The Hyakugo Bank, Ltd.
Consolidated Financial Statements
March 31, 2024 and 2023

- 1 © 2024 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public
Accountants Law and a member firm of the KPMG global organization of independent member firms affiliated with
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The Hyakugo Bank, Ltd. and Consolidated Subsidiaries
Consolidated Balance Sheets
As of March 31, 2024 and 2023
Thousands of
U.S. dollars(Note 1)
2024

Millions of yen
2024
2023
Assets:¥Cash and due from banks (Note 7)
Call loans and bills bought (Note 3)
Monetary claims bought (Note 3)
Trading account securities (Notes 3 and 4)
Money held in trust (Notes 3 and 4)
Securities (Notes 3, 4 and 7)
Loans and bills discounted (Notes 3, 5 and 14)
Foreign exchange (Note 5)
Lease receivables and lease investment assets(Note 15)
Other assets (Notes 3, 7 and 16)
Tangible fixed assets (Note 6)
Intangible fixed assets
Asset for employee retirement benefits(Note 10)Deferred tax assets (Note 17)
Customers’ liabilities for acceptances andguarantees (Note 11)
Allowance for loan losses
Total assets (Note 20)¥

1,411,071
5,716
8,136
93
1,000
1,552,223
4,883,888
6,711

1,351,152
10,72912,75155
2,013
1,391,914
4,546,631
4,443$

9,319,541
37,75653,740617
6,605
10,251,791
32,256,047
44,32830,473
93,847
43,796
3,561

30,10789,46743,5802,996

201,262
619,826
289,258
23,52563,677762

35,765790

420,562
5,034

18,828(26,597)
8,097,192

17,069(21,639)
7,517,829

124,356(175,666)
53,478,582

See accompanying Notes to Consolidated Financial Statements.

- 2 -

¥

¥

$

Thousands of
U.S. dollars(Note 1)
2024

Millions of yen
2024
2023
Liabilities:¥ 5,889,981
Deposits (Notes 3, 7 and 8)
Negotiable certificates of deposit (Notes 3 and 8)
172,888
Call money and bills sold (Note 3)
629,300
Payables under securities lending transactions(Notes 3 and 7)
269,133
Borrowed money (Notes 3, 7 and 9)
470,557
Foreign exchange
196
Other liabilities (Notes 3, 9, 15, 16 and 17)
63,071
Provision for bonuses
269
Liability for employee retirement benefits (Note 10)535
Provision for directors’ retirement benefits
111
Provision for reimbursement of deposits
1,753
Provision for point card certificates
482
Provision for contingent loss
372
Reserves under special laws
3
Deferred tax liabilities (Note 17)
80,344
Deferred tax liabilities for land revaluation (Note 6)
2,443
Acceptances and guarantees (Note 11)18,828
Total liabilities
7,600,272
Net assets (Notes 12, 19 and 22):
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Valuation difference on available-for-salesecurities (Note 4)
Deferred gains/losses on hedges
Revaluation reserve for land (Note 6)
Retirement benefit adjustments (Note 10)
Total accumulated other comprehensive
incomeStock acquisition rights (Note 13)
Total net assets
Total liabilities and net assets¥ 5,772,980
145,558
365,800$

38,900,876
1,141,856
4,156,265

235,605
472,052625
70,669
258
485
106
1,685
479
319
2
39,651
2,443
17,0697,125,793

1,777,514
3,107,837
1,296
416,560
1,781
3,536
738
11,580
3,185
2,459
22
530,640
16,136124,356
50,196,637

20,00010,384
284,735(2,527)
312,592

20,00010,385274,258(174)
304,470132,092
68,5851,880,561(16,695)
2,064,543

158,561
1,853
4,166
19,625
184,207

80,631
22
4,166
2,637
87,457

1,047,234
12,24427,517
129,621
1,216,616

119
496,919¥ 8,097,192

107
392,035¥ 7,517,829

786
3,281,945
53,478,582

- 3 -

$

The Hyakugo Bank, Ltd. and Consolidated Subsidiaries
Consolidated Statements of Income
For the Years Ended March 31, 2024 and 2023
Thousands of
U.S. dollars(Note 1)
2024

Millions of yen
2024
2023
Income (Note 20):
Interest income:Interest on loans and bills discounted
Interest and dividends on securities
Interest on call loans and bills bought
Other interest income
Total interest income
Fees and commissions (Note 18)
Other operating income
Other income (Note 10)
Total income
Expenses (Note 20):
Interest expense:
Interest on deposits
Interest on negotiable certificates of deposit
Interest on call money and bills soldInterest on payables under securities lendingtransactions
Interest on borrowings and rediscounts
Other interest expense
Total interest expense
Fees and commissions
Other operating expenses
General and administrative expenses
Provision of allowance for loan losses
Other expenses
Total expenses
Income before income taxes (Note 20)
Income taxes (Note 17):
Current
Deferred
Total income taxes (Note 20)
Net income
Net income attributable to owners of the parent(Note 22)¥¥47,54024,484316
1,273
73,613
20,734
17,138
8,009
119,495¥

39,60318,184116
1,576
59,481
19,547
17,137
6,767
102,934

$

415
13
19

277
15
(60)

2,747
91
130

6,997
26
1,859
9,333
5,515
33,81542,8496,383
1,717
99,614
19,881

4,107
16
2,022
6,379
4,996
24,37541,2683,716
1,739
82,475
20,45846,213
177
12,28361,641
36,427223,336
283,005
42,158
11,344
657,911
131,309

6,446
(846)
5,600
14,281

4,825
1,139
5,964
14,49342,578(5,591)
36,987
94,322

14,281¥

14,493$Yen
Per share (Note 22):
Net income:- Basic- Diluted
Cash dividends¥

See accompanying Notes to Consolidated Financial Statements.

- 4 -313,983
161,7072,088
8,410
486,188
136,940
113,190
52,902789,220

56.44
56.37
15.00

¥

94,322
U.S. dollars

57.15
57.08
13.00

$

0.37
0.37
0.10

The Hyakugo Bank, Ltd. and Consolidated Subsidiaries
Consolidated Statements of Comprehensive Income
For the Years Ended March 31, 2024 and 2023

Millions of yen
2024
2023
14,281 ¥
14,493

Net income¥
Other comprehensive income (loss) (Note 21):
Valuation difference on available-for-sale securities
Deferred gains/losses on hedges
Retirement benefit adjustments
Total other comprehensive income (loss)
Comprehensive income (loss) for the year¥

77,930
1,831
16,98896,750111,031

Comprehensive income (loss) attributable to:
Owners of the parent

111,031¥

See accompanying Notes to Consolidated Financial Statements.

- 5 -Thousands of
U.S. dollars(Note 1)
2024$
94,322¥(20,003)
2,436(3,841)(21,409)(6,915)$

514,696
12,096112,203
638,995
733,317¥(6,915)$733,317

The Hyakugo Bank, Ltd. and Consolidated Subsidiaries
Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2024 and 2023
Shareholders' equity
Number of shares ofcommon stock
issuedBalance at April 1, 2022
Net income attributable to owners of theparentDividends from surplus
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Net changes in items other than shareholders’equityBalance at March 31, 2023
Net income attributable to owners of theparentDividends from surplus
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Net changes in items other than shareholders’equityBalance at March 31, 2024

254,119,000

Capital stock¥

254,119,000

Capital surplus

Retained earnings

Treasury stock

¥

¥

¥

¥

254,119,000

20,00010,385-20,000

Accumulated other comprehensive income¥-

10,385

262,680(173)

14,493(2,916)0¥(1)

274,258

20,000¥10,384¥

284,735$

132,092$

68,595$

1,811,362

Deferred
gains/losses onhedges

Revaluation
reserve for land

¥

¥

¥

(0)
(174)

¥

14,281(3,804)0-¥

Valuationdifference on
Total shareholders'available-forequity
sale securities
Millions of yen¥

14,493(2,916)0(0)¥(2,366)
12¥292,892

304,470¥(1,149)$312,592(2,414)¥

14,281(3,804)0(2,366)
10(2,527)

100,635-(20,003)
80,631-¥¥-

77,930158,561¥

StockacquisitionrightsTotal net assets

¥

¥

¥

¥

-

2,436
22

¥

4,166

Retirement
benefitadjustments

Total
accumulated
othercomprehensive
income

(0)
4,166

6,479
-

¥

-

(3,841)
2,637

108,866
-

¥

-

87
-

(21,409)87,457

¥

-

19
107

401,847
14,493(2,916)
0
(0)

¥

-

(21,389)
392,035
14,281(3,804)0(2,366)
10

1,831
1,853

¥

(0)
4,166

¥

16,988
19,625¥96,750184,207

¥

11
119

¥

96,761496,919

148$

27,518$17,418$577,622$708$

2,589,230

Thousands of U.S. dollars (Note 1)
Balance at April 1, 2023
Net income attributable to owners of theparentDividends from surplus
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Net changes in items other than shareholders’equityBalance at March 31, 2024$

132,092(10)$

68,585$94,322(25,124)1$

1,880,561(15,627)
81$(16,695)

See accompanying Notes to Consolidated Financial Statements.

- 6 -2,010,900$

94,322(25,124)
1(15,627)71$

2,064,543

532,538$$

514,696
1,047,234$

12,096
12,244$(1)
27,517$--112,203
129,621638,994$ 1,216,616

$

78
786

94,322(25,124)
1(15,627)71$

639,072
3,281,945

The Hyakugo Bank, Ltd. and Consolidated Subsidiaries
Consolidated Statements of Cash Flows
For the Years Ended March 31, 2024 and 2023

Cash flows from operating activities:
Income before income taxes
Adjustments for:
Depreciation and amortization
Impairment loss
Increase (decrease) in allowance for loan losses
Interest income
Interest expense
Gain (loss) related to securities
Net decrease (increase) in loans and bills discounted
Net increase (decrease) in deposits
Net increase (decrease) in negotiable certificates of deposit
Net increase (decrease) in borrowed money (excluding
subordinated borrowings)
Net decrease (increase) in call loans
Net increase (decrease) in call money
Net increase (decrease) in payables under securities lendingtransactions
Net decrease (increase) in lease receivables and investment
assetsProceeds from fund management
Payments for financing
Others, net
Subtotal
Income taxes paid
Net cash provided by (used in) operating activities¥

Millions of yen
2024
2023

Thousands of
U.S. dollars(Note 1)2024

19,881$¥

20,458131,309

3,756
50
4,957
(73,613)9,333
327(337,256)
117,001
27,329

3,937
139
637
(59,481)
6,379
(542)
(346,274)
130,437(21,807)

24,810332
32,745(486,188)
61,642
2,161(2,227,441)
772,744
180,499(1,495)(374,779)(9,875)

9,422
263,500(4,038)80,80062,232
1,740,308

33,527(32,940)

221,437

(365)

(864)

(2,415)70,658(9,524)(47,883)
89,605(5,442)
84,16256,937(6,081)(5,787)(552,871)(3,575)(556,447)

466,667(62,908)(316,252)
591,807(35,947)
555,860(342,694)
180,305
147,881(14)
1,038(3,298)322(1,655)(18,114)(378,853)
219,458
200,483(21)(2,042)372(794)
38,603(2,263,354)
1,190,843
976,695(97)
6,861(21,784)
2,131(10,933)(119,638)

Cash flows from financing activities:
Cash dividends paid
(3,799)Payment for purchases of treasury shares(2,366)
Proceeds from sales of treasury shares
0
Others, net
0Net cash provided by (used in) financing activities(6,165)
Net increase (decrease) in cash and cash equivalents
59,883
Cash and cash equivalents at beginning of period
1,348,295
Cash and cash equivalents at end of period (Note 2(b)) ¥ 1,408,178(2,912)(0)(2,912)(520,757)
1,869,053¥ 1,348,295(25,091)(15,627)00(40,718)
395,504
8,904,931$ 9,300,435

Cash flows from investment activities:
Purchase of securities
Proceeds from sales of securities
Proceeds from redemption of securities
Payments for increase in money held in trust
Proceeds from decrease in money held in trust
Purchase of tangible fixed assets
Proceeds from sales of tangible fixed assets
Purchase of intangible fixed assets
Net cash provided by (used in) investment activities

See accompanying Notes to Consolidated Financial Statements.

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

Basis of Financial Statements(a) Basis of presenting consolidated financial statements
The accompanying consolidated financial statements of The Hyakugo Bank, Ltd. (the “Bank”) and its
consolidated subsidiaries (together with the Bank, the “Hyakugo Bank Group”) have been prepared on
the basis of accounting principles generally accepted in Japan (“Japanese GAAP”), which are different
in certain respects as to application and disclosure requirements from International Financial ReportingStandards (“IFRS”). The consolidated financial statements have been compiled from the original
Japanese consolidated financial statements prepared by the Bank as required by the Financial Instruments
and Exchange Act of Japan and submitted to the Director of the Kanto Finance Bureau of Japan.
In preparing these consolidated financial statements, certain reclassifications and rearrangements weremade to the original Japanese consolidated financial statements in order to present them in a form thatwould be more familiar to readers outside Japan. In addition, certain reclassifications have been made in
the financial statements for the year ended March 31, 2023 to conform to the classifications used in thefinancial statements for the year ended March 31, 2024.
The amounts in Japanese yen are presented in millions of yen, rounded down to the nearest million inaccordance with applicable law. Accordingly, the total yen amounts may not be equal to the sum of theindividual account balances.
(b) U.S. dollar amounts
The Hyakugo Bank Group maintains its accounting records in Japanese yen. The U.S. dollar amounts
included in the consolidated financial statements and these accompanying notes represent the conversionof Japanese yen amounts to U.S. dollar amounts using the exchange rate at March 31, 2024, which was¥151.41 to U.S. $1.00. The inclusion of the dollar amounts is solely for the convenience of the readers
and is not intended to imply that the assets and liabilities originated in yen have been, could have been or
could in the future be readily converted, realized or settled in dollars at this or any other rate of exchange.
2.

Summary of Significant Accounting Policies(a) Principles of consolidation
The accompanying consolidated financial statements include the accounts of the Bank and its 11
significant subsidiaries at March 31, 2024 and 2023. These consolidated subsidiaries are primarily
engaged in businesses that provide a wide range of financial services to customers. Under the concept ofcontrol, companies over which the Bank directly or indirectly exercises control in regards to operations
are fully consolidated. The consolidated financial statements do not include the accounts of fivesubsidiaries at March 31, 2024 and 2023, because the total assets, total income, net income and retained
earnings of the subsidiaries did not have any material impact on the consolidated financial statements.
For the years under review, there were no affiliates over which the Bank had significant influence, andall intercompany transactions and accounts have been eliminated.
HM holdings Co., Ltd., TREE CLIMBING WORLD Co., Ltd., VISOR INC., Zenoah Environment
Equipment Co., Ltd., Asahi Dietec Co., Ltd. and Diatop Corporation, each of which the Bank owns morethan 50% of the voting rights, are not recognized as consolidated subsidiaries for the year ended March
31, 2024 because these companies were directly or indirectly held by the Bank’s unconsolidated
subsidiary for the purpose of incubating the investees and not for the purpose of controlling the entities.

- 8 -(b) Cash and cash equivalents
For the purpose of the consolidated statements of cash flows, cash and cash equivalents consisted of cash
and due from The Bank of Japan as follows.
Thousands of
U.S. dollars
2024

Millions of yen
2024
Cash and due from banks
Less due from banks other than
The Bank of Japan
Cash and cash equivalents

2023

¥

1,411,071¥

1,351,152$

9,319,541¥(2,892)
1,408,178¥(2,857)
1,348,295$(19,106)
9,300,435(c) Trading account securities
Trading account securities are stated at fair value at the fiscal year-end. Related gains and losses, both
realized and unrealized, are included in current earnings. Accrued interest on trading account securities
is included in “other assets.”(d) Securities
Debt securities for which the Hyakugo Bank Group has both a positive intent and the ability to hold tomaturity are classified as held-to-maturity securities and are stated at amortized cost. Marketablesecurities other than those classified as trading or held-to-maturity securities are carried at fair value asavailable-for-sale securities, and net unrealized gains and losses reported as valuation differences onavailable-for-sale securities, net of applicable income taxes, are reported as accumulated othercomprehensive income. Available-for-sale securities that are nonmarketable are stated at moving averagecost. The carrying values of individual investment securities are reduced, if necessary, through writedowns to reflect other-than-temporary impairment in value. Gains and losses on the disposal ofinvestment securities are computed principally using the moving average method.
Accrued interest on securities is included in “other assets.” Funds entrusted to trust banks as securities
for the Bank (included in “money held in trust”) are stated using the method applicable to the marketablesecurities described above.
(e) Derivatives and hedge accounting
The Hyakugo Bank Group uses swaps, forwards, options and other types of derivative contracts. These
derivative instruments are used to meet customers’ needs for risk management, to manage the Hyakugo
Bank Group’s assets and liabilities and to generate income. Derivatives are recorded at fair value if hedge
accounting is not appropriate or when there is no hedge designation. Gains and losses on derivatives arerecognized in current earnings.
In connection with interest rate risks arising from financial assets and liabilities, the Bank applies thedeferral method of hedge accounting as prescribed in the Industry Audit Committee Practical Guidance
No. 24, “Accounting and Auditing Treatment of Accounting Standards for Financial Instruments in the
Banking Industry,” issued by the Japanese Institute of Certified Public Accountants (“JICPA”) on March
17, 2022. The effectiveness of a fair value hedge in offsetting movements in the fair value of hedged
items due to changes in interest rates is assessed by classifying the hedged items, such as deposits, loans
and similar instruments, and the corresponding hedging instruments, such as interest rate swaps, andgrouping those with similar risk characteristics in a maturity bucket. In addition, the effectiveness of acash flow hedge is assessed by verifying the correlation between the base interest rate index of the hedged
cash flow and that of the hedging instrument.
In addition, the Bank applies the portfolio hedge method or the exceptional treatment permitted forinterest rate swaps to certain assets and liabilities. The Bank’s consolidated subsidiaries also apply
methods similar to those of the Bank for hedge accounting.
- 9 -The Bank also applies the deferral method to account for hedges of foreign exchange risks associatedwith various foreign currency denominated monetary assets and liabilities in accordance with the standard
treatment under JICPA’s Industry Audit Committee Practical Guidance No. 25 of October 8, 2020,“Treatment of Accounting and Auditing Concerning Accounting for Foreign Currency Transactions in
the Banking Industry.” The effectiveness of currency swap transactions, exchange swap transactions andsimilar transactions that hedge the foreign exchange risks of monetary assets and liabilities denominatedin foreign currencies is assessed based on a comparison of the foreign currency position of the hedged
monetary assets and liabilities and that of the corresponding hedging instruments.
(f) Loans and bills discounted and allowance for loan losses
Loans and bills discounted are stated at the amount of the unpaid principal. Unearned interest anddiscounts are recorded as liabilities and recognized as income over the term of the loan or bill.
The accounting policy of an allowance for loan losses is stated in (v) Significant accounting estimates.
(g) Tangible fixed assets and depreciation
Except for lease assets, tangible fixed assets are stated at cost, less accumulated depreciation, computed
using the straight-line method over the estimated useful life of the asset. For buildings, the useful life
ranges from 15 to 50 years. For other assets, the useful life ranges from 4 to 15 years.
(h) Intangible fixed assets
Intangible fixed assets, except for lease assets, are amortized using the straight-line method. Costs ofcomputer software developed or obtained for internal use are deferred and amortized on a straight-line
basis over the estimated useful life of five years.
(i) Leases
Under “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13 on March 30, 2007), as
lessee, all finance leases are capitalized, and the Bank recognizes lease assets and lease obligations in
the balance sheet. In addition, as lessor, all finance leases that transfer ownership of the leased property
to the lessee (“transferable finance leases”) are recognized as lease receivables, and all non-transferrable
finance leases are recognized as lease investment assets.
As lessor, revenue from finance lease transactions and the related costs are recognized when the lease
payments are received. As lessee, lease assets under non-transferrable finance leases recorded in “tangible
fixed assets” or “intangible fixed assets” are depreciated using the straight-line method over the term of
the lease with a predetermined residual value of zero or as stated in the applicable lease contract.
(j) Foreign currency translation
Assets and liabilities denominated in foreign currencies are translated into Japanese yen at the exchange
rates prevailing at the fiscal year-end. Revenues and expenses are translated at the exchange rates
prevailing on the applicable transaction dates. Foreign exchange gains and losses resulting from suchtransactions are included in the determination of net income.

- 10 -

(k) Provision for bonuses
The consolidated subsidiaries provide provisions for bonuses based on the estimated amounts of future
payments to employees attributable to the current year.
(l) Provision for directors’ retirement benefits
Provisions for the retirement benefits of the directors of the consolidated subsidiaries are provided for thepayment of retirement benefits to directors and corporate auditors in the amounts deemed accrued at the
fiscal year-end based on internal regulations.
(m) Provision for reimbursement of deposits
A provision for the reimbursement of deposits which had been derecognized from liabilities under certain
conditions is provided for possible losses on future claims of withdrawal based on historicalreimbursement experience.
(n) Provision for point card certificates
A provision for point card certificates is recorded for the future use of point card certificates by card
holders in an amount rationally estimated and deemed necessary.
(o) Provision for contingent loss
A provision for contingent loss is provided for contingent liabilities not covered by other provisions in
an amount deemed necessary based on future estimated losses.
(p) Reserves under special laws
Reserves under special laws are reserves for contingent liabilities and are provided for compensation forlosses from securities related transactions pursuant to Article 46-5-1 of the Financial Instruments andExchange Act of Japan and Article 175 of the Cabinet Office Ordinance on Financial Instruments
Business.
(q) Employee retirement benefits
Employees who terminate their services with the Hyakugo Bank Group are entitled to retirement benefits
generally determined based on the basic rate of pay at the time of termination, length of service andconditions under which the termination occurred.
In accordance with the accounting standard for employee retirement benefits, the Hyakugo Bank Group
recognizes retirement benefits based on the actuarial present value of the retirement benefit obligations
using the actuarial appraisal approach and the fair value of pension plan assets available for benefits at
the respective fiscal year-end. In calculating retirement benefit obligations, the Hyakugo Bank Group
attributes expected retirement benefits to periods of service on a benefit formula basis. Consolidated
subsidiaries use the simplified method to calculate the amounts required to be paid as retirement benefits
by determining the benefits that would have to be paid if all the employees retired voluntarily at the fiscal
year.
Past service cost that is yet to be recognized is amortized on a straight-line basis over a fixed period of
three years, which is within the average remaining service years of the employees, measured from theyear in which such cost arises. Actuarial differences arising from changes in retirement benefit obligations
or pension plan assets not anticipated under previous assumptions or from changes in the assumptions
themselves that are yet to be recognized are amortized on a straight-line basis over a fixed period of 10
years, which is within the average remaining service years of the employees, measured from the year
following the year in which such differences arise. Actuarial differences and past service cost that are yet
to be recognized in profit or loss are recognized as retirement benefit adjustments under a component ofaccumulated other comprehensive income within the net assets section, after adjusting for tax effects, and- 11 -

the difference between retirement benefit obligations and plan assets are recognized as an asset or liability
for employee retirement benefits, without any adjustments, in the accompanying consolidated balance
sheets.
In order to provide for the payment of retirement bonuses to executive officers of the Bank, the amountconsidered to be incurred up to the end of the year ended March 31, 2024 was recorded in “Liability for
employee retirement benefits” on the consolidated balance sheet.
(r) Accounting for revenue and costs
Accounting for revenue from finance leases
Net sales and cost of sales are recognized upon receipt of a lease premium.
Accounting for revenue from transactions with customers
The Bank recognizes revenue when control of a promised good or service is transferred to a customer inan amount that reflects the consideration to which the Company expects to be entitled in exchange forthose goods and services.
The Bank and consolidated subsidiaries recognize revenue by applying the following five steps:
Step 1: Identify the contracts with a customer
Step 2: Identify the performance obligations under the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations under the contract
Step 5: Recognize revenue when (or as) the entity satisfies the performance obligation
Revenue from transactions with customers of the Bank and consolidated subsidiaries is related withtransaction services recognized when control of promised goods or services is transferred to the customer
and such revenue includes deposit-taking fees, lending business fees, exchange business fees, securitiesrelated business fees, etc.
(s) Income taxes
Income taxes are accounted for using the asset-liability method. Deferred tax assets and liabilities arerecognized as future tax consequences attributable to the differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply totaxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that
includes the enactment date.
(t) Appropriation of retained earnings
Cash dividends are recorded in the fiscal year when a proposed appropriation of retained earnings isapproved by the board of directors and/or shareholders.
(u) Per share data
Net income per share is computed by dividing income available to common shareholders by the weighted
average number of shares of common stock outstanding during the respective years. Diluted net income
per share is calculated to reflect potential dilution assuming that all stock options are exercised at the timesof issue, unless such options are anti-dilutive.
Cash dividends per share shown in the accompanying consolidated statements of income represent
dividends declared by the Bank as applicable to the respective years shown.

- 12 -

(v) Significant accounting estimates
Accounting estimates are determined at a reasonable amount based on available information at the timeof the preparation of the consolidated financial statements. Of the amounts recorded in the consolidated
financial statements for the year ended March 31, 2024 based on accounting estimates, the items below
may have a significant effect on the consolidated financial statements for the following fiscal year:
Allowance for loan losses
Allowances for loan losses in the amounts of ¥26,597 million ($175,666 thousand) and ¥21,639
million were recorded in the consolidated financial statements as of March 31, 2024 and 2023,
respectively.
An allowance for loan losses of the Bank is recorded in accordance with predetermined criteria on
write-offs and provisions. The Bank classified borrowers into five categories: Normal Borrowers,
Borrowers Requiring Attention, Potentially Bankrupt Borrowers, Virtually Bankrupt Borrowers
and Bankrupt Borrowers. Thereafter, the Bank classifies the related assets examining the degree ofrisk of default and impairment of the asset value.
Normal Borrowers are borrowers whose business is favorable and whose financial positions have noparticular problems. Borrowers Requiring Attention are borrowers whose loans are subject torenegotiation of the contractual terms, including the reduction or exemption of interest, whose loans
are under-performing in that repayment of principal or interest payments are substantially in arrears
or borrowers requiring attention because their business is slow or unstable or borrowers whose
financial positions are otherwise doubtful. Potentially Bankrupt Borrowers are borrowers that are notpresently in the situation of a business failure but are likely to go into bankruptcy in the future as
they are in financial difficulties and business improvement plans are not working well. Virtually
Bankrupt Borrowers are borrowers who are not legally or formally bankrupt but are in serious
financial difficulties and are not likely to recover. Bankrupt Borrowers are borrowers who are legallyand formally bankrupt.
For claims against Bankrupt Borrowers and Virtually Bankrupt Borrowers, an allowance is provided
based on the amounts of the claims, net of amounts expected to be collected through the disposal ofcollateral or execution of guarantees. For claims against Potentially Bankrupt Borrowers, anallowance is provided based on the amounts of the claims, net of amounts expected to be collected
through the disposal of collateral or execution of guarantees, and projected credit losses for the
coming three years. Projected credit losses are calculated using the higher of a loss ratio based on the
average ratio for the past five calculation periods of loan losses for three years or a loss ratio basedon the average ratio of loan losses for a longer period in the past. For claims against other borrowers,
an allowance is provided based on projected credit losses for the following year or for the coming
three years. Projected credit losses are calculated using the higher of the loss ratio based on the
average of one-year or three-year actual loss ratio for the past five calculation periods of loan losses
or the loss ratio based on the average of actual loss ratio for the past seven calculation periods andthe highest historical loss ratio in the past excluding the past seven calculation periods. The amounts
expected to be collected through the disposal of collateral or execution of guarantees are determinedaccording to an assessment of the collateral and/or type of guarantees based on the internal rules for
self-assessment of asset quality.
All claims are assessed by the Bank’s operating divisions based on the Bank’s internal rules for selfassessment of asset quality. The Bank’s inspection division, which is independent from the Bank’s
operating divisions, conducts audits of such assessments, and an allowance is provided based on suchaudit results.
The allowance for loan losses of the consolidated subsidiaries is recorded in the same manner as thatof the Bank in accordance with predetermined criteria on write-offs and provisions.
The management of the Bank has determined that the accounting estimates used for recording theallowance for loan losses are reasonable and appropriately recorded. However, due to possible
changes in the assumptions on which the estimates are based, such as changes in the economic
environment, changes in the financial conditions of the borrowers and/or a decline in collateral value,- 13 -

the Bank might find it necessary to increase or decrease the amount of allowance for loan losses infuture.
Changes in accounting estimates
For allowances for loan losses for claims other than those against Potentially Bankrupt Borrowers,
Virtually Bankrupt Borrowers and Bankrupt Borrowers, the Bank previously determined theallowance for loan losses using one-year or three-year loan losses calculated using the average ratioof loan losses for the past five calculation periods of loan losses. However, from the year ended
March 31, 2024, the Bank changed its calculation method and uses the higher of 1) one-year or threeyear credit losses calculated using a loss ratio based on the average ratio for the past five calculation
periods of loan losses or 2) one-year or three-year credit losses calculated using a loss ratio based on
the average ratio of loan losses for the past seven calculation periods and the highest loan losses in
the past excluding them.
While COVID-19 has had an impact on the occurrence of events, such as legal bankruptcy,
deterioration in the credit status of counterparties and delayed payments of principal or interest, its
impact has been eased. The Bank analyzed the historical loan losses information and as a result, theBank judged that it was more appropriate, in determining the allowance for loan losses, to continue
using the loss ratio based on the average ratio of actual loan losses for the past five calculation periods
to reflect recent trends, while adding calculation periods to cover the short-term business cycle in theJapanese economy and comparing with the loss ratio taking into account the highest historical loan
loss ratio in order to prepare for significant economic downturns that may occur within long-termbusiness cycles.
As a result of this change, the allowance for loan losses as of March 31, 2024 increased by ¥1,669
million ($11,028 thousand) and income before income taxes for the year ended March 31, 2024
decreased by the same amount, compared with those recognized using the previous method.
3.

Financial Instruments and Related Disclosures
Outline of financial instruments(1) Policy for financial instruments
The Hyakugo Bank Group is engaged in financial services centered on banking operations. In addition
to investing funds in loans, securities and monetary claims bought for the purpose of earning interest
income, the Bank also operates, within defined limits, in securities and money held in trust for the purposeof earning income from price fluctuations. In order to enhance the liquidity of its assets, the Bank also
maintains cash deposits and invests funds in call loans and others in short-term markets. These
investments are funded almost exclusively through deposits and negotiable certificates of deposit, whilefrom an asset and liability management (ALM) perspective, other sources of funding are used asnecessary, including call money and borrowings.
Moreover, the Bank uses derivative transactions in order to meet its customers’ needs for hedging risks
and to make use of the Bank’s own ALM. Within defined limits, the Bank also engages in derivativetransactions for the purpose of earning income from trading derivatives.
The consolidated subsidiaries of the Bank include companies that engage in securities operations, credit
card operations, leasing operations and operations for forming and operating funds. Each of thesecompanies holds various financial assets, such as lease receivables and investment assets, installment
receivables, member accounts receivable, investments in capital and cash deposits. Certain consolidated
subsidiaries use borrowed money to raise funds.
(2) Nature and extent of risks arising from financial instruments
The financial assets held by the Hyakugo Bank Group comprise mainly loans to corporations andindividuals located in the area in which the Bank conducts business. It also holds securities, including
domestic and foreign bonds and stocks. With regard to bonds, the Bank holds Japanese government bonds,
local government bonds and bonds issued by highly creditworthy issuers, such as financial institutions,- 14 -

business entities and foreign governments. The Bank also holds securitized products comprising
receivable or real estate backed assets. In terms of monetary claims bought, the Bank maintains leasereceivables and investment assets related to the business of holding trust beneficiary rights and monetaryclaims purchased from customers in relation to the integrated factoring system. Monetary claims bought
are exposed to the credit risk of borrowers and issuers. Of such monetary claims bought, fixed interest
rate items are exposed to the risk of fluctuation in actual value due to interest rate fluctuations, andmarketable securities are exposed to the risk of fluctuation in market value.
The majority of financial liabilities comprise deposits and negotiable certificates of deposit, the majorityof which are received from customers located in the area in which the Bank conducts business. A highproportion of financial liabilities consist of short-term deposits, such as liquid deposits with no definedmaturity and fixed deposits maturing within one year. Call money and other short-term fund raisingsources are used primarily for adjusting yen and foreign currency denominated capital positions.
With financial assets and liabilities, there is risk of loss due to changes in the actual value or capitalmargins from fluctuations in interest rates or foreign currency exchange rates as a result of differences ininterest rate renewal dates, fund settlement dates or transaction currencies between assets and liabilities.
Should circumstances significantly impair the short-term liquidity of assets, there is risk that the Bank
would be forced to raise additional funds that are costly or dispose of assets at lower than expected prices
or the like in order to cover the shortfall.
With regard to derivative transactions, interest related derivatives comprise primarily interest rate swaps,
and currency related derivative transactions involve primarily currency swaps and foreign exchange
forwards. The majority of these derivatives are used primarily to hedge the Bank’s own market risk orthat of its customers. Stock futures, bond futures, over-the-counter bond options and credit derivatives
are used to earn income from trading activities or to hedge risks. In terms of risks arising from transactions,both market and credit risks are limited because the great majority of the transactions are for the purposeof hedging or are covered transactions and all counterparties are highly creditworthy financial institutions
or corporations. The Bank does not enter into any high-risk transactions in which the rate of change infair value corresponding to the price fluctuation of the object is very high.
Hedged items accounted for using hedge accounting consisted of debt securities and loans and bills
discounted in the year ended March 31, 2024. Hedging instruments consisted of interest rate swaps,
foreign currency swaps, and foreign exchange swaps. The Bank determines whether to revise its hedging
policy every month, and identifies the items to be hedged, hedging instruments and hedging ratios
annually. Consolidated subsidiaries sometimes set the above policies for themselves. Hedge effectivenessis assessed using the methods provided in JICPA’s Accounting System Committee Report No. 14,“Practical Guidance Concerning Accounting for Financial Instruments.”(3) Risk management for financial instrumentsi.

Credit risk management
In order to avoid large-scale losses resulting from the materialization of credit risk, the Hyakugo Bank
Group adheres to the basic policy of maintaining the soundness of overall assets by controlling credit risk
to within an acceptable level with reference to shareholders’ equity. To this end, the Hyakugo Bank
Group has prepared various rules and organizational structures on which it bases its credit risk
management.
The Bank has established a system in which the ALM Risk Management Committee of each Hyakugo
Bank Group company comprehensively gauges, evaluates and monitors the status of various risks,
including credit risk, and considers policies and response measures related to risk management on amonthly basis. In addition, the Bank uses Value at Risk (VaR) to measure credit risk in a manner that
includes credit concentration risk, which is not included in the calculation of the capital adequacy ratio,
based on the framework for integrated risk management. By managing risk within specified limits, theBank aims to take on appropriate risks and secure stable earnings.
In managing credit risk, the loan screening divisions independent of the sales promotion divisions review- 15 -

and manage loans, and the market risk management department (middle office) manages the same on a
day-to-day basis. The Bank has also established a credit risk management department within the risk
management division, which is independent from other divisions, thus ensuring a system of mutual
checks and balances.
In addition, the Bank has prepared a credit rating system to evaluate credit risk for each borrower andimplement comprehensive measures. Credit ratings are used to formulate finance loan policies and to set
loan interest rates. The Hyakugo Bank Credit Policy stipulates a basic policy regarding finance loans inmanaging credit portfolios. Under the policy, the Bank ensures that investments are not concentrated toonly certain companies or corporate groups while striving to ascertain and monitor the status of credit bycategories such as industry, region, credit rating and level of borrowing and to distribute credits
appropriately across the categories.
With regard to loan recipients who are facing difficulties due to worsening business conditions or otherreasons, the Bank gauges and monitors the management status and implements guidance on restructuring
plans and collecting receivables as needed.
The Bank prepares various rules for and manages the market risk of each of its consolidated subsidiaries
and manages the credit risk of the entire Hyakugo Bank Group through its credit risk management
department. Furthermore, the Hyakugo Bank Group comprehensively gauges, evaluates and monitors thestatus of various types of risk, including credit risk, through the Risk Management Committees
established at each subsidiary.
ii.

Market risk management
The Hyakugo Bank Group works to accurately measure and evaluate the impact of market fluctuations
on its business and to conduct appropriate portfolio management by limiting risk and preparing various
rules and organizational systems to manage market risk under the basic policy of securing stable revenues.
The Bank has established a system in which the ALM Risk Management Committee of each Hyakugo
Bank Group company comprehensively gauges, evaluates and monitors the status of various risks,
including market risk, and considers policies and response measures related to risk management on amonthly basis. In addition, the Bank uses VaR to measure market risk in a manner that includes interest
rate risk, which is not included in the calculation of the capital adequacy ratio, based on a framework for
integrated risk management. By managing risk within specified limits set for each risk type, the Bank
aims to take on appropriate risks and secure stable earnings.
The Bank seeks to reduce the risk of loss due to insufficient funds by managing market risk, drawing
clear distinctions between the trade execution department (front office) and the administrative processing
department (back office) and by establishing a market risk management department (middle office)within the risk management division, which is independent from other divisions. All of the abovementioned departments are overseen by the risk control management department, thus ensuring a system
of mutual checks and balances. The transaction status, fair value and risk exposure are calculated andmanaged on appropriate dates, and management systems are strengthened at appropriate times in
response to situations that arise. In addition, for transactions entered into to secure a profit throughpurchase and sale, etc., the Bank limits its risk of loss by preparing a management framework tailored tothe specific circumstances of each investment, including by establishing position limits, loss cutting rules
and cumulative loss limits, and conducting rigorous management on such a framework.
The Bank manages market risk for its overall financial assets and listed liabilities, including deposits andother forms of funds, from an ALM perspective. The Bank seeks to reduce foreign exchange rate
fluctuation risk associated with foreign currency denominated products used for procurement of funds
through the operation of foreign currency denominated foreign bonds and foreign currency funds by using
call money and other forms of procurement. It also uses currency exchange related derivatives to maintainroughly the equivalent operating and procurement amounts in each currency.
The Bank prepares various rules for and manages market risk of each of its consolidated subsidiaries andmanages market risk of the entire Hyakugo Bank Group through its market risk management department.
- 16 -

Furthermore, the Hyakugo Bank Group comprehensively gauges, evaluates and monitors the status ofvarious types of risk, including market risk, through the Risk Management Committees established ateach subsidiary company.
Quantitative information concerning market risk:
Interest rate risk
The main financial instruments used by the Hyakugo Bank Group that are exposed to interest rate risk
are bonds included in securities, loans and bills discounted, deposits, negotiable certificates of deposit,
borrowed money and interest rate swap contracts included in derivative transactions. Interest rate risks
attached to these financial assets and liabilities are managed by monitoring VaR calculated using thehistorical simulation method (which applies a holding period of three months, confidence interval of 99%
and observation period of five years). As of March 31, 2024, the amount of interest rate risk (a predictedamount of loss) the Bank was exposed to was estimated at ¥32,708 million ($216,008 thousand) (¥23,937
million in 2023).
With regard to liquid deposits without maturity dates, VaR is calculated by internal models using due
dates estimated with consideration for long-term retention. The interest rate risk the consolidated
subsidiaries are exposed to is not included in the calculation as the outstanding balances of their financial
instruments that are potentially exposed to interest rate risk are fairly small and their importance minimal.
Stock price risk
The main financial instruments used by the Hyakugo Bank Group exposed to stock price risk are stocks
included in securities. Of these financial assets, stock price risks attached to those held for pureinvestment purposes are managed by monitoring its VaR, which is calculated using the historicalsimulation method (which applies a holding period of three months, confidence interval of 99% andobservation period of five years), and stock price risk attached to those held for purposes other than pureinvestments purposes are managed by monitoring valuation losses, which may arise as assumed under
the VaR model, the VaR of which is calculated using the historical simulation method (which applies aholding period of six months, confidence interval of 99% and observation period of five years). As of
March 31, 2024, the total amount of stock price risk (a predicted amount of loss) the Bank was exposed
to was estimated at ¥1,224 million ($8,083 thousand) (¥1,108 million in 2023).
The stock price risk the consolidated subsidiaries are exposed to is not included in the calculation as theoutstanding balances of their financial instruments that are potentially exposed to stock price risk are
fairly small and their importance minimal.
Other price fluctuation risk
The main financial instruments used by the Hyakugo Bank Group exposed to price fluctuation risk areinvestment trusts included in securities. The price fluctuation risk attached to these financial assets is
managed by monitoring the VaR, which is calculated using the historical simulation method (whichapplies a holding period of three months, confidence interval of 99% and observation period of five years).
As of March 31, 2024, the total amount of other price fluctuation risk (a predicted amount of loss) the
Bank was exposed to was estimated at ¥15,523 million ($102,503 thousand) (¥16,528 million in 2023).
Reasonableness of VaR
The Bank conducts back testing which compares the results calculated under the VaR model with changes
in present value. As a result of the back testing, the accuracy of capturing interest rate risk and other pricefluctuation risk was a concern. Therefore, the value was computed after an adjustment of multipliers to
VaR calculated by the measurement model to secure the capturing accuracy with a confidence level of
99%.
iii.

Liquidity risk management
The Hyakugo Bank Group manages liquidity risk through the establishment of relevant internal rules andorganizational structures, adherence to the basic policy of maintaining structures that can appropriately
respond to a liquidity crisis and by accurately assessing situations involving investment and funding andmarket trends regarding stable funding.
- 17 -

The Bank has established a system in which the ALM Risk Management Committee of each Hyakugo
Bank Group comprehensively gauges, evaluates and monitors the status of various risks, including
liquidity risks, and considers risk management policies and response measures on a monthly basis.
In funding operations, the Bank controls and manages daily and future funding requirements in Japanese
yen and foreign currencies. The Bank also monitors the availability of funding in the markets andestablishes countermeasures, such as the establishment and timely review of maximum funding amounts,
based on the availability of funding against unexpected adverse events beforehand to prepare against
liquidity risks.
(4) Supplementary explanation concerning fair values of financial instruments
The fair values of financial instruments comprise values determined based on market prices and values
determined by other methods when there are no available market prices. Since variable factors areincorporated in computing the relevant fair values, the fair values may vary depending on the applicationof different assumptions.

- 18 -

Fair values of financial instruments and fair value information by level within the fair value hierarchy
The following tables summarize the amounts stated on consolidated balance sheets and the fair value offinancial instruments as of March 31, 2024 and 2023 together with their differences and the fair value offinancial instruments by level within the fair value hierarchy.
The fair value of financial instruments is classified into the following three levels according to theobservability and materiality of inputs used to measure fair value.
Level 1 fair value: Fair value measured using observable inputs, i.e., quoted prices in active markets for
assets or liabilities that are the subject of the measurement.
Level 2 fair value: Fair value measured using observable inputs other than Level 1 inputs.
Level 3 fair value: Fair value measured using unobservable inputs.
If multiple inputs are used that are significant to the fair value measurement, the fair value measurement iscategorized in its entirety at the level of the lowest-level input that is significant to the entire measurement.
(1) Financial instruments measured at fair value
March 31, 2024

Millions of yen
Fair value
Level 2
Level 3

Level 1
Monetary claims bought
Trading account securities
Money held in trust (forinvestment purposes)
Securities:
Available-for-sale securities
Japanese government bonds
Local government bonds
Corporate bonds
Equity securities
Other (*1)
Total assets
Total liabilities
Derivative transactions (*2)(*3) (*4)
Interest rate related
Currency related
Other

¥

56

¥

553,930
553,930
171,284
299,263
83,382553,986

¥

¥

¥

36

¥

Total

5,060
-

¥

5,060
93

¥

1,000
942,698
942,698
451,745
200,500
290,452
943,735¥

44,48844,48825,56018,92849,5491,000
1,541,117
1,541,117
171,284
451,745
226,060
299,263392,762
1,547,271

-

¥

-

¥

-

¥

-

-

¥

(17,294)
2,899(20,193)
-

¥

(0)
(0)
(0)

¥

(17,294)
2,899(20,193)(0)(*1) Investment trusts, etc., of which the standard quotation price defined by Paragraph 24-9 Fair Value
Measurement Guidance (ASBJ Guidance No. 31, June 17, 2021) is deemed as the fair value, are not includedin the above table. The carrying amount of such investment trusts, etc., in the consolidated balance sheet is¥305 million .
(*2) Financial derivatives (assets) of ¥6,023 million and financial derivatives (liabilities) of ¥23,317 million
are recorded under “Other assets” and “Other liabilities” in the consolidated balance sheet, respectively.
Receivables and payables arising from derivative transactions are presented as net amounts. Net payables
are presented in parentheses.
(*3) The value of derivatives to which hedge accounting is applied, was ¥(10,028) million, as recorded in
the consolidated balance sheet.
(*4) These derivatives refer to interest rate swaps designated as hedging instruments to offset market fluctuations
arising from loans, etc., as hedged items, and deferral hedge accounting is applied. Practical Issue Task Force(PITF) No. 40, “Practical Solution on the Treatment of Hedge Accounting for Financial Instruments that- 19 -

Reference LIBOR,” March 17, 2022, is applied to these hedging relationships.

March 31, 2023

Millions of yen
Fair value
Level 2
Level 3

Level 1
Monetary claims bought
Trading account securities
Money held in trust (forinvestment purposes)
Securities:
Available-for-sale securities
Japanese government bonds
Local government bonds
Corporate bonds
Equity securities
Other (*1)
Total assets¥

Total liabilities
Derivative transactions (*2)(*3) (*4)
Interest rate related
Currency related
Other

28

¥

27

¥

Total

9,420
-

¥

9,420
55

¥

2,013
918,569
918,569103
456,829
178,089503
283,045920,611¥

46,262
46,26230,291
15,97055,682

-

¥

-

¥

-

¥

-

-

¥

(9,817)
186(10,003)
-

¥

0
0
(0)

¥

(9,816)
186(10,003)(0)¥415,457
415,457
152,020
190,384
73,052415,485

¥

¥

2,013
1,380,288
1,380,288
152,123456,829
208,381
190,887
372,067
1,391,778(*1) Investment trusts, etc., to which the treatment handling the standard quotation price defined by
Paragraph 24-9 Fair Value Measurement Guidance (ASBJ Guidance No. 31, June 17, 2021) as the fair value
is applied, are not included in the above table. The carrying amount of such investment trusts, etc., in the
consolidated balance sheet is ¥308 million .
(*2) Derivative transactions recorded under other assets and liabilities in the consolidated balance sheets
have been listed together.
Receivables and payables arising from derivative transactions are presented as net amounts. Net payables
are presented in parentheses.
Financial derivatives (assets) in an amount of ¥7,375 million and financial derivatives (liabilities) in an
amount of ¥17,192 million are recorded under “Other assets” and “Other liabilities” in the consolidatedbalance sheet, respectively.
(*3) The value of derivatives to which hedge accounting is applied, as recorded in the consolidated balance
sheet, was ¥(8,469) million.
(*4) These derivatives refer to interest rate swaps designated as hedging instruments to offset market fluctuations
arising from loans, etc., as hedged items, and deferral hedge accounting is applied. Practical Issue Task Force(PITF) No. 40, “Practical Solution on the Treatment of Hedge Accounting for Financial Instruments that
Reference LIBOR,” March 17, 2022, is applied to these hedging relationships.

- 20 -

March 31, 2024

Thousands of U.S. dollars
Fair value
Level 2
Level 3

Level 1
Monetary claims bought (*1)
Trading account securities
Money held in trust (forinvestment purposes)
Securities:
Available-for-sale securities
Japanese government bonds
Local government bonds
Corporate bonds
Equity securities
Other (*1)
Total assets
Total liabilities
Derivative transactions (*2)(*3) (*4)
Interest rate related
Currency related
Other

$

374

$

3,658,479
3,658,479
1,131,262
1,976,511
550,706
3,658,853

$

$

$

243

$

Total

33,425-$

6,605
10,178,438
10,178,438
1,131,262
2,983,593
1,493,037
1,976,511
2,594,035$ 10,219,085

33,425
617

$

6,605
6,226,131
6,226,131
2,983,593
1,324,221
1,918,317
6,232,979$

293,828
293,828
168,816
125,012327,253

-

$

-

$

-

$

-

-

$

(114,220)19,149(133,369)
-

$

(0)
(0)
(0)

$

(114,220)19,149(133,369)(0)(*1) Investment trusts, etc., to which the treatment handling the standard quotation price defined by
Paragraph 24-9 of the Fair Value Measurement Guidance (ASBJ Guidance No. 31, June 17, 2021) as thefair value is applied, are not included in the above table. The carrying amount of such investment trusts, etc.,
in the consolidated balance sheet is $2,020 thousand.
(*2) Derivative transactions recorded under other assets and liabilities in the consolidated balance sheets
have been listed together.
Receivables and payables arising from derivative transactions are presented as net amounts. Net payables
are presented in parentheses.
Financial derivatives (assets) in an amount of $39,782 thousand and financial derivatives (liabilities) in an
amount of $154,002 thousand are recorded under “Other assets” and “Other liabilities” in the consolidatedbalance sheet, respectively.
(*3) The value of derivatives to which hedge accounting is applied, as recorded in the consolidated balance
sheet, was $(66,236) thousand.
(*4) These derivatives refer to interest rate swaps designated as hedging instruments to offset market fluctuations
arising from loans, etc., as hedged items, and deferral hedge accounting is applied. Practical Issue Task Force(PITF) No. 40, “Practical Solution on the Treatment of Hedge Accounting for Financial Instruments that
Reference LIBOR,” March 17, 2022, is applied to these hedging relationships.

- 21 -

(2) Financial instruments other than those measured at fair value
Cash and due from banks, call loans and bills bought, foreign exchange (assets/liabilities), call money andbills sold, agreements, and payables under securities lending transactions are not included in the following
as they are short-term (within one year), and their fair values approximate their carrying values.
Millions of Yen
March 31, 2024
Fair value
Level 1
Monetary claims bought (*)¥-

Loans and bills discounted (*)
Total assets
Deposits

Level 2¥-Carrying amount

Level 3-¥

108,418

Total

3,074

¥

4,739,099

3,074 ¥

3,074

4,847,517

4,858,949¥(11,431)¥-¥

108,418¥

4,742,173¥

4,850,592 ¥

4,862,023¥(11,431)¥-¥5,890,163¥–¥

5,890,163 ¥

5,889,981¥

181

Negotiable certificates of deposit-

172,888–

172,888

172,888

Borrowed money-

470,557–

470,557

470,557

6,533,609 ¥6,533,427

Total liabilities

Difference

¥

-

¥

6,533,609

¥

–

¥

(0)
¥

181

Millions of Yen
March 31, 2023
Fair value
Level 1
Monetary claims bought (*)¥

Loans and bills discounted (*)
Total assets
Deposits

Level 2-¥-Carrying amount

Level 3-¥

72,911

Difference

Total

3,330

¥

4,441,485

3,330 ¥

3,330

4,514,397

4,526,753¥(12,356)¥-¥

72,911¥

4,444,815¥

4,517,727 ¥

4,530,083¥(12,356)¥-¥

5,772,958¥–¥

5,772,958 ¥

5,772,980¥(21)

Negotiable certificates of deposit-

145,558–

145,558

145,558(0)

Borrowed money-

472,052–

472,052

472,052-

6,390,570 ¥

6,390,592

Total liabilities

¥

-

¥

6,390,570

¥

–

¥

¥

(21)

Thousands of U.S. dollars
March 31, 2024
Fair value
Level 1
Monetary claims bought (*)$

Loans and bills discounted (*)
Total assets
Deposits

Level 2-$-Carrying amount

Level 3-$716,060

Total

20,305$31,299,778

20,305 $32,015,838

20,305$32,091,337(75,499)$-$

716,060$

31,320,083$

32,036,143 $32,111,642$(75,499)$-$

38,902,077

$

–

$

38,902,077 $

38,900,876

$

1,201

Negotiable certificates of deposit-

1,141,856–

1,141,856

1,141,856

Borrowed money-

3,107,837–

3,107,837

3,107,837

43,151,770 $

43,150,569

Total liabilities

Difference

$

-

$

43,151,770

$

–

$

(0)
$

1,201

(*)A general allowance for loan losses and a specific allowance for loan losses corresponding to loans and bills discounted have been deducted.

(Note 1) A description of the valuation technique(s) and inputs used in the fair value measurements- 22 -

Assets:
Monetary claims bought
For monetary claims bought, the fair value of securitized products is determined by prices obtained fromexternal brokers, etc., referencing analysis of consistency with market published indices, prepayment
ratios, etc. Monetary claims purchased from customers in accordance with the integrated factoring system
are settled over a specified short-term period. The fair value of these claims is, therefore, presented at thecarrying amount because the carrying amount approximates the fair value. The fair value is classified as
Level 3.
Trading account securities and securities
The fair value of trading account securities and securities is classified as Level 1 if the unadjusted market
price in active markets is available. Principally, listed equity securities, listed investment trusts andJapanese government bonds are included in this category. If the market is inactive, even though the
published market price is available, the fair value is classified as Level 2. Principally, local government
bonds and corporate bonds are included in this category. In addition, the fair value of investment trusts
which do not have a market price is determined using the standard quotation price and classified as Level2, unless there is such significant restriction that consideration for the risk is demanded by market
participants regarding cancellation or buy-back claims. The fair value of private placement bonds is
calculated by discounting the sum of principal and interest income using the discount rate reflecting credit
risk, etc., based on the internal rating, and is classified as Level 3. The fair value of certain Japanese yendenominated foreign bonds is determined using the price calculated based on the price obtained fromexternal brokers, etc., with reference to the findings of regular monitoring, including analysis of
consistency with published market indices, and is classified as Level 3.
For details regarding securities categorized by the purpose for which they are held, see Note 4, “Trading
Account Securities, Money Held in Trust and Securities.”
Money held in trust
The fair value of securities that are invested as trust assets within non-consolidated money held in trust
is determined by the prices presented by partner financial institutions and principally classified as Level
2 based on the level of components.
For details regarding money held in trust for holding purposes, see Note 4, “Trading Account Securities,
Money Held in Trust and Securities.”
Loans and bills discounted
The fair value of loans or bills discounted (excluding loans containing credit derivatives) is determinedfor each category based on the type, internal rating and maturity, by discounting the sum of principal andinterest at the interest rate applied to a new loan of the same type. However, the carrying amount of fixedrate loans and bills discounted whose contractual maturity or remaining maturity through interest maturity
is short (within one year), and of floating-rate loans and bills discounted, is presented as the fair value aslong as the credit status of borrowers has not changed significantly since the grant of such loans, because
the carrying amount approximates the fair value. Additionally, for loans receivable from bankrupt,
virtually bankrupt or potentially bankrupt borrowers, the estimated losses are determined based on theamount expected to be recovered from collateral and guarantees, and the fair value approximates the
carrying amount of loans as of the fiscal closing date less allowance for loan losses. Accordingly, suchamount is regarded as the fair value, and is classified as Level 3.
The fair value of loans containing credit derivatives is determined using the spread observed from credit
default swaps and market interest rates as principal inputs and classified as Level 2.
With respect to the loans and bills discounted of consolidated subsidiaries, the carrying amount ispresented as the fair value due to their lower materiality.

- 23 -

Liabilities:
Deposits and negotiable certificates of deposit
For on-demand deposits, the payment obligation existing at the balance sheet date, which is the carrying
amount, is regarded as the fair value. The fair value of time deposits and negotiable certificates of deposit
is computed using the present value by discounting future cash flows for each category based on the typeand maturity period. For deposits whose deposit term or residual maturity is within one year, the carrying
amount is presented as the fair value since such carrying amount approximates the fair value. The fairvalue of these items is classified as Level 2.
Borrowed money
The present value of borrowed money is computed by discounting the sum of principal and interest
income to be received, classified by a fixed period, using the rate that would apply to new borrowings ofthe same type. For borrowed money whose contractual term or residual maturity is within one year, thecarrying amount is presented as the fair value since such carrying amount approximates the fair value.
The carrying amount of such instruments is presented as the fair value, as the carrying amountapproximates the fair value due to the short-term maturity (within one year). The fair value of these items
is classified as Level 2.
For borrowed money of consolidated subsidiaries, the carrying amount is presented as the fair value as aminimum requirement.
Derivative transactions:
The fair value of OTC-traded derivatives is determined by the value calculated using the discounted
present value of future cash flows or option pricing models, etc., using inputs such as interest rates, foreignexchange rates, volatilities and the like, as the published market price of OTC-traded derivatives does notexist.
If observable inputs solely are used, or if the impact of unobservable inputs is not material, the fair valueof such derivatives is classified as Level 2.
(Note 2) Information about fair value of Level 3 for financial instruments stated at fair value in the
consolidated balance sheet(1) Qualitative information about significant unobservable inputs
Year ended March 31, 2024
Category
Securities
Available-for-salesecurities
Corporate bonds(private placement
bonds)

Valuation techniqueSignificant
unobservable inputs

Discounted present
value method

Credit spreadYear ended March 31, 2023
Category
Securities
Available-for-salesecurities
Corporate bonds(private placement
bonds)

Valuation techniqueSignificant
unobservable inputs

Discounted present
value method

Credit spread- 24 -

average
Range of inputs Weighted
of inputs
0.316%-100%

0.473%

average
Range of inputs Weighted
of inputs
0.302%-50%

0.744%

(2) Reconciliation of the beginning balance and the ending balance and unrealized gain (loss) recognizedin net income or loss
Millions of Yen
March 31, 2024

Net income orother comprehensive income

Included in
net income*1

April 1, 2023
Monetary claims bought

¥

9,420

–

¥

Included in othercomprehensive
income2

Changes due topurchases,
issues, sales andsettlements

¥

¥

(3)

(4,356)

Transfers tofair value ofLevel 3–¥

Transfers fromfair value ofLevel 3¥

March 31, 2024

– ¥

5,060

Change inunrealized gains(losses) included
in net income
for financial
assets andliabilities still
held at March
31, 2024¥－

Securities
Available-for-salesecurities:
Corporate bonds(private bonds)
Other

30,291(79)

41(4,693)––25,560–15,970

–

(42)

3,000

–

–

18,928–Millions of Yen
March 31, 2023

Net income orother comprehensive income

Included in
net income*1

April 1, 2022
Monetary claims bought¥

10,411–¥

Included in othercomprehensive
income2

Changes due topurchases,
issues, sales andsettlements

¥

¥

3

(994)

Transfers tofair value ofLevel 3–¥

Transfers fromfair value ofLevel 3¥

March 31, 2023

– ¥

9,420

Change inunrealized gains(losses) included
in net income
for financial
assets andliabilities still
held at March
31, 2023¥－

Securities
Available-for-salesecurities:
Corporate bonds(private bonds)
Other

32,02486(7)(1,811)––30,291–

20,008–(37)(4,000)––15,970–Thousands of U.S. dollars
March 31, 2024

Transfers fromfair value ofLevel 3

Change inunrealized gains(losses) included
in net income
for financial
assets andliabilities still
held at March
March 31, 2024
31, 2024$$

Net income or other comprehensive
incomeMonetary claims bought

April 1, 2023

Included in net
income*1

Included in othercomprehensive
income2

Changes due topurchases,
issues, sales andsettlements

$

$

$

$

62,219–(22)(28,772)

Transfers tofair value ofLevel 3$––33,425$－

Securities
Available-for-salesecurities:
Corporate bonds(private bonds)
Other

200,065

(527)

273

(30,996)––

168,815–

105,476–(278)

19,814––125,012－*1. Included in “Other operating income” in the consolidated statement of income.
*2. Included in “Unrealized gains on available-for-sale securities” under “Other comprehensive income” in the consolidated statement of comprehensive income.

(3) Explanation of valuation process used to measure fair value
The Finance Division has established the Hyakugo Bank Group policy and procedures regarding
measurement of fair value, and each operating division measures fair value in accordance with said policy
and procedures. The measurement of such fair value is validated in terms of the reasonableness of valuation- 25 -

techniques and inputs as well as the appropriateness of the fair value classification level. The results of thisvalidation process are reported to the Finance Division for each period and the appropriateness of the policy
and procedures used to measure fair value is confirmed. In measuring fair value, valuation models capableof reflecting the nature, characteristics and risks associated with each asset are used. In addition, when quoted
prices obtained from third parties are used as fair value, appropriate steps are taken to substantiate theirvalidity, such as confirming the valuation techniques and inputs used and comparing the fair value with thefair value of similar financial instruments.
(4) Explanation of effects of changes in significant unobservable inputs on fair value
Significant unobservable inputs used in measuring the fair value of privately placed corporate bonds are
credit spreads. Significant increases (decreases) in these inputs in isolation will lead to a significant decline(rise) in fair value.

- 26 -

(Note 3) The following table summarizes financial instruments whose fair values were extremely difficult
to estimate. These instruments were not included in the above table regarding the fair values of financial
instruments.
Millions of yen
2024
2023

Category
Unlisted stocks (*1)(*2)
Investments in capital of partnerships, etc.
(*3)

¥

1,866
8,934

¥

1,918
9,397

Thousands of
U.S. dollars
2024$

12,32759,006(*1) The fair values of unlisted stocks were not disclosed based on Paragraph 5 of “Implementation
Guidance on Disclosures of Fair Value of Financial Instruments” (ASBJ Guidance No. 19, March 31,2020).
(*2) The Bank recognized an impairment loss in the amount of ¥38 million ($252 thousand) and ¥2
million on unlisted stock for the years ended March 31, 2024 and 2023, respectively.
(*3) The fair values of investments in capital of partnerships were not disclosed in accordance with
Paragraph 24-16 of the Fair Value Measurement Guidance (ASBJ Guidance No. 31, June 17, 2021).

- 27 -

(Note 4) Maturities of financial assets and securities with contractual maturities at March 31, 2024 and2023

March 31, 2024

Within one
year

Due from banks ¥ 1,361,150
Call loans andbills bought
5,716
Monetaryclaims bought
3,390
Available-forsale securities
with maturity:
86,273o/w Japanese
government
bonds
Local
government
bonds
38,332
Corporatebonds
12,637
Others35,303Loans and bills
discounted (*)
801,038¥ 2,257,569
Total

March 31, 2023

Within one
year

Due from banks ¥ 1,287,192
Call loans andbills bought
10,729
Monetaryclaims bought
3,493
Available-forsale securities
with maturity:
115,440o/w Japanese
government
bonds
100
Local
government
bonds
27,234
Corporatebonds
18,297
Others69,808Loans and bills
discounted (*)
775,968¥ 2,192,824
Total

One to three
years
¥

¥

-

¥

¥

-

¥

-

Seven to 10
years
¥

-

Over 10
years
¥

-

-

-

-

-

-

1,678

1,296

1,783

-

-

260,167

261,515

152,913

195,500

247,683

-

8,000

7,000

93,00075,000130,883

77,202

109,915

93,6696,562

40,95488,32966,686109,626

26,218
9,778

3,500
5,330

82,02784,093

680,554
942,400

628,284
891,095

443,020
597,717464,554660,054

1,829,136¥ 2,076,819¥

One to threeyears¥

Millions of yen
Five toseven years

Three tofive years-

Millions of yen
Five toseven years

Three tofive years
¥

¥

-

¥

-

¥

Seven to 10
years
¥

-

Over 10
Years
¥

-

-

-

-

-

-

3,970

2,770

-

2,525

-

287,457

206,556

120,538

232,904

258,288---

84,00075,000130,61287,67788,353

119,318

7,642

39,385
117,459

45,30573,573

4,916
27,26816,50013,08687,15988,486

679,863971,291

556,181765,508

417,799
538,338

442,051
677,481

1,634,189¥ 1,892,477¥- 28 -¥¥

March 31, 2024

Within one
year

Due from banks $ 8,989,830
Call loans andbills bought
37,756
Monetaryclaims bought
22,392Available-forsale securities
with maturity:
569,801o/w Japanese
government
bonds
Local
government
bonds
253,169
Corporatebonds
83,465
Others
233,167
Loans and bills
discounted (*)
5,290,525
Total$ 14,910,304

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

One to three
years

$

-

$

$

-

$

-

$

Over
10 years

-

$

-

-

-

-

-

-

11,084

8,560

11,781--

1,718,297

1,727,198

1,009,927

1,291,197

1,635,843-

52,837

46,232

614,226

495,344864,433

509,891

725,949

618,648

43,340270,487
583,377

440,434
724,036

173,162
64,584

23,11635,207541,758
555,401

4,494,780
6,224,161

4,149,559
5,885,317

2,925,969
3,947,677

3,068,188$ 4,359,385

12,080,687$ 13,716,530$$(*) These loans and bills discounted do not include loans in the amount of ¥37,298 million ($246,339
thousand) and ¥40,576 million that did not have specific maturity dates as of March 31, 2024 and 2023,
respectively.
(Note 5) Maturities of interest bearing liabilities at March 31, 2024 and 2023

March 31, 2024

Within one
year

One to threeyears

Deposits (*)¥ 5,546,275¥

Negotiablecertificates ofdepositCall money andbills soldPayables under
securities
lendingtransactions
Borrowed
money
Total

257,160

Millions of yen
Five toseven years

Three tofive years¥

86,545¥-Seven to 10
years

¥

-

Over 10
years

¥

-

172,788

100

-

-

-

-

629,300

-

-

-

-

-

269,133

-

-

-

-

-

3,573
¥ 6,621,070

4,653
261,913462,299548,845

31
31

-

-

¥

¥

- 29 -¥¥¥

March 31, 2023

Within one
year

One to threeyears

Deposits (*)¥ 5,486,415¥

Negotiablecertificates ofdepositCall money andbills soldPayables under
securities
lendingtransactions
Borrowed
money
Total

March 31, 2024

Within one
year

Deposits (*)

Millions of yen
Five toseven years

Three tofive years

236,420¥

50,145¥Seven to 10
years

-

¥

Over 10
years

-

¥

-

145,524

34

-

-

-

-

365,800

-

-

-

-

-

235,605

-

-

-

-

-

6,901
¥ 6,240,246

23,892
260,346441,241
491,387

17
17

-

-

$

Negotiablecertificates ofdepositCall money andbills soldPayables under
securities
lendingtransactions
Borrowed
money
Total
$

36,630,841

¥

¥

¥

¥

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

One to three
years

$

¥

1,698,439$

571,596

$

-

$

-

Over 10
years

$

-

1,141,195

661

-

-

-

-

4,156,265

-

-

-

-

-

1,777,514

-

-

-

-

-

23,60043,729,415

30,733
1,729,833

3,053,297$ 3,624,893

207
207

-

-

$

$

(*) On-demand deposits are included in the “Within one year” column.

- 30 -$$

4. Trading Account Securities, Money Held in Trust and Securities
At March 31, 2024 and 2023, securities consisted of the following:Thousands of
U.S. dollars
2024

Millions of yen
2024
Japanese government bonds
Local government bonds
Corporate bonds
StocksOther securities
Total

¥

¥

2023

171,284
451,745
226,060
301,130
402,002
1,552,223¥

152,123456,829
208,381
192,806
381,773
1,391,914¥$$

1,131,262
2,983,593
1,493,036
1,988,839
2,655,061
10,251,791

Guarantees provided for certain private placement bonds were included in securities in accordance with
Article 2, Paragraph 3 of the Financial Instruments and Exchange Act of Japan. The guarantees amounted
to ¥25,783 million ($170,286 thousand) and ¥30,475 million at March 31, 2024 and 2023, respectively.
Investments in securities are classified as trading, held-to-maturity or available-for-sale securities. Suchclassifications determine the respective accounting method to be applied as stipulated under theaccounting standards for financial instruments. At March 31, 2024 and 2023, the carrying values of
trading account securities, money held in trust for trading purposes, and related net unrealized gains andlosses included in current earnings were as follows:

Carrying
value

Unrealized
gains(losses)

Carrying
value

Unrealized
gains(losses)Millions of yen
2024
Trading accountsecurities¥
Money held in trust

93
1,000

¥

2023
1
-

- 31 -

¥

55
2,013

¥

0
13

Unrealized
Carrying
gains
value
(losses)Thousands of
U.S. dollars
2024
$

617
6,605

$

10
-

At March 31, 2024 and 2023, gross unrealized gains and losses on marketable available-for-sale securities
were as follows.
Acquisition
cost

Gross
Gross
unrealized
unrealized
gains
lossesMillions of yen

Fair andcarryingvalue

As of March 31, 2024
Securities for which carrying value exceeds
acquisition cost:
Stocks¥Bonds:
Japanese government bonds
Local government bonds
Corporate bonds
OthersSecurities for which carrying value does notexceed acquisition cost:
StocksBonds:
Japanese government bonds
Local government bonds
Corporate bonds
OthersTotal¥

52,355¥245,917¥-¥298,272

32,611
138,249
41,099218,171

73
487
106
9,744

-

32,685
138,736
41,205
227,915

1,045

-

(54)

991

149,702317,901
190,662
177,856
1,319,655¥

256,329¥(11,103)(4,892)(5,807)(7,643)(29,500)¥

138,599
313,009
184,854
170,213
1,546,484

41,857¥138,289¥-¥

180,146

As of March 31, 2023
Securities for which carrying value exceeds
acquisition cost:
Stocks¥Bonds:
Japanese government bonds
Local government bonds
Corporate bonds
OthersSecurities for which carrying value does notexceed acquisition cost:
StocksBonds:
Japanese government bonds
Local government bonds
Corporate bonds
OthersTotal¥

100
156,438
48,471
137,516

3
981
256
3,562

-

103
157,419
48,728141,078

11,577-(836)

10,741

159,405
304,411
163,056
251,873
1,274,707

143,092(7,385)(5,001)(3,402)(11,155)(27,781)

152,020
299,409
159,653
240,718
1,390,018- 32 -¥¥¥

Acquisition
cost

Gross
Gross
unrealized
unrealized
gains
lossesThousands of U.S. dollars

Fair andcarryingvalue

As of March 31, 2024
Securities for which carrying value exceeds
acquisition cost:
Stocks$Bonds:
Japanese government bonds
Local government bonds
Corporate bonds
OthersSecurities for which carrying value does notexceed acquisition cost:
StocksBonds:
Japanese government bonds
Local government bonds
Corporate bonds
OthersTotal$

345,784$

1,624,180$-$

1,969,964

215,385
913,078
271,443
1,440,933

489
3,220
705
64,355-

215,874
916,298
272,148
1,505,288

6,905

-

(358)

6,547

988,7212,099,607
1,259,247
1,174,671
8,715,774

1,692,949(73,332)(32,311)(38,359)(50,479)$ (194,839)

915,389
2,067,296
1,220,888
1,124,192
10,213,884$$

An impairment loss on investment securities in the amount of ¥80 million ($528 thousand) (consisting ofcorporate bonds in the amount of ¥80 million) was recorded for the year ended March 31, 2024.
No impairment loss was recognized on investment securities for the year ended March 31, 2023.
If the fair value of a marketable investment security declines to between 30% and 50% of the acquisition
cost, recoverability of the security will be determined based on the trend of changes in related fair values
over a given period and the financial condition of the issuing company. If the determined amount of
decline in the fair value is deemed unrecoverable, impairment loss will be recognized.
At March 31, 2024 and 2023, net unrealized gains on available-for-sale securities, net of applicable
income taxes and noncontrolling interests, recorded in the valuation difference on available-for-salesecurities in the accompanying consolidated balance sheets were as follows.
Millions of yen
2024
2023

Thousands of
U.S. dollars
2024

Unrealized gains¥
226,651 ¥
115,292 $1,496,937
Less applicable income taxes(68,009)(34,580)(449,171)
Less noncontrolling interests portion
(80)
(80)
(532)
¥
158,561 ¥
80,631 $
1,047,234
Net unrealized gains in net assets(Note) Unrealized gains includes unrealized loss in the amounts of ¥177 million ($1,173 thousand)and ¥18 million at March 31, 2024 and 2023, respectively, on available-for-sale securities thatare components of partnerships, etc.

- 33 -

Available-for-sale securities sold during the years ended March 31, 2024 and 2023 were as follows:
Proceeds fromsales

For the year 2024:
StocksBonds:
Japanese government
bonds
Local government bonds
Corporate bonds
OthersFor the year 2023:
StocksBonds:
Japanese government
bonds
Local government bonds
Corporate bonds
OthersLoss on sales

¥

2,973

¥

267

¥

453
851
19
5,183
6,775

¥

352

¥

1
5,634
5,988

¥

7,182

¥

19,09750,6891,161
70,576
148,708

¥

23
0
4,629
7,626

¥

10,311

¥

2,986

¥

80,451
666
119,733
211,163

¥

702
58
3,516
7,264

Proceeds fromsales

For the year 2024:
StocksBonds:
Japanese government
bonds
Local government bonds
Corporate bonds
OthersGain on sales
Millions of yen$$

Gain on sales
Thousands of U.S. dollars

47,437$

19,638Loss on sales

$

1,765

126,133

158

2,993

334,786
7,672
466,130
982,158

1
30,57550,372

5,626
130
34,23744,751- 34 -$$

5.

Loans and Bills Discounted
At March 31, 2024 and 2023, loans and bills discounted consisted of the following:Thousands of
U.S. dollars
2024

Millions of yen
2024
Bills discounted
Loans on notes
Loans on deeds
Overdrafts

¥

¥

2023

3,804
70,9894,442,582
366,5124,883,888

¥

¥

3,965
71,0494,104,152
367,464
4,546,631$$

25,126
468,856
29,341,404
2,420,661
32,256,047

Bills discounted are accounted for as financial transactions in accordance with JICPA’s Industry Audit
Committee Practical Guidance No. 24 of March 17, 2022, “Accounting and Auditing Treatment of
Accounting Standards for Financial Instruments in the Banking Industry.” The Hyakugo Bank Group has
the right to sell or pledge bills discounted without restrictions. The total face value of these bills amounted
to ¥3,804 million ($25,126 thousand) and ¥3,965 million at March 31, 2024 and 2023, respectively.
Loans based on the Banking Act and the Law concerning Emergency Measures for the Revitalizationof the Financial Functions are as follows:
Loans are defined as corporate bonds included in “Securities” in the consolidated balance sheet (thewhole or part of the redemption of the principal and payment of interest are guaranteed and limited tocorporate bonds issued through private placement of the securities (as provided in Paragraph 3 ofArticle 2 of the Financial Instruments and Exchange Act)), loans, foreign exchange, those that areincluded in the accounts of accrued interest and temporary payments under other assets and customers’
liabilities for acceptances and guarantees, and lent securities (limited to loan-for-use contracts or lease
contracts).
Millions of yen
2024
2023
Loans under bankruptcy/rehabilitation orsimilar proceedings
Risk loans
Delinquent loans past due over three months
Restructured loans
Total

¥

¥

10,893 ¥50,0998,004
68,998 ¥8,257 $
50,048108
7,842
66,257 $Thousands of
U.S. dollars
2024
71,950330,887
52,868455,705

Loans under bankruptcy/rehabilitation or similar proceedings are loans to borrowers under bankruptcy
or similar proceedings due to such reasons as commencement of bankruptcy proceedings,
commencement of rehabilitation proceedings, petition for rehabilitation proceedings, etc.
Risk loans are loans on which the principal and interest are unlikely to be collectable in accordancewith the contract due to deterioration in the financial position and operating performance of the
debtors, although they have not been declared bankrupt, and do not fall into the category of loans
under bankruptcy/rehabilitation or similar proceedings.
Delinquent loans past due over three months are loans on which the payment of principal and/orinterest is past due for three months or more from the due date, and which do not fall into the categoryof loans under bankruptcy/rehabilitation or similar proceedings, or risky claims.
Restructured loans are loans on which terms and conditions have been amended in favor of borrowers
in order to facilitate or assist the borrowers’ restructuring efforts by reducing the rate of interest, by
providing a grace period for the payment of principal or interest or by loan forgiveness, and are notclassified in any of the above categories.
The amounts shown for the above loans are before deducting allowances for credit losses.

- 35 -

6.

Tangible Fixed Assets
At March 31, 2024 and 2023, tangible fixed assets, net of accumulated depreciation, were as follows:
Millions of yen
2024
2023
Buildings
Land
Construction in progress
Other tangible fixed assets
Tangible fixed assets¥

18,553 ¥
19,732
253
5,256
43,796 ¥¥Thousands of
U.S. dollars
2024

18,913 $
19,732
0
4,933
43,580 $122,537
130,327
1,678
34,716289,258

Accumulated depreciation of tangible fixed assets amounted to ¥40,777 million ($269,319 thousand) and¥39,749 million as of March 31, 2024 and 2023, respectively.
Pursuant to the Act Concerning Revaluation of Land (the “Revaluation Act”), the Bank elected a onetime revaluation to restate the cost of land used for the banking business at values reassessed to reflect
adjustments for land shape and other factors based on appraisal values issued by the Japanese National
Tax Agency effective March 31, 1998. According to the Revaluation Act, the amount equivalent to thetax effect on the excess of the reassessed value over the original book value is recorded as a deferred tax
liability for land revaluation. The remainder of such excess, net of the tax effect, is recorded as arevaluation reserve for land in accumulated other comprehensive income of net assets in the balance
sheets. At March 31, 2024 and 2023, the differences in the total carrying value of land used for the banking
business after revaluation over the then total current market value at the fiscal year-end amounted to¥2,424 million ($16,010 thousand) and ¥2,675 million, respectively.
As permitted by the accounting principles and practices generally accepted in Japan, the Bank deducts
deferred capital gain on the sale of real property from the original acquisition cost of property newly
acquired for replacement purposes in the same line of business as the property sold. At March 31, 2024
and 2023, deferred capital gain in the amount of ¥4,351 million ($28,741 thousand) and ¥4,327 million,
respectively, were directly deducted from the acquisition cost of land and buildings.
7.

Pledged Assets
At March 31, 2024 and 2023, the following assets were pledged as collateral for liabilities.
Millions of yen
2024
2023
Securities¥

778,529 ¥760,689 $Thousands of
U.S. dollars
2024
5,141,866

The above pledged assets secure the following liabilities.
Millions of yen
2024
2023
Deposits
Payables under securities lending transactions
Borrowed money¥

23,890 ¥269,133
460,000

54,468 $235,605
464,400

Thousands of
U.S. dollars
2024
157,787
1,777,514
3,038,108

In addition, securities amounting to ¥980 million ($6,473 thousand) and ¥994 million at March 31, 2024
and 2023, respectively, and cash and due from banks amounting to ¥200 million ($1,321 thousand) at
March 31, 2024 and 2023, respectively, were pledged as collateral for settlement of exchange, derivatives- 36 -

and other transactions.
Other assets include guarantee money of ¥1,293 million ($8,541 thousand) and ¥1,416 million as ofMarch 31, 2024 and 2023, respectively, margin money deposited with a central clearing organization of¥25,000 million ($165,115 thousand) as of both March 31, 2024 and 2023, and margin money depositedfor financial instruments of ¥18,183 million ($120,093 thousand) and ¥9,420 million as of March 31,
2024 and 2023, respectively.
8.

Deposits and Negotiable Certificates of Deposit
At March 31, 2024 and 2023, deposits consisted of the following.
Millions of yen
2024
2023
Demand deposits
Time deposits
Other deposits
Deposits
Negotiable certificates of deposit

¥

¥

9.

3,936,771
1,910,389
42,8205,889,981
172,888
6,062,870¥¥

3,802,292
1,904,772
65,9155,772,980
145,558
5,918,539

Thousands of
U.S. dollars
2024
$

$

26,000,734
12,617,328
282,81438,900,876
1,141,856
40,042,732

Borrowed Money and Lease Obligations
Borrowed money consisted of borrowings from financial institutions with an average interest rate of
0.00% per annum at March 31, 2024 due through April 2029.
Borrowed money due annually through 2029 at March 31, 2024 was as follows.
Millions ofyenYear ending March 31
2025
2026
2027
2028
2029 and
thereafter

¥

3,573
2,689
1,963
461,547

Thousands of
U.S. dollars
$

783
¥

- 37 -

470,557

23,60017,766
12,967
3,048,329
5,175$

3,107,837

Lease obligations included in “other liabilities” due annually through June 2029 at March 31, 2024 wereas follows.
Millions ofyenYear ending March 31
2025
2026
2027
2028
2029
2030 and
thereafter

¥

¥

27
27
27
27
27
6
143

Thousands of
U.S. dollars
$

182
180
180
180
180
45
947

$

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

Changes in retirement benefit obligations for the years ended March 31, 2024 and 2023 were as follows:
Millions of yen
2024
2023
Beginning balance of retirement benefit
obligations
Service cost
Interest cost
Actuarial differences
Retirement benefits paid
Past service cost
Other
Ending balance of retirement benefit obligations¥¥- 38 -

38,145
1,269
115
171
(2,559)037,141¥¥39,405
1,319
118
(221)
(2,477)
038,145

Thousands of
U.S. dollars
2024
$

$

251,933
8,385
764
1,131
(16,907)1
245,307

ii.

The changes in pension plan assets for the years ended March 31, 2024 and 2023 were as follows:
Millions of yen
2024
2023

Thousands of
U.S. dollars
2024

Beginning balance of pension plan assets¥
73,425¥75,708$484,945
Expected return on pension plan assets
2,163
2,159
14,286
Actuarial differences
25,345(4,368)167,396Contribution from the employer
1,015
1,601
6,705
Retirement benefits paid
(1,665)(1,674)(11,000)
0
0
1
Other
Ending balance of pension plan assets¥
100,283¥
73,425$662,333
iii. Reconciliations between the ending balances of retirement benefit obligations and pension plan assets
and the liability or asset for employee retirement benefits recorded in the consolidated balance sheet wereas follows.
Millions of yen
2024
2023
Funded retirement benefit obligations
Pension plan assets
Unfunded retirement benefit obligations
Net liability (asset) recorded in the consolidatedbalance sheet¥

36,649(100,283)(63,634)492¥

37,702(73,425)(35,722)442$

242,053(662,333)(420,280)
3,254¥(63,141)¥(35,280)$(417,026)

Millions of yen
2024
2023
Liability for employee retirement benefits
Asset for employee retirement benefits
Net liability (asset) recorded in the consolidatedbalance sheet

Thousands of
U.S. dollars
2024

Thousands of
U.S. dollars
2024

¥

535
(63,677)¥

485(35,765)$3,536(420,562)¥(63,141)¥(35,280)$(417,026)

iv. The components of retirement benefit expenses for the years ended March 31, 2024 and 2023 were as
follows.
Millions of yen
2024
2023
Service cost
Interest cost
Expected return on pension plan assets
Amortization of actuarial differences
Amortization of past service cost
Other
Retirement benefit expenses on defined benefit
plans

Thousands of
U.S. dollars
2024

¥

1,269
115
(2,163)
(838)
-

¥

1,319
118
(2,159)(1,356)
-

$

8,385
764
(14,286)(5,539)-¥(1,616)¥(2,076)$(10,676)(Note) Retirement benefit expenses of consolidated subsidiaries applying the simplified method were all
included in “service cost.”- 39 -

v.

The components of retirement benefit adjustments (before tax effect) on other comprehensive income
were as follows.
Thousands of
U.S. dollars
2024

Millions of yen
2024
2023
Actuarial differences
Other
Total
vi.

¥
¥

(24,335)(24,335)

¥
¥

5,503
5,503

$
$

(160,727)(160,727)

The components of retirement benefit adjustments (before tax effect) on accumulated othercomprehensive income were as follows:
Thousands of
U.S. dollars
2024

Millions of yen
2024
2023
Unrecognized actuarial differences
Other
Total

¥
¥

(28,113)(28,113)¥¥(3,777)(3,777)$$(185,677)(185,677)

vii. Pension plan assets
i. Components of pension plan assets
Pension plan assets consisted of the following:
2024
Bonds
StocksCash and deposits
General account
Other
Total

9%
62%
0%
11%
18%
100%

2023
9%
51%
0%
15%
25%
100%

(Note) At March 31, 2024, the retirement benefit trust established for lump-sum retirement benefit plans
and corporate pension fund plans accounted for 53% (41% in 2023) of total pension plan assets.
ii. Method for determining the long-term expected rate of return on pension plan assets
The long-term expected rate of return on pension plan assets is determined by considering the allocationof pension plan assets and long-term rates of return that are expected currently and in the future forvarious components of the pension plan assets.
viii. Assumptions used for the years ended March 31, 2024 and 2023 were as follows:

Discount rate

Corporate pension fund plans
Lump-sum retirement benefit plans

Long-term expected rate of return(mainly)

2024
0.4%
0.0%

2023
0.4%
0.0%

3.5%

3.5%

(Note) In computing retirement benefit obligations, points awarded for the future based on the benefit
formula are not factored in, and the expected rate of salary increase is not applied.

- 40 -

(3) Defined contribution plans
The required contribution to the defined contribution plans of the Bank and its consolidated subsidiaries
amounted to ¥467 million ($3,088 thousand) and ¥469 million for the years ended March 31, 2024 and2023, respectively.
11. Acceptances and Guarantees
The Bank provides guarantees with respect to certain liabilities of its customers for the payment of loans
and other liabilities from other financial institutions. As a contra account, “customers’ liabilities for
acceptances and guarantees” are shown in assets on the accompanying consolidated balance sheets,
indicating the Bank’s right of indemnity from its customers.
12. Net Assets
The authorized number of shares of common stock without par value is 396,000,000 shares. At both
March 31, 2024 and 2023, the number of shares of common stock issued was 254,119,000 shares. At
March 31, 2024 and 2023, the number of shares of treasury stock held by the Hyakugo Bank Group was
4,214,012 shares and 537,155 shares, respectively.
At both March 31, 2024 and 2023, capital surplus consisted principally of additional paid-in capital.
Retained earnings included legal reserve of the Bank amounting to ¥17,377 million ($114,772 thousand)at both March 31, 2024 and 2023. The Banking Act of Japan provides that an amount equivalent to atleast 20% of the cash payments as an appropriation of retained earnings be appropriated as legal reserve
until the total amount of additional paid-in capital and legal reserve equals 100% of common stock. The
reduction of the legal reserve is restricted under the current circumstances to the proper action of theshareholders of the Bank.

- 41 -

13. Stock Options
On July 28, 2023 and July 28, 2022, stock options were granted to the directors of the Bank. The related
costs in the amount of ¥22 million ($148 thousand) and ¥19 million were recorded under general andadministrative expenses for the years ended March 31, 2024 and 2023, respectively.
The stock options outstanding at March 31, 2024 were as follows:

Persons granted

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

Persons granted

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

Persons granted

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

2011
Stock Options
13 directors of
the Bank

2012
Stock Options
13 directors of
the Bank

94,000 shares ofcommon stockof the Bank
July 26, 2012
Not definedNot defined2013
Stock Options
13 directors of
the Bank(excluding
independent
directors)
71,700 shares ofcommon stockof the Bank
July 24, 2013
Not definedNot defined2014
Stock Options
13 directors of
the Bank(excluding
independent
directors)
71,200 shares ofcommon stockof the Bank
July 31, 2014
Not definedNot defined2015
Stock Options
12 directors of
the Bank(excluding
independent
directors)
48,100 shares ofcommon stockof the Bank
July 30, 2015
Not definedNot defined

91,600 shares ofcommon stockof the Bank
July 25, 2011
Not definedNot defined
July 26, 2011
through July 25,
2041

July 27, 2012
through July 26,
2042

July 25, 2013
through July 24,
2043

August 1, 2014
through July 31,
2044

July 31, 2015
through July 30,
2045

2016
Stock Options
12 directors of
the Bank(excluding
independent
directors)
71,400 shares ofcommon stockof the Bank

2017
Stock Options
12 directors of
the Bank(excluding
independent
directors)
62,800 shares ofcommon stockof the Bank

2018
Stock Options
6 directors of
the Bank(excluding
independent
directors)
43,800 shares ofcommon stockof the Bank

2019
Stock Options
6 directors of
the Bank(excluding
independent
directors)
61,700 shares ofcommon stockof the Bank

July 27, 2016
Not definedNot defined

July 27, 2017
Not definedNot defined

July 30, 2018
Not definedNot defined

July 30, 2019
Not definedNot defined2020
Stock Options
6 directors of
the Bank(excluding
independent
directors)
54,100 sharesof common
stock of the
Bank
July 31, 2020
Not definedNot defined

July 28, 2016
through July 27,
2046

July 28, 2017
through July 27,
2047

July 31, 2018
through July 30,
2048

July 31, 2019
through July 30,
2049

August 1, 2020
through July
31, 2050

2021
Stock Options
6 directors of
the Bank(excluding
independent
directors)
62,300 shares ofcommon stockof the Bank
July 30, 2021
Not definedNot defined2022
Stock Options
6 directors of
the Bank(excluding
independent
directors)
66,800 shares ofcommon stockof the Bank
July 28, 2022
Not definedNot defined2023
Stock Options
6 directors of
the Bank(excluding
independent
directors)
53,000 shares ofcommon stockof the Bank
July 28, 2023
Not definedNot defined

July 31, 2021
through July 30,
2051

July 29, 2022
through July 28,
2052

July 29, 2023
through July 28,
2053*The number of options is equal to and is shown as the number of shares.

- 42 -

The stock option activities were as follows.
Number of stock
options (in shares)
Nonvested:
Outstanding at
April 1, 2022
GrantedForfeited
VestedOutstanding at
March 31, 2023
GrantedForfeited
VestedOutstanding at
March 31, 2024
Vested:Outstanding at
April 1, 2022
VestedExercised
Forfeited
Outstanding at
March 31, 2023
VestedExercised
Forfeited
Outstanding at
March 31, 2024

2011
Stock Options

2012
Stock Options

2013
Stock Options

2014
Stock Options

2015
Stock Options

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

15,80016,20014,70014,60012,60015,80016,20014,70014,60012,60015,80016,20014,70014,60012,600

Number of stock
options (in shares)
Nonvested:
Outstanding at
April 1, 2022
GrantedForfeited
VestedOutstanding at
March 31, 2023
GrantedForfeited
VestedOutstanding at
March 31, 2024
Vested:Outstanding at
April 1, 2022
VestedExercised
Forfeited
Outstanding at
March 31, 2023
VestedExercised
Forfeited
Outstanding at
March 31, 2024

2016
Stock Options

2017
Stock Options

2018
Stock Options

2019
Stock Options

2020
Stock Options

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

18,60020,10016,40024,50038,80018,60020,10016,40024,50038,80018,60020,10016,40024,5006,800
32,000- 43 -

Number of stock
options (in shares)
Nonvested:
Outstanding at
April 1, 2022
GrantedForfeited
VestedOutstanding at
March 31, 2023
GrantedForfeited
VestedOutstanding at
March 31, 2024
Vested:Outstanding at
April 1, 2022
VestedExercised
Forfeited
Outstanding at
March 31, 2023
VestedExercised
Forfeited
Outstanding at
March 31, 2024

2021
Stock Options

2022
Stock Options

2023
Stock Options

-

-

-

-

66,80066,800----53,00053,000-62,300--62,30066,80066,800-16,20046,10014,80052,00053,00053,000- 44 -

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

Exercise price
Average stock price at
exercise
Fair value at grant date

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

2012
Stock Options
¥1
-

2013
Stock Options
¥1
-

2014
Stock Options
¥1
-

2015
Stock Options
¥1
-

¥302

¥300

¥404

¥396

¥578

2016
Stock Options
¥1
-

2017
Stock Options
¥1
-

2018
Stock Options
¥1
-

2019
Stock Options
¥1
-

2020
Stock Options
¥1
¥411

¥377

¥433

¥480

¥303

¥293

2021
Stock Options
¥1
¥411

2022
Stock Options
¥1
¥411

2023
Stock Options¥1 ($0.01)
-

¥267

¥294

¥424 ($2.80)

The method and assumptions used to measure the fair value of stock options granted for the years ended
March 31, 2024 and 2023 were as follows.
1) 2023 stock options:
Estimation method:Black-Scholes option pricing model
Volatility of stock price (Note 1):25.56%
3.58 years
Estimated remaining outstanding period (Note 2):
Estimated dividend (Note 3):¥13.0 ($0.08) per share
0.00%
Risk free interest rate (Note 4):
Notes:
1. Volatility was computed based on actual stock prices during the period corresponding to the estimated remaining
outstanding period from December 2019 through July 2023.
2. The estimated remaining outstanding period was determined by calculating the period from the date of allotmentof the stock options until the first election after each present director’s age exceeds the average retirement age ofthe retired directors with titles and directors who concurrently served as executive officers during the past 10 years,
and averaging them. If the current age of a present director exceeds the average retirement age in the past, theperiod from the date of allotment of the stock options until the next election is used.
3. The estimated dividend was determined using the actual dividend payments for the year ended March 31, 2023.
4. The risk free interest rate is the yield on Japanese government bonds corresponding to the estimated remaining
outstanding period2) 2022 stock options:
Estimation method:Black-Scholes option pricing model
Volatility of stock price (Note 1):26.51%
3.25 years
Estimated remaining outstanding period (Note 2):
Estimated dividend (Note 3):¥11.0 ($0.08) per share(0.07)%
Risk free interest rate (Note 4):
Notes:
1. Volatility was computed based on actual stock prices during the period corresponding to the estimated remaining
outstanding period from April 2019 through July 2022.
2. The estimated remaining outstanding period was determined by adding the period from the date of allotment of thestock options to the following election to the difference between the average retirement age of the retired directors
with titles and directors who concurrently served as executive officers during the past 10 years and the average ageof the present directors. If the difference is shorter than the period from the date of allotment of the stock options
to the following election, the difference is considered to be zero in estimating the remaining outstanding period.
3. The estimated dividend was determined using the actual dividend payments for the year ended March 31, 2022.
4. The risk free interest rate is the yield on Japanese government bonds corresponding to the estimated remaining
outstanding period.

14. Loan Commitments
Contracts for overdraft facilities and loan commitment limits represent the maximum amounts the Bank
will lend to customers in response to the customers’ applications for loans, provided that there are no- 45 -

violations of any conditions in the applicable contracts. At March 31, 2024 and 2023, the total unused
amount within the limits of these contracts was ¥1,216,691 million ($8,035,740 thousand) and¥1,269,790 million, respectively. These unused amounts included amounts related to contracts which
will expire within one year or are revocable by the Bank at any time without any conditions in theamount of ¥1,134,255 million ($7,491,283 thousand) and ¥1,181,676 million at March 31, 2024 and2023, respectively.
Since many of these commitments expire without being drawn down, an unused amount does notnecessarily represent a future cash requirement. Most of these contracts have conditions that permit the
Bank to refuse the customers’ applications for loans or decrease the contract limit for proper reasons(e.g., changes in the financial situation, deterioration in the customer’s creditworthiness or the like). As
a condition to entering a contract, the Bank may obtain collateral in the form of real estate, securities,
etc., if considered necessary. During the term of the contract, the Bank performs periodic reviews of thecustomers’ business based on internal rules and may take necessary measures that include reconsidering
the conditions under the contract and/or requiring additional collateral and/or guarantees.
15. Leases(1) Finance leases
As a lessor:
Lease investment assets at March 31, 2024 and 2023 were as follows:
Thousands of
U.S. dollars
2024

Millions of yen
2024
2023
Gross lease receivables
Estimated residual values
Unearned interest income
Lease investment assets¥¥

27,2201,437(1,956)
26,701¥¥

26,5991,445(1,913)
26,131$$

179,783
9,491(12,919)
176,355

Lease receivables which arose under transferable finance leases that mature subsequent to March 31,
2024 and 2023 were as follows.
Thousands of
U.S. dollars
2024

Millions of yen
2024
2023
Due within one year
More than one year, but within two years
More than two years, but within three years
More than three years, but within four years
More than four years, but within five years
More than five years
Lease receivables

¥

¥

1,112
874
574
439
290
615
3,906

¥

¥

1,156
926
686
384
241
708
4,103

$

$

7,349
5,773
3,794
2,901
1,917
4,064
25,798Gross lease receivables under nontransferable finance leases that mature subsequent to March 31, 2024
and 2023 were as follows:- 46 -

Thousands of
U.S. dollars
2024

Millions of yen
2024
2023
Due within one year
More than one year, but within two years
More than two years, but within three years
More than three years, but within four years
More than four years, but within five years
More than five years
Gross lease receivables of lease
investment assets

¥

8,053
6,821
5,115
3,600
1,921
1,708

¥

7,749
6,398
5,027
3,504
2,106
1,812

$

53,19145,05333,78523,777
12,693
11,284¥27,220¥26,599$179,783(2) Operating leases
Future minimum lease payments under non-cancellable operating lease transactions were as follows:
Thousands of
U.S. dollars
2024

Millions of yen
2024
2023
As lessee:
Due within one year
Due after one year¥¥

As lessor:
Due within one year
Due after one year

¥
¥

320
673
993

¥

950
1,343
2,294

¥

¥

¥

624
702
1,326

$

808
1,162
1,970

$

$

$

2,115
4,448
6,563

6,278
8,873
15,151(3) Subleases
Sublease related amounts before deducting interest equivalent amounts recorded in the consolidatedbalance sheets were as follows:
Thousands of
U.S. dollars
2024

Millions of yen
2024
2023
Lease investment assets
Lease obligations

¥

143
143

¥

173
173

$

947
947

16. Derivative Instruments
Derivative instruments involve, in varying degrees, elements of credit and market risk. The Hyakugo
Bank Group is exposed to credit loss in the event of nonperformance by the counterparties. However, theHyakugo Bank Group has not faced and does not expect such nonperformance.
Derivative contracts to which hedge accounting was not applied:With respect to derivatives to which hedge accounting was not applied, the contract amounts or notional
principal amounts as defined in the applicable contracts, the fair values and valuation gains (losses) as ofMarch 31, 2024 and 2023 are set forth in the table below. Note that the contract amounts do not represent
the market risk exposure of the derivative transactions themselves.

- 47 -

Contract amounts
Fair value
Millions of yen
At March 31, 2024
Interest rate contracts:
Swaps
Foreign exchange contracts:
Currency swaps
Forwards
Currency options
Earthquake derivatives¥

32,071¥

211,017
169,170
63,8931,450

At March 31, 2023
Interest rate contracts:
Swaps
Foreign exchange contracts:
Currency swaps
Forwards
Currency options
Earthquake derivatives¥

33,441

164

Valuation
gains (losses)¥(3,709)(3,720)(0)¥231,902212,955
61,162
1,250

172

164
(3,709)(3,720)
347
-

¥

103
(1,623)
(0)

172
103
(1,623)358-

Thousands of U.S. dollars
At March 31, 2024
Interest rate contracts:
Swaps
Foreign exchange contracts:
Currency swaps
Forwards
Currency options
Earthquake derivatives$

211,817
1,393,680
1,117,301
421,990
9,577

$

1,086
(24,500)(24,570)
(0)

$

1,086
(24,500)(24,570)
2,295-

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

Derivative contracts to which hedge accounting was applied:With respect to derivatives to which hedge accounting was applied, the contract amounts or notional
principal amounts as defined in the applicable contracts and the fair values by transaction type andaccounting method as of March 31, 2024 and 2023 are set forth the table below. Note that the contract
amounts do not represent the market risk exposure of the derivative transactions themselves.

- 48 -

Contract
amount due
after one year

Contract
amountHedge
accounting
methodTransaction type

At March 31, 2024
DeferralInterest rate
methodswaps:
Receivable
floating rate/
payable fixedrate

Major hedged
items

¥

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

DeferralmethodForeigncurrency swaps:
Foreign currency Loans andforwardbills
contracts:
discounted

Interest
rate swaps
meeting
certainconditions
DeferralmethodInterest rate
swaps:
Receivable
floating rate/
payable fixedrate

Millions of yen

Securities,
loans and bills
discounted

Interest
rate swaps
meeting
certainconditions

At March 31, 2023
Interest rate
Deferralswaps:
methodReceivable
floating rate/
payable fixed
rate

Fair value

83,590¥83,459

¥

2,734

408

408

See Note 2

49,66334,522(12,763)---

Securities,
loans and bills
discounted¥

39,137¥38,934¥13

Loans and bills
discounted

Foreigncurrency swaps:
Foreign currency Loans andforwardbills
contracts:
discounted- 49 -

740

648

See Note 2

47,632

40,955(8,483)---

Contract
amount due
after one year

Contract
amountHedge
accounting
methodTransaction type

Major hedged
items

At March 31, 2024
DeferralInterest rate
methodswaps:
Securities,
Receivableloans and bills
floating rate/
payable fixed rate discounted

Interest
rate swaps
meeting
certainconditions

Interest rate
swaps:
Receivable
Loans andfloating rate/bills
payable fixed rate discounted

DeferralmethodForeigncurrency swaps:
Forwardcontracts:

Fair value

Thousands of U.S. dollars$

Loans andbills
discounted

552,078$

551,216$

18,063

2,700

2,700

See Note 2

328,005

228,005(84,299)---

Notes:
1. Gains and losses on the above contracts are deferred until the maturity of the hedged items pursuant to “Accounting
and Auditing Treatment of Accounting Standard for Financial Instruments in the Banking Industry” (JICPA’s Industry
Audit Committee Practical Guidance No. 24 of March 17, 2022).
2. With respect to interest rate swap contracts which meet certain conditions, the fair value of the interest rate swap
contract is considered part of the fair value of the relevant loan or bill discounted described in Note 3, “Financial
Instruments and Related Disclosures,” since such interest rate swap contracts are used for recording loans and bills
discounted as hedged items.
3. With respect to foreign currency related contracts, the deferral method of hedge accounting is principally applied inaccordance with the “Accounting and Auditing Treatment of Accounting for Foreign Currency Transactions in the
Banking Industry” (JICPA’s Industry Audit Committee Practical Guidance No. 25 of October 8, 2020).

- 50 -

17. Income Taxes
At March 31, 2024 and 2023, income taxes (including local taxes) payable in the amount of ¥3,475
million ($22,957 thousand) and ¥2,491 million, respectively, were included in “other liabilities” in theaccompanying consolidated balance sheets.
At March 31, 2024 and 2023, the tax effects of temporary differences that gave rise to a significant
portion of deferred tax assets and liabilities were as follows:
Thousands of
U.S. dollars
2024

Millions of yen
2024
2023
Deferred tax assets:¥
Allowance for loan losses
Deferred losses on hedges
Valuation loss on securities
OthersSubtotalLess valuation allowance
Total deferred tax assets
Net of deferred tax liabilities:
Unrealized gains on available-for-salesecurities
Retirement benefits
Deferred gains on hedges
OthersTotal deferred tax liabilities
Net deferred tax assets (liabilities) ¥

7,623
132
854
4,133
12,744(1,296)
11,447(68,009)(21,257)
(933)
(829)
(91,030)(79,582)

¥

¥

6,159
168
918
3,285
10,531(1,388)9,142(34,580)(13,033)
(177)
(211)
(48,003)(38,860)$$

50,350873
5,646
27,302
84,171(8,562)75,609(449,171)(140,400)(6,168)(5,477)(601,216)(525,607)

The reconciliation between the Japanese statutory tax rate and the effective tax rate reflected in the
consolidated statement of income for the year ended March 31, 2024 was as follows:
Percentage ofpretax income
30.19%

Statutory tax rate
Increase (decrease) due to:Permanently nondeductible expenses
Tax exempt income
Local minimum taxes per capita levy
Changes in valuation allowance
Other
Effective tax rate

0.48%
(2.04)%
0.29%(0.47)%(0.29)%
28.16%The reconciliation between the Japanese statutory tax rate and the effective tax rate reflected in the
consolidated statement of income for the year ended March 31, 2023 was not presented because thedifference was less than 5% of the statutory tax rate.

- 51 -

18. Revenue Recognition(1) Information on disaggregated revenue from contracts with customers
Reportable segment
Bankingbusiness

Leasing

Others

Total

Total

Year ended March 31, 2024
Millions of yen
Fees and Commissions Income
Deposit-taking business

¥

1,862

¥

-

¥

1,862

Lending business

4,982

-

4,982

Foreign exchange business

3,019

-

Securities-related businessAgency business

1,432
245

-

Custody, safe-deposit boxes

¥

226

¥

2,088

-

4,982

3,019

-

3,019

1,432
245

1,369
-

2,802
245

130

-

130

-

130

Insurance sales

1,272

-

1,272

-

1,272

Other
Ordinary income fromcontracts with customers
Other ordinary income
Ordinary income from externalcustomers

3,305

-

3,305

1,881

5,187

¥

16,250¥-82,579¥98,830¥15,708¥15,70816,250¥98,288¥

114,538

3,476

¥

1,471
¥

4,948

19,72799,759¥119,487

Reportable segment
Bankingbusiness

Leasing

Others

Total

Total

Year ended March 31, 2023
Millions of yen
Fees and Commissions Income
Deposit-taking business¥

Lending business
Foreign exchange business

1,837

¥

4,757
2,996

-

¥

-

1,837

¥

218

¥

2,055

4,757
2,996

-

4,757
2,996

Securities-related business

961

-

961

800

1,762

Agency business

255

-

255

-

255

Custody, safe-deposit boxes

133

-

133

-

133

Insurance sales

1,529

-

1,529

-

1,529

Other
Ordinary income fromcontracts with customers
Other ordinary income
Ordinary income from externalcustomers

3,237

-

3,237

1,727

4,964

¥

15,709¥68,036¥

83,745-¥

14,266¥- 52 -

14,266

15,709¥82,302¥

98,011

2,745

¥

2,126
¥

4,872

18,45484,429¥102,884

Reportable segment
OthersBankingbusiness

Leasing

Total

Total

Year ended March 31, 2024
Thousands of U.S. dollars
Fees and Commissions Income
Deposit-taking business$

12,301

Lending business

32,908Foreign exchange business
Securities-related business

$

-

$

12,301

$

1,493

$

32,90819,941-

19,941-

19,941

9,463

-

9,463

9,044

18,507

Agency business

1,620

-

1,620

-

1,620

Custody, safe-deposit boxes
Insurance sales

859
8,403

-

859
8,403

-

859
8,403

Other
Ordinary income fromcontracts with customers
Other ordinary income
Ordinary income from externalcustomers

21,833-

21,833

12,42734,260$107,328$

545,405$

652,733-$

103,748$

103,748

107,328-

13,794-$649,153$

756,481

22,964$9,720$

32,684(Note) “Other” refers to business segments that do not belong to any other reportable segment and include credit cardbusiness and financial instrument business.

(2) Basic information to understand revenue from contracts with customers
This information is omitted as it is presented in (r) “Accounting for significant revenue and costs” under
Note 2 “Summary of Significant Accounting Policies.”- 53 -

32,908130,292
658,873$

789,165

19.

Subsequent Events
Appropriation of retained earnings
The shareholders of the Bank approved the following appropriation of retained earnings at the annual
general shareholders’ meeting on June 20, 2024.

Cash dividends (¥7.00 ($0.05) per share)
20.

Millions of yen

Thousands of
U.S. dollars

¥

$

1,749

11,554

Segment Information(a) Description of reportable segments
The reportable segments of the Hyakugo Bank Group are business units for which separate financial
information is available and whose results are regularly reviewed by the Board of Directors to makedecisions about resources to be allocated to such segments.
The Hyakugo Bank Group’s business centers on banking operations, but the Hyakugo Bank Group also
engages in financial service operations, such as leasing operations.
The Hyakugo Bank Group’s segments are based on its business activities related to financial services,
and its reportable segments comprise the “banking” and “leasing” segments.
The “banking” segment includes deposit taking and lending operations, and the “leasing” segment
includes leasing operations.
(b) Methods of measurement for the amounts of ordinary income, profit (loss), assets and other items foreach reportable segment
The accounting treatment of the business segments reported in this section is the same as that stated in
Note 2, “Summary of Significant Accounting Policies.” Segment profit is based on ordinary profit, which
represents ordinary income less ordinary expenses. Ordinary income represents total income less special
gains included in other income. Ordinary expenses represent total expenses less special losses included
in other expenses.
Intersegment ordinary income is valued at market prices.

- 54 -

(c) Ordinary income, profit (loss), assets and other items.
For the year ended March 31, 2024
Reportable segments
Banking

Leasing

Others

Total

Total

Reconciliations

Consolidated

119,487
2,542

¥

¥

Millions of yen
Ordinary income:Externalcustomers
Intersegment

¥

Total
Segment profit

98,830
1,007¥

99,838¥19,19915,708248¥

15,956¥

537

114,538
1,255¥

115,794¥

19,736

4,948
1,286

¥

6,235
¥

952

122,030¥

20,688¥(2,542)(2,542)

119,487(634)

20,054

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

119,487
-

(173)

¥

8,073,917¥

49,910¥8,123,828¥

24,994¥ 8,148,822¥ (51,630)¥

19,881¥

8,097,192

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

2,939
74,119
9,306
8

751
73
128
-

3,690
74,193
9,435
8

65
156
-

3,756
74,349
9,435
8

(735)
(101)
-

3,756
73,613
9,333
8

8
180

-

8
180

0

8
181

-

8
181

130

-

130

0

130

-

130

50

-

50

-

50

-

50

-

-

-

0

0

-

0

5,164

159

5,323

276

5,600

-

5,600

3,474

1,298

4,773

180

4,953

-

4,953

Notes:(1) The “others” business segment includes credit card operations and financial instruments business operations.
(2) Reconciliations consist of the following:a. Reconciliation of segment profit of ¥(634) million consists of elimination of intersegment profits.
b. Reconciliation of segment assets of ¥(51,630) million consists of elimination of intersegment assets.
c. Reconciliation of interest income of ¥(735) million consists of elimination of intersegment interest income.
d. Reconciliation of interest expense of ¥(101) million consists of elimination of intersegment interest expense.

- 55 -

For the year ended March 31, 2023
Reportable segments
Banking

Leasing

Others

Total

Total

Reconciliations

Consolidated

102,884
2,741

¥

¥

Millions of yen
Ordinary income:Externalcustomers
Intersegment

¥

Total
Segment profit

83,745
1,312¥

85,057¥20,005

14,266278¥

98,011
1,590¥

20,737

14,544¥732¥

99,602

4,872
1,150

¥

6,023
¥

896

105,625¥

21,634¥(2,741)(2,741)

102,884(839)

20,794

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

102,884
-

(336)

¥

7,496,017¥

44,512¥

7,540,530¥

23,501¥ 7,564,032¥ (46,202)¥

20,458¥7,517,829

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

3,230
60,228
6,363
50

630
77
88
-

3,861
60,306
6,452
50

75
87
0
-

3,937
60,393
6,452
50

(911)
(72)
-

3,937
59,481
6,379
50

50
376

-

50
376

9

50
386

-

50
386

237

-

237

9

246

-

246

139

-

139

-

139

-

139

-

-

-

0

0

-

0

5,441

225

5,667

297

5,964

(0)

5,964

1,911

851

2,763

73

2,836

-

2,836

Notes:(1) The “others” business segment includes credit card operations and financial instruments business operations.
(2) Reconciliations consist of the following:a. Reconciliation of segment profit of ¥(839) million consists of elimination of intersegment profits.
b. Reconciliation of segment assets of ¥(46,202) million consists of elimination of intersegment assets.
c. Reconciliation of interest income of ¥(911) million consists of elimination of intersegment interest income.
d. Reconciliation of interest expense of ¥(72) million consists of elimination of intersegment interest expense.

- 56 -

For the year ended March 31, 2024
Reportable segments
Banking

Leasing

Others

Total

Total

Reconciliations

Consolidated

789,165
16,793$$Thousands of U.S. dollars
Ordinary income:Externalcustomers
Intersegment$652,733
6,656$ 103,748
1,638

Total

659,389

105,386

764,775

41,183805,958(16,793)

Segment profit

126,805

3,548

130,353

6,288

136,641(4,187)

$

$

$

$

756,481
8,294

$

$

32,684
8,499

$

$

$

(16,793)

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

789,165
789,165$

132,454(1,145)$$53,324,865$ 329,636$ 53,654,501

19,411
489,528
61,469

4,965
487
845

24,376490,01562,314

55

-

55
1,193

$

165,077$

131,30953,819,578$ (340,996)$ 53,478,582

434
1,032
-

24,810491,047
62,314(4,859)(673)

24,810486,188
61,641

55

-

55

-

55

-

55
1,193

7

55
1,200

-

55
1,200

861

-

861

0

861

-

861

332

-

332

-

332

-

332

-

-

-

7

7

-

7

34,107

1,052

35,1591,828

36,987-36,987

22,948

8,576

31,524

1,193

32,717-32,717

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

Notes:(1) The “others” business segment includes credit card operations and financial instruments business operations.
(2) Reconciliations consist of the following:a. Reconciliation of segment profit of $(4,187) thousand consists of elimination of intersegment profits.
b. Reconciliation of segment assets of $(340,996) thousand consists of elimination of intersegment assets.
c. Reconciliation of interest income of $(4,859) thousand consists of elimination of intersegment interest income.
d. Reconciliation of interest expense of $(673) thousand consists of elimination of intersegment interest expense.

- 57 -

(d) Related informationa.

Information for individual services
Loanbusiness

Securities
investment

Leasing

Others

Total

Millions of yen
Ordinary income from externalcustomers:
For the year ended March 31,2024
For the year ended March 31,
2023¥

53,095¥32,585¥

15,708¥18,097¥

119,487¥

44,935¥25,818¥14,266¥

17,864¥

102,884$

119,527$

789,165

Thousands of U.S. dollars
For the year ended March 31,
2024$

350,673$

215,217$

103,748b. Geographical information(1) Ordinary income
Geographical information for ordinary income for each of the years ended March 31, 2024 and 2023 was notdisclosed because the income from external customers located in Japan was more than 90% of total ordinary
income.
(2) Tangible fixed assets
Geographical information for tangible fixed assets for each of the years ended March 31, 2024 and 2023 was
not disclosed because the assets located in Japan were more than 90% of total tangible fixed assets.
c. Main customers
Information for main customers for each of the years ended March 31, 2024 and 2023 was not disclosed
because the Hyakugo Bank Group had no customers which accounted for 10% or more of total ordinary
income.
(e) Impairment loss on fixed assets for reportable segments
Reportable segments
Banking

Leasing

Others

Total

Total

Millions of yen
Impairment loss:
For the year ended March 31, 2024

¥

50

¥

-

¥

50

¥

-

¥

50

For the year ended March 31, 2023

¥

139

¥

-

¥

139

¥

-

¥

139

$

-

$

332

Thousands of U.S. dollars
For the year ended March 31, 2024

$

332

$

- 58 -

-

$

332

21.

Other Comprehensive Income

The components of other comprehensive income for the years ended March 31, 2024 and 2023 were as
follows:
Thousands of
U.S. dollars

Millions of yen

2024
Valuation difference on available-for-sale securities:
Gain (loss) incurred during the year
Reclassification adjustment to net income
Amount before tax effectTax effect
Valuation difference on available-for-salesecurities
Deferred gains/losses on hedges:
Gain (loss) incurred during the year
Reclassification adjustment to net income
Amount before tax effectTax effect
Deferred gains/losses on hedges
Retirement benefit adjustments:
Gain (loss) incurred during the year
Reclassification adjustment to net income
Amount before tax effectTax effect
Retirement benefits adjustment
Total other comprehensive income (loss)- 59 -¥¥

112,532(1,173)111,358(33,428)2023¥(26,516)(2,141)(28,657)
8,653

2024
$

743,228(7,749)735,479(220,783)

77,930(20,003)514,696

1,194
1,429
2,623
(792)
1,831

560
2,929
3,490
(1,053)
2,436

7,889
9,438
17,327(5,231)
12,09625,174(838)
24,335(7,346)
16,98896,750(4,147)(1,356)(5,503)
1,661(3,841)(21,409)

166,266(5,539)160,727(48,524)
112,203
638,995

¥

$

22.

Per Share Information

Net assets per share at March 31, 2024 and 2023 and net income per share for the years then ended were as
follows:
Yen

U.S. dollars

2024
Net assets per share
Net income per share – basic
Net income per share – diluted¥

1,987.95
56.44
56.37

2023
¥

2024

1,545.56
57.15
57.08

$

13.13
0.37
0.37

Computing the above per share data was as follows:
Thousands of
U.S. dollars

Millions of yen

2024(Net assets per share)
Net assets per balance sheet
Amounts to be attributed to subscription rights tosharesNet assets attributed to common stock¥

Outstanding number of common stocks at end of year
(unit: thousand shares)(Net income per share - basic)
Net income attributable to owners of the parent perincome statement
Net income attributable to owners of the parent
regarding common stock
Average outstanding number of shares during the year
(unit: thousand shares)(Net income per share - diluted)
Increase in common stock (unit: thousand shares)
Of which, subscription rights to shares (unit: thousand
shares)- 60 -

496,919
(119)

2023
¥

2024

392,035(107)$ 3,281,945(786)

496,800

391,927

3,281,159

249,904

253,581

14,281

14,493

94,322

14,281

14,493

94,322

252,993

253,582

332
332

303
303

23.

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

Presented below are the nonconsolidated balance sheets, nonconsolidated statements of income andchanges in net assets of the Bank, the parent company.
Nonconsolidated Balance Sheets (Unaudited)
The Hyakugo Bank, Ltd. (Parent)
As of March 31, 2024 and 2023
Millions of yen
2024
2023

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

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

Net assets:
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Valuation difference on available-for-salesecurities
Deferred gains/losses on hedges
Revaluation reserve for land
Total valuation and translation adjustments
Stock acquisition rights
Total net assets
Total liabilities and net assets¥- 61 -

1,408,552
5,716
8,136
93
1,000
1,562,196
4,910,914
6,711
68,96440,2943,350
35,6449,302,903
37,75653,740617
6,605
10,317,655
32,434,548
44,328455,481
266,126
22,131
235,418

1,348,617
10,72912,75155
2,013
1,401,999
4,571,185
4,443
67,46940,4492,914
33,110$17,069(19,424)
7,493,385

124,356(161,885)$ 53,139,779

5,779,579
149,858
365,800
235,605
465,177
625
56,894
1,223
1,685
346
266
38,5072,443
17,0697,115,084$ 38,960,881
1,170,916
4,156,265
1,777,514
3,043,244
1,296
321,887
1,361
11,5802,182
2,348
474,535
16,136124,356
50,064,501

20,0007,560
276,079(2,527)301,11120,0007,561
266,095(174)
293,483

132,092
49,933
1,823,388(16,695)
1,988,718

158,376
1,853
4,166
164,396119465,627
8,045,893

80,52022
4,166
84,709107
378,300
7,493,385

1,046,013
12,24427,517
1,085,774
786
3,075,278$ 53,139,779

18,828(24,510)
8,045,893
5,899,067
177,288629,300
269,133
460,777
196
48,736
206
1,753
330
355
71,8492,443
18,8287,580,266¥

Thousands of
U.S. dollars
2024

¥
¥

¥

Nonconsolidated Statements of Income (Unaudited)
The Hyakugo Bank, Ltd. (Parent)
For the Years Ended March 31, 2024 and 2023
Millions of yen
2024
2023
Income:Interest income:Interest on loans and bills discounted
Interest and dividends on securities
Interest on call loans
OthersTotal interest income
Fees and commissions
Other operating income
Other income
Total income
Expenses:
Interest expense:
Interest on deposits
Interest on negotiable certificates of deposit
Interest on call money
Interest on payables under securities lendingtransactions
Interest on borrowings and rediscounts
OthersTotal interest expense
Fees and commissions
Other operating expenses
General and administrative expenses
Provision of allowance for loan losses
Other expenses
Total expenses
Income before income taxes
Income taxes:
Current
Deferred
Total income taxes
Net income¥¥- 62 -

47,617
24,974316
1,273
74,181
17,435142
8,141
99,900¥39,65018,979116
1,576
60,322
17,033
1,058
6,807
85,221Thousands of
U.S. dollars
2024$

314,496
164,9442,088
8,409
489,937
115,153940
53,769659,799

416
13
19

278
15
(60)

2,749
91
130

6,997

4,107

46,213

0
1,859
9,306
5,880
18,86538,894
6,385
1,693
81,02518,874

0
2,022
6,363
5,366
10,93537,5093,690
1,719
65,585
19,636

3
12,283
61,46938,835124,598
256,882
42,171
11,187535,142
124,657

5,928
(841)
5,086
13,787

4,302
1,091
5,393
14,24239,152(5,555)33,59791,060¥$Nonconsolidated Statements of Changes in Net Assets (Unaudited)
The Hyakugo Bank, Ltd. (Parent)
For the Years Ended March 31, 2024 and 2023

Shareholders' equity

Number ofshares ofcommon stock
issuedBalance at March 31, 2022
Net income
Dividends from surplus
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Net changes in items other thanshareholders’ equity
Balance at March 31, 2023
Net income
Dividends from surplus
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Net changes in items other thanshareholders’ equity
Balance at March 31, 2024

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

CapitalsurplusCapital stock¥¥¥

20,00020,00020,000

¥

¥

¥

7,561
7,561
(1)
7,560

Retainedearnings¥¥¥

254,768
14,242(2,916)0
266,095
13,787(3,804)0
276,079

Treasury
stock
¥

¥

¥

(173)
(0)
(174)
(2,366)12(2,527)

Total
Shareholders’equity¥¥¥282,157
14,242(2,916)0(0)293,483
13,787(3,804)0(2,366)10
301,111

Valuation and translation adjustments
Valuation
DeferredTotal
difference on
gains
Revaluation
valuation andavailable-for(losses) on
reserve fortranslation
sale securities
hedgeslandadjustments
Millions of yen¥¥¥

100,502(19,981)
80,52077,855
158,376¥(2,414)
2,436
22
-

¥

1,831
1,853

¥

¥

¥

¥

4,166
(0)
4,166
(0)
4,166

¥

¥

¥

102,255(17,545)
84,70979,687
164,396StockacquisitionrightsTotal net assets

¥

¥

¥

¥

87
19
107
11
119

¥

¥

384,499
14,242(2,916)0(0)(17,525)
378,300
13,787(3,804)0(2,366)
10
79,698465,627

Thousands of U.S. dollars
Balance at April 1, 2023
Net income
Dividends from surplus
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Net changes in items other thanshareholders’ equity
Balance at March 31, 2024$$

132,092
132,092$$

49,943(10)$ 1,757,451
91,060(25,124)
1-$(1,149)-49,933$ 1,823,388$ (16,695)$(15,627)81- 63 -$

1,938,337
91,060(25,124)
1(15,627)71$

531,807-

1,988,718

514,206$ 1,046,013

$

$

148
12,096
12,244$$27,519-$559,474-(2)
27,517526,300$ 1,085,774

$

$

708
78
786

$

$

2,498,519
91,060(25,124)
1(15,627)71
526,378
3,075,278

Independent Auditor’s Report
The Hyakugo Bank, Ltd. and its subsidiaries
For the Years ended March 31,
2024 and 2023

KPMG AZSA LLC
August 2024

This independent auditor’s report prepared by KPMG AZSA LLC (including the one that issigned with electoronic signatures) shall not be reprinted, disclosed, quoted, summarized,
translated, cited, circulated or otherwise used, in whole or in part, to any third party including
posting on the web without prior written consent as specified by KPMG AZSA LLC, except forthe purpose of compliance with laws, regulations and the like, or for usage in response to anorder or request from an administrative or judicial body.

© 2024 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law
and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee. All rights reserved.

Independent auditor’s report
To the Board of Directors of The Hyakugo Bank, Ltd.:
OpinionWe have audited the accompanying consolidated financial statements of The Hyakugo Bank, Ltd. (“theCompany”) and its consolidated subsidiaries (collectively referred to as “the Group”), which comprisethe consolidated balance sheets as at March 31, 2024 and 2023, the consolidated statements of income
and comprehensive income, changes in net assets and cash flows for the years then ended , and notes,
comprising a summary of significant accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at March 31, 2024 and 2023, and its
consolidated financial performance and its consolidated cash flows for the years then ended inaccordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Consolidated Financial Statements section of our report. We are independent of the Groupin accordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in thecontext of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Reasonableness of the Company’s judgments on the classification of borrowers
The key audit matterIn the consolidated financial statements of
the Group, for the year ended March 31,
2024, loans and bills discounted of¥4,883,888 million are recognized,
representing a significant proportion of total
assets of ¥8,097,192 million. In addition,
allowance for loan losses of ¥26,597 million
is recognized, mainly provided for loans and

How the matter was addressed in our audit
In order to assess the reasonableness of the Company’s
judgments on the classification of borrowers, we
performed the following procedures among others:(1) Internal control testing
We assessed the design and operating effectivenessof relevant internal controls over the judgments onbills discounted.
Of these amounts, loans and bills discountedof ¥4,910,914 million and allowance for loan
losses of ¥24,510 million (including theintercompany balances for consolidated
subsidiaries) are recognized in the
Company’s nonconsolidated balance sheet as
at March 31, 2024, respectively. Thesebalances are of significance to theconsolidated financial statements of theGroup.
As described in Note 2.(v) “Significant
accounting estimates” to the consolidated
financial statements, the Company assessed
asset quality based on its internal rules on
self-assessment of asset quality. An
allowance for loan losses is provided for eachborrower category based on the result of theasset assessment in accordance with internal
rules set out for write-offs and provisions ofallowance.
The classification of a borrower into aborrower category is based on parameters
defined in the system using quantitative
information such as financial information of
the borrower, but also takes into accountqualitative factors such as future projectionsof business performance, and accordingly
involves subjective judgment of theCompany’s management.
The classification of borrowers may have asignificant impact on the consolidated
financial position and financial performanceof the Group, particularly with respect to:large borrowers with a significant amount of
unsecured loans (downward change in theclassification of the borrower may result in asignificant change in allowance for loan
losses of the Company); borrowers reside in
Aichi prefecture, where the largest increase
rate of loans by area where the Company
conducts business was recorded.
We, therefore, determined that ourassessment of the reasonableness of theCompany’s judgments on the classificationof borrowers was of the most significance in
our audit of the consolidated financial
statements for the current fiscal year, andaccordingly, a key audit matter.

the classification of borrowers, primarily performing
procedures set our below:i.

evaluation of whether the relevant internal
rules on self-assessment was set out incompliance with relevant accounting
standards.

ii.

evaluation of the reliability of financial
information of borrowers that were enteredinto the IT system.

iii.

evaluation relating to judgments on theclassification of borrowers, including
qualitative judgments.

(2) Substantive procedures relevant to thereasonableness of the judgments on theclassification of borrowers
With respect to the reasonableness of the judgementson the classification of borrowers, we primarily
performed the procedures set out below, andassessed quantitative and qualitative judgements on
the classification of borrowers made by theCompany, referring to the relevant internal rules on
self-assessment;i.

We selected certain borrowers to be assessedby us from among the borrowers of which
downward change in the classification of theborrower may potentially impact allowance
for loan losses of the Company, particularly
with respect to the following:・Large borrowers with a significant amount of
unsecured loans,・Borrowers residing in Aichi prefecture,
where the largest increase rate of loans by
area where the Company conducts business
was recorded.

ii.

For the selected borrowers, we examined theanalysis of their financial results performed by
the Company by comparing it with theirfinancial statements.

iii.

For the selected borrowers, we evaluated theircurrent business conditions and future
projections of business performance, byinspecting the self-assessment documents
prepared by the Company and the documentsthat the Company obtained from them, as wellas inquiring of relevant personnel.

Other Information
The other information comprises the information included in the disclosure documents that contain or
accompany the audited financial statements, but does not include the financial statements and our
auditor’s report thereon.We do not perform any work on the other information as we determine suchinformation does not exist.
Responsibilities of Management and Corporate Auditors and the Board of Corporate Auditors
for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan and using the going concern basis ofaccounting unless management either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
Corporate auditors and the board of corporate auditors are responsible for overseeing the directors’
performance of their duties with regard to the design, implementation and maintenance of the Group’s
financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion. Reasonable assurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance with auditing standards generally accepted in Japan
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express an
opinion on the effectiveness of the Group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting
and based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group tocease to continue as a going concern.


Evaluate whether the presentation and disclosures in the consolidated financial statements are inaccordance with accounting standards generally accepted in Japan, the overall presentation,
structure and content of the consolidated financial statements, including the disclosures, andwhether the consolidated financial statements represent the underlying transactions and events in amanner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.

We communicate with corporate auditors and the board of corporate auditors regarding, among othermatters, the planned scope and timing of the audit, significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide corporate auditors and the board of corporate auditors with a statement that we havecomplied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and whereapplicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with corporate auditors and the board of corporate auditors, we
determine those matters that were of most significance in the audit of the consolidated financial
statements of the current period and are therefore the key audit matters. We describe these matters in
our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our reportbecause the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
Fee-related Information
Fees paid or payable to our firm and to other firms within the same network as our firm for audit andnon-audit services provided to the Company and its subsidiariesare described for the current year are 57
million yen and 6 million yen, respectively.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2024 are presented solely for convenience. Our audit also included the translation of
yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis
described in Note 1 to the consolidated financial statements.

Interest required to be disclosed by the Certified Public Accountants Act of Japan
We do not have any interest in the Group which is required to be disclosed pursuant to the provisions of
the Certified Public Accountants Act of Japan.

Tetsuya Nakamura
Designated Engagement Partner
Certified Public Accountant
Hideki Okada
Designated Engagement Partner
Certified Public Accountant

KPMG AZSA LLC
Nagoya Office, Japan
August 7, 2024