Annual Repor t 2016

Our Mission
Region-Based Operations and Sound Management
Maintaining a close relationship with the communities in the region
where we operate, we will contribute to the prosperity of the region andthe development of its economy, with a commitment tosound management that enjoys the trust of our customers,
while bolstering our business operations.

Head office

Management Vision (Ideal and prospective image)

A Bank that grows and develops together with Yamanashi andits surroundings as a driving force for regional economic revitalization

Theme During the Medium-Term Management Plan
Live up to the trust accorded by customers andcontribute to regional revitalization
YamanashiTokyo

Slogan (3Cs)

Concern, Change, Challenge

Mt. Fuji

Basic Strategies ofMedium-Term Management Plan S.T.E.P. up 2019 ealization of a business model adapted to changes in the environmentR— Selection and concentration, and differentiation from other financial institutions—● Building and strengthening a robust management structure●

Profile (as of March 31, 2016)
Corporate Name:The Yamanashi Chuo Bank, Ltd.

Head Office:20-8, Marunouchi 1-chome, Kofu, Yamanashi

Established:

December 1, 1941

President:

Nakaba Shindo

Common Stock:¥15,400 million

Number of Shares Issued:

Businesses:

174,915,000 shares

Stock Listing:First Section of the Tokyo Stock Exchange

Long-Term Credit Rating:A(Rating and Investment Information, Inc.)

Network:

Domestic: 	91 locations(Head Office and Branches: 89,
District Offices: 2)
Overseas: Hong Kong Representative Office

The Yamanashi Chuo Bank Group
comprises the Yamanashi Chuo Bank andfour consolidated subsidiaries. Centeredon its core banking business, the Group
provides an integrated financing service
that includes a leasing and credit-cardbusiness. The Bank is the leading local
bank in Yamanashi Prefecture, and its
sphere of operations encompasses boththe prefecture and the western part of
the Tokyo metropolitan region.

Contents

1 Consolidated Financial Highlights
2 Message from the President
4 Medium-Term Management Plan S.T.E.P. up 20196 Region-Based Financial Services
8 Operational Review
10 Financial Review (on a consolidated basis)
11 Consolidated Balance Sheets
13 Consolidated Statements of Income

Forward-looking
statements

Statements contained in this report regarding the Bank’s future performance do not constitute statements of historical fact, and arethus subject to a number of risks and uncertainties. Readers are therefore cautioned not to place undue reliance on forward-looking
statements, as factors beyond the Bank’s control and outside its ability to predict, including general economic conditions and market
fluctuations, could cause results to diverge materially from the Company’s projections.

15 Consolidated Statements of Comprehensive Income
16 Consolidated Statements of Changes in Net Assets
19 Consolidated Statements of Cash Flows
21 Notes to Consolidated Financial Statements
47 Corporate Data
48 Board of Directors and Corporate Auditors
48 Organization
49 Internal Control and Risk Management

Consolidated Financial Highlights
The Yamanashi Chuo Bank, Ltd. and Consolidated Subsidiaries
Fiscal years ended March 31

Millions of yen

2012

2013

2014

2015

2016

Ordinary Income

51,89250,47050,51850,33555,718

Ordinary Profit

9,606

10,912

12,826

13,464

13,829Profit Attributable to Shareholders of the Parent

7,323

6,362

8,736

8,753

9,452

Comprehensive Income

14,70823,393

8,617

40,346

106

Net Assets

172,343

193,620

199,258

237,440

235,158

Total Assets

2,890,741

3,028,916

3,041,323

3,155,903

3,239,117

Net Assets per Share (Yen)

959.53

1,093.22

1,136.72

1,367.58

1,370.62

Net Income per Share (Yen)

40.68

35.69

49.86

50.38

54.91

Capital Adequacy Ratio (Domestic Standard, %)

16.41

16.75

17.28

17.35

18.05

Return on Equity (%)

4.44

3.50

4.48

4.40

4.03

Price Earning Ratio (Times)

9.04

12.02

9.34

10.44

7.52

Cash Flows from Operating Activities

207,059

72,87088,999(3,806)70,287

Cash Flows from Investing Activities(181,424)(70,360)(50,148)(61,232)(17,638)

Cash Flows from Financing Activities(1,821)(2,467)(1,625)(2,018)(2,397)

Cash and Cash Equivalents

88,84488,889126,115

59,058109,309

Notes(1) Amounts do not include consumption and local taxes payable by the Bank and its consolidated subsidiaries.
(2) Capital ratio is calculated on a consolidated basis in accordance with the Bulletin Notification No. 19 issued by the Financial Services Agency in 2006 underParagraph 2, Article 14 of the Banking Law. Because the amended capital adequacy rules have been applied to banks that focus on domestic operations
since the fiscal year ended March 31, 2014, in the fiscal years ended March 31, 2014, 2015, and 2016, the Bank calculated the capital adequacy ratio basedon the formula set forth in the notification after the amendment.

Total assets

Profit attributable toshareholders of the parent

ROE/
Capital adequacy ratio(Domestic standard)(¥ billion)(¥ billion)

(%)

3,300

10.0

18.0

3,200

15.0

8.0

Capital adequacy
ratio

12.0

3,100
6.0

9.0

3,000

ROE

4.0
6.0

2,900
2.0

2,800

2,700

March 31

2012

2013

2014

2015

2016

0.0
FY

3.0

2012

2013

2014

2015

THE YAMANASHI CHUO BANK 2016

1

2016

0.0
FY

2012

2013

2014

2015

2016

Message from the President

I would like to take this opportunity to thank our shareholders and other stakeholders
for their steadfast support for the Bank and its Group companies.
In April 2016, the Bank launched its medium-term management plan S.T.E.P. up 2019
for the period April 2016 to March 2019. Under this plan, our management vision (ideal
and prospective image) is to become a bank that grows and develops together with
Yamanashi and its surroundings as a driving force for regional economic revitalization.
To realize this vision, we have embraced “Live up to the trust accorded by customers
and contribute to regional revitalization” as our theme during the medium-term
management plan. Guided by this theme, the Bank is implementing the plan’s
individual strategies.
Moreover, to execute those strategies, we have embraced “Concern, Change,
Challenge” as our slogan. This message embodies our desire to see all membersof management and employees demonstrate concern, drive change, and tackle
challenges in every aspect of their duties. By remaining true to this slogan, we will
endeavor to enhance the satisfaction of our communities, customers, and shareholders.
Below, we present an overview of our business performance for fiscal 2015 (April
2015 to March 2016), together with a report on future management plans.

Overview of fiscal 2015 performance

Nakaba Shindo,
President

Fund, with the aim of nurturing businesses underscoring the future of
local communities. Through these and other measures, we provided
support for enhancing local industrial capabilities and maintaining andexpanding employment. We held our Agri-Business School with thegoal of supporting new agri-business and the sixth industrialization
for agriculture- and food-related business operators. In addition, as
measures to support the development and expansion of sales channels,
we conducted the “Yamanashi Food Sector Business Matching Fair,”“Regional Banking Food Selection,” and other events. We implemented
a number of measures for tourist-related businesses, including setting
up a tourism support desk, supporting our clients through a tourism
advisor, and providing tourism-related information via social media.
Other measures included holding seminars on in-bound tourism andhelping our business customers register as tax-free shops. In the areasof business succession and inheritance measures, the Bank reinforced
its support readiness through partnerships with outside institutions andheld individual consultations to accurately meet the needs of customers. In international operations, we formed a new alliance with the StateBank of India, in addition to our existing operation tie-ups with six otheroverseas banks, thus further enhancing our preparedness for overseas
expansion support.
Turning to individual customers, we have responded to a wide
range of asset management needs of individual customers throughmeasures including enhancing our product lineup with investment
trusts, whole life insurance products and annuities, all of which cater tomedium- and long-term investment needs, as well as offering deposits
for monetary gifts for marriage and parenting (product name: Egao no
Katachi), which uses a tax-exempt system, and launching Junior NISA
accounts. Additionally, we have also addressed the asset-building needsof customers through such means as proposing a “household budget
review” that anticipates major events in customers’ lives. Meanwhile,
the Bank also worked to fulfill the financial needs of customers throughinitiatives including conducting interest rate campaigns for housing,auto, education and credit card loans, thereby providing products andIn the year ended March 31, 2016, the Japanese economy showed agradual recovery in the first half, supported by strong corporate earnings and improving employment and income levels. However, in thesecond half, economic conditions generally treaded water as exports
and production slowed in response to the deceleration of overseas
economies, and businesses took a cautious approach to capital investment based on an uncertain economic outlook.
Looking at the financial situation during this period, the Nikkei
Stock Average recovered temporarily to the ¥20,000 level against the
backdrop of improving corporate earnings. However, from the summer
onward, stock prices declined reflecting an uncertain economic outlook
accompanying the deceleration of the Chinese economy. In the foreignexchange market, the yen generally weakened in the first half of the
fiscal year, but has rapidly appreciated since the beginning of 2016.
Furthermore, in January 2016, the Bank of Japan introduced anegative interest rate policy as an additional monetary easing measure
to realize its price stabilization target of 2%. Interest rates decreased
significantly as a result of this policy.
Against this financial and economic backdrop, in the final year of“Best Bank Plan 2016,” the Bank’s three-year medium-term management
plan running from April 2013 through March 2016, we proactively
implemented the following measures towards establishing a highly
trustworthy bank that fully satisfies customers, as described in our ideal
and prospective image (management vision).
We supported the growth and development of our corporate
and sole proprietorship customers by providing optimal solutions toresolve their business issues based on an appropriate assessment of
their business models, growth potential and other aspects (businessfeasibility studies), thereby strengthening our measures to facilitate
regional revitalization. In regard to regional revitalization, we helped
Yamanashi Prefecture and municipalities formulate their comprehensive
strategies, along with setting up the Yamanashi Chugin Revitalization

THE YAMANASHI CHUO BANK 20162

Message from the President

The Economy of Yamanashi Prefecture—Our Business Base (fiscal 2014)¥3,536 billion
Real Growth Rate:–1.8%
Shipment Value of Production in Prefecture: ¥2,133 billion

Shares in Yamanashi Pref. (%)

General Prefectural Production:(as of March 31, 2016)
13.0

Major Products and Their Share in Japanese Market
Products

Shipment Value

Share

Ranking

41.2

29.3

No. 1

Precious Metal Products

25.9

25.5

No. 1

Numerical Control Robots

169.6

69.6

No. 1

Quartz crystal units (excluding for clock and watch use)

13.1

9.8

No. 3

Flat-Panel Display Manufacturing Equipment

18.8

6.6

(¥ billion)

Mineral Water

Medical Apparatus and Instruments

40.2

(%)

7.0

27.7

1.8

Deposit
Shares

9.3
7.1
Loan
Shares

50.4

41.8

32.3
9.5

7.1
Yamanashi Chuo Bank

Yamanashi Chuo Bank

Major banks

Major banks

Shinkin banks/credit unions

Shinkin banks/credit unions

No. 3

Agricultural cooperatives

Agricultural cooperatives

No. 5

Other
(excluding Japan Post Bank)

services focused on the life plans of its customers.
As a result of the foregoing, in the fiscal year ended March 31, 2016,
operating income increased ¥5,382 million year on year to ¥55,718
million on a consolidated basis. Ordinary profit increased ¥365 million to¥13,829 million, and net income attributable to owners of parent rose
¥698 million to ¥9,452 million on a consolidated basis.
In the Bank’s main accounts (consolidated basis), the Bank enhanced
its deposit products and services to appropriately and swiftly meet thediversifying asset management needs of customers. As a result, theyear-end balance of total deposits increased ¥18.3 billion to ¥2,719.8
billion mainly due to an increase in deposits held by both individual andcorporate customers.
Total deposits including negotiable certificates of deposit (NCDs)
increased ¥36.9 billion during the year to ¥2,842.2 billion.
The year-end balance of over-the-counter Japanese government
bonds and investment trusts declined ¥18.2 billion during the year to¥137.4 billion. Turning to loans, we proactively expanded lending tosecond-tier companies and SMEs through solution banking based on
business feasibility studies and also increased loans to individuals. At thesame time, we proactively met the funding demand primarily from local
government bodies. As a result, the balance of loans increased by ¥25.8
billion to ¥1,514.5 billion.

Semi-government institutions/
othercontraction in line with the prefecture’s declining population.
In the financial sector, competition with other financial institutions
has continued to intensify unabated. In this environment, innovation in
IT is expected to profoundly transform conventional financial functions
and services, as underscored by the emergence of Fintech, the integration of finance and digital technology.
Moreover, the Bank of Japan’s negative interest rate policy will makeit increasingly challenging for banks to generate earnings going forward.
To appropriately tackle the issues presented by these environmental
changes, and to build a stable, highly profitable management structure
in anticipation of conditions five to ten years from now, the Bank
launched the S.T.E.P. up 2019 medium-term management plan in April
2016 for the period April 2016 to March 2019. Under this plan, the Bank
has formulated its ideal and prospective image (management vision)
as “A Bank that grows and develops together with Yamanashi and its
surroundings as a driving force for regional economic revitalization.” The
Bank has also embraced “Live up to the trust accorded by customers
and contribute to regional revitalization” as its theme during the
medium-term management plan.
To realize this management vision and theme, the Bank will implement two basic strategies, namely “I. Realization of a business model
adapted to changes in the environment—Selection and concentration,and differentiation from other financial institutions” and “II. Build andstrengthen a robust management structure,” in conjunction withadvancing individual strategies in line with those basic strategies. The
Bank is seeking to establish a financial and revenue base supporting
sustainable growth.
The Group and all management and employees will work together
to contribute to community prosperity and economic development.

Future management policies
In Yamanashi Prefecture, tourism-related industries offer growing prospects for development, underpinned by factors including a record-highnumber of overnight visitors to the prefecture, including foreign tourists.
Moreover, steady progress is being made on several large-scale national
projects in the prefecture, such as the Chubu-Odan Expressway andthe Linear Chuo Shinkansen. These projects are expected to contributesignificantly to cultural and economic development.
Meanwhile, with Yamanashi Prefecture’s population recently
dropping below 840,000, there are concerns about a possible economic

President

Nakaba Shindo

THE YAMANASHI CHUO BANK 20163

Medium-Term Management Plan
S.T.E.P. up 2019
Overview

steadily and promptly execute two basic strategies, namely

In April 2016, the Bank launched the new medium-term manage-

environment—Selection and concentration, and differentiation

ment plan S.T.E.P. up 2019 for the period April 1, 2016 to March 31,

from other financial institutions” and “Build and strengthen a2019.

robust management structure,” and advance individual strategies“Realization of a business model adapted to changes in the

Under this plan, we have formulated our management vision

formulated based on those two strategies. In parallel, the Bank will(ideal and prospective image) as “A Bank that grows and develops

seek to win the resounding trust of the people of Yamanashi by

together with Yamanashi and its surroundings as a driving force forproviding comprehensive financial services that are pertinent toregional economic revitalization.” Moreover, to realize this vision,changing customer needs and economic conditions in a timely

we have embraced “Live up to the trust accorded by customers

and appropriate manner through rigorously enforcing complianceand contribute to regional revitalization” as our theme during

and the protection of customers and their privacy. The Bank will

the medium-term management plan, and “Concern, Change,

also seek to earn trust by contributing to the development of the

Challenge” as our slogan. With these principles in mind, the Bank

regional economy, as well as local industries and businesses, withwill work to implement various strategies.

its financial intermediation capabilities.

Moreover, to achieve our management vision, we will

(Diagram of S.T.E.P. up 2019: April 2016 to March 2019)

Management vision
Ideal andprospective image

A Bank that grows and develops together with Yamanashi andits surroundings as a driving force for regional economic revitalization

Theme during the plan

Live up to the trust accorded by customers and contribute to regional revitalization

Enhance stakeholder satisfaction (society, customers, shareholders, and employees)
Establish a financial and revenue base supporting sustainable growth

Realization of a business model adapted to changes in the environment
Selection and concentration, and differentiation from other financial institutions
Strengthen retail
solution banking

Strengthen coordination
with industrial, government,
and academic funds

Strengthen corporate
solution banking

Strengthen and expand
the capital markets
investment approach

Build and strengthen a robust management structure
Develop human resources andstrengthen organizational capabilities

Optimally redistribute management resources
such as branches, human resources and IT systems

Fundamentally reform and reengineer operations
based on sophisticated risk management approaches

Strengthen the approach and enhancethe effectiveness of internal control

Strengthen the enhancement ofcustomer and employee satisfaction

Strengthen CSR activities

Rigorously enforce compliance andthe protection of customers and their privacy

THE YAMANASHI CHUO BANK 2016

4

Advance IT utilization

Medium-Term Management Plan
S.T.E.P. up 2019

Quantitative targets
Item

Net business profit

Profit attributable toshareholders of the parent

Year-end deposit balance*

Year-end loan balance

Target¥9.5 bn¥6.0 bn¥3,260.0 bn¥1,590.0 bn(Year ending March 2019)* Deposit balance: Deposits + Investment trusts + Public bonds

CSR within the medium-term
management plan

economic revitalization through our core businesses, we will

At the Yamanashi Chuo Bank, we have been working to fulfill our

citizen, thereby contributing to the sustainable development ofcorporate social responsibilities, as we recognize that this, along

the regional community. In parallel, the Bank will actively disclosewith sustained value creation and improved competitiveness, isinformation on the status of its CSR activities as part of efforts

essential in forging even stronger ties with all our stakeholders,to build relationships of trust with stakeholders and enhance its

including our customers and shareholders, other market investors,

corporate value and competitiveness, which will pave the way forour employees, and the regional community.

earnings growth.

continue taking further measures to contribute to society andprotect the environment to meet our obligations as a corporate

Looking ahead, in addition to contributing to regional

Strengthening CSR activities
in the medium-term management plan S.T.E.P. up 2019
Enhance corporate value
and competitiveness

Increase earnings

Sustainable developmentof the regional community

Activities
to promote regional
economic revitalization

Help communities revitalize industries
Coordinate with local authorities
Participate in local projects
Collect and use market intelligence

Activities
to contribute to
the regional community

Strengthen support for education
Proactively take steps to promote artsand culture, sports and other activities
Promote corporate activities
from the standpoint of contributing to society,including wellness initiatives

Activities
to tackle environmental
problems

Strengthen activities to reduce the Bank’s
own environmental impact
Support and facilitate activities undertaken
by regional communities, customers andothers to reduce environmental impact

THE YAMANASHI CHUO BANK 2016

5

Build relationshipsof trust with stakeholders

Proactively disclose
the status of activities

Region-Based Financial Services
Region-Based Financial Services

2019, to realize its management vision (ideal and

The provision of region-based financial services

develops together with Yamanashi and its surroundings(relationship banking) is a long-term issue for the Bank.

as a driving force for regional economic revitalization.”

Accordingly, the Bank will vigorously push ahead with

Looking ahead, we will continue to take measures torelationship banking in the course of executing various

develop the regional economy and community, improvemeasures set forth in the medium-term management

our services for customers in the region, and promoteplan S.T.E.P. up 2019 for the period April 2016 to March

relationship banking.

prospective image) of becoming “A Bank that grows and1

Provide consulting services to corporate customers

2

Proactively participate in broad-based regional revival

3

Proactively provide information to the community and other stakeholders

Activities to promote relationship banking
in the medium-term management plan1

Provide consulting services to corporate customers• Provide appropriate life-stage solutions to companies• Enhance the depth of solution banking groundedin business feasibility studies• Develop human resources who can address diversifying andincreasingly sophisticated needs

2

Proactively participate in broad-based regional revival• Support the growth and revitalization of industries that

support the region• Proactively engage in regional revitalization and other measuresin coordination with local municipalities and other entities• Conduct social contribution activities such as the promotionof support for education, arts and culture, and sports

3

Proactively provide information to the communityand other stakeholders• Proactively provide clear information through various media,

including the Bank’s website and disclosure reports

THE YAMANASHI CHUO BANK 2016

6

Management vision(Ideal and prospective image)

A Bank that grows
and develops together with
Yamanashi and its surroundings
as a driving force for regional
economic revitalization

Region-Based Financial Services

Corporate growth assistance through collaboration with business advisors (April 2001 to March 2016)
Number of investment target and borrower enterprises, investment amount188¥13.5 bn

Number of business matching deals

88 lines

In the field of corporate growth support, since employment ofbusiness advisors in April 2001, we have provided consulting
services to 587 companies regarding expansion of marketing
channels and evaluation of potential of business.

Yamanashi Chugin Management Support Coordination Services,and corporate customer support through business matching services (April 2005 to March 2016)
Number of companies that havereceived support (problem-solving)from Yamanashi Chugin Management
Support Services
Number of business matching deals
successfully concluded via the Bank’s
network or Bank-sponsored businessmeetings

1,142

The coordination services utilizes a network of contacts linking
the Bank with external support institutions to offer corporate
customers tailored proposals backed up by specialist know-how(Jan. 2006 to March 2016).

2,214

Business matching has been achieved by using the Bank’s
network to provide data on customer companies, as well as
business fairs such as the Yamanashi Food Sector Business
Matching Fair, the Regional Banking Food Selection, etc.
(FY2005–2016).

Achievements in support for management improvement (April 2015 to March 2016)
Debtors (excluding normal borrowers) as of the start of term: A
Of which, those receiving management improvement support: a

2,868
179

Of which, those upgraded their debtor categories as of the term-end: b

18

Of which, those drawing up reconstruction plans: c

136

Percentage receiving management improvement support: (a/A)

6.2%

Percentage upgraded: (b/a)

10.1%

Percentage drawing up reconstruction plans: (c/a)

76.0%

THE YAMANASHI CHUO BANK 2016

7

Operational Review

Corporate Banking

Support for companies through our solutions businesses
In collaboration with outside support organizations, the Grouphas created a support system for establishing businesses, starting up new businesses, and growing and revitalizing business,and is working to provide high-quality financial services.
In fiscal 2015, we continued our previous fiscal year’s efforts
to facilitate smooth financing to local companies, provide
consulting services to corporate customers, and strengthen
our solutions businesses. In response to the “SME Finance
Facilitation Act,” we meticulously consulted with customers
about financing based on the “Basic Policy for Financial
Facilitation” established by the Bank. At the same time, we
strengthened our support system, formulated management
improvement plans, and provided strong support for the
implementation of those plans.
The Bank supported the growth and development of its
customers by providing optimal solutions to resolve theirbusiness issues based on an appropriate assessment of theirbusiness models, growth potential and other aspects (businessfeasibility studies), thereby strengthening its measures tofacilitate regional revitalization.
In regard to regional revitalization, we helped Yamanashi
Prefecture and municipalities formulate their comprehensive
strategies in coordination with municipalities, along withsetting up the Yamanashi Chugin Revitalization Fund, withthe aim of nurturing businesses underscoring the future of
local communities. Through these and other measures, we
provided support for enhancing local industrial capabilities andmaintaining and expanding employment.
We held our Agri-Business School with the goal of supporting new agri-business and the sixth industrialization for
agriculture- and food-related business operators. In addition, as
measures to support the development and expansion of sales
channels, we conducted the “Yamanashi Food Sector Business
Matching Fair,” “Regional Banking Food Selection,” and otherevents.

We implemented a number of measures for tourist-related
businesses, including setting up a tourism support desk, supporting our clients through a tourism advisor, and providing
tourism-related information via social media. Other measures
included holding seminars on in-bound tourism and helping
our business customers register as tax-free shops.
In international operations, we formed a new alliance with
the State Bank of India, in addition to our existing operation
tie-ups with six other overseas banks, thus further enhancing
our preparedness for overseas expansion support.
In the areas of business succession and inheritance services,
the Bank reinforced its support readiness through partnerships
with outside institutions and held complimentary individual
consultations to accurately meet the needs of customers.
Moreover, the Bank worked to nurture highly specialized
employees to strengthen support for the revitalization of local
industries and generate new sources of funding demand.
Specifically, to nurture highly specialized employees, theBank assigned employees to seminars held by the Regional
Banks Association of Japan, as well as to the Japan External
Trade Organization (JETRO) and other organizations. The Bank
also assigned employees to external companies primarily in
local industries, such as the jewelry, wine and hotel sectors,
with the goal of enhancing employees’ discernment by having
them obtain knowledge of the characteristics of each industry
and develop industry expertise.
The total of loans outstanding to SMEs as of March 31, 2016
was up by ¥28.6 billion year on year to ¥501.9 billion, accounting for 32.9% of all loans outstanding.
Looking ahead, the Bank will work hard to provide
comprehensive financial services and strengthen its consulting
capabilities to better respond to the needs of our corporate
customers who form the bedrock of the regional economy.

Agri-Business School

Yamanashi Food Business Liaison Conference

THE YAMANASHI CHUO BANK 2016

8

Operational Review

Consumer Banking
Meeting customers’ diverse needs

The Bank has responded to a wide range of asset management
needs of individual customers through measures including
enhancing its product lineup with investment trusts, whole
life insurance and annuities, all of which cater to medium- andlong-term investment needs, as well as offering deposits formonetary gifts for marriage and parenting (product name: Egaono Katachi), which uses a tax-exempt system, and launching
Junior NISA accounts. Additionally, we have also addressed
the asset-building needs of customers through such means as
proposing a “household budget review” that anticipates major
events in customers’ lives.
Meanwhile, the Bank also worked to fulfill the financial
needs of customers through initiatives including conducting
interest rate campaigns for housing, auto, education and credit
card loans, thereby providing products and services focused on
the life plans of its customers.

The balance of loans to individuals as of March 31, 2016,
decreased by ¥3.7 billion from the previous year-end to ¥372.1
billion, accounting for 24.4% of all loans. The balance of housing loans outstanding at the year-end stood at ¥365.2 billion,
down ¥2.7 billion from March 31, 2015.

Various asset management seminars held

Western Tokyo Bloc

Seeking greater potential beyond Yamanashi Prefecture
Bordering Yamanashi Prefecture to the east, the western partof Tokyo in which we operate, is a large market that is home
to around 5.51 million people, and 170,000 business sites. We
call it the Western Tokyo Bloc and it has tremendous growthpotential. As of March 31, 2016, we had 15 branches within
this Bloc. Most have been in operation for 30 to 40 years andare well-established as a local financial institution in their local
communities. In addition, the Bank currently operates four
Loan Square offices devoted to housing loans in the WesternTokyo Bloc.
This region has achieved greater profitability and efficiency
exceeding that within Yamanashi Prefecture and we view thisas one of the pillars for “increasing operating income” in the
new medium-term management plan. In this plan, we will
expand the marketing base multi-dimensionally through theactive investment of human resources and the aggressive
expansion of new business bases with the aim of even greater
profitability and efficiency.
In the fiscal year ended March 31, 2016, personal loans
increased by ¥1.2 billion year on year to ¥80.4 billion, whilebusiness loans increased by ¥4.3 billion to ¥93.3 billion. The
total of corporate borrowers now on our books increased by
104 to 1,872 (in terms of transactions). Loan RAROA (earnings

after deduction of credit cost/loans), a prime indicator of profitability, was better than in Yamanashi Prefecture, reflecting highprofitability of our operations in the Western Tokyo Bloc.

Loans and corporate borrowers
in Western Tokyo Bloc
Personal loans

Business loans

Corporate borrowers(¥ billion)

90

1,872
1,768

60

1,659

1,665

2013

2014

30

0

As of March, 31

2015* Local public bodies are excluded in corporate borrowers

THE YAMANASHI CHUO BANK 2016

9

2016

Financial Review(on a consolidated basis)

Operating Environment

Overview of Principal Accounts

In the year ended March 31, 2016, the Japanese economy showed a gradual
recovery in the first half, supported by strong corporate earnings and improving employment and income levels. However, in the second half, economic
conditions generally treaded water as exports and production slowed in
response to the deceleration of overseas economies, and businesses took a cautious approach to capital investment based on an uncertain economic outlook.
Looking at the financial situation during this period, the Nikkei Stock
Average recovered temporarily to the ¥20,000 level against the backdrop of
improving corporate earnings. However, from the summer onward, stock
prices declined reflecting an uncertain economic outlook accompanying thedeceleration of the Chinese economy. In the foreign exchange market, the yen
generally weakened in the first half of the fiscal year, but has rapidly appreciated since the beginning of 2016.
Furthermore, in January 2016, the Bank of Japan introduced a negativeinterest rate policy as an additional monetary easing measure to realize its
price stabilization target of 2%. Interest rates decreased significantly as a resultof this policy.
The economy of Yamanashi Prefecture, specifically the non-manufacturingsector, saw signs of strong business sentiment in the tourism-related industries
owing to an increase in domestic and international tourists. However, in the
manufacturing sector, production turned soft across a wide range of industries,
including the jewelry industry, which had maintained strong sales to Asia, andthe automotive parts and electronic component-related industries. Overall,economic activity in Yamanashi Prefecture generally lacked vigor.

In the Bank’s main accounts, the Bank enhanced its deposit products andservices to appropriately and swiftly meet the diversifying asset management
needs of customers. As a result, the year-end balance of total deposits on aconsolidated basis increased ¥18.3 billion to ¥2,719.8 billion mainly due to anincrease in deposits held by both individual and corporate customers.
Total deposits including negotiable certificates of deposit (NCDs) increased¥36.9 billion during the year to ¥2,842.2 billion. The year-end balance of overthe-counter Japanese government bonds and investment trusts declined ¥18.2
billion during the year to ¥137.4 billion.
Turning to loans, we proactively expanded lending to second-tiercompanies and SMEs through solution banking based on business feasibility
studies and increased loans to individuals. At the same time, we proactively
met funding demand primarily from local government bodies. As a result, thebalance of loans increased by ¥25.8 billion to ¥1,514.5 billion.
In investment securities, we took measures to ensure smooth management, while keeping a close eye on the investment environment andmarket trends. We also underwrote public debt beginning with municipal,
government-guaranteed and other public bonds. As a result, the balance ofinvestment securities increased ¥2.7 billion to ¥1,518.0 billion.
The consolidated capital adequacy ratio (domestic standard) increased 0.7
percentage points to 18.05%.

Cash FlowsNet cash provided by operating activities amounted to ¥70.2 billion (comparedwith a net outflow of ¥3.8 billion in the previous year), with deposits increasing¥36.9 billion and payables under securities lending transactions increasing¥57.3 billion, despite loans and bills discounted increasing ¥25.8 billion.
Net cash used in investing activities totaled ¥17.6 billion (compared with a
net outflow of ¥61.2 billion in the previous year), with acquisition of investment
securities totaling ¥432.0 billion and sales and redemption of investment
securities totaling ¥417.2 billion.
Net cash used in financing activities came to ¥2.3 billion (compared with a
net outflow of ¥2.0 billion in the previous year), with expenses on acquisition oftreasury stock totaling ¥0.9 billion and dividend payments of ¥1.5 billion.
As a result, cash and cash equivalents at the end of the fiscal year came to¥109.3 billion (up ¥50.2 billion from the previous year).

Overview of Earnings
On the earnings front, the Bank worked to strengthen its earning capacity,
efficiently manage assets, and rationalize and streamline all aspects of management. Although interest on loans and bills discounted decreased due to lower
interest rates on loans, increases in interest and dividends on securities and ingains on the sale of stocks, along with higher fees and commissions, resulted in
an increase in ordinary income.
Meanwhile, credit costs rose significantly in line with additional provisions
to loan loss reserves in readiness for future changes in the business environment and other factors.
As a result, consolidated ordinary income rose ¥5,382 million to ¥55,718 million. Consolidated ordinary profit increased ¥365 million to ¥13,829 million. Profit
attributable to shareholders of the parent increased ¥698 million to ¥9,452 million.

ROA

OHR

Capital adequacy ratio(Domestic standard)

(%)

(%)

0.8

20.0

80.0

0.6

15.0

75.0

0.4

10.0

70.0

0.2

5.0

65.0

0.0

March 31

2012

2013

2014

2015

2016

0.0

March 31

(%)

2012

2013

2014

2015

2016

60.0

March 31

2012

ROA = Core net business profit / (Average Balance of Total Assets – Average Balance of Customers’ Liabilities for Acceptances & Guarantees)
Capital Ratio = On a consolidated basis, domestic standard OHR = Operating expenses / Core Gross Business Profit
Note: A ll except for the capital ratio are on a non-consolidated basis.
THE YAMANASHI CHUO BANK 2016

10

2013

2014

2015

2016

【Consolidated Financial Statements】①【Consolidated Balance Sheets】
Millions of Yen
End of FY2015(March 31, 2016)

Thousands of U.S. Dollars

End of FY2014(March 31, 2015)

End of FY2015(March 31, 2016)

Assets:Cash and due from banks¥ 109,493¥ 69,226

Call loans and bills bought

41,22934,287

365,903

Monetary claims bought

10,804

11,716

95,887

1,518,043

1,515,314

13,472,163

1,514,537

1,488,648

※6

1,381

1,067

12,259※8, ※922,822

12,998

202,542

26,05225,546231,206

Buildings

9,392

8,851

83,354Land

13,55913,521

120,339

15

622

138

3,084

2,550

27,375

3,239

4,091

28,753

2,499

2,748

22,184

Software in progress

408

1,009

3,622

Other intangible fixed assets

332

332

2,947

0

2,585

─

Deferred tax assets

2,506

395

22,240

Customers’ liabilities for acceptances and guarantees

4,561

4,968

40,485(15,555)(14,944)(138,054)¥3,239,117¥3,155,903¥28,746,162

Securities※1, ※8, ※13

Loans and bills discounted※2, ※3, ※4, ※5, ※6, ※7, ※10
Foreign exchanges
Other assets

Tangible fixed assets※11, ※12Construction in progress
Other tangible fixed assets
Intangible fixed assets
Software

Net defined benefit asset

Allowance for possible loan losses
Total assets

11

THE YAMANASHI CHUO BANK 2016

11¥

971,724

13,441,053

Millions of Yen
End of FY2015(March 31, 2016)

Thousands of U.S. Dollars
End of FY2015(March 31, 2016)

End of FY2014(March 31, 2015)

Liabilities:※8¥2,719,829¥2,701,437$24,137,641

Negotiable certificates of deposit

122,418

103,832

1,086,428

0

5,287

─

83,46926,095

740,766

20,36722,710180,756

74

183

663

26,552

26,331

235,646

46

44

408

4,152

971

36,8529

7

88

Reserve for reimbursement of deposits

261

237

2,321

Reserve for contingent losses

135

107

1,200

Deferred tax liabilities

22,07926,247

195,950

Acceptances and guarantees

4,561

4,968

40,485

3,003,959

2,918,462

26,659,204

Common stock

15,40015,400136,670

Capital surplus

8,287

8,287

73,548Retained earnings

153,207145,268

1,359,671

Treasury stock(2,009)(1,126)(17,830)

Total shareholders’ equity

174,886

167,829

1,552,059

Unrealized gains on available-for-sale securities

63,152

68,042560,458

Remeasurements of defined benefit plans(4,866)(259)(43,190)

Total accumulated other comprehensive income

58,28567,782517,268

133

124

1,186

1,853

1,703

16,445

235,158

237,440

2,086,958¥3,239,117¥3,155,903$28,746,162

Deposits

Call money and bills soldPayables under securities lending transactions
Borrowed money※8※8, ※9Foreign exchanges
Other liabilities
Accrued bonuses to directors and corporate auditors
Net defined benefit liability
Reserve for directors’ and corporate auditors’
retirement benefits

Total liabilities

Net assets:

Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

12
THE YAMANASHI CHUO BANK 201612

②【Consolidated Statements of Income and Consolidated Statements of Comprehensive Income】【Consolidated Statements of Income】
Millions of Yen

Thousands of U.S. Dollars

Consolidated FY2015(From April 1, 2015
to March 31, 2016)

Consolidated FY2014(From April 1, 2014
to March 31, 2015)

Consolidated FY2015(From April 1, 2015
to March 31, 2016)

Ordinary income:¥55,718¥50,335$494,484

Interest and dividends income

36,12135,000320,570

Interest on loans and bills discounted

18,101

19,290160,647

Interest and dividends on securities

17,75815,450157,602

Interest on call loans and bills bought

88

46

782

Interest on due from banks

95

91

844

Other

78

120

695

Fees and commissions

7,915

7,716

70,251Other operating income

5,346

4,190

47,444

Other ordinary income

6,334

3,427

56,220

0

1,686

─

6,334

1,741

56,220Ordinary expenses

41,88836,871

371,750

Interest expenses

1,798

1,690

15,961

Deposits

1,445

1,506

12,826

Negotiable certificates deposits

93

95

832

Call money and bills sold

1

19

9

Payables under securities lending transactions

216

32

1,924

Borrowed money

41

36

369

Other

0

0

1

Fees and commissions

2,062

1,931

18,302Other operating expenses

4,971

3,606

44,11928,94429,217

256,872

4,112

424

36,496

Provision of allowance for possible loan losses

1,549

0

13,755

Other expenses

2,562

424

22,741

13,82913,464

122,734

Reversal of allowance for possible loan losses
Other

※1

General and administrative expenses※2

Other expenses

Ordinary profit

13

THE YAMANASHI CHUO BANK 2016

13

Millions of Yen

Thousands of U.S. Dollars

Consolidated FY2015(From April 1, 2015
to March 31, 2016)

Consolidated FY2014(From April 1, 2014
to March 31, 2015)

Consolidated FY2015(From April 1, 2015
to March 31, 2016)

292

─

2,598

292

─

2,598

409

417

3,634

353

63

3,140

55

353

494

Income before income taxes and non-controllinginterests

13,712

13,047

121,698

Income taxes – current

4,152

3,001

36,853

Income taxes – deferred

(50)

1,105

(445)

Total income taxes

4,102

4,107

36,408

9,610

8,939

85,290

158

186

1,404

¥9,452¥8,753$83,886

Extraordinary income:Gain on disposal of fixed assets
Extraordinary losses
Impairment losses※3

Losses on disposal of fixed assets

ProfitProfit attributable to non-controlling interests
Profit attributable to shareholders of the parent

14
THE YAMANASHI CHUO BANK 201614

【Consolidated Statements of Comprehensive Income】
Millions of Yen

Thousands of U.S. Dollars

Consolidated FY2015(From April 1, 2015
to March 31, 2016)

Consolidated FY2014(From April 1, 2014
to March 31, 2015)

Consolidated FY2015(From April 1, 2015
to March 31, 2016)¥9,610¥8,93985,290(9,503)31,406(84,342)Net unrealized gains on available-for-sale securities(4,896)30,594(43,456)

Remeasurements of defined benefit plans(4,606)811(40,885)106

40,346949

Total comprehensive income attributable toshareholders of the parent(44)

40,157(397)

Total comprehensive income attributable tonon-controlling interests

151

189

1,346

ProfitOther comprehensive income※1

Total comprehensive income

15
THE YAMANASHI CHUO BANK 201615

③【Consolidated Statements of Changes in Net Assets】
Millions of Yen
Shareholders' equity
Consolidated FY2015 (From April 1,2015 to March 31, 2016)
Common stock Capital surplus
Balance at beginning of current year
¥15,400¥8,287
Cumulative effect of changes inaccounting policies
Balance at beginning of year
15,4008,287
reflecting changes in accounting
policies
Changes during year:
Cash dividends
Profit attributable to shareholders of
the parent
Purchases of treasury stock
Cancellation of treasury stock
Disposals of treasury stock(5)
Transfer from retained earnings tocapital surplus

Retainedearnings
Treasury stock¥145,268¥(1,126)

Total
shareholders’equity¥167,8290145,268

0(1,126)

167,829(1,507)(1,507)

9,452

9,452
(915)
0
32

(915)
27

5

(5)

─

─

7,938

(882)

7,056

¥15,400¥8,287¥153,207¥(2,009)¥174,886

Total
Unrealized
accumulated
gains onRemeasurements
otheravailable-for- of defined benefit comprehensive Subscription
sale securities
plans
incomerights to shares

Non-controllinginterests

Net changes in items other thanshareholders' equity
Total changes during year
Balance at end of current year

Millions of Yen
Accumulated other comprehensive income

Consolidated FY2015 (From April 1,2015 to March 31, 2016)
Balance at beginning of current year
Cumulative effect of changes inaccounting policies
Balance at beginning of year
reflecting changes in accounting
policies¥68,042¥(259)¥67,782¥124¥1,703

Total net
assets¥237,440068,042(259)

67,782

124

1,703

237,440

Changes during year:
Cash dividends(1,507)

Profit attributable to shareholders of
the parent

9,452

Purchases of treasury stock(915)

Cancellation of treasury stock
Disposals of treasury stock

27

Transfer from retained earnings tocapital surplus
Net changes in items other thanshareholders' equity(4,890)(4,606)(9,497)8149(9,338)

Total changes during year

(4,890)(4,606)(9,497)8149(2,281)

Balance at end of current year

¥63,152¥(4,866)¥58,285¥133¥1,853¥235,158

16

THE YAMANASHI CHUO BANK 201616

Millions of Yen
Shareholders' equity
Consolidated FY2014 (From April 1,2014 to March 31, 2015)
Common stock Capital surplus
Balance at beginning of current year
¥15,400¥8,287
Cumulative effect of changes inaccounting policies
Balance at beginning of year
15,4008,287
reflecting changes in accounting
policies
Changes during year:
Cash dividends
Profit attributable to shareholders of
the parent
Purchases of treasury stock
Cancellation of treasury stock(2,140)
Disposals of treasury stock(0)
Transfer from retained earnings tocapital surplus

Retainedearnings
Treasury stock¥140,009¥(2,423)(179)
139,829

Total
shareholders’equity¥161,272(179)(2,423)161,092(1,173)(1,173)

8,753

8,753
(844)
2,140
1

(844)
1

2,140

(2,140)

─

─

5,439

1,297

6,737

¥15,400¥8,287¥145,268¥(1,126)¥167,829

Total
Unrealized
accumulated
gains onRemeasurements
otheravailable-for- of defined benefit comprehensive Subscription
rights to sharessale securities
plans
incomeNon-controllinginterests

Net changes in items other thanshareholders' equity
Total changes during year
Balance at end of current year

Millions of Yen
Accumulated other comprehensive income

Consolidated FY2014 (From April 1,2014 to March 31, 2015)
Balance at beginning of current year
Cumulative effect of changes inaccounting policies
Balance at beginning of year
reflecting changes in accounting
policies¥ 37,450¥(1,071)¥36,379¥90¥1,515

Total net
assets¥199,258(179)

37,450(1,071)36,37990

1,515

199,078

Changes during year:
Cash dividends(1,173)

Profit attributable to shareholders of
the parent

8,753

Purchases of treasury stock(844)

Cancellation of treasury stock
Disposals of treasury stock

1

Transfer from retained earnings tocapital surplus
Net changes in items other thanshareholders' equity

30,591811

31,40334

187

31,625

Total changes during year

30,591811

31,40334

187

38,362

Balance at end of current year

¥68,042¥(259)¥67,782¥124¥1,703¥237,440

17
THE YAMANASHI CHUO BANK 201617

Thousands of U.S. Dollars
Shareholders' equity
Consolidated FY2015 (From April 1,2015 to March 31, 2016)
Common stock
Balance at beginning of current year
Cumulative effect of changes inaccounting policies
Balance at beginning of year
reflecting changes in accounting
policies

Capital surplus

Retainedearnings

Treasury stock

Total
shareholders’equity$136,670$73,548$1,289,216$ (9,997)$1,489,438

136,670

73,5481,289,216(9,997)

1,489,438

Changes during year:
Cash dividends(13,381)(13,381)

Profit attributable to shareholders of
the parent

83,886

83,886

Purchases of treasury stock(8,124)(8,124)

290

241

7,834
$ (17,830)

62,621$1,552,059

Cancellation of treasury stock
Disposals of treasury stock(50)

Transfer from retained earnings tocapital surplus

50

(50)

－
$73,548

70,455$1,359,671

Net changes in items other thanshareholders' equity
Total changes during year
Balance at end of current year－
$136,670

Thousands of U.S. Dollars
Accumulated other comprehensive income

Consolidated FY2014 (From April 1,2014 to March 31, 2015)
Balance at beginning of current year
Cumulative effect of changes inaccounting policies
Balance at beginning of year
reflecting changes in accounting
policies

Total
Unrealized
accumulated
gains onRemeasurements
otheravailable-for- of defined benefit comprehensive Subscription
sale securities
plans
incomerights to shares

Non-controllinginterests

Total net
assets$603,856$ (2,305)$601,551$1,107$15,114$2,107,209

－

－

－

－

－

－

603,856(2,305)

601,551

1,107

15,114

2,107,209

Changes during year:
Cash dividends(13,381)

Profit attributable to shareholders of
the parent

83,886

Purchases of treasury stock(8,124)

Cancellation of treasury stock
Disposals of treasury stock

241

Transfer from retained earnings tocapital surplus
Net changes in items other thanshareholders' equity
Total changes during year
Balance at end of current year

(43,398)(40,885)(84,283)

79

1,331

(82,873)(43,398)$560,458(40,885)$(43,190)(84,283)$517,26879$1,186

1,331$16,445(20,252)$2,086,958

18
THE YAMANASHI CHUO BANK 201618

④【Consolidated Statements of Cash Flows】
Millions of Yen

Thousands of U.S. Dollars

Consolidated FY2015(From April 1, 2015
to March 31, 2016)

Consolidated FY2014(From April 1, 2014
to March 31, 2015)

Consolidated FY2015(From April 1, 2015
to March 31, 2016)¥13,712¥13,047$121,698

3,057

3,295

27,138

Impairment losses

55

353

494

Increase (decrease) in allowance for possible
loan losses

611(2,733)

5,428

Increase (decrease) in accrued bonuses todirectors and corporate auditors

1

(1)

11

2,585

(1,253)

22,948

Increase (decrease) in net defined benefit liability

3,181

(491)

28,233

Increase (decrease) in reserve for directors’andcorporate auditors’retirement benefits

2

1

19

Increase (decrease) in reserve forreimbursement of deposits

24

47

216

Increase (decrease) in reserve for contingent
losses

27

(128)

242

Interest income recognized on consolidated
statements of income(36,121)(35,000)(320,570)

Interest expenses recognized on consolidated
statements of income

1,798

1,690

15,961

Losses (gains) on investment securities(5,719)(1,042)(50,757)

Foreign exchange losses – net

4,930(3,320)43,760

61

63

542

Net increase (decrease) in loans and bills
discounted(25,888)(48,247)(229,756)

Net increase in deposits

18,391

65,561

163,220

Net increase in negotiable certificates of deposit

18,586(21,945)

164,951

Net increase (decrease) in borrowed money(2,342)

1,073(20,792)

Net decrease in due from banks (excluding cash
equivalents)

9,984

10

88,613Net decrease (increase) in call loans(6,030)(30,335)(53,515)

Net increase (decrease) in call money(5,287)(1,196)(46,925)

Net increase (decrease) in payables under
securities lending transactions

57,374

18,557509,177

Net decrease (increase) in foreign exchanges(assets)

(313)

374

(2,787).
Operating activities:
Income before income taxes and non-controllinginterests
Adjustment for:
Depreciation and amortization

Decrease (increase) in net defined benefit asset

Losses on disposal of premises and equipment

19

THE YAMANASHI CHUO BANK 2016

19

Millions of Yen
Consolidated FY2015(From April 1, 2015
to March 31, 2016)
Net increase (decrease) in foreign exchanges(liabilities)

Thousands of U.S. Dollars

Consolidated FY2014(From April 1, 2014
to March 31, 2015)

Consolidated FY2015(From April 1, 2015
to March 31, 2016)

(108)

69

(967)

Interest income (cash basis)

39,62139,016351,632

Interest expenses (cash basis)(1,554)(1,283)(13,795)

Other – net(16,671)

2,742(147,956)

Total adjustments

73,970(1,073)

656,464

Income taxes paid

(3,682)(2,733)(32,684)

Net cash provided by (used in) operating activities

70,287(3,806)

623,781

Purchases of investment securities(432,021)(280,148)(3,834,058)

Proceeds from sales of investment securities

190,483

105,249

1,690,484

Proceeds from redemption of investment securities

226,744

117,424

2,012,290

Purchases of premises and equipment(2,216)(2,669)(19,668)

Proceeds from sales of premises and equipment

150

－

1,333

Purchases of intangible fixed assets(781)(1,089)(6,932)1

1

17(17,638)(61,232)(156,535)(1,507)(1,173)(13,381)

(1)

(1)

(15)

(915)

(844)

(8,124)

27

1

241

(2,397)(2,018)(21,280)004Net increase (decrease) in cash and cash equivalents

50,251(67,057)

445,970

Cash and cash equivalents, beginning of year

59,058126,115524,122¥109,309¥59,058$970,092

Investing activities:

Proceeds from sales of intangible fixed assets
Net cash used in investing activities
Financing activities:
Dividends paid
Payment of dividends to non-controlling interests
Repurchases of treasury stock
Proceeds from sales of treasury stock
Net cash used in financing activities
Foreign currency transaction adjustments on cash andcash equivalents

Cash and cash equivalents, end of year

※1

20

THE YAMANASHI CHUO BANK 201620

【Notes to Consolidated Financial Statements】
Important items used as basis for preparing consolidated financial statements
1. Items relating to scope of consolidation(1) Consolidated subsidiaries

4 companies

The names of consolidated subsidiaries are Yamanashi Chuo Guarantee Co., Ltd., Yamanashi Chugin Lease Co., Ltd.,
Yamanashi Chugin DC Card Co., Ltd. and Yamanashi Chugin Management Consulting Co., Ltd.
(2) Number of non-consolidated subsidiaries

2 companies

Yamanashi New Business Support Investment Limited Partnership
Yamanashi Sixth Industrialization Support Investment Limited Partnership
Yamanashi Chugin Regional Revitalization Investment Limited Business Partnership
Non-consolidated subsidiaries are excluded from the scope of consolidation since their assets, ordinary income, and ourownership percentage of their net income and retained earnings does not have a material impact on our results ofoperations and financial condition.
Yamanashi Chugin Regional Revitalization Investment Limited Business Partnership was newly established in the
consolidated fiscal year under review.

2. Items relating to application of equity method(1) Non-consolidated subsidiaries that are applied to equity method
Not applicable(2) Affiliates that are applied to equity method
Not applicable(3) Number of non-consolidated subsidiaries not accounted for by the equity method

3 companies

Yamanashi New Business Support Investment Limited Partnership
Yamanashi Sixth Industrialization Support Investment Limited Partnership
Yamanashi Chugin Regional Revitalization Investment Limited Business Partnership
Non-consolidated subsidiaries not accounted for by the equity method are excluded from the scope of the equity method
since our ownership percentage of their net income and retained earnings do not have a material impact on our consolidated
financial statements.
Yamanashi Chugin Regional Revitalization Investment Limited Business Partnership was newly established in the
consolidated fiscal year under review.
(4) Affiliates that are not applied to equity method
Not applicable

3. Items relating to business years of consolidated subsidiaries
All of the consolidated subsidiaries have their settlement day on March 31.

4. Items relating to accounting standards(1) Valuation standards and methods for trading account securities
Trading securities, which are held for the purpose of earning capital gains, are reported at fair value and the related
unrealized gains and losses are included in earnings.
(2) Valuation standards and methods for securities
Held-to-maturity debt securities, which management has the positive intent and ability to hold to maturity are reported atamortized cost, and available-for-sale securities, which are not classified as either of the aforementioned securities, arereported at fair value with unrealized gains and losses, net of applicable taxes, reported in a separate component of equity.

21

THE YAMANASHI CHUO BANK 2016

21

Available-for-sale securities whose fair values are extremely difficult to be determined are stated at cost determined by themoving-average method. The cost of securities sold is determined based on the moving-average method.
(3) Valuation standards and methods for derivative transactions
Derivative transactions are measured at fair value.
(4) Methods of depreciation of fixed assets① Tangible fixed assets (excluding lease assets)
Depreciation of tangible fixed assets is calculated principally using the declining-balance method. Useful lives of tangible
fixed assets are primarily as follows:
Buildings

3 to 50 years

Other

2 to 20 years② Intangible fixed assets (excluding lease assets)
Amortization of intangible fixed assets is calculated principally using the straight-line method.
Software for internal use by the Bank and its subsidiaries is calculated over the useful life of the software (principally
five years).
③ Lease assets
Lease assets employed in leasing transactions that do not transfer ownership of the lease assets to the lessee – bothpremises and equipment and intangible fixed assets – are depreciated by the straight-line method over the lease period.
Residual value of those lease assets is zero unless any guaranteed amount is prescribed in the lease agreement.
(5) Allowance for possible loan losses
The allowance for possible loan losses is stated in amounts considered to be appropriate based on management’s
judgment and an assessment of future losses estimated through the Bank’s self assessment of the quality of all loans.
The Bank has a credit rating system and a self assessment system. These systems are used to assess the Bank’s asset
quality based on past experience of credit losses, possible credit losses, analysis of customers’ conditions, such as
business conditions, character and quality and the overall performance of the portfolio. For claims of debtors who haverestructured loans for which cash flows related to the recovery of loan principal or receipt of interest could be reasonably
estimated, an allowance for possible loan losses (based on the cash flow estimate method) is provided for the difference
between the present value of expected future cash flows discounted at the contracted interest rate and the carrying value ofthe claim. All loans are classified into one of five categories for self assessment purposes, “normal,” “caution,” “possible
bankruptcy,” “virtual bankruptcy” or “legal bankruptcy.”
The allowance for possible loan losses is calculated based on the actual past loss ratio for “normal” and “caution”
categories, and the fair value of the collateral for collateral-dependent loans and other factors, including the value of future
cash flows for other self assessment categories.
The policy for the allowance for possible loan losses of consolidated subsidiaries is similar to the Bank’s.
(6) Accrued bonuses to directors and corporate auditors
Accrued bonuses to directors and corporate auditors are provided in the amount of the estimated bonuses which are
attributable to each fiscal year.
(7) Reserve for directors’ and corporate auditors’ retirement benefits
A reserve for directors’ and corporate auditors’ retirement benefits is provided at the amount which would be required if all
directors and corporate auditors retired at the balance sheet date.
(8) Reserve for reimbursement of deposits
Provision is made for possible losses on future claims of withdrawal of deposits which were derecognized as liabilities undercertain conditions in an amount deemed necessary based on historical reimbursement experience.
(9) Reserve for contingent losses

22

THE YAMANASHI CHUO BANK 201622

Reserve for contingent losses, which is provided for possible losses from contingent events, is calculated by estimation of
the impact of those contingent events.
(10) Accounting procedures for retirement benefits
In calculating retirement benefit obligations, the Bank used the benefit formula as the method of attributing the estimatedretirement benefits to periods of service to the end of the consolidated fiscal year under review.
In addition, the method of recording expenses for past service costs and actuarial gains and losses are as follows.
Past service costs: Recognized in profit and loss using the straight-line method over a fixed period (10 years) within the
average remaining service period of employees at the time they occur.
Actuarial gains and losses: Recognized the amount equally divided by using the straight-line method over a fixed period(10 years) based on the average remaining service period in each consolidated fiscal year in which they occur and recorded
in profit and loss from each of the following year of the occurrence.
(11) Foreign currency items
Foreign currency assets and liabilities are translated into yen at the exchange rates prevailing at the balance sheet date.
(12) Lease transactions(Lessor)
Revenues and cost of revenues of finance lease transactions are recognized when lease payments are made.
(13) Cash and cash equivalents
For the purpose of reporting cash flows, cash and cash equivalents are defined as cash and due from the Bank of Japan.
(14) Consumption taxes
The accounting treatment of national consumption tax and local consumption tax is based on the tax exclusion method.
[Changes in accounting policies][Application of Accounting Standard for Business Combinations and Related Standards and Implementation Guidance]
Accounting Standard for Business Combinations (ASBJ Statement No. 21, September 13, 2013), Accounting Standard forConsolidated Financial Statements (ASBJ Statement No. 22, September 13, 2013), Accounting Standard for Business
Divestitures (ASBJ Statement No. 7, September 13, 2013) and related standards and implementation guidance have been
applied since the consolidated fiscal year under review. In line with this, the method of presentation has changed so thatdifferences due to fluctuations in the Bank’s equity in subsidiaries where it retains control is now recorded as capital surplus, andexpenses related to acquisitions are recorded as expenses in the fiscal year in which they occur. Furthermore, for businesscombinations executed on or after the start of the consolidated fiscal year under review, the method of presentation has changed
from revising the allocation amount of the acquisition cost based on the provisional accounting treatment to reflecting theacquisition cost in the financial statements for the fiscal year of the business combination date. Moreover, the presentation of net
income has been changed, and the presentation of minority interests has been changed to non-controlling interests. To reflect
these changes, the Bank has restated the consolidated financial statements for the previous fiscal year.
As a result, in the consolidated statements of cash flows for the fiscal year under review, cash flows pertaining to theacquisition or sale of shares in subsidiaries unaccompanied by change in the scope of consolidation were recorded under cash
flows from financing activities. Cash flows pertaining to expenses incurred in the acquisition of shares in subsidiaries
accompanied by change in the scope of consolidation, as well as cash flows pertaining to expenses incurred in the acquisition orsales of shares in subsidiaries unaccompanied by change in the scope of consolidation, were recorded under cash flows fromoperating activities.
With regard to the adoption of the Accounting Standard for Business Combinations and related standards and implementation
guidance, the Bank has adopted the Accounting Standard for Business Combinations from April 1, 2015, the beginning of theconsolidated fiscal year under review and onwards in accordance with the transitional treatment set forth in Article 58-2 (4) of the
Accounting Standard for Business Combinations, Article 44-5 (4) of the Accounting Standard for Consolidated Financial
Statements, and Article 57-4 (4) of the Accounting Standard for Business Divestitures.

23

THE YAMANASHI CHUO BANK 201623

There was no impact from the application of these standards on the consolidated financial statements in the fiscal year
under review.
[New accounting standards not yet applied]○ Revised Implementation Guidance on Recovery of Deferred Tax Assets (ASBJ Implementation Guidance No. 26, March 28,
2016)(1) Overview
The Revised Implementation Guidance on Recovery of Deferred Tax Assets basically retains the guidance on therecoverability of deferred tax assets set forth in JICPA Audit Committee Report No. 66, "The Auditing Treatment on
Determining the Recoverability of Deferred Tax Assets," with the exception of certain revisions.
(2) Scheduled adoption date
The Revised Implementation Guidance on Recovery of Deferred Tax Assets will be adopted effective April 1, 2016, from thestart of the fiscal year ending March 31, 2017.
(3) Impact of adopting revised accounting standards and implementation guidance
The effect of the Revised Implementation Guidance on Recovery of Deferred Tax Assets is currently being evaluated.

24

THE YAMANASHI CHUO BANK 201624

(Relating to Consolidated Balance Sheets)*1 Shares held or investments in non-consolidated subsidiaries and affiliates
As of March 31, 2016

(Millions of yen)

Investments¥651*2 The amounts of loans to customers in bankruptcy and past due loans included in loans and bills discounted were as follows:
As of March 31, 2016

(Millions of yen)

Loans to customers in bankruptcy¥2,622

Past due loans¥32,386

Loans to customers in bankruptcy represent nonaccrual loans to debtors who are legally bankrupt, as defined in Article 96,
Paragraph 1, Subparagraphs 3 and 4 of Enforcement Ordinance for the Corporation Tax Law. Past due loans are defined
as nonaccrual loans except for loans to customers in bankruptcy and loans of which the interest payments are deferred inorder to assist in the financial recovery of a debtor in financial difficulties.
*3 The amount of accruing loans contractually past due three months or more included in loans and bills discounted was asfollows:
As of March 31, 2016

(Millions of yen)

Past due loans of three months or more

¥20

Accruing loans contractually past due three months or more are loans on which the principal or interest is three months ormore past due.
*4 The amount of restructured loans for which the Bank has relaxed lending conditions included in loans and bills discounted was
as follows:
As of March 31, 2016
Restructured loans for which the Bank hasrelaxed lending conditions(Millions of yen)
¥4,036

Restructured loans are loans for which the Bank has relaxed lending conditions, such as: reduction of the original interest
rate, deferral of interest payment, extension of maturity date, or reduction of the amount of the debt or accrued interest.
*5 The total amount of loans to customers in bankruptcy, past due loans, accruing loans contractually past due three months ormore and restructured loans for which the Bank has relaxed lending conditions was as follows:
As of March 31, 2016
Total amount(Millions of yen)
¥39,065

The loan amounts identified in the preceding items (2) to (5) are before deducting any allowance for possible loan losses.
*6 Bills discounted are accounted for as financial transactions in accordance with JICPA Industry Audit Committee Report No. 24,
February 13, 2002, “Treatment for Accounting and Auditing of Application of Accounting Standard for Financial Instruments in
Banking Industry.” The Bank has the right to sell or pledge commercial bills discounted and foreign exchanges bought without
restrictions. The face amount was as follows:
As of March 31, 2016

(Millions of yen)
¥ 4,579*7 The amount of loan participation recorded in the consolidated balance sheet and included in participated principals that were
accounted for as loans to original debtors in accordance with JICPA Accounting System Committee Report No. 3, November
28, 2014, “Accounting Treatment and Representation of Loan Participation” was as follows:
As of March 31, 2016

(Millions of yen)
¥ ―25

THE YAMANASHI CHUO BANK 201625

*8 Assets pledged as collateral were as follows:
As of March 31, 2016

(Millions of yen)

Assets pledged as collateral
Investment securities¥316,401

Liabilities related to pledged assets
Deposits¥5,778

Payables under securities lendingtransactions¥83,469

Borrowed money¥20,024

In addition to the aforementioned, the following items were pledged as collateral for the settlement of foreign currency
exchange and other transactions:
As of March 31, 2016

(Millions of yen)

Investment securities¥71,769

Moreover, guarantee deposits included in other assets were as follows:
As of March 31, 2016

(Millions of yen)

Guarantee deposits¥262*9 Lease contract assets (the total sum of lease investment assets included in Other assets and interest receivables on lease
investment assets) for the remaining lease periods, which were pledged as collateral for a portion of borrowed money, wereas follows:
As of March 31, 2016

(Millions of yen)

Lease contract assets¥611

Corresponding borrowed money¥343*10 Commitment line contracts on overdrafts and loans are agreements to lend to customers when they apply for borrowing, up
to a prescribed amount, as long as there is no violation of any condition established in the contract. The amounts of unused
commitments as of March 31, 2016 were as follows:
As of March 31, 2016
Total amount of unused commitments as ofthe end of the period:
Amount of unused commitments whose
original contract terms were within one year
or unconditionally cancelable at any time

(Millions of yen)
¥377,362¥367,412

Since many of these commitments are expected to expire without being drawn upon, the total amount of unused
commitments does not necessarily represent actual future cash flow requirements. Many of these commitments haveclauses that allow the Bank to withdraw the commitment line offer or reduce the contract amounts in situations where
economic conditions are changed, the Bank needs to secure claims, or other conditions are triggered.
In addition, the Bank requires the customers to pledge collateral such as premises and securities and takes necessary
measures such as seizing the customers’ financial positions, revising contracts when the need arises and securing claims
after conclusion of the contracts.
*11 Accumulated depreciation of tangible fixed assets
As of March 31, 2016
Total amount of accumulated depreciation(Millions of yen)
¥33,327*12 Deferred gains on tangible fixed assets deductible for tax purposes:
As of March 31, 2016

(Millions of yen)

Deferred gains¥1,03726

THE YAMANASHI CHUO BANK 201626

*13 The amount of guarantee liabilities for private placement bonds in “Securities” (provided in accordance with the Financial
Instruments and Exchange Act, Article 2, Paragraph 3) was as follows:
As of March 31, 2016

(Millions of yen)
¥963

(Relating to Consolidated Statements of Income)*1 “Other ordinary income” includes the following item:
From April 1, 2015 to March 31, 2016

(Millions of yen)

Gain on sales stock¥5,565*2 “General and administrative expenses” include the following.:
From April 1, 2015 to March 31, 2016

(Millions of yen)

Salary allowance¥12,413

Depreciation and amortization

3,058*3 In the case of the following asset groups, book values were written down to the recoverable levels due to falling land prices
and lower net cash from operating activities, and differences have been recorded as impairment losses.
From April 1, 2015 to March 31, 2016

(Millions of yen)

Location

Use

Category

Total impairment loss

Yamanashi Prefecture

Idle assets

Land

¥2

Tokyo

Operating assets

Other tangible fixed
assets

53

Total

―

―

¥55

In this method of asset grouping, operating assets as a rule are treated as business premises units (however businesspremises groups that handle combined businesses are treated as Group units), and idle assets are treated as individual asset
units. Head Office, computing centers, company residences and dormitories, etc. are regarded as shared assets.
Recoverable amounts are whichever is the higher of net selling prices and value in use. In the case of net selling prices, thecalculation involves deduction of expected disposal expenses from the sum reasonably calculated by real estate asset valuation,etc. In the case of value in use, the calculation uses a 1.6% discount rate for future cash flow.
The calculation of recoverable amounts for the fiscal year ended March 31, 2015 employs a 1.6% discount rate in the case ofvalue in use.
All of the recoverable amounts for the fiscal year ended March 31, 2016 represent net selling prices.

27

THE YAMANASHI CHUO BANK 201627

(Relating to Consolidated Statements of Comprehensive Income)*1 Reclassification adjustment and tax effect related to comprehensive income
From April 1, 2015 to March 31, 2016

(Millions of yen)

Valuation difference on available-for-salesecurities:
Difference arising during the fiscal year

¥ (3,922)

Reclassification adjustment to profit and loss

(5,192)

Amount before income tax effect(9,115)

Income tax effect

4,219

Valuation difference on available-for-salesecurities:(4,896)

Remeasurements of defined benefit plans
Gains (losses) arising during the fiscal year

(6,689)Reclassification adjustment to profit and loss

73

Amount before income tax effect(6,616)

Income tax effect2,009

Remeasurements of defined benefit plans(4,606 )Total other comprehensive income¥ (9,503)(Relating to Consolidated Statements of Changes in Net Assets)
1 Items to kind and total number of shares outstanding and treasury stocks(Thousands of shares)
Number of shares atthe beginning of
FY2015

Number of shares
increased during
FY2015

Number of shares
decreased during
FY2015

179,915――

174,915

2,631

2,239

76

4,794

Number of shares atthe end of FY2015

Remarks

Shares outstanding
Common stock
Treasury stock
Common stock

Notes 1 Breakdown of increases in the number of shares during the consolidated fiscal year under review is as follows:
Increase by acquisition of treasury stock upon resolution of the board of directors
Increase by purchase claims of less than one unit

2,209 thousand
30 thousand

2 Breakdown of decrease in the number of shares during the consolidated fiscal year under review is as follows:
Decrease by exercise of stock option rights

76 thousand

28

THE YAMANASHI CHUO BANK 201628

Note 1,2

2 Matters concerning share subscription rights and own share options

Classification

Breakdown of
share
subscription
rightsThe Bank

Stock options as
share
subscription
rightsClass of shares tobe issued ortransferred upon
the exercise ofshare
subscription rights

Number of shares to be issued or transferred upon the exerciseof share subscription rights (shares)
FY2015
Beginning ofEnd of the
Increase
Decrease
FY2015FY2015

Total

Balance as ofthe end of the
FY2015(Millions of yen)

―

¥133

―

¥133

3 Items relating to dividends(1) Dividend paid during FY2015(Resolution)
Annual General
Meeting of
Shareholders on June24, 2015
Board of Directors’Meeting on
November 11, 2015

Total dividend

Dividends per share(Millions of yen)

(Yen)

Common stock¥ 646

Common stock

861

Type of stock

Reference date

Effective date

¥3.75

March 31, 2015

June 25, 2015

5.00

September 30, 2015

December 3, 2015

(2) Dividends whose reference date falls in the current fiscal year, but where the effective date of dividend occurs after the end of
FY2015.
(Resolution)

Type of stock

Total dividend(Millions of yen)Fund for dividend

Dividends per
share (Yen)

Reference date

Effective date

Annual General
Meeting of
Shareholders on
June 24, 2016

Common stock¥850

Retained earnings¥5.00

March 31, 2016

June 27, 2016

(Relating to Consolidated Statements of Cash Flows)*1 The reconciliation of the cash and due from banks in the consolidated balance sheets and the cash and cash equivalents at
March 31, 2016, is as follows:
Cash and due from banks¥ 109,493 million

Due from banks, excluding due from Bank of Japan(183) million

Cash and cash equivalents¥ 109,309 million(Relating to Lease Transactions)
Finance leases(Lessor)
1. Details of net investment in leases for the year ended March 31, 2016 are as follows:(Millions of yen)
Gross lease receivables¥ 7,606

Estimated residual value

34

Unearned interest income(646)

Net investment in leases¥ 6,995

29

THE YAMANASHI CHUO BANK 201629

2. Expected amounts from the collection of gross lease receivables for the year ended March 31, 2016 are as follows:(Millions of yen)
1 year or less¥ 2,429

1 to 2 years

1,942

2 to 3 years

1,428

3 to 4 years

960

4 to 5 years

487

Over 5 years357¥ 7,606

Total(Financial Instruments and Related Disclosure)
1. Qualitative Information of Financial Instruments(1) Policy for financial instruments
The Group is involved in financial services including the leasing and the credit card business, etc. around the banking
business. Within banking, we are involved in the business of taking deposits, making loans and securities trading, as well as
domestic and foreign exchange operations, corporate bond underwriting, the over-the-counter sale of public bonds such as
Japanese government bonds, investment trusts and insurance. In addition, for the purpose of short-term fund raising, we
enter into call loans and call money in the interbank market. In hedging foreign exchange risk and finance and using different
currencies, we enter into arrangements such as forward exchange contracts and currency swap transactions. However, we
do not conduct transactions whose structures are complicated and speculative transactions. Because we hold financial
assets and liabilities with interest rate risk, we conduct Asset Liability Management (ALM) to limit the disadvantageous
influence from fluctuations in interest.
(2) Nature and extent of risks arising from financial instruments
The financial assets that the Group holds are loans for domestic customers and domestic and foreign securities. Loans havecredit risk, brought about by the borrower’s nonperformance of contractual obligations. The contents of securities are mainly
bonds, stocks and investment trusts. The Group holds these securities for the purpose of holding to maturity, investment
available for sale and policy investment (business promotion). Securities have issuer’s credit risk, interest rate risk and market
price risk.
The Group regards the deposits from customers as its main supply of financial funds. The Group secures stable financing
by maintaining the soundness of financial affairs, but has liquidity risk that it may not be possible to obtain necessary funds
due to the outflow of unexpected funds.
As with other transactions, derivative transactions are subject to risks such as market, credit, and liquidity risks. Hedge
accounting is applied for derivative transactions that meet the requirements of hedge accounting based on internal standardsin accordance with JICPA Industry Audit Committee Report No. 25, July 29, 2002, “Treatment of Accounting and Auditing
concerning Accounting for Foreign Currency Transactions in the Banking Industry.”(3) Risk management systems for financial instruments① Credit risk management
The Group performs maintenance of the credit screening system, fosters talented human resources and positively advances
credit risk management. The credit screening system keeps the credit screening section independent and performs strict
screening in advance, performs interim screening and assesses credit enhancements and credit risk management after
lending. Regarding administration, the marketing section and credit screening section or the headquarters and businessoffices perform mutual check functions. The Group tries for the observance of the financing rule and appropriate use andthereby acts in enhancement of system support such as the practical use of the financing support system. Furthermore, for
coping with risk fluctuating continually, the Group monitors the actual condition of customers through credit rating and self

30

THE YAMANASHI CHUO BANK 201630

assessment to be performed regularly or at any time. The Group introduced “Credit risk information integration service” thatis a joint undertaking of the banks that joined the Regional Bank Association to attempt the upgrade of the credit risk
management and are aiming at refining measurement of value at risk (VaR).
We monitor credit information, current-prices and VaR and manage the credit risk of issuers of securities andcounterparty risk of derivative transactions in the risk management section.
The situation of these risk management activities is reported to management regularly in the ALM Committee and theboard of directors.
② Market risk management(A) Interest-rate risk management
The Group supports the needs of customers properly and, for the earning capacity improvement of the bank, conducts
interest rate risk management as a basic policy. We devised “the basic policy for the interest rate risk hedge” as a
general rule every half term to control interest rate risk properly in the ALM Committee in which management is involved
as the main members and involved in examining interest rate changes and reviews it regularly. In addition, in the ALM
committee meeting held monthly, the Group examines an interest rate predictive report that the interest rate prediction
committee produces and monitors the change in the interest rate risk amount of the whole bank account closely. In therisk management section, the Group calculates VaR and basis point value (BPV) and manages the interest rate risk
amount of the banking account. In addition, the Group performs stress tests based on a stress scenario extending toeach risk category. These results are reported to management regularly in the ALM Committee and the board of
directors.
(B) Foreign exchange risk management
The Group manages foreign exchange risk by monitoring exposure to foreign exchange and VaR in the risk management
section. Moreover, it reports regularly to management in the ALM committee and board of directors, etc. The majority offoreign exchange risk is hedged by forward exchange contracts.
(C) Market price risk management
Regarding investment in financial instruments including securities, the Group conducts risk management in conformity
with a basic administration policy. The basic administration policy is as follows. The Group executes the market businesswhile attempting to secure fairness and prompt correspondence. The Group takes the opportunity for earnings byactively taking risks that can be measured and managed. The proof of maximizing management vitality, like earnings andequity capital, are assumed to be a precondition. The operative plans are decided by the board of managing directors
after discussion with the ALM Committee.
In making the plans, the Group examines the expected rate of return based on the prospect of interest rate and stock
prices, market price risk and return in consideration of the correlation between the financial instruments invested in. The
Group measures market price risks such as stock price risk using the VaR method. The ALM Committee monitors VaR
based on risk limits and the results of stress tests and tries for coexistence of securing of financial soundness andearning profit.
(D) Derivative transactions
For derivative transactions, the aim is for maintenance of strong management so as not to exert a negative influence on
profit and loss, and the Group tries to set position limits and operate loss-cut rules strictly based on the risk management
standard. Moreover, the Group reports regularly to management in the ALM committee and the board of directors, etc.
(E) Quantitative information regarding market risk
In principle, the Group undertakes a quantitative analysis of the market risks applicable to all of its financial instruments.
The volume of market risk is mainly managed utilizing the VaR method. In specific terms, market risks are managed in amanner that ensures that VaR (the amount of risk after writing down investment in shares undertaken for strategic
business purposes for a portion of VaR) does not exceed the maximum amount of risk (amount of capital allocation)
determined by a resolution of the Board of Directors or other appropriate bodies. The variance-covariance method(holdings period: 240 days; confidence interval: 99%; observation period: 240 business days) is used to measure VaR

31

THE YAMANASHI CHUO BANK 201631

(excluding trading securities) while taking into consideration the correlation among interest rates for shares andinvestment trusts. In addition, with respect to the yen-denominated interest risk applicable to demand deposits, internal
models are used to estimate core deposits and VaR used as the means for measurement. Trading securities VaR ismeasured using the separate holding period of 10 days. Financial instruments including shares of non-listed companies,
where fair values are deemed as being extremely difficult to ascertain, are managed on a credit risk basis. Taking into
consideration the nominal amount of market risk applicable to the financial instruments held by consolidated subsidiaries,
these financial instruments are excluded from the scope of VaR measurement.
The Group’s VaR (excluding trading securities) amounted to ¥62,133 million as of March 31, 2016 compared with
¥54,162 million as of the end of the previous fiscal year. There was no VaR of trading securities. (There was no VaR oftrading securities in the previous fiscal year). The Group undertakes backtesting to compare VaR, calculated using VaR
measurement models, with actual income and loss. The results of this comparison are reported to the ALM Committee ona monthly basis. As a result of this backtesting, the Group is confident that the VaR measurement models used are morethan adequate in accurately identifying market risks. However, VaR represents the amount of market risks arising with acertain probability using a statistical methodology based on historical market volatilities. Accordingly, situations may arise
where it is not possible to identify risks appropriately due to market environment volatility that exceeds normallyrecognized parameters.
③ Liquidity risk management
The Group controls liquidity risk by managing the mismatch between the terms of investing and procuring funds as well as
holding highly liquid assets. Financing risk is limited by holding assets with high liquidity as payment reserves forunexpected capital outflows, and a smooth financing resource is secured. Moreover, the Group reports regularly to
management in the risk management committee and the board of directors, etc.
(4) Supplementary explanation of the fair value financial instruments
The fair value of financial instruments includes, in addition to the value based on the market price, the value reasonably
calculated if no market prices are available. Certain assumptions are used in the calculation of such amounts. Accordingly,
the results of such calculations may vary if different assumptions are used.

32

THE YAMANASHI CHUO BANK 201632

2. Fair Values of Financial Instruments
Fair value and carrying amounts of financial instruments are shown below. Some instruments, such as unlisted stocks, whose fairvalues are extremely difficult to determine, are not included in the table below (see Note 2).
(Millions of yen)
Carrying amount

Fair value

Difference(1) Cash and due from banks¥109,493¥109,493¥―(2) Call loans and bills bought

41,22941,229

―

963

969

5

1,515,879

1,515,879―

1,499,188

1,513,430

14,241

Total¥3,166,755¥3,181,002¥14,246(1) Deposits¥2,719,829

2,722,408

290

122,432

122,438

5

83,46983,469―¥2,928,019¥2,928,315

¥295

9,661

9,661

―

―

―

―

¥9,661¥9,661¥―(3) Securities
Held-to-maturity
Available-for-sale securities

1,514,537(4) Loans and bills discounted
Accrued income (Interest on loans)

664

Deferred income (Interest on loans and guarantee
charge) (*1)(829)
(15,184)

Reserve for possible loan losses (*2)

2,288

Accrued expenses (Interest on deposits)

2,722,117
122,418(2) Negotiable certificates of deposits

13

Accrued expenses (Interest on NCDs)(3) Payables under securities lending transactions
Total
Derivatives (*3)
Hedge accounting is not applied
Hedge accounting is applied
Total*1. Represents deferred interest received on loans and deferred guarantee fees received from a consolidated subsidiary performing guarantees
on the Bank’s loans to customers.
*2. General reserve for possible loan losses and specific reserve for possible loan losses provided to “Loans and bills discounted” are separately
presented in the above table.
*3. Derivative transactions recorded in “Other assets” and “Other liabilities” are aggregated and shown herein. Assets and liabilities attributable tothe derivative transactions are totally offset and the net liability position as a consequence of offsetting would be represented with brackets.

(Note 1) Method Used for Determining the Fair Value of Financial Instruments
Assets(1) Cash and due from banks
For due from banks without maturity, fair value is the value closest to acquisition cost or amortized cost method value. For
due from banks with maturity, the contract period is short (less than one year) and fair value is the value closest toacquisition cost or amortized cost method value.
(2) Call loans and bills bought

33

THE YAMANASHI CHUO BANK 201633

The fair values of fixed-rate loans and bills discounted whose terms are short (within one year) approximate theiracquisition cost or depreciable cost, and the fair values are therefore deemed equal to these values.
(3) Securities
The fair values of stocks are determined by reference to quoted market prices on stock exchanges. The fair values ofbonds are determined by reference to quoted market prices or prices offered by correspondent financial institutions. The
prices of the Bank’s guaranteed private placement bonds are calculated by discounting the estimated future cash flows foreach classification based on the issuers’ internal rating and terms by using the risk-free interest rates plus credit cost rates
and expense rates. Investment trusts are determined by reference to their publicly available net asset value.
Information outlining notes for investment securities according to the purpose for which they are held is contained under“Relating to securities.”(4) Loans and bills discounted
As floating-rate loans and bills discounted reflect market interest rates over short periods, unless the credit standing of theborrower is significantly different after the loan was made or the bill was drawn, the fair value approximates the carrying
value. The fair value is therefore deemed equal to the carrying value.
The fair values of fixed-rate loans and bills discounted are their present values that are estimated for each classification
based on their type, internal rating, status of collateral and guarantee, and terms, and by discounting the future cash flowsof the principal and interest using the rates at which similar new loans would be made or market interest rates plus credit
cost rates in accordance with internal ratings and expense rates. The fair values of fixed-rate loans and bills discounted
whose terms are short (within one year) approximating their carrying values and are therefore deemed equal to thecarrying values.
Losses from loans to borrowers in legal bankruptcy, in virtual bankruptcy and in possible bankruptcy are computed
based on estimated recoverable amounts. Thus, the fair values of those loans approximate the consolidated balance sheet
amounts at the closing date minus the currently estimated losses and are therefore deemed equal to the amounts.
The fair values of loans and bills discounted for which repayment terms are not set because of their attributes (e.g.
loans are limited to the amounts of pledged assets) are assumed to approximate their carrying values, considering the
expected repayment periods and interest rate conditions, and are deemed equal to the carrying values.
Liabilities(1) Deposits and (2) Negotiable certificates of deposits
The fair values of demand deposits are deemed equal to the amounts that would be paid (carrying values) if the payments
were demanded at the balance sheet date. The fair values of time deposits and negotiable certificates of deposit, which areclassified in accordance with their periods, are their present values that are estimated by discounting the future cash flows
using the rates that would be offered for new deposits to be received.
The fair values of deposits and negotiable certificates of deposit with short deposit terms (within one year) or withvariable interest rates approximate their carrying values and are deemed equal to their carrying values.
Derivatives
Derivative transactions are listed under “Relating to derivative transactions.”

34

THE YAMANASHI CHUO BANK 201634

(Note 2) Financial instruments, whose fair values are extremely difficult to be determined, are recorded on the
consolidated balance sheet are as follows: The following instruments are not included in ‘Assets (3) Securities’in the above table showing the fair values of financial instruments as of March 31, 2016.
(Millions of yen)
Carrying amountUnlisted equity securities (*1) (*2)¥548

Contributions to unions (*1) (*3)

651

Total

¥1,200*1. They are excluded from disclosure because they do not have a market price and their fair values are extremely difficult to determine.
*2. Classified as available-for-sale securities; in the previous consolidated fiscal year, no impairment loss was recognized.
Classified as available-for-sale securities; in the consolidated fiscal year under review, an impairment loss of ¥3 million was recognized.
*3. Investment in non-consolidated subsidiaries.

(Note 3) Maturity analysis for monetary claims and securities with contractual maturities(Millions of yen)
1 year or lessOver 1 year less
3 years

Over 3 years less
5 years

Over 5 years less
7 years

Over 7 years less10 years

Over 10 years

Due from banks¥81,783

¥―

¥―

¥―

¥―

¥―

Call loans and bills
bought41,229

―

―

―

―

―

Securities

255,180

176,653

93,422286,831

165,925

123,894

248

689

26

―

―

―

Held-to-maturity

248

689

26

―

―

―

Available-for-salesecurities that havematurities
Japanesegovernment bonds

254,931

175,963

93,396

286,831

165,925

123,894

177,300

64,20013,000133,800

66,000116,400

Municipal bonds

37,511

81,922

34,03437,64028,664

7,494

Corporate bonds

38,42920,826

8,275

7,331

13,231―Others

1,690

9,014

38,085108,060

58,030―Loans and bills
discounted (*)

355,493

287,898

250,630

127,000

144,451

204,797

Total¥733,687¥464,551¥344,053¥413,831¥310,377¥328,692

Corporate bonds* Of loans and bills discounted, the portion whose timing of collection is unforeseeable, such as loans to borrowers in legal bankruptcy, in virtual
bankruptcy and in possible bankruptcy, amounting to ¥35,008 million, is not included in the above table. Loans that do not have contractual
maturities, amounting to ¥109,072 million are not included either.

35

THE YAMANASHI CHUO BANK 2016

35

(Note 4) Maturity analysis for interest-bearing debt
(Millions of yen)Over 1 year less
3 years

Over 3 years less
5 years

Over 5 years less
7 years

Over 7 years less10 years

Over 10 years¥2,414,470¥192,127¥29,679

¥―

¥―

¥―

122,418

―

―

―

―

―

83,469

―

―

―

―

―

¥2,620,359¥192,127¥29,679

¥―

¥―

¥―

1 year or less
Deposits (*)
Negotiablecertificates ofdeposits
Payables under
securities lendingtransactions
Total* Non-interest-bearing deposits such as checking accounts are excluded. Demand deposits are included in “1 year or less.”(Relating to securities)
1. Trading securities(Millions of yen)
Unrealized gains/losses recognized as income
Trading securities―

2. Held-to-maturity debt securities(Millions of yen)
Carrying amount

Fair value

Differences

Fair value exceeded carrying amount:

Corporate bonds

¥ 963

¥969

¥5

Fair value not exceeded carrying amount:

Corporate bonds

―

―

―

¥963

¥969

¥5

Total

36

THE YAMANASHI CHUO BANK 201636

3. Available-for-sale securities(Millions of yen)
Fair value

Cost

Japanese stocks¥64,301¥30,883

33,417

Bonds total

936,343898,388

37,954

Japanese Government bonds

621,879

592,400

29,479Japanese municipal bonds

224,415

217,9886,427Japanese corporate bonds

90,04888,0002,047

423,967

403,177

20,7901,424,612

1,332,449

92,162

Japanese stocks

4,450

4,979

(529)

Bonds total

9,558

9,641

(82)

―

―

―

Japanese municipal bonds

9,289

9,372

(82)

Japanese corporate bonds

268

269

(0)

Other securities

77,257

78,212(955)

Sub-total

91,266

92,834(1,567)¥1,515,879¥1,425,284¥90,594

Fair value exceeded
cost:

Other securities
Sub-total

Japanese Government bonds
Fair value notexceeded cost:

Valuation differences

Total

Note: Unlisted stocks that have a fair value and cost of ¥548 million, respectively, are excluded from the table above since there are no market
prices and their fair values are extremely difficult to be determined.

4. Held-to-maturity debt securities sold(Millions of yen)Type

Sales costs

Japanese corporate bonds

Sales proceeds

Gains on sales

¥3

¥5

¥1

The above securities were sold due to redemption by the issuer.

5. Available-for-sale securities sold(Millions of yen)Type

Sales costs

Gross realized gains

Gross realized losses

Japanese stocks¥10,529¥2,072¥321

Bonds total

60,698861

332Japanese Government bonds

46,794807

332

Japanese municipal bonds

13,904

53―

Japanese corporate bonds

―

―

―

Other securities

21,765

4,076

597

Total

¥92,993¥7,011¥1,25237

THE YAMANASHI CHUO BANK 201637

6. Securities recognized for revaluation loss
Among securities other than securities for trading purposes (except securities for which the fair value is extremely difficult toascertain), for securities that are not recognized as having prospects of recovery after their fair value fell sharply comparedwith the acquisition costs, fair value is recognized in the consolidated balance sheets, and valuation difference is treated as
an impairment loss (“revaluation loss”) in the consolidated year under review.
A revaluation loss of ¥76 million (all of which was from stocks) was recognized in the previous consolidated fiscal year.
No revaluation loss was recognized during the consolidated fiscal year under review.
The impairment accounting standards applied in cases where fair value is judged to have fallen significantly are as follows:(1) Across-the-board impairment losses shall be booked for securities whose fair values as of the consolidated balance
decline by 50% or more compared with their acquisition costs.
(2) Impairment losses shall be booked for securities whose fair values decline by 30% or more, but less than 50% where it isdeemed that there is little likelihood of a recovery in value after taking into consideration fair value levels over the pastyear.
(3) Impairment losses shall be booked for securities whose fair values decline by less than 30% as and when deemednecessary after taking into consideration the financial standing and related factors of the issuer.

(Relating to Net Unrealized Gains/Losses on Available-for-Sale Securities)
Available-for-sale securities were valued at market and net unrealized gains/losses on valuation were as follows:(Millions of yen)Amounts
Valuation difference¥90,594

Other securities

90,594

Deferred tax liabilities

27,435Net unrealized gains (before non-controlling interests)

63,1597

Non-controlling interests¥63,152

Net unrealized gains on available-for-sale securities

38

THE YAMANASHI CHUO BANK 201638

(Relating to Derivative Transactions)
1 Derivative Instruments not accounted for as hedges
Regarding the derivative instruments which are not accounted for as hedge transactions, Contract Amount or Notional Amount,
Fair Value and Unrealized Gain or Loss for each type of derivative transactions, respectively, at the end of the consolidatedbalance sheet date, and Determination of fair value are as follows. Contract or Notional Amounts do not show market risk ofderivative instruments.
(1) Interest-related derivative instruments
Not applicable(2) Currency-related derivative instruments(Millions of yen)Contract Amount or
Notional AmountCurrency swaps

Over 1 Year

Fair Value

Unrealized Gain/Loss¥11,252

11,252

¥(8)

¥(8)

Sold

171,905

―

9,722

9,722

Buy

1,239

―

(53)

(53)

Total

―

―

¥9,661¥9,661

Forward Rate Agreements
OTC(Notes)1 Derivative instruments are revalued to fair value. Changes in fair value are included in the consolidated statement of operations.
2 Determination of fair value:
Fair value is determined based on the discounted net present value model.

(3) Stock-related derivative instruments
Not applicable(4) Bond-related derivative instruments
Not applicable(5) Commodity-related derivative instruments
Not applicable(6) Credit derivative transactions
Not applicable
2 Derivative Instruments accounted for as hedges
Not applicable

39

THE YAMANASHI CHUO BANK 2016

39

(Relating to Employees’ Retirement Benefits)
1. Outline of employees’ retirement benefits
To provide for employees’ retirement benefits, the Bank has a funded defined benefit pension plan. The defined-benefit
corporate pension plan (funded plan) pays a lump sum or a pension based on employee compensation and length of service.
The defined benefit corporate pension plan has within it a retirement benefit trust.
The lump-sum retirement plan (an unfunded plan, but as a result of the establishment of the retirement benefit trust, it has
become a funded plan) pays a lump sum based on employee compensation and length of service.
2. Funded defined benefit pension plan
(1) Reconciliation of retirement benefits obligations at beginning of year and end of year
(Millions of yen)
Retirement benefit obligations at beginning of year

26,590

Cumulative effect of changes in accounting policies―

Balance at beginning of year reflecting changes in accounting policies

26,590Service cost

877

Interest cost

354

Actuarial gains and losses

4,313

Retirement benefits payment(1,158)

Past service cost

―

Other

―

Retirement benefits obligations at end of year

30,976(2) Reconciliation of pension assets at beginning of year and end of year
(Millions of yen)
Pension assets at beginning of year

28,204

Expected return on plan assets

880

Actuarial gains and losses(2,375)

Employer's contribution

811

Retirement benefits payment

(697)

Other

―

Pension assets at end of year

26,82440

THE YAMANASHI CHUO BANK 201640

(3) Reconciliation of retirement benefits obligations and pension assets at end of year and liabilities and assets of retirement
benefits recorded in the consolidated balance sheets(Millions of yen)
Retirement benefits obligations of funded plan

30,976

Pension assets(26,824)
4,152

Retirement benefits obligations of unfunded plans―

Assets and liabilities recorded in consolidated balance sheets, net

4,152(Millions of yen)
Liability of retirement benefits

4,152

Assets of retirement benefits―

Liabilities and assets recorded in the consolidated balance sheets, net

4,152(4) Breakdown of retirement benefit costs(Millions of yen)
Service cost

877

Interest cost

354

Expected return on plan assets(880)

Actuarial gains and losses recorded in expenses

118

Past service costs recorded in expenses

(45)

Other

―

Retirement benefit costs of defined benefit plan

424(5) Remeasurements of defined benefit plans
Breakdown of items (before tax-related effects) recorded in remeasurements of defined benefit plans are as follows:(Millions of yen)
Past service costs

45

Actuarial gains and losses

6,570

Other

―

Retirement benefit costs of defined benefit plan

6,616

41
THE YAMANASHI CHUO BANK 201641

(6) Accumulated adjustment for retirement benefits
The breakdown of items (before the deduction of tax effects) recorded in accumulated adjustment for retirement benefits is
as follows:(Millions of yen)
Unrecognized past service costs(64)

Unrecognized actuarial gains and losses

7,062

Other

―

Retirement benefit costs of defined benefit plan

6,998

(7) Pension assets
1. The percentage of each main category for total pension assets is as follows:
Stocks

35％

Bonds

49％

Life insurance general account

10％

Other

6％

Total

100％

Note: Included in total pension assets is 11% (compared with 14% in the previous fiscal year) for retirement benefit trusts
established in the corporate pension plan, and 30% (compared with 31% in the previous fiscal year) for retirement benefit
trusts established in the lump-sum retirement plan.

2. Method for calculating the long-term expected rate of return on plan assets
To determine the long-term expected rate of return on plan assets, the Bank considers the current and projected pension
assets allocations, as well as the current and expected long-term rate of return for the various assets that make up thepension assets.
(8) Basis for calculating actuarial calculations
Basis for calculating main actuarial calculations (weighted average)
Discount rate

0.4%

Long-term expected rate of return on plan assets

3.2%

Rate of salary increase
Defined-benefit corporate pension plan

3.6%

Lump-sum retirement plan

3.5%

42

THE YAMANASHI CHUO BANK 201642

(Stock options and other related information)
1. Accounting line item and the amount of stock options charged as expenses(Millions of yen)
Consolidated FY2015(From April 1, 2015 to March 31, 2016)
General and administrative expenses¥35

2. Description of stock options / Changes in the size of stock options(1) Description of stock options
2015 Stock Options
Category and number of people to whom stock options are granted

The Bank’s directors (excluding outside directors): 12

Type and number of shares granted as stock options

Common stock: 67,200 shares

Date on which stock options were granted

July 29, 2015

Vesting terms and conditions

Vesting terms and conditions have not been prescribed

Vesting period

Vesting period has not been prescribed

Exercise period

July30, 2015 to July 29, 2045

Note: The number of stock options is presented after converting to the number of shares.

(2) Changes in the size of stock options
The following describes changes in the size of stock options that existed during the fiscal year ended March 31, 2016. The
number of stock options is converted into the number of shares.
①

Number of stock options
2015 Stock Options

Stock options which are not yet vested (shares):
As of March 31, 2015―

Granted67,200Forfeited―

Vested67,200

Balance of stock options not vested―

Stock options which have already been vested (shares):
As of March 31, 2014―

Vested67,200Exercised―

Forfeited―

Balance of stock options not exercised②

67,200Per share price information
2015 Stock Options

Exercise price (Yen)1

Average price per share upon exercise (Yen)―Fair value per share at the grant date (Yen)

535

43

THE YAMANASHI CHUO BANK 201643

3. Method for estimating the per share fair value of stock options
During the fiscal year ended March 31, 2016, the fair value per share with respect to 2015 stock options was estimated asfollows:(1) Evaluation technique used to estimate the fair value per share: Black-Scholes method(2) Main numerical and estimation methods
2015 Stock Options
Stock price volatility (Note 1)

30.4％

Projected residual period (Note 2)

34 months

Projected cash dividends (Note 3)¥7.00/share

Risk-free interest rate (Note 4)

0.01％

Notes:
1. Stock price volatility is calculated based on the stock price performance for the period (weekly from the week of August 27, 2013 to theweek of July 20, 2015) that corresponds to the projected residual period.
2. The projected residual period is estimated based on the average period in office of directors (excluding outside directors) who have retiredin the past.
3. Projected cash dividends are based on cash dividend results for the fiscal year ended March 31, 2015.
4. The risk-free interest rate is the yield on government bonds for the period that corresponds to the projected residual period.

4. Estimation method for the number of stock options vested
Because it is difficult to reasonably estimate the number of stock options that will be forfeited in the future, the number of stock
options that has actually been forfeited is solely reflected for the stock options that have already been vested.

(Relating to tax effect accounts)
1. The tax effects of significant temporary differences and tax loss carry-forwards which resulted in deferred tax assets andliabilities are as follows:(Millions of yen)
Consolidated FY2015(From April 1, 2015 to March 31, 2016)
Deferred tax assets:
Net defined benefit liability¥4,737

Allowance for possible loan losses

4,391

Losses on investment securities

1,527
727

Depreciation
Other

2,456

Sub-total

13,840

Valuation allowance(5,146)

Total deferred tax assets

8,693

Deferred tax liabilities:(27,435)

Unrealized gains on available-for-sale securities

(832)

Other
Total deferred tax liabilities(28,267)

Net deferred tax assets (figures in parentheses represent liabilities)(19,573)44

THE YAMANASHI CHUO BANK 201644

2. A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in the accompanying
consolidated statements of income is as follows:
Consolidated FY2015(From April 1, 2015 to March 31, 2016)
Normal effective statutory tax rate

32.8％

Valuation allowance(4.6)％

Income not taxable for income tax purposes(1.1)％

Expenses not deductible for income tax purposes

0.3％

Reduction in fiscal year-end deferred tax assets due to tax rate changes

2.0％

Other—net

0.5％

Actual effective tax rate

29.9％

3. Revision of amount of deferred tax assets and deferred tax liabilities due to change in corporate income tax rate
The “Act for Partial Revision of the Income Tax Act, etc.” (2016, Law No. 15) and the “Act for Partial Revision of the Local Tax
Act, etc.” (2016, Law No. 13) were established by the National Diet of Japan on March 29, 2016 and the corporate income tax
rate was lowered from consolidated fiscal years starting on or after April 1, 2016. Accordingly, the statutory effective tax rateused in calculating deferred tax assets and deferred tax liabilities will be lowered from the previous 32.1% to 30.7% for
temporary differences which are expected to be dissolved in the consolidated fiscal years starting April 1, 2016 and April 1,
2017, and will be lowered further to 30.5% for temporary differences which are expected to be dissolved in the consolidated
fiscal years starting on or after April 1, 2018. Due to the change in the tax rate, deferred tax assets decreased ¥425 million,
deferred tax liabilities decreased ¥1,484 million, unrealized gains on available-for-sale securities increased ¥1,440 million,
remeasurements of defined benefit plans decreased ¥112 million and income taxes deferred increased ¥270 million.

(Segment information by type of business)【Segment information】
Segment Information is not shown in these statements, since the banking business is the only reportable segment.
【Related information】
1 Information for service segment(Millions of yen)
Loans
Ordinary income from
customers

Securities investment¥18,961

Other¥24,837

Total¥11,920(Note) Instead of the net sales of a non-financial company, ordinary income in gross is indicated.

2 Information for geographic areas
Not disclosed.
3 Information about major customers
Not disclosed.
【Information about impairment loss of fixed assets in segment】
Not disclosed.
【Information about the amortization of goodwill and unamortized balance by reportable segment】
Not applicable.
【Information about the gain recognized on negative goodwill by reportable segment】

45

THE YAMANASHI CHUO BANK 2016

45

¥55,718

Not applicable.
【Related-Party Transactions】
1. Related-party transactions involving directors, corporate auditors and major stockholders (individuals only) of the Bank.
(Millions of yen)
Relationship

Statutory
auditorDirector’s
consortName

Address

Toshihito
FuruyaMayumi
Nagasaka

Votingrights [%]Details of
businessrelationship

Corporate
auditor of theBank,simultaneously
serving as legal
advisor

0.01

Lending
Compensation
for legal
advisory
services―

Director’s consortof the Bank―

Lending

3

Real estatebusiness―

Lending

Paid-in
capitalPosition―――

Company,
etc.
controlled by
an officer or
Fuefuki City,
his/her
Yotsubakai
Yamanashi
relatives
LLC
Prefecture
throughmajority
ownership ofvoting rights

Transactions

Transaction Accounting Year-end
amountnamebalanceLending
Interest
incomeLegaladvisoryfee paid
Lending

―

Loans

114

3

―

―

3

―

―

―

Loans

32

Interest
income0――

Lending

―

Loans

162

Interest
income4――Note: The conditions as applied to general parties with which the Bank enters into transactions are applied.

(Per Share Information)(Yen)
Consolidated FY2015(From April 1, 2015 to March 31, 2016)
Net assets per share¥1,370.62

Net income per share

54.91

Diluted net income per share

54.81

Note1: The basis for calculating net income per share and diluted net income per share is presented as follows.
(Millions of yen)
Consolidated FY2015(From April 1, 2015 to March 31, 2016)
Net income per share
Net income¥9,452

Net income attribute to common stock¥9,452Average balance of common stock (thousands)

172,119

Diluted net income per share
Increase in the number of common stock (thousands)

333

New share subscription rights (thousands)

333(Important subsequent events)
Not applicable.

46

THE YAMANASHI CHUO BANK 201646

Corporate Data(as of March 31, 2016)

Common Stock: ¥15,400 million

Breakdown of Stockholders

Number of Shares :	Authorized 398,000,000 shares
Issued		
174,915,000 shares

Financial institutions 70,787
Securities companies
907
Other corporations
31,198Foreigners
23,769Individuals and others 47,113

Total

174,915

Number of
Stockholders: 5,588

Stock Listing: First Section of the Tokyo Stock Exchange

Transfer Agent: Mitsubishi UFJ Trust & Banking Corporation

shares40.74%
0.52%
17.95%
13.68%
27.11%*Shares (1 trading unit: 1,000 shares)
Note: The category “Individuals and others” contains treasury
stock of 2,631 trading units of shares.

Major Stockholders
Name

Number of shares held
(thousands)

Percentage of
all shares issued (%)

10,680
6,169
6,047
5,680
3,421
3,000
3,000
2,977
2,657
2,502
46,134

6.10
3.52
3.45
3.24
1.95
1.71
1.71
1.70
1.51
1.43
26.37

Japan Trustee Services Bank, Ltd. (Trustee Account)
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Meiji Yasuda Life Insurance Company
The Yamanashi Chuo Bank, Ltd. Employees’ Stockholdings
CBNY DFA INTL SMALL CAP VALUE PORTFOLIO
Tokio Marine & Nichido Fire Insurance Co., Ltd.
Fukoku Mutual Life Insurance Company
Teikyo University
FUJI KYUKO CO., LTD.
The Master Trust Bank of Japan, Ltd. (Trustee Account)
Total

Yamanashi Chuo Bank’s Share Price and Trading Volume on the Tokyo Stock Exchange
2,000
1,500

Tokyo Stock Price Index (TOPIX)

1,000
500

9,000
6,000

700
600
500
400
300
200

Yamanashi Chuo Bank’s share price (yen)Trading volume (thousands)

3,000
0

Apr.
2014

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.
2015

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.
2016

Feb.

Mar.

Consolidated Subsidiaries
Tokyo Stock
Price Index (TOPIX)
Name

1162.44
Yamanashi Chuo Guarantee
Co., Ltd.
1201.41
Yamanashi Chugin Lease Co.,Ltd.
1262.56
Yamanashi Chugin DC Card
Co., Ltd.
1289.42
1277.97Consulting Co., Ltd.
Yamanashi Chugin Management
1326.29
1333.641410.34
1407.511415.071523.85

Chuo(yen)
Yamanashi
share price
Capital Chuo Bank’sYamanashi
Bank’s share (%)(Millions of yen)

443
449
480
464
464
481
499
495
488
THE YAMANASHI CHUO BANK 201647 472
549

20
20
20
200

99.8
61.0
67.5
87.5

Trading volume (thousands)

Lines of business

3701
Loan guarantees
1763
Leasing2405
Credit cards 2603
1759
Consulting, economic
research
2434
3326
2712
2857
2396
3562

Board of Directors and Corporate Auditors(as of July 1, 2016)

ChairmanManaging Directors

Directors

Standing Corporate Auditors

Toshihisa Ashizawa

Tadashi Kato
Kimihisa Tanabe
Tatsuyuki Miyake

Fumiaki Asakawa
Takeshi Nakajima
Kazuhiko Kitta
Hisanobu Yoshizawa
Hirohiko Yanada
Kimihiro Asai
Yukio Osada
Michio Masukawa
Riyo Kano

Masaki Saito
Akira Omata
Corporate Auditors
Magozaemon Takano
Toshihito Furuya
Koichiro Horiuchi

President

Nakaba Shindo
Senior Managing Director

Mitsuyoshi Seki

Organization(as of July 1, 2016)

Annual General Meeting of Shareholders
Corporate Planning
Board of Directors

Chairman

Personnel Division
Planning and
Administration

Corporate
Administration

Management Control Division
General Affairs Division

President
Deputy President
Senior Managing Director

Credit Screening

Credit Screening Division

Financial Markets

Financial Market Division
Business Promotion Division

Managing Directors
Business Planningand Control
Department

Directors
Non-Standing Director

Corporate Planning DivisionMarketing(in charge of International Division)

Corporate Sales Promotion Division
Retail Sales Promotion Division
Operation Administration Division

Operations

Systems Administration Division

Board of Corporate Auditors
Central Operations Division
Standing Corporate Auditors
Corporate Auditors

Secretariat

Office of Corporate Auditors

Tokyo Liaison Office
Auditing Division

Auditing

Branches
THE YAMANASHI CHUO BANK 201648

Internal Control and Risk Management
Enhancing corporate governanceto the prosperity of the regional community and the developmentof its economy.
To this end, the Bank has built a stronger internal control system

Guided by its social responsibility as a banking institution and its
public-service mission in that role, Yamanashi Chuo Bank aims

and organizational structure, along with working to enhance cor-to secure the trust of various stakeholders, including customers,

porate governance, notably by maintaining high ethical standards

shareholders, employees and the community it serves, by suchamong all executives and employees, and ensuring the activemeans as maintaining the Group’s sound management and assur-

disclosure of corporate activities.

ing transparency of management, in conjunction with contributing

The structure of the internal control system
General Meeting of Stockholders
Board of Corporate Auditors

Board of Directors
ChairmanStanding Corporate Auditors

President

Non-Standing Director

Deputy President

Corporate Auditors

Senior Managing Director

Office of Corporate Auditors

Board of Managing Directors

Managing Directors
Directors

Independent Auditors
Auditing Division

Compliance Committee Risk Management Committee
Head Office Divisions
All Branches

Group Companies

Risk management

range of social rules, including social norms (ethics) and business

The operating environment for financial institutions is changing

community as a corporate citizen. In other words, complianceconstantly, and banks consequently face a diversifying array ofentails adapting adroitly to changes in society as we strive toincreasingly complex risks. To secure a steady earnings stream into

ensure the protection of customer rights and the enhancement of

the future, it is therefore essential for the Bank to accurately ascer-convenience.

ethics, to meet the demands and expectations of the broader

tain the monetary value of the various risks involved in the conduct

At the Yamanashi Chuo Bank, we assign a high managementof its banking operations, and then to continuously monitor andpriority to compliance. To maintain and reinforce the relationshipmanage those risks.

of trust we enjoy with our customers, we have set up a compliancemanagement system headed by the Compliance Committee, andThe risks to which the Bank is exposed are broadly categorized
for management purposes as credit risk, market risk, liquidity

we work constantly to further strengthen our compliance stance.

risk and operational risk. To ensure integrated risk appraisal andTo supervise and monitor compliance-related matters at all theanalysis, the Bank’s ALM committee and the Risk Management

Bank’s offices, compliance officers have been appointed in eachCommittee assess the possible impact of risk materialization on thedepartment at the Bank’s Head Office and at each branch. We

Bank’s operations and work out countermeasures. The Bank uses a

conduct the Compliance Program every fiscal year to establish an

system of risk-adjusted capital allocation to ensure the soundness

effective compliance framework.
The program lays out concrete steps to realize complianceof banking operations and effective use of capital.

with the provisions of particular laws and regulations, as well as

Compliancecompliance training courses. The staff at the Bank’s Head Office
departments and its branch offices are working together to ensure

With regard to compliance, we believe that our duty is not solely toadequate compliance throughout the Bank. We intend to further

abide by the law, but also to ensure the strict observance of a wide

reinforce our compliance stance in the coming years.

THE YAMANASHI CHUO BANK 201649

20-8, Marunouchi 1-chome,
Kofu, Yamanashi 400-8601, Japan
Phone: 055-233-2111
URL: http://www.yamanashibank.co.jp/