Proﬁle of N A G A N O BANK

2019
Financial Statements
March 31, 2019

ProfileNagano Bank is a regional bank established in 1950. It is based in Nagano Prefecture in central Japan. Since
its founding, the bank has worked tirelessly to contribute to local communities by offering a wide range offinancial products and services.
As of March 31, 2019, we operate 53 branches in Nagano Prefecture and 1 branch in Tokyo. At the sametime, total deposits stood at ¥1,031 billion (US$9,291 million) and total assets at ¥1,094 billion (US$9,859million).
Moreover, the bank got listed in the Second Section of the Tokyo Stock Exchange in March 1997. The listing
was subsequently moved to the First Section in September 1998, and additional capital was raised via thirdparty allotments of shares in 1999 to further improve the bank’s equity and gradually build a strong businessfoundation.

Message from the Management
I would like to express my appreciation to all stakeholders for their patronage and loyal support of Nagano
Bank. We have published this disclosure report to provide stakeholders with a deeper understanding of thebank’s operations and an easy-to-understand explanation of our business results and initiatives for the fiscal
year that ended on March 31, 2019. We hope you will take the time to read this disclosure report and find it
useful.
Based on our 10th medium-term management plan whose implementation began in April 2016, we have been
striving to expand our customer base and managed to progress at a pace even faster than expected. For thatreason, we have started to map out the next medium-term plan in the fiscal year 2018. It pivots toward accountexpansion and we have already made efforts to unify management of these accounts to further improveefficiency.
The business environment we operate in is influenced by the slowdown of economic growth in China and its
ripple effect on the manufacturing industry as well as the problem of Brexit. They produce an acute sense of
uncertainty in regards to the business climate. Moreover, the Bank of Japan’s quantitative and qualitative
monetary easing with yield curve control continues just like the decrease in lending rates and securities
investment yields. This creates an even more challenging situation.
To overcome these aspects of the business environment, we have adopted the slogan “continuous change andeven greater evolution”. Accordingly, our new 11th medium-term management plan has taken effect in April
2019. We are aiming to deepen our relationship with small and medium-sized businesses and retail customers
by positioning ourselves as “Nagano Prefecture’s home bank” as well as by discovering the needs of ourclients and focusing on problem-solving. By making all employees a part of this process, everyday business
operations will take a big leap forward.
We are hoping for your continued support and patronage while working toward these objectives.

July 2019

Hitoshi Nishizawa, President

1Non-Consolidated Balance Sheets

As of March 31, 2019 and 2018

Thousands ofU.S.dollars

Millions of yen2019

20182019¥ 47,201¥ 43,829$ 425,275

Call loans

8,776

30,00079,078

Securities

399,459

389,080

3,599,061

Loans and bills discounted

620,348596,118

5,589,229

468

604

4,224

Other assets

13,631

13,165

122,813

Tangible fixed assets

9,581

10,00686,331Intangible fixed assets

617

799

5,564

Prepaid pension cost594591

5,354

Customers' liabilities for acceptances and guarantees

1,412

1,475

12,727

Allowance for loan losses(7,805)(7,880)(70,322)¥ 1,094,288¥1,077,791$ 9,859,339¥ 1,031,209¥1,013,844$ 9,291,013

Borrowed money

358

1,093

3,227

Foreign exchanges

006

Bonds with subscription rights to shares

2,965

2,965

26,714

Other liabilities

3,096

3,013

27,901

Provisions

1,082

1,133

9,749

Deferred tax liability

2,007

2,428

18,087

Acceptances and guarantees

1,412

1,475

12,727¥ 1,042,132¥1,025,954$ 9,389,427

Capital stock¥ 13,017¥ 13,017$ 117,285

Capital surplus

9,681

9,681

87,225Retained earnings

21,97821,312

198,026

Treasury stock

(759)

(813)

(6,844)

Total shareholders' equity¥ 43,917¥ 43,197$ 395,692

Total valuation and translation adjustments¥ 8,162¥ 8,533$ 73,540

75

105

678

¥ 52,155¥ 51,836$ 469,912¥ 1,094,288¥1,077,791$ 9,859,339

AssetsCash and due from banks

Foreign exchanges

Total assets
Liabilities and net assets
Liabilities
Deposits

Total liabilities

Net assets

Subscription rights to shares
Total net assets
Total liabilities and net assets

Notes:1. Japanese yen figures are expressed with amounts under one million omitted. Accordingly, breakdown figures may not add up to the sum totals given.
2. U.S. dollar amounts represent translations of Japanese yen at the exchange rate of ¥110.99 to US$1.00, the prevailing rate on March 31, 2019(the last business day of the term).

2Non-Consolidated Statements of Operations and Retained Earnings

For the years ended March 31, 2019 and 2018

Thousands ofU.S.dollars

millions of yen
201920182019

IncomeInterest on loans and discounts¥ 8,396¥ 8,830$ 75,650

4,380

3,966

39,469Interest on call loans

183167

Other interest income

2627

235

Fees and commissions

1,199

1,068

10,805

Other operating income

740

1,156

6,673

Other income

1,358

3,427

12,242

Total income¥ 16,120¥ 18,481$ 145,244

Interest on deposits

¥ 233

¥ 331

$ 2,099

Interest on call money

(0)

(0)

(0)

Other interest expenses

78

79711

Fees and commissions

1,596

1,606

14,382Other operating expenses

891

2,137

8,030General and administrative expenses

10,52910,94594,870

Other expenses

1,602

1,121

14,435

Total expenses¥ 14,931¥ 16,220$ 134,529

Income before income taxes

1,189

2,260

10,715

Income taxes-current

263

396

2,374

Income taxes-deferred(255)

82(2,301)¥ 1,181¥ 1,781$ 10,642

Interest and dividends on securities

Expenses

Net incomeNotes:1. Japanese yen figures are expressed with amounts under one million omitted. Accordingly, breakdown figures may not add up to the sum totals given.
2. U.S. dollar amounts represent translations of Japanese yen at the exchange rate of ¥110.99 to US$1.00, the prevailing rateon March 31, 2019 (the last business day of the term)

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Risk-Managed Loans under the Banking Law

As of March 31, 2019 and 2018

Thousands ofU.S. dollars

Millions of yen2019

2018

2019

Loans to legally bankrupt borrowers１¥ 1,478¥ 757$ 13,322

Loans with repayment in arrears2

15,504

16,941

139,693

－
529

－
1,314

－
4,773

¥ 17,512¥ 19,014$ 157,788

Loans repayment extended for more than three months3
Loans whose terms have been eased4
TotalNotes:

1. Loans to legally bankrupt borrowers refer to loans for which the accrual of interest income for accounting purposes is no longer recognized, and at the same time where theobligor is the subject of legal proceedings under the company rehabilitation law, the bankruptcy law, the civil rehabilitation law, or the commercial code; and/or where theobligor’s bills are barred by clearing houses.
2. Loans with repayment in arrears refer to loans for which the accrual of interest income for accounting purposes is no longer recognized, other than those falling into thecategory of “loans to legally bankrupt borrowers” or loans on which the receipt of interest has been waived in order to provide support for the obligor in corporate
rehabilitation efforts.
3. Loans repayment extended for more than three months or more refers to loans for which payments of principal or interest are delinquent by three months or more, ascalculated from the day following the contracted payment date, but that are not within the scope of loans to legally bankrupt borrowers or loans with repayment in arrears.
4. Loans whose terms have been eased comprise loans for which lending conditions have been relaxed to promote the financial rehabilitation of obligors in distress, such asreduction of the original interest rate, forbearance of interest payment and/or principal repayment, waiver of claims, and similar measures that are outside the scope of thecategories of “loans to legally bankrupt borrowers,” “loans with repayment in arrears,” and “loans repayment extended for more than three months or more.”
5. Japanese yen figures are expressed with amounts under one million omitted. Accordingly, breakdown figures may not add up to the sum totals given.
6. U.S. dollar amounts represent translations of Japanese yen at the exchange rate of ¥110.99 to US$1.00, the prevailing rate on March 31, 2019(the last business day of the term).

Risk Management System
Evolving regulatory frameworks, internationalization and derivatives trading are only some of the elements ofthe changing world of finance. It is necessary to ensure more diversification and find ways to deal withincreasingly complex settings for financial organizations to be able to find new business opportunities. For thisreason, risk management in the financial sector is more important than ever.
To ensure that our financial situation remains sound and revenue growth develops as anticipated within thisenvironment, we consider risk management an issue of the highest priority and therefore engage in ongoing
efforts to strengthen our comprehensive risk management system.
The main risks financial institutions are exposed to include credit risk, market risk, liquidity risk and operationalrisk. To adequately address these issues, Nagano Bank has drafted internal policies and regulations to clearly
define responsibilities within the organization in regards to risk management. Furthermore, to monitor theeffectiveness of our risk management system, we conduct internal audits that are carried out by the Main Audit
Department and also implement external audits performed by an affiliated certified accountant. In addition, toalign the risk management practices of our entire organization, we have established a Risk Management Section
within the General Planning Department.
Risk Management System Organization
Independent Auditors
Attorneys

Board of Directors

Board of Auditors

Executive Committee
Overall Risk
Management Dept.:
General Planning Dept.

Respective Risk Committees:
Credit Risk Committee(Credit Risk)
ALMCommittee (Overall Marketand Liquidity Risk)
OperationalRiskCommittee(AdministrativeandSystemRisk)
CorporateOfficersCouncil / ComplianceCommittee
DepositGuaranteeCommittee(OverallOtherOperational Risk)

Internal Auditing Dept.:
Auditing Dept.

Management Dept.:
Operational Risk (General Management Dept.: General Planning Dept.)
Credit Risk

Market Risk

Liquidity Risk

Financing
Generalization
Dept.
Securities &International Dept.

Securities &International Dept.
Business
Unification Dept.

General Planning
Dept.
Securities &International Dept.

AdministrativeRisk

System Risk

Other Operational Risk

Business
OperationsDept.
Respectivedept.

Business
OperationsDept.
Respectivedept.

Legal Risk:
Human Risk:
TangibleAssetRisk:
Reputation Risk:
Other Risk:

General Affairs Dept.
HumanResources Dept.
General Affairs Dept.
General Planning Dept.
General Planning Dept.

Head Office, Branches, Affiliated Companies

4Corporate Data

As of March 31, 2019

Founded: November 1950
Capital stock: ¥13,017 million
Number of Employees: 667

Board of Directors

As of June 30, 2019

Chairman of the Board Directors

Isao Nakajo

President
Hitoshi Nishizawa Directors Masanao Watanabe
Katsuo Tokutake
Managing Directors Hirofumi Uchikawa
Sachio Miyazaki
Masayasu Kondo
Sayuri Uchikawa
Koichi Osawa
Keizo Futatsugi

Service Network

Standing Auditor Masumi Tsukada
Auditors
Mika Godo
Hayato Todoroki
Seiichiro Furihata

As of March 31, 2019

Head Office

Address: 2-9-38, Nagisa, Matsumoto City,
Nagano 390-8708, Japan
Phone: +81-263-27-3311
URL: http://www.naganobank.co.jp/Email: enagagin@naganobank.co.jp

Tokyo Branch

Address: 2-12-6, Uchikanda, Chiyoda-ku,
Tokyo 101-0047, Japan
Phone: +81-3-3258-6351

Securities & International
Department

NAGANOPREFECTURE:
53 Offices

Address: 2-9-38, Nagisa, Matsumoto City,
Nagano 390-8708, Japan
Phone: +81-263-27-3311
Fax: +81-263-28-6550
SWIFT: NAGAJPJZ

Number of Branches
Money Exchange Offices

Nagano: 53 Offices
Tokyo: 1 Office
11 Offices

TOKYO:1 Office

THE NAGANO BANK, LTD.
Head Office
Address: 2-9-38, Nagisa, Matsumoto City, Nagano 390-8708, Japan
Phone: +81-263-27-3311

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