Annual Report 200916BK

THE JUROKU BANK, LTD.

Profile
The Juroku Bank, Ltd., has its business base in Gifu and Aichi prefectures, the industrial center of
the Chubu region of Japan. During the over 130 years since its founding in 1877, it has played apivotal role as a leading financial institution in its area.
We will continue to follow our philosophy of “serving our community by fulfilling oursocial 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 throughstronger earnings power, and improving our personnel and organization.
The head office of the Bank is located in Gifu Prefecture. The
Bank has 148 domestic branch offices, mainly in Gifu and Aichi
prefectures, as well as representative offices in Hong Kong andShanghai. On a consolidated basis, as of the end of March 2009,
the Bank had total deposits of ¥3,733.2 billion (US$38,005
million), total assets of ¥4,176.1 billion (US$42,514 million),and a capital ratio of 10.06% according to domestic standards.

Contents
1
2
3
10
11
12
12
13
14
15
16
17
18
29
30
31
32
33
34
34
35

Financial Highlights (Consolidated)
Message from the PresidentManagement Strategy
Non-Performing Loans
Contribution to the Regional Economy and Community
Board of Directors and Corporate Auditors
Organization Chart
Financial Review
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Non-Consolidated Six-Year Summary (Unaudit)
Non-Consolidated Balance Sheets
Non-Consolidated Statements of Operations
Non-Consolidated Statements of Changes in Equity
Independent Auditors’ Report
Corporate Data
Affiliates
Directory

Head Office

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 forwardlooking statements. We are under no obligation, andexpressly disclaim any obligation, to update or alter ourforward-looking statements, whether as a result of new
information, future events, or otherwise.

Financial Highlights (Consolidated)
The Juroku Bank, Ltd. and Subsidiaries
Years Ended March 31, 2009 and 2008

Millions of Yen
2009

2008

Thousands of
U.S. Dollars
2009

Total income¥ 115,791¥ 141,934$ 1,178,774

Total expenses

130,519

123,050

1,328,708

Net (loss) income(9,386)

10,314(95,551)

Cash dividends

2,552

2,916

25,980Total assets¥4,176,116¥4,141,588$42,513,652

Loans and bills discounted

3,040,399

2,892,737

30,951,838

Securities

845,989

853,864

8,612,328

Deposits

3,733,204

3,630,156

38,004,724

Total equity

201,888

241,7092,055,258¥ (28,308)¥ (74,067)$ (288,181)

Net cash (used in) provided by investing activities(61,743)

71,005(628,555)

Net cash (used in) provided by financing activities(2,602)

2,961(26,489)

101,190

193,853

1,030,133

For the Fiscal YearAt Year-End

Cash FlowsNet cash used in operating activities

Cash and cash equivalents, end of year

Note: Amounts stated in United States dollars have been computed, solely for convenience, at the rate of ¥98.23 = US$1,
the approximate rate of exchange at March 31, 2009.

THE JUROKU BANK, LTD.

1

Annual Report 2009

Message from the President

Embarking on 11th
Medium-Term Management
Plan: “Working to become
our customers’ best partnerbank, and helping realize
their dreams.”
Hakumi Horie
President

Looking at the operating environment for financial institutions, we find it likely that the outlook
for local economies will remain uncertain and thatbusiness conditions will continue to be harsh, as it
appears that the global recession will be prolonged.
Under these conditions, to fulfill its responsibilities as a regional financial institution, the Juroku
Bank must work to further improve its financial
soundness so as to raise profitability, and strengthen
the trust it earns from customers while meeting thediverse needs of local businesses.
To meet these challenges, the Bank has launchedits 11th Medium-Term Management Plan under
the slogan: “Working to become our customers’ best
partner bank, and helping realize their dreams.”
Implementation of the plan, which covers fiscal 2009 through fiscal 2011, began in April 2009.
Under this plan, we will strive to raise profitability,
become a bank that can achieve sustainable growth
in any environment and, as a provider of financial
services, create strong, lifelong partnerships withcustomers to help them realize their dreams. In addition, we must provide quality services at our business sites, which is where we have the most contact
with customers, to win their trust. To do this, we
THE JUROKU BANK, LTD.

will maximize our business capabilities at front-line
branch offices by improving employee training andoperation quality and established a high-level ofcompliance system. In addition, we will strengthen
our internal control system, which includes a thoroughgoing risk management system, and work
towards establishing an unshakable business foundation that can adopt ourselves to changes in the business environment.
Although the Bank’s performance in the reporting fiscal year was unsatisfactory, we intend toachieve a recovery for fiscal 2009 through the efforts
outlined above. We are also working to realize sustainable and steady growth in the future, and I am
sure that the Bank’s enterprise value will increase.
I look forward to receiving the continued support and encouragement of all our stakeholders.
July 2009
Hakumi Horie
President2

Annual Report 2009

Management Strategy
First Year of 11th Medium-Term
Management Plan

Basic Strategies
Strengthening Earnings Capability by Building
Lifelong Partnerships

In April 2009 the Bank began operations under its
11th Medium-Term Management plan, which covers the next three years, under the slogan “Working
to become our customers’ best partner bank, andhelping realize their dreams.”
Our goal is to transform the Bank into one that
can achieve sustainable growth in any environmentby creating lifelong , robust partnerships withcustomers.
Numerical Targets

Ratio of credit cost to total loans

Tier I capital ratio:

OHR (Overhead Ratio;
expenses as a percentage of grossbusiness profit):

Loans to SMEs (Small andMedium-sized Enterprises) as apercentage of total loans:

We will shift our focus from product features to customer needs by providing detailed services and know-how tailored to the life-stage of eachcustomer. By doing this, we will create life-long partnerships that extend
to the next generation, and will strive to enhance our earnings capability.

Raising the Level of Customer Trust
The Bank must win the complete trust of customers to become theirlifelong, best partner. Therefore, while maintaining the soundness of
the Bank’s financial position, we must meet customer needs and provide
products and services that are highly competitive in terms of price andother factors at the same time we fully ascertain risks.
To do this, we are working to reduce credit costs and improve theBank’s financial soundness through such initiatives as eliminating therisk of overconcentration of credits by making a number of loans to awider range of customers, and by implementing borrower support programs. At the same time, we are making efforts to further strengthen ties
with customers by precisely identifying their needs through daily marketing activities, and providing optimal solutions.

FY2011 Targets

Lower than 0.3%

Strengthening Business Capabilities at Front-Line
Branch Offices
Since our branch offices are not only the starting point for the provisionof our financial services, but also the places where we have the greatest opportunities for contact with customers, it is important to provide
impressive services of the highest quality. To maximize our capabilities
in front-line operations, we are working to develop human resources,
and focus on improving the quality of operations and raising compliancestandards.

7% or more

Lower than 67%

Market Strategy and Office Strategy
I n our home market territory of Gifu Prefecture, we will create easyto-use channels while developing activities such as information-based
marketing that fully leverage the Bank’s strengths and deepen business
relationships with existing customers.
Since Aichi Prefecture has become a crucial market for the Bank’s
growth in the foreseeable future, we will continue to position it as a marketing base on the same level of importance as Gifu Prefecture, and willconduct proactive marketing while strengthening our brand.

80% or morePursuit of Synergies through a Business Tie-Up withThe Gifu Bank, Ltd.
In January 2009, we concluded a business and capital tie-up agreementwith The Gifu Bank, Ltd. to make regional financing more stable andsmooth, expand our earnings base, improve business efficiency, and contribute to the development of local communities and the economy of theTokai region, particularly in Gifu prefecture.
To achieve these goals, the banks will create a Business Tie-up Study
Committee to move forward with the examination of various businesspossibilities and actively leverage each other’s strengths.

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

Strategic Use of Complaints and Requests
Customer complaints and requests can be used as valuable opportunities
when customers contact the Bank. We do our best to resolve problems
as a matter of course, but we also view problems as an important tool to
uncover customer needs. We will work to strengthen relationships basedon our relationship of trust with our customers, by actively responding
these needs.

THE JUROKU BANK, LTD.

3

Annual Report 2009

and ensures appropriate auditing functions. There are no
conflicts of interest between the outside auditors and the
Bank that need to be disclosed.
With regard to internal controls, the Audit &Inspection Division conducts internal audits, and at
least once per year seeks outside opinions regarding thedevelopment and management of the internal control
system. Based on these objective opinions, we work tofurther improve the internal control system. Moreover,to reinforce the compliance system, we have establisheda whistle-blower system which provides a reporting
mechanism for both internal use and for use by outside
lawyers.
With respect to the risk control system, we haveestablished the ALM 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 isreviewed 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. We have also signed
consultation agreements with three lawyers, who provide
advice on legal matters and perform a variety of legal
checks when necessary.
The Bank’s accounts are audited by the independent
auditing firm Deloitte Touche Tohmatsu. This firm
provides accurate audits on the basis of appropriate
information disclosure.

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

Progress Thus Far
The Board of Directors comprises 11 members who
deliberate and decide matters stipulated in laws and regulations and important 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 areable to quickly decide on important matters affecting thedaily conduct of business operations.
The Bank employs the conventional statutory
auditor system stipulated by the Companies Act. The
Board of Corporate Auditors comprises four statutory
auditors, including two outside auditors and two
standing auditors. To support the statutory auditors, wehave established the Corporate Auditors’ Office, whichmonitors the execution of business operations objectively

THE JUROKU BANK, LTD.

Going forward, we will work to further enhance ourcorporate governance standards and ensure the soundness of our ethical conduct and financial position.

Basic Policy on Strengthening Internal
Control System
We are currently making efforts to build an internal
control system based on the policies described below.

4

Annual Report 2009

of risk, ensuring effective risk management. In addition,an organizational structure will be established, including
an ALM Committee, chaired by the director in chargeof the department responsible for comprehensive risk
management. Risk management reports will be made to
the Board of Directors on a regular basis, or as necessary.
(3) The following are risks to be managed. When newrisks arise, a department to handle them will be promptly
established by the Board of Directors.
1) credit risk, 2) market risk, 3) liquidity risk,4) operational risk, and 5) other risks that could have aserious impact on the Bank’s business.
4. System to ensure the efficient execution of directors’
duties(1) A Medium-Term Management Plan and guidelines
based on this plan will be created for each six-month
period, and duties will be executed in accordance with
the Basic Policy and an Action Plan.
(2) Progress made in implementing these plans will bereported to the Board of Directors in a timely manner,and steps will be taken in response as needed.
(3) Items that should be taken up by the Board of
Directors will be clearly stated in regulations such as theBoard of Directors Regulations, and important items
will be discussed by the Managing Directors Committee,
which comprises managing directors or above, toensure that issues are sufficiently examined. In addition,
Regulations on Decision-Making Authority Related
to Operations will stipulate the appropriate delegationof authority to subordinates based on such factors as
the importance of the 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 of Incorporation(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 and Compliance Policy, the Bank
will establish a department to provide overall control.

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 asa financial institution, and to seek business growththrough sound practices founded on a broad and rational
perspective.
To implement this policy, directors of the Bank areresponsible for the establishment of ethical standards
and a compliance policy, and for ensuring that businessis conducted in accordance with these standards andthat laws, ordinances, and the Articles of Incorporation
are adhered to. In addition, directors are responsible forpreventing damage caused by criminal groups.
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 (including electronic records);
adherence to these regulations will be monitored, andregulations will be revised when necessary.
In addition, a system will be established to enabledirectors and statutory auditors to view this informationand the relevant documents when necessary.
3. Risk management regulations(1) Risk management is positioned as an important
duty to ensure the soundness and safety of business,and regulations related to each type of risk, including aComprehensive Risk Management Policy, will be established, and efforts will be made to appropriately improvethe measurement, evaluation, and management of risk byfollowing these regulations. An independent third party
will regularly evaluate the Bank’s management of majorrisks, and the Bank will continually work to improve risk
management level evaluations.
(2) In addition to designating one department tocomprehensively manage risk, individual departments
will be made specifically responsible for each category

THE JUROKU BANK, LTD.

5

Annual Report 2009

ance of their duties, and at least one full-time employee
will be assigned to work in that office. Upon obtaining
the opinions of the Board of Auditors, decisions will bemade on the positions and qualifications of employees tobe assigned to engage in this work, and a roster of such
employees will be created.
8. Ensuring the independence of the above employees
from directors
The appointment, transfer, and evaluation of employees
who assist the Corporate Auditors in their duties will be
subject to the approval of the Board of Auditors.
9. System for directors and employees to report toCorporate Auditors and a system for other reports
to Corporate Auditors
Officers shall submit reports and provide information in
response to requests from the Board of Auditors or individual Corporate Auditors. 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) Significant accounting policies and standards andchanges to them(4) Content of disclosed earnings, projections, and otherimportant disclosure materials(5) Operation of the whistle-blower system andnotifications(6) Circulation of documents such as draft proposals
and the minutes of important conference/committee
meetings(7) Other items deemed necessary by the Corporate
Auditors
10. System to ensure effective audits by Corporate
Auditors
The representative director will regularly meet andcooperate with the Corporate Auditors to ensure theeffectiveness of audits, and will regularly exchange
opinions on management problems and progress inauditing to ensure high accuracy.

In addition, a Compliance Committee, chaired by the
director responsible for the department undertaking
overall control, will be created, and this committee will
be tasked with handling compliance-related issues.
(2) An in-house system will be created for reporting
violations of laws and ordinances and other compliancerelated issues, and a whistle-blower system that employs
an independent lawyer to receive reports. Efforts will bemade to prevent or promptly detect problems such as
violations of laws.
6. System to ensure appropriate operations of thecorporate group, which is composed of relatedcompanies, including affiliates(1) An internal auditing agreement has been 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 throughvarious activities, including appointing officers of the
Bank as statutory auditor 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 Bank and its affiliates.
(3) When engaging in transactions with affiliates andother entities, steps will be taken to verify that the termsof the transaction conform to the arms-length principle.
(4) A whistle-blower system will be established at the
Bank and all affiliates, making it possible for parties suchas affiliate employees to make reports or seek advice.
(5) A system will be created to ensure the reliability of
the financial reporting of the Group, especially for theBank.
7. Items related to employees whose assignment toassist them in their duties is requested by the statutory auditors of the BankA Corporate Auditors’ Office will be created to assist thestatutory auditors (Corporate Auditors) in the perform-

THE JUROKU BANK, LTD.

6

Annual Report 2009Compliance System

Inspection Section(Audit and Inspection Division)

Recognizing that the survival of financial institutions
depends on trust, we put top priority on earning the firm
trust of the general public. To this end, we embrace highcorporate ethical standards and promote extensive awareness of the importance of legal compliance.
We are further strengthening our compliance system
under our 11th Medium-Term Management Plan
through policies which are designed to:1) 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 ofcompliance 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 acompliance program each fiscal year. All departments
hold monthly study meetings to foster knowledge oflegal issues and increase compliance-related awareness.
We have also prepared curriculums related to compliancefor individual training programs in order to boost theknowledge and awareness of compliance among our
employees. In addition, each department conducts
periodic self-checks according to its specific responsibilities. This is part of our initiative to ingrain a complianceoriented corporate culture.

The section conducts audits and other investigations
related to the compliance conditions in each division.

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

Customer Protection Management System
The Bank set up a Customer Protection Management
Policy in September 2007 to develop and establish asystem 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 are focusing more heavily on

customer-oriented management. The purpose of thepolicy is to improve the protection and convenience ofcustomers 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

Information Security, Management of
Customer Information

Organizational Structure

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 the Bank’s headquarters and an
information officer in each department and branch. We

Compliance Committee
Chaired by the managing director in charge of the Risk
Management Division and consisting of general managers
from relevant divisions, the Compliance Committee
examines, discusses, and issues directives concerning
matters of compliance.

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

THE JUROKU BANK, LTD.

7

Annual Report 2009

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 indaily operations.

Risk Management Policies(11th Medium-Term Management Plan)

Risk Management
The importance of risk management has grownas the risks confronting financial institutions havebecome more complex and diverse. Recognizing risk
management as crucial for safe and sound operations,
we have implemented compliance measures in the
Risk Management Policies contained in our 11th
Medium-Term Management Plan. In addition, we
have established Comprehenisive Risk Management
Policies 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 step up our commitment in this area. We aim
to further strengthen our risk management systemthrough use of the PDCA cycle, by laying down
policy (planning), creating internal rules and organizations (doing ), assessing results of these measures(checking) and making improvements where needed(acting).
In addition, to ensure that our risk management
mechanisms function effectively with regard to sections within the Group subject to auditing (the Bank’shead office divisions, branches and consolidated
affiliates), regular, planned, on-site audits of suchdepartments are carried out by staff of the Audit
and Inspection Division, which is independent frombusiness operation departments. In this way the
Bank verifies the effectiveness of its risk management
systems.

THE JUROKU BANK, LTD.

1

Implement appropriate risk management toensure that risk taking is handled in line with
the Bank’s financial strength.

2

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

3

Bring risk management into conformity with
Basel II.

4

Strengthen credit risk management.

Comprehensive Risk Management
The Bank’s comprehensive risk management framework comprises a Comprehensive Risk Management
Policy and Rules.
T h e B a n k c a rr i e s o ut c o mp r e h en s i v e r i s kmanagement to secure sound operations. Each risk ismanaged by related divisions individually, and, taken
one step further, by quantifying risk statistically tolimit exposure to a certain level of regulatory capital(within Tier I thresholds).
Whenever necessary, we ensure flexibility in ourpolicy response to new developments in comprehensive risk management through meetings of themonthly ALM Committee and through submissionof relevant reports to the Board of Directors.

Credit Risk
We manage credit risk according to our Credit Risk
Management Policies as a credit risk management
system, and our Credit Risk Management Rules,
Credit Portfolio Management Rules and our Credit
Policy Rules as specific rules.

8

Annual Report 2009

We have clearly separated the sales promotion
and credit screening functions and undertake strict
reviews and management under a policy of screening
by borrower business sector. Individual cases arescreened by verifying various aspects including theuse of funds, income and expenditure plans, andinvestment outcomes, and by carefully examining aborrower’s resources and plans for repayment. We
have introduced a credit rating system to objectively
determine a borrower company’s credit level and to
standardize credit extension criteria. We endeavor tomaintain a sound asset base by implementing our own
assessment of loan assets and by making appropriate
write-offs and provisions for possible loan losses. We
are working to improve the quality of our loan portfolio management by ensuring a thorough understanding of credit risk levels, avoiding concentration of risk
with particular borrowers, and ensuring a sufficientlevel of earnings to absorb credit costs.

Management Rules and regard stable cash flows as
the primary objective. Moreover, we have in place asystem (Liquidity Risk Contingency Plan) that can
respond to a wide variety of circumstances promptly
and appropriately.

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. For the important categories ofadministrative and system risk, we have drawn up thefollowing sub-policies and procedures.

<Administrative Risk>
We manage administrative risk through our own
Administrative Risk Management Policies andAdministrative Risk Management Rules. Whileadapting to the growing diversification and complexity of banking operations, our administration has
become more rigorous in an effort to retain andstrengthen the trust of our customers.

Market Risk
We manage market risk through the Bank’s Market
Risk Management Policies and, as specific rules,
Market Risk Management Rules.
T h e R i s k Ma na g e m e nt D i v i s i o n ma na g e sinterest rate risk related to deposits and loans, as wellas the risk associated with securities, derivatives andother 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 and reported to management. From the perspective of managing assets and liabilities together, wehold monthly ALM Committee meetings, forecast
interest rates, stock prices and exchange rates, as a setof measures to enable an appropriate response to risk.

<System Risk>
System risk is managed through the Bank’s System
R i s k Ma n a g e m e nt Po l i c i e s a n d Sy s t e m R i s k
Management Rules. We have established a frameworkthat 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 have compiled a Business Continuity
Plan, and have taken measures that would enable us
to continue major business operations even underemergency conditions.
At Juroku Bank, we recognize the importance of integrated risk management, and we will continue working
to enhance the sophistication of our risk management
system.

Liquidity Risk
We manage liquidity risk through our Liquidity
Risk Manag ement Policies and Liquidit y Risk
THE JUROKU BANK, LTD.

9

Annual Report 2009

Non-Performing Loans
The Bank provides information about the status of its
assets in three different ways. First, we conduct selfassessment to calculate appropriate write-offs andreserves by classifying borrowers according to theirfinancial soundness. Second, disclosure based on“The Financial Reconstruction Law” is used to classify
problem assets. Third, we disclose the value of RiskMonitored Loans based on the Banking Law, which
excludes non-loan assets such as foreign exchange,
accrued interest and advance payments.

Asset Self-Assessment / Assets Disclosed under the Financial Reconstruction Law /Risk-Monitored Loans under the Banking Law(Non-consolidated)

Billions of Yen

Asset Self-Assessment
For all assets
Borrower category
Balances of credits
Legallybankrupt borrowers

13.2
[3.8]

Classification
I

II

III

IV

11.1

2.2

—
(1.0)

—
(9.4)

—
(1.3)

—
(9.4)

Virtuallybankrupt borrowers

17.1
[7.7]

13.3

3.8

Potentiallybankrupt borrowers

73.3

Assets disclosed under the Financial Reconstruction Law
and coverage of the claims
For all claims

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

Portion of claims
Classification
secured*2
Balances of claims

Classification

Reserves

Coverage ratio

Bankrupt andquasi-bankrupt assets

Bankrupt loans

9.2

30.3

21.2

38.4

20.1

14.8
(17.5)[11.5]
Non-accrual loans

73.3

11.9

17.5

79.7%

2.3

15.1

207.9

465.1

115.5
[96.7]

Others*1
Normal assets

3,023.9

Normal borrowers

1.7

34.1%

52.5

40.4

80.4%

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

3.6%[3.0%]

2,345.4

Total

3,139.4[3,120.7]

2.4

Past due loans(3 months or more)

0.3

Restructured loans

11.4

Total

115.0
[96.4]

Sub-total

Substandard
borrowers

2,345.4

90.1[80.8]

41.0

Substandard loans*3

672.9

13.0
[3.8]

100.0%

Doubtful assets

Borrowers requiringcaution

17.4

Loan balances

Ratio of risk-monitored loans
to total loans
Figures in brackets are those after applicationof partial charge-offs (direct deduction).

3.7%[3.1%]

Total

2,618.3

506.3

14.8
(19.9)—(18.8)*1 Borrowers requiring caution, excluding substandard borrowers*2 Portion of claims secured by collateral or guarantees

3,139.4[3,120.7]*3 Substandard claims consist of loans only.

exchanges + Suspense payments with a similar nature toloans + Accrued interest.

Notes:
1. Amounts in asset self-assessment and claims disclosed
under the Financial Reconstruction Law and the coverage of claims are rounded 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 theamounts in parentheses are specific reserves for eachclassification.
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 inbrackets.

2. All credit items = Loans + Customers’ liabilities for acceptances and guarantees + Bonds issued through private
placements covered by guarantees of the Bank + Foreign

THE JUROKU BANK, LTD.

10

Annual Report 2009

Contribution to the Regional Economy and Community
Activities to Revitalize the Regional
EconomySupport for Management Improvements andBusiness Reconstruction
To revitalize the regional economy, the Bank carries out
activities designed to facilitate management improvements, such as appropriate analysis of the financial
standing and advice for developing business improvement plans, while valuing relationships with its customers. In cooperation with SME Revitalization Support
Committees and corporate revitalization funds, we support radical business revitalization through consultationand proposal services.
The “Gifu SME Support Fund,” set up in April 2008
to assist small companies in getting their business backon track, offers tailormade support on an ongoing basis
in partnership with “Gifu SME Revitalization Support
Committees.” Through its contributions to the “Gifu
SME Support Fund,” the Bank helps revitalize theregional economy and maintain employment at a healthy
level. In addition, we aim to provide more prompt support for business revitalization by making better use of
our own proprietary networks, which include numerous external organizations and consultants with expert
knowledge in specific business areas.

operations in Hong Kong and neighboring regionsof southern China and for uncovering new business
opportunities.
The event featured a seminar arranged by Japan
External Trade Organization (JETRO), business confabs
in which 52 companies displayed products, and information exchange meetings using the buffet format. In a new
initiative, a noticeboard corner was set up enabling businesses to publicize their needs. Lively exchanges involving over 240 customers of the Bank took place.

Handling Eco-Friendly Financial Products
The Bank believes that a commitment to dealing
with environmental issues is a public responsibility.
Accordingly, we provide proactive support to customers,
addressing environmental issues by offering eco-friendly
financial products, including the Every Support 21 andJuroku Eco Loan products.

The Second Business Information Exchange
Meeting for Japanese Companies Operating in
Hong Kong and South China
On June 13, 2008, The Second Business Information
Exchange Meeting for Japanese Companies Operatingin Hong Kong and South China was held in Shenzhen
by us together with other 16 regional banks with basesin Hong Kong. This was the second time that Japaneseregional banks based in Hong Kong have jointly organized this forum, giving hitherto rare opportunities for
information exchange among Japanese companies withTHE JUROKU BANK, LTD.

11

Annual Report 2009

Board of Directors and Corporate Auditors
The Juroku Bank, Ltd. (as of June 30, 2009 )President

Hakumi Horie
Senior Managing Director

Yukio Murase
Managing Directors

Hajime Muramatsu
Tomio Kawamura
Yoji Matsuura
Directors

Hakumi Horie

Toshiro Hori
Yutaka Sugiyama
Eiji Yamada
Tetsuya Miyaura
Naoki Ikeda
Kiyoshi Mabuchi

President

Standing Corporate Auditors

Tatsuharu Ando
Kunitaka Okamoto
Corporate Auditors

Hisashi Yura
Katsuhiko Kumazaki

Yukio Murase

Hajime Muramatsu

Tomio Kawamura

Yoji Matsuura

Senior Managing Director

Managing Director

Managing Director

Managing Director

Organization Chart
The Juroku Bank, Ltd. (as of June 30, 2009)

Corporate Auditors’ Office
Audit and Inspection DivisionCorporate Administration DivisionCorporate Planning Division

General Meeting of
Shareholders

Marketing Supervision Division
Retail Marketing Division

Board of Directors

Corporate Marketing Division

Board of Corporate
Auditors

International and Securities Division
Hong Kong Representative Office
Shanghai Representative Office

Corporate Auditors
Executive
Committee

Credit Supervision Division
Enterprise Support Division
Operations Administration Division
Risk Management Division
Head Office
Domestic Branches (147)

THE JUROKU BANK, LTD.

12

Annual Report 2009

Financial Review¥33,612 million deterioration from the previous fiscal year.
In addition, the Bank posted a net loss of ¥9,386 million(US$96 million), compared with a net income of ¥10,314
million for the previous term.

Performance
During the fiscal year under review, the Japanese economy
rapidly slowed down, with exports, capital expenditures andconsumer spending all declining sharply, as a result of thedeterioration of the global economy, appreciation of the yen,and sudden fall in stock prices that accompanied the financial crisis triggered by the U.S. subprime mortgage loan issue.
In the Bank’s business bases, principally Gifu and Aichi
prefectures, manufacturing, including auto-related andheavy equipment industries, which had been performing
well, entered a severe adjustment phase involving production cuts and work force adjustments.
Under these conditions, the Bank’s consolidated results
for the fiscal year under review were as follows:
Ordinary income from banking operations was ¥90,380
million (US$920 million), a year on year drop of ¥25,932
million. This decrease, which occurred despite a steady
growth in loan balance and an increase in interest fromloans, was largely the result of a decrease in gains from thesale of securities. Ordinary expenses increased ¥9,643 million, to ¥106,893 million (US$1,088 million), as credit
costs remained high and losses on valuation of securities
were recorded due to the weakness of financial markets,
which was triggered by the U.S. financial crisis. As a result,an ordinary loss of ¥16,513 million (US$168 million) wasrecorded, a deterioration of ¥35,575 million from the figure
for the previous term.
In the leasing business, efforts were made to improvecustomer service at a time of major changes in the operating
environment. As a result, ordinary income came to ¥21,569
million (US$220 million) for a decline of ¥318 million.
Ordinary expenses decreased by ¥663 million to ¥20,709
million (US$211 million), and ordinary profit rose ¥345
million to ¥860 million (US$9 million).
In other businesses, including the credit card businessand credit guarantee business, ordinary income came to¥5,555 million (US$57 million), a decline of ¥169 million,
while ordinary expenses fell ¥162 million to ¥4,576 million(US$47 million). Ordinary profit amounted ¥979 million(US$10 million), a decline of ¥7 million from the previous
year.
As a result, ordinary income on a consolidated basis
stood at ¥115,685 million (US$1,178 million), a decreaseof ¥26,125 million, while ordinary expenses climbed¥8,912 million to ¥130,371 million (US$1,327 million).
Consequently, the Bank posted a loss before income taxes
and minority interests of ¥14,728 million, which reflects a

THE JUROKU BANK, LTD.

Financial Position
Our balance of deposits as of March 31, 2009 was ¥3,733.2
billion (US$38,005 million), an increase of ¥103,048 million from the previous balance-sheet date. This was theresult of aggressive efforts 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 life insurance as a positive response todiversified asset management needs.
In lending activities, to fulfill its responsibilities as aregional financial institution, the Bank worked to provide
reliable financing for small- and medium-sized businesses,
and actively responded to demand for funds from local
enterprises. Along with this, we worked actively to provide
mortgage loans and other financing to individuals andfunds to local government entities. As a result of these
efforts, our balance of loans at the end of March 2009 stoodat ¥3,040.4 billion (US$30,952 million), up ¥147,662 million from the previous fiscal year.
In addition to underwriting and purchasing central andlocal government bonds, while closely watching market
conditions, the Bank engaged in bond and other securities transactions in order to efficiently manage funds. As aresult, our balance of securities declined by ¥7,875 million
to ¥845,989 million (US$8,612 million). Unrealized gains
on valuations of other available-for-sale securities came to¥3,889 million (US$40 million) at term-end, a decrease of¥28,843 million.
Net cash used in operating activities fell ¥45,759 million year on year, to ¥28,308 million (US$288 million) for
various reasons, including an increase in deposits. Net cashused in investing activities amounted to ¥61,743 million(US$629 million), compared with a net cash provided of¥71,005 million for the previous term, as a result of several
factors, including a decrease in proceeds from the sale ofsecurities. Net cash used in financing activities amounted
to ¥2,602 million (US$26 million), compared with a net
cash provided of ¥2,961 million for the previous term. As aresult, the closing balance of cash and cash equivalents fell
¥92,663 million to ¥101,190 million (US$1,030 million).
13

Annual Report 2009

Consolidated Balance Sheets
The Juroku Bank, Ltd. and Consolidated Subsidiaries
March 31, 2009 and 2008

Millions of Yen
2009
2008

Thousands of
U.S. Dollars (Note 1)
2009¥ 101,806 ¥ 194,199
—
158
—
0
1,666
1,514
—
4,000
845,989
853,8643,040,399
2,892,737
3,909
4,613
46,027—
60,12879,551
67,550111,500
8,389
14,30633,287
8,645
27,44330,785(60,477)(54,284)¥4,176,116 ¥4,141,588$ 1,036,404——
16,960—8,612,328
30,951,838
39,794
468,564
612,114687,672
85,402
338,868
279,375(615,667)$42,513,652¥3,733,204
18,22825,982
15,04849,350575
30,00056,2417,747
810,40327,442
3,974,228¥3,630,156
23,23633,063—44,826
737
30,00089,195
7,458—
10,42430,784
3,899,879$38,004,724
185,564
264,502
153,191
502,392
5,854
305,406
572,544
78,866
81
105,905
279,365
40,458,394

36,83925,358105,472
3,889
12,69936,83925,362
117,388
32,732
12,729375,028
258,149
1,073,725
39,591
129,278(1,276)(1,250)182,981
223,800
18,907
17,909201,888
241,709¥4,176,116 ¥4,141,588(12,990)
1,862,781
192,477
2,055,258$42,513,652

ASSETS:Cash and due from banks (Note 3) ............................................
Call loans and bills bought ......................................................
Monetary receivables purchased ...............................................
Trading securities (Note 4) .......................................................
Money held in trust (Note 5) ....................................................
Securities (Notes 4, 11 and 22) .................................................
Loans and bills discounted (Note 6) ..........................................
Foreign exchanges (Note 7) ......................................................
Lease receivables and investments in lease (Note 20)
Other assets (Notes 8 and 11) ..................................................
Premises and equipment (Note 9) .............................................
Intangible assets .......................................................................
Deferred tax assets (Note 19) ....................................................
Customers’ liabilities for acceptances and guarantees (Note 10)...
Reserve for possible loan losses .................................................
Total Assets......................................................................
LIABILITIES AND EQUITY:

Liabilities:
Deposits (Notes 11 and 12) ......................................................
Negotiable certificates of deposit ..............................................
Call money and bills sold (Note 11)..........................................
Payables under securities lending transactions (Note 11) ..........
Borrowed money (Notes 11 and 13)..........................................
Foreign exchanges (Note 7) ......................................................
Bonds (Note 14) .......................................................................
Other liabilities (Note 15) ........................................................
Liability for retirement benefits (Note 16) ................................
Deferred tax liabilities (Note 19) ..............................................
Deferred tax liabilities for land revaluation surplus (Note 2.g)...
Acceptances and guarantees (Note 10) ......................................
Total Liabilities ................................................................
Commitments and Contingent Liabilities (Notes 20, 21 and 22)
Equity (Notes 17 and 23):
Common stock:authorized, 460,000,000 shares;
issued, 366,855,449 shares in 2009 and 2008 ......................
Capital surplus .........................................................................
Retained earnings .....................................................................
Unrealized gain on available-for-sale securities .........................
Land revaluation surplus (Note 2.g) ..........................................
Treasury stock—at cost:
2,511,127 shares in 2009 and 2,423,329 shares in 2008.......
Total ...............................................................................
Minority interests .....................................................................
Total equity .....................................................................
Total Liabilities and Equity ..............................................
See notes to consolidated financial statements.
THE JUROKU BANK, LTD.

14

Annual Report 2009

Consolidated Statements of Operations
The Juroku Bank, Ltd. and Consolidated Subsidiaries
Years Ended March 31, 2009 and 2008

Millions of Yen
2009
2008

Thousands of
U.S. Dollars (Note 1)
2009

Income:Interest on:

Loans and discounts ..............................................................
Securities ..............................................................................
Other ...................................................................................
Fees and commissions ...............................................................
Other operating income............................................................
Gain on sale of securities...........................................................
Other income ...........................................................................
Total Income ....................................................................

¥ 61,334
13,328257
14,93523,516
326
2,095
115,791¥ 61,273
16,103262
16,936
31,647
13,912
1,801
141,934$ 624,392
135,6822,616
152,041
239,397
3,319
21,327
1,178,774

10,466
1,825
165
4,639
25,38152,547
16,23027
19,239130,519

10,130
3,059
685
4,663
25,67352,60014,383379
11,478123,050

106,546
18,5791,680
47,226258,383
534,938
165,224275
195,857
1,328,708(14,728)

18,884(149,934)

1,156(7,582)(6,426)
1,084¥ (9,386)

11,369(3,515)
7,854
716¥ 10,314

11,768(77,186)(65,418)
11,035$ (95,551)

2009

2008

U.S. Dollars
2009¥(25.75)
7.00¥28.298.00

Expenses:
Interest on:

Deposits ...............................................................................
Borrowings and re-discounts ................................................
Other ...................................................................................
Fees and commissions ...............................................................
Other operating expenses ..........................................................
General and administrative expenses ........................................
Provision for possible loan losses ...............................................
Impairment loss on long-lived assets.........................................
Other expenses (Note 18) .........................................................
Total Expenses .................................................................
(Loss) Income before Income Taxes andMinority Interests .................................................................
Income Taxes (Note 19):
Current ................................................................................
Deferred ...............................................................................
Total Income Taxes ..........................................................
Minority Interests in Net Income .........................................
Net (Loss) Income ..................................................................

Yen

Per Share of Common Stock (Note 2.p):
Basic net (loss) income..........................................................
Cash dividends applicable to the year ...................................
See notes to consolidated financial statements.

THE JUROKU BANK, LTD.

15

Annual Report 2009$(0.26)0.07

Consolidated Statements of Changes in Equity
The Juroku Bank, Ltd. and Consolidated Subsidiaries
Years Ended March 31, 2009 and 2008
Thousands

Millions of Yen

Outstanding
Number of
Shares ofCommon stock

Unrealized
Deferred Loss
Gain onon
Land
Available-for-Sale Derivatives under Revaluation
Securities Hedge Accounting
Surplus

CommonStockCapitalSurplusRetained
Earnings

Balance at April 1, 2007 .................

364,590¥36,839¥25,362¥109,766¥86,113¥(37)

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

—

—

—

10,314——

Cash dividends, ¥8.00 per share.........

—

—

—

(2,916)——

Transfer of land revaluation surplus ...

—

—

—

224

—

—

Purchase of treasury stock ..................

(180)

—

—

—

—

—

Disposal of treasury stock ..................

22

—

0

—

—

—

Net change in the year.......................

—

—

—

—

(53,381)

Balance at March 31, 2008 ..............

364,432

36,83925,362

117,388

Net loss .............................................

—

—

—

(9,386)

Cash dividends, ¥7.00 per share.........

—

—

—

(2,552)——

Transfer of land revaluation surplus ...

—

—

—

30

—

—

Purchase of treasury stock ..................

(155)

—

—

—

—

—

Disposal of treasury stock ..................

67

—

(4)

(8)

—

—

Treasury
Stock

Total

Minority
Interests

Total Equity¥12,953¥(1,140)¥269,856¥17,308¥287,164——

10,314—

10,314——(2,916)—(2,916)

—

—

224

—

224

—

(123)

(123)

—

(123)

—

13

13

—

13

¥ 37

(224)

—

(53,568)

601(52,967)

32,732—

12,729(1,250)223,800

17,909241,709

—

—

—

—

(9,386)—(9,386)——(2,552)—(2,552)

—

—

30

—

30

—

(67)

(67)

—

(67)

—

41

29

—

29

Net change in the year.......................

—

—

—

—

(28,843)

—

(30)

—

(28,873)998(27,875)

Balance at March 31, 2009..............

364,344¥36,839¥25,358¥105,472¥ 3,889—¥12,699¥(1,276)¥182,981¥18,907¥201,888

Total

Minority
Interests

Total Equity

Thousands of U.S. Dollars (Note 1)

CommonStock

Balance at March 31, 2008...............................

CapitalSurplusRetained
Earnings

Unrealized
Deferred Loss
Gain onon
Land
Available-for-Sale Derivatives under Revaluation
Securities Hedge Accounting
Surplus$375,028 $258,190 $1,195,032 $333,218——(95,551)

Cash dividends, $0.07 per share..........................

——(25,980)——

Transfer of land revaluation surplus ....................

—

—

305

—

—

Purchase of treasury stock ...................................

—

—

—

—

—

Disposal of treasury stock ...................................

—

(41)

(81)

—

—

—

—

—

(293,627)—$375,028 $258,149 $1,073,725 $ 39,591—

Net change in the year........................................
Balance at March 31, 2009...............................

——Net loss ..............................................................

—

See notes to consolidated financial statements.

THE JUROKU BANK, LTD.

16

Annual Report 2009

TreasuryStock$129,583 $(12,725) $2,278,326 $182,317 $2,460,643——(95,551)—(95,551)

—

—

—

—

(25,980)—(25,980)

305

—

305

—
—

(682)

(682)

—

(682)

417

295

—

295

(305)

—

(293,932)

10,160(283,772)$129,278 $(12,990) $1,862,781 $192,477 $2,055,258

Consolidated Statements of Cash Flows
The Juroku Bank, Ltd. and Consolidated Subsidiaries
Years Ended March 31, 2009 and 2008

Millions of Yen
2009
2008

Operating Activities:(Loss) Income before income taxes and minority interests..........
Adjustments for:
Income taxes - paid...............................................................
Depreciation and amortization..............................................
Impairment loss on long-lived assets ....................................
Interest income recognized on statements of operations ........
Interest expense recognized on statements of operations........
Net loss (gain) on securities ..................................................
Unrealized (gain) loss on derivatives .....................................
Net increase in reserve for possible loan losses.......................
Net increase in liability for retirement benefits .....................
Net increase in loans.............................................................
Net increase in deposits ........................................................
Net decrease in negotiable certificates of deposit ..................
Net increase in due from banks(excluding cash equivalents) .................................................
Net decrease (increase) in call loans and others .......................
Net (decrease) increase in call money and others ...................
Net increase (decrease) in payables under securities
lending transactions ...........................................................
Net increase in lease receivables and investments in lease......
Interest income - cash basis ..................................................
Interest expense - cash basis ..................................................
Other - net ...........................................................................
Total adjustments ............................................................
Net cash used in operating activities ............................
Investing Activities:
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 ....................
Proceeds from sales of intangible assets .................................
Other ...................................................................................
Net cash (used in) provided by investing activities .......
Financing Activities:
Proceeds from subordinated loans .........................................
Repayment of subordinated loans .........................................
Proceeds from issuance of subordinated bonds ......................
Proceeds from sales of treasury stock .....................................
Acquisition of treasury stock ................................................
Dividends paid .....................................................................
Net cash (used in) provided by financing activities .......
Foreign Currency Translation Adjustments on Cash andCash Equivalents ...........................................................................
Net Decrease in Cash and Cash Equivalents ........................
Cash and Cash Equivalents, Beginning of Year ...................
Cash and Cash Equivalents, End of Year (Note 3) ................

¥ (14,728)¥ 18,884$ (149,934)(12,836)5,472
27(74,918)
12,456
19,292(1,269)6,193
288(147,662)
103,048(5,009)(11,031)
20,006379(77,638)
13,874(14,996)
1,238
6,278
90
(86,085)
14,051(18,063)(130,673)
55,706275(762,679)
126,805
196,396(12,919)
63,0462,932(1,503,227)
1,049,048(50,992)(271)
158(7,080)(27)(158)
14,175(2,759)1,608(72,076)

15,048(128)
74,351(10,513)
9,773(13,580)(28,308)(23,833)—
79,596(11,232)
425(92,951)(74,067)

153,191(1,303)756,907(107,024)
99,491(138,247)(288,181)(330,978)180,882
90,070(1,699)
(215)
200
31
(34)
(61,743)(537,467)
478,625
130,995(1,129)
(658)
639
0
—
71,005(3,369,419)
1,841,413
916,930(17,296)(2,189)
2,036
316
(346)
(628,555)

—
—
—
28
(67)
(2,563)(2,602)

10,000(19,000)
15,00013(123)(2,929)
2,961

—
—
—
285
(682)
(26,092)(26,489)(10)(92,663)
193,853¥101,190

(22)
(123)
193,976¥193,853(102)(943,327)
1,973,460$1,030,133

See notes to consolidated financial statements.
THE JUROKU BANK, LTD.

17

Thousands of
U.S. Dollars (Note 1)
2009

Annual Report 2009

Notes to Consolidated Financial Statements
The Juroku Bank, Ltd. and Consolidated Subsidiaries
Years Ended March 31, 2009 and 2008

d. 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 cost,and 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 or amortizedcost determined by the moving-average method.
Prior to April 1, 2008, carrying amounts of government bonds withfloating interest classified as available-for-sale securities were statedat market value. However, carrying amounts are stated at reasonableestimate amounts at March 31, 2009, because the market value is notdeemed as fair value due to current market conditions. The reasonableestimate amounts are the present value of future cash flows discounted
by the interest rate based on discount rate consistent with the price ofgovernment bonds with fixed interest and volatility of swap options
evaluated by the market. The effect of this treatment was to increase
securities by ¥2,525 million ($25,705 thousand), decrease deferred tax
asset by ¥1,004 million ($10,221 thousand) and increase unrealized gain
on available-for-sale securities by ¥1,521 million ($15,484 thousand) at
March 31, 2009.
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.
e. 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 overthe estimated useful lives of the assets. Depreciation of premises andequipment of the consolidated subsidiaries except for leased assets iscomputed 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.
Under certain conditions such as exchanges of premises andequipment of 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. Deferred gain on
premises and equipment deductible for tax purposes was ¥1,159 million($11,799 thousand) in 2009.
f. Long-lived assets
The Group reviews its long-lived assets for impairment whenever eventsor changes in circumstance 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.
g. Land revaluation
Under the “Law of Land Revaluation,” the Bank elected a one-time

1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements have been
prepared in 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, andin conformity with accounting principles generally accepted in Japan,
which are different in certain respects as to application and disclosure
requirements of International Financial Reporting Standards.
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. In addition, certain reclassifications have been made in the 2008 consolidated financial
statements to conform to the classifications used in 2009.
The consolidated financial statements are stated in Japanese yen,
the currency 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 ofreaders outside Japan and have been made at the rate of ¥98.23 to $1,
the approximate rate of exchange at March 31, 2009. Such translations
should not be construed as representations that the Japanese yenamounts 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, 2009 and 2008
include the accounts of the Bank and its seven 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. and Juroku Capital Co., Ltd.
(together, the “Group”).
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 three (four in 2008) unconsolidated subsidiaries arestated at cost. If the equity method of accounting had been applied to theinvestments in these companies, the effect on the accompanying consolidated
financial statements would not be material.
Information on two special purpose entities, which are not regarded as
subsidiaries pursuant to Article 8 Paragraph 7 of the Financial Statements
Regulations, is not disclosed because they are immaterial. “Implementation
Guidance on Disclosures about Certain Special Purpose Entities”(Accounting Standards Board of Japan (“ASBJ”) Guidance No.15, issued on
March 29, 2007) is effective for the year beginning on or after April 1, 2007,
and the Group applied the guidance for the year ended March 31, 2008.
The difference between the cost of an acquisition and the fair value ofthe net assets of the acquired subsidiaries at the date of acquisition is being
amortized over a period of five 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 are eliminated in consolidation.
b. Cash and cash equivalents
For the purpose of the consolidated statements of cash flows, cash and cash
equivalents represent cash and amounts due from the Bank of Japan.
c. 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 is determined based on the moving-average method.

THE JUROKU BANK, LTD.

18

Annual Report 2009

Retirement benefits to directors and corporate auditors of theGroup are provided at the amount that would be required if all directors
and corporate auditors retired at the balance sheet date.
k. Leases
In March 2007, the ASBJ issued ASBJ Statement No.13, “AccountingStandard for Lease Transactions,” which revised the previous accounting
standard for lease transactions issued in June 1993. The revised accounting standard for lease transactions is effective for fiscal years beginningon or after April 1, 2008 with early adoption permitted for fiscal years
beginning on or after April 1, 2007.
(As lessee)
Under the previous accounting standard, finance leases that deem totransfer ownership of the leased property to the lessee were to be capitalized. However, other finance leases were permitted to be accounted for
as operating lease transactions if certain “as if capitalized” information
is disclosed in the note to the lessee’s financial statements. The revised
accounting standard requires that all finance lease transactions should
be capitalized to recognize lease assets and lease obligations in thebalance sheet. In addition, the accounting standard permits leases which
existed at the transition date and do not transfer ownership of the leased
property to the lessee to be accounted for as operating lease transactions.
(As lessor)
Under the previous accounting standard, finance leases that deem totransfer ownership of the leased property to the lessee were to be treatedas sales. However, other finance leases were permitted to be accounted
for as operating lease transactions if certain “as if sold” information isdisclosed in the note to the lessor’s financial statements. The revised
accounting standard requires that all finance leases that deem to transfer
ownership of the leased property to the lessee should be recognized
as lease receivables, and all finance leases that deem not to transfer
ownership of the leased property to the lessee should be recognized as
investments in lease. In addition, the accounting standard permits theamount of investments in lease to be the carrying amount of premises
and equipment as of the transition date rather than cash purchaseamount with regards to leases which existed at the transition date anddo not transfer ownership of the leased property to the lessee.
The Group applied the revised accounting standard effective April
1, 2008. In addition, the Group accounted for leases as lessee which
existed at the transition dated and do not transfer ownership of theleased property to the lessee as operating lease transactions. The effectof this change was to decrease loss before income taxes and minority
interests by ¥107 million ($1,089 thousand) for the year ended March
31, 2009.
The Group accounted for investments in lease at the carrying
amount of premises and equipment as of the transition date and theinterest portion is amortized by the straight-line method over the lease
period with regards to leases which existed at the transition date and do
not transfer ownership of the leased property to the lessee. As a resultof this treatment, loss before income taxes and minority interests was
greater by ¥1,764 million ($17,958 thousand) than if accounting for at
cash purchase amount for the year ended March 31, 2009.
All other leases are accounted for as operating leases.

revaluation 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 componentof equity. There is no effect on the consolidated statements of operations. Continuous readjustment is not permitted unless the land value
subsequently declines significantly such that the amount of the decline
in value should be removed from the land revaluation surplus accountand related deferred tax liabilities.
The carrying amount of the land after the above one-timerevaluation exceeded the market value by ¥18,795 million ($191,337
thousand) as of March 31, 2009.
h. 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.
i. 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.”
The credit rating system is used for self-assessment of asset quality.
For normal and caution loans, the reserve for possible loan losses isprovided for based on actual past loss ratios. For loans such as possible
bankruptcy, the reserve for possible loan losses is provided for in 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 provided 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.
j. 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 severance lump-sum payment plansfor directors and corporate auditors.

THE JUROKU BANK, LTD.

19

Annual Report 2009

l. Bonuses to directors and corporate auditors
Bonuses to directors and corporate auditors are accrued at the year end
to which such bonuses are attributable.
m. Income taxes
The provision for current income taxes is computed based on the pretax
income included in the consolidated statements of income. The asset
and liability 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.
n. 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.
o. Derivatives
The Bank uses a variety of derivative financial instruments. All derivatives are recognized as either assets or liabilities and measured at fairvalue, and gains or losses on derivative transactions are recognized in thestatements of operations.
Prior to April 1, 2003, the Bank applied “macro hedge,” the temporary treatment stipulated in “Treatment of Accounting and Auditingin Applying Accounting Standard for Financial Instruments in the
Banking Industry,” JICPA Industry Audit Committee Report No.24,
which is the method to manage aggregate interest rate risks arising fromnumerous financial assets and liabilities, such as loans and deposits, byusing derivatives.
Effective April 1, 2003, the Bank applied the principle treatment
of JICPA Industry Audit Committee Report No.24 and unrealized
gains and losses incurred during the year were included in earnings forthe year ended March 31, 2004. The deferred hedge losses, which werepreviously accounted for under “macro hedge,” were charged to otheroperating expenses over five years beginning April 1, 2003.
p. 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.
The weighted average numbers of common shares used in thecomputation for the years ended March 31, 2009 and 2008 were364,394,170 shares and 364,496,064 shares, respectively.
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 theyear (or at the time of issuance) with an applicable adjustment for related
interest expense, net of tax, and full exercise of outstanding warrants.
Diluted net income per share is not disclosed because there are no dilutive shares.
Cash dividends per share presented in the accompanying consolidated statements of operations are dividends applicable to the respective
years including dividends to be paid after the end of the year.

THE JUROKU BANK, LTD.

3. Cash and Due from Banks
Cash and due from banks as of March 31, 2009 and 2008 consisted of
the following:

Cash ............................................
Due from banks ...........................
Total ......................................

Millions of Yen
2009
2008

Thousands of
U.S. Dollars
2009¥ 57,344 ¥ 64,330
44,462 129,869¥101,806 ¥194,199$ 583,773
453,631$1,036,404

A reconciliation between the cash and due from banks on the
consolidated balance sheets and the cash and cash equivalents on the
consolidated statements of cash flows for the years ended March 31,
2009 and 2008 was as follows:

Cash and due from banks .............
Due from banksother than the Bank of Japan .....
Cash and cash equivalents ............

Millions of Yen
2009
2008

Thousands of
U.S. Dollars
2009¥101,806 ¥194,199$1,036,404

(616)
(346)
¥101,190 ¥193,853(6,271)$1,030,133

4. Trading Securities and Securities
Trading securities as of March 31, 2009 and 2008 consisted of thefollowing:
Millions of Yen
2009
2008

National government bonds ........
Local government bonds ..............

¥1,63432¥1,666¥1,44569¥1,514

Thousands of
U.S. Dollars
2009$16,634
326$16,960

Valuation gains, which were included in other operating income for theyears ended March 31, 2009 and 2008 were ¥6 million ($61 thousand)and ¥13 million, respectively.
Valuation losses, which were included in other operating expenses
for the years ended March 31, 2009 and 2008 were ¥2 million ($20
thousand) and ¥1 million, respectively.
Securities as of March 31, 2009 and 2008 consisted of the following:
Millions of Yen
2009
2008

Stock shares ...............................
National government bonds ......
Local government bonds ............
Corporate bonds ........................
Other securities .........................
Total ....................................

20

Annual Report 2009

¥122,859
385,764
125,908
144,375
67,083¥845,989¥164,710
301,083
149,798
162,61375,660¥853,864

Thousands of
U.S. Dollars
2009$1,250,728
3,927,151
1,281,767
1,469,765
682,917$8,612,328

The carrying values of debt securities and other investments bycontractual maturities for securities classified as available-for-sale andheld-to-maturity as of March 31, 2009 were as follows:

Information regarding available-for-sale and held-to-maturity securities
as of March 31, 2009 and 2008 was as follows:

2009

Securities classified as:
Available-for-sale:
Equity securities ................
Debt securities...................
Other ................................
Held-to-maturity:
Debt securities...................

Cost

Fair
Value

Millions of Yen
Available- Held-tofor-Sale Maturity

Due in one year or less ......... ¥ 75,853 ¥ 7,560
Due after one year
through five years .............. 334,278 38,556
Due after five years
through ten years............... 187,869
6,791
Due after ten years ...............
65,8170
Total .............................. ¥663,817 ¥52,907¥ 97,615 ¥22,457 ¥10,782 ¥109,290
598,734
4,806
400 603,140
72,154584 11,775
60,963
1,439

2008

Securities classified as:
Available-for-sale:
Equity securities ................
Debt securities...................
Other ................................
Held-to-maturity:
Debt securities...................

Millions of Yen
Unrealized Unrealized
Gains
Losses22

Millions of Yen
Unrealized Unrealized
Gains
LossesCost¥102,618 ¥60,494
555,048
4,440
75,707
233

2009

1,864

Cost

0

1,461
Fair
Value

0

Thousands of
U.S. Dollars
Unrealized Unrealized
Gains
Losses3,403,013 392,507
1,912,542 69,134
670,0290$6,757,782 $538,603

Carrying AmountThousands ofMillions of Yen
U.S. Dollars
2009
2008
2009

1,905

Amounts per the balance sheet ....

Fair
Value

6. Loans and Bills Discounted
Loans and bills discounted as of March 31, 2009 and 2008 consisted of
the following:

Securities classified as:
Available-for-sale:
Equity securities ................ $ 993,739 $228,617 $109,763 $1,112,593
Debt securities................... 6,095,225 48,926
4,072 6,140,079
Other ................................
734,541
5,945 119,871 620,615
Held-to-maturity:
14,649224
014,873
Debt securities...................

¥ 7,543
5,153$138,135
46,401

51,468¥69,595

53,485¥66,181

523,954$708,490—

Thousands of
U.S. Dollars
2009$406,251
2,177,054
23,597,394
4,713,621
57,518$30,951,838

Nonaccrual loans, which include loans to borrowers in bankruptcy
and past 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 ultimate collectability of either the principal or interest, and if theloans are past due for certain period or for other reasons.
“Loans to borrowers in bankruptcy” represent nonaccrual loans
to debtors who are legally bankrupt, which are 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, 2009 and 2008 were ¥14,744 million ($150,097 thousand) and¥7,609 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 difficulties.
Past due loans as of March 31, 2009 and 2008 were ¥92,197 million($938,583 thousand) and ¥87,058 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, 2009 and 2008
were ¥415 million ($4,225 thousand) and ¥672 million, respectively.

Investments in non-consolidated subsidiaries included in “Securities”
in the accompanying consolidated balance sheets at March 31, 2009
and 2008 were ¥1,562 million ($15,902 thousand) and ¥1,718 million,
respectively.
Proceeds from sales of available-for-sale securities for the years
ended March 31, 2009 and 2008 were ¥153,327 million ($1,560,898
thousand) and ¥499,451 million, respectively. Gross realized gains andlosses on these sales, computed on the moving average cost basis, were¥1,234 million ($12,562 thousand) and ¥9,674 million ($98,483
thousand), respectively, for the year ended March 31, 2009, and¥21,831 million and ¥3,525 million, respectively, for the year ended
March 31, 2008.
THE JUROKU BANK, LTD.

¥4,000Bills discounted ......................... ¥ 39,906 ¥ 49,280
Loans on bills ............................
213,852
234,307
Loans on deeds........................... 2,317,972 2,148,571
Overdrafts .................................
463,019454,535
Others
5,650
6,044
Total .................................... ¥3,040,399 ¥2,892,737

Carrying AmountThousands ofMillions of Yen
U.S. Dollars
2009
2008
2009

¥13,569
4,558—

Millions of Yen
2009
2008

Available-for-sale securities and held-to-maturity securities whose fairvalue was not readily determinable as of March 31, 2009 and 2008 wereas follows:

Available-for-sale:
Equity securities ........................
Investment vehicles and others...
Held-to-maturity:
Debt securities...........................
Total ......................................

$ 772,198 $ 76,962

5. Money Held in Trust
Information regarding money held in trust for trading purposes as ofMarch 31, 2009 and 2008 was as follows:¥5,944 ¥157,168
1,343 558,145
7,152
68,78841

Thousands of
U.S. Dollars
Available- Held-tofor-Sale Maturity

21

Annual Report 2009

“Restructured loans” are defined as loans which the lender is providing financial support to a borrower by a reduction of the interest rate,
deferral of interest payment, extension of maturity date, or reduction of
the face or maturity amount of the debt or accrued interest. Loans classified as loans to borrowers in bankruptcy, past due loans and accruingloans past due three months or more are excluded from restructuredloans. Restructured loans as of March 31, 2009 and 2008 were ¥11,478
million ($116,848 thousand) and ¥38,221 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, 2009 and 2008 was ¥118,834 million($1,209,753 thousand) and ¥133,560 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 JICPA. The Bank has rights to sell or pledge
accepted commercial bills discounted and foreign bills of exchangebought without restrictions. The total face value of commercial bills
discounted and foreign bills of exchange bought included in foreignexchanges as of March 31, 2009 and 2008 was ¥41,436 million($421,826 thousand) and ¥50,825 million, respectively.

9. Premises and Equipment
Premises and equipment as of March 31, 2009 and 2008 consisted of
the following:Land ............................................
Building ......................................
Construction in progress ..............
Other ..........................................
Total ......................................

Assets:Due from foreign
correspondent account .............
Foreign bills of
exchange bought .....................
Foreign bills of
exchange receivable .................
Total ....................................
Liabilities:
Due to foreign
correspondent account .............
Foreign bills of
exchange payable .....................
Total ....................................

¥1,621¥2,321

15,586757¥3,909748¥4,613

7,706$39,794

¥ 427

¥ 447

$ 4,347

148
¥ 575

290
¥ 737

1,507
$ 5,854

Millions of Yen
2009
2008

Assets pledged as collateral:
Securities ................................ ¥138,723
Other assets ............................
9,636
Total .................................... ¥148,359
Relevant liabilities to above assets:
Deposits ................................. ¥ 77,588
Call money and bills sold........
20,000
Payables under securities
lending transactions..............
15,048Borrowed money ....................
12,640Total .................................... ¥125,276

8. Other Assets
Other assets as of March 31, 2009 and 2008 consisted of the following:Accrued income ...........................
Accounts receivable .....................
Installment receivables ................
Derivative assets ..........................
Other ..........................................
Total ......................................

Millions of Yen
2009
2008

Thousands of
U.S. Dollars
2009¥ 6,170
13,302
7,164
18,56014,932¥60,128$ 62,812
135,41772,931
188,944
152,010$612,114¥ 5,409
31,649
7,061
21,10814,324¥79,551$482,113
147,888
3,054
54,617$687,672¥ 47,215
15,28765
48,933¥111,500

11. Assets Pledged
Assets pledged as collateral and their relevant liabilities as of March 31,
2009 and 2008 were as follows:$16,5021,544¥47,358
14,527300
5,365¥67,550

10. 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 ¥50,920 million($518,375thousand) and ¥51,670 arising from guarantees of private
placement securities as of March 31, 2009 and 2008, respectively.

Thousands of
U.S. Dollars
2009

1,531

Thousands of
U.S. Dollars
2009

The accumulated depreciation of premises and equipment as of March
31, 2009 and 2008 amounted to ¥78,569 million ($799,847
thousand) and ¥113,766 million, respectively.

7. Foreign Exchanges
Foreign exchanges as of March 31, 2009 and 2008 consisted of thefollowing:
Millions of Yen
2009
2008

Millions of Yen
2009
2008

Thousands of
U.S. Dollars
2009¥93,23779¥93,316$1,412,227
98,096$1,510,323¥93,283—$789,861
203,604——¥93,283

153,191
128,677$1,275,333

In addition, the following assets were pledged or deposited with respect
to foreign exchange settlements and derivatives as of March 31, 2009
and 2008.

Securities ...................................
Other assets ...............................
Total ....................................

Millions of Yen
2009
2008

Thousands of
U.S. Dollars
2009¥76,100
8¥76,108$774,713
81$774,794¥79,895
8¥79,903

Deposits included in other assets as of March 31, 2009 and 2008 were
¥1,930 million ($19,648 thousand) and ¥1,893 million, respectively.

THE JUROKU BANK, LTD.

22

Annual Report 2009

12. Deposits
Deposits as of March 31, 2009 and 2008 consisted of the following:
Millions of Yen
2009
2008

Current deposits ........................ ¥ 208,422 ¥ 215,181
Ordinary deposits ...................... 1,465,628 1,489,656
Deposits at notice ......................
30,662
25,536Time deposits ............................ 1,824,524 1,694,259
Other deposits ...........................
203,968
205,524
Total .................................... ¥3,733,204 ¥3,630,156

15. Other Liabilities
Other liabilities as of March 31, 2009 and 2008 consisted of thefollowing:Thousands of
U.S. Dollars
2009

Millions of Yen
2009
2008

$ 2,121,775
14,920,371
312,145
18,574,000
2,076,433$38,004,724

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

13. Borrowed Money
Borrowed Money as of March 31, 2009 and 2008 consisted of thefollowing:

Borrowings due serially to April
2018 with weighted averageinterest rates of 1.65% in 2009
and 1.66% in 2008..................

Millions of Yen
2009
2008

Thousands of
U.S. Dollars
2009¥49,350$502,392¥44,826

Millions of Yen

Thousands of
U.S. Dollars¥19,018
4,828
3,589
3,010
905
18,000¥49,350$193,607
49,15036,53730,642
9,213
183,243$502,392

2010......................................................
2011......................................................
2012......................................................
2013......................................................
2014......................................................
2015 and thereafter ...............................
Total ................................................

14. Bonds
Bonds as of March 31, 2009 and 2008 consisted of the following:

Unsecured Yen subordinatedbonds due March 2017 (a).........
Unsecured Yen subordinatedbonds due September 2017 (b)...
Total ....................................

Thousands of
U.S. Dollars
2009¥15,000¥15,000$152,703

15,000¥30,000

15,000¥30,000

152,703$305,406

Projected benefit obligation.......
Fair value of plan assets..............
Unrecognized actuarial loss........
Prepaid pension cost ..................
Net liability .........................

99
7,537
6,599
9,505
2,209
20,25633,5609,430¥89,195

$

367
9,315
87,17398,18822,396
182,225
69,510103,370$572,544

Millions of Yen
2009
2008

Thousands of
U.S. Dollars
2009¥46,021(26,782)(13,431)1,477¥ 7,285$468,502(272,645)(136,730)
15,036$ 74,163¥44,999(32,393)(6,303)661¥ 6,964

The components of net periodic retirement benefit costs for the years
ended March 31, 2009 and 2008 were as follows:(a) The interest rates of the bonds are 1.75% for the period from March
23, 2007 to March 22, 2012 and six-month Euroyen Libor plus
1.92% for the period from March 23, 2012 to March 22, 2017.
(b) The interest rates of the bonds are 1.92% for the period from
September 19, 2007 to September 18, 2012 and six-month Euroyen
Libor plus 2.03% for the period from September 19, 2012 to
September 15, 2017.

THE JUROKU BANK, LTD.

¥

16. Retirement and Pension Plans
The Bank and certain subsidiaries have severance payment plans for
employees, directors and corporate auditors. Under most circumstances,
employees terminating their employment are entitled to retirement
benefits determined based on the rate of pay at the time of termination,
years of service and certain other factors. If the termination is involuntary, caused by retirement at the mandatory retirement age or death, or
certain other causes, the employee is entitled to greater payment than in
the case of voluntary termination.
The liability for retirement benefits for directors and corporate
auditors as of March 31, 2009 and 2008 was ¥462 million ($4,703
thousand) and ¥494 million, respectively. The retirement benefits for
directors and corporate auditors are paid subject to the approval of theshareholders.
The liability for retirement benefits for employees as of March 31,
2009 and 2008 consisted of the following:

Borrowings include subordinated borrowings of the Bank, whichamounted to ¥18,000 million ($183,243 thousand) and ¥18,000
million as of March 31, 2009 and 2008.

Millions of Yen
2009
2008

36
915
8,563
9,645
2,200
17,900
6,828
10,154¥56,241*The domestic exchange settlement account consisted of outstanding remittance bills
from other banks and/or collection bills for which the Bank has received notices forpayment from other banks which have not been settled.

Annual maturities of borrowings as of March 31, 2009 were as follows:Year Ending March 31¥

Thousands of
U.S. Dollars
2009

Millions of Yen
2009
2008

Service cost ................................
Interest cost ...............................
Expected return on plan assets ...
Recognized actuarial loss ...........
Net periodic retirement
costs...................................

23

Annual Report 2009

Thousands of
U.S. Dollars
2009¥1,248
899
(927)
1,365

¥1,282
891
(994)
675

$12,705
9,152(9,437)
13,896¥2,585¥1,854$26,316

Assumptions used for the years ended March 31, 2009 and 2008 wereset forth as follows:2009

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

18. Other Expenses
Other expenses for the years ended March 31, 2009 and 2008 consistedof the following:

2008

Millions of Yen
2009
2008

Thousands of
U.S. Dollars
2009¥ 9,213¥ 1,715$ 93,790

5,082
583
2,027

387
36
6,276

51,736
5,935
20,635120
2,214¥19,239258
2,806¥11,478

1,222
22,539$195,857

Straight-line Straight-line
methodmethod

2.0%
3.5%

2.0%
3.5%

10 years

10 years

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 ..............................

17. Equity
Since May 1, 2006, Japanese banks have been subject to the Companies
Act of Japan (the “Companies Act”). The significant provisions in the
Companies Act that affect financial 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 meetcertain criteria such as; (1) having the Board of Directors, (2) having
independent auditors, (3) having the Board of Corporate Auditors, and(4) the term of service of the directors is prescribed as one year rather
than two years of normal term by its articles of incorporation, the Boardof 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 notmeet all the above criteria. Semiannual interim dividends may also be
paid once a year upon resolution by the Board of 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 is defined as the amountavailable for distribution to the shareholders, but the amount of net
assets after dividends must be maintained at no less than ¥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 Boardof Directors. The amount of treasury stock purchased cannot exceed
the amount available for distribution to the shareholders which isdetermined by specific formula. Under the Companies Act, stockacquisition rights 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
directly from 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 ($205,182
thousand) as of March 31, 2009 and 2008.

THE JUROKU BANK, LTD.

19. Income Taxes
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 40% for the years ended March 31,
2009 and 2008.
The tax effects of significant temporary differences and tax loss carryforwards, which result in deferred tax assets and liabilities as of March
31, 2009 and 2008 were as follows:

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 ....................................

Millions of Yen
2009
2008

Thousands of
U.S. Dollars
2009¥20,521
9,596
4,695
3,634
1,976
2,019
(6,119)36,322¥18,934
38
4,846
5,723
2,097
3,332
(6,236)28,734$208,908
97,68947,79636,995
20,116
20,554(62,293)369,765(18,736)(16,930)(1,353)—(20,089)¥ 8,645(13,774)(274)(30,978)$338,787

Deferred tax liabilities:
Unrealized gain on availablefor-sale securities .....................
(1,663)Gain on contribution of availablefor-sale securities to employees’
retirement benefit trusts ..........
(1,353)
Other ........................................
(27)
Total ....................................
(3,043)Net deferred tax assets ............... ¥33,279

A reconciliation between the normal effective statutory tax rate andthe actual effective tax rate reflected in the accompanying consolidated
statement of operations for the year ended March 31, 2009 was asfollows:
2009

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
Other — net
Actual effective tax rate

24

Annual Report 200939.76%(0.61)
4.38(0.48)
0.78(0.20)
43.63%

A reconciliation for the year ended March 31, 2008 was not disclosed
because the difference was not material.

Maturities of lease receivables for finance leases that deem to transfer
ownership of the leased property to the lessee are as follows:Year Ending March 31

20. Leases
Finance lease(Lessee)A subsidiary leases certain equipment.
Total rental expense including lease payments under the financeleases for the years ended March 31, 2009 and 2008 were ¥1 million($10 thousand) and ¥0 million, respectively.
As discussed in Note 2.k, the Group accounts for leases which
existed at the transition date and do not transfer ownership of the leased
property to the lessee as operating lease transactions. Pro forma information of such leases existing at the transition date, such as acquisition
cost, accumulated depreciation, obligations under finance leases anddepreciation expense on an “as if capitalized” basis for the years ended
March 31, 2009 and 2008 was as follows:
Millions of Yen
2009
2008

Acquisition cost.........................
Accumulated depreciation .........
Net leased property ..............

¥3
(1)
¥2

¥3
(0)
¥3

2010..........................................
2011..........................................
2012..........................................
2013..........................................
2014..........................................
2015 and thereafter ...................
Total ....................................

Due within one year ..................
Due after one year......................
Total ....................................

¥1
1
¥2

¥1
2
¥3

Thousands of
U.S. Dollars
2009

$30
(10)
$20

$10
10
$20

*The amounts of obligations under finance leases include the imputed interest
expense portion.

Gross lease receivables ...............
Unguaranteed residual values ....
Unearned interest income ..........
Total ....................................

¥50,537464(6,259)¥44,742$514,476
4,724(63,718)$455,482$ 2,199
1,924
2,046
1,721
1,547
3,645
$13,082

Year Ending March 31

Millions of Yen

Thousands of
U.S. Dollars

2010..........................................
2011..........................................
2012..........................................
2013..........................................
2014..........................................
2015 and thereafter ...................
Total ....................................

¥15,50212,783
9,726
6,419
3,690
2,417
¥50,537$157,813
130,133
99,01365,34737,56524,605$514,476

2008

Equipment

Millions of Yen
Other

Total

Acquisition cost.........................
Accumulated depreciation .........
Net leased property ..............

¥80,188(36,575)¥43,613¥6,369(3,193)¥3,176¥86,557(39,768)¥46,789

Expected future rental revenues under finance leases as of March 31,
2008 were as follows:

Depreciation expense, which was not reflected in the accompanying
consolidated statements 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, 2009
and 2008 were ¥1 million ($10 thousand) and ¥0 million, respectively.
(Lessor)A subsidiary leases certain equipment and other assets.
The net investments in lease are summarized as follows:
Thousands of
U.S. Dollars
2009

¥ 216
189
201
169
152
358
¥1,285

Total rental revenues under finance leases for the year ended March 31,
2008 were ¥16,828 million.
Leased property of finance leases that do not transfer ownership ofthe leased property to the lessee, which were stated as a component ofassets on the consolidated balance sheet as of March 31, 2008 was asfollows:

Thousands of
U.S. Dollars
2009

Millions of Yen
2009

Thousands of
U.S. Dollars

Maturities of investment in lease for finance leases that deem not totransfer ownership of the leased property to the lessee are as follows:

Obligations under finance leases as of March 31, 2009 and 2008 were as
follows:
Millions of Yen
2009
2008

Millions of Yen

Millions of Yen
2008

Due within one year ..................
Due after one year......................
Total ....................................

¥13,876
33,763¥47,639

Depreciation expense for the year ended March 31, 2008 was ¥13,021
million. Interest income for the year ended March 31, 2008 was ¥2,036
million.
Operating lease(Lessee)
The minimum rental commitments under noncancellable operatingleases as of March 31, 2009 and 2008 were as follows:
Millions of Yen
2009
2008

Due within one year ..................
Due after one year......................
Total ....................................

THE JUROKU BANK, LTD.

25

Annual Report 2009

¥ 44
771
¥815

—
—
—

Thousands of
U.S. Dollars
2009

$ 448
7,849
$8,297

(Lessor)
Expected future rental revenues under operating leases as of March 31,
2009 and 2008 were as follows:
Millions of Yen
2009
2008

Due within one year ..................
Due after one year......................
Total ....................................

¥46
40
¥86

¥ 47
55
¥102

Derivatives are subject to market risk and credit risk. Market risk
is the exposure created by potential fluctuation in market conditions,
including interest rate, foreign exchange and price. The Bank mitigatesmarket risks by conducting effective covering transactions against
derivative transactions to meet the needs of the Bank’s customers andestablishing the permitted risk amount in advance before entering into
derivative transactions for trading purposes. Credit risk is defined as therisk that counterparties will not be able to fulfill their obligations to theGroup. Because the Bank conducts its derivative with trading businessto major financial institutions and enterprises, the Bank considers credit
risk to be minimal.
Derivative transactions entered into by the Bank have been madein accordance with internal policies. The dealing section is responsible
for executing and controlling derivative transactions, mark-to-market
of positions, determining related gains and losses and the outstanding
exposures of balances.
The dealing section is also responsible for periodically reportingto management and the Risk Management Division, which deals withrisk control. In order to achieve an appropriate segregation of duties
relating to derivative transactions, the ALM office reviews outstanding
derivative transactions executed by the international dealing section.
Each derivative transaction is reported to management. Management
evaluates the risks concerning the whole portfolio including deposits,loans and securities, and discusses the hedging policies at ALM committee meetings periodically.
The Bank had the following derivative contracts outstanding as ofMarch 31, 2009 and 2008:

Thousands of
U.S. Dollars
2009

$468
407
$875

21. Commitments and Contingent Liabilities
Commitment line contracts on overdrafts and loans are agreements
to make loans to customers when they apply for borrowing up to aprescribed amount, as long as there is no violation of any condition of
the contracts.
The total amounts of unused open commitments as of March 31,
2009 and 2008 were ¥1,226,455 million ($12,485,544 thousand) and¥1,197,872 million, respectively. Multi-purpose accounts included in
the unused open commitments as of March 31, 2009 and 2008 were¥544,675 million ($5,544,895 thousand) and ¥506,351 million, respectively. The amounts of unused commitments whose original contract
terms were within one year or unconditionally cancelable at any time asof March 31, 2009 and 2008 were ¥1,216,873 million ($12,387,998
thousand) and ¥1,185,495 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 request
the customers to pledge collateral such as premises and securities at theexecution of the contracts. After the execution, the Bank and certain
subsidiaries periodically evaluate the customers’ financial positions
based upon the internal policy, and take necessary measures to manage
the credit exposures, such as revising the terms of contracts or securing
the claims.

2009Over-the-counterinterest-related contracts:
Interest rate swap:
Fixed rate receipt,
floating rate payment .........
Floating rate receipt,
fixed rate payment ............
Over-the-countercurrency-related contracts:
Currency swap ........................
Foreign exchange forward:
Sell ......................................
Buy ......................................
Currency option:
Sell ......................................
Buy ......................................
Other:
Sell ......................................
Buy ......................................

22. 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.
The Bank principally enters into derivative transactions to meetthe needs of the Bank and its customers and to hedge risks of assets andliabilities held, which are related to interest rates, price fluctuations andforeign exchanges. The Bank also enters into derivative transactions for
trading purposes under certain risk limitations for speculative purposes.

THE JUROKU BANK, LTD.

26

Annual Report 2009

Contract or
Notional Amount¥ 4,541

Millions of Yen
Fair
Unrealized
Value
Gains/(Losses)

¥

54

¥

54

4,541

(38)

(38)

347,548

537

537

9,476
13,691

(164)
208

(164)
208

219,666
215,122(16,591)
16,591

(298)
2,104

1,357
1,191

(43)
105

(43)
105

2008

Over-the-counterinterest-related contracts:
Interest rate swap:
Fixed rate receipt,
floating rate payment .........
Floating rate receipt,
fixed rate payment ............
Over-the-countercurrency-related contracts:
Currency swap ........................
Foreign exchange forward:
Sell ......................................
Buy ......................................
Currency option:
Sell ......................................
Buy ......................................
Over-the-counter
credit derivative contracts:
Credit default option:
Sell ......................................

2009

Contract or
Notional Amount¥ 7,040

Millions of Yen
Fair
Unrealized
Value
Gains/(Losses)

¥

7,040

62
(37)

¥

Notes:
1. Derivative transactions are valued at market and the gains/(losses) arerecognized in the consolidated statements of operations.
2. Market values of exchange-traded transactions are based on closing prices
on the Tokyo International Financial Future Exchange and other. Market
values of over-the-counter contracts are based on the discounted cash flow
method and the option pricing calculation models and other.
3. The contract or notional amounts of derivatives, which are shown in theabove table, do not represent the amounts exchanged by parties and do
not measure the Group’s exposure to credit or market risk.

62
(37)

399,684

639

639

12,63934,457

725
(533)

725
(533)

227,265
223,054(18,393)
18,390(2,120)
4,328

3,000

(1,379)(1,379)23. Subsequent Event
On June 19, 2009, the Bank’s shareholders authorized the appropriationof retained earnings as follows:
Year-end cash dividends,¥3.50 ($0.04) per share............

Thousands of U.S. Dollars
Contract or
Fair
Unrealized
Notional Amount
Value
Gains/(Losses)

Over-the-counterinterest-related contracts:
Interest rate swap:
Fixed rate receipt,
floating rate payment ......... $ 46,228
Floating rate receipt,
fixed rate payment ............
46,228Over-the-countercurrency-related contracts:
Currency swap ........................ 3,538,104
Foreign exchange forward:
Sell ......................................
96,467
Buy ......................................
139,377
Currency option:
Sell ...................................... 2,236,241
Buy ...................................... 2,189,983
Other:
Sell ......................................
13,815
Buy ......................................
12,125

$

550

$ 550

(387)

(387)

5,467

5,467

(1,670)2,117(1,670)2,117(168,900)
168,900(3,034)
21,419

(438)
1,069

(438)
1,069

THE JUROKU BANK, LTD.

27

Annual Report 2009

Millions of Yen

Thousands of
U.S. Dollars¥1,275$12,980

24. Segment Information
Information about operations in business segments for the years ended March 31, 2009 and 2008 was as follows:
2009

Millions of Yen
Other*
Total

BankingLease

89,783597
90,380106,893¥ (16,513)¥21,283286
21,56920,709¥ 860¥ 4,619
936
5,555
4,576
¥ 979

¥4,125,662
5,111
27
1,533

¥60,527178—
131¥30,383
46—
56

Banking

Lease¥ 115,491
821
116,312
97,250¥ 19,062¥21,524363
21,887
21,372¥ 515¥ 4,795
929
5,724
4,738
¥ 986

¥4,090,667
4,932
356
2,312

¥58,933
15,042—
16,453¥30,551
51
23
24

Banking

Lease

914,008
6,078
920,086
1,088,191$ (168,105)$216,665
2,911
219,576
210,821$ 8,755$ 47,022
9,529
56,551
46,585$ 9,966$616,176
1,812
—
1,334

$309,305
468—
570

Elimination/Corporate

Consolidated¥ 115,685
1,819
117,504
132,178¥ (14,674)—¥ (1,819)(1,819)(1,807)¥(12)¥ 115,685—
115,685
130,371(14,686)(42)¥ (14,728)¥4,216,572
5,335
27
1,720

¥(40,456)
137
—
114

¥4,176,116
5,472
27
1,834

Elimination/Corporate

Consolidated¥ 141,810
2,113
143,923
123,360¥ 20,563—¥ (2,113)(2,113)(1,901)¥ (212)¥ 141,810—
141,810
121,459
20,351(1,467)¥ 18,884¥4,180,151
20,025379
18,789¥(38,563)
(19)
—
(15)

¥4,141,588
20,006379
18,774

Elimination/Corporate

Consolidated$ 1,177,695
18,5181,196,213
1,345,597$ (149,384)—$ (18,518)(18,518)(18,396)$(122)$ 1,177,695—
1,177,695
1,327,201(149,506)(428)$ (149,934)$42,925,501
54,311
275
17,510$(411,849)
1,395
—
1,161

$42,513,652
55,706275
18,671(a) Income
Ordinary income:(1) Outside customers ...............................................
(2) Intersegment transactions....................................
Total .............................................................
Ordinary expenses ....................................................
Ordinary (loss) profit .....................................
Other income and expenses–net ................................
Loss before income taxes and minority interests ..............

¥(b) Assets, depreciation and capital expenditures:
Assets .................................................................
Depreciation .......................................................
Impairment loss on long-lived assets ...................
Capital expenditures ...........................................
2008

Millions of Yen
Other*Total(a) Income
Ordinary income:(1) Outside customers ...............................................
(2) Intersegment transactions....................................
Total .............................................................
Ordinary expenses ....................................................
Ordinary profit ..............................................
Other income and expenses–net ................................
Income before income taxes and minority interests.........

(b) Assets, depreciation and capital expenditures:
Assets .................................................................
Depreciation .......................................................
Impairment loss on long-lived assets ...................
Capital expenditures ...........................................
2009

Thousands of U.S. Dollars
Other*Total(a) Income
Ordinary income:(1) Outside customers ...............................................
(2) Intersegment transactions....................................
Total .............................................................
Ordinary expenses ....................................................
Ordinary (loss) profit .....................................
Other income and expenses–net ................................
Loss before income taxes and minority interests ..............

$(b) Assets, depreciation and capital expenditures:
Assets .................................................................
Depreciation .......................................................
Impairment loss on long-lived assets ...................
Capital expenditures ...........................................

$42,000,020
52,031275
15,606*Other includes business segments of credit cards, computer services and credit guarantees.

Note:1) As discussed in Note 2.k, effective April 1, 2008, the Company applied
ASBJ statement No.13, “Accounting Standard for Lease Transactions.”
The effect of this change was to increase ordinary profit by ¥106 million($1,079 thousand) and decrease depreciation by ¥12,781 million ($130,113
thousand) in the Lease segment for the year ended March 31, 2009.
2) As discussed in Note 2.d, carrying amounts of government bonds withfloating interest classified as available-for-sale securities were stated at reasonable estimate amount. The effect of this treatment was to increase assetsof Banking by ¥1,521 million ($15,484 thousand) at March 31, 2009.

Ordinary income represents total income less certain special income included
in other income in the accompanying consolidated statements of income.
Ordinary expenses represent total expenses less certain special
expenses included in other expenses in the accompanying consolidated
statements of income.
The Group operates only in Japan for the years ended March 31, 2009
and 2008.
Accordingly, the figures for ordinary income and assets by geographical segment for the Group were not presented.
Ordinary income from overseas operations was not presented herein as
it was less than 10% of consolidated ordinary income for the years ended
March 31, 2009 and 2008.
THE JUROKU BANK, LTD.

28

Annual Report 2009

Non-Consolidated Six-Year Summary (Unaudit)
The Juroku Bank, Ltd.
Years Ended March 31(Supplemental Information)

2009

2008

Millions of Yen
2007
2006

2005

2004

95,288 ¥
72,522
22,766
9,089
13,677 ¥83,542 ¥62,51321,029
9,467
11,562 ¥86,69069,396
17,294
7,294
10,000For the Year

Total income ................................
Total expenses ..............................
(Loss) income before income taxes ...
Total income taxes........................
Net (loss) income ..........................

¥

90,414 ¥ 116,391 ¥
107,131
98,819(16,717)
17,572(7,171)
7,214¥(9,546) ¥ 10,358 ¥

89,491 ¥65,60023,891
8,439
15,452 ¥At Year-End
Assets:Trading securities .........................
Securities ......................................
Loans and bills discounted ............
Foreign exchanges ........................
Other ...........................................
Total assets...........................

¥

1,666 ¥
1,514 ¥
3,042 ¥
2,898 ¥
2,031 ¥
1,947
844,836852,504 1,008,292 1,075,252
966,978
976,246
3,056,008 2,909,033 2,822,570 2,724,546 2,640,424 2,564,532
3,909
4,613
3,361
11,305
3,829
3,375
219,115
322,892
298,191
261,179
332,309
370,755¥4,125,534 ¥4,090,556 ¥4,135,456 ¥4,075,180 ¥3,945,571 ¥3,916,855

Liabilities:

Deposits .......................................
Foreign exchanges ........................
Other ...........................................
Total liabilities.....................

¥3,745,652 ¥3,639,608 ¥3,624,885 ¥3,497,563 ¥3,534,395 ¥3,511,491
575
737
738
560
948
298
198,559
228,491
242,111
325,796
212,087
219,792
3,944,786 3,868,836 3,867,734 3,823,919 3,747,430 3,731,581

Equity:Common stock .............................
Capital surplus and earnings .........
Total equity .........................
Total liabilities and equity ...

36,83936,83936,83936,83936,83936,839143,909
184,881
230,883
214,422
161,302148,435
180,748
221,720
267,722251,261
198,141
185,274¥4,125,534 ¥4,090,556 ¥4,135,456 ¥4,075,180 ¥3,945,571 ¥3,916,855

THE JUROKU BANK, LTD.

29

Annual Report 2009

Non-Consolidated Balance Sheets
The Juroku Bank, Ltd.
March 31, 2009 and 2008
(Supplemental Information)

Millions of Yen
2009
2008

Thousands of
U.S. Dollars
2009¥ 101,448 ¥ 194,060
—
158
1,666
1,514
—
4,000
844,836852,504
3,056,008
2,909,033
47,391
67,36564,21965,371
8,066
10,81731,187
6,968
26,02029,088(55,307)(50,322)¥4,125,534 ¥4,090,556$ 1,032,760—
16,960—8,600,590
31,110,740
482,449
653,762
82,113
317,490
264,889(563,036)$41,998,717¥3,745,652
23,22825,982
15,04821,92930,00037,4491,375
7,699
10,40326,021
3,944,786¥3,639,608
28,23733,063—18,00030,00071,564
1,438
7,414
10,42429,0883,868,836$38,131,447
236,465
264,502
153,191
223,241
305,406
381,238
13,99878,377
105,904
264,899
40,158,668

36,83936,839375,028

25,367—25,367
5258,241—

20,155
20,15583,324
95,3983,880
32,716
12,69912,729(1,516)(1,489)180,748
221,720¥4,125,534 ¥4,090,556

205,182
848,254
39,499129,278(15,433)
1,840,049$41,998,717

ASSETS:Cash and due from banks ..........................................................
Call loans..................................................................................
Trading securities ....................................................................
Money held in trust ..................................................................
Securities ..................................................................................
Loans and bills discounted ........................................................
Other assets .............................................................................
Premises and equipment ...........................................................
Intangible assets .......................................................................
Deferred tax assets ....................................................................
Customers’ liabilities for acceptances and guarantees ...............
Reserve for possible loan losses ...................................................
Total Assets ......................................................................
LIABILITIES AND EQUITY:
Liabilities:

Deposits ...................................................................................
Negotiable certificates of deposit ..............................................
Call money ...............................................................................
Payables under securities lending transactions ..........................
Borrowed money .....................................................................
Bonds .......................................................................................
Other liabilities .......................................................................
Accrued bonuses .......................................................................
Liability for retirement benefits ................................................
Deferred tax liabilities for land revaluation surplus ...................
Acceptances and guarantees ......................................................
Total Liabilities ................................................................
Commitments and Contingent Liabilities
Equity:Common stock .........................................................................
Capital surplus:
Additional paid-in capital......................................................
Other capital surplus .............................................................
Retained earnings:
Legal reserve ..........................................................................
Unappropriated .....................................................................
Unrealized gain on available-for-sale securities .........................
Land revaluation surplus ...........................................................
Treasury stock—at cost ............................................................
Total Equity .....................................................................
Total Liabilities and Equity ..............................................

THE JUROKU BANK, LTD.

30

Annual Report 2009

Non-Consolidated Statements of Operations
The Juroku Bank, Ltd.
Years Ended March 31, 2009 and 2008
(Supplemental Information)

Millions of Yen
2009
2008

Thousands of
U.S. Dollars
2009

Income:Interest on:

Loans and discounts ..............................................................
Securities ..............................................................................
Other ...................................................................................
Fees and commissions ...............................................................
Other operating income............................................................
Gain on sales of securities .........................................................
Other income ...........................................................................
Total Income ....................................................................

¥ 60,870
13,309228
11,527
2,122
318
2,040
90,414¥ 60,728
16,091
223
13,531
9,949
14,095
1,774
116,391$ 619,668
135,488
2,321
117,347
21,603
3,237
20,768920,432

10,495
1,455
152
4,422
7,393
49,641
27
33,546
107,131(16,717)

10,156
2,724
668
4,460
6,226
49,5381,301
23,746
98,81917,572

106,841
14,812
1,547
45,01775,262505,355275
341,505
1,090,614(170,182)

67(7,238)(7,171)¥ (9,546)

10,863(3,649)7,214¥ 10,358

682(73,684)(73,002)(97,180)

Expenses:
Interest on:

Deposits ...............................................................................
Borrowings and re-discounts ................................................
Other ...................................................................................
Fees and commissions ...............................................................
Other operating expenses ..........................................................
General and administrative expenses.........................................
Impairment loss on long-lived assets.........................................
Other expenses .........................................................................
Total Expenses .................................................................
(Loss) Income before Income Taxes
Income Taxes:
Current ................................................................................
Deferred ...............................................................................
Total Income Taxes ..........................................................
Net (Loss) Income ..................................................................

THE JUROKU BANK, LTD.

31

Annual Report 2009$

Non-Consolidated Statements of Changes in Equity
The Juroku Bank, Ltd.
Years Ended March 31, 2009 and 2008
(Supplemental Information)
Thousands

Millions of Yen

CommonStockCapital Surplus
Additional
Other
Paid-in
CapitalCapitalSurplus

Legal
Reserve

364,590¥36,839¥25,367¥ 4¥20,155¥87,733¥86,087

—

—

—

—

—

10,358—Cash dividends, ¥8.00 per share.........

—

—

—

—

—

(2,917)——

Transfer of land revaluation surplus ...

—

—

—

—

—

224

—

—

Purchase of treasury stock ..................

(180)

—

—

—

—

—

—

—

Disposal of treasury stock ..................

22

—

—

1

—

—

—

—

Net change in the year.......................

—

—

—

—

—

—

(53,371)¥ 37

Balance at March 31, 2008..............

364,432

36,83925,367

5

20,155

95,39832,716Net loss .............................................

—

—

—

—

—

(9,546)—

Cash dividends, ¥7.00 per share.........

—

—

—

—

—

(2,550)——Transfer of land revaluation surplus ...

—

—

—

—

—

30

—

—

Purchase of treasury stock ..................

(155)

—

—

—

—

—

—

—

Disposal of treasury stock ..................

67

—

—

¥ (5)

—

(8)

—

—

Outstanding
Number of
Shares ofCommon Stock

Balance at April 1, 2007 .................
Net income .......................................

Retained Earnings

Deferred Loss
Unrealized Gain onon
Available-for-Sale Derivatives under
Unappropriated
Securities
Hedge Accounting

Land
Revaluation
SurplusTreasury
Stock

Total
Equity¥(37)¥12,953¥(1,379)¥267,722———

10,358——(2,917)

—

—

224

—

(123)

(123)

—

13

14

(224)

—

(53,558)—

12,729

(1,489)221,720———(9,546)——(2,550)

—

—

30

—

(68)

(68)

—

41

28

Net change in the year.......................

—

—

—

—

—

—

(28,836)

—

(30)

—

(28,866)

Balance at March 31, 2009..............

364,344¥36,839¥25,367—¥20,155¥83,324¥ 3,880—¥12,699¥(1,516)¥180,748

CommonStockCapital Surplus
Additional
Other
Paid-in
CapitalCapitalSurplus

Land
Revaluation
SurplusTreasury
Stock

Total
EquityThousands of U.S. Dollars

Balance at March 31, 2008...............................

$375,028 $258,241$ 51

Retained Earnings
Legal
Reserve

Deferred Loss
Unrealized Gain onon
Available-for-Sale Derivatives under
Securities
Hedge Accounting
Unappropriated$205,182 $971,170 $333,055—$129,583
—

—

—

—

—

(97,180)

Cash dividends, $0.07 per share..........................

—

—

—

—

(25,960)——

Transfer of land revaluation surplus ....................

—

—

—

—

305

—

—

Purchase of treasury stock ...................................

—

—

—

—

—

—

—

Disposal of treasury stock ...................................

—

—

$(51)

—

(81)

—

—

—

—

—

Net change in the year........................................
Balance at March 31, 2009...............................

——Net loss ..............................................................

$(15,158) $2,257,152—(97,180)——(25,960)

—

—

305

—

(692)

(692)

—

417

285

—

(293,861)——(293,556)

—

(305)

$375,028 $258,241—$205,182 $848,254 $ 39,499—$129,278

THE JUROKU BANK, LTD.

32

Annual Report 2009$(15,433) $1,840,049

Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORTTo the Board of Directors of The Juroku Bank, Ltd.:We have audited the accompanying consolidated balance sheets of The Juroku Bank, Ltd. (the “Bank”) and consolidated
subsidiaries as of March 31, 2009 and 2008, and the related consolidated statements of operations, changes in equity, andcash flows for the years then ended, all expressed in Japanese yen. These consolidated financial statements are the responsibility of the Bank’s management. Our responsibility is to express an opinion on these consolidated financial statements based on
our audits.
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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis forour opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated
financial position of the Bank and consolidated subsidiaries as of March 31, 2009 and 2008, and the consolidated results of
their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted inJapan.
Our audit was conducted for the purpose of forming an opinion on the basic 2009 and 2008 consolidated financial statements taken as a whole. The supplemental non-consolidated financial information which includes a non-consolidated balance
sheets as of March 31, 2009 and 2008, and non-consolidated statements of operations and changes in equity for the years
then ended and omits related footnote disclosure, is presented for the purpose of additional analysis and is not a required partof the basic consolidated financial statements. The non-consolidated financial information is the responsibility of the Bank’s
management. Such non-consolidated financial information for the years ended March 31, 2009 and 2008 has been subjected
to our audit of the basic consolidated financial statements for the years then ended and, in our opinion, is fairly stated in allmaterial respects when considered in relation to the basic consolidated financial statements taken as a whole.
As discussed in Note 2.k to the consolidated financial statements, effective April 1, 2008, the Bank applied the new accounting standard for lease transactions.
Our audits also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, suchtranslation has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely forthe convenience of readers outside Japan.

June 19, 2009

THE JUROKU BANK, LTD.

33

Annual Report 2009

Corporate Data(as of March 31, 2009)

Date of Establishment:
October 10, 1877
Authorized Shares:
460,000 thousand shares
Shares of Common Stock Issued andOutstanding:
366,855 thousand shares
Stock Listed:
First Sections of the Tokyo andNagoya Stock Exchanges
Paid-in Capital:¥36,839 million
Number of Shareholders:
11,669Number of Employees:
2,896

10 Principal Shareholders:
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Japan Trustee Services Bank, Ltd.
(Held in trust account)
NIPPONKOA Insurance Co., Ltd.
Meiji Yasuda Life Insurance Company
Japan Trustee Services Bank, Ltd.
(Held in trust account 4G)
Tokio Marine and Nichido Fire Insurance Co., Ltd.
Fuji Baking Co., Ltd.
Mizuho Corporate Bank, Ltd.
The Juroku Bank Employee Shareholders’
Association
Mitsubishi UFJ Trust and Banking Corporation

Affiliates(as of March 31, 2009)

Business Lines

Established

Capital(¥ Millions)

EquityStake*

Juroku Business Service Co., Ltd.

Clerical work service

Jan. 197910

100

Juroku DC Card Co., Ltd.

Credit card flotation service

Aug. 1982

50

5

Juroku JCB Co., Ltd.

Credit card flotation service

Nov. 1994

50

5

Juroku Lease Co., Ltd.

Leasing service

Mar. 1975

102

5

Juroku Computer Service Co., Ltd.

Computer system development service

Aug. 1985

245

5

Juroku Credit Guarantee Co., Ltd.

Credit guaranty service

May 1979

50

3

Juroku Capital Co., Ltd.

Investment and finance service

Apr. 1984

108

5

Name

* Voting rights held by the Bank as a percentage of total voting rights

THE JUROKU BANK, LTD.

34

Annual Report 2009

Directory(as of July 06, 2009)

Head Office

Takayama Branch

Branches Handling
Foreign Exchange
Business

8-26, Kandamachi, Gifu-shi,
Gifu 500-8516, Japan
Telephone: +81-58-265-2111(18 Offices)

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

International and Securities Division

Head Office

Ichinomiya 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
Akinori Sasaki

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

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

Overseas Network
Hong Kong Representative Office

Yanagase Branch

Suite 3307, Two Exchange Square,
8 Connaught Place, Central,
Hong Kong
Telephone: +852-2526-5716
Facsimile: +852-2810-6261
Chief Representative
Yoshitaka Masuda
Shanghai Representative Office
18th Floor, HSBC 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
Masahiro Furuike

Nagara Branch

Nagoya Ekimae Branch

1643-5, Nagarafukumitsu,
Gifu-shi, Gifu
Telephone: +81-58-232-1611

3-28-12, Meieki,
Nakamura-ku, Nagoya-shi, Aichi
Telephone: +81-52-561-5431
Nagoya Branch

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

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

Toiyamachi Branch

Ozone Branch

3-38, Toiyamachi, Gifu-shi, Gifu
Telephone: +81-58-262-2111

1-19-16, Ozone, Kita-ku,
Nagoya-shi, Aichi
Telephone: +81-52-911-6116

Kakamigahara Branch
1, Higashinakacho,Naka, Kakamigahara-shi, Gifu
Telephone: +81-58-383-1600

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

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

Kariya Branch

Seki Branch

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

1-4, Honmachi, Seki-shi, Gifu
Telephone: +81-575-22-2016

Osaka Branch

Tajimi Branch

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

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

Tokyo Branch

Nakatsugawa Branch
2-5-1, Ootamachi, Nakatsugawa-shi, Gifu
Telephone: +81-573-65-3116

4-1-10, Nihombashi Honcho,
Chuo-ku, Tokyo
Telephone: +81-3-3242-1661

Gifu Prefecture (107)ShanghaiHong Kong

Tokyo Branch
Aichi Prefecture (39)
Osaka Branch

THE JUROKU BANK, LTD.

35

Annual Report 2009

Total 148 Domestic Offices

http://www.juroku.co.jp/