The transactions pursuant to the joint share transfer described in this press release involve securities of a Japanese company. The
joint share transfer is subject to disclosure requirements of Japan that are different from those of the United States. Financial
information included in this document, if any, was excerpted from financial statements prepared in accordance with foreign
accounting standards that may not be comparable to the financial statements of United States companies.
It may be difficult for you to enforce your rights and any claim you may have arising under the U.S. federal securities laws, since
the issuer is located in Japan and some or all of its officers and directors reside outside of the United States. You may not be able
to sue a Japanese company or its officers or directors in a Japanese court for violations of the U.S. securities laws. It may bedifficult to compel a Japanese company and its affiliates to subject themselves to a U.S. court’s judgment. You should be awarethat the issuer may purchase securities otherwise than under the joint share transfer, such as in the open market or throughprivately negotiated purchases.
This document has been translated from the Japanese-language original for reference purposes only. In the event of any conflict or
discrepancy between this document and the Japanese-language original, the Japanese-language original shall prevail in all
respects.

May 11, 2022
To Whom It May Concern
Company Name

The Aichi Bank, Ltd.

Representative Name

Yukinori Ito, President(Code: 8527, Tokyo Stock Exchange Prime,
Nagoya Stock Exchange Premier)

Company Name

The Chukyo Bank, Limited

Representative Name

Hideo Kobayashi, President(Code: 8530, Tokyo Stock Exchange Prime,
Nagoya Stock Exchange Premier)

Notice Regarding the Execution of the Definitive Agreement on Establishment of a Joint Holding Company by The
Aichi Bank, Ltd. and The Chukyo Bank, Limited (Joint Share Transfer), Development of a Share Transfer Plan,
and Dividend of Surplus (Special Dividend)

The Aichi Bank, Ltd. (President: Yukinori Ito, hereinafter “Aichi Bank”) and The Chukyo Bank, Limited (President:
Hideo Kobayashi, hereinafter “Chukyo Bank”, with both Aichi Bank and Chukyo Bank jointly referred to as the “Banks”),
in accordance with a basic agreement (hereinafter the “Basic Agreement”), as a result of the Board of Directors meetings
held at each Bank as of the present date, and assuming the approval of the Banks’ general meetings of shareholders, theacquisition of permission from relevant authorities, and MUFG Bank, Ltd. (hereinafter “MUFG Bank”) tendering all of its
8,534,385 Chukyo Bank Shares to the Treasury Stock Tender Offer (defined in 2. below), thereby legally completing thesettlement of the Treasury Stock Tender Offer, the Banks have both resolved to form the “Aichi Financial Group, Inc.”(hereinafter the “Joint Holding Company”), which would function as the parent company to which the Banks will become
wholly owned subsidiaries, via a joint share transfer method on October 3, 2022 (hereinafter the “Share Transfer”), on theoverview of the Joint Holding Company, as well as on the terms and conditions of the Share Transfer. Both Banks having
executed a business integration agreement (hereinafter the “Business Integration Agreement”), and jointly developed ashare transfer plan as of today, and therefore announce each as follows.
1

I． Business Integration
1. Overview of Business Integration(1) History of Business Integration
Aichi Bank and Chukyo Bank, as local financial institutions with their main branches located in Aichi Prefecture,
which is a center for a variety of industries, have fulfilled their social missions and built solid operation bases with thesupport from local residents.
With recent changes in industrial structures and social environments nationwide such as environmental problems andthe post-COVID-19 environment, in the Aichi Prefecture and the surrounding Tokai area in which the Banks operate (the“Region”), customer needs are becoming more sophisticated and diversified as the management issues of businesscustomers and the lifestyles of individual customers change and the Banks believe they are at a turning point in terms of
expanding their business opportunities with increased missions and roles as local financial institutions. While the market
is becoming increasingly competitive with new entrants in the financial area from different industries such as fintech
companies, the Banks are required to develop new financial businesses that can be the primary source of revenue, notjust as competitors of those new entrants, but by establishing business alliances that utilize their respective technologies
and operating bases and by effectively taking advantage of deregulation under the Banking Act, thereby building asustainable profit base and contributing to the local community as local financial institutions.
Being aware of such management environment and issues and continuing to respond to the expectations of local
residents while the competition with other financial institutions including those in adjacent prefectures intensifies in thefertile market of the Region, which is expected to expand, the Banks decided that the best option to contribute to thedevelopment of their stakeholders is to utilize the management resources and strengths of the Banks that have built theiroperation bases in the Region over many years, achieve business integration between urban financial institutions,enhance their competitive edge by displaying an outstanding presence, and continue providing advanced financial
services.
As they have already announced through the December 10, 2021 press release entitled “Notice Regarding Basic
Agreement on Business Integration between The Aichi Bank, Ltd. and The Chukyo Bank, Limited,” both Banks havebeen advancing deliberations and considerations in anticipation of a business integration (hereinafter the “Business
Integration”), which will proceed under a basic policy of the formation of a joint holding company, targeted for October
3, 2022, via the Share Transfer, and a future merger of both Banks under the Joint Holding Company, and today the
Banks have reached a definitive agreement regarding this Business Integration.
The Banks intend to apply for new listings for the to-be-founded Joint Holding Company on the Prime Market of theTokyo Stock Exchange, Inc. (hereinafter the “Tokyo Stock Exchange”), and the Premier Market of the Nagoya Stock
Exchange, Inc. (hereinafter the “Nagoya Stock Exchange”). The planned listing date is October 3, 2022. Furthermore, asboth Banks will be the wholly-owned subsidiaries of the Joint Holding Company via the Share Transfer, they are plannedfor de-listing from the Tokyo Stock Exchange and the Nagoya Stock Exchange on September 29, 2022, ahead of theeffective date of the Share Transfer. Note that the final decisions regarding the listing date of the Joint Holding Company
and the de-listing dates of the Banks will be made in accordance with the bylaws of the Tokyo Stock Exchange and the
Nagoya Stock Exchange.
Furthermore, in order to maximize the effects of integration, the Banks will be operating under a basic policy ofachieving a merger of the Banks in approximately two years after the effective date of the Share Transfer, and areengaging in deliberations and considerations to integrate core systems and clerical processing standards to those of thecore system and clerical processing standards of Aichi Bank at a timing that coincides with the merger.
Note, in accordance with the provisions of Article 15-3(2) of the Act on Prohibition of Private Monopolization and
Maintenance of Fair Trade, the Fair Trade Commission has been notified of the Business Integration as of February 9,2022, and the Banks received notice from the FTC on March 2, 2022 that it would not implementing a cease and desist
order.
(2) Corporate Philosophy and Post-Business Integration Policies of the New Financial Group2

The new financial group centered on the Joint Holding Company will be operated under the “VISION” management
vision, which is itself defined by three separate elements: “PURPOSE,” “MISSION,” and “VALUE.”
The “VISION” management vision indicates the ideal state (values, ideals, dreams, beliefs) of this new financialgroup to all group employees and officers, and will function as a clear guideline for making a variety of different
decisions.
By sharing this “VISION” management vision throughout the organization as a whole, the group will enhance themotivation of its employees and officers, develop a sense of organizational unity, and utilize it as a major source of
motivational power for our endeavors.
<Positioning of Each Element>
The element of “PURPOSE” will comprise the core of the “VISION” management vision, and will serve as thefundamental guiding principal defining the very existence of this financial group.
The element of “MISSION” indicates the specific goals to be achieved by all of the group’s employees and officers,
working as one, in realizing the “PURPOSE.”
The element of “VALUE” helps define the shared values that propel the group toward its “PURPOSE,” and is avow made by all officers and employees to the financial group's stakeholders.
<Details of Each Element>“PURPOSE”: Contributing to the prosperity of the local community via financial services“MISSION”: To become the No. 1 regional financial group in Aichi Prefecture“VALUE”:(1) To establish robust management and a solid business foundation(2) To become a financial group that is trusted by the local community(3) To provide financial services that are useful to all customers(4) To make employees happy via the implementation of ES and health management(5) To continuously grow and improve corporate value to remain an attractive corporation

The financial group will endeavor to realize the following objectives for the future to enhance their corporate value
and respond to the expectations of their stakeholders by aiming to respond to the changing business environment throughenhancement of stable operation base and increase of profitability by taking advantage of the fact that the Business
Integration will allow the financial group to increase its market share and to inject additional resources, and also to build
a sustainable business model.
(1) Contribute to the prosperity of the local economy
By taking advantage of their respective strengths, the Banks will contribute to the realization of a sustainable local
community in a proactive and sustainable manner through the provision of the highest standard of financial services asa financial group with a presence in the Region.
(2) Respond to increasingly sophisticated and diversified customer needs
By utilizing each other’s personnel, information, and knowhow and maximizing the synergy effect of the Business
Integration, the Banks will build a consulting solution-oriented business model to a level that cannot be achieved
independently and make every effort to respond to the increasingly sophisticated and diversified needs of theircustomers.
(3) Establish a corporate atmosphere where personnel are highly motivated to take on new challenges
By promoting prompt harmonization among the officers and employees of the Banks and providing opportunities for
those personnel to participate even more actively, the Banks will motivate employees and build a vibrant corporate
climate where personnel are motivated to take on new challenges.
(4) Optimally invest managerial resources
By promoting efficiency and rationalization through optimal investment of their management resources, the Banks
3

will build a solid operation base that will be popular with customers and trusted by the local community more than ever.
(5) Realize maximum integration effect
The Banks will promote mutual exchanges of personnel, reorganization of stores, system integration, reorganizationof affiliate companies, and standardization of operations to maximize the synergy effects.
(3) Synergistic effects expected from the Business Integration
To realize an integration effect promptly after the integration, the financial group will collaborate with each other andconsider specific measures based on the following synergy effects to draw a dynamic growth curve as a financial groupwith a presence in the Region.
(1) Establishment of a consulting and solutions business model
In the Region, where further growth is expected, the Banks will integrate their good relationship with customers,
knowhow and networks, strengthen their consulting functions, work towards the joint development of new products
and services, and enhance their solutions, thereby establishing a business model to make a concerted effort as a group
to continue to respond to the increasingly sophisticated and diversified needs of their customers.
For business customers, the Banks will utilize their relationships with those customers and support those customers
through business feasibility assessments and other dialogues, and provide advanced solutions by making proposals on
matters such as business matching, business succession, and M&As.
For individual customers, the Banks will enhance non-face-to-face channels and make proposals, tailored to eachcustomer’s life stage, based on their knowhow on matters such as long-term asset building by housing loans, asset
management, and savings for retirement to deal with lifestyle changes due to increased convenience, the declining
birthrate and aging population.
For local residents, the Banks will take advantage of their networks to provide useful and timely information andcooperate in efforts to achieve SDGs in the local community, thereby contributing to the realization of a sustainable
society.
(2) Cultivation of diverse human resources
The Bank will allocate personnel based on the principle of fair and equitable treatment and placing the right people
in the right jobs regardless of which bank that person is from, promptly promote personnel exchanges by, for example,
mutually dispatching people to their areas of strength, establish an optimal and efficient system for the personnel
system and compensation system, create a new corporate atmosphere with a diverse range of people by combining
their knowledge and developing highly specialized personnel, thereby contributing to the development of the region.
(3) Optimization and streamlining of management
The Banks will work to improve operational efficiency that can only be achieved through the business integration
between financial institutions located in the urban area, such as the optimization of stores and sales offices withoverlapping headquarters, organizations and functions and subsidiaries with overlapping lines of business, thestandardization of systems and administrative procedures, and the digitalization of operations, and focus personnel
and other management resources obtained as a result of those efforts on growth areas to improve the convenience forcustomers, enhance advanced solutions, and strengthen consulting functions.
2. Treasury Stock Tender Offer
Chukyo Bank executed a treasury stock tender offer application agreement (hereinafter the “Treasury Stock Tender
Offer Application Agreement”) with MUFG Bank, on the presumption that positive and collaborative relationships
would continue between MUFG Bank, Chukyo Bank, Aichi Bank, and the Joint Holding Company, and, in accordancewith this Treasury Stock Tender Offer Application Agreement, implemented a tender offer with respect to Chukyo Bank
shares (hereinafter the “Treasury Stock Tender Offer”), and MUFG Bank has agreed to tender all 8,534,385 Chukyo
Bank shares it owns to this Treasury Stock Tender Offer. The conditions of the Treasury Stock Tender Offer are aslargely as described in the table below, but for details regarding the Treasury Stock Tender Offer, Chukyo Bank’s
4

decision-making process behind the Treasury Stock Tender Offer, and the measures implemented by Chukyo Bank toensure the fairness of the Treasury Stock Tender Offer, please see the “Notice Regarding the Acquisition of Treasury
Stock and the Planned Start of a Treasury Stock Tender Offer” published today by Chukyo Bank (hereinafter the“Treasury Stock Tender Offer Press Release”).
1

Tender Offeror

Chukyo Bank

2

Target share certificates, etc.

Chukyo Bank common shares

3

Tender Offer Price

1,195 yen per Chukyo Bank common share
The 21 business day period from July 1, 2022 to August 1, 2022 (or the4

Tender Offer Period

applicable period of extension in the event Chukyo Bank extends theperiod in accordance with applicable laws and regulations)

5
6

Minimum number of shares

Nonescheduled to be purchased
Maximum number of shares

8,534,385 shares

scheduled to be purchased
As set forth in the Tender Offer Report by Chukyo Bank pertaining to theTreasury Stock Tender Offer, within the scope set forth in Article 27-11(1)7Withdrawal Eventof the Financial Instruments and Exchange Act (Act No. 25 of April 13,
1948, including subsequent amendments; hereinafter the “Act”), as
applied through Article 27-22-2(2) of the same Act.

3. Summary of the Share Transfer(1) Schedule of the Share Transfer
Friday, December 10, 2021

Execution of the Basic Agreement (Both Banks)

Wednesday, March 2, 2022

Receipt of notice by the FTC that no cease and desist order will be
issuedThursday, March 31, 2022

Record date pertaining to the ordinary general meeting of shareholders(Both Banks)

Wednesday, May 11, 2022 (Today)

Board of directors meetings resolutions regarding the execution of theBusiness Integration Agreement, and the execution of the Business
Integration Agreement (Both Banks)
Board of directors meetings resolutions regarding the development of
the Share Transfer plan, and the development of the Share Transfer plan
(Both Banks)
Board of directors meeting resolution regarding the execution of theTreasury Stock Tender Offer Application Agreement, and execution of
the Treasury Stock Tender Offer Application Agreement (Chukyo
Bank)

Friday, June 24, 2022 (Planned)
Thursday,

September

29,

Holding of ordinary general meeting of shareholders (Both Banks)
2022(Planned)
Before Friday, September 30, 2022
(Planned)
Friday, September 30, 2022 (Planned)

Tokyo Stock Exchange and Nagoya Stock Exchange de-listing date
(Both Banks)
Start date of Treasury Stock Tender Offer settlement
Record date of interim dividend for both Banks (including Special
Dividend by Chukyo Bank)

Monday, October 3, 2022 (Planned)

Establishment date of Joint Holding Company (effective date of Share
Transfer)5

Listing date for shares of Joint Holding Company(Note 1)The schedule is subject to change by agreement between the Banks as future procedures are being conducted
where necessary to advance the Share Transfer, or for other reasons where necessary.

(Note 2)For details regarding the Special Dividend by Chukyo Bank, see “II. Dividend of Surplus (Special Dividend)”
below.

(2) Method of Share Transfer
The Share Transfer will involve conversion of both Banks into wholly-owned subsidiaries in share transfer, with the
newly founded Joint Holding Company acting as the wholly-owning parent company in the share transfer.
(3) Details of Allocation Pertaining to the Share Transfer (Share Transfer Ratio)
Company Name

Aichi Bank

Chukyo Bank

Share Transfer Ratio

3.33

1

(Note 1) Share allocation ratio

For every common share of Aichi Bank, 3.33 common shares of the Joint Holding Company shall be allocated, andfor every common share of Chukyo Bank, 1 common shares of the Joint Holding Company shall be allocated. Note thatthe share unit number for the Joint Holding Company is planned to be 100 shares. The share transfer ratio above, as
described under “(1) Basis and Reasoning for Details of Allocation” of “4. Calculation Basis, etc. of Details for
Allocation Pertaining to the Share Transfer” below, was based on the calculations and analytical results of a third party
valuation institution, the advice of legal advisors, and the results of due diligence performed by each Bank on the other,and was comprehensively decided upon using various factors, such as the market share price of the Banks, theirrespective financial situations, future outlooks, the Treasury Stock Tender Offer to be performed ahead of the Share
Transfer, and the allocation of 141 yen in surplus (prior to deducting the amount of taxes withheld, the same applying
hereinafter) per Chukyo Bank share, as per the shareholder return policy for general shareholders of Chukyo Bank
described in “II. Dividend of Surplus (Special Dividend)” below.
If, as a result of the Share Transfer, shareholders of either Bank must be granted fractions of a share that do not amountto one common share of the Joint Holding Company, in accordance with Article 234 of the Companies Act and otherrelated laws and regulations, shareholders shall be paid an amount equivalent to the value of such fractional sharesamounting to less than one share.
Note that the above share transfer ratio may change by mutual agreement of the Banks following the execution of theBusiness Integration Agreement, but before the effective date of the Share Transfer, in the event major circumstances are
discovered or occur that may have a significant impact on the share transfer ratio.

(Note 2) New shares to be granted by the Joint Holding Company (planned)

Common shares: 49,094,859 shares
The above values were calculated based on the total number of common shares issued by Aichi Bank as of March 31,
2022 (10,943,240 shares), as well as the total number of common shares issued by Chukyo Bank as of March 31, 2022
(21,780,058 shares). However, taking into consideration the fact that Chukyo Bank is planning to acquire as treasury
stock the 8,534,385 common shares owned by MUFG Bank via the Treasury Stock Tender Offer, and that the Joint
Holding Company is to cancel all treasury stock owned by either Bank just before the Joint Holding Company is toacquire all of the issued shares for both Banks (hereinafter the “Basis Period”), the amount of treasury stock for Aichi
Bank as of March 31, 2022 (176,172 shares), the amount of treasury stock for Chukyo Bank as of March 31, 2022 (5,150
shares), as well as the 8,534,385 common shares of Chukyo Bank owned by MUFG Bank that Chukyo Bank plans toacquire via the Treasury Stock Tender Offer, have been excluded as targets for the new share grant described in thecalculation above. Note that, if as a result of the Treasury Stock Tender Offer, shareholders of either Aichi Bank or6

Chukyo Bank exercise their rights to request purchases of shares, or some other event arises before the Basis Period thatchanges the amount of treasury stock applicable to either Bank as of March 31, 2022, this may change the number of
new shares granted by the Joint Holding Company.
(Note 3) Handling of shares constituting less than a unit

Shareholders of either Bank who are to receive allocations through the Share Transfer amounting to less than one unit
(100 shares) of the common shares of the Joint Holding Company (hereinafter “Fractional Shares”) may not sell their
Fractional Shares on the Tokyo Stock Exchange, the Nagoya Stock Exchange, or any other financial instruments
exchange. Shareholders who hold such Fractional Shares may, in accordance with the provisions of Article 192(1) of theCompanies Act, demand that the Joint Holding Company purchase such Fractional Shares. Furthermore, in accordancewith the provisions of Article 194(1) of the Companies Act, and the articles of incorporation of the Joint Holding
Company, the Banks plan to enable shareholders to demand that the Joint Holding Company sell to them fractional
shares of the Joint Holding Company equivalent to those fractional shares said shareholders already possess.
(4) Handling of the rights to subscribe for new shares and bonds with rights to subscribe for new sharesWith respect to any rights to subscribe for new shares issued by Aichi Bank and Chukyo Bank, at the time of the Share
Transfer, parties with rights to subscribe for new shares for either Bank will be allocated rights to subscribe for new
shares applicable to the Joint Holding Company in accordance with the details of such rights and the share transfer ratio,
and in accordance with the rights to subscribe for new shares applicable at the Basis Period. Note, neither Bank has
issued bonds with rights to subscribe for new shares.
4. Calculation Basis, etc. of Details for Allocation Pertaining to the Share Transfer(1) Basis and reasons for details of allocation
As described in “1. (1) History and Purpose of Business Integration” above, on December 10, 2021 the Banks enteredinto the Basic Agreement to advance consultations and considerations toward a business integration, and established a
General Preparation Committee to advance consultations and considerations toward the Business Integration, with a(planned) effective date for the Share Transfer of October 3, 2022.
As described in “(4) Measures to Ensure Fairness” below, in order to ensure the fairness of the consideration for the
Share Transfer, as well as other elements related to the fairness of the Share Transfer, Aichi Bank appointed Mizuho
Securities Co., Ltd. (hereinafter “Mizuho Securities”) as its third party valuation institution, and Mori Hamada &Matsumoto as its legal advisor in starting its considerations regarding the Share Transfer, and, as a result of careful
deliberations and considerations based on third party valuation institution Mizuho Securities’ share transfer ratio
calculation report received on May 10, 2022, and the legal advice of legal advisor Mori Hamada & Matsumoto, Aichi
Bank determined that it would be appropriate to conduct the Share Transfer in accordance with the share transfer ratio
described in “3. (3) Details of Allocation Pertaining to the Share Transfer (Share Transfer Ratio).”
On the other hand, as described in “(4) Measures to Ensure Fairness” below, in order to ensure the fairness of theconsideration for the Share Transfer, as well as other elements related to the fairness of the Share Transfer, Chukyo Bank
appointed Nomura Securities Co., Ltd. (hereinafter “Nomura Securities”) as its third party valuation institution, andAnderson Mori & Tomotsune Law Office Joint Foreign Law Business (hereinafter Anderson Mori & Tomotsune) as its
legal advisor in starting its considerations regarding the Share Transfer, and, as a result of careful deliberations andconsiderations based on third party valuation institution Nomura Securities’ share transfer ratio calculation report
received on May 10, 2022, and the legal advice of legal advisor Anderson Mori & Tomotsune, Chukyo Bank determinedthat it would be appropriate to conduct the Share Transfer in accordance with the share transfer ratio described in “3. (3)Details of Allocation Pertaining to the Share Transfer (Share Transfer Ratio).”
In this way, after taking into consideration the results of calculations and analyses by their respective third party
valuation institutions, the advice of their legal advisors, and the results of due diligence performed by each Bank withrespect to the other, both Banks determined, through comprehensive examinations of various factors such as the market
share prices, financial conditions, and future outlooks of both Banks, the Treasury Stock Tender Offer to be performed7ahead of the Share Transfer, and the Special Dividend, and repeated careful discussions regarding the share transfer ratio,that the share transfer ratio ultimately described in “3. (3) Details of Allocation Pertaining to the Share Transfer (Share
Transfer Ratio)” was appropriate, and decided and agreed upon said ratio during each Bank’s respective board of
directors meetings held today.
(2) Matters Regarding the Valuation(1) Name of the valuation institution and relationship to the Banks
Neither Mizuho Securities, Aichi Bank’s financial advisor (third party valuation institution) nor Nomura Securities,
Chukyo Bank’s financial advisor (third party valuation institution) constitute related parties to either Aichi Bank or
Chukyo Bank, neither do they possess any noteworthy conflicts of interests with respect to the Share Transfer.
(2) Overview of the calculation
In order to ensure fairness in calculating the share transfer ratio utilized for this Share Transfer, Aichi Bank
appointed Mizuho Securities as its third party valuation institution, Chukyo Bank appointed Nomura Securities as its
third party valuation institution, and each Bank requested that their respective valuation institutions calculate andanalyze the share transfer ratio.
In calculating the share transfer ratio for both Banks, Mizuho Securities took into consideration the effects of theTreasury Stock Tender Offer and the Special Dividend, performed calculations using the historical reference shareprice analysis based on the fact that both Banks are listed on the Tokyo Stock Exchange Prime Market and the
Nagoya Stock Exchange Premier Market and thus have market share prices, performed calculations using thecomparable companies analysis based on the fact that multiple companies exist that are comparable to the Banks, thus
making it possible to infer share prices based on comparisons of similar companies, and, in addition, to better reflect
future business activities into the evaluation, performed calculations using the dividend discount model analysis(hereinafter the “DDM analysis”), which is broadly used in evaluating financial institutions by analyzing stock value
by discounting cash flow attributable to shareholders after taking into consideration the internal reserves necessary tomaintain a certain capital structure. The calculation results of each analysis are as follows. The share transfer ratio
calculation range set forth below is the valuation range for the number of Joint Holding Company common shares tobe allocated for each Aichi Bank common share, in the event one Joint Holding Company common share is to beallocated for every common share of Chukyo Bank.
Valuation Range of the Share Transfer

Analysis
１

Ratio

Historical Reference Share Price

2.80 to 2.89

Analysis2Comparable Companies Analysis

2.55 to 3.72

3

DDM Analysis

2.72 to 4.65

Note that, for the historical reference share price analysis, May 10, 2022 (hereinafter the “Reference Date”) was
treated as the basis, and the average was calculated based on closing share price of the Reference Date, and theaverage closing share prices of the week before, the month before, and three months before the Reference Date.
Mizuho Securities, in calculating the share transfer ratio, used information received from both Banks as well as
publicly disclosed information; the materials and information, etc. provided and disclosed were presumed to becorrect, and Mizuho Securities did not independently verify the accuracy or completeness of these materials, etc.
Furthermore, Mizuho Securities has not carried out an independent valuation, appraisal, or assessment of assets or
liabilities (including contingent liabilities) of the Banks their affiliates, including any analysis or valuation ofindividual assets and liabilities, and Mizuho Securities has not requested any action on the part of a third party
organization. Mizuho Securities’ share transfer ratio calculations reflect information and economic conditions
8

applicable to May 10, 2022, and the financial projections of both Banks (including profit plans and otherinformation) were presumed to have been rationally developed by the management of each Bank based on the best
forecasts and judgments available at the present time. Note that Mizuho Securities has not anticipated significant
increases or decreases to profit with respect to the future profit plans for both Banks that formed the basis of the
DDM analysis calculation.
In calculating the share transfer ratio for both Banks, Nomura Securities took into consideration the effects of theTreasury Stock Tender Offer and the Special Dividend, performed calculations using the market share price analysis
based on the fact that both Banks are each listed on the Tokyo Stock Exchange Prime Market and the Nagoya Stock
Exchange Premier Market and thus have market share prices, performed calculations using the comparable
companies analysis based on the fact that multiple companies exist that are comparable to the Banks, thus making it
possible to infer share prices based on comparisons of comparable companies, and, in addition, to better reflect futurebusiness activities into the evaluation, performed calculations using the DDM analysis, which is broadly used in
evaluating financial institutions by analyzing stock value by discounting profit attributable to shareholders after taking
into consideration the internal reserves necessary to maintain a certain capital structure. When one common share of
the Joint Holding Company is to be allocated for each common share of Chukyo Bank under each of the evaluation
analysis, the calculation results for the number of Joint Holding Company shares to be allocated for each commonshare of Aichi Bank are as follows.
Share Transfer Ratio Calculation

Analysis

Results

1

Market Share Price Analysis

2.64 to 3.34

2Comparable Companies Analysis

3.63 to 7.06

3

DDM Analysis

3.10 to 3.67

Note, with respect to the market share price analysis, the day “speculative coverage pertaining to the formation of
the Basic Agreement,” December 2, 2021, was treated as the valuation reference date (hereinafter “Reference Date(1)”), and the following average closing prices were utilized: in addition to the closing price on the Tokyo Stock
Exchange Prime Market for both Banks on Reference Date (1), the average closing price as of the transaction dates
for the five business days before, the month before, three months before, and six months before Reference Date (1).
For a separate valuation reference date, May 10, 2022 (hereinafter “Reference Date (2)”), the following averageclosing prices were utilized: in addition to the closing price on the Tokyo Stock Exchange Prime Market for both
Banks on Reference Date (2), the average closing price as of the transaction dates for the five business days before,
the month before, three months before, and six months before Reference Date (2).
When calculating the share transfer ratio, Nomura Securities assumes that public information and all information
provided to Nomura Securities by both Banks is accurate and complete and Nomura Securities has not independently
verified the accuracy and completeness thereof. Nomura Securities has not carried out an independent valuation,
appraisal, or assessment of assets or liabilities (including derivative products, off-balance sheet assets and liabilities,
and any other contingent liabilities) of the Banks or of their affiliates, including any analysis or valuation of individual
assets and liabilities, and Nomura Securities has not requested any third-party organization to carry out an appraisal orassessment. Nomura Securities’ share transfer ratio calculations reflect information and economic conditions acquiredby Nomura Securities up to May 10, 2022, and the financial projections of both Banks (including profit plans andother information) were presumed to have been rationally developed by the management of each Bank based on thebest forecasts and judgments available at the present time.
The future financial forecasts used as the basis for Nomura Securities’ calculations with respect to both banks under
the DDM analysis did not include any fiscal years anticipating major increases or decreases to profit.

9

(3) Handling of the Joint Holding Company’s listing application
The Banks intend to apply for new listings for the to-be-founded Joint Holding Company for the Prime Market of theTokyo Stock Exchange, and the Premier Market of the Nagoya Stock Exchange. The planned listing date is October 3,
2022.
Furthermore, as both Banks will be the subsidiaries of the joint holding via the Share Transfer, they are planned for delisting from the Tokyo Stock Exchange and the Nagoya Stock Exchange on September 29, 2022, ahead of the listing dateof the Joint Holding Company.
Note that the final decisions regarding the listing date for the shares of the Joint Holding Company and the de-listing
dates of the Banks will be made in accordance with the bylaws of the Tokyo Stock Exchange and the Nagoya Stock
Exchange.
(4) Measures to Ensure Fairness
Aichi Bank has implemented the following measures in order to ensure the fairness of the Share Transfer.
i.

Acquisition of a share transfer ratio calculation report from an independent third party valuation institution
In order to ensure the fairness of the Share Transfer, Aichi Bank, as described in “4. (1) Basis and reasons for detailsof allocation” above, appointed Mizuho Securities as its third party valuation institution, and has acquired a sharetransfer ratio calculation report that will form the basis of the agreed-upon share transfer ratio used for the Share
Transfer. Aichi Bank engaged in negotiations and consultations with Chukyo Bank with reference to the analyses andopinions of Mizuho Securities, a third party valuation institution, and resolved to conduct the Share Transfer inaccordance with the share transfer ratio described in “3. (3) Details of Allocation Pertaining to the Share Transfer (Share
Transfer Ratio)” during the Aichi Bank Board of Directors meeting held today.
Furthermore, Aichi Bank has received a fairness opinion from Mizuho Securities dated May 10, 2022 indicating thatthe share transfer ratio applicable to this Share Transfer is appropriate from the financial perspective of Aichi Bank. For
details regarding the key assumptions behind Mizuho Securities’ fairness opinion, please see the attached exhibit.
ii.

Advice from an independent law firm
In order to ensure the fairness and appropriateness of the decision-making process of the Board of Directors, Aichi

Bank has received legal advice from Mori Hamada & Matsumoto, a legal advisor independent of both Banks, regarding
the decision-making methods and processes of Aichi Bank, and other procedures associated with the Share Transfer.
At the same time, Chukyo Bank has implemented the following measures in order to ensure the fairness of the Share
Transfer.
i.

Acquisition of the share transfer ratio valuation report from an independent third party valuation institution
In order to ensure the fairness of the Share Transfer, Chukyo Bank, as described in “4. (1) Basis and reasons fordetails of allocation” above, appointed Nomura Securities as its third party valuation institution, and has acquired theshare transfer ratio valuation report that will form the basis of the agreed-upon share transfer ratio used for the Share
Transfer. Chukyo Bank engaged in negotiations and consultations with Aichi Bank with reference to the analyses andopinions of Nomura Securities, a third party valuation institution, and resolved to conduct the Share Transfer inaccordance with the agreed-upon share transfer ratio described in “3. (3) Details of Allocation Pertaining to the Share
Transfer (Share Transfer Ratio)” during the Chukyo Bank Board of Directors meeting held today.
Furthermore, Chukyo Bank has received the fairness opinion from Nomura Securities dated May 10, 2022 statingthat the share transfer ratio applicable to this Share Transfer is fair to of Chukyo Bank’s general shareholders from afinancial point of view.
ii.

Advice from an independent law firm
In order to ensure the fairness and appropriateness of the decision-making process of the Board of Directors, Chukyo
10Bank has received legal advice from Anderson Mori & Tomotsune, a legal advisor independent of both Banks,
regarding the decision-making methods and processes of Chukyo Bank, and other procedures associated with the Share
Transfer.
(5) Measures Taken to Avoid Conflicts of Interest
As neither Aichi Bank nor Chukyo Bank have any particular conflicts of interest to note pertaining to the Share
Transfer, neither Bank has implemented any special measures.

11

5. Overview of the Companies Involved in the Share Transfer(1) Company Overview (as of the end of March 2022)
Name

The Aichi Bank, Ltd.

The Chukyo Bank, Limited

Location

3 chome-14-12 Sakae, Naka-ku, Nagoya

3 chome-33-13 Sakae, Naka-ku, Nagoya

Job title and name of

Yukinori Ito, President

Hideo Kobayashi, President

Description of businessBanking businessBanking business

Share capital

18 billion yen

31.8 billion yen

Date of establishment

May 15, 1944

February 10, 1943

Total number of issued shares

Common shares: 10,943,240 shares

Common shares: 21,780,058 shares

Settlement Term

March 31

March 31

Number of employees

1,527 individuals

1,110 individuals

106 branches

87 branches

representative(consolidated)(as of the end of September
2021)
Number of branches(including satellite offices)
Large shareholders and

The Master Trust Bank of Japan,

ownership ratios

Ltd. (trust account)

8.91%

MUFG Bank, Ltd.

39.19%

4.09%

Misono Service Co., Ltd.

9.69%

3.15%

Custody Bank of Japan, Ltd.

4.55%

(as of the end of September
2021)
Custody Bank of Japan, Ltd.
(Trust account)
Aichi Bank Employee
Shareholding Association(Trust Account 4)

2.25%

NGK Insulators, Ltd.

The Master Trust Bank of Japan,

4.05%

Ltd. (trust account)

2.20%

Toho Gas Co., Ltd.

Custody Bank of Japan, Ltd.

3.02%

(Trust account)
Nippon Life Insurance Company

2.17%

KT Capital Corporation

2.80%

Custody Bank of Japan, Ltd.

2.08%

Chukyo Bank Employee

2.19%(Trust Account 4)

Shareholding Association

1.91%

Meiji Yasuda Life Insurance
Company

Daido Life Insurance Company

1.51%(Standing Proxy: Custody Bankof Japan, Ltd.)

Sumitomo Life Insurance

1.58%

Daiwa Can Company

1.36%

1.45%

Chukyo TV. Broadcasting Co.,

1.21%

Company
Sumitomo Realty & Development
Co., Ltd.

Ltd.

Relationship to the parties
involved
Capital Relationship

Not applicable.

Personnel Relationship

Not applicable.

Business Relationship

Not applicable.

Status of Related Party
Relationship

Not applicable.

12(2) Overview of Performance Over the Past 3 Years (Units: million yen)
Aichi Bank
Settlement Term

FY2019Chukyo BankFY2020

FY2021FY2019FY2020

FY2021

Consolidated net assets

209,350

246,391

239,51299,472

110,691

108,146

Total consolidated assets

3,246,230

3,788,132

4,320,749

1,976,330

2,107,003

2,348,196

19,055.59

22,480.79

21,811.72

4,574.50

5,083.59

4,955.94

Consolidated ordinary income

52,89553,281

56,11230,924

31,446

31,528

Consolidated ordinary income

4,138

6,043

15,534

3,489

3,632

6,067

2,930

4,266

10,945

2,316

2,333

3,728

272.08396.82

1,017.22

106.74107.51

171.30

100

120

310

40

40

55

Amount of net assets per share(yen)

Net income attributable toshareholder of parent company
Current term per-shareconsolidated net profit (yen)Dividend per share (yen)

6. Overview of the company to be newly founded via the Share Transfer (Joint Holding Company)(1)

Trade name

Aichi Financial Group, Inc.
(English: Aichi Financial Group, Inc.)
As a bank holding company, the purpose of the company is to engage in thefollowing business duties.
(1) Management of a bank, as well as a bank capable of having a bank as a(2)

Description of businesssubsidiary under the Banking Act(2) All business duties associated with those described in the previous item
(3) In addition to the duties described in the previous two items, any business duties
that a bank holding company is permitted to engage in under the Banking Act

(3)
(4)

Location headquarters
Functional location ofprincipal headquarters

3 chome-14-12 Sakae, Naka-ku, Nagoya, Aichi Prefecture
3 chome-14-12 Sakae, Naka-ku, Nagoya, Aichi Prefecture
President

andRepresentative

Yukinori Ito(Current President of Aichi Bank)

Director
Vice-President

andRepresentative

Hideo Kobayashi

Director
Director
Representatives and(5)

officers’ planned

Director

appointment(Note 1, 2, and 3)

Director(Current

Presidentof

ChukyoBank)

Nobuhiko(Currently

SeniorManagement

Kuratomi

Director of Aichi Bank)

Hiroyasu(Currently Managing Director of

MatsunoAichi Bank)

Hiroaki(Currently Director of Aichi Bank)

YoshikawaDirector

Makoto(Currently

Hayakawa

Officer of Chukyo Bank)

Director

Norimasa Suzuki(Currently Director of Aichi Bank)

Director

Kenji Ito

(Currently Executive Officer andGeneralManaging

Managerof

Executive

GeneralPlanning Department of Aichi
13

Bank)
Director

Hisashi(Currently Executive Officer and

Sebayashi

GeneralManager

Planning

andof

GeneralAdministration

Department of Chukyo Bank)
Director(AuditMasahiro Kato

Committee)
Director(Audit Committee))(AuditYasutoshi Emoto

Committee)
Director(AuditYuki Shibata(AuditChieko Murata(Audit(AuditCommittee)
(6)
(7)
(8)
(9)
(10)
(11)
(12)

Capital
Net assets(consolidated)
Total assets(consolidated(Currently Head of Chieko Murata
Tax Accountant Office)Committee)
Director(Currently External Director of
Chukyo Bank)

Committee)
Director(Currently External Director of
Aichi Bank (Audit Committee))Committee)
Director(Currently Director of Aichi Bank

Yoshiko(Currently External Auditor of

Kurimoto

Chukyo Bank)

Takumi Azuma(Currently Full-time Auditor of
INTEC Inc.)

20 billion yen
Undetermined
Undetermined

Settlement Term

March 31

Listed securities

The Tokyo Stock Exchange Prime Market and the Nagoya Stock Exchange

exchanges

Premier Market

Accounting auditor

KPMG AZSA LLC

Shareholders’ list
administrator

Mitsubishi UFJ Trust and Banking Corporation(Note 1) Yasutoshi Emoto, Yuki Shibata, Chieko Murata, Yoshiko Kurimoto and Takumi Azuma are scheduled forappointment as the external directors set forth in Article 2(xv) of the Companies Act. Furthermore, Yasutoshi
Emoto, Yuki Shibata, Chieko Murata, Yoshiko Kurimoto and Takumi Azuma are scheduled for designation as
the independent auditors stipulated by the Tokyo Stock Exchange, Inc. and Nagoya Stock Exchange, Inc. , andnotice of their designation will be provided to the Tokyo Stock Exchange and Nagoya Stock Exchange.
(Note 2) Yasutoshi Emoto is currently an external director to Aichi Bank (Audit Committee), but he is currently
scheduled to resign from his position as director of Aichi Bank as of the day before the effective date of the
Share Transfer (October 2, 2022), and is scheduled to be appointed as an external director (Audit Committee)of the Joint Holding Company as of the effective date of the Share Transfer (October 3, 2022). In addition,
Chieko Murata is scheduled to be appointed as a candidate for an external director (audit committee) in thegeneral shareholders meeting of Aichi Bank on June 24, 2022. In the event Chieko Murata is appointed as anexternal director (audit committee) of Aichi Bank in the general shareholders meeting, she is currently
scheduled to resign from her position as a director of Aichi Bank as of the effective date of the Share Transfer(October 2, 2022), and is scheduled to be appointed as an external director (Audit Committee) of the Joint
Holding Company as of the effective date of the Share Transfer (October 3, 2022).
(Note 3) Yuki Shibata is currently an external director to Chukyo Bank, but he is currently scheduled to resign from his
position as director of Chukyo Bank as of the day before the effective date of the Share Transfer (October 2,2022), and is scheduled to be appointed as an external director (Audit Committee) of the Joint Holding
Company as of the effective date of the Share Transfer (October 3, 2022). Also, Yoshiko Kurimoto is currently14

an external statutory auditor to Chukyo Bank, but she is currently scheduled to resign from her position as
statutory auditor of Chukyo Bank as of the day before the effective date of the Share Transfer (October 2,2022), and is scheduled to be appointed as an external director (Audit Committee) of the Joint Holding
Company as of the effective date of the Share Transfer (October 3, 2022).
7. Overview of Accounting Processing Associated with the Share Transfer
The accounting processing associated with the Share Transfer corresponds to an acquisition under accounting standards
for business combinations, and the application of the purchase method is anticipated. Furthermore, the amount of goodwill(or negative goodwill) that may arise from the Share Transfer is undetermined at this stage.
8. Future Outlook(1) Dividend Policies of Both Banks
Through the Business Integration Agreement, both Banks have made the following agreements regarding dividends ofsurplus: Aichi Bank has agreed to provide a maximum of the following dividends of surplus: (1) To shareholders or
registered pledgees of shares of Aichi Bank registered or recorded in the final shareholders’ list dated March 31, 2022, 220
yen for every common share owned, or (2) to shareholders or registered pledgees of shares of Aichi Bank registered orrecorded in the final shareholders’ list dated September 30, 2022, 150 yen for every common share owned. Chukyo Bank
has agreed to provide a maximum of the following dividends of surplus: (1) To shareholders or registered pledgees ofshares of Chukyo Bank registered or recorded in the final shareholders’ list dated March 31, 2022, 35 yen for every
common share owned, or (2) to shareholders or registered pledgees of shares of Chukyo Bank registered or recorded in the
final shareholders’ list dated September 30, 2022, 141 yen for every common share owned (including the Special Dividend).
Furthermore, through the Business Integration Agreement, both Banks have agreed to the following: that Chukyo Bank has
acquired permissions necessary for the Share Transfer Plan and Special Dividend at Chukyo Bank’s general shareholders
meeting (hereinafter the “General Shareholders Meeting”), and that a Special Dividend of 141 yen per common share shallbe paid to every shareholder or registered pledgee of shares of Chukyo Bank registered or recorded as owning Chukyo
Bank common shares in the final shareholders’ list dated September 30, 2022, based on the condition that the Share
Transfer has not been canceled, and is rationally expected to definitively come into effect on October 3, 2022. For details
regarding the Special Dividend, see “II. Dividend of Surplus (Special Dividend)” below.
(2) Forecast of Performance of the Joint Holding Company
Performance forecasts for the Joint Holding Company are currently under development, and will be announced once
finalized.
9. Presumptive Conditions for the Execution of the Share Transfer
Execution of the Share Transfer will be premised on a variety of assumptions, such as the general shareholders meetings
for both Banks having provided the necessary approvals for the Share Transfer Plan and the Share Transfer, the General
Shareholders Meeting approving the implementation of a Special Dividend, the relevant authorities have issued therequisite approvals necessary to conduct the Share Transfer, the Treasury Stock Tender Offer has been settled legally with
MUFG Bank having tendered all 8,534,385 shares of Chukyo Bank in its ownership to the Tender Offer, and that the Share
Transfer is not canceled in accordance with the provisions of the Share Transfer Plan.
II. Dividend of Surplus (Special Dividend)(1) Details of Dividend
Through the Business Integration Agreement, both Banks have agreed to the following: that Chukyo Bank has acquired
permissions necessary for the Share Transfer Plan and Special Dividend at the General Shareholders Meeting, and that aSpecial Dividend of 141 yen per common share shall be paid to every shareholder or registered pledgee of shares of
Chukyo Bank registered or recorded as owning Chukyo Bank common shares in the final shareholders’ list dated
September 30, 2022, based on the suspension condition that the Share Transfer has not been canceled, and is rationally15expected to definitively come into effect on October 3, 2022.
Chukyo Bank has resolved during the Board of Directors meeting held today, that it would bring a proposal to conduct
the Special Dividend before the General Shareholders Meeting, on the condition that a proposal to approve the Share
Transfer Plan has been approved and passed before such shareholders meeting. The details of the Special Dividend are aslaid out below, and will be implemented on the following conditions: that the permissions necessary for the Share Transfer
Plan and Special Dividend were acquired at the General Shareholders Meeting, and that the Share Transfer has not beencanceled, and is rationally expected to definitively come into effect on October 3, 2022.
(1) Record date: September 30, 2022 (Note 1)(2) Dividend per share: 141 yen(3) Total amount of dividend: 1,867 million yen (Note 2)(4) Effective date: Undetermined (Note 3)(5) Resources for dividends

Earned surplus(Note 1) The announcement date pertaining to the setting of the record date for the Special Dividend will be determined

during a future Chukyo Bank Board of Directors meeting.
(Note 2) The total amount of dividend was obtained by taking the total number of common shares issued by Chukyo Bank

as of March 31, 2022 (21,780,058 shares), subtracting the quantity of current treasury stock (5,150 shares) and thenumber of common shares to be acquired from MUFG Bank by Chukyo Bank via the Treasury Stock Tender
Offer (8,534,385 shares), and multiplying the result (13,240,523 shares) by the dividend amount per share. The
total dividend amount may change in the event there is a change in the quantity of treasury stock as of March 31,
2022 by the Basis Period due, for example, to the results of the Treasury Stock Tender Offer or exercises of rights
to request purchases of shares by Chukyo Bank shareholders. Therefore, the actual total dividend amount will be
the amount obtained when the dividend amount per share is multiplied against the amount obtained when thequantity of treasury stock available as of the above record date is subtracted from the total number of sharesissued.
(Note 3) The effective date of the Special Dividend will be determined during a future Chukyo Bank Board of Directors

meeting.
(2) Reason for the Dividend
Chukyo Bank's Board of Directors resolved to conduct the Special Dividend after careful consideration, while engaging
in consultations with Aichi Bank regarding the Business Integration, and will be implemented as a means of providing
certain returns to the general shareholders of Chukyo Bank.

(Reference) Status of Chukyo Bank dividends(Units: yen)
Annual dividends

Period ending March

End of the first

End of the

End of the third

quarter

second quarter

quarter

End of the term

Total

－

20.00

－

20.00

40.00

－

20.00

－

35.00

55.00

－

141.00 (Note 1)－－(Note 2)－2021
Period ending March
2022
Forecasted for term
ending March 2023
(Note 1) The dividend paid at the end of the second quarter of the term ending March 2023 is a special dividend.
(Note 2) Due to the scheduled Business Integration, the dividend to be paid at the end of the term ending March 2023 is asof yet undetermined.
16

End

17

(Reference) Aichi Bank’s consolidated financial forecast for the current term (announced on May 11, 2022) and theconsolidated results from the previous term (Units: million yen)
Aichi Bank

Net income attributable toCurrent term per-share net

shareholder

profitof parent company(Units: yen)

Ordinary income

Consolidated financial
forecast for the current term

15,60010,9501,016.99

15,534

10,945

1,017.22(FY2022)
Consolidated performancefrom the previous term
(FY2021)(Reference) Chukyo Bank’s consolidated financial forecast for the current term (announced on May 11, 2022) and theconsolidated results from the previous term (Units: million yen)
Chukyo Bank

Net income attributable toCurrent term per-share net

shareholder

profitof parent company(Units: yen)

Ordinary income

Consolidated financial
forecast for the current
term

4,200

2,800

128.59

6,067

3,728

171.30(FY2022)
Consolidated performancefrom the previous term
(FY2021)(Point of Contact for the Present Matter)
The Aichi Bank, Ltd.

General Planning Department

TEL: 052-262-9668

The Chukyo Bank, Limited

General Planning and Administration Department

TEL: 052-249-1613

18

Exhibit: Assumptions, etc. of Mizuho Securities’ Fairness Opinion
On May 10, 2022, Mizuho Securities submitted a written opinion to the effect that the share transfer ratio (hereinafter
the “share transfer ratio”) agreed upon between Aichi Bank and Chukyo Bank is reasonable for Aichi Bank’s generalshareholders from a financial perspective (the “Opinion”). The Opinion is based on the following assumptions.
When expressing its thoughts in the Opinion, Mizuho Securities relied on the fact, and assumed, that all publicly
disclosed information that was examined by Mizuho Securities and all information provided to Mizuho Securities by
each bank, or financial and other information that Mizuho Securities discussed with each bank, that was substantially thebasis for the analysis in the Opinion (the “Information”) are accurate and complete. Mizuho Securities has notindependently verified the accuracy or completeness of the Information, nor does it bear an obligation for independently
verifying it. Therefore, the conclusions expressed in the Opinion may differ in the event that there is a material error in
the Information, if there are undisclosed facts or circumstances at the time that the Opinion was delivered, or facts orcircumstances arise after the Opinion is delivered (including latent facts at the time that the Opinion was delivered that
became apparent thereafter). Mizuho Securities has assumed that the management of Aichi Bank is not in any way awareof facts which would cause the information provided to Mizuho Securities by each bank or financial or other informationthat Mizuho Securities discussed with Aichi Bank to be incomplete or misleading.
The financial forecasts and other forward-looking information (including expected future revenue and expenses, cost
reduction outlooks, and the business plans of both banks) received by Mizuho Securities are assumed to have beenreasonably prepared and created by the management of each bank based on the best forecasts and judgment currently
obtainable regarding the operating results and financial condition of each bank and each bank’s related companies.
Mizuho Securities has relied on such financial forecasts and business plans without independently verifying thefeasibility thereof and expresses no opinion whatsoever regarding any analysis or forecast referred to in the Opinion, or
any assumption based thereon. With respect to the synergies for the Banks from the Share Transfer, Mizuho Securities is
not aware of any matter that can be quantitatively assessed that may have a material effect on the opinions expressed at
the time that the Opinion was submitted, and they are not incorporated in the examination in the Opinion.
When preparing the Opinion, with the consent of Aichi Bank, Mizuho Securities has used assumptions it believes tobe reasonable and appropriate with respect to information requested by Mizuho Securities that was not provided ordisclosed by each bank, that was provided or disclosed, but has an undetermined effect on the share value of each bank,or was not able to be used as a basis for assessment by Mizuho Securities even by some other method. The results ofassessment may differ if it becomes apparent that such assumptions by Mizuho Securities differ from the facts in amaterial respect.
Mizuho Securities has assumed that the Share Transfer is a non-taxable transaction for the Banks under Japan’s
Corporation Tax Act and that other tax-related matters in relation to the Share Transfer do not affect the Share Transfer
Ratio. Without conducting independent verification, Mizuho Securities has assumed that the Share Transfer will becompleted in a timely manner, that all material government or regulatory or other authority consents and approvals(irrespective of whether pursuant to laws, regulations, or agreements) necessary to complete the Share Transfer can beobtained without having any adverse effect whatsoever on the Banks or the benefits expected from the Share Transfer,that the content of such consents and approvals has no effect on the Share Transfer Ratio, and that, other than those
disclosed by each bank, if either bank has an order, measure, or other disposition issued or imposed by a regulatory orother authority, it currently has no effect, or will have no effect in the future, on each bank’s future results. Mizuho
Securities is not a legal, regulatory, or tax expert, and has relied on the assessments conducted by the Banks’ outside
experts with respect to such matters.
Mizuho Securities has not independently assessed or appraised the assets and liabilities (including derivatives
transactions, off-the-book assets and liabilities, and other contingent liabilities) or allowances of each bank or theirrelated companies, has not conducted analysis of the reasonableness of the accounting or tax evaluation amount or theappropriateness of accounting treatment or tax treatment, and has not independently had a third party, or requested a third
party, to provide any assessment, appraisal, or analysis whatsoever. Mizuho Securities bears no obligation to inspect the19

property or facilities of each of the banks or their related companies, and has not carried out assessment of theshareholder capital or payment capacity of each bank or their related companies based on laws regarding insolvency,
bankruptcy, etc. Note, value calculations for the transaction were performed based on the presumption that the Treasury
Stock Tender Offer by Chukyo Bank will be implemented ahead of the Share Transfer, and that the Special Dividend by
Chukyo Bank with a planned record date of September 30, 2022 will also be implemented before completion of the
Share Transfer, as planned.
Mizuho Securities has assumed that neither bank, nor their related companies, have in the past entered into or will notin the future enter into, any contract, agreement, or other instrument whatsoever that would have a material effect on the
Share Transfer Ratio, that they have not made or will not in the future made, a decision to do so, and that that
implementing the Share Transfer will not in future constitute a breach of such a material agreement binding upon eitherbank or their related companies as parties and will not give rise to a right to cancel such material agreement or right todeclare default or seek remedy under such agreement. Other than disclosures in the Information, Mizuho Securities has
assumed that there are no contingent liabilities relating to litigation, dispute, or the like, or off-the-book liabilities relating
to tax or intellectual property rights, etc., all of which involve each bank or their related companies, and that the amountof insurance coverage is sufficient for the business operations relating to the business of each bank.
The Opinion assumes financial, economic, market, and other circumstances that exist and can be assessed as of thedate of the Opinion, and relies on information that Mizuho Securities has obtained as of the date of the Opinion. With
respect to information that Mizuho Securities has obtained as of the date of the Opinion and facts potentially included insuch information, information and facts for which the effect on the share value of each bank is not necessarily apparent
as of the date of the Opinion have been excluded from the scope of examination. Mizuho Securities has also assumed
that there are no technical innovations or other phenomena that may have a significant effect on the business or financial,etc. outlook currently anticipated by each bank. Therefore, if there is a change in or effect on the facts that are basis of theassumptions of the examination in the Opinion on or after the date of the Opinion, or it becomes apparent that there is aneffect on the share value due to the discovery of a potential fact as discussed above, etc., it may have an effect on Mizuho
Securities’ opinion. However, Mizuho Securities will bear no responsibility whatsoever to amend, renew, supplement, or
reconfirm the Opinion.
Mizuho Securities plans to receive a fee (including a success fee conditioned on completion of the Share Transfer) as
consideration for services as Aichi Bank’s financial advisor in relation to the Share Transfer. Mizuho Securities and its
related companies have in the past received fees from Aichi Bank and its related companies as consideration for theprovision of services relating to financial advice and financing, etc. Aichi Bank agrees to indemnify Mizuho Securities
for certain obligations incurred by Mizuho Securities due to its involvement, including those in relation to the submissionof the Opinion. In the course of ordinary business or in connection with the Share Transfer, Mizuho Securities and thecompanies in the Mizuho Financial Group of which Mizuho Securities is a member may underwrite, hold, or sell on theirown account or customer accounts all types of financial products, including certain shares, bonds, and other financial
instruments issued by either of the Banks or their related companies, and may from time-to-time hold positions in suchfinancial instruments and may carry out derivatives transactions regarding either of the Banks, their related companies, or
all types of financial instruments issued by such companies. Mizuho Securities and the companies in the Mizuho
Financial Group of which Mizuho Securities is a member may have a loan or other business relationship with either ofthe Banks or their related companies in the ordinary course of business or in connection with the Share Transfer, and may
receive consideration for such acts.
Mizuho Securities was not requested to submit an opinion regarding Aichi Bank’s management decision-making on
which proceeding with, or implementing, the Share Transfer are based, and Mizuho Securities’ opinion does not address
such matters in any respect whatsoever. The Share Transfer Ratio was determined through negotiations between the
Banks and approved by Aichi Bank’s board of directors, and Mizuho Securities’ opinion was just one of many factors
considered when Aichi Bank examined the Share Transfer. Therefore, it cannot be viewed as a deciding factor for theboard of directors of Aichi Bank with respect to the Share Transfer and the Share Transfer Ratio. Mizuho Securities was
not requested to submit nor express, an opinion regarding transactions other than the Share Transfer or the relative meritsof the Share Transfer and other transactions. Mizuho Securities does not bear an obligation to Aichi Bank or Aichi
20

Bank’s board of directors to solicit the interest of third parties regarding the Share Transfer, and has not conducted such
solicitation.
Mizuho Securities’ opinion is limited to whether the Share Transfer Ratio is reasonable for the common shareholdersof Aichi Bank from a financial perspective as of the date of the Opinion, and does not express an opinion regarding thereasonableness of the Share Transfer Ratio for other classes of security holders, creditors, or other related parties of Aichi
Bank. The Opinion does not express an opinion regarding how common shareholders of Aichi Bank should exercise
their voting rights or otherwise act in relation to the Share Transfer either. Mizuho Securities has not expressed an
opinion regarding the various terms and conditions of the Share Transfer (excluding the Share Transfer Ratio), including
the form or structure, etc. of the Share Transfer, and has not expressed an opinion regarding the amount or nature of
remuneration, or reasonableness of such remuneration, to any director, executive officer, employee, or party equivalent
thereto of the Banks, in connection with the Share Transfer.

21

The transactions pursuant to the joint share transfer described in this document involve securities of a Japanesecompany. The joint share transfer is subject to disclosure requirements of Japan that are different from those of
the United States. Financial information included in this document, if any, was excerpted from financial
statements prepared in accordance with foreign accounting standards that may not be comparable to thefinancial statements of United States companies.
It may be difficult for you to enforce your rights and any claim you may have arising under the U.S. federal
securities laws, since the issuer is located in Japan and some or all of its officers and directors reside outside of
the United States. You may not be able to sue a Japanese company or its officers or directors in a Japanesecourt for violations of the U.S. securities laws. It may be difficult to compel a Japanese company and its
affiliates to subject themselves to a U.S. court’s judgment.
You should be aware that the issuer may purchase securities otherwise than under the joint share transfer, suchas in the open market or through privately negotiated purchases.
This document has been translated from the Japanese-language original for reference purposes only. In theevent of any conflict or discrepancy between this document and the Japanese-language original, the Japaneselanguage original shall prevail in all respects.

Definitive Agreement Regarding Business Integration

Aichi Financial Group, Inc.
The Aichi Bank, Ltd.

The Chukyo Bank, Limited

May 11, 2022

Contents
1.

Background and Purpose of the Business Integration

2

2.

Overview of Business Integration

3

3.

Group Overview Post-Business Integration

4

4.

Trade Name and Corporate Philosophy of the New
Financial Group5

5.

Management Strategy of the New Financial Group6

6.

Initiatives to Achieve a Sustainable Local Community

112

1. Background and Purpose of the Business Integration
Background of the Business Integration

Purpose of the Business Integration• Changes to the industry structure and social environment
such as environmental issues and a post-COVID world• Changes to the management environment due to theentrance of fintech companies and others to the market
and fiercer competition with other financial institutions• Increased importance of the mission and role of regional
financial institutions due to more sophisticated anddiverse customer needs• To leverage an expanded market share and the potential
to additionally invest resources because of businessintegration and to respond to changes in the management
environment with an expanded stabilized sales base andimproved profitability• To enhance the corporate values of both banks andrespond to stakeholder expectations by developing asustainable business model for the future

Contributions to thedevelopment of theregional economy
Establishment of acorporate culture where
personnel are motivated totake on new challenges

Initiatives to Achieve
Purposes

Achievement of
maximized effects ofintegration

Responding to moresophisticated anddiverse customer
needs

Optimal use ofmanagement
resources32. Overview of Business Integration
Format of Business Integration
Method of
ShareTransfer• Establishment of a new joint holding company that makes
both banks wholly owned subsidiaries via share transfer.

Share
Transfer
Ratio• Shares shall be allocated and issued based on 3.33
common shares in the joint holding company for eachcommon share in Aichi Bank and 1 common shares in the
joint holding company for each common share in Chukyo
Bank.

SpecialDividends
by ChukyoBank• On September 30, 2022, all general shareholders of
Chukyo Bank will receive a dividend of surplus of 141 yen
per share in Chukyo Bank as per the shareholder returns
policy.

Establishment of a Holding Company via Joint Share Transfer

Aichi Financial Group, Inc.
100%

100%

The Aichi Bank, Ltd. The Chukyo Bank, Limited

Future Schedule for Business Integration
May 11, 2022 (Today)
Execution of the Business Integration
Agreement (both banks)
Creation of a share transfer plan (both banks)
Execution of a Tendering of Treasury Shares
Agreement (Chukyo Bank)
June 24, 2022 (Scheduled)
Approval and resolution regarding the sharetransfer plan
(Annual meeting of shareholders at bothbanks)
September 29, 2022 (Scheduled)
Date of delisting for shares of both banks

September 30, 2022 (Scheduled)
Record date for interim dividends andspecial dividends
October 3, 2022 (Scheduled)
Date of establishment of holding company
and date of listing
Approx. two years after the effective dateof the share transfer
Merger of banks

43. Group Overview Post-Business Integration
Overview of Holding Company
Trade Name

Aichi Financial Group, Inc.

Head Office
Address andFunctions3-14-12 Sakae, Naka-ku, Nagoya,
Aichi

SystemCompany with an audit andsupervisory committee

Representative
Director

Group Organization Chart (Expected)
General Meetingof Shareholders
Board of Directors

Renumeration Committee

Auditing Committee

Personnel Committee
Group Business Management
Committee

Risk Management Committee
Management
Committee

President and Representative Director
Yukinori Ito(President of Aichi Bank)

Sustainability Committee
Integration Promotion Committee

Vice-President and Representative
Director Hideo Kobayashi(President of Chukyo Bank)
Share Capital

20 billion yen

Scheduled Dateof
Establishment

October 3, 2022

Listed Stock
Exchanges

Prime Market, Tokyo Stock Exchange
Premier Market, Nagoya Stock
Exchange

Compliance Committee

Audit Dept.

Integration
Promotion
Dept.

Corporate
Planning
Dept.

ComplianceBusiness
Personnel
Business& RiskSystem& General
Management
Management
Management
Affairs Dept.
Dept.
Dept.
Dept.

The Aichi Bank, Ltd. The Chukyo Bank, Limited
5

4. Trade Name and Corporate Philosophy of the New Financial Group
Trade Name

Aichi Financial Group, Inc.
Ideas behind trade name: We value Aichi as our main sales base and by growing together, we wanted to reflect
our "goal to become the No. 1 regional financial group in the Aichi Prefecture."

Corporate
Philosophy*"AICHI": Combines the first Japanese character of Aichi Bank (A), the first character ofthe second word of the phrase "chiiki ichiban" (I), a saying that reflects thegroup's aims to become the best in the region, and the first character of
Chukyo Bank (CHI).
Purpose: Reason for existence and direction of development

Contribution to the prosperity of the local community
via financial services
Mission: Specific goals to be achieved

To become the No. 1 regional financial group in Aichi Prefecture
Values: Common values(1) To establish robust management and a solid business foundation(2) To become a financial group that is trusted by the local community(3) To provide financial services that are useful to all customers(4) To make employees happy via the implementation of ES and health management(5) To continuously grow and improve corporate value to remain an attractive
corporation

The corporate philosophy of this financial group is known as its management vision (Vision) and is comprised of threeelements: Purpose, Mission and Value. The Vision forms the guide for how all employees should aim to act and also guidetheir decision-making.

6

5. Management Strategy of the New Financial Group(1) Expansion of Sales BaseThis business integration will allow for expansion of the sales base due to increased market
share centered around Aichi Prefecture, which is the main market for both banks.
Bases Within Aichi Prefecture

Owari Region

Number of Bases of Both Banks

Nagoya City

Ama Region

Nishi-Mikawa Region
Chita Region: Aichi Bank
: Chukyo Bank

Higashi-Mikawa Region

Aichi Prefecture
Within Nagoya
City
Owari Region
Ama Region
Chita Region
Nishi-Mikawa
RegionHigashiMikawa Region
Mie Prefecture
Gifu Prefecture
ShizuokaPrefecture
Osaka Prefecture
Tokyo
Metropolitan Area
Total

Aichi
Bank
87

Chukyo
Bank
55

44

30

74

21
4
7

13
4
4

34
8
11

8

3

11

3

1

4

2
3

3
0

5
3

1

1

2

1

1

2

1

1

2

95

61

156

Total
142

*Number of bases for both banks current as of March 2022
*Does not include branches in other stores or virtual
branches such as Internet-based branches75. Management Strategy for the New Financial Group(2) Establishment of a Consulting and Solutions Business Model (1/2)
We will pool the relationships that both banks share with our customers, know-how, andnetworks to achieve further enhanced consulting functions.
For Customers Who Operate Businesses
Sophistication of Services•

Further advanced sales system that
demonstrates banking features at multiple
branches through block systems, areasystems, etc.

•

Securing of the largest amount of head
office solutions personnel in the prefecture•

Implementation of speedy head officesales from advanced personnel withspecialist knowledge

Pooling of Know-how•

Acquisition and accumulation ofqualitative information via businessfeasibility evaluation•

Provision of a consulting and solutions
service based on all types of information

Specific Initiatives•

Provision of an advanced menu ofsolutions corresponding to the life stage ofbusinesses(1) New business foundation support:
Subsidy application support, linking
with business and academia, sales plan
formulation support(2) Growth support: Business matching,
M&A, linking with business andacademia, human resource referrals

Communication
with customers(3) Business succession support: Businesssuccession support, M&A, management
improvement plan formulation support

Strongersales skills•

Utilization of networks of affiliatedcompanies (subsidiaries that specialize incards, leases, investment)•

Joint development of new products andservices (subordinated loans, SDGs, zerocarbon support, etc.)85. Management Strategy for the New Financial Group(2) Establishment of a Consulting and Solutions Business Model (2/2)
We will use proposals that incorporate the know-how of both banks to further strengthen
consulting functions that can respond to increased convenience, low birth rates and aging
populations and changing life stages.
For Individual Customers
Sophistication of Services•

Proposal of advanced and specialist
solutions that accurately grasp customer
needs

•

Improved solution capabilities due tobetter human resource cultivation andactive support for qualification acquisition•

Implementation of even more efficientsales activities due to the application of IT

Stronger sales
skillsPooling of Know-how•

Improvement of the home loan sales
system and promotion of consumer loans•

Implementation of support that grasps theneeds of the wealthy and owners ofcorporations

Specific Initiatives•

Roll out of consulting services
corresponding to life stage with a starting
point of home loans(1) Young people: "Increase" and "Prepare"- Accumulation-type investment trusts,
private pension insurance(2) Asset-building: "Save" and "Protect" Investment trusts, asset utilization

Enhancement ofsales system(3) Wealthy/senior: "Save," "Protect" and"Connect" - Inheritance measures, asset
inheritance support•

Dedicated sales for private banking, wealthmanagement•

Enhanced non-face-to-face channels(Internet banking, apps, etc.)95. Management Strategy for the New Financial Group(3) Cultivation of Diverse Human Resources
The early integration of the staff of both banks will create a new corporate culture and allow
them to respond to the sophisticated and diverse needs of customers.
Active Personnel Exchange••

Personnel are dispatched
into fields that the otherbank specializes in
Personnel exchange is
implemented to integrate
staff early on

Optimization of Staff
Deployment•••

Support for Employees
Challenging to Expand Work
Opportunities

Fair and impartial
treatment•

Deployment of the rightstaff for the right job

Training to specialize insolutions•Short-term main branchtrainees•

Open call-style practicaltraining

Optimization of all systems

Cultivation of IT/DXProficient Human Resources••

Promotion of personnel
acquiring IT-related
qualifications and their onthe-job application
Cultivation of DX (digitaltransformation) humanresources including
external deployment

Diversification of
Employment Methods•

Enhancement of midcareer recruitment•

Active appointment ofspecialist external humanresources• Reformation into a strong organization in which both banks and personnel continue to grow via the aim to become agroup of diverse professionals• Implementation of diversity and inclusion (fostering of trust between group companies and diverse human resources)• Establishment of a corporate culture where personnel are increasingly motivated to take on new challenges

105. Management Strategy for the New Financial Group(4) Optimization and Streamlining of Management
We will concentrate management resources in growth fields, including extra personnel producedby the streamlining of management through business integration.
Optimization and Streamlining of Management and Business• Main branch organization /Subsidiary companies• Branches/Sales offices

Optimization
Streamlining and optimization of
branch networks• Systems• Business procedures• Service expansion• Business in generalStandardization

Digitization

Integration of core systems andsubsystems

Expansion and enhancement of non-face-to-facechannels
Centralization of sales office work at main branch
and DX (digital transformation) of main branchfunctionsConcentration of extra personnel and other management resources into growth fields
Anticipated Synergy from Business Integration(1) Expansion of sales base(2) Establishment of a consulting and solutions-style business model(3) Cultivation of diverse human resources(4) Optimization and streamlining of management*Estimated synergy amounts are based on comparisons with FY2021 results

Through these initiatives we hope to achievesynergy worth more than 5 billion yen in
FY2030 and more than 12 billion yen in total
across the Third Mid-term Management Plan
(FY2028–FY2030)*
11

6. Initiatives to Achieve a Sustainable Local Community
We will work to support regional economic development and problem-solving in the local
community and to achieve safe and fulfilling lives and a sustainable community for locals.
Future Initiatives from the New Financial Group

Response to Climate Change• Cutting CO2 emissions• Investment and financing initiatives for sustainability

Vitalization of Local Economies• Enhanced collaboration with external bodies such as local authorities and universities• Extensive business support based on corporate life stage

Contribution to the Local Community• Improvement of financial literacy and career development support for the young• Donations and aid for educational/cultural activities, environmental conservation,etc.
12This material contains remarks pertaining to future business performance. Such remarks do not guaranteesuch business performance and include risks and uncertainties. Please note that future performance may
differ from stated targets due to changes in the management environment, etc.

Point of Contact
The Aichi Bank, Ltd.

General Planning
Department

Tel: +81(0)52-262-9668

The Chukyo Bank, Limited

General Planning and
Administration Department

Tel: +81(0)52-249-1613