(572)
172

139,342
129,792

85,962
82,568(12,428)
12,457

(264)
1,651

944
912

608
584

42
11

42
11

31

from collateral and guarantees and guarantee fees, and discounted at aninterest rate based on the market interest rate as of the date of evaluation
with certain adjustments.
Information on securities by classification is included in Note 5,“Trading securities and Securities”.
Loans and bills discounted
For loans with variable interest rates, the carrying amount represents thefair value as the fair value approximates such carrying value as it reflects
the market interest rate in the short term as long as the credit status of
the borrower has not changed significantly. For loans with fixed interest
rates, the fair value is calculated by bundling the type of loans and theinternal credit rating using the expected future cash flows, which arediscounted by the risk free rate and certain management costs. As forcertain consumer loans such as home mortgages, fair value is calculatedby discounting the total loan principal with the same rate as a similarloan. Also, for consumer loans that mature within one year, the carrying amount represents the fair value as the fair value approximates suchcarrying value. In addition, as for loans to legally bankrupt borrowers,
virtually bankrupt borrowers, and potentially bankrupt borrowers, thefair value is calculated by deducting the allowance, which is calculated
based on the present value of the estimated future cash flow or theestimated collection of cash from collateral and guarantee, from thebalance in the consolidated balance sheet date. Therefore, the book value
approximates the fair value. Regarding loans which do not have repayment terms because the outstanding amount of the loan is limited to thevalue of collateral assets, the carrying amount represents the fair value as
the fair value approximates such carrying amount according to estimatedrepayment periods and conditions of interest.
Liabilities
Deposits and negotiable certificates of deposit
For demand deposits, the amount payable on demand as of the consolidated balance sheet date (i.e., the carrying amount) is considered tobe the fair value. For variable rate time deposits, the carrying amountrepresents the fair value as the fair value approximates such carrying
amount because the market interest rate is reflected in such deposits
within a short time period. Fixed rate time deposits are grouped bycertain maturity lengths. Their fair value is calculated by discounting
future cash flows with the same interest rate as that of accepted new
deposits. For the deposits and negotiable certificates of deposits with therepayment period within 2 year, the carrying amount represents the fairvalue because the fair value approximates the carrying amount.
Payable under securities of deposits
For payables under securities of deposit, the contract term is short(within 1 year). Therefore, the carrying amount represents the fair value
because the fair value approximates such carrying amount.
Borrowed money
For borrowed money with variable interest rates, the carrying amountrepresents the fair value as the fair value approximates such carrying
value as it reflects the market interest rate in the short term as longas the credit rating of the Bank and its subsidiaries has not changed
significantly. For borrowed money with fixed interest rates, the fair value
is calculated by discounting the total of the principal by the rate whichreflects the credit risks of the Group. In addition, for short term borrowed money (within 1 year), the carrying amount represents the fairvalue as the fair value approximates such carrying value.

30

Derivatives
Information regarding the fair value for derivatives is included in Note 25.
(b) Financial instruments whose fair value cannot be reliably determined
Carrying amountThousands of
U.S. Dollars
2013

Millions of Yen

Unlisted equity securities
Investments in unconsolidated
subsidiaries
Others
Total

2013

2012

¥ 8,307¥8,490

940

1,003

9,995

3,351
¥12,598

4,192¥13,685

35,631$133,951$88,325(5) Maturity analysis for financial assets, securities and financial liabilities with contractual maturities

March 31, 2013

Millions of Yen
Due after One Due after Five
Due in One
Due after
Year through Years throughYear or LessTen Years
Five Years
Ten Years¥ 277,536———
60,000———Cash and due from banks
Call loans
Securities:
Held-to-maturity securities:
Debt securities:
10,529 ¥ 28,468 ¥ 1,481
Corporate bonds
Available-for-sale securities
with contractual maturities:
Debt securities:
National government bonds
117,000
164,958
298,700
Local government bonds
9,274
177,849
107,529
Corporate bonds
19,977148,299
44,869Other
5,592
66,571
29,561Loans and bills discounted (*1)
994,607 1,072,767
604,237
Total¥1,494,515 ¥1,658,912 ¥1,086,377

March 31, 2013
Deposits
Negotiable certificates of deposit
Payables under securities
lending transactions
Total

March 31, 2013—

¥ 12,000—
54,213
19,575797,184¥882,972

Millions of Yen
Due after One Due after Five
Due in One
Due after
Year through Years throughYear or LessTen Years
Five Years
Ten Years¥4,249,616¥743,274¥8,158—
131,760———
48,915———¥4,430,291¥743,274¥8,158—

Thousands of U.S. Dollars
Due after One Due after Five
Due in One
Due after
Year through Years throughYear or LessTen Years
Five Years
Ten Years$2,950,941———
637,959———

Cash and due from banks
Call loans
Securities:
Held-to-maturity securities:
Debt securities:
111,951 $ 302,690 $15,747—
Corporate bonds
Available-for-sale securities
with contractual maturities:
Debt securities:
National government bonds 1,244,019 1,753,939 3,175,970 $ 127,592
Local government bonds
98,607 1,891,005 1,143,317—
Corporate bonds
212,408 1,576,810
477,076
576,427
Other
59,458707,826
314,312208,134
Loans and bills discounted (*1) 10,575,300 11,406,348 6,424,636 8,476,172
Total$15,890,643 $17,638,618 $11,551,058 $9,388,325

Thousands of U.S. Dollars
Due after One Due after Five
Due in One
Due after
March 31, 2013
Year through Years throughYear or LessTen Years
Five Years
Ten Years
Deposits$45,184,646 $7,902,967$86,741—
Negotiable certificates of deposit
1,400,957———
Payables under securities
520,096———lending transactions
Total$47,105,699 $7,902,967$86,741—(*1) Loans and bills discounted whose cash flow cannot be estimatedsuch as “legal bankruptcy,” “vitrtual bankruptcy,” and “possible bankruptcy” loans amounting to ¥133,163 million ($1,415,875 thousand)and loans and bills discounted with no contractual maturities amounting to ¥44,774 million ($476,066 thousand) are not included.
Please see Note 14 for annual maturities of borrowed money.

24. Commitments and Contingent Liabilities

Commitment line contracts on overdrafts and loans are agreements tomake loans to customers when they apply for borrowing up to a prescribed amount, as long as there is no violation of any condition in thecontracts.
The total amounts of unused open commitments as of March 31,
2013 and 2012 were ¥1,387,611 million ($14,753,971 thousand) and¥1,347,714 million, respectively. Multi-purpose accounts includedin the unused open commitments as of March 31, 2013 and 2012 are¥752,265 million ($7,998,565 thousand) and ¥678,315 million, respectively. The amounts of unused commitments whose original contract
terms were within one year or unconditionally cancellable at any time
as of March 31, 2013 and 2012 were ¥1,377,322 million ($14,644,572
thousand) and ¥1,337,309 million, respectively.
Since many of these commitments are expected to expire without
being drawn upon, the total amount of unused commitments does notnecessarily represent actual future cash flow requirements. Many of thesecommitments have clauses enabling the Bank and certain subsidiaries toreject the loans to customers or reduce the contract amounts of commitment, in the event monetary conditions have changed and the Bank andcertain subsidiaries need to secure claims, or other considerable events
have occurred.
In addition, if necessary, the Bank and certain subsidiaries can request the customers to pledge collateral such as premises and securities
at the execution of the contracts. After execution, the Bank and certain
subsidiaries periodically evaluate the customers’ financial position based
upon the Bank’s internal policy, and take necessary measures to manage
the credit exposures, such as revising the terms of contracts or securing
the claims.

25. Derivative Information

The Bank enters into swap, future, cap and floor agreements related
to interest rates, foreign exchange forward contracts, swap and option
contracts related to currencies, bond futures, bond futures options, overthe-counter bond options, stock futures, stock futures options and stock
option contracts related to securities. In addition, the Bank has credit
derivatives embedded in compound instruments.

Derivative transactions to which hedge accounting is not applied at
March 31, 2013 and 2012

March 31, 2013
Over-the-counterinterest-related contracts:
Interest rate swap:
Fixed rate receipt,
variable rate payment
Variable rate receipt,
fixed rate payment
Over-the-countercurrency-related contracts:
Currency swap
Foreign exchange forward:
Sell
Buy
Currency option:
Sell
Buy
Other:Sell
Buy

March 31, 2012
Over-the-counterinterest-related contracts:
Interest rate swap:
Fixed rate receipt,
variable rate payment
Variable rate receipt,
fixed rate payment
Over-the-countercurrency-related contracts:
Currency swap
Foreign exchange forward:
Sell
Buy
Currency option:
Sell
Buy
Other:Sell
Buy

Contract
AmountMillions of Yen
Contract
Unrealized
Amount due Fair Value
Gains/(Losses)
after One Year¥ 1,604¥ 1,221

¥ 52

¥52

1,604

1,221

(35)

(35)

80,17558,938129

129

26,376
11,77419—(1,015)681(1,015)681

90,032
90,62353,94153,518(5,109)
5,156

3,169
(2,279)

507
421

220
178

(48)
71

(48)
71

Contract
AmountMillions of Yen
Contract
Unrealized
Amount due Fair Value
Gains/(Losses)
after One Year¥2,195¥2,195

¥60

¥60

2,195

2,195

(38)

(38)

127,694

77,787247

247

20,14010,043

247
—

(572)
172

(572)
172

139,342
129,792

85,962
82,568(12,428)
12,457

(264)
1,651

944
912

608
584

42
11

42
11

31

March 31, 2013
Over-the-counterinterest-related contracts:
Interest rate swap:
Fixed rate receipt,
variable rate payment
Variable rate receipt,
fixed rate payment
Over-the-countercurrency-related contracts:
Currency swap
Foreign exchange forward:
Sell
Buy
Currency option:
Sell
Buy
Other:Sell
Buy

Thousands of U.S. Dollars
Contract
Contract
Unrealized
Amount due Fair Value
AmountGains/(Losses)
after One Year$ 17,055$ 12,982

$ 553

$553

17,055

12,982

(372)

(372)

852,472

626,667

1,372

1,372

280,447
125,189202—(10,792)
7,241(10,792)7,241

957,278
963,562

573,535
569,038(54,322)54,822

33,695(24,232)

5,391
4,476

2,339
1,893

(510)
755

(510)
755

Notes:
1. Derivative transactions are valued at market and the gains/ (losses) arerecognized in the consolidated statement of income.
2. Market values of exchange-traded transactions are based on closing
prices on the exchange markets, such as the Tokyo International
Financial Future Exchange. Market values of over-the-counter contracts are based on the valuation techniques, such as the discounted
cash flow method and the option pricing calculation models.
Derivative transactions to which hedge accounting is applied at March
31, 2013 and 2012.

March 31, 2013
Interest rate swaps:(Fixed rate receipt,
variable rate payment)

March 31, 2012
Interest rate swaps:(Fixed rate receipt,
variable rate payment)

March 31, 2013
Interest rate swaps:(Fixed rate receipt,
variable rate payment)

Hedged Item

Deposits

Hedged Item

Deposits

Millions of Yen
Contract
Contract
Amount due Fair Value
Amountafter One Year
¥27,433¥27,433(*)

Millions of Yen
Contract
Contract
Amount due Fair Value
Amountafter One Year¥36,743¥36,743(*)

Thousands of U.S. Dollars
Contract
Contract
Hedged Item
Amount due Fair Value
Amountafter One Year
Deposits$291,685$291,685(*)(*) The above interest rate swaps which qualify for hedge accounting
and meet specific matching criteria are not remeasured at market value,
but the differential paid or received under the swap agreements is recognized and included in interest expense or income. In addition, the fairvalue of such interest rate swaps in Note 23 is included in that of thehedged items (i.e. deposits).

32

26. Comprehensive Income

29. Segment Information

The components of other comprehensive income for the years ended
March 31, 2013 and 2012, were as follows:
Thousands of
U.S. Dollars
2013

Millions of Yen
Unrealized gain on availablefor-sale securities:
Gains arising during the year
Reclassification adjustments
to profit or loss
Amount before income tax effect
Income tax effectTotal
Land revaluation surplus:
Gains arising during the year
Reclassification adjustments
to profit or loss
Amount before income tax effect
Income tax effectTotal
Total other comprehensive
income2013

2012¥32,543¥13,675$346,018(1,431)

2,771(15,215)

31,112(10,388)¥20,724

16,446(4,466)¥11,980

330,803(110,452)$220,351

—

—

—

—

—

—

—
—
—

—
¥1,247¥1,247———¥20,724¥13,227$220,351

27. Net Income per Share

Reconciliation of the differences between basic and diluted net income
per share (“EPS”) for the years ended March 31, 2013 and 2012 is asfollows:
Millions of Thousands ofYenshares
Weighted
Net income
average shares
For the year ended March 31, 2013:
Net income
23,181
Amount not attributable to(120)
common shareholders
Basic EPS—Net income
available to common¥23,061 373,741
shareholders
Effect of dilutive securities:
Dividends on preferred stock120
40,482
Diluted EPS—Net income for¥23,181 414,223
computation
Millions of Thousands ofYenshares
Weighted
Net income
average shares
For the year ended March 31, 2012:
Basic EPS—Net income
available to common¥11,941 373,768
shareholders
Effect of dilutive securities:
Adjustment for dilutive(2,151)
4,574
shares issued by subsidiaries
Diluted EPS—Net income for¥ 9,790 378,342
computation

Yen

2. Methods of measurement for the amounts of income, profit, assets and other items for each reportable segment
The accounting policies of each reportable segment are consistent with those disclosed in Note 2, “Summary of Significant Accounting Policies”.
3. Information about income, profit, assets, liabilities and other items is as follows.

EPS

Millions of Yen¥61.70$0.66¥55.96

$0.60

Yen
EPS

2013
Ordinary income:(1) Outside customers(2) Intersegment transactions
Total
Segment profit
Segment assets
Other:
Depreciation
Amortization of goodwill
Interest income
Interest expense
Provision (reversal) of allowance for doubtful
accounts
Increase in premises and equipment andintangible assets

Reportable Segment
Banking
Lease
Total

Other*

Total

Reconciliations Consolidated¥90,820
366¥91,186
10,3185,613,747¥20,429290¥20,719
1,543
59,255¥111,249
656¥111,905
11,861
5,673,002¥4,552951¥5,503
1,783
37,115¥115,801
1,607¥117,408
13,6445,710,117—¥(1,607)¥(1,607)(34)(42,318)¥115,801—¥115,801
13,6105,667,799¥3,835
245
70,488
6,002

¥282
—
60
359

¥4,117245
70,548
6,361

¥68
—
534
85

¥4,185
245
71,082
6,446

¥131
—
(234)
(220)

¥4,316
245
70,848
6,226

5,415

57

5,472

(146)

5,326

—

5,326

2,875

653

3,528

52

3,580

79

3,659

Millions of Yen¥31.94¥25.88On June 27, 2013, the Bank’s shareholders authorized an appropriationof retained earnings as follows:

Year-end cash dividends:¥3.50 ($0.04) per share oncommon stock¥3.00 ($0.03) per share on
preferred stock

1. Description of reportable segments
The Group’s reportable segments are those for which separately financial information is available and regular evaluation by the Group’s management isbeing performed in order to decide how resources are allocated among the Group.
The Group consists of the Bank and eight (eleven in 2012) consolidated subsidiaries. The Group provides banking services-based comprehensive
financial services and leasing business. The Group operates its business by units which consists of some branches located in a certain range. But theGroup discloses these units as a segment of the Banking business because their economic nature is similar to each other. Therefore, the Group consistsof two reportable segments of banking business and lease business.
Banking business is operated by the Bank. Banking business provides various services such as deposit-taking and lending services, trading securities, securities investment, domestic exchange, foreign exchange, managing bonds, derivatives business and other related businesses at headquarters andbranches of the Bank.
Lease business is operated by Juroku Lease Co., Ltd.. It provides leasing business to meet local customers’ needs.
Gifu Bank and its 3 subsidiaries were a part of Banking business since those entities were providing banking services-based comprehensive financial
services as a group. However, based on the Group reviewed the grouping of the segment in conjunction with the reorganization of the Group, and theGroup deemed it is more appropriate to include Gifu Bank and its one subsidiary into banking business and its two subsidiaries into other segment.
Further, the disclosed information related to the operating results for the year ended march 31, 2012 is based on the revised segment to present
comparable information.

U.S. Dollars

28. Subsequent EventAppropriations of Retained Earnings

Millions of Yen

Under ASBJ Statement No. 17, “Accounting Standard for Segment Information Disclosures” and ASBJ Guidance No. 20, “Guidance on AccountingStandard for Segment Information Disclosures,” an entity is required to report financial and descriptive information about its reportable segments.
Reportable segments are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components ofan entity about which separate financial information is available and such information is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance. Generally, segment information is required to be reported on the same basis as is usedinternally for evaluating operating segment performance and deciding how to allocate resources to operating segments.

Thousands of
U.S. Dollars¥1,308$13,907

60

638

2012
Ordinary income:(1) Outside customers(2) Intersegment transactions
Total
Segment profit
Segment assets
Other:
Depreciation
Amortization of goodwill
Interest income
Interest expense
Provision of allowance for doubtful
accounts
Increase in premises and equipment andintangible assets

Reportable Segment
Banking
Lease
Total

Other*

Total

Reconciliations Consolidated¥102,360
496¥102,856
20,126
5,438,931¥21,260
282¥21,542
1,744
59,239¥123,620
778¥124,398
21,8705,498,170¥4,634885¥5,519
1,781
41,744¥128,255
1,663¥129,918
23,651
5,539,914—¥(1,663)¥(1,663)(31)(51,876)¥128,254—¥128,254
23,6205,488,038¥5,395
245
75,105
7,486

¥249
—
56
424

¥5,644245
75,161
7,910

¥59
—
667
107

¥5,703245
75,828
8,017

¥129
—
(336)
(323)

¥5,832
245
75,492
7,694

(667)

533

(134)

(37)

(171)

—

(171)

4,729

92

4,821

99

4,920

227

5,147

33

March 31, 2013
Over-the-counterinterest-related contracts:
Interest rate swap:
Fixed rate receipt,
variable rate payment
Variable rate receipt,
fixed rate payment
Over-the-countercurrency-related contracts:
Currency swap
Foreign exchange forward:
Sell
Buy
Currency option:
Sell
Buy
Other:Sell
Buy

Thousands of U.S. Dollars
Contract
Contract
Unrealized
Amount due Fair Value
AmountGains/(Losses)
after One Year$ 17,055$ 12,982

$ 553

$553

17,055

12,982

(372)

(372)

852,472

626,667

1,372

1,372

280,447
125,189202—(10,792)
7,241(10,792)7,241

957,278
963,562

573,535
569,038(54,322)54,822

33,695(24,232)

5,391
4,476

2,339
1,893

(510)
755

(510)
755

Notes:
1. Derivative transactions are valued at market and the gains/ (losses) arerecognized in the consolidated statement of income.
2. Market values of exchange-traded transactions are based on closing
prices on the exchange markets, such as the Tokyo International
Financial Future Exchange. Market values of over-the-counter contracts are based on the valuation techniques, such as the discounted
cash flow method and the option pricing calculation models.
Derivative transactions to which hedge accounting is applied at March
31, 2013 and 2012.

March 31, 2013
Interest rate swaps:(Fixed rate receipt,
variable rate payment)

March 31, 2012
Interest rate swaps:(Fixed rate receipt,
variable rate payment)

March 31, 2013
Interest rate swaps:(Fixed rate receipt,
variable rate payment)

Hedged Item

Deposits

Hedged Item

Deposits

Millions of Yen
Contract
Contract
Amount due Fair Value
Amountafter One Year
¥27,433¥27,433(*)

Millions of Yen
Contract
Contract
Amount due Fair Value
Amountafter One Year¥36,743¥36,743(*)

Thousands of U.S. Dollars
Contract
Contract
Hedged Item
Amount due Fair Value
Amountafter One Year
Deposits$291,685$291,685(*)(*) The above interest rate swaps which qualify for hedge accounting
and meet specific matching criteria are not remeasured at market value,
but the differential paid or received under the swap agreements is recognized and included in interest expense or income. In addition, the fairvalue of such interest rate swaps in Note 23 is included in that of thehedged items (i.e. deposits).

32

26. Comprehensive Income

29. Segment Information

The components of other comprehensive income for the years ended
March 31, 2013 and 2012, were as follows:
Thousands of
U.S. Dollars
2013

Millions of Yen
Unrealized gain on availablefor-sale securities:
Gains arising during the year
Reclassification adjustments
to profit or loss
Amount before income tax effect
Income tax effectTotal
Land revaluation surplus:
Gains arising during the year
Reclassification adjustments
to profit or loss
Amount before income tax effect
Income tax effectTotal
Total other comprehensive
income2013

2012¥32,543¥13,675$346,018(1,431)

2,771(15,215)

31,112(10,388)¥20,724

16,446(4,466)¥11,980

330,803(110,452)$220,351

—

—

—

—

—

—

—
—
—

—
¥1,247¥1,247———¥20,724¥13,227$220,351

27. Net Income per Share

Reconciliation of the differences between basic and diluted net income
per share (“EPS”) for the years ended March 31, 2013 and 2012 is asfollows:
Millions of Thousands ofYenshares
Weighted
Net income
average shares
For the year ended March 31, 2013:
Net income
23,181
Amount not attributable to(120)
common shareholders
Basic EPS—Net income
available to common¥23,061 373,741
shareholders
Effect of dilutive securities:
Dividends on preferred stock120
40,482
Diluted EPS—Net income for¥23,181 414,223
computation
Millions of Thousands ofYenshares
Weighted
Net income
average shares
For the year ended March 31, 2012:
Basic EPS—Net income
available to common¥11,941 373,768
shareholders
Effect of dilutive securities:
Adjustment for dilutive(2,151)
4,574
shares issued by subsidiaries
Diluted EPS—Net income for¥ 9,790 378,342
computation

Yen

2. Methods of measurement for the amounts of income, profit, assets and other items for each reportable segment
The accounting policies of each reportable segment are consistent with those disclosed in Note 2, “Summary of Significant Accounting Policies”.
3. Information about income, profit, assets, liabilities and other items is as follows.

EPS

Millions of Yen¥61.70$0.66¥55.96

$0.60

Yen
EPS

2013
Ordinary income:(1) Outside customers(2) Intersegment transactions
Total
Segment profit
Segment assets
Other:
Depreciation
Amortization of goodwill
Interest income
Interest expense
Provision (reversal) of allowance for doubtful
accounts
Increase in premises and equipment andintangible assets

Reportable Segment
Banking
Lease
Total

Other*

Total

Reconciliations Consolidated¥90,820
366¥91,186
10,3185,613,747¥20,429290¥20,719
1,543
59,255¥111,249
656¥111,905
11,861
5,673,002¥4,552951¥5,503
1,783
37,115¥115,801
1,607¥117,408
13,6445,710,117—¥(1,607)¥(1,607)(34)(42,318)¥115,801—¥115,801
13,6105,667,799¥3,835
245
70,488
6,002

¥282
—
60
359

¥4,117245
70,548
6,361

¥68
—
534
85

¥4,185
245
71,082
6,446

¥131
—
(234)
(220)

¥4,316
245
70,848
6,226

5,415

57

5,472

(146)

5,326

—

5,326

2,875

653

3,528

52

3,580

79

3,659

Millions of Yen¥31.94¥25.88On June 27, 2013, the Bank’s shareholders authorized an appropriationof retained earnings as follows:

Year-end cash dividends:¥3.50 ($0.04) per share oncommon stock¥3.00 ($0.03) per share on
preferred stock

1. Description of reportable segments
The Group’s reportable segments are those for which separately financial information is available and regular evaluation by the Group’s management isbeing performed in order to decide how resources are allocated among the Group.
The Group consists of the Bank and eight (eleven in 2012) consolidated subsidiaries. The Group provides banking services-based comprehensive
financial services and leasing business. The Group operates its business by units which consists of some branches located in a certain range. But theGroup discloses these units as a segment of the Banking business because their economic nature is similar to each other. Therefore, the Group consistsof two reportable segments of banking business and lease business.
Banking business is operated by the Bank. Banking business provides various services such as deposit-taking and lending services, trading securities, securities investment, domestic exchange, foreign exchange, managing bonds, derivatives business and other related businesses at headquarters andbranches of the Bank.
Lease business is operated by Juroku Lease Co., Ltd.. It provides leasing business to meet local customers’ needs.
Gifu Bank and its 3 subsidiaries were a part of Banking business since those entities were providing banking services-based comprehensive financial
services as a group. However, based on the Group reviewed the grouping of the segment in conjunction with the reorganization of the Group, and theGroup deemed it is more appropriate to include Gifu Bank and its one subsidiary into banking business and its two subsidiaries into other segment.
Further, the disclosed information related to the operating results for the year ended march 31, 2012 is based on the revised segment to present
comparable information.

U.S. Dollars

28. Subsequent EventAppropriations of Retained Earnings

Millions of Yen

Under ASBJ Statement No. 17, “Accounting Standard for Segment Information Disclosures” and ASBJ Guidance No. 20, “Guidance on AccountingStandard for Segment Information Disclosures,” an entity is required to report financial and descriptive information about its reportable segments.
Reportable segments are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components ofan entity about which separate financial information is available and such information is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance. Generally, segment information is required to be reported on the same basis as is usedinternally for evaluating operating segment performance and deciding how to allocate resources to operating segments.

Thousands of
U.S. Dollars¥1,308$13,907

60

638

2012
Ordinary income:(1) Outside customers(2) Intersegment transactions
Total
Segment profit
Segment assets
Other:
Depreciation
Amortization of goodwill
Interest income
Interest expense
Provision of allowance for doubtful
accounts
Increase in premises and equipment andintangible assets

Reportable Segment
Banking
Lease
Total

Other*

Total

Reconciliations Consolidated¥102,360
496¥102,856
20,126
5,438,931¥21,260
282¥21,542
1,744
59,239¥123,620
778¥124,398
21,8705,498,170¥4,634885¥5,519
1,781
41,744¥128,255
1,663¥129,918
23,651
5,539,914—¥(1,663)¥(1,663)(31)(51,876)¥128,254—¥128,254
23,6205,488,038¥5,395
245
75,105
7,486

¥249
—
56
424

¥5,644245
75,161
7,910

¥59
—
667
107

¥5,703245
75,828
8,017

¥129
—
(336)
(323)

¥5,832
245
75,492
7,694

(667)

533

(134)

(37)

(171)

—

(171)

4,729

92

4,821

99

4,920

227

5,147

33

(5) Information about goodwill and negative goodwill by reportable segments

Thousands of U.S. Dollars
2013
Ordinary income:(1) Outside customers(2) Intersegment transactions
Total
Segment profit
Segment assets
Other:
Depreciation
Amortization of goodwill
Interest income
Interest expense
Provision (reversal) of allowance for doubtful
accounts
Increase in premises and equipment andintangible assets

Reportable Segment
Banking
Lease
Total

Other*

Total

Reconciliations Consolidated$965,657
3,891$969,548
109,708
59,688,964$217,214 $1,182,871
3,084
6,975
$220,298 $1,189,846
16,406
126,114630,037 60,319,001$48,400 $1,231,271
10,111
17,086$58,511 $1,248,357
18,958145,072
394,630 60,713,631— $1,231,271—$(17,086)$(17,086) $1,231,271(362)
144,710(449,952) 60,263,679$40,777
2,605
749,474
63,817$2,998 $43,775
—
2,605
638
750,112
3,817
67,634$723 $44,498
—
2,605
5,677
755,789
904
68,538$1,392 $45,890—
2,605(2,488)753,301(2,340)66,19857,576606

58,182(1,553)56,629—56,62930,5696,943

37,512553

38,065840

38,905

Notes:
1. Ordinary income represents total income less certain extraordinary income included in “Other income” in the accompanying consolidated statementof income.
2. “Other” includes business segments of credit cards, computer services and credit guarantees.
3. Reconciliations mainly represent elimination of intra-segment transactions.
4. Segment profit is adjusted to reconcile to income before income taxes and minority interests less certain extraordinary items in the accompanying
consolidated statement of income.
4. Associated Information(1) Information about services
2013
Ordinary income:Outside customers

Lending Service¥56,4022012
Ordinary income:Outside customers

Lending Service

2013
Ordinary income:Outside customers

Lending Service¥59,627$599,702

Securities Services¥20,378

Securities Services¥27,864

Millions of Yen
Leasing¥20,361
Millions of Yen
Leasing¥21,190

Thousands of U.S. Dollars
Securities Services
Leasing$216,672$216,491

Other

Total

¥18,660¥115,801

Other

Total

¥19,573¥128,254

Other

Total

$198,406$1,231,271

2013
Amortization of goodwill
Goodwill at March 31, 2013

Banking
¥245
4,343

Lease

2013
Gain on negative goodwill

Banking¥2,905

Lease——

Millions of Yen
Other
—
—

Elimination/Corporate
—
—

Total
¥245
4,343

—

Millions of Yen
Other—Elimination/Corporate
765

Total
¥3,670Notes:
1. The Group recorded gain on negative goodwill of ¥778 million arising from acquisition of treasury stock (Class 5 preferred stock issued by Gifu
Bank) on May 10, 2012, in the banking segment.
2. The Bank was merged with Gifu Bank on September 18, 2012. Since the Bank issued 0.9 shares of Class 1 preferred shares for 1 share of Class 5
preferred shares issued by Gifu Bank, the Group recorded gain on negative good will of ¥2,127 million in the banking segment.
3. The Group recorded gain on negative goodwill of ¥765 million arising from acquiring additional shares on Juroku Lease Co., Ltd. on May 28, 2012.
Since this gain is not related to a specific segment, the gain was treated as the Corporate gain.

2012
Amortization of goodwill
Goodwill at March 31, 2012

Banking
¥245
4,587

Lease
—
—

Millions of Yen
Other
—
—

Elimination/Corporate
—
—

Total
¥245
4,587

For the year ended March 31, 2012, the Group recorded gain on negative goodwill of ¥1,061 million arising from acquiring additional shares on
Juroku Capital Co., Ltd. The gain was recognized because the acquisition cost of the subsidiary’s shares from minority shareholders was lower than thedecreased amount of minority interests. Since this gain is not related to a specific segment, the gain was treated as the Corporate gain.
2013
Amortization of goodwill
Goodwill at March 31, 2013

Banking$2,605
46,178

Lease

Thousands of U.S. Dollars
Elimination/Corporate
Other
—
—
—
—
—
—

Total
$2,605
46,1782013
Gain on negative goodwill

Banking$30,888

Lease

Thousands of U.S. Dollars
Elimination/Corporate
Other
—
—
8,134

Total
$39,022

Notes:
1. The Group recorded gain on negative goodwill of $8,272 thousand arising from acquisition of treasury stock (Class 5 preferred stock issued by Gifu
Bank) on May 10, 2012, in the banking segment.
2. The Bank was merged with Gifu Bank on September 18, 2012. Since the Bank issued 0.9 shares of Class 1 preferred shares for 1 share of Class 5
preferred shares issued by Gifu Bank, the Group recorded gain on negative good will of $22,616 thousand in the banking segment.
3. The Group recorded gain on negative goodwill of $8,134 thousand arising from acquiring additional shares on Juroku Lease Co., Ltd. on May 28,
2012. Since this gain is not related to a specific segment, the gain was treated as the Corporate gain.

(2) Geographical information(a) Operating revenues
This information is not presented because the Group’s revenues in Japan account for more than 90% of revenues in the consolidated statement of income.
(b) Property and equipment
This information is not presented because the Group’s property and equipment in Japan account for more than 90% of property and equipment in the
consolidated balance sheet.
(3) Information by major customers
This information is not presented because there are no customers for which income account for more than 10% of revenues in the consolidated statement of income.
(4) Information about impairment loss by reportable segments

34

2013
Impairment loss

Banking
¥609

Lease

2012
Impairment loss

Banking
¥309

Lease

2013
Impairment loss

Banking$6,475

Lease—

Millions of Yen
Other—Elimination/Corporate
—

Total
¥609

—

Millions of Yen
Other—Elimination/Corporate
—

Total
¥309

Thousands of U.S. Dollars
Elimination/Corporate
Other
—
—
—

Total
$6,47535

(5) Information about goodwill and negative goodwill by reportable segments

Thousands of U.S. Dollars
2013
Ordinary income:(1) Outside customers(2) Intersegment transactions
Total
Segment profit
Segment assets
Other:
Depreciation
Amortization of goodwill
Interest income
Interest expense
Provision (reversal) of allowance for doubtful
accounts
Increase in premises and equipment andintangible assets

Reportable Segment
Banking
Lease
Total

Other*

Total

Reconciliations Consolidated$965,657
3,891$969,548
109,708
59,688,964$217,214 $1,182,871
3,084
6,975
$220,298 $1,189,846
16,406
126,114630,037 60,319,001$48,400 $1,231,271
10,111
17,086$58,511 $1,248,357
18,958145,072
394,630 60,713,631— $1,231,271—$(17,086)$(17,086) $1,231,271(362)
144,710(449,952) 60,263,679$40,777
2,605
749,474
63,817$2,998 $43,775
—
2,605
638
750,112
3,817
67,634$723 $44,498
—
2,605
5,677
755,789
904
68,538$1,392 $45,890—
2,605(2,488)753,301(2,340)66,19857,576606

58,182(1,553)56,629—56,62930,5696,943

37,512553

38,065840

38,905

Notes:
1. Ordinary income represents total income less certain extraordinary income included in “Other income” in the accompanying consolidated statementof income.
2. “Other” includes business segments of credit cards, computer services and credit guarantees.
3. Reconciliations mainly represent elimination of intra-segment transactions.
4. Segment profit is adjusted to reconcile to income before income taxes and minority interests less certain extraordinary items in the accompanying
consolidated statement of income.
4. Associated Information(1) Information about services
2013
Ordinary income:Outside customers

Lending Service¥56,4022012
Ordinary income:Outside customers

Lending Service

2013
Ordinary income:Outside customers

Lending Service¥59,627$599,702

Securities Services¥20,378

Securities Services¥27,864

Millions of Yen
Leasing¥20,361
Millions of Yen
Leasing¥21,190

Thousands of U.S. Dollars
Securities Services
Leasing$216,672$216,491

Other

Total

¥18,660¥115,801

Other

Total

¥19,573¥128,254

Other

Total

$198,406$1,231,271

2013
Amortization of goodwill
Goodwill at March 31, 2013

Banking
¥245
4,343

Lease

2013
Gain on negative goodwill

Banking¥2,905

Lease——

Millions of Yen
Other
—
—

Elimination/Corporate
—
—

Total
¥245
4,343

—

Millions of Yen
Other—Elimination/Corporate
765

Total
¥3,670Notes:
1. The Group recorded gain on negative goodwill of ¥778 million arising from acquisition of treasury stock (Class 5 preferred stock issued by Gifu
Bank) on May 10, 2012, in the banking segment.
2. The Bank was merged with Gifu Bank on September 18, 2012. Since the Bank issued 0.9 shares of Class 1 preferred shares for 1 share of Class 5
preferred shares issued by Gifu Bank, the Group recorded gain on negative good will of ¥2,127 million in the banking segment.
3. The Group recorded gain on negative goodwill of ¥765 million arising from acquiring additional shares on Juroku Lease Co., Ltd. on May 28, 2012.
Since this gain is not related to a specific segment, the gain was treated as the Corporate gain.

2012
Amortization of goodwill
Goodwill at March 31, 2012

Banking
¥245
4,587

Lease
—
—

Millions of Yen
Other
—
—

Elimination/Corporate
—
—

Total
¥245
4,587

For the year ended March 31, 2012, the Group recorded gain on negative goodwill of ¥1,061 million arising from acquiring additional shares on
Juroku Capital Co., Ltd. The gain was recognized because the acquisition cost of the subsidiary’s shares from minority shareholders was lower than thedecreased amount of minority interests. Since this gain is not related to a specific segment, the gain was treated as the Corporate gain.
2013
Amortization of goodwill
Goodwill at March 31, 2013

Banking$2,605
46,178

Lease

Thousands of U.S. Dollars
Elimination/Corporate
Other
—
—
—
—
—
—

Total
$2,605
46,1782013
Gain on negative goodwill

Banking$30,888

Lease

Thousands of U.S. Dollars
Elimination/Corporate
Other
—
—
8,134

Total
$39,022

Notes:
1. The Group recorded gain on negative goodwill of $8,272 thousand arising from acquisition of treasury stock (Class 5 preferred stock issued by Gifu
Bank) on May 10, 2012, in the banking segment.
2. The Bank was merged with Gifu Bank on September 18, 2012. Since the Bank issued 0.9 shares of Class 1 preferred shares for 1 share of Class 5
preferred shares issued by Gifu Bank, the Group recorded gain on negative good will of $22,616 thousand in the banking segment.
3. The Group recorded gain on negative goodwill of $8,134 thousand arising from acquiring additional shares on Juroku Lease Co., Ltd. on May 28,
2012. Since this gain is not related to a specific segment, the gain was treated as the Corporate gain.

(2) Geographical information(a) Operating revenues
This information is not presented because the Group’s revenues in Japan account for more than 90% of revenues in the consolidated statement of income.
(b) Property and equipment
This information is not presented because the Group’s property and equipment in Japan account for more than 90% of property and equipment in the
consolidated balance sheet.
(3) Information by major customers
This information is not presented because there are no customers for which income account for more than 10% of revenues in the consolidated statement of income.
(4) Information about impairment loss by reportable segments

34

2013
Impairment loss

Banking
¥609

Lease

2012
Impairment loss

Banking
¥309

Lease

2013
Impairment loss

Banking$6,475

Lease—

Millions of Yen
Other—Elimination/Corporate
—

Total
¥609

—

Millions of Yen
Other—Elimination/Corporate
—

Total
¥309

Thousands of U.S. Dollars
Elimination/Corporate
Other
—
—
—

Total
$6,47535

I ndependent Auditors’ Report

C orporate Data(as of March 31, 2013)

Date of Establishment:

10 Principal Shareholders:

October 10, 1877

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Authorized Shares:

Japan Trustee Services Bank, Ltd. (Trust account)

460,000 thousand shares

NIPPONKOA Insurance Co., Ltd.

Shares of Common Stock Issued and Outstanding:

The Juroku Bank Employee Shareholders’ Association

To the Board of Directors of The Juroku Bank, Ltd.:379,241 thousand shares

Tokio Marine and Nichido Fire Insurance Co., Ltd.

We have audited the accompanying consolidated balance sheet of The Juroku Bank, Ltd. and its consolidated
subsidiaries as of March 31, 2013, and the related consolidated statements of income, comprehensive income, changes
in equity, and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory
information, all expressed in Japanese yen.

Shares of Class 1 Preferred Stock Issued and Outstanding:Meiji Yasuda Life Insurance Company

20,000 thousand shares

Fuji Baking Group Co., Ltd.

Stock Listed:

Mitsubishi UFJ Trust and Banking Corporation

First Sections of the Tokyo and Nagoya Stock Exchanges

Nippon Life Insurance Company

Management’s Responsibility for the Consolidated Financial Statements

Paid-in Capital:

The Master Trust Bank of Japan, Ltd. (Trust Account)

Management is responsible for the preparation and fair presentation of these consolidated financial statements inaccordance 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.

¥36,839 million

Auditor’s Responsibility

1

INDEPENDENT AUDITOR’S REPORTOur responsibility is to express an opinion on these consolidated financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements arefree from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation andfair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness ofaccounting estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements.

Number of Common Stock Shareholders:
14,125
Number of Class 1 Preferred Stock Shareholders:Number of Employees:
3,441

A ffiliates(as of June 30, 2013)

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Name

OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, theconsolidated financial position of The Juroku Bank, Ltd. and its consolidated subsidiaries as of March 31, 2013, andthe consolidated results of their operations and their cash flows for the year then ended in accordance withaccounting principles generally accepted in Japan.
Convenience Translation

Our audit also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion,such translation has been made in accordance with the basis stated in Note 1 to the consolidated financial statements.
Such U.S. dollar amounts are presented solely for the convenience of readers outside Japan.

June 27, 201336

Business Lines

Established

Capital(¥ Millions)

EquityStake*

EquityStake ofsubsidiaries*

Juroku Business Service Co., Ltd.

Clerical work service

Jan. 1979

10

100.0

—

Juroku Research Institute Company Limited

Business consulting service
Survey and research service

Jun. 2013

50

100.0

—

Juroku DC Card Co., Ltd.

Credit card flotation service

Aug. 1982

50

6.4

64.0

Juroku JCB Co., Ltd.

Credit card flotation service

Nov. 1994

50

5.0

65.0

Juroku Lease Co., Ltd.

Leasing service
Venture capital service

Mar. 1975

102

19.9

30.4

Juroku Computer Service Co., Ltd.

Computer system development service

Aug. 1985

245

5.0

71.0

Juroku Credit Guarantee Co., Ltd.

Credit guaranty service

May 1979

50

3.0

40.0

The Gifugin Hosho Service Co., Ltd.

Credit guaranty service

Oct. 1987

90

100.0

—

*Voting rights held by the Bank, or subsidiaries excluding the Bank, as a percentage of total voting rights.

37

I ndependent Auditors’ Report

C orporate Data(as of March 31, 2013)

Date of Establishment:

10 Principal Shareholders:

October 10, 1877

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Authorized Shares:

Japan Trustee Services Bank, Ltd. (Trust account)

460,000 thousand shares

NIPPONKOA Insurance Co., Ltd.

Shares of Common Stock Issued and Outstanding:

The Juroku Bank Employee Shareholders’ Association

To the Board of Directors of The Juroku Bank, Ltd.:379,241 thousand shares

Tokio Marine and Nichido Fire Insurance Co., Ltd.

We have audited the accompanying consolidated balance sheet of The Juroku Bank, Ltd. and its consolidated
subsidiaries as of March 31, 2013, and the related consolidated statements of income, comprehensive income, changes
in equity, and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory
information, all expressed in Japanese yen.

Shares of Class 1 Preferred Stock Issued and Outstanding:Meiji Yasuda Life Insurance Company

20,000 thousand shares

Fuji Baking Group Co., Ltd.

Stock Listed:

Mitsubishi UFJ Trust and Banking Corporation

First Sections of the Tokyo and Nagoya Stock Exchanges

Nippon Life Insurance Company

Management’s Responsibility for the Consolidated Financial Statements

Paid-in Capital:

The Master Trust Bank of Japan, Ltd. (Trust Account)

Management is responsible for the preparation and fair presentation of these consolidated financial statements inaccordance 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.

¥36,839 million

Auditor’s Responsibility

1

INDEPENDENT AUDITOR’S REPORTOur responsibility is to express an opinion on these consolidated financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements arefree from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation andfair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness ofaccounting estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements.

Number of Common Stock Shareholders:
14,125
Number of Class 1 Preferred Stock Shareholders:Number of Employees:
3,441

A ffiliates(as of June 30, 2013)

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Name

OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, theconsolidated financial position of The Juroku Bank, Ltd. and its consolidated subsidiaries as of March 31, 2013, andthe consolidated results of their operations and their cash flows for the year then ended in accordance withaccounting principles generally accepted in Japan.
Convenience Translation

Our audit also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion,such translation has been made in accordance with the basis stated in Note 1 to the consolidated financial statements.
Such U.S. dollar amounts are presented solely for the convenience of readers outside Japan.

June 27, 201336

Business Lines

Established

Capital(¥ Millions)

EquityStake*

EquityStake ofsubsidiaries*

Juroku Business Service Co., Ltd.

Clerical work service

Jan. 1979

10

100.0

—

Juroku Research Institute Company Limited

Business consulting service
Survey and research service

Jun. 2013

50

100.0

—

Juroku DC Card Co., Ltd.

Credit card flotation service

Aug. 1982

50

6.4

64.0

Juroku JCB Co., Ltd.

Credit card flotation service

Nov. 1994

50

5.0

65.0

Juroku Lease Co., Ltd.

Leasing service
Venture capital service

Mar. 1975

102

19.9

30.4

Juroku Computer Service Co., Ltd.

Computer system development service

Aug. 1985

245

5.0

71.0

Juroku Credit Guarantee Co., Ltd.

Credit guaranty service

May 1979

50

3.0

40.0

The Gifugin Hosho Service Co., Ltd.

Credit guaranty service

Oct. 1987

90

100.0

—

*Voting rights held by the Bank, or subsidiaries excluding the Bank, as a percentage of total voting rights.

37

D irectory(as of June 30, 2013)

Head Office

Branches Handling
Foreign Exchange
Business

8-26, Kandamachi, Gifu-shi,
Gifu 500-8516, Japan
Telephone: +81-58-265-2111

Ichinomiya Branch(17 Offices)

1-2-5, Sakae,
Ichinomiya-shi, Aichi
Telephone: +81-586-73-5116

International and Securities Division

Head Office

Nagoya Ekimae Branch

8-26, Kandamachi, Gifu-shi,
Gifu 500-8516, Japan P.O. Box 40
Telephone: +81-58-265-2111
Facsimile: +81-58-266-1698
SWIFT Address: JUROJPJ T
General Manager
Koji Iwata

8-26, Kandamachi, Gifu-shi, Gifu
Telephone: +81-58-265-2111

4-2-28, Meieki,
Nakamura-ku, Nagoya-shi, Aichi
Telephone: +81-52-561-5431

Nagara Branch

Nagoya Main Office1643-5, Nagarafukumitsu,
Gifu-shi, Gifu
Telephone: +81-58-232-1611

3-1-1, Nishiki, Naka-ku,
Nagoya-shi, Aichi
Telephone: +81-52-961-8111

Yanagase BranchOverseas Network
Hong Kong Representative Office
Suite 1606, 16th Floor, Tower 2,
The Gateway,Harbour City,
Tsim Sha Tsui, Kowloon, Hong Kong
Telephone: +852-2526-5716
Facsimile: +852-2810-6261
Chief Representative
Tadashi Murase
Shanghai Representative Office
18th Floor, Hang Seng Bank Tower,
1000 Lujiazui Ring Road, Pudong New Area,
Shanghai, People’s Republic of China
Telephone: +86-21-6841-1600
Facsimile: +86-21-6841-1881
Chief Representative
Hitoshi Iwamura

Osu Branch

3-10-2, Kandamachi,
Gifu-shi, Gifu
Telephone: +81-58-265-2521

1-14-23, Matsubara,Naka-ku,
Naoya-shi, Aichi
Telephone: +81-52-321-5486

Kakamigahara Branch

Ozone Branch

1-33, Nakasumiyoshicho,
Kakamigahara-shi,Gifu
Telephone: +81-58-383-1600

3-5-23, Ozone, Kita-ku,
Nagoya-shi, Aichi
Telephone: +81-52-911-6116

Ogaki Branch

Atsuta Branch

1-26, Takayacho, Ogaki-shi, Gifu
Telephone: +81-584-78-2161

3-1-1, Shin-Otou, Atsuta-ku,
Nagoya-shi, Aichi
Telephone: +81-52-671-4116

Seki Branch
51-1, Higashikashiage, Seki-shi, Gifu
Telephone: +81-575-22-2016

Kariya Branch

Tajimi Branch

3-20, Toyocho, Kariya-shi, Aichi
Telephone: +81-566-21-1611

1-24, Sakaemachi, Tajimi-shi, Gifu
Telephone: +81-572-22-1301

Osaka Branch

Nakatsugawa Branch
2-5-1, Ootamachi, Nakatsugawa-shi, Gifu
Telephone: +81-573-65-3116
Takayama BranchTokyo Branch
4-1-10, Nihombashi Honcho,
Chuo-ku, Tokyo
Telephone: +81-3-3242-1661

136, Shimosannomachi,
Takayama-shi, Gifu
Telephone: +81-577-32-1600

ShanghaiHong Kong

2-3-8, Honmachi, Chuo-ku,
Osaka-shi, Osaka
Telephone: +81-6-6264-1600

Gifu Prefecture (104)Tokyo Branch
Aichi Prefecture (50)
Mie Prefecture (1)Osaka Branch38

Total 157Domestic Offices

D irectory(as of June 30, 2013)

Head Office

Branches Handling
Foreign Exchange
Business

8-26, Kandamachi, Gifu-shi,
Gifu 500-8516, Japan
Telephone: +81-58-265-2111

Ichinomiya Branch(17 Offices)

1-2-5, Sakae,
Ichinomiya-shi, Aichi
Telephone: +81-586-73-5116

International and Securities Division

Head Office

Nagoya Ekimae Branch

8-26, Kandamachi, Gifu-shi,
Gifu 500-8516, Japan P.O. Box 40
Telephone: +81-58-265-2111
Facsimile: +81-58-266-1698
SWIFT Address: JUROJPJ T
General Manager
Koji Iwata

8-26, Kandamachi, Gifu-shi, Gifu
Telephone: +81-58-265-2111

4-2-28, Meieki,
Nakamura-ku, Nagoya-shi, Aichi
Telephone: +81-52-561-5431

Nagara Branch

Nagoya Main Office1643-5, Nagarafukumitsu,
Gifu-shi, Gifu
Telephone: +81-58-232-1611

3-1-1, Nishiki, Naka-ku,
Nagoya-shi, Aichi
Telephone: +81-52-961-8111

Yanagase BranchOverseas Network
Hong Kong Representative Office
Suite 1606, 16th Floor, Tower 2,
The Gateway,Harbour City,
Tsim Sha Tsui, Kowloon, Hong Kong
Telephone: +852-2526-5716
Facsimile: +852-2810-6261
Chief Representative
Tadashi Murase
Shanghai Representative Office
18th Floor, Hang Seng Bank Tower,
1000 Lujiazui Ring Road, Pudong New Area,
Shanghai, People’s Republic of China
Telephone: +86-21-6841-1600
Facsimile: +86-21-6841-1881
Chief Representative
Hitoshi Iwamura

Osu Branch

3-10-2, Kandamachi,
Gifu-shi, Gifu
Telephone: +81-58-265-2521

1-14-23, Matsubara,Naka-ku,
Naoya-shi, Aichi
Telephone: +81-52-321-5486

Kakamigahara Branch

Ozone Branch

1-33, Nakasumiyoshicho,
Kakamigahara-shi,Gifu
Telephone: +81-58-383-1600

3-5-23, Ozone, Kita-ku,
Nagoya-shi, Aichi
Telephone: +81-52-911-6116

Ogaki Branch

Atsuta Branch

1-26, Takayacho, Ogaki-shi, Gifu
Telephone: +81-584-78-2161

3-1-1, Shin-Otou, Atsuta-ku,
Nagoya-shi, Aichi
Telephone: +81-52-671-4116

Seki Branch
51-1, Higashikashiage, Seki-shi, Gifu
Telephone: +81-575-22-2016

Kariya Branch

Tajimi Branch

3-20, Toyocho, Kariya-shi, Aichi
Telephone: +81-566-21-1611

1-24, Sakaemachi, Tajimi-shi, Gifu
Telephone: +81-572-22-1301

Osaka Branch

Nakatsugawa Branch
2-5-1, Ootamachi, Nakatsugawa-shi, Gifu
Telephone: +81-573-65-3116
Takayama BranchTokyo Branch
4-1-10, Nihombashi Honcho,
Chuo-ku, Tokyo
Telephone: +81-3-3242-1661

136, Shimosannomachi,
Takayama-shi, Gifu
Telephone: +81-577-32-1600

ShanghaiHong Kong

2-3-8, Honmachi, Chuo-ku,
Osaka-shi, Osaka
Telephone: +81-6-6264-1600

Gifu Prefecture (104)Tokyo Branch
Aichi Prefecture (50)
Mie Prefecture (1)Osaka Branch38

Total 157Domestic Offices

THE JUROKU BANK, LTD.
http://www.juroku.co.jp/