Procrea Annual Report 2022
Brief Disclosure Document for the Fiscal Year Ended March 2022
(April 1, 2021 - March 31, 2022)

Procrea Holdings, Inc.

Susumu Narita

Takayuki Fujisawa

President and Representative Director(President and Director, Aomori Bank)

Vice-president and Representative Director(President and Director, Michinoku Bank)

1

Greetin g
We would like to thank you for your continuous confidence in us. We would also like to offer our consolation for everyone
impacted by the COVID-19.
This will be Procrea Holdings’ first issue of the Brief Disclosure Document - Procrea Annual Report 2022. We hope that you
would be able to gain a deeper understanding about the group after reading this digest.
On April 1, The Aomori Bank and The Michinoku Bank set up Procrea Holdings, Inc., a parent company that wholly owns
both banks. The group took a new step forward.
Under the business principles of “Create the future of local regions,” “Accompany our customers,” and “Realize the dreamsof each person,” we have joined the know-how, network, and information fostered by both banks until now. We streamline andoptimize the management to cultivate myriad human talents, capital, and risk-taking reserve capacity. We continue strengthening
our financial intermediary roles and services, while expanding the business reach.
The idea instilled in Procrea is to Challenge and Creation.
We actively challenge the potential of the local regions to create a brighter, richer future for the local and our customers.
We bear the values upheld by the company name. From now, we will continue to accompany and cultivate connections with you.
We would like to thank you for your continuous support and confidence.

Susumu Narita
President and Representative Director

Contents

Trade name Procrea Holdings, Inc.
Established on April 1, 2022

Greeting ............................................................... 2

Location of head office 3-1 Katta 1-chome, Aomori-shi, Aomori

Procrea Holdings Overview ............................. 3-5

Location of main head 9-30 Hashimoto 1-chome, Aomori-shi, Aomori
office functions
Business • Company administration and management within thecompetence of the subsidiaries, as defined by the banks
and the Banking Act. Business tasks related to them.
• Other business tasks of bank holding companies authorized
by the Banking Act.
Capital ¥20 billion

The 1st Medium-Term Business Plan ................ 6
Sustainability Guidelines .................................... 7
CSR Implementations ...................................... 8-9
Financial Highlight (The Aomori Bank) ....... 10-11
Financial Highlight (The Michinoku Bank) .. 12-13

Operating branches 156 main and local branches

Procrea Holdings Business Foundation .......... 14

Fiscal year Year ending March 31
Listing stock exchange Tokyo Stock Exchange Prime Market (Securities code: 73 84)

2

Shareholders Incentive System ....................... 15

Procrea Holdings Overview
Trade Name

Procrea Holdings, Inc.
The Idea Behind the Trade Name

Challenge and Creation
The name “Procrea” is a combination of the Latin words provocatio (meaning “challenge”) and creare (meaning “create”).
It expresses our mission to take on the challenge of bringing out the potential of the region and to create the future of the region,and our stance to move forward with our customers as professionals.

Organization Chart of Procrea Holdings (As of April 1, 2022)

General Meeting of Shareholders

ALM & Income Management Committee

Financial Auditor
Compliance Committee

Holding company

Risk Management Committee

Board of Directors

Nomination andRemuneration
Committee

Audit and Supervisory Committee
Executive Committee

Business Strategy Committee
IT Strategy Committee
Foundational Service Maintenance& Improvement Committee
Integration Promotion Committee

Management
Planning
Division

Risk
Administration
Division

Subsidiary
Group
banks
Companies• Aogin Card Service, Co., Ltd.
• Aogin Lease, Inc.
• Aogin Confidence Guarantee, Co., Ltd. • Aogin Koda, Co., Ltd.
• Aomori Creation Partners, Co., Ltd.
3

Regional
Co-creation
Division

HR Planning
Division

System andOperations
Administration
Division

Audit andSupervisory
Committee OfficeIntegration
Promotion
Division

Auditing
Division• Michinoku Card, Co., Ltd.
• Michinoku Leasing, Co., Ltd.
• Michinoku Credit Guarantee, Co., Ltd. • Michinoku Servicer, Co., Ltd.

Procrea Holdings Overview
List of Directors (As of July 1, 2022)
Positions

Names

Concurrent positions within the main group

President and Representative Director

Susumu Narita

President and Director, Aomori Bank

Vice-president and Representative Director

Takayuki Fujisawa

President and Director, Michinoku Bank

Director

Keitaro Ishikawa

Director, Senior Managing Executive Officer,
Aomori Bank

Director

Tsutomu Inaniwa

Director, Senior Executive Officer,
Michinoku Bank

Director

Tsuyoshi Tamura

Managing Executive Officer, Aomori Bank

Director

Yo MoriManaging Executive Officer, Aomori Bank

Director

Motomi Shiratori

Executive Officer, Aomori Bank

Director

Shinji Suto

Senior Executive Officer, Michinoku Bank

Outside Director

Katsunori Mikuniya

Outside Director

Kazunari Higuchi

Director(Audit & Supervisory Committee Member)

Akira Nakagawa

Outside Director(Audit & Supervisory Committee Member)

Masashi Iwakigawa

Outside Director(Audit & Supervisory Committee Member)

Tetsutaro Wakatsuki

Outside Director(Audit & Supervisory Committee Member)

Mie Ishida4Procrea Holdings Overview
Business Principles
Commitments embedded in the principles:“Creating the Future of the Region”

We will create a bright and enriching future by ensuring that
we maintain our soundness as a company, and actively taking
on the challenge of tackling regional issues and bringing out
the region’s potential.

“Continuing to Walk Side by Sidewith Customers”

We will live up to customers’ trust in us and continue to walkside by side with them to achieve growth and development,by improving our expertise and pursuing services that exceed
expectations.

“Giving Shape to the Ideas ofEach and Every Person”

We will build an organization full of confidence and pridewhere the work is worthwhile, and give shape to each andevery person’s ideas, by valuing autonomy and transforming
diverse individuality into our strength.

Brand Concept

Challenge and Creation

We channel each person’s uniqueness into strength,
using this to power our endeavor. We go beyond theconfines of finance and stretch the potential of thelocal regions. We aim to be a challenge and creation
corporate group that creates a brighter and richer
future together with our customers.

The brand concept Challenge
and Creation reflects the ideas
instilled in our trade name. The
subtitle reflects the outlook of
Procrea based on the businessprinciples.

Brand Logo

Challenge. Surpass. Create Together.

The logo is an arrow pointing to right and upwards, showing the way tothe future. The design superimposes it with the letter “P”, the first letterof Procrea upholding the brand concept, Challenge and Creation.
The key color is Procrea navy. It leaves the impression of honesty andclarity, symbolizing the ideas and awareness of contributing to the
local regions as the ideal partner. The color shade represents thehometowns with endless green and beauty, as well as the infinite
potential sleeping within the local regions.
Also, the accent color, the Procrea orange, radiates energy, giving theimpression of the sun shining on the local regions, lighting the path
towards a richer future.
5

The 1st Medium-Term Business Plan

Procrea Holdings’ 1st Medium-Term Business Plan

Challenge and Creation
SloganAchieve synergy promptly and build a rock solid business foundation

Management
IssuesFoundational Strategies

Ensure both stability andquality of the financial service

Develop local industries
Improve life quality of
local citizens

Build a sound and sustainablebusiness foundation

Foundational strategy I

Foundational strategy II

Foundational strategy III

Strengthen financial
intermediary role

Expand business scopes

Streamline andoptimize management(5) Build up a regional
development/general trading
company model(6) Optimize infrastructure, etc.
(7) Digitalize business tasks(8) Optimize organizational structure(1) Strengthen companion
consulting service(2) Strengthen financial services
and solutions(3) Diversify and deepen expertise(4) Digitalize services

Foundational strategy IV

Strengthen group
foundation(9) Strengthen human talents(10) Improve allocation of securities(11) Strengthen risk management conditions(12) Strengthen governance structure(13) Strengthen other sustainability implementations

6

Sustainability Guidelines
Draft and Publish the Procrea Holdings’ Sustainability Guidelines
Interests in sustainability issues such as climate change and decarbonization issues, as well as health, relative poverty, diversity & inclusion
have been heightening. These guidelines work to show the direction Procrea Holdings will take when it comes to achieving a sustainable
society in these environments.

Procrea Holdings’ Sustainability Guidelines

Pass on a promising and rich future
to the next generation

We will take up the challenge to create a promising and rich future, so that the next generation can inherit our beloved hometowns in theirbeauty. We face the various issues in local regions and their infinite potentials. We continue accompanying you through our sustainablebusiness activities, from the lens of environment, society, and governance.

Promises made to the stakeholders
Naturalenvironment

We aim for environmental preservation and harmonious growth of the regional economy. We take on ourbusiness activities while constantly being aware of their impact on climate change and nature.

Regional society

To draw out the peak values of natural and human capitals, as well as creating an appealing society,we channel carefully the communication with everyone into the contribution of regional society development.

Customers

As the ideal partner to our customers, we respond to society changes
while providing steadily reassuring and optimal solutions to our customers.

Employees

We work to create a company architecture and organizational culture that allow each executive andemployee to continue working in a wholesome and unique manner while thriving.

Shareholders
and investors

We strive to continue being an alluring company that all stakeholders have solid trust in,
by developing together with everyone from the local regions.

Agreement to the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)
In recent years, damages caused by abnormal climate phenomena and natural catastrophes have worsened worldwide. Aomori Prefecture,
where our group headquarter is located, suffered from severe damages due to the heavy seasonal rains in August 2021. The effects ofclimate change on the local regions are increasing daily.
Considering these situations, our group has positioned response to the nature and environment as a priority issue, including climatechange, based on the Procrea Holdings’ Sustainability Guidelines. To strengthen our measures against climate change, we have agreed to
the Recommendations of the TCFD. To achieve a sustainable local society, we will continue analyzing risks and opportunities brought byclimate change, while working on the disclosures mentioned in the Recommendations.
What are the Recommendations of the TCFD?
The measures to mitigate climate change have been gaining importance. Following the request from G20, the Financial Stability Board set up and published the Task Force on
Climate-related Financial Disclosures (TCFD) to discuss climate change data disclosures and measures taken by financial institutions.
It recommends corporations to disclose governance structures, management strategies, and risk management methods related to risks and opportunities brought on by
climate change.

7

CSR Implementations
SDGs permeation underway “Thank you from 2030”
From January to November 2021, we publish the videos “Thank you from 2030” on our
active official YouTube channel to promote understanding, permeation, and awarenessabout SDGs in Aomori Prefecture.
These videos are realized together with a local VTuber Aomori Rinko*. The videos
localize global SDGs goals to Aomori Prefecture, explaining regional issues in an easily
understandable way, from the perspective of what SDGs mean to Aomori Prefecture.
Aomori Prefecture, universities, schools, and organizations working on SDGs from
Aomori Prefecture helped create the videos.

*Aomori Rinko
Aomori Rinko started the activities from 2019 as a virtual YouTuber. With the catchphrase of “Cheer up Aomori”, Aomori Rinko broadcasts the beauty of Aomori on the website,
Twitter, YouTube, etc.

Launching the Takeout-1 Draft
We launched the Takeout-1 Draft as ameasure to support businesses in theprefecture. Under this plan, we joined
forces with businesses and 2 supermarkets(Beniya Shoji Co., Ltd. and Maeda Co., Ltd.)in the prefecture to develop takeout
merchandise and sell them as curated items
at various shops of the 2 companies.
In September 2021, we started accepting
applications for participating businesses.
After document selection and final selection,
we completed and put the 2 items from the2 businesses on shelves in all Maeda storesin February. In March, we completed andshowcased the 2 items from 2 businesses inall Cub Center and Beny ｍart stores. All
merchandise received wide popularity, withmany customers seeking after them andmost stores out of stock during the sales.

8CSR Implementations
S

Supporting financial education

We work to popularize financial literacy among children, as
they will one day shoulder the future of the regional economy.
We held the Economics Koshien Aomori Tournament, a
national high-school economics quiz tournament, to allow
them to learn financial knowledge while having fun.
Also, we held the online Michinoku Kids School 2022 forelementary school children to help them learn about money
through identification of banks’ roles, appraisal of money, and quiz.

Regional contribution “Repay Kindness After 100 Years”
As we welcome our 100th anniversary in October 2021, we launched a series of activities to “repay kindness” to local people and business
partners. At the main office and various branches, we participated in cleaning activities, food banks, collaborations in regional events, etc.,
totaling 100 repayments of kindness.

Cleaning activities (Asamushi)

Donate picture books to children aid facilities

Set up food boxes

Recycle bottle caps

Gift the original Nanbu Senbei crackers

9Financial Highlight

The Aomori BankCore net business profit

Ordinary profit/net income

Core net business profit increased by 0.6 billion yen YoY to 4.7
billion yen despite the decrease of fund income following
decrease of the fund management income. This was offset byincrease in service income and reduction in expenses, etc.

Ordinary profit improved drastically due to gains from securities
following increase of profits from stock liquidations, as well as
decrease in credit expenses. Ordinary profit increased by 2.3
billion yen YoY to 5.3 billion yen. Also, net income increased by 1.5
billion yen YoY to 3.7 billion yen due to increase in ordinary profit.

(Unit: billion yen)

Ordinary profit

5.0(Unit: billion yen)

Net income

6.0

4.7

5.3

4.5

4.0

4.0

4.5

4.0

3.5

1.7
1.5

3.0
0

End of fiscal year
March 2020

End of fiscal year
March 2021

0

End of fiscal year
March 2022

3.7

2.9

3.0

2.1
1.2

End of fiscal year
March 2020

End of fiscal year
March 2021

End of fiscal year
March 2022

Deposits (including negotiable certificates of deposits)

Loans

Total balance of deposits, including negotiable certificates ofdeposits, increased by 154.8 billion yen to 3,048.3 billion yen
compared to the end of last fiscal year, due to a favorable growthin personal and public deposits.

Loans increased by 10.8 billion yen to 1,867.1 billion yen comparedto the end of last fiscal year despite the unwinding of demands for
COVID-19 system financing and decrease in business loans
following reduction of market loans outside of the prefecture.
Increase in personal loans, mainly housing loans, helped offset it.

Personal deposits

Total deposits(Unit: billion yen)

Business loans

3,500

2,000

3,000

2,893.5

2,652.3

2,000

1,715.5

1,835.6

1,500

1,899.4

1,000

1,805.3

1,500

581.4

580.9

589.3

1,000

469.8

500.1

524.1

754.1

775.2

753.7

500

End of March 2020

End of March 2021

0

End of March 2022

End of March 2020 End of March 2021 End of March 2022

Definition of terms■ Core net business profit: This shows the profitability of the main businesses such as deposits, loans, and exchanges.

10(Unit: billion yen)

1,867.1

500
0Public loans

1,856.3

3,048.3

2,500

Personal loans

Financial Highlight

The Aomori Bank

Assets under custody

Capital adequacy ratio

Despite the increase of investment trust following an increase insales volume, the assets under custody decreased by 1.3 billion
yen compared to the end of last fiscal year. This is due to decreasein public bonds and insurances.

The capital adequacy ratio increases by 0.46% compared to the endof the last fiscal year to 9.55% due to increase of capital following an
accumulation of profits, as well as reduction of risk assets such as
securities, etc.
Capital amount (left scale)

Investment trusts

Public bonds

Insurances(Unit: billion yen)

300
250

Capital adequacy ratio (right scale)(Unit: billion yen)

(Unit %)

99

246.0

247.8

246.4

9.05%

9.55%

10.0

98.1

9.0

9.09%

98

200
150

165.5

164.1

161.8

27.0

20.2

15.2

53.5

63.3

69.3

0

8.0

96.2
96

100
50

97

End of March 2020

7.0

95.3

95
0

End of March 2021 End of March 2022

6.0

End of March 2020

End of March 2021 End of March 2022

0

Claims disclosed subject to the financial revitalization law
The amount of disclosed loans subject to the Financial
Revitalization Law increased by 2.4 billion yen comparedto the end of the last fiscal year to 26.8 billion yen due toincrease in doubtful loans. Also, the ratio of the disclosed
loans in the total credit increased by 0.12% to 1.41%
compared to the end of the last fiscal year.

Balance of loans disclosed under the Financial Revitalization Law (left scale)
Ratio of the disclosed loans in the total credit (right scale)(Unit: billion yen)

(Unit %)

30

1.29%

25

1.14%

20

21.1

24.4

1.41%

1.5

26.8

1.25
1.0

15

0.75

10

0.5

5

0.25

0

End of March 2020

End of March 2021 End of March 2022

0

■ Ordinary profit: It is derived by adding or subtracting gains or losses of securities and credit expenses (bad loan write-off, etc.) from core net business profit.
■ Net income: It is derived by adding or subtracting extraordinary items, taxes, etc. from ordinary profit.

11*The amounts are rounded
down to the nearest units.

Financial Highlight

The Michinoku BankCore net business profit

Ordinary profit/net income

Core net business profit increased by 1.1 billion yen YoY to 8.2
billion yen due to an increase of fund income following an
increase of the fund management income and a decrease of theproperty expenses, etc.

Ordinary profit increased by 0.5 billion yen YoY to 2.5 billion yen
due to decrease of credit expenses. Also, net income increased
by 0.5 billion yen YoY to 2.5 billion yen.

Ordinary profit(Unit: billion yen)
10

2.0

2

8

7.1

8.2

(Unit: billion yen)

Net income

3

1.9

2.5

2.5

1
0

6

-1
4

-2

0

-3

1.8

2

-4
End of fiscal year
March 2020

End of fiscal year
March 2021

-5

End of fiscal year
March 2022

-3.2
-4.4
End of fiscal year
March 2020

End of fiscal year
March 2021

End of fiscal year
March 2022

Deposits (including negotiable certificates of deposits)

Loans

Balance of deposits increased by 52.0 billion yen compared tothe end of last fiscal year, due to a favorable growth in personal
deposits.

Loans increased by 3.6 billion yen to 1,724.9 billion yen
compared to the end of last fiscal year due to an increase inpersonal loans, mainly housing loans.

Personal deposits

Total deposits(Unit: billion yen)

Business loans

2,500

1,500

2,146.4

2,019.92,000

1,512.9

2,000

1,571.7

Personal loans

Public loans(Unit: billion yen)

1,679.9

1,721.2

1,724.9

1,500

368.3

421.6

420.1

1,000

598.6

615.4

633.1

712.8

684.1

671.6

2,198.4
1,602.9

1,000
500

500
0

End of March 2020

End of March 2021

0

End of March 2022

End of March 2020 End of March 2021 End of March 2022

Definition of terms■ Core net business profit: This shows the profitability of the main businesses such as deposits, loans, and exchanges.

12Financial Highlight

The Michinoku Bank

Assets under custody

Capital adequacy ratio

Despite the decrease of public bonds, the assets under custodyincreased by 12.6 billion yen compared to the end of last fiscal
year due to an increase in insurance balance.

Independently, the capital adequacy ratio increases by 0.23%
compared to the end of the last fiscal year to 7.93% due to increaseof capital following an accumulation of profits.

Capital amount (left scale)
Investment trusts
300

265.2

Public bonds

274.3

Insurances(Unit: billion yen)

(Unit: billion yen)

287.0

87

250

Capital adequacy ratio (right scale)

7.70%

7.93%

(Unit %)

86.1

7.0

7.41%

86

8.0

200
150

227.1

228.5

85

237.1

100
50
0

8.7

10.0

9.8

29.2

35.8

40.0

6.0

84.6

84

5.0

83

4.0

0

End of March 2020 End of March 2021 End of March 2022

84.5

End of March 2020 End of March 2021 End of March 2022

0

Claims disclosed subject to the financial revitalization law
The amount of disclosed loans subject to the Financial
Revitalization Law decreased by 1.1 billion yen
compared to the end of the last fiscal year to 23.9 billion
yen due to a decrease in bankruptcy restructuring loans
and loans pegged to them. Also, the ratio of thedisclosed loans in the total credit decreased by 0.07%
to 1.36% compared to the end of the last fiscal year.

Balance of loans disclosed under the Financial Revitalization Law (left scale)
Ratio of the disclosed loans in the total credit (right scale)(Unit: billion yen)
30

1.29%

25

1.43%
25.1

22.1

20

(Unit %)

1.36%

1.5
1.25

23.9

1.0

15

0.75

10

0.5

5

0.25

0

End of March 2020

End of March 2021 End of March 2022

0

■ Ordinary profit: It is derived by adding or subtracting gains or losses of securities and credit expenses (bad loan write-off, etc.) from core net business profit.
■ Net income: It is derived by adding or subtracting extraordinary items, taxes, etc. from ordinary profit.

13*The amounts are rounded
down to the nearest units.

Procrea Holdings Business Foundation
Share of Deposits and Loans in the Prefecture

Ratio of Deposits and Loans in the Prefecture(As of March 31, 2022)

City banks, regional banks,
second-tier regional banks
Shinkin (cooperative regional
financial institutions)and credit cooperatives

16.9 %
4.3 %Share ofdeposits(As of March 31, 2022)

City banks, regional banks,
second-tier regional banks
From outside the prefecture(405.5 billion yen)

Shinkin (cooperative regional
financial institutions)and credit cooperatives

6.6 %12.8 %
Share ofloans

in AomoriPrefecture

in AomoriPrefecture

Both banks 78.6 %Both banks 80.4 %Main Locations

Donan region: 8
The Aomori Bank: 2
The Michinoku Bank: 6

Chunan region: 27
The Aomori Bank: 15
The Michinoku Bank: 12

Ratio ofloans in theprefecture

From inside the prefecture

For inside the prefecture(4,841.3 billion yen)

(2,604.5 billion yen)

Total balance of deposits(5,246.8 billion yen)

Total balance of loans(3,592.1 billion yen)

72.5 %

Number of Locations

We have a strong base of operations, stretching from Aomori
Prefecture to the Donan region (southern Hokkaido).

Seihoku region: 17
The Aomori Bank: 8
The Michinoku Bank: 9

Ratio ofdeposits in theprefecture

92.3 %*Excluding Japan Post Bank Co., Ltd., workers’ credit unions, agriculture cooperative
associations, and government financial institutions

Tosei region: 39
The Aomori Bank: 21
The Michinoku Bank: 18

For outside the prefecture(987.5 billion yen)Prefectures

The Aomori
Bank

The Michinoku
Bank

Total of Both
Banks

Aomori Prefecture

74

61

135

Tosei region

21

18

39

Chunan region

15

12

27

Sanpachi region

16

13

29

Seihoku region

8

9

17

Kamikita region

11

7

18

Shimokita region

3

2

5

Hokkaido Prefecture

3

7

10

Iwate Prefecture

1

2

3

Miyagi Prefecture

1

1

2

Akita Prefecture

2

2

4

Tokyo Metropolitan

1

1

2

Total

82

74

156

Shimokita region: 5
The Aomori Bank: 3
The Michinoku Bank: 2

Kamikita region: 18
The Aomori Bank: 11
The Michinoku Bank: 7
Sanpachi region: 29
The Aomori Bank: 16
The Michinoku Bank: 13

14

To be closer to everyone.
We have welcomed the era to provoke challenge.
The connections we forged with you until now.
Our mission is to unify the trust,surpass the era and become the strength
to create a promising future.
The confines of finance will not stop it.
We walk with you,to face the regional issues and infinite
potential lying dormant.
Yes. Our steps have been and will
always be with the locals.
As the ideal partner, we answer all ideas.
Our hometowns,
with their endless rolling green and beauty.
For the people who will always love this land.

Challenge. Surpass. Create Together.

Published by Procrea Holdings Management Planning Division
9-30 Hashimoto 1-chome, Aomori-shi, Aomori, 030-8668 (Headquarters) TEL: 017-777-5111
URL: https://www.procrea-hd.co.jp Email: kouhou@procrea-hd.co.jp