This is the preliminary translation of the Japanese version Lawson Bank financial results provided by Lawson, Inc.

Financial Summaryfor the First Half of Fiscal Year 2018 Ended September 30, 2018
November 13, 2018
Lawson Bank, Inc. (https://www.lawsonbank.jp/)

I.

Financial Results Highlights(Millions of Yen)
1.

Results of Operation (Non-consolidated)

Total revenue
Net interest income
Net fees and commissions
Net trading income
Net other business income
Net provision of generalreserve for credit losses
General and administrativeexpenses
Ordinary business profits
Ordinary profits
Net income

Post-opening1
September 2018 (1 month)
1,783
-33
1,81700

1H FY2018(6 months)
7,463-128
7,592
00

11

1,705
77
6763

6,933
529
520
303

1 Lawson Bank commenced its operation on September 10, 2018, but figures from results of operation for one

month from September 1 to 30, 2018, are reported.

2.

Balance Sheets (Non-consolidated)
September 30, 2018
Cash and due from banks
Securities
Loans
Total assets
Deposits
Borrowed money
Other liabilities
Total liabilities
Total equity

3.

132,8635,507
0
170,649936
135,000
13,264
149,200
21,449Financial Ratios (Non-consolidated)

Expense-to-revenue ratio

Post-opening1
September 2018 (1 month)
95.6%

1H FY2018(6 months)
92.9%

1 Lawson Bank commenced its operation on September 10, 2018, but figures from results of operation for one

month from September 1 to 30, 2018, are reported.

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September 30, 2018
Capital adequacy ratio

21.48%(Basel III, domestic standard)

Non-performing loan ratio
based on Financial
Revitalization Law
II.

-Interim Financial Statements
1. Interim Balance Sheets (Non-consolidated)(Millions of Yen)
September 30, 2018
[Assets]
Cash and due from banks
Securities
Other assets
Tangible fixed assets
Intangible fixed assets
Reserve for credit losses
Total assets[Liabilities]
Deposits
Borrowed money
Other liabilities
Accrued corporate taxes
Accrued expenses
Lease obligations
Other liabilities
Accrued employees’ bonuses
Total liabilities[Equity]Common stock
Capital surplus
Capital reserves
Retained earnings
Other retained earnings
Retained earnings carried forward
Total shareholders’ equity
Unrealized gain (loss) on available-for-salesecurities
Valuation and translation adjustments
Total equity
Total liabilities and equityNote: Financial figures are truncated to the unit stated.

2132,863
5,507
4,855
15,757
11,666-1
170,649936
135,000
13,111298
38
10,5372,237
152
149,200
11,60011,60011,600-1,750-1,750-1,75021,44900
21,449170,649

2.

Interim Statement of Income (Non-consolidated)

Ordinary income
Interest income
Interest and dividends on securities
Interest income on due from banks
Fees and commissions income
ATM commissions received
Other business income
Other ordinary income
Ordinary Expenses
Interest expenses
Interest on deposits
Fees and commissions expenses
ATM installation commissions expenses
ATM commissions expenses
Other business expenses
General and administrative expenses
Other ordinary expenses
Ordinary profit
Extraordinary losses
Tangible fixed asset disposal expenses
Net income before income taxes
Income taxes
Deferred income taxes
Net income
Note: Financial figures are truncated to the unit stated.

3(Millions of Yen)
1H FY2018 (6 months)
9,867
0
00
9,864
9,864
3
9,347
128
0
2,272
1,059
1,212
6,933
13520
22518
210
4303

3.

Interim Statement of Changes in Equity (Non-consolidated) for the 1st half of fiscal year 2018
ended September 30, 2018
(Millions of Yen)
Valuation and translation
adjustments

Shareholders’ equity
Capitalsurplus
Commonstock

Capitalreserves

Retainedearnings
Otherretainedearnings
Deferedretained
earnings

Total
shareholders’ equity

Balance of
beginning of500
500-2,054
periodChange during
interim period
Increase incapital andcapital
11,100 11,100
reserves
Net income
303
Net change
during interim
period foritems otherthanshareholders’equityTotal change in
11,100303
interim period 11,100
Balance,
September 30,11,600 11,600-1,7502018
Note: Financial figures are truncated to the unit stated.

4

Unrealized gain Total valuation Total equity
and translation(loss) onadjustments
available-forsale securities-1,054---1,054

22,200303--22,200
303

-

00

0

22,5030022,503

21,44900

21,449

4.

Interim Cash Flow Statement (Non-consolidated)(Millions of Yen)
1H FY2018 (6 months)
I Cash flows from operating activities
Income (loss) before income taxes

518

Depreciation

1,341

Net change in provision of reserve for loanlosses
Net change in accrued employees’ bonuses (-)

52Interest income0

Interest expenses

128

Net change in deposits (-)

936

Interest received

10

Interest paid

-131

Losses (gains) on disposal of fixed assets

2

Net change in borrowed money (-)

138,200

Repayment of lease obligations-1,671Other-514

Sub total

138,862

Payment of corporate taxes, etc.

-3

Refund of sales tax, etc.

538

Net cash generated by operating activities

139,397

II Cash flow from investing activities
Purchase of securities-5,507Purchase of tangible fixed assets-75

Purchase of intangible fixed assets-3,795

Net cash provided by (used in) investing activities-9,378III Cash flow from financing activities
Cash flow from financing activities-IV Foreign currency translation adjustments oncash and cash equivalents
V Net change in cash and cash equivalents
VI Cash and cash equivalents at beginning ofinterim period
VII Net change in cash and cash equivalents
relating to absorption-type company split
VIII Cash and cash equivalents at end of interim
periodNote: Financial figures are truncated to the unit stated.

5130,020
2,120723
132,863

III. Reference Information
1. Capital Adequacy Raito InformationSeptember 30, 2018
(Grandfathered basis)

2.

(Millions of Yen)
September 30, 2018
(Not grandfathered basis)

Risk-weighted assets

56,42456,424

Core capital

12,117

9,784

Capital adequacy ratio

21.48%

17.34%

Claims Classified under the Financial Revitalization Law (Non-consolidated)(Millions of Yen)
September 30, 2018
Claims against bankrupt and quasi-bankrupt obligors-

Doubtful claims-

Substandard claims-

Normal claims

83.

Derivative Transaction
None.

4.

ATM Transactions
September 30, 2018
Number of ATM units installed

13,145June 1, 2018 to September 30,2018
79,698

Total number of ATM usage (1,000s)
Average daily ATM usage (no. of times per day per unit)

49.8

Note: Figures are from operations after June 1, 2018 when the absorption-type split of Lawson ATM Networks, Inc.
was implemented.

September 30, 2018
Number of affiliated financial institutions (banks, companies,depositories)

93

Note: The JA Bank and JF Marine Bank are considered each as an institution depending on business categories.

5.

Other
Post-opening1
September 2018 (1 month)Interest margin for total fund-85.08%1H FY2018 (6 months)-111.64%1 Lawson Bank commenced its operation on September 10, 2018, but figures from results of operation for one

month from September 1 to 30, 2018, are reported.

66.

General and Administrative Expenses(Millions of Yen)
1H FY2018 (6 months)
Personnel expenses

677

Non-personnel expenses

6,161

Depreciation

1,341

Taxes

94

General and administrativeexpenses
7.

6,933

Number of Directors, Auditors, and Employees
September 30, 2018
Directors and auditors

11Directors

7

Auditors

4

Employees

138

Total

149

Notes:
1. The number of directors and auditors includes external directors and auditors.
2. The number of employees includes executive officers and transferred employees, but not loaned workers, butnot temporary employees.

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