The transactions pursuant to the joint share transfer described in this document involve securities of a Japanese company. The joint sharetransfer is subject to disclosure requirements of Japan that are different from those of the United States. Financial information included in thisdocument, if any, was excerpted from financial statements prepared in accordance with foreign accounting standards that may not becomparable 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 islocated in Japan and some or all of its officers and directors reside outside of the United States. You may not be able to sue a Japanese company
or its officers or directors in a Japanese court for violations of the U.S. securities laws. It may be difficult to compel a Japanese company andits 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, 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.

Internet Disclosure Matters upon Notice of Calling of the113th Annual General Meeting of Shareholders[Business Report]
Matters Regarding Rights to Subscribe for New Shares, etc. of the Bank
Systems to Ensure Proper Business Activities[Financial Statements]
Statement of Changes in Equity
Notes to the Non-Consolidated Financial Statements[Consolidated Financial Statements]
Consolidated Statement of Changes in Equity
Notes to the Consolidated Financial Statements[Reference Documents for the General Meeting of Shareholders] (regarding Proposal 2)
The following matters from Proposal 2 “Approval of Share Transfer Plan With The Chukyo Bank, Limited.”・

Matters regarding The Chukyo Bank, Limited. Rights to Subscribe for New Shares and Systems to

Ensure Proper Business Activities by The Chukyo Bank, Limited.
・Statement of Changes in Equity of The Chukyo Bank, Limited.

・

Notes to the Non-Consolidated Financial Statements of The Chukyo Bank, Limited.

・Consolidated Statement of Changes in Equity of The Chukyo Bank, Limited.

・

Notes to the Consolidated Financial Statements of The Chukyo Bank, Limited.

(From April 1, 2021 to March 31, 2022)

In accordance with the provisions of laws and regulations and Article 16 of the
Articles of Incorporation, the matters set forth above are provided to shareholders byposting them on the Bank’s website (URL: https://www.aichibank.co.jp/).

- 1 -Matters Regarding Rights to Subscribe for New Shares, etc. of the Bank
(1) Rights to subscribe for new shares, etc. of the Bank held by officers of the Bank as of the last day of the
fiscal year

Summary of the content of the rights to subscribe for
new shares, etc.

Number of
persons withrights to subscribe
for new shares,etc.

Name of rights to subscribe for new shares
The Aichi Bank, Ltd. Series 2 Rights to Subscribe for New Shares(ii) Allocation date for the rights to subscribe for new shares
July 19, 2013(iii) Total number of rights to subscribe for new shares
7 rights(iv) Class and number of shares underlying the rights to subscribe for
new shares
700 shares of the Bank’s common stock(v) Exercise period for rights to subscribe for new shares
From July 20, 2013 to July 19, 2043
(vi) Exercise price
One yen per share(vii) Conditions for exercise of rights to subscribe for new shares
Holders of rights to subscribe for new shares may exercise theirrights to subscribe for new shares from the day after the day on
which they lose their position as either director or company auditorof the Bank.

One

(i)

Directors(excluding those who are
Audit
Committee
Members and Outside
Directors)(i)Name of rights to subscribe for new shares
The Aichi Bank, Ltd. Series 3 Rights to Subscribe for New Shares(ii) Allocation date for the rights to subscribe for new shares
July 25, 2014(iii) Total number of rights to subscribe for new shares
5 rights(iv) Class and number of shares underlying the rights to subscribe
for new shares
500 shares of the Bank’s common stock(v) Exercise period for rights to subscribe for new shares
From July 26, 2014 to July 25, 2044(vi) Exercise price
One yen per share(vii) Conditions for exercise of rights to subscribe for new shares
Holders of rights to subscribe for new shares may exercise theirrights to subscribe for new shares from the day after the day on
which they lose their position as either director or company auditorof the Bank.

One

Summary of the content of the rights to subscribe for
new shares, etc.

Number of
persons withrights to subscribe
for new shares,
e
t
c
.

- 2 -

(i)

Directors(excluding those who are
Audit Committee
Members and Outside
Directors)

Name of rights to subscribe for new shares
The Aichi Bank, Ltd. Series 4 Rights to Subscribe for New Shares(ii) Allocation date for the rights to subscribe for new shares
July 24, 2015(iii) Total number of rights to subscribe for new shares
8 rights(iv) Class and number of shares underlying the rights to subscribe for
new shares
800 shares of the Bank’s common stock(v) Exercise period for rights to subscribe for new shares
From July 25, 2015 to July 24, 2045(vi) Exercise price
One yen per share(vii) Conditions for exercise of rights to subscribe for new shares
Holders of rights to subscribe for new shares may exercise theirrights to subscribe for new shares from the day after the day on
which they lose their position as either director or company auditorof the Bank.
Name of rights to subscribe for new shares
The Aichi Bank, Ltd. Series 5 Rights to Subscribe for New Shares(ii) Allocation date for the rights to subscribe for new shares
July 22, 2016(iii) Total number of rights to subscribe for new shares
18 rights(iv) Class and number of shares underlying the rights to subscribe for
new shares
1,800 shares of the Bank’s common stock(v) Exercise period for rights to subscribe for new shares
From July 23, 2016 to July 22, 2046
(vi) Exercise price
One yen per share(vii) Conditions for exercise of rights to subscribe for new shares
Holders of rights to subscribe for new shares may exercise theirrights to subscribe for new shares from the day after the day on
which they lose their position as director (including directors who
are Audit Committee Members) of the Bank.

Two

(i)

- 3 -

Three

Summary of the content of the rights to subscribe for
new shares, etc.

Number of
persons withrights to subscribe
for new shares,etc.

Name of rights to subscribe for new shares
The Aichi Bank, Ltd. Series 6 Rights to Subscribe for New Shares(ii) Allocation date for the rights to subscribe for new shares
July 21, 2017(iii) Total number of rights to subscribe for new shares
16 rights(iv) Class and number of shares underlying the rights to subscribe for
new shares
1,600 shares of the Bank’s common stock(v) Exercise period for rights to subscribe for new shares
From July 22, 2017 to July 21, 2047
(vi) Exercise price
One yen per share(vii) Conditions for exercise of rights to subscribe for new shares
Holders of rights to subscribe for new shares may exercise theirrights to subscribe for new shares from the day after the day on
which they lose their position as director (including directors who
are Audit Committee Members) of the Bank.

Three

(i)

Directors(excluding those who are
Audit Committee
Members and Outside
Directors)(i)Name of rights to subscribe for new shares
The Aichi Bank, Ltd. Series 7 Rights to Subscribe for New Shares(ii) Allocation date for the rights to subscribe for new shares
July 20, 2018(iii) Total number of rights to subscribe for new shares
18 rights(iv) Class and number of shares underlying the rights to subscribe for
new shares
1,800 shares of the Bank’s common stock(v) Exercise period for rights to subscribe for new shares
From July 21, 2018 to July 20, 2048
(vi) Exercise price
One yen per share(vii) Conditions for exercise of rights to subscribe for new shares
Holders of rights to subscribe for new shares may exercise theirrights to subscribe for new shares from the day after the day on
which they lose their position as director (including directors who
are Audit Committee Members) of the Bank.

- 4 -

Three

Summary of the content of the rights to subscribe for
new shares, etc.

Number of
persons withrights to subscribe
for new shares,etc.

Name of rights to subscribe for new shares
The Aichi Bank, Ltd. Series 8 Rights to Subscribe for New Shares(ii) Allocation date for the rights to subscribe for new shares
July 19, 2019(iii) Total number of rights to subscribe for new shares
39 rights(iv) Class and number of shares underlying the rights to subscribe for
new shares
3,900 shares of the Bank’s common stock(v) Exercise period for rights to subscribe for new shares
From July 20, 2019 to July 19, 2049
(vi) Exercise price
One yen per share(vii) Conditions for exercise of rights to subscribe for new shares
Holders of rights to subscribe for new shares may exercise theirrights to subscribe for new shares from the day after the day on
which they lose their position as director (including directors who
are Audit Committee Members) of the Bank.

Three

(i)

Directors(excluding those who are
Audit Committee
Members and Outside
Directors)(i)Name of rights to subscribe for new shares
The Aichi Bank, Ltd. Series 9 Rights to Subscribe for New Shares(ii) Allocation date for the rights to subscribe for new shares
July 22, 2020(iii) Total number of rights to subscribe for new shares
78 rights(iv) Class and number of shares underlying the rights to subscribe for
new shares
7,800 shares of the Bank’s common stock(v) Exercise period for rights to subscribe for new shares
From July 23, 2020 to July 22, 2050
(vi) Exercise price
One yen per share(vii) Conditions for exercise of rights to subscribe for new shares
Holders of rights to subscribe for new shares may exercise theirrights to subscribe for new shares from the day after the day on
which they lose their position as director (including directors who
are Audit Committee Members) of the Bank.

- 5 -

Five

Summary of the content of the rights to subscribe for
new shares, etc.

Number of
persons withrights to subscribe
for new shares,etc.

Name of rights to subscribe for new shares
The Aichi Bank, Ltd. Series 10 Rights to Subscribe for New Shares(ii) Allocation date for the rights to subscribe for new shares
June 25, 2021(iii) Total number of rights to subscribe for new shares
108 rights(iv) Class and number of shares underlying the rights to subscribe for
new shares
10,800 shares of the Bank’s common stock(v) Exercise period for rights to subscribe for new shares
From July 22, 2021 to July 21, 2051
(vi) Exercise price
One yen per share(vii) Conditions for exercise of rights to subscribe for new shares
Holders of rights to subscribe for new shares may exercise theirrights to subscribe for new shares from the day after the day on
which they lose their position as director (including directors who
are Audit Committee Members) of the Bank.

Seven(excluding directors who
are Audit Committee
Members)－－

Directors who are Audit
Committee Members

－

－

(i)

Directors(excluding those who are
Audit Committee
Members and Outside
Directors)

Outside Directors(2) Rights to subscribe for new shares, etc. of the Bank delivered to employees, etc. during the fiscal year
No applicable matters.

- 6 -Systems to Ensure Proper Business Activities<Summary of the Content of Systems for Ensuring Proper Business Activities>
As set forth below, the Bank has established the Basic Policy on the Establishment of Internal Control
Systems by resolution of the Board of Directors as systems for ensuring proper business activities.
(1) Systems for ensuring that the execution of duties of directors and employees complies with laws andregulations and the articles of incorporation
Officers and employees shall carry out conscientious and fair corporate activities that are in accordancewith the Aichi Bank Code of Ethics and Code of Conduct established based on the Bank’s management
philosophy, bank credo, and bank motto, that comply with laws and regulations, etc., and that do not violatesocial norms.
The Bank seeks to establish and strengthen the compliance system by establishing the Compliance
Committee as the organization overseeing compliance, and the Compliance Risk Management Department
as the department responsible for supervising and managing legal compliance.
A Compliance Manual is distributed to officers and employees to ensure that compliance is fully
understood. In addition, as a concrete implementation plan for realizing compliance, each fiscal year acompliance program is formulated, and directors receive and evaluate reports on the progress thereof andreports by committees, etc.
A compliance hotline is established as a system to report on and consult about violations of laws andregulations, etc., and efforts are made to quickly detect and resolve fraudulent practices, etc. and takecorrective action.
Under the Basic Policy Against Anti-Social Forces, efforts are made to block all relationships, includingtransactions, with anti-social forces that threaten the order and safety of civil society, and unreasonable
demands are firmly rejected.
(2) Systems regarding preservation and management of information related to the execution of directors’
duties
Efforts are made to appropriately manage information assets based on the Security Policy, etc.
Board of Directors meeting minutes and other minutes and reports of important committees, etc. areprepared and retained by the responsible department in accordance with laws and regulations and internal
rules. These documents are organized and preserved in accordance with the internal rules so that the directors
can always view them.

- 7 -(3) Rules and other systems related to management of the risk of loss
Under the Basic Rules for Risk Management and the Crisis Management Rules, basic rules and manuals
are established for each type of risk and risk management is implemented.
A Risk Management Committee is established as the risk management supervising organization, anddiscusses and examines reports on the status of various risks, comprehensive risk management, etc.
The status of credit risk, market-related risk, liquidity risk, operational risk, etc. is regularly reported to
the Board of Directors.
The Audit Department is established as an organization directly controlled by the Board of Directors, andit conducts internal audits of each department at headquarters, branch offices, and group companies.
(4) System to ensure that the execution of duties by directors is performed efficiently
Meetings of the Board of Directors are held once a month, and otherwise as necessary. Various
committees are established and cross-sectional discussions are held on important matters. In addition,
duties of directors are clarified based on managerial posts, rules on division of duties, etc., and efforts are
made to ensure that duties are executed efficiently.
Directors regularly report to the Board of Directors on the status of their execution of business.
(5) System to ensure proper business activities in the business group comprised of the Bank and groupcompanies
In accordance with the Affiliate Company Management Rules, a department in charge of operations for
managing group companies, such as risk management and compliance, is established, and important matters
for Bank approval and to be reported to the Bank are stipulated.
The General Planning Department is responsible for managing group companies, and a system isestablished to receive reports on the details of business from group companies in accordance with the
Affiliate Company Management Rules and provide guidance and management for group companies.
In addition, the Bank’s Audit Department has a system to conduct audits with regard to the appropriatenessand effectiveness of the internal control systems, etc. of group companies.
A system is established to enable the Bank and group companies to operate and respond to the compliancehotline in a unified manner.
(6) Information related to employees who assist the duties of the Audit Committee
The Audit Committee Administrative Office is established to assist the duties of the Audit Committee,
and full-time, dedicated employees are assigned thereto. The opinion of the Audit Committee regarding thenumber of Audit Committee Administrative Office employees and the appointment thereof is heard inadvance and respected.

- 8 -(7) Matters related to independence from other directors (excluding directors who are Audit Committee
Members) of employees who are to assist in the duties of the Audit Committee, and matters related toensuring the effectiveness of the instructions given by the Audit Committee to the employees
The opinion of the Audit Committee is respected with regard to the appointment, transfer, and performance
review of employees assigned to the Audit Committee Administrative Office.
Employees who belong to the Audit Committee Administrative Office are not to receive instructions ororders from persons other than the Audit Committee.
(8) System for directors (excluding directors who are Audit Committee Members) and employees to report to
the Audit Committee and other systems related to reporting to the Audit Committee, and system to ensurethat a person who reports to the Audit Committee is not treated disadvantageously due to making the report
A system is established to circulate important internal approval documents and reports to full-time Audit
Committee Members, and to report any material risks that arise.
A system is established to enable the Audit Committee to seek explanations from directors (excluding
directors who are Audit Committee Members) or employees regarding reported matters, etc. as necessary.
A system is established such that a full-time Audit Committee Member is one of the Bank’s and groupcompanies’ compliance hotline reporting and consultation contacts, and can receive reports and be consulted.
In addition, the person reporting or consulting is kept confidential and treated so as not to suffer any
disadvantage, etc. in the course of employment.
(9) Matters related to policies concerning procedures for advanced payment or reimbursement of expenses
that arise with regard to execution of duties of Audit Committee Members (limited to the execution of Audit
Committee duties) or other processing of expenses or obligations that arise with regard the execution of thosedutiesIf an Audit Committee Member finds it necessary in order to execute their duties, they may ask the Bankfor the expenses therefor.
(10) Other systems to ensure that audits by the Audit Committee are performed effectively
The Audit Committee conducts regular interviews, etc. with the Representative Director. In addition, asystem is established to ensure that audits are conducted effectively, such as by cooperating and holding
regular meetings with attorneys, accounting auditors, corporate auditors at group companies, and the Audit
Department, which is the internal audit division.

- 9 -<Outline of Operating Status of Systems to Ensure Proper Business Activities>
The operating status of systems to ensure proper business activities is as follows.
(1) Compliance systems-

The Bank distributes to its officers and employees the Compliance Manual that puts together the Aichi
Bank Code of Ethics and Code of Conduct, compliance guidance, basic laws and regulations, Q&A, etc.,
and strives to raise awareness and ensure compliance with laws and regulations.

-

The Compliance Committee meets every other month in principle to improve and strengthen thecompliance system.

-

Based on the Compliance Regulations, a compliance program is formulated for the fiscal year, and reports
are made to the Compliance Committee and the Board of Directors every six months on the status of
implementation of the compliance program, the details of material compliance violations andcountermeasures, and other material matters.

-

With regard to the system for reporting and consulting on violations of laws and regulations, etc., acompliance hotline has been established with the Bank’s full-time Audit Committee Members, General
Manager of Audit Department, and a third-party organization (attorney) as points of contact, and the statusof reporting, etc. is regularly reported to the Compliance Committee and the Board of Directors.

-

The status of responses to anti-social forces is reported to the Compliance Committee and the Board of
Directors.

(2) Risk management system-

The Bank holds a meeting of the Risk Management Committee every other month in principle to reporton the status of various risks, discuss and examine the status of comprehensive risk management, etc., anddevelop provisions and manuals concerning risk management and crisis management.

-

In addition to the status of comprehensive risk management, an overview of each type of risk is reported
to the Board of Directors every six months.

-

The Audit Department conducts internal audits of each department at headquarters, branch offices, andgroup companies, and reports the audit results and progress of improvement, etc. to the Board of Directors
every six months.

(3) System for ensuring the efficient execution of duties by directors-

Meetings of the Board of Directors are held regularly once a month and at any time as necessary. In thecurrent fiscal year, the company has held 12 regular Board of Directors meetings and nine extraordinary
Board of Directors meetings.

- 10 -

-In addition, in order to discuss important matters, meetings are held of the Management Committee (18times), the Risk Management Committee (10 times), and the Compliance Committee (9 times).

-

Duties of directors are clarified based on managerial posts, rules on division of duties, etc., and regular
reports are made to the Board of Directors on the status of directors’ execution of business.

-

Minutes and reports of the minutes of meetings of the Board of Directors and other important committees,
etc. are prepared and are stored and managed by the responsible department in accordance with laws andregulations and internal rules.

(4) Systems for ensuring proper business activities in the Bank’s group-

The management system of group companies and important matters, etc. that require an application for
approval and reporting to the Bank are stipulated in the Affiliate Company Management Rules. In addition,
the General Planning Department, as the department responsible for managing group companies, hasestablished a system for receiving reports on the details of operations and conducting guidance for andmanagement of group companies.

-

The Auditing Department conducts audits on the appropriateness and effectiveness of the internal control
posture, etc. of group companies.

-

A system has been established that allows the Bank and group companies to operate and respond tocompliance hotlines in a unified manner.

(5) Ensuring, etc. that audits by the Audit Committee are performed effectively-

The Audit Committee holds regular interviews with the representative director, and regularly exchanges
information and cooperates with the accounting auditor, corporate auditors of group companies, and the
Audit Department, which is the internal audit division, etc.

-

The Bank’s and group companies’ important internal approval documents and reports are circulated tofull-time Audit Committee Members as necessary, and full-time Audit Committee Members attend
important meetings of various committees, etc.

-

In order to assist in the Audit Committee’s duties, there are full-time staff members who are unable toreceive instructions from outside the Audit Committee.

- 11 -

Statement of Changes in Equity for the 113th Period(From April 1, 2021 to March 31, 2022)(Unit: millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Amount ofstatedcapitalCapitalreserve

Other
capitalsurplusTotal
capitalsurplus13,834－

13,834Retained Reserveforearnings
reserve reduction
entry ofreplacedassetsTotal
retainedearnings

Generalreserve

Retainedearnings
brought
forward127,280

4,376

137,484

Dividends of surplus−1,721−1,721

Net income for period

10,801

10,801140

140−2,000－−9−9Balance at the beginning of period

18,0005,392

434

Change of items during period

Acquisition of treasury shares−9

Disposition of treasury shares−9

Reversal of revaluation difference on
land
Provision of general reserve

2,000

Transfer to capital surplus from retained
earnings

99Changes in the amount for the period(net amount) for items other thanshareholders’ equity
Total change during period
Balance at end of period

－

－

－

－

－

－

2,000

7,211

9,211

18,00013,834－

13,834

5,392

434

129,280

11,587

146,695- 12 -

(Unit: millions of yen)
Shareholders’ equity

Valuation and translation adjustments

Valuationdifference
Total
Treasuryonshareholder
sharesavailables’ equity
for-salesecurities
Balance at the beginning of period−1,055

168,263

59,255Rights to
Total
Deferredvaluation subscribe
Revaluation
for new
gains orandreserve forshareslosses ontranslation
landhedgesadjustments
100

8,413

67,768302

Total equity

236,334

Change of items during period
Dividends of surplus−1,721−1,721

Net income for period

10,801

10,801

Acquisition of treasury shares

−3

−3

−3

Disposition of treasury shares

78

69

69

Reversal of revaluation difference on
land

140

140

Provision of general reserve－－

Transfer to capital surplus from retained
earnings－－

Changes in the amount for the period(net amount) for items other thanshareholders’ equity−16,638535−140−16,243−43−16,286

Total change during period

75

9,286

−16,638535−140−16,243−43−6,999Balance at end of period−979

177,549

42,616635

8,272

51,525259

229,334- 13 -

Notes to the Non-Consolidated Financial Statements
Stated monetary amounts are rounded down to the nearest million yen.
Significant accounting policies
1. Valuation basis and valuation method for marketable securities
The valuation of marketable securities is carried out in accordance with the market value method (selling costs arecalculated using the moving average method).
2.

Valuation basis and valuation method for securities
The valuation of securities is carried out using the amortized cost method using the moving average method for bonds
held to maturity (straight-line method), the cost method using the moving average method for shares in subsidiaries andsubsidiary corporations, etc., and the market value method for other securities (selling costs are calculated using themoving average method), but the cost method using the moving average method is used for shares, etc. without market
price.

3.

Valuation differences on available-for-sale securities are included in equity.
Valuation criteria and valuation method for derivative transactions

4.

Derivative transactions are evaluated based on the market value method.
Depreciation method for fixed assets(1) Tangible fixed assets (excluding leased assets)
Tangible fixed assets are depreciated using the declining balance method (however, the straight-line method forbuildings excluding ancillary equipment acquired on or after April 1, 1998, and for ancillary equipment and structuresacquired on or after April 1, 2016).
The principal useful life is as follows:
Buildings
8–50 years
Other
3–20 years(2) Intangible fixed assets (excluding leased assets)
Intangible fixed assets are depreciated using the straight-line method. Software for own use is depreciated based on
the usable period within the Bank (five years).
(3) Leased assets
Leased assets in “tangible fixed assets” or “intangible fixed assets” under finance leases that do not involve transfer ofownership are depreciated using the straight-line method, with the lease term as the useful life of the lease period. The
residual value is zero.

5.

The basis for the translation of foreign currency dominated assets and liabilities into Japanese currency
Foreign currency-denominated assets and liabilities are converted into yen using the exchange rate on the closing date.

- 14 -

6.

Allowance recording standards(1) Allowance for doubtful accounts
Allowances for doubtful accounts are recorded as follows in accordance with the pre-prescribed amortization andallowance rules.
For claims equivalent to claims against normal obligors and claims requiring attention stipulated in the “Guidelines on
Self-Assessment of Assets of Banks and Other Financial Institutions and Audit of Bad Debt Amortization andAllowance for Doubtful Accounts” (Japan Institute of Certified Public Accountants Special Committee on Audits ofBanks, etc. Report No. 4, April 14, 2022), the expected loss amount for the next year or the expected loss amount for
the next three years is estimated and recorded, with the expected loss amount calculated by calculating the loss rate
based on the average value of the bad debt record rate over a certain period in the past based on the bad debt record
for one year or three years, and adding necessary adjustments such as future prospects to this. For claims corresponding
to claims against obligors with a concern of bankruptcy, the estimated amount of collateral that can be disposed of andthe estimated recoverable amount from the guarantee are deducted from the amount of the claim, and the remaining
amount that is deemed necessary is recorded. For claims corresponding to claims against legally or substantiallybankrupt obligors, the estimated amount of collateral that can be disposed of and the estimated recoverable amountfrom the guarantee are deducted from the amount of the claim, and the remaining amount is recorded.
All claims are assessed by the asset valuation department in cooperation with the sales-related department based on
the asset self-assessment standards.
(2) Allowance for investment loss
In order to provide for losses on investment, the reserve for investment losses is recorded in the amount deemednecessary in consideration of the financial position, etc. of securities issuers.
(3) Allowance for bonuses payable
In order to provide for the payment of bonuses to employees, the reserve for bonuses is recorded in the estimatedamount of bonus payments to employees that are attributable to the current fiscal year.
(4) Allowance for officers’ bonuses payable
In order to provide for the payment of bonuses to officers, the reserve for officer bonuses is recorded in the estimatedamount of bonus payments to officers that are attributable to the current fiscal year.
(5) Allowance for retirement benefits
In order to provide for the payment of employee retirement benefits, a reserve for retirement benefits is recorded basedon the estimated amount of retirement benefit obligations and pension assets at the end of the current fiscal year. The
method of attributing the estimated amount of retirement benefits to the period lasting until the end of the current fiscal
year when calculating the retirement benefit obligations is based on the benefit calculation formula standard. Actuarial
differences are expensed over a period (13–14 years) that is no longer than the average remaining service period for
employees as of the year in which they arise, starting from the first year following that in which they arise.
(6) Allowance for officers’ retirement benefits
In order to provide for the payment of retirement benefits to executive officers, a reserve for officer retirement benefits
is recorded in the amount of estimated payment of retirement benefits to executive officers that can be recognized ashaving occurred by the end of the current fiscal year.

- 15 -

(7) Allowance for reimbursement losses for inactive deposits
In order to provide for reimbursement losses based on reimbursement claims from depositors for inactive deposits thatwere recognized as profit, a reserve for reimbursement of inactive deposits is recorded in the expected amount of future
reimbursement losses based on past reimbursements.
(8) Allowance for contingent loss
In order to provide for future payments of obligations through liability sharing systems, etc. for guarantees of credit
guarantee associations pertaining to loans, etc., a reserve for contingent losses (reserve for guarantee losses) is recordedin the amount deemed necessary in consideration of past bad debts, etc.
7.

Method of recording revenue and expenses
The main performance obligation in key businesses concerning revenue generated from contracts with customers is theprovision of financial services, etc., and revenue is recognized in the amount that is expected to be received in exchange
for promised goods or services when control of such goods or services transfers to the customer.

8.

Hedge accounting method
Interest rate risk hedging
The method of hedge accounting for interest rate risk arising from financial assets and liabilities is based on deferredhedges prescribed in “Accounting and Audit Treatment regarding Application of Financial Instruments AccountingStandards in the Banking Industry” (Japanese Institute of Certified Public Accountants Industry Committee Practical
Guidelines No. 24, March 17, 2022; “Industry Audit Committee Practical Guidelines No. 24”). With regard to the hedging
effectiveness assessment method, for hedging that offsets market fluctuations, we group into each certain (remaining)
period and then identify and evaluate the deposits and loans, etc. to be hedged and interest rate swap transactions, which
are hedging instruments. In addition, with regard to hedging that fixes cash flows, effectiveness is evaluated by verifying
the correlation between interest rate fluctuation factors of the hedged items and the hedging instruments.
For some assets, deferred hedges are used by individual hedges that directly correspond with hedged items and hedging
instruments.
The hedging effectiveness assessment has been omitted because the terms of the hedging instruments and hedged items
are essentially the same, so market fluctuations are offset at the start of hedging and continuously thereafter.
Among the above hedging relationships, the special treatment set out in “Treatment of Hedge Accounting for Financial
Instruments that Reference LIBOR” (Practical Issues Task Force Report No. 40, March 17, 2022; Accounting Standards
Board of Japan) is applied to all hedging relationships within the scope of the report. The details of hedge accounting towhich this practical response report is applied are as follows.
Hedge accounting method
Deferred hedging
Type of financial instrument that is the hedging instrument
Interest rate swap
Type of financial instruments that are hedged
Types of hedge transaction

Japanese government bond
Offsetting market fluctuations- 16 -

9.

Accounting treatment for consumption tax, etc.
Non-deductible consumption tax, etc. on tangible fixed assets is recorded in expenses for the current fiscal year.

Changes to accounting policies(Application of Accounting Standards for Recognition of Revenue, etc.)
The Accounting Standards for Revenue Recognition (Corporate Accounting Standards No. 29, March 31, 2020;“Revenue Recognition Accounting Standards”), etc. have been applied from the beginning of the current fiscal year, andrevenue is recognized in the amount expected to be received in exchange for promised goods or services when control ofsuch goods or services transfers to the customer.
As a result, part of the consideration paid to customers such as cash-backs has changed from the method of being treatedas “operating expenses” or “other ordinary expenses” in “ordinary expenses” to the method of making a reduction from thetransaction price.
This effect that this change has on the financial statements is minor.
(Application of Accounting Standards for Fair Value Measurement, etc.)
The Accounting Standards for Fair Value Measurement (Corporate Accounting Standards No. 30, July 4, 2019; “Fair
Value Measurement Accounting Standards”), etc. have been applied from the beginning of the current fiscal year, and inaccordance with the transitional treatment set forth in Section 19 of the Fair Value Measurement Accounting Standards andSection 44-2 of the Accounting Standards for Financial Instruments (Corporate Accounting Standards No. 10, July 4, 2019),
the new accounting policies established by the Fair Value Measurement Accounting Standards will be applied in the future.
The effect that this change has on the financial statements is minor.
Significant accounting estimates
Items for which the amount was recorded in the financial statements for the current fiscal year based on accounting
estimates and that could have a material impact on the financial statements for the next fiscal year are as follows.
Allowance for doubtful accounts(1) Amount recorded in the financial statements for the current fiscal year
Allowance for doubtful accounts
13,223 million yen(2) Information that contributes to an understanding of the content of an important accounting estimate pertaining to theidentified item(i) Calculation method
As stated in “(1) Allowance for doubtful accounts” under 6. Allowance recording standards” of “Significant
accounting policies,” assets are valued based on asset self-assessment standards, and allowances for doubtful accounts
are recorded in accordance with the amortization and allowance rules according to the determined debtor category.
(ii) Key assumptions
Debtor category is determined based on quantitative information such as the debtor’s financial information in
addition to making a judgment taking qualitative factors, etc. into consideration, and there is a high degree of
uncertainty about the estimate mainly in the following areas.

- 17 -

-

Ascertaining the credit status of the debtor, including the future prospects for performance of the debtor(including financial analysis, industry trends, use of funds, repayment plan, etc.)-

Estimating expected losses based on the recent economic environment and future outlook based on risk
factors and past bad debt results
Regarding the estimates for allowance for doubtful accounts due to the COVID-19 pandemic, it is expected that
escalation of the pandemic and the resulting stagnation of economic activity will continue to have an impact in thenext fiscal year, but it is expected that economic activity will gradually recover with the support of economic
measures by the government.
Against this backdrop, it is assumed that some industries will continue to see an impact on earnings such as lower
sales, and that there will be some degree of impact on credit risk for loans, etc. Based on these assumptions, in orderto provide for the expected losses due to such impact, the allowance for doubtful accounts is recorded by reflecting

the deterioration of debtors’ recent performance, which is expected to be impacted, in the debtor categorization.
(iii) Impact on financial statements for the next fiscal year
The above assumptions involve a high degree of uncertainty, and changes in the assumptions used in the initial
estimates due to escalation of the pandemic or changes in economic environment and changes in borrowers’ financial
situations, etc. may have a material impact on the allowance for doubtful accounts in the financial statements for the
next fiscal year.

- 18 -

Matters to Be Set Down in Notes(Balance Sheet-Related)
1.
2.

Total amount of shares of affiliates: 1,888 million yen
The claims under the Banking Act and the Act on Emergency Measures for the Revitalization of Financial Functions are
as follows. Claims are recorded in the accounts for corporate bonds (limited to contracts under which the redemption of
the principal and payment of the interest in whole or in part are guaranteed, and such corporate bond is issued throughthe private placement of securities (Article 2, Paragraph 3 of the Financial Instruments and Exchange Act)), loans, andforeign exchange under “securities,” and accrued interest, suspense payments, and customers’ liabilities for acceptancesand guarantees under “other assets” in the balance sheet.
Amount of claims subject to bankruptcy or reorganization proceedings and7,478 million yen

equivalent claims
Amount of claims with risks

40,489 million yen

Amount of claims requiring monitoring
Amount of claims in arrears for three months or more

5,005 million yen
302 million yen

Amount of restructured loans
Subtotal

4,703 million yen
52,974 million yen

Amount of normal claims
Total amount

2,756,813 million yen
2,809,787 million yen“Claims subject to bankruptcy or reorganization proceedings and equivalent claims” means claims held against debtors
with failed business status due to grounds such as a petition for commencement of bankruptcy proceedings,
commencement of reorganization proceedings, or commencement of rehabilitation proceedings, and any other type ofclaims equivalent thereto.
“Claims with risks” means claims that do not fall under the category of claims subject to bankruptcy or reorganization
proceedings and equivalent claims and for which, although the debtor has not entered bankruptcy, there is a highpossibility that loan principal cannot be recovered or interest cannot be received according to the contract because ofdifficulties in the financial condition and business performance of the debtor.
“Claims in arrears for three months or more” are loans for which the payment of principal or interest has been not paid
for three months or more from the day following the agreed payment date, and which do not fall under the category ofclaims subject to bankruptcy or reorganization proceedings and equivalent claims or claims with risks.
“Restructured loans” are loans that, for the purpose of the rehabilitation or support of the debtor, have reduced or
exempted interest rates, deferred payment of interest, deferred repayment of principal, loan forgiveness, or otherarrangements that are advantageous to the debtor, and do not fall under the category of claims subject to bankruptcy orreorganization proceedings and equivalent claims, claims with risks, or claims in arrears for three months or more
“Normal claims” are claims classified as those other than claims subject to bankruptcy or reorganization proceedings andequivalent claims, claims with risks, claims in arrears for three months or more, and restructured loans, and for which the
debtor has no particular financial condition or business performance problems.
The aforementioned amount of claims is before deducting the allowance for doubtful claims.
Change in presentation
Following the implementation from March 31, 2022 of the Cabinet Office Ordinance Partially Revising the Ordinancefor Enforcement of the Banking Act, etc. (Cabinet Office Ordinance No. 3 of January 24, 2020), the categories, etc. of
risk-monitored claims under the Banking Act are presented in accordance with the classification, etc. of disclosed claims
under the Act on Emergency Measures for the Revitalization of Financial Functions.
3.

Discounts on negotiable instruments are treated as financial transactions pursuant to the Industry Audit Committee- 19 -

Practical Guidelines No. 24. The bank acceptances, commercial bills, documentary bills, and foreign exchange purchases,
etc. that have been accepted pursuant thereto have rights enabling disposition at will by way of sale or (re-) collateral.
4.

The face value of this amount is 14,346 million yen.
In loan participation, the amount recorded on the balance sheet is 3,248 million yen out of the participation principal
amount accounted for as loans to original debtors based on Accounting and Presentation of Loan Participation (JapaneseInstitute of Certified Public Accountants Accounting System Committee No. 3, November 28, 2014)

5.

Assets offered as collateral are as follows.
Assets offered as collateral
Securities
Loans

463,045 million yen
111,268 million yen

Obligations corresponding to the security assets
Call money

6,119 million yen

Security accepted for bond lending transactions
Borrowed money

49,241 million yen
447,070 million yen

In addition to the above, 704 million yen of securities has been provided as collateral for transactions such as foreignexchange settlements and substitutes for futures trading margins, etc.
Other assets include 10,000 million yen of deposited margin from central clearing houses and 334 million yen ofguarantee money.
6.

Overdraft agreements and commitment line agreements pertaining to loans are agreements that promise to lend funds up
to a certain limit provided there is no breach of the terms and conditions set forth in the agreement if a request is received
from a customer to execute a loan. The unused loan balance pertaining to such agreements is 619,394 million yen, andall have an original agreement term of one year or less (or are unconditionally revocable at any time).
As many of these agreements end without drawdown, the undrawn loan balance itself does not necessarily affect theBank’s future cash flow. Many of these agreements contain provisions to the effect that the Bank may reject a loan
drawdown request or reduce the maximum amount of the contract due to a change in the financial situation, preservationof claims, and other reasonable grounds. In addition to requiring collateral such as real estate, securities, etc. as necessary
at the time of contract, the customer’s business conditions are regularly ascertained based on predetermined internal
procedures after entering into the agreement, and the agreement is reviewed and measures for credit protection, etc. are

7.

taken as necessary.
A revaluation of land for business use was conducted in conformance with the Act on Revaluation of Land (Act No. 34
of March 31, 1998), and the amount corresponding to tax on the resulting revaluation difference is recorded to thecategory for liabilities as a “deferred tax liability for revaluation,” and the amount after this deduction is recorded to thecategory for equity as the “land revaluation difference.”
Date of revaluation:
March 31, 1998
The method of reevaluation stipulated in Article 3, Paragraph 3 of said Act.
Calculation by making areasonable adjustment based on the taxable value of the land
value tax prescribed in Article 2, item (iv) of the Order for
Enforcement of the Act on Revaluation of Land (Cabinet OrderNo. 119 of March 31, 1998).
The difference between the total amount of the market value at the end of the current fiscal year of the land forbusiness use for which revaluation has been carried out as prescribed in Article 10 of said Act and the total amountof the book value after the revaluation of the said land for business use
The difference is not stated because the market value of the land for which revaluation was carried out exceeds- 20 -

the book value after the revaluation.
8.
9.

Amount of accumulated amortization for tangible fixed assets
Amount of reduction entries for tangible fixed assets

24,207 million yen
1,892 million yen

10. Of the corporate bonds under “securities,” the Bank’s guarantee obligation for corporate bonds through private placementof securities (Article 2, Paragraph 3 of the Financial Instruments and Exchange Act) is 36,078 million yen.
11. Total amount of monetary claims against directors arising from transactions with directors
12. Total amount of monetary claims with respect to affiliates

3 million yen
7,200 million yen

13. Total amount of monetary obligations with respect to affiliates

5,123 million yen- 21 -

(Profit and Loss Statement-Related)
1. Revenue from transactions with affiliates
Total amount of revenue pertaining to money management transactions
Total amount of revenue pertaining to service transactions, etc.

35 million yen
14 million yen

Total amount of revenue pertaining to other operations and other current transactions
Expenses due to transactions with affiliates

2.

72 million yen

Total amount of expenses pertaining to fund-raising transactions
Total amount of expenses pertaining to service transactions, etc.

50 million yen
47 million yen

Total amount of expenses pertaining to other operations and other current transactions
Total expenses pertaining to other transactions

246 million yen
0 million yen

The book value of the following assets has been reduced to the recoverable value due to a change in the use of the asset
or a continuous decline in land prices, etc., and the amount of such decrease and removal expenses, etc. are recorded to
extraordinary losses as impairment losses (186 million yen).
Category
RegionMain useType
OperatingassetsAichi
Prefecture

3 sales branches, etc.

Impairment loss (millions of yen)

Land and building, movable
assets, etc.

186
(Of which, land
(Of which, buildings, etc.

71)
77)

(Of which, movable assets,
etc.

－)

(Of which, removal expenses 37)
Total

186
(Of which, land
(Of which, buildings, etc.

71)
77)

(Of which, movable assets, －)etc.
(Of which, removal expenses 37)
Operating assets are grouped by branch office, which is the smallest division of management accounting (however, abranch office group that conducts business in a coordinated manner is that group unit).
In addition, idle assets are treated as one unit.
The recoverable value used to measure the impairment loss in the current fiscal year is the net sale price. The net saleprice is calculated by deducting the estimated amount of disposition expenses from the real estate appraisal amount,etc.

- 22 -

3.

Transactions with related parties
Officers and major shareholders (limited to individuals), etc.

Type

StatedcapitalLine oforCompanybusiness
Locatio capitaldesignationorncontribu
or nameprofessiotionn(millions of yen)Close
relative YasumichiofI n u k a i
officer(Note)－－

Certifiedt a x
accountantHolding(held)
ratio ofvotingrights, etc.
( % )

－

RelatioE n d o f
Details of Transactionshipp e r i o dthen amount Accounttobalancetransactio (millions
title
related(millions of
nsof yen)
party
yen)

－

(Averagebalance)Lending
30
of funds
Loans(Lending
interest rate)
0

Transaction terms and policies for deciding transaction terms, etc.
Lending of funds is decided in the same manner as general transaction terms and conditions.

- 23 -

29

(Statement of Changes in Equity-Related)
Matters regarding class and number of treasury shares(Unit: thousands of shares)
Number ofshares at the end
Summaryof the current
fiscal year

Number of sharesat the beginning of
the current fiscal
year

Increase in
number of sharesin current fiscal
year

Decrease in
number of sharesin the current
fiscal year

Common stock

189

0

14

176

T

189

0

14

176

Treasury shares

o

t

a l

(Note)(Note) 1. The increase in the number of common stock treasury shares of 0 thousand shares is due to an increaseof 0 thousand shares from purchases of fractional units of shares.
2. The decrease in the number of common stock treasury shares of 14,000 shares is a decrease of 0
thousand shares due to request(s) for additional purchase of fractional shares and a decrease of 14,000
shares due to treasury share dispositions in conjunction with the exercise of stock options.
(Securities-Related)
In addition to government bonds, local government bonds, corporate bonds, stocks, and other securities, trust beneficial
1.

interests in trading account securities and monetary claims purchased are included in the balance sheet.
Trading securities (as of March 31, 2022)
Valuation difference included in profit and loss for thecurrent fiscal year (millions of yen)
Trading securities

02.

Bonds held to maturity (as of March 31, 2022)
No applicable matters.

3.

Shares in subsidiaries, subsidiary corporations, etc. and affiliated corporations, etc. (as of March 31, 2022)
No applicable matters.
(Note)
Amount of shares, etc. without market price recorded on the balance sheet
Amount recorded on the balance sheet (millions of yen)
Shares of subsidiaries
corporations, etc.

andsubsidiary

1,888
－

Shares of affiliated corporations, etc.

- 24 -

4.

Available-for-sale securities (as of March 31, 2022)
Amount recordedon the balance
sheet(millions of yen)

Acquisition cost
(millions of yen)Amount ofdifference(millions of yen)

Shares115,790

53,21362,577

Bond certificates

189,453

188,243

1,210

999

998

0

66,897

66,687

210

121,557

120,557

1,000

Overseas bonds

17,78817,673115

Other

93,09682,657

10,439Sub total

416,130

341,787

74,343

Shares12,12913,686−1,557

Bond certificates

389,434

394,612−5,177

126,798

129,791−2,992

97,54898,805−1,257

165,087

166,015−927

Overseas bonds

56,13058,453−2,322

Other

123,481

128,057−4,576

Sub Total

581,176594,810−13,634

997,306

936,597

60,709

Type

Japanesegovernment
bonds
Local
government
bonds

Items for whichamount recorded onbalance sheet
exceeds acquisition
cost

Corporate bonds

Japanesegovernment
bonds
Local
government
bonds

Items for whichamount recorded onbalance sheet does
not exceed
acquisition cost

Corporate bonds

Total(Note)

Amount recorded on the balance sheet for shares without market price and partnershipcontributions, etc., which are not included in the table above
Amount recorded on the balance sheet(millions of yen)

Unlisted shares

1,403

Partnershipcontributions, etc.

1,003

Partnership contributions, etc. are not subject to market value disclosure pursuant to Paragraph 27 of the
Guidelines for Application of Accounting Standards for Fair Value Measurement (Guidelines on Applicationof Corporate Accounting Standards No. 31, July 4, 2019).

- 25 -

5.

Available-for-sale securities sold during the current fiscal year (from April 1, 2021 to March 31, 2022)
Sale proceeds(millions of yen)

Total gain on sale(millions of yen)

Total loss on sale(millions of yen)

Shares13,085

5,353

532

Bond certificates

28,29945

79

14,501

43

32

－

－

－

13,7982

47

Overseas bonds

9,790

4

12

Other

19,218

489

960

Total

70,393

5,891

1,584

Japanesegovernment bonds
Local government
bonds
Corporate bonds

6.

Securities subject to impairment
Among securities other than trading securities (excluding shares, etc. without market prices and partnership contributions,etc.), if the market value of the securities has fallen significantly compared to the acquisition cost and the market price is
not expected to recover to the acquisition cost, the relevant market value is treated as the amount recorded on the balance
sheet and the valuation difference is treated as a loss in the current fiscal year (“impairment loss”).
The amount of impairment loss in the current fiscal year is 72 million yen (of which, 64 million yen is for shares and 8
million is for corporate bonds).
In addition, the criteria used to determine that the market value has “fallen significantly” is that the market value has
fallen by 30 percent or more compared to the acquisition cost.
Of these, all stocks with a decline rate of 50 percent or more are collectively booked as impairment losses, and for thosewith a decline rate of 30 percent or more but less than 50 percent, all impairment losses are recognized except for thosethat are deemed to have a possibility of recovery in the market price.

- 26 -(Tax Effect Accounting-Related)
The breakdown by major cause of deferred tax assets and deferred tax liabilities is respectively as follows.
Deferred tax assets
Allowance for doubtful accounts
Allowance for contingent loss

3,692 million yen
478
348

Depreciation expense
Depreciation of securities

1,390
336

Land impairment, etc.
Other

1,599

Deferred tax assets subtotal
Valuation allowance

7,846−1,985

Deferred tax assets total

5,861

Deferred tax liabilities
Valuation difference on available-for-sale securities
Allowance for employee retirement benefits
Gain on establishment of retirement benefit trust
Deferred gains or losses on hedges
Reserve for reduction entry of replaced assets−18,092
−14
−337
−280
−191
−11

Other

−18,928−13,066 million yen

Deferred tax liabilities total
Net deferred tax liabilities(Revenue Recognition)
Notes have been omitted due to sharing the same content stated in the consolidated balance sheets- 27 -

(Stock Options, etc.-Related)
1. Amount reported as expenses and account title for the current fiscal year pertaining to stock options
2.

General and administrative expenses: 25,000,000 yen
Stock option details, scope, and changes(1) Stock option details
Series 1 rights to subscribe for new shares

Series 2 rights to subscribe for new sharesClassification and number ofpeople subject to grant

13 directors of the Bank (excluding outside
directors)

13 directors of the Bank (excluding outside
directors)

Number of stock options byclass of share (Note)

13,000 shares of common stock of the Bank

12,200 shares of common stock of the Bank

Grant dateJuly 20, 2012

July 19, 2013

Vesting conditions

No vesting conditions have been set.

No vesting conditions have been set.

Requisite service period

No requisite service period has been set.

No requisite service period has been set.

Exercise period

July 21, 2012 – July 20, 2042

July 20, 2013 – July 19, 2043

Series 3 rights to subscribe for new shares

Series 4 rights to subscribe for new sharesClassification and number ofpeople subject to grant

13 directors of the Bank (excluding outside
directors)

13 directors of the Bank (excluding outside
directors)

Number of stock options byclass of share (Note)

9,100 shares of common stock of the Bank

7,100 shares of common stock of the Bank

Grant dateJuly 25, 2014

July 24, 2015

Vesting conditions

No vesting conditions have been set.

No vesting conditions have been set.

Requisite service period

No requisite service period has been set.

No requisite service period has been set.

Exercise period

July 26, 2014 – July 25, 2044

July 25, 2015 – July 24, 2045

Series 5 rights to subscribe for new shares
13 directors of the Bank (excluding
directors who are Audit Committee
members and outside directors)

Series 6 rights to subscribe for new shares
11 directors of the Bank (excluding
directors who are Audit Committee
members and outside directors)

Number of stock options byclass of share (Note)

10,600 shares of common stock of the Bank

7,400 shares of common stock of the Bank

Grant dateJuly 22, 2016

July 21, 2017

Vesting conditions

No vesting conditions have been set.

No vesting conditions have been set.

Requisite service period

No requisite service period has been set.

No requisite service period has been set.

Exercise period

July 23, 2016 – July 22, 2046

July 22, 2017 – July 21, 2047

Classification and number ofpeople subject to grant- 28 -

Series 7 rights to subscribe for new shares
9 directors of the Bank (excluding directors
who are Audit Committee members andoutside directors)

Series 8 rights to subscribe for new shares
7 directors of the Bank (excluding directors
who are Audit Committee members andoutside directors)

Number of stock options byclass of share (Note)

7,700 shares of common stock of the Bank

9,500 shares of common stock of the Bank

Grant dateJuly 20, 2018

July 19, 2019

Vesting conditions

No vesting conditions have been set.

No vesting conditions have been set.

Requisite service period

No requisite service period has been set.

No requisite service period has been set.

Exercise period

July 21, 2018 – July 20, 2048

July 20, 2019 – July 19, 2049

Series 9 rights to subscribe for new shares
7 directors of the Bank (excluding directors
who are Audit Committee members andoutside directors)

Series 10 rights to subscribe for new shares
7 directors of the Bank (excluding directors
who are Audit Committee members andoutside directors)

Number of stock options byclass of share (Note)

10,600 shares of common stock of the Bank

10,800 shares of common stock of the Bank

Grant dateJuly 22, 2020

July 21, 2021

Vesting conditions

No vesting conditions have been set.

No vesting conditions have been set.

Requisite service period

No requisite service period has been set.

No requisite service period has been set.

Exercise period

July 23, 2020 – July 22, 2050

July 22, 2021 – July 21, 2051

Classification and number ofpeople subject to grantClassification and number ofpeople subject to grant(Note)

Disclosed as equivalent number of shares- 29 -

(2) Scope of and changes in stock options
These disclosures cover the stock options that existed in the current fiscal year (ending March 2022), and state the(i)number of stock options as the equivalent number of shares.
Number of stock options
Series 1
Series 2
Series 3
Series 4
Series 5
rights to subscribe rights to subscribe rights to subscribe rights to subscribe rights to subscribe
for new sharesfor new sharesfor new sharesfor new sharesfor new shares

Before vesting
End of preceding
fiscal year
Granted

－

－

－

－

－

－

－

－

－

－

Canceled

－

－

－

－

－

Vested

－

－

－

－

－

Unvested

－

－

－

－

－

4,000 shares

6,900 shares

5,800 shares

6,100 shares

10,600 shares

－

－

－

－

－

2,600 shares

2,900 shares

1,900 shares

2,300 shares

2,900 shares

－

－

－

－

－

1,400 shares

4,000 shares

3,900 shares

3,800 shares

7,700 shares

After vesting
End of preceding
fiscal year
VestedExercised rights
CanceledUnexercised rights

Series 6
Series 7
Series 8
Series 9
Series 10
rights to subscribe rights to subscribe rights to subscribe rights to subscribe rights to subscribe
for new sharesfor new sharesfor new sharesfor new sharesfor new shares
Before vesting
End of preceding
fiscal year
Granted

－

－

－

－

－

－

－

－

－

10,800 shares

Canceled

－

－

－

－

－

Vested－－－－10,800 shares

Unvested

－

－

－

－

－

7,400 shares

7,700 shares

9,500 shares

10,600 shares

－

－

－

－

1,300 shares

100 shares－

After vesting
End of preceding
fiscal year
VestedExercised rights
CanceledUnexercised rights

10,800 shares
－

－

－

－

－

－

－

6,100 shares

7,600 shares

9,500 shares

10,600 shares

10,800 shares- 30 -

(ii) Unit price information

Exercise Price
Average share priceupon exercise
Fair unit value as of the
grant date

Exercise Price
Average share priceupon exercise
Fair unit value as of the
grant date

Series 1
Series 2
Series 3
Series 4
Series 5
rights to subscribe rights to subscribe rights to subscribe rights to subscribe rights to subscribe
for new sharesfor new sharesfor new sharesfor new sharesfor new shares
1 yen
1 yen
1 yen
1 yen
1 yen
2,848 yen

3,375 yen

3,831 yen

4,363 yen

4,566 yen

3,645 yen

4,556 yen

4,959 yen

6,811 yen

4,466 yen

Series 6
Series 7
Series 8
Series 9
Series 10
rights to subscribe rights to subscribe rights to subscribe rights to subscribe rights to subscribe
for new sharesfor new sharesfor new sharesfor new sharesfor new shares
1 yen
1 yen
1 yen
1 yen
1 yen
4,700 yen

4,700 yen－－－

6,004 yen

4,673 yen

3,523 yen

2,358 yen

2,367 yen

- 31 -

3.

Method of estimating fair unit value of stock options
The fair unit value for the series 10 rights to subscribe for new shares granted in the current fiscal year is as follows.
(1) Valuation method used: Black-Scholes model(2) Main basis figures and estimation method
Series 10 rights to subscribe for new shares
Share price volatility (Note 1)

30.666%

Expected remaining period (Note 2)

4.1 years

Forecasted dividend (Note 3)

120 yen/share

Risk-free interest rate (Note 4)−0.152％(Notes)1. The calculation is based on the stock price performance for the period corresponding to the expected
remaining period (from June 2017 to July 2021).
2. The expected remaining period is estimated as the difference between the average term of office of directors
who have retired in the past 10 years and the average term of office of current incumbent directors.
3. This is the dividend performance for the fiscal year ending March 2021.

4.

4. This is the yield of government bonds corresponding to the expected remaining term.
Method of estimating the number of vesting stock options
Given the difficulty of forming reasonable estimates for the number of options to expire in the future, the estimate
basically adopts the method of reflecting only the number of options that have expired in the past.

(Per-share information)
Amount of equity per share
Current net profit amount per share

21,275.57 yen
1,003.85 yen

Diluted net income per share

998.15 yen- 32 -

(Significant post-balance sheet events)
Business Integration between the Bank and The Chukyo Bank, Limited.
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”) dated December 10, 2021, as aresult of the Board of Directors meetings held at each Bank as of May 11, 2022, and assuming the approval of the Banks’general meetings of shareholders, the acquisition 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 the settlement of the Treasury Stock Tender Offer, the Banks have bothresolved 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 the overview of the Joint Holding Company, as well as on theterms and conditions of the Share Transfer. Both Banks have executed a business integration agreement (hereinafter the“Business Integration Agreement”), and jointly developed a share transfer plan as of the same day.
1.

Purpose of the Business Integration through the Share Transfer(1) Background and Purpose of the 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 ofrevenue, not just 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, therebybuilding a sustainable profit base and contributing to the local community as local financial institutions.

- 33 -

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, enhancetheir 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 as of May 11,2022 the Banks have reached a definitive agreement regarding this Business Integration.
(2)(i)

Method of the Share Transfer and Details of Allotment in the Share Transfer

Method of the Share Transfer
The Share Transfer will be a joint share transfer, under which the Banks will become wholly-owned subsidiaries of

the Joint Holding Company to be incorporated following the share transfer, and the Joint Holding Company will become
the wholly-owning parent company of the Banks.
(ii)

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 share of the Joint Holding Company shall be allocated. The shareunit of the Joint Holding Company is planned to be 100 shares.
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.
The above share transfer ratio may change by mutual agreement of the Banks following the execution of the Business
Integration Agreement, but before the effective date of the Share Transfer, if an event is newly discovered or occurs that
may have a significant impact on the share transfer ratio.

- 34 -

(Note 2)
Number of new shares to be delivered by the Joint Holding Company (planned)
Common stock: 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 from being subject to the new share delivery in thecalculation above. Note that, if as a result of the Treasury Stock Tender Offer, shareholders of either Aichi Bank or
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 newshares delivered by the Joint Holding Company.
(Note 3)

Handling of shares constituting less than one 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, Inc. (the “Tokyo Stock Exchange”), the Nagoya Stock Exchange, Inc.
(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 the Companies Act, demand that the Joint Holding
Company purchase such Fractional Shares. Furthermore, in accordance with the provisions of Article 194(1) of theCompanies 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 tothose fractional shares said shareholders already possess.
(3) Handling of rights to subscribe for new shares and bonds with rights to subscribe for new shares in conjunction
with the Share Transfer
With 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. Neither of the Banks has
issued bonds with rights to subscribe for new shares.

- 35 -

2.

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 issued

Thursday, March 31, 2022

Record date of the annual shareholders’ meetings (Both Banks)

Wednesday, May 11, 2022

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)

Holding of annual general meetings of shareholders (adoption ofresolution approving the Share Transfer Plan) (Both Banks)

Thursday, September 29, 2022 (Planned)

Tokyo Stock Exchange and Nagoya Stock Exchange de-listing date
(Both Banks)

Before Friday, September 30, 2022
(Planned)

Start date of Treasury Stock Tender Offer settlement

Friday, September 30, 2022 (Planned)

Record date of interim dividend for both Banks (including Special
Dividend by Chukyo Bank)

Monday, October 3, 2022 (Planned)

Formation date of the Joint Holding Company (effective date of the Share
Transfer)
Share listing date of the Joint Holding Company(Note)

The above schedule may be changed upon consultation between the Banks where necessary in thecourse of moving towards the Share Transfer or for other reasons.

3.

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

Name

The Aichi Bank, Ltd.

Location

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

Job title andrepresentative

name

of

The Chukyo Bank, Limited
33-13

Sakae

3-chome,Naka-ku,

NagoyaYukinori Ito, President

Hideo Kobayashi, President

Description of businessBanking businessBanking businessAmount of stated capital

18 billion yen

31.8 billion yen

Date of establishment

May 15, 1944

February 10, 1943

Total number of issued shares

Common stock: 10,943,240 shares

Common stock: 21,780,058 shares

Settlement Term

March 31

March 314.

Company to be newly founded through the Share Transfer- 36 -

Trade Name

Aichi Financial Group, Inc.
(English: Aichi Financial Group, Inc.)

Location of headquarters

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

Functional location of principal
headquarters

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

Amount of stated capital

20,000 million yen

Settlement Term

March 31

5.

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.

- 37 -

Consolidated Statement of Changes in Equity for the 113th Period(From April 1, 2021 to March 31, 2022)(Unit: millions of yen)
Shareholders’ equity

Balance at the beginning of the current
periodAmount of statedcapitalCapital surplus

Retained earnings

Treasury shares

Total shareholders’equity18,00013,883142,074−1,055

172,903

Cumulative effects of changes inaccounting policies
Balance at the beginning of the current
period after changes in accounting policy-38
18,00013,883142,036-38−1,055

172,865

Change of items during period
Dividends of surplus−1,721−1,721

Net income for period attributable toshareholders of the parent company

10,945

10,945Acquisition of treasury shares−9

Disposition of treasury shares
Reversal of revaluation difference on
land

−3

−3

78

69

140

140

9

−9

－

－

－

9,355

75

9,430

18,00013,883

151,391−979

182,295

Transfer to capital surplus from retained
earnings
Changes in the amount for the period(net amount) for items other thanshareholders’ equity
Total change during period
Balance at end of period- 38 -

(Unit: millions of yen)
Accumulated Other Comprehensive Income

Balance at the beginning of the period

Valuationdifferenceonavailablefor-salesecurities

Total
Cumulative
accumulat
Revaluatio adjustments
ed othern reserveofcomprehefor landretirement
nsive
benefits
incomeDeferred
gains orlosses onhedges59,345

100

8,413

991

68,850

Rights to
subscribe
for new
shares302

Cumulative effects of changes inaccounting policies
Balance at the beginning of the current
period after changes in accounting policy

59,345

100

8,413

991

68,850302

Noncontrolling Total equity
interests

4,335

246,391

-20

-58

4,315

246,333

Change of items during period
Dividends of surplus−1,721

Net income for period attributable toshareholders of the parent company

10,945Acquisition of treasury shares−3

Disposition of treasury shares

69

Reversal of revaluation difference on
land

140

Transfer to capital surplus from retained
earnings－

Changes in the amount for the current
period (net amount) for items other thanshareholders’ equity-16,627

535

−140

-65

-16,297−43

90-16,250

Total change during period-16,627

535

−140

-65

-16,297−43

90-6,820

Balance at end of period

42,718

635

8,272

925

52,552

259

4,405

239,512- 39 -

Notes to the Consolidated Financial Statements
Stated monetary amounts are rounded down to the nearest million yen.
Matters regarding accounting policies
1. Valuation basis and valuation method for trading account securities
The valuation of trading account securities is carried out in accordance with the market value method (selling costs arecalculated using the moving average method).
2.

Valuation basis and valuation method for securities
The valuation of securities is carried out using the amortized cost method using the moving average method for bonds
held to maturity (straight-line method), and the and the market value method for other securities (selling costs arecalculated using the moving average method), but the cost method using the moving average method is used for shares,
etc. without market price.
Valuation differences on available-for-sale securities are included in equity.

3.
4.

Valuation criteria and valuation method for derivative transactions
Derivative transactions are evaluated based on the market value method.
Depreciation method for fixed assets(1) Tangible fixed assets (excluding leased assets)
The Bank’s tangible fixed assets are depreciated using the declining balance method (however, the straight-line method
for buildings excluding ancillary equipment acquired on or after April 1, 1998, and for ancillary equipment andstructures acquired on or after April 1, 2016).
The principal useful life is as follows:
Buildings
Other

8–50 years
3–20 years

Tangible fixed assets of consolidated subsidiaries and subsidiary corporations, etc. are amortized mainly using thestraight-line method based on the estimated useful life of the assets.
(2) Intangible fixed assets (excluding leased assets)
Intangible fixed assets are depreciated using the straight-line method. Furthermore, software for own use is depreciatedbased on the useful life determined by the Bank and consolidated subsidiaries and subsidiary corporations, etc. (5years).
(3) Leased assets
Leased assets in "tangible fixed assets" and "intangible fixed assets" under finance leases that do not involve transferof ownership are depreciated using the straight-line method, with the lease term as the useful life of the lease period.
The residual value is zero.

- 40 -

5.

Recording standards for allowances for doubtful accounts
The Bank's allowances for doubtful accounts are recorded as follows in accordance with the pre-prescribed amortization
and allowance rules.
For claims equivalent to claims against normal obligors and claims requiring attention stipulated in the “Guidelines on
Self-Assessment of Assets of Banks and Other Financial Institutions and Audit of Bad Debt Amortization and Allowancefor Doubtful Accounts” (Japan Institute of Certified Public Accountants Special Committee on Audits of Banks, etc.
Report No. 4, April 14, 2022), the expected loss amount for the next year or the expected loss amount for the next three
years is estimated and recorded, with the expected loss amount calculated by calculating the loss rate based on the averagevalue of the bad debt record rate over a certain period in the past based on the bad debt record for one year or three years,
and adding necessary adjustments such as future prospects to this. For claims corresponding to claims against obligors
with a concern of bankruptcy, the estimated amount of collateral that can be disposed of and the estimated recoverable
amount from the guarantee are deducted from the amount of the claim, and the remaining amount that is deemed necessary
is recorded. For claims corresponding to claims against legally or substantially bankrupt obligors, the estimated amountof collateral that can be disposed of and the estimated recoverable amount from the guarantee are deducted from theamount of the claim, and the remaining amount is recorded.
All claims are assessed by the asset valuation department in cooperation with the sales-related department based on theasset self-assessment standards.
Allowances for doubtful accounts for consolidated subsidiaries and subsidiary corporations, etc. are recorded respectively
in the amount believed necessary in light of the past bad debt ratio, etc. for ordinary claims, and in an estimatedunrecoverable amount for specific claims such as claims with a possibility of default, individually taking into account the6.

possibility of collection.
Recording standards for allowance for investment loss
In order to provide for losses on investment, the reserve for investment losses is recorded in the amount deemed necessary
in consideration of the financial position, etc. of securities issuers.

7.

8.

Recording standards for allowance for bonuses payable
In order to provide for the payment of bonuses to employees, the reserve for bonuses is recorded in the estimated amountof bonus payments to employees that are attributable to the current consolidated fiscal year.
Recording standards for allowance for officers' bonuses payable
In order to provide for the payment of bonuses to officers, the reserve for officer bonuses is recorded in the estimatedamount of bonus payments to officers that are attributable to the current consolidated fiscal year.

9.

Recording standards for allowance for officers' retirement benefits
In order to provide for the payment of retirement benefits to the Bank’s executive officers and the officers of consolidated
subsidiaries and subsidiary corporations, etc., a reserve for officer retirement benefits is recorded in the amount of
estimated payment of retirement benefits to the Bank’s executive officers and the officers of consolidated subsidiaries
and subsidiary corporations, etc. that can be recognized as having occurred by the end of the current consolidated fiscal
year.

10. Recording standards for allowance for reimbursement losses for inactive deposits
In order to provide for reimbursement losses based on reimbursement claims from depositors for inactive deposits thatwere recognized as profit, the Bank’s reserve for reimbursement of inactive deposits is recorded in the expected amountof future reimbursement losses based on past reimbursements.

- 41 -

11. Recording standards for allowances for contingent loss
In order to provide for future payments of obligations through liability sharing systems, etc. for guarantees of credit
guarantee associations pertaining to loans, etc., a reserve for contingent losses (reserve for guarantee losses) is recordedin the amount deemed necessary in consideration of past bad debts, etc.
12. Accounting for retirement benefits
The method of attributing the estimated amount of retirement benefits to the period lasting until the end of the current
consolidated fiscal year when calculating the retirement benefit obligations is based on the benefit calculation formula
standard. Furthermore, actuarial differences are expensed over a period (13–14 years) that is no longer than the averageremaining service period for employees as of the consolidated fiscal year in which they arise, starting from the first
consolidated fiscal year following that in which they arise.
13. The basis for the translation of foreign currency dominated assets and liabilities into Japanese currency
The foreign currency-denominated assets and liabilities of the Bank and consolidated subsidiaries and subsidiarycorporations, etc. are added using the converted yen amount based on the exchange rate on the consolidated closing date.
14. Recording standards for material revenue and expenses(1) Recording standards for revenue and expenses in finance lease transactions
The recording standards for revenue and expenses pertaining to finance lease transactions are based on the method ofrecording ordinary income and ordinary expenses when lease fees are received.
(2) Recording standards for revenue arising from contracts with customers
The principal performance duty in the principal business related to revenue arising from contracts with customers of
the Bank and its consolidated subsidiaries and subsidiary corporations, etc. is the provision of financial services, etc.,
and revenue is recognized at the time of the transfer of control of the promised goods or services to the customer in
the amount that is expected to be received in exchange for such goods or services.
15. Material hedge accounting methods
Interest rate risk hedging
The method of hedge accounting for interest rate risk arising from the Bank’s financial assets and liabilities is based ondeferred hedges prescribed in "Accounting and Audit Treatment regarding Application of Financial Instruments
Accounting Standards in the Banking Industry" (Japanese Institute of Certified Public Accountants Industry Committee
Practical Guidelines No. 24, March 17, 2022; “Industry Audit Committee Practical Guidelines No. 24”). With regard to
the hedging effectiveness assessment method, for hedging that offsets market fluctuations, we group into each certain(remaining) period and then identify and evaluate the deposits and loans, etc. to be hedged and interest rate swap
transactions, which are hedging instruments. In addition, with regard to hedging that fixes cash flows, effectiveness isevaluated by verifying the correlation between interest rate fluctuation factors of the hedged items and the hedging
instruments.
For some assets, deferred hedges are used by individual hedges that directly correspond with hedged items and hedging
instruments.
The assessment of the effectiveness of hedges has been omitted because the terms of the hedging instruments and hedged
items are essentially the same, so market fluctuations are offset at the start of hedging and continuously thereafter.

- 42 -

Among the above hedging relationships, the special treatment set out in “Treatment of Hedge Accounting for Financial
Instruments that Reference LIBOR” (Practical Issues Task Force Report No. 40, March 17, 2022; Accounting Standards
Board of Japan) is applied to all hedging relationships within the scope of the report. The details of hedge accounting towhich this practical response report is applied are as follows.
Hedge accounting method
Deferred hedging
Type of financial instrument that is the hedging instrument
Interest rate swap
Type of financial instruments that are hedged
Types of hedge transaction

Japanese government bond
Offsetting market fluctuations

16. Accounting treatment for consumption tax, etc.
Non-deductible consumption tax, etc. on tangible fixed assets is recorded in expenses for the current consolidated fiscalyear.

- 43 -

Changes to accounting policies(Application of Accounting Standards for Recognition of Revenue, etc.)
The Accounting Standards for Revenue Recognition, (Corporate Accounting Standard No. 29 March 31, 2020;
hereinafter, "Income Revenue Recognition Accounting Standard"), etc. were applied from the beginning of the current
consolidated fiscal year, and at the time that control of the promised goods or services transfers to customers, we havedecided to recognize revenue at the amount expected to be received in exchange for such goods or services.
As a result, part of the consideration paid to customers such as cash-backs has changed from the method of being treatedas “operating expenses” or “other ordinary expenses” in “ordinary expenses” to the method of making a reduction from thetransaction price. In addition, although the revenue recognition standard for credit card annual membership fees at ourconsolidated subsidiary corporations, etc. had been recognized as a lump sum at the time of receipt, they are performance
duties that are satisfied over a certain period of time, so from the current consolidated fiscal year we now recognize revenue
depending on the period elapsed.
The application of the Income Revenue Recognition Accounting Standard, etc. is in accordance with the transitional
treatment set forth in the proviso to Paragraph 84 of the Income Revenue Recognition Accounting Standard, and thecumulative effect amount in the case that the new accounting policy was retroactively applied prior to the beginning of thecurrent consolidated fiscal year is added to or subtracted from retained earnings at the beginning of the current consolidated
fiscal year, and the new accounting policy is applied from that beginning balance.
As a result, the impact on the consolidated balance sheet, consolidated profit and loss statement, net asset amount per
share, and the amount of net income attributable to parent company shareholders for the current consolidated fiscal year islimited.
Due to the cumulative impact amount having been reflected in the equity at the beginning of the current consolidated
fiscal year, the beginning balance of retained earnings in the consolidated statement of changes in equity has decreased by
38 million yen, and the beginning balance of non-controlling interests has decreased by 20 million yen.
(Application of Accounting Standards for Fair Value Measurement, etc.)
The Accounting Standards for Fair Value Measurement (Corporate Accounting Standards No. 30, July 4, 2019; hereinafter,"Fair Value Measurement Accounting Standards"), etc. have been applied from the beginning of the current consolidated
fiscal year, and in accordance with the transitional treatment set forth in Section 19 of the Fair Value Measurement
Accounting Standards and Section 44-2 of the Accounting Standards for Financial Instruments (Corporate AccountingStandards No. 10, July 4, 2019), the new accounting policies established by the Fair Value Measurement AccountingStandards, etc. will be applied in the future. The effect that this change has on the consolidated financial statements is minor.
In addition, in the "Financial Instruments-Related" notes, we have made notes on matters such as the breakdown of themarket value of financial instruments by level.

- 44 -

Significant accounting estimates
Items for which the amount was recorded in the consolidated financial statements for the current consolidated fiscal year
based on an accounting estimate and that could have a material influence on the consolidated financial statements for the
next consolidated fiscal year are as follows.
Allowance for doubtful accounts(1) The amount recorded in the consolidated financial statements for the current consolidated fiscal year
Allowance for doubtful accounts
14,059 million yen(2) Information that contributes to an understanding of the content of an important accounting estimate pertaining to theidentified item(i) Calculation method
As stated in "5. Recording standards for allowances for doubtful accounts " under "Matters regarding Accounting
Policies," assets are valued based on the asset self-assessment standards, and allowances for doubtful accounts arerecorded in accordance with the amortization and allowance rules according to the determined debtor category.
(ii) Key assumptions
Debtor category is determined based on quantitative information such as the debtor’s financial information in addition
to making a judgment taking qualitative factors, etc. into consideration, and there is a high degree of uncertainty about
the estimate mainly in the following areas.
- Ascertaining the credit status of the debtor, including the future prospects for performance of the borrower-(including financial analysis, industry trends, use of funds, repayment plan, etc.)
Estimating expected losses based on the recent economic environment and future outlook based on risk factors

and past bad debt results
Regarding the estimates for allowance for doubtful accounts due to the COVID-19 pandemic, it is expected that
escalation of the pandemic and the resulting stagnation of economic activity will continue to have an impact in thenext consolidated fiscal year, but it is expected that economic activity will gradually recover with the support ofeconomic measures by the government.
Against this backdrop, it is assumed that some industries will continue to see an impact on earnings such as lower
sales, and that there will be some degree of impact on credit risk for loans, etc. Based on these assumptions, in orderto provide for the expected losses due to such impact, the allowance for doubtful accounts is recorded by reflecting
the deterioration of debtors’ recent performance, which is expected to be impacted, in the debtor categorization.
(iii) Impact on consolidated financial statements for the next consolidated fiscal year
The above assumptions involve a high degree of uncertainty, and changes in the assumptions used in the initial
estimates due to escalation of the pandemic or changes in economic environment and changes in borrowers’ financial
situations, etc. may have a material impact on the allowance for doubtful accounts in the consolidated financial
statements for the next consolidated fiscal year.

- 45 -

Matters to Be Set Down in Notes(Consolidated Balance Sheet-Related)
1.

The claims under the Banking Act and the Act on Emergency Measures for the Revitalization of Financial Functions are
as follows. Claims are recorded in the accounts for corporate bonds (limited to contracts under which the redemption of
the principal and payment of the interest in whole or in part are guaranteed, and such corporate bond is issued throughthe private placement of securities (Article 2, Paragraph 3 of the Financial Instruments and Exchange Act)), loans, andforeign exchange under “securities,” and accrued interest, suspense payments, and customers’ liabilities for acceptancesand guarantees under “other assets” in the consolidated balance sheet.
Amount of claims subject to bankruptcy or reorganization proceedings andequivalent claims

7,504 million yen

Amount of claims with risks
Amount of claims requiring monitoring

40,489 million yen
5,005 million yen

Amount of claims in arrears for three months or moreAmount of restructured loans
Subtotal
Amount of normal claims

302 million yen
4,703 million yen
53,000 million yen
2,756,925 million yen

Total amount
2,809,926 million yen“Claims subject to bankruptcy or reorganization proceedings and equivalent claims” means claims held against debtors
with failed business status due to grounds such as a petition for commencement of bankruptcy proceedings,
commencement of reorganization proceedings, or commencement of rehabilitation proceedings, and any other type ofclaims equivalent thereto.
“Claims with risks” means claims that do not fall under the category of claims subject to bankruptcy or reorganization
proceedings and equivalent claims and for which, although the debtor has not entered bankruptcy, there is a highpossibility that loan principal cannot be recovered or interest cannot be received according to the contract because ofdifficulties in the financial condition and business performance of the debtor.
“Claims in arrears for three months or more” are loans for which the payment of principal or interest has been not paid
for three months or more from the day following the agreed payment date, and which do not fall under the category ofclaims subject to bankruptcy or reorganization proceedings and equivalent claims or claims with risks.
“Restructured loans” are loans that, for the purpose of the rehabilitation or support of the debtor, have reduced or
exempted interest rates, deferred payment of interest, deferred repayment of principal, loan forgiveness, or otherarrangements that are advantageous to the debtor, and do not fall under the category of claims subject to bankruptcy orreorganization proceedings and equivalent claims, claims with risks, or claims in arrears for three months or more
“Normal claims” are claims classified as those other than claims subject to bankruptcy or reorganization proceedings andequivalent claims, claims with risks, claims in arrears for three months or more, and restructured loans, and for which the
debtor has no particular financial condition or business performance problems.
The aforementioned amount of claims is before deducting the allowance for doubtful claims.
(Change in presentation)
Following the implementation from March 31, 2022 of the Cabinet Office Ordinance Partially Revising the Ordinancefor Enforcement of the Banking Act, etc. (Cabinet Office Ordinance No. 3 of January 24, 2020), the categories, etc. of
risk-monitored claims under the Banking Act are presented in accordance with the classification, etc. of disclosed claims
2.

under the Act on Emergency Measures for the Revitalization of Financial Functions.
Discounts on negotiable instruments are treated as financial transactions pursuant to the Industry Audit Committee
Practical Guidelines No. 24. The bank acceptances, commercial bills, documentary bills, and foreign exchange purchases,- 46 -

etc. that have been accepted pursuant thereto have rights enabling disposition at will by way of sale or (re-) collateral.
The face value of this amount is 14,346 million yen.
3.

4.

In loan participation, the amount recorded on the consolidated balance sheet is 3,248 million yen out of the participation
principal amount accounted for as loans to original debtors based on Accounting and Presentation of Loan Participation(Japanese Institute of Certified Public Accountants Accounting System Committee No. 3, November 28, 2014)
Assets offered as collateral are as follows.
Assets offered as collateral
Securities
Loans
Obligations

463,045 million yen
111,268 million yen

corresponding

to

the

security assets
Call Money and bills sold

6,119 million yen

Security accepted for bond lendingtransactions

49,241 million yen

Borrowed money
447,070 million yen
In addition to the above, 704 million yen of securities has been provided as collateral for transactions such as foreignexchange settlements and substitutes for futures trading margins, etc.
Other assets include 10 billion yen of deposited margin from central clearing organization and 355 million yen in security
deposits.
5.

Overdraft agreements and commitment line agreements pertaining to loans are agreements that promise to lend funds up
to a certain limit provided there is no breach of the terms and conditions set forth in the agreement if a request is received
from a customer to execute a loan. The unused loan balance pertaining to these agreements is 619,411 million yen, andall have an original agreement term of one year or less (or unconditionally revocable at any time).
As many of these agreements end without drawdown, the undrawn loan balance itself does not necessarily affect future
cash flows of the Bank and consolidated subsidiaries and subsidiary corporations, etc. Many of these agreements containprovisions to the effect that the Bank and consolidated subsidiaries and subsidiary corporations, etc. may reject a loan
drawdown request or reduce the maximum amount of the contract due to a change in the financial situation, preservationof claims, and other reasonable grounds. In addition to collecting collateral such as real estate and securities, etc. asnecessary at the time of contract, the customer’s business conditions are regularly ascertained based on predeterminedinternal procedures after entering into the agreement, and the agreement is reviewed and measures for credit protection,etc. are taken as necessary.

6.

A revaluation of the Bank’s land for business use was conducted in conformance with the Act on Revaluation of Land
(Act No. 34 of March 31, 1998), and the amount corresponding to tax on the resulting revaluation difference is recorded
to the category for liabilities as a “deferred tax liability for revaluation,” and the amount after this deduction is recorded
to the category for equity as the “land revaluation difference.”
Date of revaluation:
March 31, 1998
The method of reevaluation stipulated in Article 3, Paragraph 3 of said Act.

Calculationbymakingareasonable adjustment based on the taxable value of the land
value tax prescribed in Article 2, item (iv) of the Order for
Enforcement of the Act on Revaluation of Land (Cabinet
Order No. 119 of March 31, 1998).
The difference between the total amount of the market value at the end of the current consolidated fiscal year of
the land for business use for which revaluation has been carried out as prescribed in Article 10 of said Act and- 47 -

the total amount of the book value after the revaluation of the said land for business use
The difference is not stated because the market value of the land for which revaluation was carried out exceeds
7.

the book value after the revaluation.
Amount of accumulated amortization for tangible fixed assets

8.
9.

Amount of reduction entries for tangible fixed assets
1,892 million yen
Of the corporate bonds in "Securities", the guarantee obligation for corporate bonds through private placement of

24,730 million yen

securities (Article 2, Paragraph 3 of the Financial Instruments and Exchange Act) is 36,078 million yen.
10. Total monetary claims against directors arising from transactions with our bank's directors- 48 -

3 million yen

(Consolidated Profit and Loss Statement-Related)
1. "Other ordinary income" includes 5,431 million yen on the sale of shares, etc.
2.

"Other ordinary expenses" includes 532 million yen in losses on the sale of shares, etc. and 67 million yen in retirementof shares, etc.

3.

The book value of the following assets has been reduced to the recoverable value due to a change in the use of the asset
or a continuous decline in land prices, etc., and the amount of such decrease and removal expenses, etc. are recorded to
extraordinary losses as impairment losses (186 million yen).
Category
RegionMain useType
OperatingAichi
3 sales branches, Land and building,assetsPrefectureetc.
movable assets, etc.

Impairment loss (million yen)186
(Of which, land
(Of which, buildings, etc.
(Of which, movable assets, etc.
(Of which, removal expenses

71)
77)
－)
37)
Total
186
(Of which, land71)
(Of which, buildings, etc.
77)
(Of which, movable assets, etc.
－)
(Of which, removal expenses
37)
Operating assets are grouped by branch office, which is the smallest division of management accounting (however, abranch office group that conducts business in a coordinated manner is that group unit).
In addition, idle assets are treated as one unit.
The recoverable price used to measure the impairment loss for the current consolidated fiscal year is the net sale price.
The net sale price is calculated by deducting the estimated amount of disposition expenses from the real estateappraisal amount, etc.

- 49 -

(Consolidated Statement of Changes in Equity-Related)
1. Matters regarding class and number of shares issued and class and number of treasury shares(Unit: thousands of shares)
Number of shares
Number of shares
Increase in number Decrease in number
at beginning of theat end of theof shares during the of shares during theSummcurrent
current
current consolidated current consolidatedary
consolidated fiscal
consolidated fiscal
fiscal year
fiscal year
year
year
Issued shares
Common stockTotal

10,943－－

10,943

10,943－－

10,943

189

0

14

176

189

0

14

176

Treasury shares
Common stock
Total(Note)(Note)

1. The increase in the number of common stock treasury shares of 0 thousand shares is due to anincrease of 0 thousand shares from purchases of fractional units of shares.
2. The decrease in the number of common stock treasury shares of 14,000 shares is a decrease of 0
thousand shares due to request(s) for additional purchase of fractional shares and a decrease of2.

14,000 shares due to treasury share dispositions in conjunction with the exercise of stock options.
Matters regarding rights to subscribe for new shares and own rights to subscribe for new sharesClass ofsharesunderlying
rights to
subscribe
for new
sharesNumber of shares underlying rights to subscribe for
new shares

Balance ate n d o fcurrent
consolidate Summd f i s c a l ary
y e a r(millions ofyen)

Category

Breakdown ofrights to
subscribe for
new shares

Our
bank

Share warrants
asstock
options

－

259

Total

－

259

Beginningof current
consolidate
d fiscalyear

Increase incurrent
consolidate
d fiscalyear- 50 -

Decrease incurrent
consolidate
d fiscalyear

End ofcurrent
consolidate
d fiscalyear

3.

Matters Regarding Dividends(1) Dividend amounts paid during the current consolidated fiscal year
(Resolutions)Share class

Total dividend
amountDividend
amount per
share

June 25, 2021
Annual General Meetingof Shareholders

Commonstock

752 million
yen

November 12, 2021
Board of Directors

Commonstock

968 million
yen

Total

－

1,721 million
yen(Note)

Record date

Effective date

70 yenMarch 31, 2021

June 28, 2021

90 yenSeptember 30,
2021

December 6,
2021

－

－

－

The dividend amount per share decided by the Annual General Meeting of Shareholders on June 25,
2021 includes a special dividend of ¥20.

(2) Dividends for which the record date falls in this consolidated fiscal year, but the effective date of the dividend will beafter the last day of the current consolidated fiscal year.
(Resolutions)Share class

Total dividend
amountDividendsourceDividend
amount per
share

Record date

Effective dateJune 24, 2022
Annual General
Meeting of
Shareholders

Commonstock

2,368 millionyen

O t h e r
Retained
Earnings

220 yenMarch 31,
2022

July 27, 2022

- 51 -

(Financial Instruments-Related)
1. Matters related to the status of financial instruments(1) The policy for dealing with financial instruments
The Bank’s group raises funds by accepting "deposits" from its customers. Also, the Bank conducts lending services
by loaning the “deposits” that are raised funds to private companies and individuals and also carries out market
investments by investing them in bonds and other securities.
We use derivative transactions for the purpose of avoiding customer exchange rate fluctuation risks and to avoid theBank's own risks in foreign currency financing transactions and rising interest rates. In addition, in order to avoid
financial assets and financial liabilities from being exposed to market risk, we use derivatives as a hedging instrumentfrom the perspective of comprehensive risk management.
With respect to certain interest rate swap transactions that are derivative transactions, we apply deferred hedges throughindividual hedges that directly match the hedged items and the hedging instruments. The assessment of hedge
effectiveness has been omitted because market fluctuations continue to be offset at and after the start of the hedge since
the terms of the hedge instrument and the hedged items are nearly the same.
(2) Details of financial instruments and their risks
The financial assets held by the Bank’s group are mainly loans to private companies and individuals, and they are
exposed to credit risk brought about by interest rate risk and a deterioration of the financial condition of borrowers,
etc.
Securities are primarily bond certificates and shares, and bond certificates are held for buying and selling, othersecurities and being held to maturity, and shares are held for the purpose of pure investment and policy-based
investment. These are exposed to issuer credit risk, interest rate fluctuation risk, market price fluctuation risk, andexchange rate risk. With regard to deposits, there are liquid deposits and term-deposits, with the maximum term ofterm deposits being five years.
As we hold financial assets and financial liabilities that entail interest rate fluctuations, we have implemented
comprehensive asset-liability management (ALM) so that no adverse effects due to interest rate fluctuations are
generated.
(3) Risk management system for financial instruments(i) Credit Risk Management
The Bank manages the credit risk of individual obligors through strict credit screening and management of individual
obligors, and by doing a time series analysis of credit risks by rating and industry, etc., strives to disperse the credit
risk of the Bank's overall portfolio.
With regard to management of credit risk of individual obligors, the Bank’s group conducts an evaluation by the credit
investigation division verifying each individual obligor's financial analysis, industry trends, use of funds, andrepayment plan, etc. We strive to keep track of the credit status of individual obligors at all times by conducting
evaluations at the time of new screenings and periodically or as needed due to the occurrence of events, etc. during
interim credit management and self-assessments after closing. Self-assessments means the categorization of assets inaccordance with the degree of claim risk based on the obligor classification and the status of collateral and guarantees,
etc. The self-assessment verification division verifies and reports to management the aggregate results, etc. of selfassessments.

- 52 -

With regard to the overall bank credit portfolio, the credit management department regularly monitors theconcentration of industries and large volume concentrations, etc. in order to seek to build a portfolio that eliminatesconcentration risk. The credit management department regularly reports the monitoring results to management.
The Bank has introduced an internal rating system. The internal rating system makes classifications by giving credit
ratings to individual obligors based on creditworthiness, so the internal ratings are used at the Bank when conducting
deal screening, credit management, and monitoring of credit portfolios.
In addition, the Bank quantifies credit risk and uses it for credit risk management.
(ii) Market Risk Management
In order to appropriately control the amount of market risk, the Compliance Risk Management Department monitors
the status of market risk at the Bank. Specifically, with regard to measurable market risks, we measure the market riskvolume, and by conducting stress testing and simulation analyses, we obtain a grasp of the market risk volume facing
the Bank and how the bank's profits and losses will change if interest rates, shares, and exchange markets fluctuatesignificantly.
The Compliance Risk Management department regularly reports the status of market risks to the Board of Directors
and Risk Management Committee, etc. The Risk Management Committee, etc. confirms that the market risk is held ina situation that is acceptable for the bank's capital status, and studies policies for controlling market risks.
○ Quantitative information on market risk
In the Bank’s group, the major risk variables are interest rate risk and share price risk. The principal financial
instruments affected by interest rate risk are “loans,” bonds classified as available-for-sale securities under “securities
and investment securities,” and “deposits,” and the principal financial instruments affected by share price fluctuation
risk are shares classified as available-for-sale securities under “securities and investment securities.” At the Bank’s
group, by dividing these financial assets and financial liabilities into "market integration risks," "bonds,” “investment
trusts, and other securities," "pure investment shares," and "policy investment shares" and calculating VaR, it is usedin quantitative analyses when managing interest rate fluctuation risk and share price fluctuation risk. The historicalsimulation method (125-day holding period, 99% confidence interval, 10-year observation period) is used to calculate
VaR.
As of March 31, 2022 (the consolidated closing date for the current period), the Bank group's overall market risk
amount (estimated amount of loss) is 31,709 million yen. When calculating VaR, we take the VaR value covering theinterest rate risk of the banking account, price fluctuation risk for investment trusts and other securities, and pricefluctuation risk of pure investment shares, and add it together with the VaR value covering price fluctuation risk ofpolicy investment shares.
The Bank’s group conducts back testing that compares the actual profit and loss to the VaR calculated by the model,
and we believe that the measurement model used captures market risk with sufficient accuracy. However, VaR
measures the market risk amount at a certain probability of occurrence calculated statistically based on past market
fluctuations, and it may not be possible to comprehend risk in circumstances where the market environment haschanged significantly to an extent that is not normally conceivable.
(4) Supplementary explanation for matters concerning market value of financial instruments, etc.
Since the market value of financial instruments uses certain assumptions, etc., such values may differ if different
assumptions, etc. are applied.

- 53 -

2.

The matters related to the market value, etc. of financial instruments
The amount recorded on the consolidated balance sheet and market value as of March 31, 2022 as well as the differences
between these values are described below. Shares, etc. without a market price and partnership contributions, etc. are notincluded in the following table (see Note 1). In addition, cash deposits, call loans and purchased notes, call money andbills sold, and security accepted for bond lending transactions have been omitted because they are settled in a short periodof time and the market value is close to book value.
(Unit: millions of yen)Amount recorded on
consolidated balanceMarket value
Amount of difference
sheet
7,238

7,238

－

49

49

－

990,476

990,476－

2,746,171

2,784,442

38,271

3,743,936

3,782,207

38,271

3,389,658

3,389,673

14

4,100

4,100

－

(3) Borrowed money

455,615455,282-332

Liabilities total

3,849,374

3,849,056-317(1) Monetary claims purchased(2) Trading account securities
Securities for trading purposes(3) Securities
Available-for-sale securities(4) Loans

2,759,402

Allowance for doubtful accounts(*1)

Assets total(1) Deposits(2) Negotiable certificates of deposit-13,231

Derivative transactions (*2)
Those to which hedge accounting has
not been applied(1,860)(1,860)Those to which hedge accounting
applies (*3)

916

916

－
－

Total derivative transactions

(944)

(944)

－

(＊1)

General allowances for doubtful accounts and individual allowances for doubtful accounts corresponding toloans are deducted.

(＊2)

Derivative transactions recorded in other assets and liabilities are presented collectively.
Net claims and obligations that arise from derivative transactions are presented in net amount. A figure inparentheses denotes an item that in total is a net obligation.

- 54 -

(＊3)

Interest rate swaps, etc. designated as hedging instruments to offset fluctuations in market prices of government
bonds that are hedged, and mainly deferred hedging is applied. “Treatment of Hedge Accounting for Financial
Instruments that Reference LIBOR” (Practical Issues Task Force Report No. 40, March 17, 2022; AccountingStandards Board of Japan) has been applied to these hedging relationships.

(Note 1)

The amounts recorded on the consolidated balance sheet for shares, etc. without a market price and partnershipcontributions, etc. are as follows, and are not included in "available-for-sale securities" under market value
information of financial instruments.
(Unit: millions of yen)
Category

Amount recorded on consolidated balance sheets

Unlisted shares (*1) (*2)

1,519

Partnership contributions (*3)

1,003

(＊1)

Non-listed shares are not subject to market value disclosure under Paragraph 5 of the "Guidelines for Disclosureof Market Value, etc. of Financial Instruments."(Guidelines on Application of Corporate Accounting Standards
No. 19, March 31, 2020)(＊2)

In the current consolidated fiscal year, the company recorded an impairment loss of 3,000,000 yen with respect
to unlisted shares.

(＊3)

Partnership contributions, etc. are not subject to market value disclosure pursuant to Paragraph 27 of the
Guidelines for Application of Accounting Standards for Fair Value Measurement (Guidelines on Applicationof Corporate Accounting Standards No. 31, July 4, 2019).

(Note 2)

Expected redemption amount after consolidated closing of accounts for Monetary claims and securities withmaturities(Unit: millions of yen)

Deposits
Call loans and purchased
notes
Monetaryclaimspurchased

Within one
year

More than one
year andwithin threeyears

More than
three years andwithin fiveyears

More than five
years andwithin sevenyears

More thanseven years
and within 10
years

More than 10
years

459,363

－

－

－

－

－

2,888

－

－

－

－

－

－

－

－

－

－

7,319

79,051

146,572

153,051

119,040

128,178

152,793311,254

493,483

384,734

253,250

321,079

741,698

852,557

640,055

537,786

372,291449,258

901,811

Securities
Within Available-forsale securitiesThose with a set term
Loans (*)
Total
(＊)

Of the loans, not included is 47,488 million yen with no prospect of the planned redemption amount , including
claims against bankrupt borrowers, effectively bankrupt borrowers, and borrowers at risk of bankruptcy, and206,414 million yen that does not have a set term.

- 55 -

(Note 3)

The planned repayment amount of corporate bonds, borrowed money, and other interest-bearing liabilities after
the consolidated closing date
(Unit: millions of yen)More thanseven years More than 10
and within
years
10 yearsWithin one
year

More than
one year andwithin threeyears

More than
three years
and within
five years

More than
five years
and withinseven years

3,195,761

187,030

6,866

－

－

－

Negotiable certificatesof deposit

4,100

－

－

－

－

－

Call money and bills sold131,119

－

－

－

－

－

Security accepted forbondlendingtransactions

49,241

－

－

－

－

－

Borrowed money

252,885

142,197

60,49537－－

3,633,108

329,228

67,36137－－

Deposits (*)

Total

(＊)

Within deposits, disclosure of demand deposits is included in "within one year."- 56 -

3.

Matters concerning the breakdown, etc. by market value level of financial instruments
The market value of financial instruments is classified into the following three levels depending on the observability andimportance of inputs used in the calculation of market value.
Level 1 market value:

Level 2 market value:

Among observable inputs pertaining to the calculation of market value, the market
value calculated using the market values concerning assets or liabilities that are thesubject of calculation of the relevant market value formed in an active market
Among observable inputs pertaining to market value, the market value calculated using
inputs pertaining to the calculation of market values other than the inputs set forth inLevel 1

Level 3 market value:

The market value calculated using unobservable inputs for calculation of market values

If multiple inputs that have a significant impact on the calculation of market value are used, the market value is classified
in the level with the lowest priority in the calculation of market prices from among the levels to which those inputs
respectively belong.
(1) Financial instruments reported on the consolidated balance sheet at market value
Current Consolidated Fiscal Year (March 31, 2022)(Unit: millions of yen)
Market value
Category
Level 1
Level 2
Level 3
Total
Monetary claims
7,238
7,238
－
－
purchased
Securities
256,037
488,654
36,356
781,047
Securities for trading
49
49
－
－
purposes
Government bonds,
49
49
－
－
municipal bonds, etc.
Available-for-sale
255,987
488,654
36,356780,998
securities
Government bonds,
127,797
164,445
292,243－municipal bonds, etc.
Corporate bonds
250,288
36,356286,645－
Shares128,180
128,180－－Other
873,91973,928－Derivative Transactions
1,068
1,068
－
－
Interest-related
916
916
－
－
Currency-related
152
152
－
－
Assets total
256,037
489,722
43,594
789,354
Derivative Transactions
2,012
2,012
－
－
Interest-related－－－－
Currency-related
2,012
2,012
－
－
Liabilities total
2,012
2,012
－
－
(＊) Investment trusts, etc. to which the transitional measures set forth in Paragraph 26 of the Guidelines for Applicationof Accounting Standards for Fair Value Measurement (Guidelines on Application of Corporate AccountingStandards No. 31, July 4, 2019) have been applied are not included in the table above. The amount of relevant
investment trusts, etc. on the consolidated balance sheet is 209,478 million yen.

- 57 -

(2) Financial instruments other than those recorded in the consolidated balance sheet at the market value
Current Consolidated Fiscal Year (March 31, 2022)(Unit: millions of yen)
Market value
Category
Level 1
Level 2
Level 3
Total
Loans
2,784,442
2,784,442－－
Assets total
2,784,442
2,784,442－－
Deposits
3,389,673
3,389,673－－
Negotiable certificates
4,100
4,100
－
－
of deposit
Borrowed money
455,282455,282－－
Liabilities total
3,849,056
3,849,056－－(Note 1)The valuation technique used to calculate the market value, and explanation of inputs pertaining to thecalculation of market value

AssetsMonetary claims purchased
Monetary claims purchased depend on the price at which they were acquired from the transacting financial institution,and based on the inputs used in the price at which they were acquired, are classified as Level 3 if using important
unobservable inputs, and at the Level 2 market value in other cases.
Securities
Securities that can use unadjusted market prices in active markets are classified as Level 1 market values. These aremainly listed stocks and government bonds.
Even if the published quotation price is used, if the market is not active, these are classified as a Level 2 market values.
These are mainly local government bonds, corporate bonds and mortgage-backed securities.
If market prices cannot be obtained, the market value is calculated using valuation techniques such as the discounted
present value method for future cash flows. We make maximum use of observable inputs in the valuation, including inputs
such as TIBOR, government bond yields, credit spreads, and loss rates in the event of bankruptcy. If an important
unobservable input is used in the calculation, these are classified as Level 3 market values.
Investment trusts are based on published standard prices, etc., and by applying transitional measures in accordance with
Paragraph 26 of the Guidelines for Application of Accounting Standards for Fair Value Measurement (Guidelines on
Application of Corporate Accounting Standards No. 31, July 4, 2019), are not classified at a level.
Loans
The market value of loans is calculated by discounting the total amount of principal and interest, by discounting the total
amount of principal and interest at a discount rate that incorporates risk factors such as credit risk for each type of loan,internal ratings and term, and these are therefore classified as Level 3 market values because the discount rate isunobservable.
Since claims, etc. against bankrupt borrowers, effectively bankrupt borrowers and borrowers at risk of bankruptcy arecalculated based on the present value of future cash flows or estimated amounts to be collected from guarantees, etc.,
market value is approximately the amount found by subtracting the recorded amount of allowances for doubtful accounts
from the recorded amount of claims, etc. on the consolidated balance sheet on the consolidated closing date, so that value
is made the market value, and these are classified as a Level 3 market value.

- 58 -

Liabilities
Deposits and negotiable deposits
With regard to demand deposits, the amount to be paid (book value) if a demand is made on the consolidated closing
date is deemed to be the market value. In addition, the market values of term deposits and negotiable deposits are classified
into certain periods, and present value is calculated by discounting future cash flows. The discount rate is the rate used for
new deposits of the same type that are accepted until the end of the remaining period (over-the-counter interest rate). For
transactions where the remaining period until the deposit maturity on the consolidated closing date is within one year, it isconfirmed that the market value is close to the book value, and the book value is used as the market value. These areclassified as Level 2 market values.
Borrowed money
With regard to borrowed money, the current value is calculated by discounting the estimated future cash flows generated
from the transaction at the risk-free rate. For transactions where the remaining period up to the maturity date on the
consolidated closing date is within one year, it is confirmed that the market value is close to the book value, and the bookvalue is used as the market value. These are classified as Level 2 market values.
Derivative Transactions
With regard to derivative transactions, most are over-the-counter transactions, and since there is no published market
price, the market value is calculated using the discounted present value method and other valuation methods according to
the type of transaction and the period until maturity. The inputs used in these valuation techniques include interest rates
and exchange rates. If an unobservable input is not used or its effects are not significant, these are classified as Level 2
market values, and they include plain vanilla type interest rate swap transactions, foreign exchange forward transactions,and the like.
(Note 2)

Information on Level 3 market values among the financial instruments recorded in the consolidatedbalance sheet at the market value(1) Quantitative information on important unobservable inputs (March 31, 2022)
ImportantCategory
Valuation technique
Scope of inputs
unobservable inputs
Securities
Available-forsale securities
Discount rate
0.0% to 12.5%
Self-Guaranteed
Discount
present
Rate of loss upon
private bonds
value method
0.0% to 7.0%
insolvency- 59 -

Weighted average of
inputs0.3%
1.1%

(2) Reconciliation from the beginning balance to the ending balance of the period, and valuation gain or loss recognizedas profit or loss for the current period (March 31, 2022)(Unit: millions of yen)
Current period’s profit/lossThisor other comprehensive
period’s
incomerecordedprofit orloss
amounts
Net
that areTransfe Transfe
Balancepurchase,valuationr tor fromBalancatsale,gains orLevel 3 Level 3
e atRecording as
beginnin Recordin
issuance
losses ofmarketmarketend of
other
g of
and
financialg of profit
value
value
periodcomprehensiv
periodsettlemen
assets andor losse incometfinancial(＊)
liabilities
held on the
consolidated balance
sheet date(＊)
Monetaryclaimspurchased
Trust
beneficiary
3,090
-107
4,255
7,238
－
－
－
－
interests
Securities
Availablefor-salesecurities
SelfGuarantee
32,476
-5
-80
3,966
－
－ 36,356－
d private
bonds(＊)
These are included in "Other operating income" and "Other operating expenses" in the consolidated profit and loss
statement.
(3) Explanation of the market value appraisal process
The Bank’s group has established policies and procedures for calculating the market price at the management meeting,and each transaction division and the Compliance Risk Management Department calculate the market value in accordance
therewith.
When calculating market values, we use the valuation model that enables the most appropriate reflection of the nature,
characteristics and risks of individual assets. In addition, even when using quoted prices obtained from third parties, theappropriateness of these prices is verified using appropriate methods such as confirmation of the valuation techniques andinputs used and comparison with the market values of similar financial instruments.
(4) Explanation of the impact on the market price in the case of changes in important unobservable inputs
Important unobservable inputs used in calculating the market value of self-guaranteed private bonds are the discount rate
and the loss rate in the event of bankruptcy. A significant increase (decrease) in these inputs will result in a significant
decline (increase) in the market price.

- 60 -

(Securities-Related)
In addition to securities on the consolidated balance sheet, trading account securities and trust beneficial interests in1.

monetary claims purchased are included.
Securities for trading purposes (as of March 31, 2022)
The valuation difference included in the profit or loss for the current consolidated
fiscal year (millions of yen)
Securities for trading purposes

02.

Bonds held to maturity (as of March 31, 2022)

3.

No applicable matters.
Available-for-sale securities (as of March 31, 2022)
Type

Amount recordedon consolidatedbalance sheet(millions of yen)

Acquisition cost
(millions of yen)Amount ofdifference(millions of yen)

116,051

53,26962,782

189,453

188,243

1,210

999

998

0

66,897

66,687

210

121,557

120,557

1,000

17,78817,673

115

93,14982,706

10,442

416,443

341,892

74,551

12,12913,686−1,557

389,434

394,612−5,177

126,798

129,791−2,992

97,54898,805−1,257

165,087

166,015−927

56,13058,453−2,322

123,576

128,158-4,581

581,271594,911-13,639997,715

936,803

60,911

Shares

Items for which amount recordedon consolidated balance sheet
exceeds acquisition costBondcertificatesJapanesegovernment
bonds
Local
government
bonds
Corporatebonds
Overseas
bonds
Other
Sub total
Shares

Items for which amount recordedon consolidated balance sheet does
not exceed acquisition costBondcertificatesJapanesegovernment
bonds
Local
government
bonds
Corporatebonds
Overseas
bonds
Other
Sub total

Total- 61 -

4.

Available-for-sale securities sold during the current consolidated fiscal year (from April 1, 2021 to March 31, 2022)
Sale proceeds(millions of yen)

Total gain on sale(millions of yen)

Total loss on sale(millions of yen)

Shares13,085

5,353

532

Bond certificates

28,29945

79

14,501

43

32

－

－

－

13,7982

47

Overseas bonds

9,790

4

12

Other

19,261489

967

70,436

5,891

1,590

Japanese government
bonds
Local government
bonds
Corporate bonds

Total
5.

Securities subject to impairment
Among securities other than securities for sale (excluding shares, etc. without market prices and partnershipcontributions, etc.), if the market price of the relevant securities has fallen significantly compared to the acquisition cost
and the market price is not expected to recover to the acquisition cost, the relevant market value is treated as the amountreported on the consolidated balance sheet and a valuation difference is treated as a loss for the current consolidated
fiscal year ("impairment loss").
The amount of impairment loss for the current consolidated fiscal year is 72 million yen (of which, 64 million yen isfor shares and 8 million is for corporate bonds).
In addition, the criteria used to determine that the market value has “fallen significantly” is that the market value has
fallen by 30 percent or more compared to the acquisition cost.
Of these, all stocks with a decline rate of 50 percent or more are collectively booked as impairment losses, and for
those with a decline rate of 30 percent or more but less than 50 percent, all impairment losses are recognized except for
those that are deemed to have a possibility of recovery in the market price.

- 62 -

(Revenue Recognition-Related)
1. Breakdown of revenue arising from contracts with customers (March 31, 2022)(Unit: millions of yen)
Reporting segment
Banking business Leasing Business
Revenue from Service
Transactions
Deposit and lending
services

Other

Total

Total

6,809

425

7,235

874

8,109

273

－

273

－

273

Exchange services

2,135

－

2,135

－

2,135

Agency services

4,297

－

4,297

－

4,297

103

425

528

874

1,403

74

－

74

0

74

6,884

425

7,309

874

8,184

40,457

7,352

47,809118

47,92847,341

7,778

55,119992

56,112Other
Other ordinary income
Ordinary income fromcontractswithcustomers
Ordinary income otherthan the above
Ordinary income inrelation to externalcustomers(Note)

1. The respective ordinary income is listed instead of sales as for general companies.
2. The "other" category is a business segment that is not included in a reporting segment, namely the credit
card business, administrative agency business, computer-based business processing, etc., and thebusiness of forming and operating investment limited partnerships, etc.

2. Information that serves as the basis for understanding the revenue arising from contracts with customers
Of the revenues from service transactions, etc. in the banking business described in the above breakdown information, themain revenues are loan-related fees from deposit and lending services, domestic and foreign exchange fees from exchange
services, and account transfer fees and deposited asset fees from agency services, and revenue is recognized on the basisof performance completion at the time of provision of the services.

- 63 -

(Stock Options, etc.-Related)
1. The amount reported as expenses and account title for the current consolidated fiscal year pertaining to stock options
2.

General and administrative expenses: 25,000,000 yen
Stock option details, scope, and changes(1) Stock option details
Series 1 rights to subscribe for new shares
13 directors of the Bank (excluding outside
directors)

Series 2 rights to subscribe for new shares
13 directors of the Bank (excluding outside
directors)

13,000 shares of common stock of the Bank

12,200 shares of common stock of the Bank

Grant dateJuly 20, 2012

July 19, 2013

Vesting conditions

No vesting conditions have been set.

No vesting conditions have been set.

Requisite service period

No requisite service period has been set.

No requisite service period has been set.

Exercise period

July 21, 2012 – July 20, 2042

July 20, 2013 – July 19, 2043

Series 3 rights to subscribe for new shares
13 directors of the Bank (excluding outside
directors)

Series 4 rights to subscribe for new shares
13 directors of the Bank (excluding outside
directors)

9,100 shares of common stock of the Bank

7,100 shares of common stock of the Bank

Grant dateJuly 25, 2014

July 24, 2015

Vesting conditions

No vesting conditions have been set.

No vesting conditions have been set.

Requisite service period

No requisite service period has been set.

No requisite service period has been set.

Exercise period

July 26, 2014 – July 25, 2044

July 25, 2015 – July 24, 2045

Series 5 rights to subscribe for new shares
13 directors of the Bank (excluding
directors who are Audit Committee
members and outside directors)

Series 6 rights to subscribe for new shares
11 directors of the Bank (excluding
directors who are Audit Committee
members and outside directors)

Number of stock options byclass of share (Note)

10,600 shares of common stock of the Bank

7,400 shares of common stock of the Bank

Grant dateJuly 22, 2016

July 21, 2017

Vesting conditions

No vesting conditions have been set.

No vesting conditions have been set.

Requisite service period

No requisite service period has been set.

No requisite service period has been set.

Exercise period

July 23, 2016 – July 22, 2046

July 22, 2017 – July 21, 2047

Classification and number ofpeople subject to grant
Number of stock options byclass of share (Note)

Classification and number ofpeople subject to grant
Number of stock options byclass of share (Note)

Classification and number ofpeople subject to grant- 64 -

Series 7 rights to subscribe for new shares
9 directors of the Bank (excluding directors
who are Audit Committee members andoutside directors)

Series 8 rights to subscribe for new shares
7 directors of the Bank (excluding directors
who are Audit Committee members andoutside directors)

Number of stock options byclass of share (Note)

7,700 shares of common stock of the Bank

9,500 shares of common stock of the Bank

Grant dateJuly 20, 2018

July 19, 2019

Vesting conditions

No vesting conditions have been set.

No vesting conditions have been set.

Requisite service period

No requisite service period has been set.

No requisite service period has been set.

Exercise period

July 21, 2018 – July 20, 2048

July 20, 2019 – July 19, 2049

Series 9 rights to subscribe for new shares
7 directors of the Bank (excluding directors
who are Audit Committee members andoutside directors)

Series 10 rights to subscribe for new shares
7 directors of the Bank (excluding directors
who are Audit Committee members andoutside directors)

Number of stock options byclass of share (Note)

10,600 shares of common stock of the Bank

10,800 shares of common stock of the Bank

Grant dateJuly 22, 2020

July 21, 2021

Vesting conditions

No vesting conditions have been set.

No vesting conditions have been set.

Requisite service period

No requisite service period has been set.

No requisite service period has been set.

Exercise period

July 23, 2020 – July 22, 2050

July 22, 2021 – July 21, 2051

Classification and number ofpeople subject to grantClassification and number ofpeople subject to grant(Note)

Disclosed as equivalent number of shares- 65 -

(2) Scope of and changes in stock options
These disclosures cover the stock options that existed in the current consolidated fiscal year (ending March 2022), andstate the number of stock options as the equivalent number of shares.
(i)

Number of stock options
Series 1
Series 2
Series 3
Series 4
Series 5
rights to subscribe rights to subscribe rights to subscribe rights to subscribe rights to subscribe
for new sharesfor new sharesfor new sharesfor new sharesfor new shares

Before vesting
End of preceding
consolidated
fiscalyear
Granted

－

－

－

－

－

－

－

－

－

－

Canceled

－

－

－

－

－

Vested

－

－

－

－

－

Unvested

－

－

－

－

－

4,000 shares

6,900 shares

5,800 shares

6,100 shares

10,600 shares

After vesting
End of preceding
consolidated
fiscalyear
VestedExercised rights
CanceledUnexercised rights

－

－

－

－

－

2,600 shares

2,900 shares

1,900 shares

2,300 shares

2,900 shares

－

－

－

－

－

1,400 shares

4,000 shares

3,900 shares

3,800 shares

7,700 shares

Series 6
Series 7
Series 8
Series 9
Series 10
rights to subscribe rights to subscribe rights to subscribe rights to subscribe rights to subscribe
for new sharesfor new sharesfor new sharesfor new sharesfor new shares
Before vesting
End of preceding
consolidated
fiscalyear
Granted

－

－

－

－

－

－

－

－

－

10,800 shares

Canceled

－

－

－

－

－

Vested－－－－10,800 shares

Unvested

－

－

－

－

－

7,400 shares

7,700 shares

9,500 shares

10,600 shares

－

－

－

－

－

10,800 shares

1,300 shares

100 shares

－

－

－

After vesting
End of preceding
consolidated
fiscalyear
VestedExercised rights
CanceledUnexercised rights

－

－

－

－

－

6,100 shares

7,600 shares

9,500 shares

10,600 shares

10,800 shares- 66 -

(ii) Unit price information

Exercise Price
Average share priceupon exercise
Fair unit value as of the
grant date

Exercise Price
Average share priceupon exercise
Fair unit value as of the
grant date

Series 1
Series 2
Series 3
Series 4
Series 5
rights to subscribe rights to subscribe rights to subscribe rights to subscribe rights to subscribe
for new sharesfor new sharesfor new sharesfor new sharesfor new shares
1 yen
1 yen
1 yen
1 yen
1 yen
2,848 yen

3,375 yen

3,831 yen

4,363 yen

4,566 yen

3,645 yen

4,556 yen

4,959 yen

6,811 yen

4,466 yen

Series 6
Series 7
Series 8
Series 9
Series 10
rights to subscribe rights to subscribe rights to subscribe rights to subscribe rights to subscribe
for new sharesfor new sharesfor new sharesfor new sharesfor new shares
1 yen
1 yen
1 yen
1 yen
1 yen
4,700 yen

4,700 yen－－－

6,004 yen

4,673 yen

3,523 yen

2,358 yen

2,367 yen

- 67 -

3.

Method of estimating fair unit value of stock options
The fair unit value for the Series 10 rights to subscribe for new shares granted in the current consolidated fiscal year is
as follows.
(1) Valuation method used: Black-Scholes model(2) Main basis figures and estimation method
Series 10 rights to subscribe for new shares
Share price volatility (Note 1)

30.666%

Expected remaining period (Note 2)

4.1 years

Forecasted dividend (Note 3)

120 yen/share

Risk-free interest rate (Note 4)−0.152％(Notes)1. The calculation is based on the stock price performance for the period corresponding to the expected
remaining period (from June 2017 to July 2021).
2. The expected remaining period is estimated as the difference between the average term of office of
directors who have retired in the past 10 years and the average term of office of current incumbent
directors.
3. This is the dividend performance for the fiscal year ending March 2021.
4. This is the yield of government bonds corresponding to the expected remaining term.

4.

Method of estimating the number of vesting stock options
Given the difficulty of forming reasonable estimates for the number of options to expire in the future, the estimate
basically adopts the method of reflecting only the number of options that have expired in the past.

(Per-share information)
Amount of equity per share
Net profit amount per share attributable to shareholders of the parent

21,811.72 yen
1,017.22 yencompany
Diluted net profit per share attributable to shareholders of the parent

1,011.45 yen

company- 68 -

(Significant post-balance sheet events)
Business Integration between the Bank and The Chukyo Bank, Limited.
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”) dated December 10, 2021, as aresult of the Board of Directors meetings held at each Bank as of May 11, 2022, and assuming the approval of the Banks’general meetings of shareholders, the acquisition 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 the settlement of the Treasury Stock Tender Offer, the Banks have bothresolved 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 the overview of the Joint Holding Company, as well as on theterms and conditions of the Share Transfer. Both Banks have executed a business integration agreement (hereinafter the“Business Integration Agreement”), and jointly developed a share transfer plan as of the same day.
1.

Purpose of the Business Integration through the Share Transfer(1) Background and Purpose of the 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 ofrevenue, not just 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, therebybuilding a sustainable profit base and contributing to the local community as local financial institutions.

- 69 -

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, enhancetheir 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 as of May 11,2022 the Banks have reached a definitive agreement regarding this Business Integration.
(2)

Method of the Share Transfer and Details of Allotment in the Share Transfer(i) Method of the Share Transfer
The Share Transfer be a joint share transfer, under which the Banks will become wholly-owned subsidiaries of the
Joint Holding Company to be incorporated following the share transfer, and the Joint Holding Company will become thewholly-owning parent company of the Banks.
(ii)

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 share of the Joint Holding Company shall be allocated. The shareunit of the Joint Holding Company is planned to be 100 shares.
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.
The above share transfer ratio may change by mutual agreement of the Banks following the execution of the Business
Integration Agreement, but before the effective date of the Share Transfer, if an event is newly discovered or occurs that
may have a significant impact on the share transfer ratio.

- 70 -

(Note 2) Number of new shares to be delivered by the Joint Holding Company (planned)
Common stock: 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 from being subject to the new share delivery in thecalculation above. Note that, if as a result of the Treasury Stock Tender Offer, shareholders of either Aichi Bank or
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 newshares delivered by the Joint Holding Company.
(Note 3) Handling of shares constituting less than one 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, Inc. (the “Tokyo Stock Exchange”), the Nagoya Stock Exchange, Inc.
(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 the Companies Act, demand that the Joint Holding
Company purchase such Fractional Shares. Furthermore, in accordance with the provisions of Article 194(1) of theCompanies 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 tothose fractional shares said shareholders already possess.
(3)

Handling of rights to subscribe for new shares and bonds with rights to subscribe for new shares in conjunction

with the Share Transfer
With 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. Neither of the Banks has
issued bonds with rights to subscribe for new shares.

- 71 -

2.

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 issued

Thursday, March 31, 2022

Record date of the annual shareholders’ meetings (Both Banks)

Wednesday, May 11, 2022

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)

Holding of annual general meetings of shareholders (adoption ofresolution approving the Share Transfer Plan) (Both Banks)

Thursday, September 29, 2022 (Planned)

Tokyo Stock Exchange and Nagoya Stock Exchange de-listing date
(Both Banks)

Before Friday, September 30, 2022
(Planned)

Start date of Treasury Stock Tender Offer settlement

Friday, September 30, 2022 (Planned)

Record date of interim dividend for both Banks (including Special
Dividend by Chukyo Bank)

Monday, October 3, 2022 (Planned)

Formation date of the Joint Holding Company (effective date of the Share
Transfer)
Share listing date of the Joint Holding Company(Note)

3.

The above schedule may be changed upon consultation between the Banks where necessary in the course ofmoving towards the Share Transfer or for other reasons.
5. Overview of the Companies Involved in the Share Transfer (as of the end of March 2022)

Name

The Aichi Bank, Ltd.

Location

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

Job title andrepresentative

name

of

The Chukyo Bank, Limited
33-13

Sakae

3-chome,Naka-ku,

NagoyaYukinori Ito, President

Hideo Kobayashi, President

Description of businessBanking businessBanking businessAmount of stated capital

18 billion yen

31.8 billion yen

Date of establishment

May 15, 1944

February 10, 1943

Total number of issued shares

Common stock: 10,943,240 shares

Common stock: 21,780,058 shares

Settlement Term

March 31

March 31

- 72 -

4.

Company to be newly founded through the Share Transfer

Trade Name

Aichi Financial Group, Inc.
(English: Aichi Financial Group, Inc.)

Location of headquarters

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

Functional location of principal
headquarters

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

Amount of stated capital

20,000 million yen

Settlement Term

March 31

5.

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.

- 73 -

[Reference Documents for the General Meeting of Shareholders] (regarding Proposal 2)
The following matters from Proposal 2 “Approval of Share Transfer Plan With The Chukyo Bank, Limited.”・

Matters regarding The Chukyo Bank, Limited. Rights to Subscribe for New Shares and Systems to Ensure

Proper Business Activities by The Chukyo Bank, Limited.
・Statement of Changes in Equity of The Chukyo Bank, Limited.

・

Notes to the Non-Consolidated Financial Statements of The Chukyo Bank, Limited.

・Consolidated Statement of Changes in Equity of The Chukyo Bank, Limited.

・

Notes to the Consolidated Financial Statements of The Chukyo Bank, Limited.
(from April 1, 2021 to March 31, 2022)(Note) “the Bank” used in above documents refers to Chukyo Bank.

- 74 -

- 75 -