The Hyakugo Bank, Ltd. and Subsidiaries
Notes to Consolidated Financial Statements
1.

Basis of Financial Statements(a) Basis of presenting consolidated financial statements
The accompanying consolidated financial statements of The Hyakugo Bank, Ltd. (the “Bank”) and its
consolidated subsidiaries (together with the Bank, the “Hyakugo Bank Group”) have been prepared on
the basis of accounting principles generally accepted in Japan (“Japanese GAAP”), which are different
in certain respects as to application and disclosure requirements from the International Financial
Reporting Standards (“IFRS”). The consolidated financial statements have been compiled from theoriginal Japanese consolidated financial statements, prepared by the Bank as required by the Financial
Instruments and Exchange Act of Japan and submitted to the Director of Kanto Finance Bureau ofJapan.
In preparing these consolidated financial statements, certain reclassifications and rearrangements weremade to the original Japanese consolidated financial statements in order to present them in a form thatwould be more familiar to readers outside Japan. In addition, certain reclassifications have been madein the financial statements for the year ended March 31, 2018 to conform to the classifications used in
the financial statements for the year ended March 31, 2019.
The amounts in Japanese yen are presented in millions of yen, rounded down to the nearest million inaccordance with legal provisions. Accordingly, the total yen amounts may not be equal to the sum of
the individual account balances.
(b) U.S. dollar amounts
The Hyakugo Bank Group maintains its accounting records in Japanese yen. The U.S. dollar amounts
included in the accompanying consolidated financial statements and notes thereto represent theconversion of Japanese yen amounts to U.S. dollar amounts using the exchange rate at March 31, 2019,
which was ¥110.99 to U.S. $1.00. The inclusion of the dollar amounts is solely for the convenience ofthe readers and is not intended to imply that the assets and liabilities originated in yen have been, could
have been or could in the future be readily converted, realized or settled in dollars at such or any otherrate of exchange.
2.

Summary of Significant Accounting Policies(a) Principles of consolidation
The accompanying consolidated financial statements include the accounts of the Bank and its 10
significant subsidiaries at March 31, 2019 and 2018. These consolidated subsidiaries primarily engage
in providing a wide range of financial services to customers. Under the control concept, companies overwhich the Bank, directly or indirectly, exercises control in regards to operations are fully consolidated.
The consolidated financial statements do not include the accounts of 3 subsidiaries at March 31, 2019and 2018, because the total assets, total income, net income and retained earnings of such subsidiaries
did not have any material impact on the consolidated financial statements. There were no affiliates overwhich the Bank had significant influence. All intercompany transactions and accounts have been
eliminated.

-8-

(b) Cash and cash equivalents
For the purpose of the consolidated statements of cash flows, cash and cash equivalents consisted of
cash and due from The Bank of Japan as follows.
Thousands of
U.S. dollars
2019

Millions of yen
2019
Cash and due from banks
Less due from banks other than
The Bank of Japan
Cash and cash equivalents

2018

¥

904,975¥

611,452$

8,153,667¥(2,397)
902,578¥(2,595)608,857$(21,600)
8,132,067(c) Trading account securities
Trading account securities are stated at fair value at the fiscal year-end. Related gains and losses, both
realized and unrealized, are included in current earnings. Accrued interest on trading account securities
is included in “other assets.”(d) Securities
Debt securities for which the Hyakugo Bank Group has both a positive intent and the ability to hold tomaturity are classified as held-to-maturity securities and are stated at amortized cost. Marketablesecurities other than those classified as trading or held-to-maturity securities are carried at fair value asavailable-for-sale securities, and net unrealized gains or losses reported as valuation difference on
available-for-sale securities, net of applicable income taxes, are reported as accumulated othercomprehensive income. Available-for-sale securities that are nonmarketable are stated at moving
average cost. The carrying values of individual investment securities are reduced, if necessary, throughwrite-downs to reflect other-than-temporary impairments in value. Gains and losses on the disposal ofinvestment securities are computed principally using the moving average method.
Accrued interest on securities is included in “other assets.” Funds entrusted to trust banks as securities
for the Bank (included in “money held in trust”) are stated using the method applicable to marketablesecurities described above.
(e) Derivatives and hedge accounting
The Hyakugo Bank Group uses swaps, forwards, options and other types of derivative contracts. These
derivative instruments are used for the following purposes: to meet the customers’ needs for risk
management; to manage the Hyakugo Bank Group’s assets and liabilities; and to generate income.
Derivatives are recorded at fair value if hedge accounting is not appropriate or when there is no hedge
designation. Gains or losses on derivatives are recognized in current earnings.
In connection with interest rate risks arising from financial assets and liabilities, the Bank applies thedeferral method of hedge accounting as prescribed in the Industry Audit Committee Report No. 24,
entitled the “Accounting and Auditing Treatment of Accounting Standards for Financial Instruments in
Banking Industry” issued by the Japanese Institute of Certified Public Accountants (“JICPA”) on
February 13, 2002. The effectiveness of a fair value hedge in offsetting movements in the fair value ofhedged items due to changes in interest rates is assessed by classifying the hedged items, such as
deposits, loans and similar instruments, and the corresponding hedging instruments, such as interest rate
swaps and the like, and grouping those with similar risk characteristics in a maturity bucket. In addition,
the effectiveness of a cash flow hedge is assessed by verifying the correlation between the base interest
rate index of the hedged cash flow and that of the hedging instrument.

-9-In addition, the Bank applies the portfolio hedge method or the exceptional treatment permitted forinterest rate swaps to certain assets and liabilities. The Bank’s consolidated subsidiaries also apply
methods similar to those of the Bank for hedge accounting.
The Bank also applies the deferral method to account for hedges of foreign exchange risks associatedwith various foreign currency denominated monetary assets and liabilities in accordance with thestandard treatment under JICPA’s Industry Audit Committee Report No. 25 of July 29, 2002, entitledthe “Treatment of Accounting and Auditing Concerning Accounting for Foreign Currency Transactions
in Banking Industry.” The effectiveness of currency swap transactions, exchange swap transactions andsimilar transactions hedging the foreign exchange risks of monetary assets and liabilities denominatedin foreign currencies is assessed based on a comparison of the foreign currency position of the hedged
monetary assets and liabilities to that of the corresponding hedging instruments.
(f) Loans and bills discounted and allowance for loan losses
Loans and bills discounted are stated at the amount of the unpaid principal. Unearned interest anddiscounts are recorded as liabilities and recognized as income over the term of the loan or bill.
An allowance for loan losses of the Bank is established to cover future credit losses in accordance withinternal rules on self-assessment of asset quality and provision of allowances for possible loan losses.
Loans written off are charged to either allowance for loan losses or current income. The recovery ofloans written off is recorded as other income.
The allowance is made based on the Bank’s internal rules on establishing allowances for possible loan
losses. For claims against borrowers in legal bankruptcy (“Bankrupt Borrowers”) and virtual
bankruptcy (“Virtually Bankrupt Borrowers”), an allowance is provided based on the amounts of theclaims, net of the amounts expected to be collected through the disposal of collateral or execution ofguarantees. For claims against borrowers having the possibility of bankruptcy (“Potentially Bankrupt
Borrowers”), an allowance is provided based on an overall solvency assessment performed for theamounts of the claims, net of the amounts expected to be collected through the disposal of collateral or
execution of guarantees. For claims against other borrowers, an allowance is provided based on thehistorical loan loss experience of the Bank for a certain past period. All claims are assessed by the
Bank’s operating divisions based on the Bank’s internal rules on self-assessment of asset quality. The
Bank’s inspection division, which is independent from the Bank’s operating divisions, conducts auditsof such assessments, and an allowance is provided based on such audit results.
The Bank’s consolidated subsidiaries provide allowances for loan losses on a similar basis.
(g) Tangible fixed assets and depreciation
Except for lease assets, tangible fixed assets are stated at cost, less accumulated depreciation, computed
using the straight-line method over the following range of estimated useful lives of such assets.
Buildings
Others15 years to 50 years
4 years to 15 years(h) Intangible fixed assets
Intangible fixed assets, except for lease assets, are amortized using the straight-line method. Costs ofcomputer software developed or obtained for internal use are deferred and amortized on a straight-line
basis over the estimated useful life of five years.
(i) Leases
Prior to April 1, 2008, the Hyakugo Bank Group had accounted for finance leases that do not transfer
ownership of the leased property to the lessee (“Non-transferrable Finance Leases”) as operating leasetransactions in accordance with the “Opinion Concerning Accounting Standards for Leases” issued by- 10 -

the Business Accounting Council of Japan (“BACJ”) in June 1993, on the condition that certain “as if
capitalized” information of lessees or “as if sold” information of lessors was disclosed in the notes tofinancial statements. On March 30, 2007, the Accounting Standards Board of Japan (“ASBJ”) issued
ASBJ Statement No. 13, entitled the “Accounting Standard for Lease Transactions,” which revised theprevious accounting standard for lease transactions issued in June 1993. Under the revised accounting
standard, lessees are required to capitalize all finance leases and recognize lease assets and leaseobligations in the balance sheets. In addition, the revised accounting standard requires lessors torecognize all finance leases that transfer ownership of the leased property to the lessee (“Transferable
Finance Leases”) as lease receivables and all Non-transferrable Finance Leases as lease investment
assets.
The Hyakugo Bank Group has adopted the revised accounting standard for lease transactions effectivefrom April 1, 2008. In accordance with the revised accounting standard, the Hyakugo Bank Group has
accounted for Non-transferrable Finance Leases that commenced prior to April 1, 2008 in the following
manner. For leases under which a Hyakugo Bank Group company is a lessor, the applicable leased
property has been stated at initial book value, less accumulated depreciation, as of April 1, 2008, andaccounted for as lease investment assets pursuant to Paragraph 81 of ASBJ Guidance No. 16, entitledthe “Implementation Guidance on Accounting Standard for Lease Transactions,” issued by ASBJ on
March 30, 2007. The difference between income before income taxes when Paragraph 80 of ASBJ
Guidance was applied and when Paragraph 81 of ASBJ Guidance was applied was immaterial.
As lessor, revenue from finance lease transactions and related costs are recognized when the lease
payments are received. As lessee, lease assets under Non-transferrable Finance Leases recorded in“tangible fixed assets” or “intangible fixed assets” are depreciated using the straight-line method over
the term of the lease, with a predetermined residual value of zero or as stated in the applicable lease
contract.
(j) Foreign currency translation
Assets and liabilities denominated in foreign currencies are translated into Japanese yen at the exchange
rates prevailing at the fiscal year-end. Revenues and expenses are translated at the exchange rates
prevailing on the applicable transaction dates. Foreign exchange gains and losses resulting from suchtransactions are included in the determination of net income.
(k) Provision for bonuses
The consolidated subsidiaries provide provisions for bonuses based on the estimated amounts of future
payments to employees attributable to the current year.
(l) Provision for directors’ retirement benefits
Provisions for directors’ retirement benefits of the consolidated subsidiaries are provided for paymentof retirement benefits to directors and corporate auditors in the amounts deemed accrued at the fiscal
year-end based on internal regulations.
(m) Provision for reimbursement of deposits
A provision for reimbursement of deposits, which had been derecognized from liabilities under certain
conditions, is provided for possible losses on future claims of withdrawal based on the historicalreimbursement experience.
(n) Provision for point card certificates
A provision for point card certificates is recorded for future use of point card certificates by themembers in the amount rationally estimated and deemed necessary.

- 11 -

(o) Provision for contingent loss
A provision for contingent loss is provided for contingent liabilities not covered by other provisions in
the amount deemed necessary based on future estimated losses.
(p) Reserves under special laws
Reserves under special laws are reserves for contingent liabilities and are provided for compensation
for losses from securities-related transactions pursuant to Article 46-5-1 of the Financial Instruments
and Exchange Act of Japan and Article 175 of the Cabinet Ordinance on Financial Instruments
Business.
(q) Employee retirement benefits
Employees who terminate their services with the Hyakugo Bank Group are entitled to retirement
benefits, of which the amount is generally determined based on the current basic rate of pay, length ofservice and conditions under which the termination has occurred.
In accordance with the accounting standard for employee retirement benefits, the Hyakugo Bank Grouphas principally recognized retirement benefits based on the actuarial present value of the retirement
benefit obligations using the actuarial appraisal approach and the fair value of pension plan assets
available for benefits at the respective fiscal year-end. In calculating retirement benefit obligations, theHyakugo Bank Group adopts the method of attributing expected retirement benefits to periods on abenefit formula basis. Consolidated subsidiaries use the simplified method to calculate the amounts
required to be paid as retirement benefits if such benefits for all the employees retired voluntarily at the
fiscal year end are regarded as retirement benefit obligations.
Past service cost that is yet to be recognized is amortized on a straight-line basis over a fixed period of
3 years, which is within the average remaining service years of the employees, measured from the year
in which such cost arises. Actuarial differences arising from changes in the retirement benefit
obligations or pension plan assets not anticipated under previous assumptions or from changes in theassumptions themselves that are yet to be recognized are amortized on a straight-line basis over a fixed
period of 10 years, which is within the average remaining service years of the employees, measured
from the year following the year in which such differences arise. Actuarial differences and past service
cost that are yet to be recognized in profit or loss have been recognized as retirement benefit
adjustments under a component of accumulated other comprehensive income within the net assets
section, after adjusting for tax effects, and the difference between retirement benefit obligations andplan assets has been recognized as asset or liability for employee retirement benefits, without any
adjustments, in the accompanying consolidated balance sheets.
In addition, in order to provide for payments of retirement bonuses to executive officers of the Bank,
the amount considered to be incurred up to the end of the year ended March 31, 2019 was recorded in“Liability for employee retirement benefits” on the consolidated balance sheet out of the estimatedamount of retirement bonuses to be paid to the executive officers.
(r) Income taxes
Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities
are recognized as future tax consequences attributable to the differences between the financial
statement carrying amounts of existing assets and liabilities and their respective tax bases and operating
loss carry-forwards. Deferred tax assets and liabilities are measured using the enacted tax rates
expected to apply to taxable income in the years in which those temporary differences are expected tobe recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates isrecognized in the period that includes the enactment date.

- 12 -

(s) Appropriation of retained earnings
Cash dividends are recorded in the fiscal year when a proposed appropriation of retained earnings isapproved by the board of directors and/or shareholders.
(t) Per share data
Net income per share is computed by dividing income available to common shareholders by theweighted average number of shares of common stock outstanding during the respective years. Diluted
net income per share is calculated to reflect the potential dilution assuming that all stock options are
exercised at the time of issue, unless such options are anti-dilutive.
Cash dividends per share shown in the accompanying consolidated statements of income represent
dividends declared by the Bank as applicable to the respective years shown.
(u) New accounting standard not yet adopted
On March 30, 2018, the ASBJ issued ASBJ Statement No. 29, “Accounting Standard for Revenue
Recognition,” and ASBJ Guidance No. 30, “Implementation Guidance on Accounting Standard for
Revenue Recognition.” The new standard and guidance provide comprehensive principles for revenue
recognition to Japanese GAAP in order to converge with IFRS 15, “Revenues from Contracts with
Customers” and require an entity to recognize revenue to depict the transfer of promised goods orservices to customers in an amount that reflects the consideration to which the entity expects to beentitled in exchange for those goods or services. An entity should recognize revenue in accordance withthat principle by applying the following 5 steps:
Step 1: Identify the contract with a customers
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies the performance obligation
The Hyakugo Bank Group expects to apply the standard and guidance effective from the beginning of
the fiscal year ending March 31, 2022 and is in the process of measuring the effects of applying the newstandard and guidance on the consolidated financial statements.
(v) Change in presentation
Dividend income from group credit life insurance, etc., contracted by the Bank had previously beenrecorded in “Other income,” but the Bank reviewed the presentation method taking the opportunity of
the changes in contracts regarding the payment of insurance premiums and the receipt of dividends andthe trend of increasing dividend income. As a result of our examination of the relation between insurance
premiums paid and dividend income, the Bank determined that it was more appropriate to record the net
amount of the insurance premiums less dividend income as expenses, from the viewpoint of proper
presentation of insurance premiums that shall be borne by the Bank. Accordingly, main dividend income
has been recorded in “Fees and commissions (Expenses)” and “General and administrative expenses”
from the year ended March 31, 2019.
The consolidated financial statements for the year ended March 31, 2018 have been retrospectively
reclassified in order to reflect this change. As a result, “Other income” of ¥6,723 million, “Fees andcommissions (Expenses)” of ¥4,487 million and “General and administrative expenses” of ¥45,041
million presented in the previous consolidated statement of income for the year ended March 31, 2018
are presented as “Other income” of ¥5,911 million, “Fees and Commissions (Expenses)” of ¥3,705
million and “General and administrative expenses” of ¥45,013 million in the consolidated statement ofincome for the year ended March 31, 2018.

- 13 -

3.

Financial Instruments and Related Disclosures
Outline of financial instruments(1) Policy for financial instruments
The Hyakugo Bank Group is engaged in financial service operations centered on banking operations. In
addition to investing funds in loans, securities and monetary claims bought for the main purpose of
earning interest income, the Bank also operates, within defined limits, securities and money held in
trust for the purpose of earning income from price fluctuations. Furthermore, in order to enhanceliquidity of assets, the Bank also maintains cash deposits and invests funds in call loans and others inshort-term markets. These investments are funded almost exclusively through deposits and negotiablecertificates of deposit, while from an asset and liability management (ALM) perspective, other sourcesof funding are used as necessary, including call money and borrowings.
Moreover, the Bank uses derivative transactions in order to meet the customers’ risk hedging needs andto make use of the Bank’s own ALM. Within defined limits, the Bank also engages in derivativetransactions for the purpose of earning income from trading derivatives.
The consolidated subsidiaries of the Bank include companies that engage in securities operations, credit
card operations and leasing operations. Each of these companies holds various financial assets, such aslease receivables and investment assets, installment receivables, member accounts receivable and cash
deposits. Certain consolidated subsidiaries use borrowed money to raise funds.
(2) Nature and extent of risks arising from financial instruments
The financial assets held by the Hyakugo Bank Group mainly comprise loans to corporations andindividuals located in the Bank’s business area, as well as securities, including domestic and foreign
bonds and stocks. With regard to bonds, the Bank holds Japanese government bonds, local government
bonds and bonds issued by highly creditworthy issuers, such as financial institutions, business entities
and foreign governments, as well as securitized products comprising receivable-or real-estate-backed
assets. In terms of monetary claims bought, the Bank maintains lease receivables and investment assets
related to the business of holding trust beneficiary rights and monetary claims purchased from
customers in relation to the integrated factoring system. Monetary claims bought are exposed to credit
risk of the borrowers and the issuers. Of such monetary claims bought, fixed interest rate items are
exposed to the risk of fluctuation in actual value due to interest rate fluctuations while marketablesecurities are exposed to the risk of fluctuation in market value.
The majority of financial liabilities comprise deposits and negotiable certificates of deposit, themajority of which in turn are received from customers located in the Bank’s business area. A highproportion of financial liabilities consist of short-term deposits, such as liquid deposits with no definedmaturity and fixed deposits maturing within one year. Call money and other short-term fund raisingsources are primarily used for adjusting yen- and foreign currency-denominated capital positions.
When comprehensively considering financial assets and liabilities, there is risk of losses due to changes
in the actual value or capital margins from fluctuations in interest rates or foreign currency exchange
rates as a result of differences in interest rate renewal dates, fund settlement dates or transaction
currencies between assets and liabilities. Furthermore, should circumstances significantly impair the
short-term liquidity of assets, there is risk that the Bank would be forced to raise additional funds thatare costly or dispose of assets at lower than expected prices or the like in order to cover the shortfall.
With regard to derivative transactions, interest-related derivatives primarily comprise interest rate
swaps, and currency-related derivative transactions primarily involve currency swaps and foreignexchange forwards. The majority of these derivatives are used primarily to hedge the Bank’s own
market risk or that of customers. Stock futures, bond futures, over-the-counter bond options and credit
derivatives are used to earn income from trading activities or to hedge risks. In terms of risks arisingfrom transactions, both market and credit risks are limited because the great majority of the transactions
are for the purpose of hedging or are covered transactions and all counterparties are highly creditworthy- 14 -

financial institutions or corporations. The Bank does not enter into any high-risk transactions in which
the rate of change in fair value corresponding to the price fluctuation of the object is very high.
During the years ended March 31, 2019 and 2018, the hedged items accounted for using hedge
accounting consisted of debt securities, loans and bills discounted, call loans and borrowed money andhedging instruments consisted of interest rate swaps, foreign currency swaps and foreign exchange
swaps. The Bank determines whether to revise its hedging policy every month, in addition todetermining the hedged items, hedging instruments and hedging ratios semi-annually. Consolidated
subsidiaries also set the above policies on occasion. Hedge effectiveness is assessed using the methods
provided in JICPA’s Accounting System Committee Report No. 14, entitled the “Practical Guidance
concerning Accounting for Financial Instruments.”(3) Risk management for financial instrumentsi.

Credit risk management
In order to avoid large-scale losses resulting from materialization of credit risk, the Hyakugo Bank
Group adheres to the basic policy of maintaining the soundness of overall assets by controlling credit
risk to within an acceptable scope compared to shareholders’ equity. To this end, the Hyakugo Bank
Group has prepared various rules and organizational structures on which it bases its credit risk
management.
The Bank has established a system in which the ALM Risk Management Committee of each Hyakugo
Bank Group company comprehensively gauges, evaluates and monitors the status of various risks,
including credit risks, and considers policies and response measures related to risk management on amonthly basis. In addition, the Bank uses Value at Risk (VaR) to measure credit risk in a manner that
includes credit concentration risk, which is not included in the calculation of the capital adequacy ratio,
based on the framework for integrated risk management. By managing risk within specified limits, theBank aims to take on appropriate risks and secure stable earnings.
In managing credit risk, the loan screening divisions independent of the sales promotion divisions
review and manage loans, and the market risk management department (middle office) manages thesame on a day-to-day basis. The Bank has also established a credit risk management department within
the risk management division, which is independent from other divisions, thus ensuring a system ofmutual checks and balances.
In addition, the Bank has prepared a credit rating system to evaluate credit risk for each borrower andimplement comprehensive measures. Credit ratings are used to formulate finance loan policies and to
set loan interest rates. The Hyakugo Bank Credit Policy stipulates a basic policy regarding financeloans in managing credit portfolios. Under such policy, the Bank ensures that investments are notconcentrated to only certain companies or corporate groups while also striving to ascertain and monitor
the status of credits by such categories as based on the industry, region, credit rating and level ofborrowing and to distribute credits appropriately across such categories.
With regard to loan recipients who are facing difficulties due to worsening business conditions or otherreasons, the Bank gauges and monitors the management status appropriately, and implements guidanceon formulating restructuring plans and collecting receivables as needed.
The Bank prepares various rules and manages market risk of each of its consolidated subsidiaries andmanages credit risk of the entire Hyakugo Bank Group through its credit risk management department.
Furthermore, the Hyakugo Bank Group comprehensively gauges, evaluates and monitors the status ofvarious risk types, including credit risk, through the Risk Management Committee established at eachsubsidiary.

ii.

Market risk management
The Hyakugo Bank Group works to accurately gauge and evaluate the impact of market fluctuation on
its business and to conduct appropriate portfolio management by continuously limiting risk to- 15 -

appropriate levels in light of the strength of management and preparing various rules and organizational
systems to manage market risk under the basic policy of securing stable revenues.
The Bank has established a system in which the ALM Risk Management Committee of each Hyakugo
Bank Group company comprehensively gauges, evaluates and monitors the status of various risks,
including market risks, and considers policies and response measures related to risk management on amonthly basis. In addition, the Bank uses VaR to measure market risk in a manner that includes interest
rate risk, which is not included in the calculation of the capital adequacy ratio, based on a framework
for integrated risk management. By managing risk within specified limits set for each risk type, theBank aims to take on appropriate risks and secure stable earnings.
The Bank seeks to reduce risk of losses due to insufficient funds by managing market risk, drawing
clear distinctions between the trade execution department (front office) and the administrative
processing department (back office), and by establishing a market risk management department (middle
office) within the risk management division, which is independent from other divisions. All of theabove-mentioned departments are overseen by the risk control management department, thus ensuring asystem of mutual checks and balances. The transaction status, fair value and risk exposure arecalculated and managed on appropriate dates, and management systems are strengthened at appropriate
times in response to situations that arise. In addition, for transactions entered into to secure a profit
through purchase and sale, etc., the Bank limits its risk of losses by preparing a management framework
tailored to the special circumstances of each investment object, including by establishing position limits,loss cutting rules and cumulative loss limits, and conducting rigorous management on such framework.
The Bank manages market risk for its overall financial assets and listed liabilities, including deposits
and other forms of funds from an ALM perspective. The Bank seeks to reduce foreign exchange rate
fluctuation risk associated with foreign currency denominated products used for procurement of funds
through operation of foreign currency denominated foreign bonds and foreign currency funds by using
call money and other forms of procurement as well as by using currency exchange-related derivatives
to maintain roughly equivalent operating and procurement amounts in each currency.
The Bank prepares various rules and manages market risk of each of its consolidated subsidiaries andmanages market risk of the entire Hyakugo Bank Group through its market risk management
department. Furthermore, the Hyakugo Bank Group comprehensively gauges, evaluates and monitors
the status of various risk types, including market risk, through the Risk Management Committees
established at each subsidiary company.
Quantitative information concerning market risk:
Interest rate risk
The main financial instruments used by the Hyakugo Bank Group that are exposed to impacts ofinterest rate risk are bonds included in securities, loans and bills discounted, deposits, negotiablecertificates of deposit, borrowed money and interest rate swap contracts included in derivativetransactions. Interest rate risks attached to these financial assets and liabilities are managed bymonitoring VaR calculated using the historical simulation method (which applies a holding period of
three months, confidence interval of 99% and observation period of five years).
As of March 31, 2019, the amount of interest rate risk (a predicted amount of loss) the Bank was
exposed to was estimated to be ¥8,926 million ($80,412 thousand) (¥8,821 million in 2018) overall.
With regard to liquid deposits without maturity dates, VaR is calculated by internal models using due
dates estimated with consideration for its long-term retention.
The interest rate risk the consolidated subsidiaries are exposed to is not included in the calculation, as
the outstanding balances of their financial instruments that are potentially exposed to interest rate risk
are fairly small and, hence, their importance minimal.
Stock price risk
The main financial instruments used by the Hyakugo Bank Group exposed to stock price risk are stocks
included in securities. Of these financial assets, stock price risks attached to those held for pureinvestment purpose are managed by monitoring its VaR, which is calculated using the historicalsimulation method (which applies a holding period of three months, confidence interval of 99% and- 16 -

observation period of five years), and stock price risks attached to those held for purposes other thanpure investments are managed by monitoring valuation losses, which may arise to a degree as assumed
under the VaR model, the VaR of which is calculated using the historical simulation method (whichapplies a holding period of six months, confidence interval of 99% and observation period of five
years).
As of March 31, 2019, the total amount of stock price risk (a predicted amount of loss) the Bank was
exposed to was estimated at ¥1,767 million ($15,914 thousand) (¥2,652 million in 2018) overall.
The stock price risk the consolidated subsidiaries are exposed to is not included in the calculation, as
the outstanding balances of their financial instruments that are potentially exposed to stock price risk
are fairly small and, hence, its importance minimal.
Other price fluctuation risk
The main financial instruments used by the Hyakugo Bank Group exposed to price fluctuation risk areinvestment trusts included in securities. Price fluctuation risks attached to these financial assets aremanaged by monitoring its VaR, which is calculated using the historical simulation method (whichapplies a holding period of three months, confidence interval of 99% and observation period of five
years).
As of March 31, 2019, the total amount of stock price risk (a predicted amount of loss) the Bank was
exposed to was estimated at ¥22,684 million ($204,366 thousand) (¥23,630 million in 2018) overall.
Reasonableness of VaR
The Bank conducts back testing which compares the results calculated under the VaR model withchanges in present value. As a result of the back testing, the Bank believes that the simulation model
employed captures market risk with sufficient accuracy. It is noted, however, that the VaR model
calculates market risks according to certain probability statistically calculated on the basis of historicalmarket fluctuations. Therefore, the VaR model may fail to capture risks which arise under exceptional
market conditions affected by drastic change.
iii.

Liquidity risk management
The Hyakugo Bank Group manages liquidity risks through establishment of relevant internal rules andorganizational structures, adherence to the basic policy of maintaining structures that can appropriately
respond to a liquidity crisis and by accurately grasping situations of investment and funding and market
trends on stable funding.
The Bank has established a system in which the ALM Risk Management Committee of each Hyakugo
Bank Group company comprehensively gauges, evaluates and monitors the status of various risks
including liquidity risks and considers risk management policies and response measures on a monthly
basis.
In funding operations, the Bank appropriately controls and manages daily and future funding
requirements in Japanese yen and foreign currencies. The Bank also constantly monitors funding
availability in the markets and establishes countermeasures, such as establishment and timely review ofa maximum funding amount based on the funding availability, against unexpected adverse events
beforehand to prepare against liquidity risks.

(4) Supplementary explanation concerning fair values of financial instruments
The fair values of financial instruments comprise values determined based on market prices and values
determined reasonably when there is no available market prices. Since variable factors are incorporated
in computing the relevant fair values, such fair values may vary depending on the application ofdifferent assumptions.
Fair values of financial instruments
The carrying amounts and fair values of, and unrealized gains/losses on, the financial instruments as of- 17 -

March 31, 2019 and 2018 were as follows.
It is noted that unlisted stocks and other items for which the fair values were deemed extremely difficult
to estimate were not included in the following table (see Note 2 below).
In addition, lease receivables and lease investment assets, contracts for overdraft facilities, loan
commitments, bonds and agreements on guarantee of liabilities (customers’ liabilities for acceptancesand guarantees) were omitted from the below table due to immateriality.
March 31, 2019

Carrying value

Fair value
Millions of yen(1) Cash and due from banks(2) Call loans and bills bought(3) Monetary claims bought (*1)
(4) Trading account securities(5) Money held in trust(6) Securities:
Available-for-sale securities(7) Loans and bills discounted
Allowance for loan losses (*1)¥¥

904,975
20,42912,803
23
1,997

904,975
20,42912,80323
1,997

Differences¥-

1,724,933-¥

1,724,933
3,431,337(14,313)
3,417,023
2,484
6,084,672

3,435,552
2,484¥ 6,103,201

18,52818,528(1) Deposits¥(2) Negotiable certificates of deposit(3) Call money and bills sold(4) Payables under securities lending transactions(5) Borrowed money(6) Foreign exchanges
Total liabilities¥

4,876,589
176,185
240,000
188,696316,314263
5,798,049¥ 4,876,472
176,185
240,000
188,696
316,886263¥ 5,798,504

¥

¥

¥

(8) Foreign exchanges (*1)
Total assets

Derivative transactions (*2)
To which hedge accounting is not applied
To which hedge accounting is applied
Total derivative transactions¥¥- 18 -

3,614(7,111)(3,496)¥

3,614(7,111)(3,496)

¥

¥

¥

(117)
571
454

-

March 31, 2018

Carrying value

Fair value
Millions of yen(1) Cash and due from banks(2) Call loans and bills bought(3) Monetary claims bought (*1)
(4) Trading account securities(5) Money held in trust(6) Securities:
Available-for-sale securities(7) Loans and bills discounted
Allowance for loan losses (*1)¥¥

611,452
81,366
10,93818
2,000

611,452
81,366
10,93818
2,000

Differences¥-

1,772,896-¥

1,772,896
3,095,211(14,536)3,080,674
1,731
5,561,080

3,093,398
1,731¥ 5,573,803

12,723
12,723(1) Deposits¥(2) Negotiable certificates of deposit(3) Call money and bills sold(4) Payables under securities lending transactions(5) Borrowed money(6) Foreign exchanges
Total liabilities¥

4,716,096
181,500
100,000
75,514
197,42732
5,270,572¥ 4,715,939
181,500
100,000
75,514
196,92632¥ 5,269,913

¥

¥

¥

(8) Foreign exchanges (*1)
Total assets

Derivative transactions (*2)
To which hedge accounting is not applied
To which hedge accounting is applied
Total derivative transactions¥¥- 19 -

5,624(5,323)
300

¥

5,624
(5,323)
300

¥

¥

¥

(157)
(0)
(501)
(659)

-

March 31, 2019

Carrying value
Fair value
Differences
Thousands of U.S. dollars(1) Cash and due from banks(2) Call loans and bills bought(3) Monetary claims bought (*1)
(4) Trading account securities(5) Money held in trust(6) Securities:
Available-for-sale securities(7) Loans and bills discounted
Allowance for loan losses (*1)$

8,153,667
184,067
115,359213
18,000$8,153,667
184,067
115,359213
18,000$-15,541,343-$

15,541,343
30,915,739(128,966)
30,786,773
22,38754,821,809

30,953,715
22,38754,988,751$

166,942
166,942(1) Deposits$(2) Negotiable certificates of deposit(3) Call money and bills sold(4) Payables under securities lending transactions(5) Borrowed money(6) Foreign exchanges
Total liabilities$

43,937,199
1,587,397
2,162,357
1,700,120
2,849,939
2,377
52,239,389$ 43,936,141
1,587,397
2,162,357
1,700,120
2,855,090
2,377$ 52,243,482$

32,569(64,069)(31,500)$(8) Foreign exchanges (*1)
Total assets

Derivative transactions (*2)
To which hedge accounting is not applied
To which hedge accounting is applied
Total derivative transactions$$

32,569(64,069)(31,500)

$
$

$

$

$

(1,058)
5,151
4,093

-

(*1) A general allowance for loan losses and specific allowance for loan losses corresponding to loans
and bills discounted have been deducted. Allowances for doubtful receivables for monetary claimsbought and foreign exchanges were not significant in amount. Therefore, such allowances were
written-down directly from the amounts listed in the consolidated balance sheets.
(*2) Derivative transactions recorded under other assets and liabilities have been listed together.
Receivables and payables arising from derivative transactions have been presented in net amounts.
Net payables have been presented in parentheses.
For derivative transactions to which exceptional treatment for interest-rate swaps was applied, thefair values thereof have been included in the fair values of the loans and bills discounted, which
are the hedged items.
(Note 1) Calculation method of fair values of financial instruments
Assets:(1) Cash and due from banks
With respect to due from banks without maturities, the carrying amount is presented at fair value
because such carrying amount approximates the fair value. With respect to due from banks withmaturity or due from banks held by a consolidated subsidiary, the carrying amount is presented at fairvalue because of the minimal amount of such due and out of necessity.

- 20 -

(2) Call loans and bills bought
The carrying amount of a call loan or bill bought is presented at fair value since the residual maturity ofsuch call loan or bill is within one year and such carrying amount approximates the fair value.
(3) Monetary claims bought
Of the monetary claims bought, trust beneficiary rights are valued at the price presented by partner
financial institutions. Monetary claims purchased from customers in relation to the integrated factoring
system are settled over a specified short-term period. The carrying amounts for such claims are,therefore, presented at fair value as such carrying amounts approximate the fair values.
(4) Trading account securities
Trading account securities held for the purpose of dealing operations are valued at the price at theexchange or presented by partner financial institutions.
(5) Money held in trust
Of the non-consolidated money held in trust as security, the fair value of a financial project operated astrust asset is valued at the price at the exchange or presented by partner financial institutions, etc. With
respect to call loans and other similar loans, their carrying amounts are each presented at fair value.
For details regarding money held in trust for holding purpose, see Note 4, entitled the “Trading AccountSecurities, Money Held in Trust and Securities.”(6) Securities
The fair values of securities are each determined using the quoted price at the stock exchange. (Theabove does not apply to unlisted stocks as their fair values are deemed extremely difficult to determine.)
Fair values of debt securities are each valued at the price at the exchange or presented by partner
financial institutions, etc. Of such debt securities, the fair values of privately-placed bonds guaranteedby the Bank are calculated by discounting the sum of future interest income, the principal and guarantee
receivables, using the assumed rate applicable to a similar type of loans newly advanced and procedures
applicable to business loans. In addition, the fair values of debt securities of Bankrupt Issuers, Virtually
Bankrupt Issuers or Potentially Bankrupt Issuers are stated at actual value, which is calculated byassessing the amount of write-offs based on estimated loan losses for similar business loans.
The fair value of an investment trust is determined using the published standard quotation.
For details regarding securities for holding purpose, see Note 4, entitled “Trading Account Securities,
Money Held in Trust and Securities.”(7) Loans and bills discounted
The carrying amount of a loan or bill discounted (except for loans containing credit derivatives) withvariable interest rate and short maturity is presented at fair value as such carrying amount approximates
the fair value, unless the credit situation of the borrower changes significantly after executing the loan
or bill discounted. In such a case, the market interest rate will quickly react to such change.
Of the fixed-rate loans and bills discounted, the fair value of a consumer loan or loaned product to local
governments is computed, with respect to each category of products and lending terms, by discounting
the sum of future principal and interest income, using the assumed rate applicable to a same type of newloan. The fair values of loans to businesses and similar instruments are computed, with respect to eachcategory of internal ratings and lending terms, by discounting the sum of future principal and interest
income, using the assumed rate applicable to a same type of new loan. The carrying amount of a loan orbill discounted with a short-term contract period or maturity (within one year) is presented at fair value
as such carrying amount approximates the fair value.
- 21 -

The fair values of loans containing credit derivatives are determined using the price presented bypartner financial institutions.
Losses on claims against Bankrupt Borrowers, Virtually Bankrupt Borrowers and Potentially Bankrupt
Borrowers are estimated based on the forecasted recoverable amount of collaterals and guarantees forsuch claims. The market values of such claims approximated the carrying amounts of such claims as of
the consolidated closing date after deduction of present relevant estimated loan losses. Therefore, theBank uses market values as fair values of such claims.
Meanwhile, with respect to loans and bills discounted of consolidated subsidiaries, their carrying
amounts are presented as fair value as a minimum requirement.
(8) Foreign exchanges
Foreign exchanges include foreign currency deposits with other banks (due from foreign banks - own
accounts), foreign exchange-related short-term loans receivable (due from foreign banks – theiraccounts), export bills, traveler’s checks (foreign bills bought) and loans on import bills (foreign bills
receivable). The carrying amounts of these instruments are presented at fair value, as they are dues frombanks without maturities or instruments with a short-term contract period (within one year) and theircarrying amounts approximate the fair values.
Liabilities:(1) Deposits and (2) negotiable certificates of deposit
With respect to an on-demand deposit, the payment obligation demanded at the balance sheet date,
which is the carrying amount, is deemed to be the fair value. The fair value of a time deposit iscomputed using the present value by discounting future cash flows for each category of a certain period.
The interest rate to be applied when a new deposit is made is used as the discount rate. For a deposit
whose residual maturity is within one year, the carrying amount is presented at fair value since suchcarrying amount approximates the fair value.
(3) Call money and bills sold and (4) payables under securities lending transactions
The carrying amounts of items (3) and (4) are presented at fair value as such carrying amounts
approximate the fair values due to short-term maturities (within one year).
(5) Borrowed money
The present value of borrowed money is computed by discounting the sum of principal and interest
income to be received, classified by a fixed period, using the assumed rate applicable to the same typeof borrowings. The carrying amount of such instrument is presented at fair value as such carrying
amount approximates the fair value due to the short-term maturity (within one year). With respect toborrowed money of consolidated subsidiaries, the carrying amount is presented at fair value as aminimum requirement.
(6) Foreign exchanges
Foreign exchanges include foreign currency deposits from other banks and non-resident yen deposits(due to foreign branches – their accounts), foreign exchange-related short-term loans payable (due toforeign banks – own accounts), foreign exchange-related accrued liabilities sold to customers (foreign
bills sold) and foreign exchange-related accrued liabilities sent to customers (foreign bills payable). The
carrying amounts of these instruments are presented at fair value as such carrying amounts approximate
the fair values due to such instruments being dues from banks without maturities or having shortmaturities (within one year).

- 22 -

Derivative transactions:
Please see Note 16, entitled the “Derivative Instruments.”(Note 2) The following table summarizes financial instruments whose fair values were extremely
difficult to estimate. It is noted that these instruments were not included in the aforementioned table
regarding the fair values of financial instruments.
Millions of yen
2019
2018

Category
Unlisted stocks (*1)(*2)
Investments in capital of partnerships (*3)
Total

¥
¥

2,229
4,255
6,485

¥
¥

2,232
3,608
5,841

Thousands of
U.S. dollars
2019
$
$

20,08938,34258,431(*1) The fair values of unlisted stocks were not disclosed since there were no available market prices
and such fair values were extremely difficult to estimate.
(*2) The Bank recognized impairment loss in the amount of ¥42 million ($385 thousand) and ¥3 million
on unlisted stocks for each of the years ended March 31, 2019 and 2018, respectively.
(*3) The fair values of investments in capital of partnerships comprise assets whose fair values are
deemed to be extremely difficult to estimate such as unlisted stocks and the like. Thus, the fair values ofinvestments in capital of partnerships were not disclosed.

- 23 -

(Note 3) Maturity of financial assets and securities with contractual maturities at March 31, 2019:
Millions of yen
Within one
One to three
Three toFive toSeven to 10
year
years
five years
seven years
years
Due from banks ¥ 841,495
Call loans andbills bought
20,429
Monetaryclaims bought
7,672
Available-forsale securities
with maturity:
Japanesegovernment
bonds
83,400Local
government
bonds
24,916
Corporatebonds
138,282
Others
18,009Subtotal
264,609
Loans and bills
discounted (*)
744,645
Total¥ 1,878,853

¥

-

¥

-

¥

-

¥

-

Over 10
years
¥

-

-

-

-

-

-

2,379

2,478

43

232

-

330,000

65,5006,000-

39,00070,94077,911

109,246

76,829-81,312
23,196505,450

37,40382,867
263,682

19,39032,690167,326

8,200
47,080132,110

48,334
14,971
102,306

333,383
465,726

968,959¥ 1,071,266

561,915¥ 1,069,745¥

451,272
717,433¥

318,534
485,904¥(*) These loans and bills discounted do not include loans of ¥52,626 million, which do not have specificmaturity dates.

- 24 -

Within one
year
Due from banks $ 7,581,728
Call loans andbills bought
184,067
Monetaryclaims bought
69,127Available-forsale securities
with maturity:
Japanesegovernment
bonds
751,419
Local
government
bonds
224,497
Corporatebonds
1,245,901
Others162,266
Subtotal
2,384,083
Loans and bills
discounted (*)
6,709,125
16,928,130
Total$

Thousands of U.S. dollars
Three toFive toSeven to 10
five years
seven years
years

One to three
years
$

$

-

$

-

$

-

$

Over
10 years

-

$

-

-

-

-

-

-

21,437

22,330

387

2,096

-

2,973,241

590,143

54,059-351,383

639,165

701,966

984,287

692,221-732,612
209,000
4,554,018

337,002746,618
2,375,729

174,704
294,536
1,507,586

73,880424,190
1,190,291

435,488
134,891
921,762

5,062,761
9,638,216

4,065,884
6,463,943

2,869,937
4,377,910

3,003,722$ 4,196,109

8,730,154$ 9,651,916$$(*) These loans and bills discounted do not include loans of $474,156 thousand, which do not havespecific maturity dates.
(Note 4) Maturity of interest bearing liabilities at March 31, 2019:
Millions of yen
Within one
One to three
Three toFive toyear
years
five years
seven years

Deposits (*)
Negotiablecertificates ofdepositCall money andbills soldPayables under
securities
lendingtransactions
Borrowed
money
Total

¥ 4,502,953¥

316,973¥

56,662¥-Seven to 10
years

¥

-

Over 10
years

¥

-

176,185

-

-

-

-

-

240,000

-

-

-

-

-

188,696

-

-

-

-

-

15,316¥ 5,123,151¥

31,121
348,095¥

269,876
326,538¥(*) On-demand deposits are included in the “within one year” column.

- 25 -

-

¥

-

¥

-

Within one
year

Deposits (*)$

Negotiablecertificates ofdepositCall moneyand bills soldPayables under
securities
lendingtransactions
Borrowed
money
Total
$

40,570,805

Thousands of U.S. dollars
Three toFive toSeven to 10
five years
seven years
years

One to three
years

$

2,855,877$

510,517

$

-

$

-

Over 10
years

$

-

1,587,397

-

-

-

-

-

2,162,357

-

-

-

-

-

1,700,120

-

-

-

-

-

280,401
3,136,278

2,431,539$ 2,942,056

137,999
46,158,678$$(*) On-demand deposits are included in the “within one year” column.

- 26 -

-

$

-

$

-

4. Trading Account Securities, Money Held in Trust and Securities
At March 31, 2019 and 2018, securities consisted of the following.
Thousands of
U.S. dollars
2019

Millions of yen
2019Japanese government bonds
Local government bonds
Corporate bonds
StocksOther securities
Total

¥

¥

2018

541,697
365,318
336,264
172,597
315,541
1,731,418¥

594,830
390,194
400,603
183,314
209,794
1,778,737¥$$

4,880,595
3,291,454
3,029,679
1,555,072
2,842,974
15,599,774

In the accompanying consolidated balance sheets, trading account securities, money held in trust andsecurities included marketable securities traded on stock exchanges. Included in government bonds andother securities were investment securities lent to third parties under securities loan agreements in theamounts of ¥73,068 million ($658,330 thousand) and ¥62,661 million at March 31, 2019 and 2018,
respectively.
Guarantees provided for certain privately placed bonds were included in securities in accordance with
Article 2, Paragraph 3 of the Financial Instruments and Exchange Act of Japan. The guarantees
amounted to ¥10,963 million ($98,781 thousand) and ¥9,281 million at March 31, 2019 and 2018,
respectively.
Investments in securities are classified as trading, held-to-maturity or available-for-sale securities. Suchclassifications determine the respective accounting method to be applied as stipulated under theaccounting standard for financial instruments. At March 31, 2019 and 2018, the carrying values of
trading account securities, money held in trust for trading purposes and related net unrealized
gains/losses included in current earnings were as follows.
Carrying
value

Unrealized
gains(losses)

Carrying
value

Unrealized
gains(losses)Millions of yen
2019
Trading accountsecurities¥
Money held in trust

23
1,997

¥

2018
0
(2)

- 27 -

¥

18
2,000

¥

0
0

Unrealized
Carrying
gains
value
(losses)Thousands of
U.S. dollars
2019
$

213
18,000$

5(20)

At March 31, 2019 and 2018, gross unrealized gains and losses on marketable available-for-salesecurities were summarized as follows.
Acquisition
cost

Gross
Gross
unrealized
unrealized
gains
lossesMillions of yen

Fair andcarrying value

As of March 31, 2019
Securities of which carrying value exceeds
acquisition cost:
Stocks¥Bonds:
Japanese government bonds
Local government bonds
Corporate bonds
OthersSecurities of which carrying value does
not exceed acquisition cost:
StocksBonds:
Japanese government bonds
Local government bonds
Corporate bonds
OthersTotal¥

52,998¥ 109,329¥-¥

162,328

527,472
352,663
319,089
181,928

14,225
5,423
2,692
7,633

-

541,697
358,087
321,782
189,562

9,136-(1,097)

8,039

7,236
14,518131,201
1,596,246¥ 139,304

¥

(5)
(36)
(3,850)(4,990)¥7,231
14,481
127,350
1,730,560

56,544¥ 116,843¥-¥

173,387

578,068
312,969
346,679
82,658

16,762
4,637
2,821
7,960

-

594,830
317,607349,501
90,619

8,370

-

(676)

7,694

72,92951,200120,480
1,629,902¥ 149,025

(342)
(98)
(2,499)(3,616)

72,587
51,101
117,980
1,775,311

As of March 31, 2018
Securities of which carrying value exceeds
acquisition cost:
Stocks¥Bonds:
Japanese government bonds
Local government bonds
Corporate bonds
OthersSecurities of which carrying value does
not exceed acquisition cost:
StocksBonds:
Japanese government bonds
Local government bonds
Corporate bonds
OthersTotal¥- 28 -¥¥

GrossGrossunrealized
unrealized
gains
lossesThousands of U.S. dollars

Acquisition
cost

Fair andcarrying value

As of March 31, 2019
Securities of which carrying value exceeds
acquisition cost:
Stocks$477,510
Bonds:
Japanese government bonds
4,752,430
Local government bonds
3,177,436
Corporate bonds
2,874,937
Others1,639,145
Securities of which carrying value does
not exceed acquisition cost:
Stocks82,321
Bonds:
Japanese government bonds
Local government bonds
65,202
Corporate bonds
130,813
Others1,182,100
Total$ 14,381,894$$

985,041-$

1,462,551

128,165
48,86524,261
68,776-4,880,595
3,226,301
2,899,198
1,707,921-(9,889)72,432$ 1,255,108

(48)
(333)
(34,693)$ (44,963)

65,154130,480
1,147,407$ 15,592,039

Impairment loss on marketable investments securities (stocks) in the amount of ¥340 million ($3,068
thousand) was recorded for the year ended March 31, 2019.
No impairment loss on marketable investment securities was recorded for the year ended March 31,
2018.
The method for finding an impairment loss with respect to a marketable investment security is asfollows.
If the fair value of a marketable investment security declines to between 30% and 50% of theacquisition cost, recoverability of such security will be determined based on the trend of changes inrelated fair values over a given period and the financial condition of the issuing company. If, based on
the application of such method, the amount of decline in the fair value is deemed unrecoverable,
impairment loss will be recognized.
At March 31, 2019 and 2018, net unrealized gains on available-for-sale securities, net of applicable
income taxes and non-controlling interests, recorded in valuation difference on available-for-salesecurities in the accompanying consolidated balance sheets were as follows.
Thousands of
U.S. dollars
2019

Millions of yen
2019
2018
Unrealized gains
Less applicable income taxes
Less non-controlling interests portion
Net unrealized gains in net assets¥¥- 29 -

134,331(40,177)(80)
94,072¥¥

145,502(43,239)(80)
102,182$$

1,210,301(361,996)(725)
847,580Available-for-sale securities sold during the years ended March 31, 2019 and 2018 were as follows.
Proceeds fromsales

For the year 2019:
StocksBonds:
Japanese government
bonds
Local government bonds
Corporate bonds
OthersFor the year 2018:
StocksBonds:
Japanese government
bonds
Local government bonds
Corporate bonds
OthersLoss on sales

¥

856

¥

826

¥

60
5
1,194
2,086

¥

480

¥

559
7,060
8,099

¥

12,362¥25,896
31,215
1,697
179,707250,879

¥

89
0
0
3,691
4,639

¥

22,749

¥

1,874

¥

39,89450
3,001
832,119
897,815

¥

16
0
1
8,024
9,917

Proceeds fromsales

For the year 2019:
StocksBonds:
Japanese government
bonds
Local government bonds
Corporate bonds
OthersGain on sales
Millions of yen$$

Gain on sales
Thousands of U.S. dollars

111,383$

7,714

Loss on sales

$

7,449

233,322809-

281,251
15,296
1,619,130
2,260,382

7
6
33,263
41,799542
45
10,763
18,799- 30 -$$

5.

Loans and Bills Discounted
At March 31, 2019 and 2018, loans and bills discounted consisted of the following.
Thousands of
U.S. dollars
2019

Millions of yen
2019
Bills discounted
Loans on notes
Loans on deeds
Overdrafts

¥

¥

8,263
93,9382,997,823
331,3113,431,337

2018
¥

¥

7,370
93,0452,649,304
345,492
3,095,211$$

74,452
846,372
27,009,854
2,985,061
30,915,739

Bills discounted are accounted for as financial transactions in accordance with JICPA’s Industry Audit
Committee Report No. 24 of February 13, 2002, entitled the “Accounting and Auditing Treatment of
Accounting Standards for Financial Instruments in the Banking Industry.” The Hyakugo Bank Group
has the right to sell or pledge bills discounted and foreign exchanges bought without restrictions. The
total face values of these bills amounted to ¥8,267 million ($74,489 thousand) and ¥7,454 million atMarch 31, 2019 and 2018, respectively.
Claims against borrowers in bankruptcy and past due loans were included in loans and bills discounted
and amounted to ¥45,811 million ($412,754 thousand) and ¥46,210 million at March 31, 2019 and2018, respectively. Loans are generally placed on non-accrual status when substantial doubt isdetermined to exist as to the ultimate collectability of either principal or interest because they are pastdue for a certain period or for other reasons. Interest revenue accruals are suspended when loans areclassified as claims against borrowers in bankruptcy or past due loans. Claims against borrowers inbankruptcy represent non-accrual loans, less partial charge-off of claims deemed uncollectible against
borrowers who are legally bankrupt as defined in Article 96, Paragraph 1, Subparagraphs 3 and 4 of the
Enforcement Ordinance of the Corporation Tax Act of Japan. Past due loans, other than claims against
borrowers in bankruptcy and loans for which interest payments are deferred in order to assist thefinancial recovery of borrowers in financial difficulties, are considered non-accrual loans.
At March 31, 2019 and 2018, accruing loans (which exclude non-accrual loans) for which the paymentof the principal and/or interest was contractually past due by three months or more amounted to ¥140
million ($1,270 thousand) and ¥13 million, respectively.
At March 31, 2019 and 2018, restructured loans (which excludes non-accrual loans and accruing loans
contractually past due by three months or more as mentioned above) for which the Bank has relaxed its
lending conditions for borrowers in financial difficulties through measures such as reduction of theoriginal interest rate, forbearance of interest and/or principal payments and extension of the maturity
date, in order to support such borrowers in their financial recovery or restructuring, amounted to ¥6,741
million ($60,743 thousand) and ¥6,710 million, respectively.
Total non-performing assets, net of charge-offs, consisted of non-accrual loans, accruing loans
contractually past due by three months or more and restructured loans in the amounts of ¥52,694
million ($474,766 thousand) and ¥52,934 million at March 31, 2019 and 2018, respectively.

- 31 -

6.

Tangible Fixed Assets
At March 31, 2019 and 2018, tangible fixed assets, net of accumulated depreciation, were as follows.
Millions of yen
2019
2018
Buildings
Land
Lease assets
Construction in progress
Other tangible fixed assets
Tangible fixed assets¥

21,669 ¥19,913235
4,938
46,756 ¥¥Thousands of
U.S. dollars
201922,126 $19,8660
156
4,580
46,730 $195,239
179,4132,121
44,499421,272

Accumulated depreciation of tangible fixed assets amounted to ¥35,670 million ($321,389 thousand)and ¥34,138 million as of March 31, 2019 and 2018, respectively.
Pursuant to the Act Concerning Revaluation of Land (the “Revaluation Act”), the Bank elected a
one-time revaluation to restate the cost of land used for the banking business at values reassessed toreflect adjustments for land shape and other factors based on appraisal values issued by the Japanese
National Tax Agency effective on March 31, 1998. According to the Revaluation Act, the amountequivalent to the tax effect on the excess of the reassessed value over the original book value is recorded
as deferred tax liabilities for land revaluation. The rest of such excess, net of the tax effect, is recorded
as revaluation reserve for land in accumulated other comprehensive income of net assets in the balance
sheets. At March 31, 2019 and 2018, the differences in the carrying values of land used for the banking
business after revaluation over current market values at the fiscal year-end amounted to ¥4,839 million($43,603 thousand) and ¥5,388 million, respectively.
As permitted by the accounting principles and practices generally accepted in Japan, the Bank deducts
deferred capital gains on sales of real property from the original acquisition costs of property which is
newly acquired for replacement purpose in the same line of business as the property sold. At March 31,
2019 and 2018, deferred capital gains in the amounts of ¥3,940 million ($35,503 thousand) and ¥3,924
million, respectively, were directly deducted from the acquisition costs of land and buildings.
7.

Pledged Assets
At March 31, 2019 and 2018, the following assets were pledged as collateral for liabilities.
Millions of yen
2019
2018
Securities¥

516,213 ¥342,016 $Thousands of
U.S. dollars
2019
4,650,993

The above pledged assets secure the following liabilities.
Millions of yen
2019
2018
Deposits
Payables under securities lending transactions
Borrowed money¥- 32 -

22,614 ¥188,696
296,109

20,739 $
75,514
176,143

Thousands of
U.S. dollars
2019203,750
1,700,120
2,667,897

In addition, securities amounting to ¥1,034 million ($9,318 thousand) and ¥4,945 million at March 31,
2019 and 2018, respectively, and cash and due from banks amounting to ¥200 million ($1,802
thousand) at March 31, 2019 and 2018, respectively, were pledged as collateral for settlements of
exchange, derivatives and other transactions.
Other assets include guarantee money of ¥1,388 million ($12,510 thousand) and ¥1,259 million as ofMarch 31, 2019 and 2018, respectively, margin money deposited with central clearing organization of¥25,000 million ($225,246 thousand) and ¥24,400 million as of March 31, 2019 and 2018, respectively,
and margin money deposited for financial instruments of ¥5,809 million ($52,341 thousand) and ¥7,222
million as of March 31, 2019 and 2018, respectively.
8.

Deposits and Negotiable Certificates of Deposit
At March 31, 2019 and 2018, deposits consisted of the following.
Thousands of
U.S. dollars
2019

Millions of yen
2019
2018
Demand deposits
Time deposits
Other deposits
Deposits
Negotiable certificates of deposit

¥

¥

9.

2,752,552
2,065,066
58,971
4,876,589
176,185
5,052,774¥¥

2,608,044
2,056,654
51,397
4,716,096
181,500
4,897,596$$

24,800,001
18,605,877
531,32143,937,199
1,587,397
45,524,596

Borrowed Money and Lease Obligations
Borrowed money consisted of borrowings from financial institutions with an average interest rate of
0.09% per annum at March 31, 2019 due through March 2024.
Borrowed money due annually through 2024 at March 31, 2019 was as follows.
Millions ofyenYear ending March 31
2020
2021
2022
2023
2024

¥

¥

15,3162,690
28,431
269,602273
316,314

Thousands of
U.S. dollars$$

137,999
24,241
256,160
2,429,071
2,468
2,849,939

Lease obligations included in “other liabilities” due annually through September 2025 at March 31,
2019 were as follows.
Millions ofyenYear ending March 31
2020
2021
2022
2023
2024
2025 and after¥¥- 33 -

9
9
9
8
3
0
40

Thousands of
U.S. dollars
$

$

85
85
85
80
30
4
369

10. Employee Retirement Benefits(1) Outline of the retirement benefit plans adopted
The Bank has corporate pension fund plans and lump-sum retirement benefit plans as its defined benefit
pension plans and defined contribution pension plans, which together substantially cover all employees.
Consolidated subsidiaries have lump-sum retirement benefit plans as their defined benefit plans. In
addition, the Bank has set up a retirement benefit trust.
Under the lump-sum retirement benefit plans of consolidated subsidiaries, liability for retirement
benefits and retirement benefit expenses are computed using the simplified method.
(2) Defined benefit plansi.

The changes in retirement benefit obligations for the years ended March 31, 2019 and 2018 were as
follows.
Thousands ofMillions of yen
U.S. dollars
2019
2018
2019
Beginning balance of retirement benefit
obligations
Service cost
Interest cost
Actuarial differences arising
Retirement benefits paid
Past service cost arising
Other
Ending balance of retirement benefit obligations

ii.

¥

¥

45,066
1,687
139
209
(2,732)044,371¥¥45,030
1,650
140
849
(2,604)045,066$$

406,042
15,207
1,257
1,889(24,622)2
399,775

The changes in pension plan assets for the years ended March 31, 2019 and 2018 were as follows.
Thousands ofMillions of yen
U.S. dollars
2019
2018
2019
Beginning balance of pension plan assets
Expected return on pension plan assets
Actuarial differences arising
Contribution from the employer
Retirement benefits paid
Other
Ending balance of pension plan assets¥¥

57,451
1,696(2,199)473(1,654)055,768¥¥54,464
1,669
2,482
475
(1,640)057,451$$

517,629
15,284(19,815)
4,265(14,903)2
502,462

iii. Reconciliations between the ending balances of retirement benefit obligations and pension plan assets
and the liability or asset for employee retirement benefits recorded in the consolidated balance sheet
were as follows.
Thousands ofMillions of yen
U.S. dollars
2019
2018
2019
Funded retirement benefit obligations
Pension plan assets
Unfunded retirement benefit obligations
Net liability (asset) recorded in the consolidatedbalance sheet¥

43,927(55,768)(11,840)
443¥

44,671(57,451)(12,780)
395$

395,779(502,462)(106,683)
3,996¥(11,397)¥(12,385)$(102,687)- 34 -

Millions of yen
2019
2018
Liability for employee retirement benefits
Asset for employee retirement benefits
Net liability (asset) recorded in the consolidatedbalance sheet

Thousands of
U.S. dollars
2019

¥

3,278
(14,675)¥

2,986(15,371)$

29,537(132,224)¥(11,397)¥(12,385)$(102,687)

iv. The components of retirement benefit expenses for the years ended March 31, 2019 and 2018 were as
follows.
Thousands ofMillions of yen
U.S. dollars
2019
2018
2019
Service cost
Interest cost
Expected return on pension plan assets
Amortization of actuarial differences
Amortization of past service cost
Other
Retirement benefit expenses on defined benefit
plans

¥

1,687
139
(1,696)
92
-

¥

1,650
140
(1,669)1,155-$

15,207
1,257(15,284)
831
-

¥

223

¥

1,276

$

2,011

(Note) Retirement benefit expenses of consolidated subsidiaries applying the simplified method
calculation were all included in “service cost.”v.

The components of retirement benefit adjustments (before tax effect) on other comprehensive income
were as follows.
Thousands ofMillions of yen
U.S. dollars
2019
2018
2019
Past service cost
Actuarial differences
Other
Total

¥
¥

2,316
2,316

¥
¥

(2,788)(2,788)$$20,873
20,873vi. The components of retirement benefit adjustments (before tax effect) on accumulated othercomprehensive income were as follows.
Thousands ofMillions of yen
U.S. dollars
2019
2018
2019
Unrecognized past service cost
Unrecognized actuarial differences
Other
Total

¥
¥

- 35 -

213
213

¥
¥

(2,102)(2,102)

$
$

1,927
1,927

vii. Pension plan assets
i. Components of pension plan assets
Pension plan assets consisted of the following:
2019
Bonds
StocksCash and deposits
General account
Other
Total

4%
51%
0%
20%
25%
100%

2018
5%
51%
0%
19%
25%
100%

(Note) At March 31, 2019, the retirement benefit trust established for lump-sum retirement benefit
plans and corporate pension fund plans accounted for 34% (34% in 2018) of the total pension
plan assets.
ii. Method for determining the long-term expected rate of return on pension plan assets
The long-term expected rate of return on pension plan assets is determined by considering the allocationof pension plan assets and long-term rates of return that are expected currently and in the future forvarious components of the pension plan assets.
viii. Assumptions used for the years ended March 31, 2019 and 2018 were as follows.

Discount rate

Corporate pension fund plans
Lump-sum retirement benefit plans

Long-term expected rate of return

2019
0.4%
0.0%
Mainly
3.5%

2018
0.4%
0.0%
Mainly3.5%(Note) In computing retirement benefit obligations, points to be granted in the future on the benefit
formula basis are not incorporated and the expected rate of salary is not applied.
(3) Defined contribution plans
The required contribution to the defined contribution plan of the Bank amounted to ¥104 million ($942
thousand) and ¥105 million for the years ended March 31, 2019 and 2018, respectively.

- 36 -

11. Acceptances and Guarantees
The Bank provides guarantees with respect to liabilities of its customers for payment of loans or otherliabilities from other financial institutions. As a contra account, “customers’ liabilities for acceptancesand guarantees” has been shown in assets on the accompanying consolidated balance sheets, indicating
the Bank’s right of indemnity from customers.
12. Net Assets
The authorized number of shares of common stock without par value is 396,000,000 shares. At both
March 31, 2019 and 2018, the numbers of shares of common stock issued were 254,119,000 shares. At
March 31, 2019 and 2018, the numbers of shares of treasury stock held by the Hyakugo Bank Group
were 387,600 shares and 386,600 shares, respectively.
At both March 31, 2019 and 2018, capital surplus consisted principally of additional paid-in capital.
Retained earnings included legal reserve of the Bank amounting to ¥17,377 million ($156,570
thousand) at both March 31, 2019 and 2018. The Banking Act of Japan provides that an amountequivalent to at least 20% of the cash payments as an appropriation of retained earnings be appropriatedas legal reserve until the total amount of additional paid-in capital and such reserve equals 100% ofcommon stock. The reduction of the legal reserve amount is restricted under the current circumstances
to proper action of the shareholders of the Bank.

- 37 -

13. Stock Options
On July 30, 2018 and July 27, 2017, stock options were granted to the directors of the Bank. The
related costs in the amounts of ¥21 million ($189 thousand) and ¥27 million were recorded undergeneral and administrative expenses for the years ended March 31, 2019 and 2018, respectively.
The stock options outstanding at March 31, 2019 were as follows.
2011
Stock Option
13 directors of
the Bank

2012
Stock Option
13 directors of
the Bank

Number of options
granted*91,600 shares ofcommon stockof the Bank

Date of grantVesting conditions
Eligible service
periodExercise period

July 25, 2011
Not definedNot defined

94,000 sharesof common
stock of the
Bank
July 26, 2012
Not definedNot defined

July 26, 2011
through July 25,
2041
2016
Stock Option
12 directors of
the Bank(excluding
independent
directors)
71,400 shares ofcommon stockof the Bank

Persons granted

Persons granted

Number of options
granted*Date of grantVesting conditions
Eligible service
periodExercise period

2013
Stock Option
13 directors of
the Bank(excluding
independent
directors)
71,700 shares ofcommon stock of
the Bank
July 24, 2013
Not definedNot defined2014
Stock Option
13 directors of
the Bank(excluding
independent
directors)
71,200 sharesof common
stock of the
Bank
July 31, 2014
Not definedNot defined2015
Stock Option
12 directors of
the Bank(excluding
independent
directors)
48,100 shares ofcommonstock of the
Bank
July 30, 2015
Not definedNot defined

July 27, 2012
through July26, 2042

July 25, 2013
through July 24,
2043

August 1, 2014
through July 31,
2044

July 31, 2015
through July 30,
2045

July 27, 2016
Not definedNot defined2017
Stock Option
12 directors of
the Bank(excluding
independent
directors)
62,800 sharesof common
stock of the
Bank
July 27, 2017
Not definedNot defined2018
Stock Option
6 directors of
the Bank(excluding
independent
directors)
43,800 sharesof common
stock of the
Bank
July 30, 2018
Not definedNot defined

July 28, 2016
through July 27,
2046

July 28, 2017
through July27, 2047

July 31, 2018
through July30, 2048*The number of options is equal to and is shown as the number of shares.

- 38 -

The stock option activities were as follows.
Number of stock
options (in shares)
Non-vested:
Outstanding at
April 1, 2017
GrantedForfeited
VestedOutstanding at
March 31, 2018
GrantedForfeited
VestedOutstanding at
March 31, 2019
Vested:Outstanding at
April 1, 2017
VestedExercised
Forfeited
Outstanding at
March 31, 2018
VestedExercised
Forfeited
Outstanding at
March 31, 20192011
Stock Option

2012
Stock Option

2013
Stock Option

2014
Stock Option

2015
Stock Option

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

53,60055,80054,90060,00048,100(4,400)49,200(4,300)51,500(3,300)51,600(3,300)56,700(2,200)45,90049,20051,50051,60056,70045,900

Number of stock
options (in shares)
Non-vested:
Outstanding at
April 1, 2017
GrantedForfeited
VestedOutstanding at
March 31, 2018
GrantedForfeited
VestedOutstanding at
March 31, 2019
Vested:Outstanding at
April 1, 2017
VestedExercised
Forfeited
Outstanding at
March 31, 2018
VestedExercised
Forfeited
Outstanding at
March 31, 20192016
Stock Option

2017
Stock Option

2018
Stock Option

-

-

-

-

62,800(62,800)
-

-

-

-

43,800(43,800)-

71,400--(3,300)68,10062,80062,800-68,10062,80043,80043,800- 39 -

Unit price information:
Exercise price
Average stock price at
exercise
Fair value at grant date

Exercise price
Average stock price at
exercise
Fair value at grant date2011
Stock Option
¥1
-

2012
Stock Option
¥1
-

2013
Stock Option
¥1
-

2014
Stock Option
¥1
-

2015
Stock Option
¥1
-

¥302

¥300

¥404

¥396

¥578

2016
Stock Option
¥1
-

2017
Stock Option
¥1
-

2018
Stock Option¥1 ($0.01)
-

¥377

¥433

¥480 ($4.32)

The method and assumptions used to measure the fair value of stock option granted for the years ended
March 31, 2019 and 2018 were as follows.
1) 2018 stock option:

Estimation method:Black-Scholes option pricing model
Volatility of stock price (Note 1):
23.27%
Estimated remaining outstanding period (Note 2):0.92 years¥8.0 ($0.07) per share
Estimated dividend (Note 3):
Risk free interest rate (Note 4):(0.12)%
Notes:
1. Volatility was computed based on the actual stock prices during the period corresponding to the estimatedremaining outstanding period (from August 2017 through July 2018);
The estimated remaining outstanding period was determined using the difference between the average retirement
age of the retired directors with titles and directors who concurrently served as executive officers during the past
10 years and the average age of the present directors;
If the difference is shorter than the period from the date of allotment of the stock options to the following election,
the period until the next election is considered to be the difference in estimating the remaining outstanding period.
2. The estimated dividend was determined using the actual dividend payments for the year ended March 31, 2018;
and3. The risk free interest rate is the yield of Japanese government bonds corresponding to the estimated remaining
outstanding period.

2) 2017 stock option:

Estimation method:Black-Scholes option pricing model
Volatility of stock price (Note 1):34.98%
1.53 years
Estimated remaining outstanding period (Note 2):¥8.0 per share
Estimated dividend (Note 3):
Risk free interest rate (Note 4):(0.11)%
Notes:
1. Volatility was computed based on the actual stock prices during the period corresponding to the estimatedremaining outstanding period (from January 2016 through July 2017);
2. The estimated remaining outstanding period was determined using the difference between the average retirement
age of the retired directors during the past 10 years and the average age of the present directors;
If the current age of the present directors is over the average retirement age of the retired directors, the difference
is considered to be zero in estimating the remaining outstanding period.
3. The estimated dividend was determined using the actual dividend payments for the year ended March 31, 2017;
and4. The risk free interest rate is the yield of Japanese government bonds corresponding to the estimated remaining
outstanding period.

14. Loan Commitments
Contracts for overdraft facilities and loan commitment limits represent the maximum amounts the
Bank will lend to customers in response to the customers’ applications for loans, provided that there isno violation of any conditions in the applicable contracts. At March 31, 2019 and 2018, the total
unused amounts within the limits of these contracts were ¥1,257,328 million ($11,328,304 thousand)and ¥1,216,915 million, respectively. These unused amounts included amounts relating to contracts
which will expire within one year or are revocable by the Bank at any time without any conditions in- 40 -

the amounts of ¥1,210,396 million ($10,905,456 thousand) and ¥1,178,944 million at March 31, 2019and 2018, respectively.
Since many of these commitments expire without being drawn down, an unused amount does notnecessarily represent a future cash requirement. Most of these contracts have conditions that permit
the Bank to refuse the customers’ applications for loans or decrease the contract limit for proper
reasons (e.g., changes in the financial situation, deterioration in the customer’s creditworthiness or thelike). As a condition to entering a contract, the Bank may obtain collateral such as real estate,securities, etc. if considered necessary. During the term of the contract, the Bank performs periodic
reviews of the customers’ business results based on internal rules and may take necessary measuresthat include reconsidering the conditions under such contract and/or requiring additional collateral
and/or guarantees.
15. Leases(1) Finance leases
As a lessee:
The Hyakugo Bank Group had leased tangible fixed assets, which were principally vehicles, under
Non-transferrable Finance Leases until March 31, 2018.
As a lessor:
Lease investment assets at March 31, 2019 and 2018 were summarized as follows.
Thousands of
U.S. dollars
2019

Millions of yen
2019
2018
Gross lease receivables
Estimated residual values
Unearned interest income
Lease investment assets¥¥

16,759508(1,218)16,049¥¥14,783382(1,066)
14,099$$150,997
4,586(10,978)
144,605

Lease receivables which arose under Transferable Finance Leases that mature subsequent to March 31,
2019 and 2018 were as follows.
Thousands of
U.S. dollars
2019

Millions of yen
2019
2018
Due within one year
More than one year, but within two years
More than two years, but within three years
More than three years, but within four years
More than four years, but within five years
More than five years
Lease receivables¥¥- 41 -

1,145
1,434
757
564
267
1,006
5,176

¥

¥

1,153
861
1,153
474
291
1,028
4,963

$

$

10,31812,924
6,823
5,087
2,412
9,071
46,635

Gross lease receivables under Non-transferrable Finance Leases that mature subsequent to March 31,
2019 and 2018 were as follows.
Thousands of
U.S. dollars
2019

Millions of yen
2019
2018
Due within one year
More than one year, but within two years
More than two years, but within three years
More than three years, but within four years
More than four years, but within five years
More than five years
Gross lease receivables of lease
investment assets

¥

4,716
3,903
3,001
2,282
1,552
1,303

¥

4,344
3,529
2,713
1,833
1,147
1,213

$

42,49335,171
27,04020,563
13,99011,740¥16,759¥14,783$150,997(2) Operating leases
Future minimum lease payments under non-cancellable operating lease transactions were as follows.
Thousands of
U.S. dollars
2019

Millions of yen
2019
2018
As a lessee:
Due within one year
Due after one year¥¥

As a lessor:
Due within one year
Due after one year

¥
¥

462
996
1,458

575
899
1,475

¥
¥

¥
¥

301
1,063
1,365

520
688
1,208

$
$

$
$

4,164
8,975
13,1395,188
8,107
13,295(3) Subleases
Sublease-related amounts before deducting interest equivalent amounts recorded in the consolidatedbalance sheets were as follows:
Thousands ofMillions of yen
U.S. dollars
2019
2018
2019
Lease investment assets
Lease obligations¥- 42 -

40
40

¥

49
49

$

369
369

16. Derivative Instruments
Derivative instruments involve, in varying degrees, elements of credit and market risk. The Hyakugo
Bank Group is exposed to credit loss in the event of non-performance by the counterparties. However,the Hyakugo Bank Group has not faced and does not expect such non-performance.
Derivative contracts to which hedge accounting was not applied:With respect to derivatives to which hedge accounting was not applied, the contract amounts ornotional principal amounts as defined in the applicable contracts, the fair values and valuation gains(losses) as of March 31, 2019 and 2018 were as follows.
It is noted that the contract amounts do not represent market risk exposure of the derivativetransactions.
Contract amounts
Fair value
Millions of yen
At March 31, 2019
Interest rate contracts:
Swaps
Foreign exchange contracts:
Currency swaps
Forwards
Currency options
Earthquake derivatives¥

15,600¥215,871
123,288
1,497
4,160

At March 31, 2018
Interest rate contracts:
Swaps
Foreign exchange contracts:
Currency swaps
Forwards
Currency options¥

17,215

86

Valuation
gains (losses)

¥

3,109
418
0
(0)

¥

186,057
113,323
861

101

86
3,109
418
0
-

¥

4,534
988
-

101
4,534
988
1

Thousands of U.S. dollars
At March 31, 2019
Interest rate contracts:
Swaps
Foreign exchange contracts:
Currency swaps
Forwards
Currency options
Earthquake derivatives$

140,558
1,944,966
1,110,808
13,49437,481$781
28,014
3,774
1
(1)

$

781
28,014
3,774
9-

Notes:
1. The above transactions have been stated at fair value and valuation gains (losses) have been recorded in the
consolidated statements of income.
2. The fair value has been determined using the discounted present value.
3. Since the fair value of earthquake derivatives is difficult to calculate, the acquisition cost is presented at fair value.

- 43 -

Derivative contracts to which hedge accounting was applied:With respect to derivatives to which hedge accounting was applied, the contract amounts or notional
principal amounts as defined in the applicable contracts and the fair values by transaction type andaccounting method as of March 31, 2019 and 2018 were as follows.
It is noted that the contract amounts do not represent market risk exposure of the derivativetransactions.
Contract
amount due
after one year

Contract
amountHedge
accounting
methodTransaction type

At March 31, 2019
DeferralInterest rate
methodswaps:
Receivable
floating rate/
Payable fixedrate

Major hedged
item

Securities,
Loans andbills
discounted

Interest
rate swaps
meeting
certainconditions

Interest rate
swaps:
Receivable
Loans and bills
floating rate/
discounted
Payable fixed rate

DeferralmethodForeigncurrency swaps:
Foreign currency
forwardcontracts:

At March 31, 2018
Interest rate
Deferralswaps:
methodReceivable
floating rate/
Payable fixed
rateInterest
rate swaps
meeting
certainconditions
DeferralmethodInterest rate
swaps:
Receivable
floating rate/
Payable fixedrate
Foreigncurrency swaps:
Foreign currency
forwardcontracts:

Fair value

Millions of yen¥

Call loans,
Loans andbills
discounted,
Borrowedmoney

124,224¥

123,961¥(7,073)

4,479

3,303

See Note 3

22,198

11,099(58)

12,638-21

Securities,
Loans and bills
discounted¥

139,611¥

126,394¥(6,350)Loans and bills
discounted

Call loans,
Loans andbills
discounted,
Borrowedmoney- 44 -

9,006

6,550

See Note 3

15,936

15,93678

41,128-948

Contract
amount due
after one year

Contract
amountHedge
accounting
methodTransaction type

Major hedged
item

At March 31, 2019
DeferralInterest rate
methodswaps:
Securities,
Receivable
Loans andfloating rate/
Payable fixed rate bills
discounted

Interest
rate swaps
meeting
certainconditions

Interest rate
swaps:
Loans andReceivablebills
floating rate/
Payable fixed rate discounted

DeferralmethodForeigncurrency swaps:
Forwardcontracts:

Fair value

Thousands of U.S. dollars$

Call loans,
Loans andbills
discounted,
Borrowedmoney

1,119,240$

1,116,868$(63,733)

40,36329,761

See Note 3200,000

100,000(527)

113,873-

191

Notes:
1. Gains/losses on the above-mentioned contracts are deferred until maturity of the hedged items, which is the deferral
method used under the “Accounting and Auditing Treatment of Accounting Standard for Financial Instruments in the
Banking Industry” (JICPA’s Industry Audit Committee Report No. 24 of February 13, 2002);
2. The fair value has been determined using the discounted present value, etc.
3. With respect to interest rate swap contracts which meet certain conditions, the fair values of the interest rate swap
contracts are considered part of the fair values of the relevant loans and bills discounted described in Note 3, entitledthe “Financial Instruments and Related Disclosures,” since such interest rate swap contracts are used for recording
loans and bills discounted as hedged items.
4. With respect to foreign currency related contracts, the deferral method of hedge accounting is principally applied inaccordance with the “Accounting and Auditing Treatment of Accounting for Foreign Currency Transactions in the
Banking Industry” (JICPA’s Industry Audit Committee Report No. 25 of July 29, 2002).

- 45 -

17. Income Taxes
At March 31, 2019 and 2018, income taxes (including local taxes) payable in the amounts of ¥1,477
million ($13,310 thousand) and ¥1,726 million, respectively, were included in “other liabilities” in theaccompanying consolidated balance sheets.
At March 31, 2019 and 2018, the tax effects of temporary differences that gave rise to a significant
portion of deferred tax assets and liabilities were as follows.
Thousands of
U.S. dollars
2019

Millions of yen
2019
2018
Deferred tax assets:
Allowance for loan losses¥
Deferred losses on hedges
Valuation loss on securities
OthersSubtotalLess valuation allowance
Total deferred tax assets
Net of deferred tax liabilities:
Unrealized gains on available-for-salesecurities
Retirement benefits
Deferred gains on hedges
OthersTotal deferred tax liabilities
Net deferred tax assets (liabilities) ¥

4,228
2,156
1,160
3,148
10,693(1,572)
9,121(40,177)(6,333)(3)(158)(46,673)(37,551)

¥

¥

4,441
1,934
1,145
3,115
10,637(1,525)9,111(43,239)(6,738)(2)(156)(50,137)(41,025)$

38,10019,434
10,45428,36396,351(14,167)
82,184(361,996)(57,065)(31)(1,424)(420,516)(338,332)$

At March 31, 2019 and 2018, deferred tax assets and liabilities reported in the accompanying
consolidated balance sheets were as follows.
Millions of yen
2019
2018
Deferred tax assets
Deferred tax liabilities¥

688(38,239)¥722(41,748)

Thousands of
U.S. dollars
2019
$

6,200
(344,532)

A reconciliation between the Japanese statutory effective tax rate and the actual effective income tax
rate on pre-tax income reflected in the accompanying consolidated statement of income for the years
ended March 31, 2019 and 2018 was not presented because such differences were 5% or less of theJapanese statutory effective tax rate.
18.

Business Combination
On April 1, 2017, the Bank acquired additional stocks of a consolidated subsidiary, Hyakugo Leasing
Company Limited which is engaged in leasing business from non-controlling shareholders for theaggregate consideration amount of ¥4,303 million in cash. This transaction was accounted for as thetransaction with non-controlling shareholders not resulting in a change in scope of consolidation in abusiness combination under common control in accordance with ASBJ Statement No. 21 and ASBJ
Guidance No. 10. As a result, this transaction resulted in an increase in capital surplus of ¥161 million as ofMarch 31, 2018.

- 46 -

19.

Subsequent Events(a) Appropriation of retained earnings
The shareholders of the Bank approved the following appropriation of retained earnings at the annual
general shareholders’ meeting on June 21, 2019.

Cash dividends (¥4.50 ($0.04) per share)

Millions of yen

Thousands of
U.S. dollars

¥

$

1,141

10,287(b) Change of a portion of retirement benefit plans and transfer between a portion of retirement benefit
plans
On April 1, 2019, the Bank changed a portion of its defined benefit corporate pension plans andtransferred a portion of the defined benefit pension plans to the defined contribution pension plans. In
addition, on April 1, 2019, certain consolidated subsidiaries transferred a portion of the lump-sum
retirement benefit plans to the defined contribution pension plans. Following these changes, the Bank
will adopt “Accounting for Transfer between Retirement Benefit Plans” (ASBJ Guidance No. 1,
December 16, 2016) and “Practical Solution on Accounting for Transfer between Retirement Benefit
Plans” (Practical Issues Task Force No. 2, February 7, 2007) and record the effects of these changes in
the amount of ¥2,356 million ($21,234 thousand) in “Other income.”
20.

Segment Information(a) Description of reportable segment
The reportable segments of the Hyakugo Bank Group are business units for which separate financial
information is available and whose results are regularly reviewed by the Board of Directors to makedecisions about resources to be allocated to such segments.
The Hyakugo Bank Group’s business centers on banking operations, but the Hyakugo Bank Group also
engages in financial service operations, such as leasing operations and the like.
The Hyakugo Bank Group’s segments are classified based on its business activities related to financial
services, and its reportable segments comprise the “banking” and “leasing” segments.
The “banking” segment includes deposit taking and lending operations and the “leasing” segment
includes leasing operations.
(b) Methods of measurement for the amounts of ordinary income, profit (loss), assets and other items foreach reportable segment
The accounting treatment of the business segments reported in this section is the same as that stated in
Note 2, entitled the “Summary of Significant Accounting Policies.” Segment profit stated herein isbased on ordinary profit which represents ordinary income less ordinary expenses. Ordinary income
represents total income less special gains included in other income. Ordinary expenses represent total
expenses less special losses included in other expenses.
Intersegment ordinary income is valued at market prices.
As noted in subsection (v) “Change in presentation,” under Note 2, “Summary of Significant
Accounting Policies,” dividend income from group credit life insurance, etc., contracted by the Bank
had previously been recorded mainly in “Other income.” From the year ended March 31, 2019,
however, main dividend income has been recorded in “Fees and commission (Expenses)” and “Generaland administrative expenses.”
Segment information for the year ended March 31, 2018 has been retrospectively reclassified in orderto reflect this change in the presentation.

- 47 -

(c) Information with regard to ordinary income, profit (loss), assets and other items are as follows.
For the year ended March 31, 2019
Reportable segment
Banking

Leasing

Others

Total

Total

Reconciliations

Consolidated

85,847
2,492¥¥

Millions of yen
Ordinary income:Externalcustomers
Intersegment

¥

Total
Segment profit

72,271
769¥

73,040¥14,960

9,770
454

¥

10,224¥406

82,041
1,224¥

83,265¥

15,366

3,806
1,267

¥

5,074
¥

796

88,339¥16,163¥(2,492)(2,492)

85,847(680)

15,482

Special gains(losses), net
Income before
income taxes
Segment assets

85,847-(177)¥

6,248,299¥

31,247¥

6,279,546¥

19,650¥ 6,299,197¥ (33,921)¥

15,304¥6,265,275

Others:Depreciation
Interest income
Interest expense
Special gain:
Gain ondisposal of
fixed assets
Special loss:
Loss ondisposal of
fixed assets
Impairment
loss
Provision ofreserves
under
special laws
Income tax
expenseAmount ofincrease intangible andintangible
fixed assets(capital
expenditure)

3,053
53,901
4,657
-

410
61
64
-

3,464
53,962
4,721
-

56
134
-

3,520
54,097
4,721
-

(715)
(35)
-

3,520
53,381
4,686
-

177

-

177

0

177

-

177

68

-

68

0

68

-

68

108

-

108

-

108

-

108

-

-

-

0

0

-

0

4,109

122

4,231

230

4,461

-

4,461

2,665

757

3,423

126

3,550

-

3,550

Notes:(1) The “other” business segment includes credit card operations and financial instruments business operations and so forth; and,(2) Reconciliations consist of following.
a. Reconciliation of segment profit of ¥(680) million consists of elimination of intersegment profits.
b. Reconciliation of segment assets of ¥(33,921) million consists of elimination of intersegment assets.
c. Reconciliation of interest income of ¥(715) million consists of elimination of intersegment interest income.
d. Reconciliation of interest expense of ¥(35) million consists of elimination of intersegment interest expense.

- 48 -

For the year ended March 31, 2018
Reportable segment
Banking

Leasing

Others

Total

Total

Reconciliations

Consolidated

90,612
2,011¥¥

Millions of yen
Ordinary income:Externalcustomers
Intersegment

¥

Total
Segment profit

77,771
261¥

78,033¥

15,500

9,146
444

¥

9,590
¥

417

86,917706¥

87,623¥

15,918

3,695
1,305

¥

5,000
¥

870

92,624¥

16,789¥(2,011)(2,011)

90,612(13)

16,775Special gains(losses), net
Income before
income taxes
Segment assets

90,612-(156)¥

5,723,378¥

29,310¥5,752,688¥

19,933¥ 5,772,622¥ (30,854)¥

16,619¥5,741,767

Others:Depreciation
Interest income
Interest expense
Special gain:
Gain ondisposal of
fixed assets
Special loss:
Loss ondisposal of
fixed assets
Impairment
loss
Provision ofreserves
under
special laws
Income tax
expenseAmount ofincrease intangible andintangible
fixed assets(capital
expenditure)

2,865
52,909
5,045
14

319
12
67
-

3,184
52,922
5,112
14

40
52
-

3,225
52,974
5,112
14

(45)
(32)
-

3,225
52,928
5,080
14

14
168

-

14
168

1

14
169

-

14
169

102

-

102

0

103

-

103

66

-

66

-

66

-

66

-

-

-

0

0

-

0

4,499

144

4,643

286

4,929

-

4,929

3,858

712

4,570

84

4,654

-

4,654

Notes:(1) The “others” business segment includes credit card operations and financial instruments business operations and so forth; and(2) Reconciliations consist of the following.
a. Reconciliation of segment profit of ¥(13) million consists of elimination of intersegment profits.
b. Reconciliation of segment assets of ¥(30,854) million consists of elimination of intersegment assets.
c. Reconciliation of interest income of ¥(45) million consists of elimination of intersegment interest income.
d. Reconciliation of interest expense of ¥(32) million consists of elimination of intersegment interest expense.

- 49 -

For the year ended March 31, 2019
Reportable segment
Banking

Leasing

Others

Total

Total

Reconciliations

Consolidated

773,471
22,454$$

Thousands of U.S. dollars
Ordinary income:Externalcustomers
Intersegment$651,150
6,936$

88,027
4,095$

739,177
11,031$

34,294
11,423$(22,454)773,471-

Total

658,086

92,122

750,208

45,717795,925(22,454)773,471

Segment profit

134,792

3,661

138,453

7,179

145,632(6,135)

139,497

$

$

$

$

$

$

Special gains(losses), net
Income before
income taxes
Segment assets(1,603)$$56,296,055$ 281,532$ 56,577,587

27,514
485,641
41,961

3,699
555
583

31,213
486,196
42,544

-

-

1,599

$

177,050$

137,894

56,754,637$ (305,628)$ 56,449,009

507
1,215
-

31,720487,41142,544(6,451)(322)

31,720480,960
42,222

-

-

-

-

-

-

1,599

4

1,603

-

1,603

618

-

618

2

620

-

620

981

-

981

-

981

-

981

-

-

-

2

2

-

2

37,025

1,099

38,124

2,074

40,198-40,19824,018

6,825

30,843

1,143

31,986-31,986

Others:Depreciation
Interest income
Interest expense
Special gain:
Gain ondisposal of
fixed assets
Special loss:
Loss ondisposal of
fixed assets
Impairment
loss
Provision ofreserves
under
special laws
Income tax
expenseAmount ofincrease intangible andintangible
fixed assets(capital
expenditure)

Notes:(1) The “others” business segment includes credit card operations and financial instruments business operations and so forth; and(2) Reconciliations consist of the following.
a. Reconciliation of segment profit of $(6,135) thousand consists of elimination of intersegment profits.
b. Reconciliation of segment assets of $(305,628) thousand consists of elimination of intersegment assets.
c. Reconciliation of interest income of $(6,451) thousand consists of elimination of intersegment interest income.
d. Reconciliation of interest expense of $(322) thousand consists of elimination of intersegment interest expense.

- 50 -

(d) Related informationa.

Information of each service
Loanbusiness

Securities
investment

Leasing

Others

Total

Millions of yen
Ordinary income from externalcustomers:
For the year ended March 31,
2019
For the year ended March 31,
2018¥37,268¥23,845

¥

9,770

¥

14,963¥85,847¥35,407¥30,843

¥

9,146

¥

15,214¥

90,612$

134,818$

773,471

Thousands of U.S. dollars
For the year ended March 31,
2019$335,785$

214,841$

88,027b. Geographical information(1) Ordinary income
Geographical information of ordinary income for the years ended March 31, 2019 and 2018 was notdisclosed because such income from external customers located in Japan was more than 90% of total
ordinary income.
(2) Tangible fixed assets
Geographical information of tangible fixed assets for the years ended March 31, 2019 and 2018 was notdisclosed because such assets located in Japan were more than 90% of total tangible fixed assets.
c. Information of each main customer
Information of each main customer for the years ended March 31, 2019 and 2018 was not disclosed
because the Hyakugo Bank Group had no customer which accounted for 10% or more of total ordinary
income.
(e) Information with regard to impairment loss on fixed assets for each reportable segment
Reportable segment
Banking

Leasing

Others

Total

Total

Millions of yen
Impairment loss:
For the year ended March 31, 2019
For the year ended March 31, 2018

¥
¥

108
66

¥
¥

-

¥
¥

108
66

¥
¥

-

¥
¥

108
66

$

-

$

981

Thousands of U.S. dollars
For the year ended March 31, 2019

$

981

$

- 51 -

-

$

981

21.

Other Comprehensive Income

The components of other comprehensive income for the years ended March 31, 2019 and 2018 were as
follows.
Thousands of
U.S. dollars

Millions of yen

2019
Valuation difference on available-for-sale securities:
Gain (loss) incurred during the year
Reclassification adjustment to net income
Amount before tax effectTax effect
Valuation difference on
available-for-sale-securities
Deferred gains/losses on hedges:
Gain (loss) incurred during the year
Reclassification adjustment to net income
Amount before tax effectTax effect
Deferred gains/losses on hedges
Retirement benefit adjustments:
Gain (loss) incurred during the year
Reclassification adjustment to net income
Amount before tax effectTax effect
Retirement benefit adjustments
Total other comprehensive income- 52 -¥¥(7,769)(3,401)(11,171)
3,061

2018
¥

13,116(3,159)
9,957(3,023)

2019$(70,002)(30,650)(100,652)
27,587(8,109)6,933(73,065)(3,018)
2,284
(734)
221
(512)

(1,817)
2,347
530
(160)
370

(27,197)
20,579(6,618)
1,998(4,620)(2,408)92(2,316)699(1,617)(10,239)

1,633
1,155
2,788
(841)
1,946
9,250

(21,704)831(20,873)
6,302(14,571)(92,256)

¥

$

22.

Per Share Information

Net assets per share at March 31, 2019 and 2018 and net income per share for the years then ended were as
follows:
Yen

U.S. dollars

2019
Net assets per share
Net income per share – basic
Net income per share – diluted¥

1,401.81
42.73
42.66

2018
¥

2019

1,407.933
46.07
46.00

$

12.63
0.38
0.38

Basic information in computing the above per share data is as follows:
Thousands of
U.S. dollars

Millions of yen

2019(Net assets per share)
Net assets per balance sheet
Amounts to be attributed to subscription rights tosharesNet assets attributed to common stock¥

Outstanding number of common stocks at end of year
(unit: thousand shares)(Net income per share - basic)
Net income attributable to owners of the parent perincome statement
Net income attributable to owners of the parent
regarding common stock
Average outstanding number of shares during the year
(unit: thousands shares)(Net income per share - diluted)
Increase in common stock (unit: thousand shares)
Of which, subscription rights to shares (unit: thousand
shares)- 53 -

355,859
(174)

2018
¥

2019

357,391(153)$ 3,206,230(1,568)355,685

357,238

3,204,662

253,731

253,732

10,843

11,69097,696

10,843

11,69097,696

253,731

253,730

417
417

374
374

23.

Financial Information of the Hyakugo Bank, Ltd. (Parent)

Presented below are the nonconsolidated balance sheets, nonconsolidated statements of income andchanges in net assets of the Bank, the parent company.
Nonconsolidated Balance Sheets
The Hyakugo Bank, Ltd. (Parent)
As of March 31, 2019 and 2018
Millions of yen
2019
2018

Assets:Cash and due from banks
Call loans
Monetary claims bought
Trading account securities
Money held in trust
Securities
Loans and bills discounted
Foreign exchanges
Other assets
Tangible fixed assets
Intangible fixed assets
Prepaid pension cost
Customers’ liabilities for acceptances andguarantees
Allowance for loan losses
Total assets¥¥

Liabilities:
Deposits
Negotiable certificates of deposit
Call money
Payables under securities lending transactions
Borrowed money
Foreign exchanges
Other liabilities
Provision for employee retirement benefits
Provision for reimbursement of deposits
Provision for point card certificates
Provision for contingent losses
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Acceptances and guarantees
Total liabilities¥

Net assets:
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Valuation difference on available-for-salesecurities
Deferred gains/losses on hedges
Revaluation reserve for land
Total valuation and translation adjustments
Stock acquisition rights
Total net assets
Total liabilities and net assets¥- 54 -

902,90220,42912,80423
1,997
1,741,466
3,441,753
2,484
52,82744,185
4,910
15,712

8,134,986
184,067
115,366213
18,00015,690,299
31,009,583
22,388475,968
398,101
44,243
141,566

609,098
81,366
10,93918
2,000
1,788,672
3,102,047
1,731
56,24744,5005,114
14,858$20,904(14,056)
5,723,446

199,027(125,309)$ 56,308,498

4,722,896
187,500
100,000
75,514
187,438
32
33,036
4,214
1,405
278
375
41,046
2,535
20,904
5,377,179$ 43,994,830
1,640,826
2,162,357
1,700,120
2,773,845
2,377
293,064
33,287
14,425
2,709
3,537
344,707
22,838199,027
53,187,949

20,0007,557
225,599(146)
253,010

20,0007,557
216,988(146)
244,399

180,196
68,0932,032,610(1,321)
2,279,578

93,976(4,979)4,168
93,165
174
346,349
6,249,680

102,011(4,466)
4,170
101,714153
346,267
5,723,446

846,709(44,865)
37,559839,403
1,568
3,120,549$ 56,308,498

22,090(13,907)6,249,680
4,882,986
182,115240,000
188,696
307,869
263
32,527
3,694
1,600
300
392
38,2592,534
22,0905,903,330¥

Thousands of
U.S. dollars
2019

¥
¥

¥

Nonconsolidated Statements of Income
The Hyakugo Bank, Ltd. (Parent)
For the Years Ended March 31, 2019 and 2018
Millions of yen
2019
2018
Income:Interest income:Interest on loans and discounts
Interest and dividends on securities
Interest on call loans
OthersTotal interest income
Fees and commissions
Other operating income
Reversal of allowance for loan losses
Other income
Total income
Expenses:
Interest expenses:
Interest on deposits
Interest on negotiable certificates of deposit
Interest on call money
Interest on borrowings and rediscounts
OthersTotal interest expenses
Fees and commissions
Other ordinary expenses
General and administrative expenses
Provision of allowance for loan losses
Other expenses
Total expenses
Income before income taxes
Income taxes:
Current
Deferred
Total income taxes
Net income¥¥- 55 -

34,08918,791874
289
54,044
13,816
1,367
3,996
73,225¥31,93820,061861
291
53,153
12,714
4,941
1,526
5,998
78,333Thousands of
U.S. dollars
2019$

307,136
169,308
7,881
2,608
486,933
124,483
12,32036,011
659,747

999
30
(90)
276
3,441
4,657
4,516
4,923
41,190368
2,723
58,37914,845

1,137
30
(19)
179
3,718
5,045
4,085
9,924
42,486
1,414
62,956
15,377

9,009
274
(818)
2,490
31,006
41,961
40,69044,362
371,121
3,323
24,534525,991
133,756

3,622
457
4,079
10,766

3,440
981
4,421
10,95632,633
4,121
36,75497,002¥$

Nonconsolidated Statements of Changes in Net Assets
The Hyakugo Bank, Ltd. (Parent)
For the Years Ended March 31, 2019 and 2018
Number ofshares ofcommon stock
issuedBalance at April 1, 2017
Net income
Dividends from surplus
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Net changes in items other thanshareholders’ equity
Balance at March 31, 2018 (April 1, 2018)
Net income
Dividends from surplus
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Net changes in items other thanshareholders’ equity
Balance at March 31, 2019

254,119,000
254,119,000
254,119,000

Shareholders' equity

CapitalsurplusCapital stock¥¥¥

20,00020,00020,000

¥

¥

¥

7,557
7,557
0
7,557

Retainedearnings¥¥¥

208,018
10,956(2,029)43(0)216,988
10,766(2,156)
1
225,599

Treasury
stock
¥

¥

¥

(151)
(2)
7
(146)
(0)
0
(146)

Total
Shareholders’equity¥¥¥235,424
10,956(2,029)43(2)
7244,399
10,766(2,156)1(0)
0
253,010

Valuation and translation adjustments
Valuation
Total
difference on
Deferred
Revaluation
valuation andavailable-forgains/losses
reserve fortranslation
sale securities
on hedges
landadjustments
Millions of yen¥¥¥

95,180
6,831
102,011(8,034)
93,976¥(4,836)370(4,466)-¥(512)(4,979)

¥

¥

¥

¥

4,213
(43)
4,170
(1)
4,168

¥

¥

¥

94,557
7,157
101,714-

StockacquisitionrightsTotal net assets

¥

¥

¥

133
19
153
-

(8,549)93,165¥21
174

916,430-$ 1,379-(77,027)
839,403189$ 1,568¥¥

330,115
10,956(2,029)
43
(2)
7
7,176
346,267
10,766(2,156)1(0)
0(8,528)346,349

Thousands of U.S. dollars
Balance at April 1, 2018
Net income
Dividends from surplus
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Net changes in items other thanshareholders’ equity
Balance at March 31, 2019$$180,196
180,196$$

68,0930$ 1,955,027
97,002(19,432)
13-

68,093$ 2,032,610$$(1,317)(4)
0(1,321)- 56 -$$

2,201,999
97,002(19,432)13(4)
02,279,578$$

919,103(72,394)
846,709$$(40,245)(4,620)(44,865)$$

37,572(13)
37,559$$$$3,119,808
97,002(19,432)13(4)
0(76,838)
3,120,549