Tokyo TY Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Financial Statements
Year Ended March 31, 2015
Contents:
Tokyo TY Financial Group, Inc. and Consolidated Subsidiaries
Independent Auditor’s Report
Consolidated Balance Sheet
Consolidated Statement of Income
Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Net Assets
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
The Tokyo Tomin Bank, Limited
Non-consolidated Balance Sheets (Unaudited)
Non-consolidated Statements of Income (Unaudited)
The Yachiyo Bank, Limited
Non-consolidated Balance Sheets (Unaudited)
Non-consolidated Statements of Income (Unaudited)Tokyo TY Financial Group Inc. and Consolidated Subsidiaries
Consolidated Balance Sheet
As of March 31, 2015

AssetsCash and due from banks (Notes 23 and 26)
Call loans and bills bought
Monetary claims bought
Trading account securities (Note 26)
Securities (Notes 3, 7 and 26)
Loans and bills discounted (Notes 4 and 26)
Foreign exchanges (Note 5)
Other assets (Note 7)
Tangible fixed assets (Note 6)
Intangible fixed assets
Deferred assets
Net defined benefit asset (Note 13)
Deferred tax assets (Note 18)
Customers’ liabilities for acceptances and guarantees
Reserve for loan losses
Total assets

Millions of Yen
2015

Thousands of
U.S. Dollars(Note 1)
2015

¥

$

¥

Liabilities
Deposits (Notes 7, 8 and 26)
Negotiable certificates of deposit
Payables under securities lending transactions (Notes 7 and 26)
Borrowed money (Notes 7 and 9)
Foreign exchanges (Note 5)
Bonds payable (Note 10)
Bonds with subscription rights to shares (Notes 10 and 11)
Other liabilities (Note 12)
Reserve for employees’ bonuses
Net defined benefit liability (Note 13)
Reserve for officers and directors’ retirement benefits
Reserve for point card program
Reserve for losses on interest repayments
Reserve for losses from reimbursement of inactive accounts
Reserve for contingent losses
Deferred tax liabilities (Note 18)
Deferred tax liabilities on land revaluation (Note 6)
Acceptances and guarantees (Note 14)
Total liabilities¥

Net assets (Notes 15, 16 and 19)
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities (Note 17)
Deferred gains or losses on hedges
Revaluation reserve for land (Note 6)
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Minority interests
Total net assets
Total liabilities and net assets
See notes to consolidated financial statements.

1¥

298,834
28,9383,012
607
1,236,834
3,294,802
7,731
21,01853,613
3,295
74
10,777
6,570
6,630(28,913)
4,943,828

2,486,761
240,81125,065
5,053
10,292,375
27,417,843
64,339174,908
446,150
27,425618
89,68654,67955,178(240,607)$ 41,140,288

4,491,306
27,038140,876
7,409
139
25,6005,000
30,012
2,074
3,326
137
51
14
844
740
30
15
6,630
4,741,248$

37,374,604
224,997
1,172,312
61,6601,159
213,031
41,607249,748
17,261
27,679
1,144
424
124
7,029
6,160
256
127
55,17839,454,509

20,00099,60773,245(544)
192,308

166,430
828,886
609,514(4,530)1,600,302

9,784
2
(210)
17
432
10,026
245
202,580
4,943,828

81,41919(1,749)146
3,599
83,4352,042
1,685,779
41,140,288$

Tokyo TY Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Statement of Income
For the Year Ended March 31, 2015

IncomeInterest income:Interest on loans and discounts
Interest and dividends on securities
Interest on call loans and bills boughtInterest on receivables under securities borrowing transactions
Interest on due from banks
Other interest income
Fees and commissions
Other operating income
Other income (Note 20)
Total income

Millions of Yen
2015

Thousands of
U.S. Dollars(Note 1)
2015

¥

$

37,879
6,409
145
9
163
395
13,4103,946
53,159115,519

315,216
53,341
1,210
75
1,360
3,292
111,596
32,843442,365
961,302

Expenses
Interest expense:
Interest on deposits
Interest on negotiable certificates of deposit
Interest on call money
Interest on payables under securities lending transactions
Interest on borrowed money
Interest on bonds payable
Interest on bonds with subscription rights to shares
Other interest expense
Fees and commissions payments
Other operating expenses
General and administrative expenses
Other expenses (Note 21)
Total expenses

1,812
38
0
117
212
698
53
42
2,895
209
43,7493,483
53,31415,082
320
3
974
1,766
5,810
447
355
24,0951,745
364,066
28,987
443,655

Income before income taxes and minority interests

62,205

517,646

Income taxes (Note 18):
Current
Deferred
Total income taxes

2,054
2,815
4,870

17,09923,42940,528Net income before minority interests

57,335477,118

44

369

Minority interests in net income¥

Net income
See notes to consolidated financial statements.

2

57,290$476,748

Tokyo TY Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Statement of Comprehensive Income
For the Year Ended March 31, 2015

Income before minority interests

Millions of Yen
2015

Thousands of
U.S. Dollars(Note 1)
2015

¥

$

Other comprehensive income (Note 22):
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of affiliate accounted for by the equity
methodTotal other comprehensive income

57,335477,118

7,966
2
1
6
5,087

66,29419
13
55
42,337100
13,164

832
109,552

Comprehensive income¥

70,500$586,670

Total comprehensive income attributable to:Shareholders of Tokyo TY Financial Group, Inc.
Minority interests¥

70,465
34$

586,382
287

See notes to consolidated financial statements.

3

Tokyo TY Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Statement of Changes in Net Assets
For the Year Ended March 31, 2015
Millions of Yen
Shareholders’ Equity

Thousands
Issued number ofshares ofcommon stock
40,050

Balance, April 1, 2014
Cumulative effect ofchanges in accounting
policies
Restated balance, April 1,
2014
Increase (decrease) due toshare transfer
Acquisition of shares ofsubsidiaries due to sharetransfer
Cash dividends
Net income
Purchase of treasury stock
Disposition of treasury
stock
Cancellation of treasury
stock
Transfer from retained
earnings to capitalsurplus
Change in interest in
subsidiaries
Net change in items otherthan those inshareholders’ equity
Total changes during theyear

CapitalSurplus

CommonStock¥48,120¥Stock Acquisition
Rights

18,379¥79

Retained
Earnings¥

Total
Shareholders’EquityTreasury
Stock

19,031¥(1,636)¥

83,973260
40,05048,12018,379(10,822)(28,120)

81,08979

260

19,291(1,636)

84,23452,969

153
(548)

153
(1,758)57,290
(548)

68

62

1,571

-

(1,758)57,2900(6)(1,571)
1,571(1,571)

-

(15)

(15)
(79)

(10,822)
29,227

Balance, March 31, 2015¥

(28,120)
20,00081,227
99,607

¥

(79)
-

¥

(79)

¥

53,95373,245

1,092
(544)

¥

108,073
192,308¥

Millions of Yen
Accumulated Other
Comprehensive Income
Valuationdifference on
available-forsale securities

Deferred gains
and losses onhedgesBalance, April 1, 2014
Cumulative effect ofchanges in accounting
policies
Restated balance, April 1,
2014
Increase (decrease) due toshare transfer
Acquisition of shares ofsubsidiaries due to sharetransfer
Cash dividends
Net income
Purchase of treasury stock
Disposition of treasury
stock
Cancellation of treasury
stock
Transfer from retained
earnings to capitalsurplus
Change in interest in
subsidiaries
Net change in items otherthan those inshareholders’ equity
Total changes during the
year

¥

¥

Balance, March 31, 2015

¥

1,707

-

Revaluation
reserve for land
¥

(211)

Foreign
Currency
Translation
Adjustments

Total
Accumulated
Remeasurements
Otherof defined benefit Comprehensive
plans
IncomeMinority
Interests

Total Net
Assets

¥

¥

¥

¥

10

(4,655)¥(3,148)248

81,073
260

1,707

-

(211)

10

(4,655)(3,148)248

81,33452,969153(1,758)57,290
(548)
62
(15)

2

8,076
8,076
9,784

¥

2
2

1

¥

1
(210)

6

¥

See notes to consolidated financial statements.

4

6
17

5,087

¥

5,087
432

13,174¥

13,174
10,026

(2)

¥

(2)
245

13,092¥

121,245
202,580

Thousands of U.S. Dollars (Note 1)
Shareholders’ Equity
CapitalSurplus

CommonStock
Balance, April 1, 2014
Cumulative effect ofchanges in accounting
policies
Restated balance, April 1,
2014
Increase (decrease) due toshare transfer
Acquisition of shares ofsubsidiaries due to sharetransfer
Cash dividends
Net income
Purchase of treasury stock
Disposition of treasury
stock
Cancellation of treasury
stock
Transfer from retained
earnings to capitalsurplus
Change in interest in
subsidiaries
Net change in items otherthan those inshareholders’ equity
Total changes during theyear$

Balance, March 31, 2015$

400,437$

Stock Acquisition
Rights152,949$

658

Retained
Earnings$

Total
Shareholders’EquityTreasuryStock158,367$(13,622)$698,790

2,170
400,437

152,949(234,006)

674,793

658

2,170

160,538(13,622)700,961
440,787

1,277(4,560)1,277(14,637)
476,748(4,560)572

517

13,080-(14,637)
476,7480(54)(13,080)
13,080(13,080)

-

(133)

(133)
(658)

(234,006)
166,430$

675,937
828,886

(658)
-

$

(658)

$

448,976
609,514

9,091(4,530)$899,340
1,600,302$

Thousands of U.S. Dollars (Note 1)
Accumulated Other
Comprehensive Income
Valuationdifference on
available-forsale securities

Deferred gains
and losses onhedgesBalance, April 1, 2014
Cumulative effect ofchanges in accounting
policies
Restated balance, April 1,
2014
Increase (decrease) due toshare transfer
Acquisition of shares ofsubsidiaries due to sharetransfer
Cash dividends
Net income
Purchase of treasury stock
Disposition of treasury
stock
Cancellation of treasury
stock
Transfer from retained
earnings to capitalsurplus
Change in interest in
subsidiaries
Net change in items otherthan those inshareholders’ equity
Total changes during the
year

$

$

Balance, March 31, 2015$

14,210-

Revaluation
reserve for land

Foreign
Currency
Translation
Adjustments

Total
Accumulated
Remeasurements
Otherof defined benefit Comprehensive
plans
IncomeMinority
Interests

Total Net
Assets

$

$

$

$

$

(1,762)

91(38,737)$(26,198)

2,067

674,659
2,170

14,210-(1,762)

91(38,737)(26,198)

2,067

676,829
440,787
1,277(14,637)
476,748(4,560)
517
(133)

19

67,20867,20881,419

$

19
19

13

$

13
(1,749)55$

See notes to consolidated financial statements.

5

55
146

42,337$42,337
3,599

109,633$

109,633
83,435$(24)

108,950

(24)
2,042

1,008,949$ 1,685,779

Tokyo TY Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Statement of Cash Flows
For the Year Ended March 31, 2015
Thousands of
U.S. Dollars(Note 1)
2015

Millions of Yen
2015
Operating activities:
Income before income taxes and minority interests
Depreciation and amortization
Retirement benefit expenses
Gain on negative goodwill (Note 29)
Loss on step acquisitions
Equity in earnings of investment in affiliate
Net decrease in reserve for loan losses
Net decrease in reserve for employees’ bonuses
Net increase in retirement benefit asset
Net decrease in retirement benefit liability
Net increase in reserve for officers and directors’ retirement benefits
Net increase in reserve for point card program
Net increase in reserve for losses on interest repayments
Net increase in reserve for losses from reimbursement of inactive accounts
Net decrease in reserve for contingent losses
Interest income
Interest expense
Net gains related to securities transactions
Net exchange gains
Net losses on disposition of fixed assets
Net increase in trading securities
Net increase in loans and bills discounted
Net increase in deposits
Net decrease in negotiable certificates of deposit
Net decrease in borrowed money (excluding subordinated borrowed money)
Net decrease in due from banks (excluding due from the Bank of Japan)
Net decrease in call loans and bills bought
Net increase in payables under securities lending transactions
Net decrease in money held in trust
Net decrease in foreign exchange-assets
Net increase in foreign exchange-liabilities
Interest received
Interest paid
Other-net
Subtotal
Income taxes paid¥

62,2052,508
1,263(50,476)3(202)(4,104)(50)(8,207)(1,768)
9
4
3
113
(68)
(45,003)
2,975(2,389)(9,010)76(213)(18,788)7,587(5,127)(119)
7,878
27,026140,87620496
1745,518(3,130)8,112
158,035(1,208)$517,646
20,873
10,514(420,039)
26(1,685)(34,159)(422)(68,296)(14,715)
82
35
28
942
(569)
(374,497)
24,760(19,882)(74,985)639(1,774)(156,351)
63,138(42,664)(996)
65,562
224,901
1,172,312
170
4,127
149
378,782(26,054)
67,5041,315,103(10,058)

Net cash provided by operating activities

156,827

1,305,045

Investing activities:
Purchases of securities
Proceeds from sales of securities
Proceeds from maturity of securities
Purchases of tangible fixed assets
Payments for disposition of tangible fixed assets
Proceeds from sales of tangible assets
Purchases of intangible assets(588,928)
500,403
13,998(18,332)
(46)
0
(393)

(4,900,798)
4,164,128
116,490(152,556)(388)
0(3,273)¥

Net cash used in investing activities

6(93,299)$(776,398)

Tokyo TY Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Statement of Cash Flows
For the Year Ended March 31, 2015
Thousands of
U.S. Dollars(Note 1)
2015

Millions of Yen
2015
Financing activities:
Repayments of subordinated borrowings
Payments for redemption of subordinated bonds
Cash dividends paid
Cash dividends paid to minority interests
Payments for purchase of treasury stock
Proceeds from sales of treasury stock
Payments of lease obligations¥(5,000)(5,000)(1,755)
(0)
(55)
37
(216)

$

(41,607)(41,607)(14,611)
(5)
(463)
307
(1,804)(11,992)(99,792)

11

96

Net increase in cash and cash equivalents

51,546428,949

Cash and cash equivalents at beginning of year

122,982

1,023,405

Increase in cash and cash equivalents resulting from share transfer (Note 24)

111,855

930,811

Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents¥

Cash and cash equivalents at end of year (Note 23)

286,385$

2,383,166(Concluded)

See notes to consolidated financial statements.

7

Tokyo TY Financial Group, Inc. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements
For the Year Ended March 31, 2015
1. Summary of Significant Accounting Policies
a. Basis of presentation
Tokyo TY Financial Group Inc. (the “Company”) was established as a joint holding company through a sharetransfer between The Tokyo Tomin Bank, Limited (“Tokyo Tomin”) and The Yachiyo Bank, Limited (“Yachiyo”)
on October 1, 2014. The share transfer was accounted for applying the purchase method stipulated in accounting
standards relating to business combinations with Tokyo Tomin as the acquiring company and Yachiyo as theacquired company. Accordingly, the accompanying consolidated statement of income for the year ended March 31,
2015 was prepared by consolidating the consolidated business results of Yachiyo for the period from October 1,
2014 to March 31, 2015 into the consolidated business results of Tokyo Tomin for the year ended March 31, 2015.
The accompanying consolidated financial statements of the Company and its consolidated subsidiaries have been
prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Act andits related accounting regulations, the Enforcement Regulation for the Banking Act and in conformity withaccounting principles generally accepted in Japan (“Japanese GAAP”), which are different in certain respects as toapplication and disclosure requirements of International Financial Reporting Standards.
As permitted by the Financial Instruments and Exchange Law of Japan, amounts of less than one million yen havebeen omitted. As a result, the totals shown in the accompanying consolidated financial statements (both in yen and
U.S. dollars) do not necessarily agree with the sums of the individual amounts.
b. Principles of consolidation
The accompanying consolidated financial statements include the accounts of the Company and all of its 12
subsidiaries (collectively, the “Group”).
Under the control and influence concept, those companies which the Company, directly or indirectly, is able toexercise control over operations are fully consolidated, and those companies over which the Group has the ability
to exercise significant influence in terms of its operating and financial policies is accounted for by the equity
method in the consolidated financial statements.
An investment in one affiliated company is accounted for by the equity method.
Upon the business combination, Tokyo Tomin and Yachiyo became wholly-owned subsidiaries of the Company
and came within the scope of consolidation. As a result, the consolidated subsidiaries and affiliated company ofTokyo Tomin and Yachiyo are also included in the scope of consolidation and the equity method accounting.
All significant intercompany balances and transactions have been eliminated in consolidation. All material
unrealized profit included in assets resulting from transactions within the Group is also eliminated.
The fiscal year end of one consolidated subsidiary of the Company is different from that of the Company. For
consolidation purposes, the financial statements of the subsidiary as of the Company's fiscal year end wereadditionally prepared and used for consolidation.
c. Trading account securities
Trading account securities are stated at fair value as of the balance sheet date. Cost of sales of trading accountsecurities is determined using the moving average method.
d. Securities
Held-to-maturity debt securities are carried at amortized cost (straight-line method) determined by themoving-average method.
Available-for-sale securities for which fair value is available are stated at the fair value at the fiscal year-end. Costof sales of these available-for-sale securities is determined using the moving-average method. Available-for-sale8

securities for which fair value is not readily determinable are stated at cost determined by the moving averagemethod.
Valuation difference on available-for-sale securities, net of applicable taxes, is reported in a separate component of
net assets.
e. Derivative transactions
Derivatives are stated at fair value.
f. Depreciation and amortization of fixed assets
Depreciation of tangible fixed assets (other than lease assets) of consolidated subsidiaries conducting banking
business (“banking subsidiaries”) is computed using the declining-balance method based on the estimated useful
lives of the assets, while the straight-line method is mainly applied to buildings.
The following is the ranges of useful lives of principal tangible fixed assets.
Buildings:
6 to 50 years
Other:
2 to 20 years
Depreciation of tangible fixed assets of other consolidated subsidiaries (“non-banking subsidiaries”) is principally
computed using the declining-balance method based on the estimated useful life of the assets.
Intangible fixed assets (other than lease assets) are amortized using the straight-line method. Costs of computer
software developed or obtained for internal use are amortized using the straight-line method for the estimateduseful life of 5 years.
Lease assets under finance lease which do not transfer ownership of assets to lessees are depreciated using thestraight-line method over the lease terms of the respective assets. Residual value of these lease assets isguaranteed residual value per the respective lease contracts or zero value.
g. Treatment of deferred assets
Organization costs and stock issuance costs are amortized using the straight-line method over 5 years and 3 years,
respectively.
h. Reserve for loan losses
A reserve for loan losses is provided by consolidated banking subsidiaries in accordance with internallyestablished standards for write-offs and provisions:• For claims on borrowers who have entered into bankruptcy, special liquidation proceedings or similar legal
proceedings under the Bankruptcy Law, Special Liquidation in the Commercial Law or other similar laws(“bankrupt borrowers”), and borrowers who are not legally or formally bankrupt but effectively in similar
conditions (“effectively bankrupt borrowers”), a reserve is fully provided based on the amount of claims, netof the expected amount of recoveries from collateral and guarantees.
• For claims on borrowers who are not currently bankrupt but are perceived to have a high risk of falling into
bankruptcy (“potentially bankrupt borrowers”), a reserve is provided in the amount deemed necessary basedon an overall solvency assessment of the claims, net of the expected amount of recoveries from collateral andguarantees.
• For other claims, a reserve is provided based on the rates derived from default experiences for a certain
period in the past and other factors.
For claims on borrowers who are effectively bankrupt borrowers or borrowers whose credit terms are rescheduledor reconditioned and exceed certain thresholds, if cash flows from collection of principal and interest can bereasonably estimated, the difference between the cash flows discounted by the original interest rate and thecarrying value of the loan is provided as a reserve for loan losses (discounted cash flows method).
All claims are assessed by the Asset Assessment Department under the cooperation by credit origination
department in accordance with the Group’s policies and guidelines for the self-assessment of asset quality.
For collateralized or guaranteed claims on bankrupt borrowers and effectively bankrupt borrowers, the amount of
9the claims exceeding the estimated value of collateral and guarantees is deemed to be uncollectible and is written
off against the total amount of the outstanding claims. These write-offs amounted to ¥3,854 million ($32,074
thousand) as of March 31, 2015.
For consolidated non-banking subsidiaries, a general reserve is provided based on the historical credit loss
experience for normal claims and a specific reserve is provided at the amount deemed uncollectible based on an
evaluation of potential losses for each claim other than normal claims.
i. Reserve for employees’ bonuses
A reserve for employees’ bonuses is recorded at the estimated amount attributed to the current fiscal year, toprovide for the future bonus payments to employees.
j. Reserve for officers’ and directors’ retirement benefits
A reserve for officers’ retirement benefits is recorded to provide future pension payments by certain consolidatedbanking subsidiaries and that for directors’ by certain consolidated non-banking subsidiaries in the amountdeemed accrued at the current fiscal year-end based on the estimated amount of benefits.
k. Reserve for point card program
A reserve for point card program is provided by certain consolidated subsidiaries at the amount considerednecessary to cover the estimated future costs of credit points.
l. Reserve for losses on interest repayments
Certain consolidated subsidiaries account for the necessary amount to provide for possible losses on claims for
repayments of interest on loans that exceed the maximum interest rate set by the Interest Limitation Law.
Estimated interest repayments to be applied to principals of loans amounted to ¥1 million ($12 thousand) andincluded in reserve for loan losses as of March 31, 2015.
m. Reserve for losses from reimbursement of inactive accounts
A reserve for losses from reimbursement of inactive accounts is provided by consolidated banking subsidiaries at
the amount considered necessary for future payments of deposits which were derecognized from liabilities, owing
to depositors request for reimbursements.
n. Reserve for contingent losses
A reserve for contingent losses is provided by consolidated banking subsidiaries at the amount considerednecessary to cover possible contingent losses in accordance with the Joint Responsibility System of Credit
Guarantee Corporations.
o. Retirement benefits
To provide for payments of retirement benefits to employees, an asset or liability is established at an amount ofprojected benefit obligation net of the fair value of plan assets based on the estimated amounts at the end of the
fiscal year.
In determining the retirement benefit liability for consolidated banking subsidiaries, the benefit formula basis isadopted as the attribution method of the projected retirement benefit.
Prior service costs are charged to income using the straight-line method based on the average remaining service
period of the employees (3 years or 12 to 13 years).
Actuarial differences are charged to income from the period following the period in which they arise mainly using
the straight-line method based on the average remaining service period of the employees (11 to 15 years).
The effect of change in accounting policies in excess of the substitutional portion of obligation transferred to theJapanese government is charged to income using the straight-line method over 15 years. Net effect amounted to¥11,663 million ($97,056 thousand) for the year ended March 31, 2015.
10

Simplified methods are applied by certain consolidated non-banking subsidiaries in calculating the retirement
benefit obligation and expenses which allow them to determine based on the amount considered necessary upon
voluntary resignation at the end of fiscal year.
p. Stock options
In December 2005, the Accounting Standards Board of Japan (the “ASBJ”) issued ASBJ Statement No. 8,“Accounting Standard for Stock Options,” and related guidance. This standard requires companies to recognize
compensation expense for employee stock options based on the fair value of the stock options at the date of grantand over the vesting period as consideration for receiving goods or services. The standard also requires companies
to account for stock options granted to non-employees based on the fair value of either the stock option or the
goods or services received. In the consolidated balance sheet, the stock options are presented as subscription tights
to shares, a separate component of equity until exercised.
q. Translation of assets and liabilities denominated in foreign currencies
Assets and liabilities denominated in foreign currencies are translated into Japanese yen at the exchange rates
prevailing at the balance sheet date.
r. Hedge accounting
For derivatives to hedge the interest rate risk associated with various financial assets and liabilities of theconsolidated banking subsidiaries, the Group applies the deferred method which is stipulated in “Accounting and
Auditing Treatment of Accounting Standards for Financial Instruments in Banking Industry” (JICPA Industry
Audit Committee Report No. 24). The Group assesses the effectiveness of such hedge for offsetting changes ininterest rate, by classifying the hedge items (such as deposits and loans) and the hedging instruments (such as
interest rate swaps) by their maturity. The Group had not entered into new derivative transactions for the purposeof hedging against changes in interest rates related to deposits and loans during the fiscal year ended March 31,
2015.
Exceptional treatment is applied to interest rate swaps for certain financial assets.
Consolidated non-banking subsidiaries have no transactions to which hedge accounting is applied.
s. Income taxes
Deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax
bases of the assets and liabilities and are measured using the enacted tax rates and laws which will be in effectwhen the differences are expected to reverse.
t. Appropriation of retained earnings
Under the Corporation Law, the appropriation of retained earnings with respect to a given financial period is madeby resolution of the stockholders at a general meeting held subsequent to the close of such financial period. The
accounts for that period do not, therefore, reflect such appropriations. See Note 30.
u. Cash and cash equivalents
For purposes of the consolidated statement of cash flows, cash and cash equivalents include cash and deposits
with the Bank of Japan which are included in “Cash and due from banks” in the consolidated balance sheet.
v. Consumption taxes
The Company and its domestic consolidated subsidiaries account for consumption taxes and local consumption
taxes by the tax-exclusion method whereby receipts and payments of consumption taxes are not included in thetransaction amounts and, accordingly, consumption tax amounts do not affect the measurement of profit or losstransactions. However, deducting off the subject to the consumption tax to tangible fixed assets are summed up to
the cost in this fiscal year.
w. Accounting changes(Application of the accounting standard for retirement benefits)
In the Accounting Standard for Retirement Benefits (Accounting Standards Board of Japan Statement No. 26,
11

May 17, 2012, hereinafter the “Accounting Standard for Retirement Benefits”) and the Guidance on
Accounting Standard for Retirement Benefits (ASBJ Guidance No. 25, March 26, 2015, hereinafter the“Guidance on Retirement Benefits”), the Group adopted the provisions set forth in Article 35 of the
Accounting Standard for Retirement Benefits and in Article 67 of the Guidance on Retirement Benefits since
the fiscal year ended March 31, 2015. The Group revised its calculation method of the retirement benefit
obligation and service costs and changed its attribution method of the projected retirement benefit from thestraight-line basis to the benefit formula basis. In addition, the Group changed its method of determining thediscount rate from the method in which the discount rate is determined based on one-period interest rate
corresponding to the expected average remaining service period to the method in which the discount rate isdetermined based on multiple interest rates set corresponding to each estimated benefit payment period.
Following Article 37 in the Accounting Standard for Retirement Benefits, which stipulates transitional
treatment of the new standard, at the beginning of fiscal year ended March 31, 2015, the effect of the changed
calculation method for the retirement benefit obligation and service costs is adjusted in retained earnings.
As a result, at the beginning of fiscal year ended March 31, 2015, defined benefit assets increased by ¥405
million ($3,372 thousand) and retained earnings increased by ¥260 million ($2,170 thousand),and income
before income taxes for the year ended March 31, 2015 increased by ¥374 million ($3,119 thousand).
(Application of the accounting standard for business combinations)
The “Accounting Standard for Business Combinations” (ASBJ Statement No. 21, revised on September 13,2013), “Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No. 22, revised on
September 13, 2013), and “Accounting Standard for Business Divestitures” (ASBJ Statement No. 7, revised on
September 13, 2013) could be applied from the beginning of the consolidated accounting period beginning on
or after April 1, 2014. Accordingly, the Company applied these accounting standards (excluding Article 39 of
ASBJ Statement No. 22, revised on September 13, 2013) from the beginning of the consolidated accounting
period of fiscal year ended March 31, 2015. Under these accounting standards, the Company recorded thedifferences caused by changes in the Company’s equity shares in subsidiaries in which the Company continues
to control as capital surplus. In addition, the Company recorded acquisition-related costs as expenses in thefiscal year in which the costs are incurred. Regarding business combinations, from the beginning of fiscal year
ended March 31, 2015, the Company changed the method to reflect changes in the allocation of the acquisition
costs arising from confirmation of the provisional accounting treatment on the consolidated financial
statements of the fiscal year that includes the acquisition date.
The Company has adopted these accounting standards from the beginning of fiscal year ended March 31, 2015,
following transitional treatment based on Article 58-2(4) of “Accounting Standard for Business
Combinations,” Article 44-5(4) of “Accounting Standard for Consolidated Financial Statements,” and Article
57-4(4) of “Accounting Standard for Business Divestitures”.
Adoption of these accounting standards did not have a material effect on profit or loss for the fiscal year ended
March 31, 2015 and capital surplus as of March 31, 2015.
x. Unapplied accounting standards
Accounting Standards for Business Combinations and Consolidated Financial Statements
On September 13, 2013, the ASBJ issued revised ASBJ Statement No. 21, “Accounting Standard for Business
Combinations,” revised ASBJ Guidance No. 10, “Guidance on Accounting Standards for Business
Combinations and Business Divestitures,” and revised ASBJ Statement No. 22, “Accounting Standard forConsolidated Financial Statements.”
Major accounting changes under these revised accounting standards are as follows:(1) Treatment of changes in ownership interests in its subsidiary when the parent retains control over its
subsidiary(2) Treatment of acquisition-related costs(3) Provisional accounting treatment for business combinations(4) Presentation of the consolidated balance sheet and the consolidated statement of income, which related to“net income” and changes from “minority interest” to “noncontrolling interest”
12The Group has applied the revised accounting standards for (1) to (3) above from the beginning of fiscal year
ended March 31, 2015 and expects to apply (4) above from the fiscal year ending March 31, 2016.
The changes are only in account descriptions and the effects of applying the revised accounting standards tothe financial figures for the year ending March 31, 2016 are none.
2. U.S. Dollar Amounts
Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rate of ¥120.17 =$1, the approximate rate of exchange on March 31, 2015, has been used in translation. The inclusion of suchamounts is not intended to imply that Japanese yen have been or could be readily converted, realized or settled in
U.S. dollars at that rate or any other rate.
3. Securities
Securities as of March 31, 2015 were as follows:

Millions of Yen¥
602,991
115,391
350,272
45,80399,64522,730¥ 1,236,834

Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Equity securities
Foreign securities
Other securities
Total

Thousands of
U.S. Dollars$ 5,017,819
960,233
2,914,805
381,158
829,205
189,153$ 10,292,375

As of March 31, 2015, securities included equity investments in non-consolidated subsidiaries that amounted to¥1,173 million ($9,769 thousand).
As of March 31, 2015, Japanese government bonds included bonds of ¥9,100 million ($75,726 thousand) whichwere being rented to third parties without collateral under lending contracts (securities lending transactions).
Japanese corporate bonds included bonds offered through private placement. The Group’s guarantee obligation forsuch private-placement bonds was ¥24,020 million ($199,891 thousand) as of March 31, 2015.
In the following description, in addition to “Securities”, also presented are negotiable certificates of deposit which
are classified as “Trading account securities” and “Cash and due from banks” in the consolidated balance sheet
and beneficiary claims on loan trusts which are classified as “Monetary claims bought” in the consolidatedbalance sheet.
Valuation gain or loss on trading securities included in income before income taxes and minority interests was ¥2
million ($21 thousand) as of March 31, 2015.

13

 Held-to-maturity securities
The following tables summarize carrying values, fair values and differences of securities with available fair values
as of March 31, 2015:
Millions of Yen
Carrying value
Securities with fair value exceeding carrying value:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Foreign securities
Subtotal
Securities with fair value not exceeding carrying value:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Foreign securities
Subtotal
Total

¥

¥

361,096
69,846
94,573
12,997538,514
3,519
2,008
5,187
5,056
15,771
554,286

Fair value¥¥371,236
70,182
95,133
13,194
549,747
3,518
2,008
5,183
4,927
15,638565,385

Net unrealized
gains (losses)¥¥

10,139336
560
196
11,232
(1)
(0)
(3)
(128)
(133)
11,099Thousands of U.S. Dollars
Net unrealized
Carrying value
Fair value
gains (losses)
Securities with fair value exceeding carrying value:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Foreign securities
Subtotal
Securities with fair value not exceeding carrying value:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Foreign securities
Subtotal
Total

$

$

14

3,004,884
581,232
786,997108,159
4,481,273
29,288
16,716
43,16442,076131,246
4,612,519$$

3,089,258
584,030
791,661
109,795
4,574,745
29,278
16,716
43,13441,006130,135
4,704,881$$

84,373
2,797
4,663
1,636
93,472(9)(0)(29)(1,070)(1,110)92,362

 Available-for-sale securities
The following tables summarize carrying values, acquisition costs and differences of securities with available fairvalues as of March 31, 2015:
Millions of Yen

Securities with carrying value exceeding acquisition cost:
Corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total bonds
Other securities
Subtotal
Securities with carrying value not exceeding acquisition
cost:
Corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total bonds
Other securities
Subtotal
Total

Carrying value

Acquisition cost

Net unrealized
gains (losses)

¥

¥

¥

¥

38,98827,884

11,104

179,188
37,415
199,312415,916
91,478546,383

178,422
37,228
198,681414,332
89,509531,727

765
186
631
1,583
1,968
14,655

1,947

2,172

(224)

59,186
6,120
51,198
116,506
19,534
137,988684,371

59,427
6,186
51,452
117,066
19,580138,819
670,546

(241)
(65)
(253)
(560)
(45)
(830)
13,825¥¥

Thousands of U.S. Dollars
Net unrealized
Carrying value Acquisition cost gains (losses)
Securities with carrying value exceeding acquisition cost:
Corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total bonds
Other securities
Subtotal
Securities with carrying value not exceeding acquisition
cost:
Corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total bonds
Other securities
Subtotal
Total

$

$

324,447$

232,041$

92,405

1,491,121
311,350
1,658,590
3,461,063
761,240
4,546,750

1,484,754
309,797
1,653,338
3,447,890
744,860
4,424,792

6,366
1,553
5,252
13,173
16,379
121,958

16,207

18,075(1,868)492,525
50,933426,053
969,511
162,561
1,148,280
5,695,030 $

494,530
51,477428,164
974,172
162,943
1,155,191
5,579,984(2,005)(544)(2,111)(4,661)(382)(6,911)
115,046$

Securities with fair values (excluding securities held for trading purpose) that have substantially declined from the15

acquisition cost are valued at fair value and losses on devaluation of those securities are recognized in the
consolidated statement of income unless the value is considered recoverable.
For the year ended March 31, 2015, no impairment loss was recognized.
Determining whether the fair value is “significantly declined” is based on the fair value declining by more than
50% or the criteria considering the trend of the fair value during a certain past period and credit risks of the issuers
when the fair value declined between 30% and 50% of the acquisition cost.
The following table summarizes total available-for-sale securities sold and amounts of the related gains and losses
for the year ended March 31, 2015:

Corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total bonds
Other securities
Total

Sales proceeds¥
2,444Millions of Yen
Realized gains¥
232

Realized losses¥
27

358,465
13,16554,822426,453
61,368

1,238
37
136
1,412
608

76
1
77
29

¥

490,266

¥

2,253

¥

134

Thousands of U.S. Dollars
Sales proceeds
Realized gains Realized losses$
20,342$
1,938 $
227

Corporate stocks
Bonds:
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Total bonds
Other securities
Total

2,982,987
109,557
456,2093,548,754
510,676$

4,079,773

10,307310
1,132
11,7505,067$

18,756

634
11
646
243
$

1,117

4. Loans and Bills Discounted
Loans and bills discounted as of March 31, 2015 included the following loans:

Millions of Yen¥
46,03895,8492,957,071
195,842

Commercial bills discounted
Loans on bills
Loans on deeds
Overdrafts
Total¥ 3,294,802

16

Thousands of
U.S. Dollars$
383,108
797,619
24,607,402
1,629,712$ 27,417,843

Loans and bills discounted include loans to borrowers in bankruptcy, delinquent loans, loans past due for threemonths or more, and restructured loans. The amounts of these loans were as follows:

Loans to borrowers in bankruptcy
Delinquent loans
Loans past due for three months or more
Restructured loans
Total

Millions of Yen¥
4,032
104,109
588
4,063

Thousands of
U.S. Dollars$
33,559866,349
4,896
33,811¥$

112,793

938,617

Loans are generally placed on non-accrual status when the ultimate collectability of either the principal or interest
becomes doubtful because payments have been in arrears for a certain period of time or due to other reasons.
Loans to borrowers in bankruptcy represent non-accrual loans to borrowers in legal bankruptcy as defined in the
Corporation Tax Law. Delinquent loans represent non-accrual loans other than loans to borrowers in bankruptcy
and restructured loans.
Loans past due for three months or more represent loans on which payments of principal or interest have been inarrears for three months or more, but do not meet the criteria for loans to borrowers in bankruptcy and delinquentloans.
Restructured loans are loans that have been restructured to support the rehabilitation of certain borrowers who areencountering financial difficulties, with the intention of ensuring recovery of the loans by providing easier
repayment terms for the borrowers (such as by reducing the rate of interest or by providing a grace period for thepayment of principal/interest, etc.), and are not classified in any of the above categories.
These amounts represent the gross amounts before deduction of the reserve for loan losses.
Notes discounted are recorded as cash lending/borrowing transactions in accordance with “Accounting and
Auditing Treatments of the Application of Accounting Standards for Financial Instruments in the Banking
Industry” (JICPA Industry Audit Committee, Report No. 24). The Group has a right to sell or collateralize suchbills at its discretion. As of March 31, 2015, total face value of commercial bills and bills of exchange acquired
through discounting amounted to ¥46,683 million ($388,480 thousand).
As of March 31, 2015, loans and bills discounted included the portion of extended to original borrowers based onloan participation agreements, as permitted by the JICPA Accounting Committee Report No. 3, in the amount of¥5,002 million ($41,626 thousand)Line-of-credit agreements relating to overdrafts and loans are agreements which oblige the Group to lend funds up
to a certain limit agreed to in advance. The Group makes the loan upon the request of an obligor to draw down
funds under such a loan agreement as long as there is no breach of the various terms and conditions stipulated in
the relevant loan agreement. The unused line-of-credit balance relating to these overdrafts and loan agreements asof March 31, 2015 amounted to ¥873,529 million ($7,269,113 thousand). The amount related to overdrafts andloans with a term of one year or less or overdrafts and loans which permit unconditional cancellation at any timewas ¥850,299 million ($7,075,804 thousand) as of March 31, 2015.
As many of these contracts expire undrawn, the aggregate total of the undrawn amount does not necessarily affectthe future cash flows of the Group. Many of these contracts have clauses that allow the Group to turn down a loan
request or reduce the amounts of the credit line if there is a change in financial conditions, a need to establish
increased securities, or other similar reasons. In addition to obtaining necessary collateral (real estate, securities,etc.) at the time the commitment contract is entered into, the Group assesses the condition of the customer’sbusiness operations, and analyzes other information, based on internal procedures and standards. If necessary, thecontract is reviewed and revised, or additional steps are taken to secure the credit extended to the customer.

175. Foreign Exchanges
Foreign exchanges as of March 31, 2015 consisted of the following:

Assets:Due from foreign banks
Foreign exchange bills bought
Foreign exchange bills receivable
Total
Liabilities:
Due to foreign banks
Foreign exchange bills sold
Foreign exchange bills payable
Total

Millions of Yen

Thousands of
U.S. Dollars

¥

4,431
769
2,530

$

36,877
6,406
21,054

¥

7,731

$

64,339

¥

1 $
52
85

¥

139

14
435
710
1,159

$

6. Tangible Fixed Assets
Tangible fixed assets as of March 31, 2015 were as follows:Land
Buildings
Lease assets
Construction in progress
Other
Subtotal
Accumulated depreciation
Total

Millions of Yen¥
34,62533,9091,914
2,223
18,39391,066(37,452)

Thousands of
U.S. Dollars$
288,133
282,180
15,93018,505
153,063
757,813(311,663)¥$

53,613446,150

Land used for Tokyo Tomin’s business activities has been revalued on the basis prescribed by the Law Concerning
Land Revaluation (Proclamation No. 34 dated March 31, 1998). As for the revaluation difference, the income tax
account corresponding to the revaluation difference amount is included in liabilities as “Deferred tax liabilities onland revaluation,” and the revaluation difference, net of this deferred tax liability, is included in net assets as“Revaluation reserve for land.”Date of revaluation:
March 31, 1998
Revaluation method as stated in Article 3-3 Law Concerning Land Revaluation:
The value of land is based on the official notice prices calculated as directed by public notification of theCommissioner of the National Tax Administration and as provided in the Law Concerning Public Notification ofLand Prices, as stipulated in Article 2-4 of the Ordinance Implementing the Law Concerning Land Revaluation(Government Ordinance No. 119 dated March 31, 1998), after making reasonable adjustments. Difference
between the revalued carrying amount and fair value of lands being revalued pursuant to the Article 10 of the law
was ¥184 million ($1,531 thousand).
The accelerated depreciation entry for tangible fixed assets amounted to ¥216 million ($1,805 thousand) for theyear ended March 31, 2015.
18

7. Pledged Assets
Assets pledged as collateral as of March 31, 2015 consisted of the following:

Assets pledged as collateral:
Securities
Other assets
Liabilities corresponding to assets pledged as collateral:
Deposits
Payable under securities lending transactions
Borrowed money

Millions of Yen

Thousands of
U.S. Dollars¥

188,29718$

1,566,923
153¥

10,714140,876
5$

89,1601,172,31249

In addition to the assets presented above, securities totaling ¥95,540 million ($795,040 thousand) were pledged ascollateral relating to transactions on exchange settlements, foreign exchange administration services, cooperative
system settlements and derivative transactions or as substitutes for future transaction margins as of March 31,
2015.
Other assets included deposits of ¥5,544 million ($46,135 thousand) as of March 31, 2015.
8. Deposits
Deposits as of March 31, 2015 consisted of the following:

Millions of Yen¥
220,855
2,042,268
39,74022,2252,021,308
144,907

Current deposits
Ordinary deposits
Savings deposits
Deposits at noticeTime deposits
Other deposits
Total¥ 4,491,306

Thousands of
U.S. Dollars$ 1,837,863
16,994,825
330,706
184,947
16,820,410
1,205,851$ 37,374,604

9. Borrowed Money
Borrowed money as of March 31, 2015 included subordinated borrowings amounting to ¥7,000 million ($58,250
thousand).
Annual maturities of borrowed money as of March 31, 2015 were as follows:

Millions of Yen
¥
272
57
43
25
8
7,000
¥
7,409

Year ending March 31
2016
2017
2018
2019
2020
2021 and thereafter
Total

19

Thousands of
U.S. Dollars
$
2,270
480
364
212
74
58,257$
61,66010. Bonds Payable
Bonds payable and bonds with subscription rights to shares as of March 31, 2015 consisted of the following:

Issued by the Company:
Unsecured subordinated bonds with subscription rights to shares,
due September 2016, 2.15% interest
Issued by Tokyo Tomin:
Unsecured fixed and floating callable (subordinated) debenturebonds, due July 2020, 2.15% interest
Unsecured fixed and floating callable (subordinated) debenturebonds, due February 2021, 2.21% interest
Unsecured fixed and floating callable (subordinated) debenturebonds, due November 2021, 2.38% interest
Unsecured fixed and floating callable (subordinated) debenturebonds, due November 2021, 2.38% interest
Total

Millions of Yen

Thousands of
U.S. Dollars

¥

$

¥

5,000

41,6076,000

49,9293,600

29,957

12,500104,019

3,500
30,60029,125
254,639$

Annual maturities of bonds payable and bonds with subscription rights to shares of March 31, 2015 were as
follows:

Year ending March 31
2016
2017
2018
2019
2020
2021 and thereafter
Total

Bonds with
subscription rights to shares
Thousands of
U.S. Dollars
Millions of Yen
¥
$
5,000
41,607$41,607¥5,000

Bonds payable
Thousands of
U.S. Dollars
Millions of Yen¥$
25,600213,031¥
25,600$213,031

11. Issuance of Convertible Bonds
On October 1, 2014, the Company issued ¥5,000 million ($41,607 thousand) unsecured subordinated bonds due
September 30, 2016. The bonds include subscription rights to shares which entitle bondholders to acquirecommon stock under certain circumstances, and exercisable on and after October 1, 2014 up to September 29,
2016. Initial conversion price of the bond is ¥3,741 ($31.13), subject to adjustment for certain events such as astock split, consolidation of stock or issuance of stock at a consideration per share which is less than the current
market price. Conversion ratio of the bond is 100%.
The bonds were not converted into shares of common stock during the year ended March 31, 2015.

20

12. Other Liabilities
Other liabilities as of March 31, 2015 consisted of the following:

Millions of Yen¥
3,227
26,784

Accrued expenses
Unearned revenue and other liabilities
Total

¥

30,012Thousands of
U.S. Dollars$
26,856
222,892$
249,748

Lease obligations of ¥1,216 million ($10,124 thousand) were included in “Unearned revenue and other liabilities”
in the table above. The average interest rates on lease obligations as of March 31, 2015 with maturities dates
subsequent to March 31, 2016 was 3.48%.
The aggregate annual maturities of lease obligations subsequent to March 31, 2015 were summarized as follows:

Millions of Yen
¥
367
241
199
183
146
78
¥
1,216

Year ending March 31
2016
2017
2018
2019
2020
2021 and thereafter
Total

Thousands of
U.S. Dollars
$
3,057
2,010
1,663
1,526
1,216
649
$
10,124

13. Retirement Benefit Plans(1) Outline of retirement benefit plans adopted
Tokyo Tomin maintains a corporate pension fund plan and a lump-sum payment plan. As of October 1, 2013, theretirement benefit system were revised and a switch was made from a defined benefit corporate pension plan to acash balance-type pension plan using a point system. In some cases, premium severance may be paid whenemployees retire.
In 1987, for participants with the participating period of 20 years or more, approximately 20% of the retirement
benefits was transferred from a lump-sum payment plan to a welfare pension fund plan.
Concerning the substitutional portion of the welfare pension fund plan, approval by the Minister of Health, Laborand Welfare on the exemption from the obligation to pay the future portion of funds was received on April 1, 2004
and approval on the return of the past portion was received on April 1, 2005.
Yachiyo maintains a corporate pension plan and a lump-sum payment plan. Concerning the corporate pension plan,a corporate pension fund was established as of March 1, 2004 as a result of an approved transfer from a welfare
pension fund and, as of April 1, 2005, the corporate pension plan was transferred from a fund-type to acontract-type.
On March 31, 2004, a portion of retirement benefits was shifted to a defined contribution pension plan established
as of March 1, 2004. The defined contribution pension plan adopted matching contributions as of January 1, 2013.
Certain domestic consolidated subsidiaries, other than the above mentioned two banks, maintain lump-sum
payment plans and defined contribution pension plans.
Tokyo Tomin and Yachiyo have established retirement benefit trusts.
21

(2) Defined benefit plans
The changes in the benefit obligation during the fiscal year ended March 31, 2015 were as follows:

Retirement benefit obligation as of April 1, 2014
Cumulative effect of accounting change
Retirement benefit obligation as of April 1, 2014 after cumulative
effect of accounting change
Increase due to share transfer
Service cost
Interest cost
Actuarial loss
Retirement benefits paid
Retirement benefit obligation as of March 31, 2015

Millions of Yen¥
32,526(405)¥

32,121
23,934
1,013
356
2,339
(2,762)57,004

Thousands of
U.S. Dollars$
270,672(3,372)
267,300
199,172
8,437
2,968
19,469(22,984)$474,364

The changes in plan assets during the fiscal year ended March 31, 2015 were as follows:

Millions of Yen¥
35,08918,847
877
9,046
2,663
(2,068)¥64,455

Plan assets as of April 1, 2014
Increase due to share transfer
Expected return on plan assets
Actuarial gainContributions by employers
Retirement benefits paid
Plan assets as of March 31, 2015

Thousands of
U.S. Dollars$
292,002
156,836
7,304
75,27822,164(17,217)$536,371

The following table sets forth the funded status of the plans and the amounts recognized in the consolidatedbalance sheet as of March 31, 2015

Funded retirement benefit obligation
Plan assets
Unfunded retirement benefit obligation
Net defined benefit asset in the consolidated balance sheet

Net defined benefit liability
Net defined benefit asset
Net defined benefit asset in the consolidated balance sheet

22

Millions of Yen¥
56,932(64,455)(7,523)72¥(7,451)Millions of Yen¥
3,326(10,777)¥(7,451)Thousands of
U.S. Dollars$
473,764(536,371)(62,606)
600$(62,006)
Thousands of
U.S. Dollars$
27,679(89,686)$(62,006)

The components of retirement benefit expenses for the fiscal year ended March 31, 2015 were as follows:

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service cost
Amortization of transition difference due to a change in the accounting
standards
Other

Millions of Yen
¥
1,013
356
(877)
1,830
(1,147)¥Retirement benefit expenses for defined benefit plans

537
(1)
1,712

Thousands of
U.S. Dollars
$
8,437
2,968
(7,304)
15,233(9,545)
4,468
(8)
$

14,249The components of remeasurements of defined benefit plans included in other comprehensive income (before tax
effect) for the fiscal year ended March 31, 2015 were as follows:

Prior service cost
Actuarial loss
Transition difference due to a change in the accounting standards
Total

Millions of Yen¥(1,147)
8,537
537
¥
7,927

Thousands of
U.S. Dollars$(9,545)71,043
4,468$

65,966The components of remeasurements of defined benefit plans included in accumulated other comprehensive
income (before tax effect) as of March 31, 2015 were as follows:

Millions of Yen¥(1,495)
2,032
¥
537

Unrecognized prior service cost
Unrecognized actuarial loss
Total

Thousands of
U.S. Dollars$(12,447)
16,916$

4,469

The plan assets, by major category, as a percentage of total plan assets as of March 31, 2015 were as follows:
Equity securities
Debt securities
Cash and due from banks
Other
Total

55.5%
30.0%
5.7%
8.8%
100.0%

Total plan assets included retirement benefit trusts of 31.8%, which were set for corporate pension plans.
The long-term expected rate of return on plan assets has been estimated based on the current and anticipatedallocation of plan assets and the current and long-term expected return on plan assets composed of various assets.

23

The main assumptions used in accounting for the above plans for the fiscal year ended March 31, 2015 were as
follows (presented in weighted average):
Discount rateLong-term expected rate of return on plan assets
Expected rate of salary increase

0.82% or 1.00%
1.90% or 2.00%
4.5% or 5.00%(3) Defined contribution plans
The amount to be paid to defined contribution plans by consolidated subsidiaries was ¥51 million ($431
thousand).
14. Acceptances and Guarantees
All contingent liabilities arising from acceptances and guarantees are included in this account. As a contra account,“Customers’ liabilities for acceptances and guarantees” are shown on the assets side, which represents the Group’s
right of indemnity from the applicants.
In addition, the Group’s guarantees total ¥24,020 million ($199,891 thousand) for private placement Japanese
corporate bonds held by the Group and included in Securities as of March 31, 2015. Relevant acceptances andguarantees and customers’ liabilities for acceptances and guarantees have been recorded in the net amount.
15. Shareholders’ Equity
Japanese companies are subject to the Companies Act of Japan (the "Companies Act"). The significant provisions
in the Companies Act that affect financial and accounting matters are summarized below:(1) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to theyear-end dividend upon resolution at the shareholders' meeting. For companies that meet certain criteria, such as(1) having a Board of Directors, (2) having independent auditors, (3) having an Audit & Supervisory Board, and(4) the term of service of the directors is prescribed as one year rather than two years of normal term by its articles
of incorporation, the Board of Directors may declare dividends (except for dividends in kind) at any time during
the fiscal year if the company has prescribed so in its articles of incorporation. The Company meets all the above
criteria.
The Companies Act permits companies to distribute dividends in kind (noncash assets) to shareholders subject to acertain limitation and additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if thearticles of incorporation of the company so stipulate. The Companies Act provides certain limitations on theamounts available for dividends or the purchase of treasury stock. The limitation is defined as the amountavailable for distribution to the shareholders, but the amount of net assets after dividends must be maintained at noless than ¥3 million.
(2) Increases/Decreases and Transfer of Common Stock, Reserve and Surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (acomponent of retained earnings) or as additional paid in capital (a component of capital surplus), depending on theequity account charged upon the payment of such dividends until the aggregate amount of legal reserve andadditional paid in capital equals 25% of the common stock. Under the Companies Act, the total amount ofadditional paid in capital and legal reserve may be reversed without limitation. The Companies Act also provides
that common stock, legal reserve, additional paid in capital, other capital surplus and retained earnings can betransferred among the accounts under certain conditions upon resolution of the shareholders.
(3) Treasury Stock and Treasury Stock Acquisition Rights
The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stock byresolution of the Board of Directors. The amount of treasury stock purchased cannot exceed the amount available
24

for distribution to the shareholders which is determined by a specific formula. Under the Companies Act, stockacquisition rights are presented as a separate component of equity. The Companies Act also provides thatcompanies can purchase both treasury stock acquisition rights and treasury stock. Such treasury stock acquisitionrights are presented as a separate component of equity or deducted directly from stock acquisition rights.
16. Stock Options
The stock options outstanding as of March 31, 2015 were as follows:
Stock option

Grantees

Number of options
granted (*)

Grant date

Vesting
period2011 Stock
Option7 directors

35,500 shares

July 29, 2011

Not defined

From July 29, 2011
to July 28, 2041

2012 Stock
Option7 directors

50,500 shares

July 27, 2012

Not defined

From July 27, 2012
to July 26, 2042

2013 Stock
Option7 directors

34,000 shares

July 26, 2013

Not defined

From July 26, 2013
to July 25, 2043

Exercise period(*) Number of options granted is expressed in number of shares of common stock granted.
Conditions for the exercise of stock options are not defined.

25

The stock option activity for the year ended March 31, 2015 was as follows:2011 Stock
Option2012 Stock
Option(Shares) (*1)

2013 Stock
OptionNon-vested (Shares) (*1)
March 31, 2014 - Outstanding
GrantedForfeited
VestedMarch 31, 2015 - Outstanding

-

-

-

Vested (Shares) (*1)
March 31, 2014 - Outstanding
VestedExercised
Forfeited
Cancelled (*2)
March 31, 2015 - Outstanding

21,5008,000
13,500-44,00010,00034,000-34,0007,000
27,000-Exercise price (Yen)
Average stock price at exercise (Yen)Fair value price on grant date (Yen)

¥
¥
¥

1
1,180
1,022

¥
¥
¥

1
1,180
692

¥
¥
¥

1
1,246
1,049

Exercise price (U.S. Dollar)
Average stock price at exercise (U.S. Dollar)
Fair value price on grant date (U.S. Dollar)

$
$
$

0.00
9.81
8.50

$
$
$

0.00
9.81
5.75

$
$
$

0.00
10.36
8.72

(*1) Numbers of options granted are expressed in number of shares of common stock granted.
(*2) These subscription rights to shares as stock options were acquired and cancelled as of September 30, 2014.
Actual numbers of forfeited options are used to measure the number of vested options, considering the difficulty
to reasonably estimate future forfeitures.
Stock option expenses recognized in general and administrative expenses was ¥8 million ($74 thousand) for theyear ended March 31, 2015.
17. Valuation Difference on Available-for-sale Securities
Valuation difference on available-for-sale securities as of March 31, 2015 consisted of the following:

Valuation difference on available-for-securities
Deferred tax liabilities applicable to valuation difference
Valuation difference on available-for-sale securities, net of theapplicable income taxes before adjustment for minority interests
Amount attributable to minority interests
Share of valuation difference on available-for-sale securities held byaffiliate accounted for by the equity method
Valuation difference on available-for-sale securities

26

Millions of Yen¥
14,984(5,392)Thousands of
U.S. Dollars$
124,692(44,876)

9,591
(11)

79,815
(91)

203
9,784

1,695
81,419¥$18. Income Taxes
The significant components of the deferred tax assets and liabilities as of March 31, 2015 were as follows:

Deferred tax assets:
Net losses carried forward
Items related to retirement benefits
Reserve for loan losses
Depreciation of securities
Depreciation expense
Other
Subtotal
Valuation allowance
Total
Deferred tax liabilities:
Items related to securities
Valuation difference on available-for-sale securities
Items related to asset retirement obligations
Valuation of assets
Other
Total
Net deferred tax assets

Millions of Yen

Thousands of
U.S. Dollars

¥

$

¥

2,316
6,216
9,196
1,003
1,032
2,348
22,113(4,951)
17,162(1,017)(5,292)(34)(4,277)(0)(10,622)
6,540$

19,28051,72876,526
8,351
8,592
19,539184,018(41,203)
142,815(8,469)(44,038)(284)(35,594)(6)(88,391)
54,423Net deferred tax assets as of March 31, 2015 are included in the following accounts in the consolidated balance
sheet.

Millions of Yen
¥
6,570
30

Deferred tax assets
Deferred tax liabilities

Thousands of
U.S. Dollars$
54,679256

The Group is subject to Japanese national and local income taxes which, in the aggregate, resulted in normal
effective statutory tax rate of approximately 35.64% for the fiscal year ended March 31, 2015.
The following table summarizes the significant differences between the statutory tax rate and the effective tax rate
for consolidated financial statement purposes for the fiscal year ended March 31, 2015.
Statutory tax rate
Entertainment expenses and other items permanently excluded from deductible expenses
Dividend income and other items permanently excluded from reportable revenue
Per capita inhabitants’ tax
Decrease in deferred tax assets due to tax rate changes
Change in valuation allowance
Gains on negative goodwill
Other
Effective tax rate

2735.64%
0.18(0.39)
0.12
2.37(0.34)(28.92)(0.83)
7.83%

Adjustments to deferred tax assets and liabilities due to income tax rate change
The “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 9 of 2015) was promulgated on March 31,
2015 and, as a result, the corporate tax rate, among others, will be reduced from the fiscal year beginning on orafter April 1, 2015. As a result, the effective statutory tax rate used to measure the Group’s deferred tax assets andliabilities was changed from the previous 35.64% to 33.10% for the temporary differences expected to be realized
or settled for the year beginning on April 1, 2015, and to 32.34% for the temporary differences expected to berealized or settled for the year beginning on April 1, 2016 and thereafter. The effect of the announced reduction of
the effective statutory tax rate was to decrease deferred tax assets by ¥543 million ($4,525 thousand), decreasedeferred tax liabilities by ¥1 million ($10 thousand), increase valuation difference on available-for-sale securitiesby ¥532 million ($4,434 thousand), decrease deferred gains or losses on hedges by ¥1 million ($8 thousand),decrease remeasurements of defined benefit plans by ¥58 million($485 thousand), increase income taxes-deferredby ¥1,053 million ($8,762 thousand), and to decrease deferred tax liabilities on land revaluation by ¥1 million($13 thousand) and increase revaluation reserve for land by the same amount, as of and for the fiscal year ended
March 31, 2015.
Furthermore, the system of deduction for losses carried forward has been revised. The limit of deduction fromtaxable income applicable to losses carried forward will be an amount equivalent to 65% of the income before loss
carried forward effective from the fiscal year beginning on and after April 1, 2015, and 50% effective from thefiscal year beginning on and after April 1, 2017. The effect of this revision was immaterial for the fiscal year
ended March 31, 2015.
Subsequent change in the enterprise tax rates and its effect
The “Tokyo Metropolitan Ordinance for Partial Amendment of the Ordinance for Partial Amendment of theOrdinance for Metropolitan Tax and the Ordinance for Metropolitan Tax” (Tokyo Metropolitan Ordinance No.93
of 2015) was promulgated on April 1, 2015 and, as a result, the effective statutory tax rate used to measure theGroup’s deferred tax assets and liabilities will be changed from the current 33.10% to 33.06% for the temporary
differences expected to be realized or settled for the year beginning on April 1, 2015, and from 32.34% to 32.30%
for the temporary differences expected to be realized or settled for the year beginning on April 1, 2016 andthereafter. The effect of this change was immaterial for the fiscal year ended March 31, 2015.
19. Amounts per Share
Amounts per share as of and for the fiscal year ended March 31, 2015 were as follows:

Net income per share:
Basic
DilutedNet assets per share¥

Yen

U.S. Dollars

2,638.39
2,561.38
6,959.92

$

21.95
21.31
57.91

Basic net income per share is computed based on the weighted average number of shares of common stock
outstanding during the year. Diluted net income per share is computed based on the weighted average number ofshares of common stock outstanding during the year after giving effect to the dilutive potential of shares ofcommon stock to be issued upon the exercise of subscription rights to shares.
Net assets per share are computed based on the net assets excluding minority interests and the number of shares ofcommon stock outstanding at the year end.

28

The bases for calculation are as follows:

Millions of Yen
Basic net income per share:
Net income
Amount not belonging to shareholders of common stock
Net income in relation to common stock
Weighted average number of shares of common stock during the period¥

Diluted net income per share:
Net income adjustment amount―
Interest on bonds with subscription rights to shares (net of applicable taxes)
Effect of dilutive securities―
Bonds with subscription rights to shares
Summary of residual securities not included in calculation of dilutive net
income per share because they have no dilutive effects

Thousands of
U.S. Dollars

57,290 $ 476,748
57,290476,748
21,714 thousand shares

¥

34

$

287

666 thousand shares-

Net assets per share:
Total of net assets
Amount deducted from total of net assets―Minority interests
Net asset amount for common stock at year end
Number of shares of common stock outstanding at year end for calculating
net assets per share¥

202,580245
202,334$ 1,685,779
2,042
1,683,737

29,071 thousand shares

As the Company was established on October 1, 2014 through a joint share transfer, the weighted average numberof shares of common stock outstanding during the fiscal year ended March 31, 2015 was calculated based on theweighted average number of shares of Tokyo Tomin multiplied by its share transfer ratio for the period from April
1, 2014 to September 30, 2014 prior to the establishment of the Company, and the weighted average number ofshares of common stock of the Company for the period from October 1, 2014 to March 31, 2015.
As stated in Note 1.w., the Group adopted the provisions set forth in Article 35 of the Accounting Standard for
Retirement Benefits and in Article 67 of the Guidance on Retirement Benefits since the fiscal year ended March
31, 2015, according to the transitional treatment set forth in Article 37 in the Accounting Standard for Retirement
Benefits.
As a result, at the beginning of and for the fiscal year ended March 31, 2015, net assets per share increased by¥18.17 ($0.15) and basic and diluted net income per share increased by ¥17.26 ($0.14) and ¥16.74 ($0.13),
respectively.
20. Other Income
Other income for the year ended March 31, 2015 is as follows:

Millions of Yen
¥
367
556
202
50,476210
1,346

Gain on sales of securities
Gain on sales of bonds
Equity in earnings of investment in affiliate
Gain on negative goodwill
Gain on recovery of write-offs of monetary claims
Other
Total

¥
29

53,159Thousands of
U.S. Dollars
$
3,055
4,634
1,685
420,039
1,749
11,200$442,365

21. Other Expenses
Other expenses for the year ended March 31, 2015 are as follows:

Write-offs of loans
Loss on sales of securities
Write-down of securities
Loss on sales of bonds
Loss on disposition of noncurrent assets
Provision for loan losses
Other
Total

30

Millions of Yen
¥
774
76
48
141
76
721
1,643

Thousands of
U.S. Dollars
$
6,444
634
407
1,174
640
6,007
13,680

¥

$

3,483

28,987

22. Comprehensive Income
Each component of other comprehensive income for the fiscal year ended March 31, 2015 was the following:

Valuation difference on available-for-sale securities:
Amount arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Deferred gains or losses on hedges
Amount arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Revaluation reserve for land
Amount arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectTotal
Foreign currency translation adjustments
Amount arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectTotal
Remeasurements of defined benefit plans
Amount arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Share of other comprehensive income of affiliate accounted for by
the equity method
Amount arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectTotal
Total other comprehensive income

31

Millions of Yen

Thousands of
U.S. Dollars

¥

$

¥

13,716(2,446)
11,270(3,303)
7,966

114,144(20,359)
93,785(27,490)
66,294

(0)
4
4
(2)
2

(1)
37
36
(16)
19

1
1

13
13

6
6
6

55
55
55

6,663
1,263
7,927
(2,839)5,087

55,452
10,51465,966(23,629)
42,337100
100
100
13,164

832
832
832
109,552$

23. Supplementary Cash Flow Information
The reconciliation of cash and due from banks in the consolidated balance sheet to cash and cash equivalents inthe consolidated statement of cash flows as of March 31, 2015 was as follows:

Millions of Yen¥
298,834(2,039)(10,000)(409)¥
286,385

Cash and due from banks
Time deposits
Negotiable certificates of deposit
Other deposits
Cash and cash equivalents

Thousands of
U.S. Dollars$ 2,486,761(16,969)(83,215)(3,410)$2,383,166

24. Assets and Liabilities Held by Subsidiary Newly Consolidated through Share Transfer
Breakdown of assets and liabilities held by Yachiyo newly consolidated through share transfer at the time of theconsolidation was as follows.

Total assets
Including, loans and bills discounted
Including, securities
Including, reserve for loan losses
Total liabilities
Including, deposits

Millions of Yen¥ 2,260,320
1,444,364
622,404(12,460)

Thousands of
U.S. Dollars$ 18,809,354
12,019,347
5,179,364(103,687)

2,156,770
2,122,129

17,947,664
17,659,395

25. Leases
Finance leases
As lessee of finance leases which do not transfer ownership of leased assets to lessees:
The leased assets primarily consist of computers, office machinery and equipment and software. See Note 1.f. forthe depreciation method of the leased assets.
Operating leases
Total future lease payments under non-cancelable operating leases as of March 31, 2015 were as follows:
As lessee

Within one year
Over one year
Total

Millions of Yen
¥
47
177
¥
225

Thousands of
U.S. Dollars
$
398
1,475
$
1,874

Millions of Yen
¥
27
20
¥
48

Thousands of
U.S. Dollars
$
229
170
$
399

As lessor

Within one year
Over one year
Total
32

26. Financial Instruments
Overview(1) Policy for financial instruments
The Group’s operations center on the banking business such as deposits business and lending business, withfinancial services including credit card services and credit guarantee services. The Group raises funds mainly
through local customer deposits and invests them in loans and bills discounted and securities. In this way, theGroup principally holds financial assets and financial liabilities that are subject to interest rate fluctuations, and
the Group conducts asset-liability management (ALM) to minimize the negative impact of interest rate
fluctuations. ALM includes the use of derivative transactions.
(2) Primary details of financial instruments and their risk
The Group’s financial assets mainly consists of loans and bills discounted extended to domestic corporate andprivate customers, and securities. Loans and bills discounted are subject to credit risk stemming from a borrower’s
failure to meet a contractual obligation.
Securities mainly consists of domestic debt and equity securities and investment funds. Debt securities areclassified into held-to-maturity securities and available-for-sale securities. In addition, trading account securities
are held for trading purposes. These securities are subject to issuers’ credit risk and market fluctuation risk ininterest rates and prices, respectively.
The Group’s financial liabilities mainly consists of deposits raised from domestic corporate and private customers.
Such deposits are subject to liquidity risk, which is the risk that the Group is unable to secure the funds required tohonor these deposits because of certain conditions in the operating environment.
The Group is also engaged in derivative transactions with domestic corporate customers and financial institutions.
Such derivative transactions are subject to credit risk stemming from a counterparty’s failure to meet a contractual
obligation and market fluctuation risk in interest rates and exchange rates.
(3) Risk management system for financial instruments(a) Integrated risk management
The Group establishes an integrated risk management system that captures overall risks evaluated by risk category,compares them with the Group’s strength and checks its management soundness.
(b) Management of credit risk
The Group manages credit risk appropriately, in accordance with rules and standards for credit risk management,
mainly through credit screening of each proposal, credit rating of each borrower, self-assessment of loan assets,
assistance efforts for business reconstruction and problem loan management. Credit portfolio is monitored forconcentration level by industry and customer and is aimed to be developed eliminating concentration risk.
Credit risk management is handled by each branch office and the Credit Management Department and reported
regularly to the Group Risk Management Committee. The audit function audits the status of credit risk
management.
(c) Management of market risk
The Group manages market risk appropriately, in accordance with rules and standards for market risk
management, through evaluating, monitoring and controlling market risk under the mutual checking structure ofthree departments, the Market Transaction Department (front office), the Market Operations Management
Department (back office) and the Market Risk Management Department (middle office).
The Market Risk Management Department measures the volume of market risk for measurable market risk and, inorder to control the market risk volume appropriately, sets limits to holdings and losses, monitors the status ofcompliance and reports to the Group Risk Management Committee on a monthly basis.
The Group’s main financial instruments affected by market risk are “Due from banks,” “Securities,” “Loans andbills discounted,” “Deposits,” “Borrowed money,” “Bonds payable” and “Derivative transactions.”
33

The Group calculates VaR on these financial assets and financial liabilities (observation period of five years,
holding period of six months for listed stocks other than those held for political reasons, Japanese government
bonds, Japanese local government bonds, Japanese corporate bonds, investment funds, foreign securities, deposits,loans and bills discounted, interest rate swaps and other assets and liabilities that have interest rate sensitivity, andone year for listed stocks held for political reasons, confidence interval of 99%, variance-covariance method) and
use it to capture and control the volume of market risk.
The Group’s volume of market risk is managed as the sum of that of the consolidated subsidiaries, Tokyo Tominand Yachiyo, and, as of March 31, 2015, the volume of market risk was ¥32,458 million ($270,108 thousand).
However, such volume is calculated using certain statistical probabilities based on historical market fluctuations.
Consequently, this process may not capture risk in the event that market condition changes drastically in a mannerthat is unthinkable under normal circumstances.
The Group conducts back-testing with respect to each banking subsidiary to check the accuracy of market risk
measurement model by comparing the VaR calculated by the model with actual gains or losses. As a result of suchback-testing for the fiscal year ended March 31, 2015, the Group believes that the model being used captures
market risk to an adequate degree of precision.
(d) Management of liquidity risk
In the Group, in accordance with rules and standards for liquidity risk management, the Liquidity Risk
Management Department appropriately handles daily stable cash flow management, mainly through watchingmarket environment and analyzing the status of financing and investments.
The status of cash flow management and status of financing and investments are monitored daily, including
holding certain level or more of assets as liquidity reserve that are readily convertible into cash in a short time,and is reported to the Group Risk Management Committee.
(4) Supplementary explanations of the estimated fair value of financial instruments
The fair value of financial instruments is based on the market price or the reasonably calculated values withcertain assumptions in case no market prices exist. Since various assumptions and factors are reflected inestimating the fair value, different assumptions and factors could result in different fair value.
Fair values of financial instruments
Carrying values and fair values of the financial instruments on the consolidated balance sheet as of March 31,
2015 were as follows. The following table does not include financial instruments for which it is extremely
difficult to determine the fair value (See Note 2 below). Immaterial items are omitted.

34

Assets:(1) Cash and due from banks(2) Trading account securities:
Trading securities(3) Securities:
Held-to-maturity bonds
Available-for-sale securities(4) Loans and bills discounted
Reserve for loan losses (*1)
TotalCarrying value

Millions of Yen
Fair value

¥

¥

¥

Liabilities:(1) Deposits(2) Payables under securities lending transactions
Total

¥
¥

Derivatives (*2):
Hedge accounting not applied
Hedge accounting applied
Total

¥
¥

298,834

298,820

Difference
¥

(13)

607

607

-

554,286
671,359
3,294,802(27,937)
3,266,864
4,791,952

565,385
671,359

11,099-3,296,364
4,832,537

29,49940,585¥

4,491,306
140,876
4,632,182

¥

788
(17)
770

¥

¥

¥

¥

4,491,127
140,876
4,632,004

¥

788
(17)
770

¥

¥

(178)
(178)
-

¥

Thousands of U.S. Dollars
Carrying value
Fair value
Difference
Assets:(1) Cash and due from banks(2) Trading account securities:
Trading securities(3) Securities:
Held-to-maturity bonds
Available-for-sale securities(4) Loans and bills discounted
Reserve for loan losses (*1)

$

Total

$

Liabilities:(1) Deposits(2) Payables under securities lending transactions
Total

$
$

Derivatives (*2):
Hedge accounting not applied
Hedge accounting applied
Total

$

2,486,761$

2,486,650

$

(111)

5,053

5,053

-

4,612,519
5,586,750
27,417,843(232,486)
27,185,357
39,876,442

4,704,881
5,586,750

92,362-

27,430,840$ 40,214,177

245,483
337,734

37,374,604
1,172,312
38,546,916$ 37,373,117
1,172,312$ 38,545,429$$$(1,486)(1,486)

6,558
$
(145)
$
$
6,412
$
(*1) General and specific reserve for loan losses on “Loans and bills discounted” are deducted.
(*2) Derivatives are included within the amounts indicated for “Other assets” and “Other liabilities.” Net amountsof receivables and payables arising from derivative transactions are indicated. Parentheses indicate totals that
35

6,558
(145)
6,412

$

are net payable amounts.
Notes:
1. Primary method of calculating the fair value of financial instruments
Assets(1) Cash and due from banks
With regard to cash and due from banks without maturities or with maturities within one year, the fair values andbook values are similar, so the book values are assumed as the fair values. For due from banks with maturities
over one year, the fair values are determined by the prices indicated by the financial institutions handling thesetransactions for the Group.
(2) Trading account securities
The fair values of bonds and other securities held for dealing operations are determined by the statistical reference
prices released by the Japan Securities Dealers Association or the prices indicated by the financial institutions
handling these transactions for the Group.
(3) Securities
The fair values of equity securities are determined by their prices on stock exchanges. The fair values of bonds are
determined by the reference statistical prices released by the Japan Securities Dealers Association or the prices
indicated by the financial institutions handling these transactions for the Group. For investment trusts, the fairvalues are determined by the publicly released base prices or base prices indicated by securities investment trust
management companies. For private placement bonds guaranteed by the Group, the present values calculated by
the discounted cash flow method are assumed as the fair values.
With regard to private placement bonds guaranteed by the Group issued by bankrupt borrowers, effectively
bankrupt borrowers and potentially bankrupt borrowers, the fair values are similar to the expected amounts ofrecoveries calculated based on guarantees, etc. at the consolidated balance sheet date, so those expected amounts
are assumed as the fair values.
See Note 3 for the description of securities by classification.
(4) Loans and bills discounted
With regard to loans with floating interest rates, as they reflect market interest rates in the short term, the fairvalues of them are similar to the book values unless the credit status of the borrowers change significantly after
execution, so the book values are assumed as the fair values. With regard to those with fixed interest rates, thepresent values are assumed as the fair values, being calculated by discounting the future cash flows by theappropriate index interest rates such as interest rate swap rates plus credit spread, etc., or by the assumed rates
which would be applied if a similar new loan were entered into.
With regard to loans to bankrupt borrowers, effectively bankrupt borrowers and potentially bankrupt borrowers,
the reserve for loan losses is provided based on the expected amounts of recoveries from collateral and guarantees,
and the fair values are similar to the amounts of claims less the reserve for loan losses on the consolidated balance
sheet at the consolidated balance sheet date, so the net amounts are taken as the fair value.
For loans that have no specific repayment period because loan amounts are limited within the value of the assets
securing them, the fair values are assumed to be similar to the book values based on their expected payment dates
and interest rates, so the book values are taken as the fair value.
Interest rate swaps that qualify for hedge accounting and meet specific matching criteria for an exceptional
treatment are accounted for as part of hedged loans. Their fair values are determined using discounted present
values and included in the fair values of the hedged loans.
Liabilities(1) Deposits
The fair values of demand deposits are determined as if the payment amounts (book values) were demanded on
the consolidated balance sheet date. The fair values of time deposits and installment savings are calculated by36

categorizing these deposits and savings by term, estimating their future cash flows and discounting them to theirpresent values at the rate applied to new deposits (the actual rate for the last month of the fiscal year). For thosewith maturities within one year, the fair values and book values are similar, so the book values are assumed as thefair values.
(2) Payables under securities lending transactions
With regard to payables under securities lending transactions, the maturities are within one year and the fair values
and book values are similar, so the book values are assumed as the fair values.
Derivatives
Fair value information for derivatives is included in Note 27.
2. Financial instruments for which it is extremely difficult to determine the fair value
Carrying values of financial instruments for which it is extremely difficult to determine the fair value as ofMarch 31, 2015 were as follows. These amounts are not included in “Assets, (3) Available-for-sale securities” inthe above table.
Thousands ofMillions of Yen
U.S. Dollars
Carrying value
¥
4,867
$
40,503
4,019
33,44819,153
2,301¥
11,188$
93,105

Unlisted stocks (*1) (*3)
Unlisted REIT (*1)
Investments in limited partnerships (*2) (*3)
Total(*1) Unlisted stocks and unlisted REIT for which there are no quoted market price and it is extremely difficult todetermine the fair value are not subject to disclosures of fair values.
(*2) Investments in limited partnerships whose assets comprise extremely difficult to determine fair values, suchas unlisted stocks, are not subject to disclosures of fair values.
(*3) Impairment losses on unlisted stocks and investments in limited partnership for the fiscal year ended March
31, 2015 were ¥9 million ($80 thousand) and ¥39 million ($327 thousand), respectively.

37

3. Redemption schedule for receivables and securities with maturities
The redemption schedule for receivables and securities with maturities as of March 31, 2015 are summarized asfollows:

Due from banks
Securities:
Held-to-maturity bonds:
Japanese government bonds
Japanese local government
bonds
Japanese corporate bonds
Foreign securities
Available-for-sale securities
with maturities:
Japanese government bonds
Japanese local government
bonds
Japanese corporate bonds
Other
Loans and bills discounted (*)
Total

Due from banks
Securities:
Held-to-maturity bonds:
Japanese government bonds
Japanese local government
bonds
Japanese corporate bonds
Foreign securities
Available-for-sale securities
with maturities:
Japanese government bonds
Japanese local government
bonds
Japanese corporate bonds
Other
Loans and bills discounted (*)
Total

Millions of Yen
Due after
Due after
Due after
three years
five years seven years
throughthroughthrough ten
five years seven years
years¥ 2,000¥¥-

Due inone yearor less¥ 251,557

Due after
one yearthroughthree years¥-

23,64046,61011,00097,000147,000

34,0003,818
5,300
12,01743,99029,705
1,000

5,780
8,493
-

13,824
37,6121,000

2,550
15,758
2,000

450
2,000

33,304

23,132

152,242-

22,978

6,000

3,038
15,477
1,478
685,871

6,171
73,383
8,674
672,180

9,540
110,378
70,267
411,452

3,000
28,617
5,731
267,249

21,366
18,503
5,895
334,908

2,855
710
621,047¥ 1,035,503¥ 904,847¥ 781,153¥ 454,034¥ 570,960¥ 667,063

Due inone yearor less$ 2,093,348

Due after
one yearthroughthree years$-

Thousands of U.S. Dollars
Due after
Due after
three years
five years
throughthroughfive years seven years$ 16,643 $-Due after
seven years
through ten
years
$
-

Due after
ten years$-

196,721387,867

91,536807,189

1,223,267

282,932

31,771
44,104
100,000

366,064
247,191
8,321

48,09870,674-

115,037
312,989
8,321

21,219131,130
16,643

3,744
16,643

277,146

192,498

1,266,888-

191,218

49,92925,288
128,793
12,3005,707,512

51,360610,661
72,181
5,593,579

79,387
918,521584,732
3,423,921

24,964
238,139
47,6932,223,928

177,798
153,977
49,0612,786,953

23,764
5,910
5,168,075$ 8,616,987$7,529,727$6,500,405$3,778,265$4,751,269$5,551,000

Due after
ten years¥-(*) Loans do not include an estimated ¥107,846 million ($897,446 thousand) in uncollectible loans such as thoseto bankrupt borrowers, effectively bankrupt borrowers and potentially bankrupt borrowers, and ¥194,245 million($1,616,422 thousand) in loans that have no set term.
38

4. Repayment schedule for other interest-bearing liabilities
The repayment schedule for other interest-bearing liabilities as of March 31, 2015 are summarized as follows:

Deposits (*)
Payables under securities
lending transactions
Total

Deposits (*)
Payables under securities
lending transactions
Total

Millions of Yen
Due after
Due after
three years
five years
throughthroughfive years seven years¥ 20,139¥40

Due inone yearor less¥ 4,233,462

Due after
one yearthroughthree years¥ 237,605

140,876-¥ 4,374,339¥ 237,605

Due inone yearor less$35,228,946

Thousands of U.S. Dollars
Due after
Due after
Due after
one year
three years
five years
throughthroughthroughthree years five years seven years$1,977,244$ 167,593$
335¥

20,1391,172,312--$36,401,259$1,977,244$ 167,593

Due after
seven years
through ten
years
¥
33

Due after
ten years
¥
25

-

-

¥

40

¥

335

¥

25

Due after
seven years
through ten
years
$
274

Due after
ten years
$
208

-

-

$

33

$

274

$

208

(*) Within deposits, demand deposits are included in the column of “Due in one year or less.”
27. Derivative Transactions
The Group has entered into various derivative transactions in order to manage certain risks arising from adverse
fluctuations in interest rates and foreign currency exchange rates.
The fair value and unrealized gain or loss on derivative transactions are estimates considered appropriate based on
the market at the balance sheet date and, thus, fair value is not necessarily indicative of the actual amounts that
may be realized or settled in the future. The notional amounts are not a direct measure of the Group’s risk
exposure in connection with the derivative transactions.

39

Summarized below are the notional amounts and the estimated fair value of the derivative instruments outstandingat March 31, 2015, for which hedge accounting has not been applied.
(1) Interest-related transactions
Millions of Yen

OTC interest rate swaps:
Receive/fixed and pay/floating
Receive/floating and pay/fixed
OTC interest rate swaptions:
Sell
Buy
OTC interest rate caps:
Sell
Buy

Notional amount
Maturing
Maturing
within one
after
year
one year

Fair value

Unrealized
gains (losses)

¥

¥

¥

126,990 ¥
125,525

111,375
109,890

8,300
6,800

1,190
1,190

(2)
2

39
2

2,711
2,711

2,465
2,465

(3)
3
968

69
(13)

Total

¥

1,265
(296)

Thousands of U.S. Dollars
Notional amount
Maturing
Maturing
within one
after
year
one year
Fair value
OTC interest rate swaps:
Receive/fixed and pay/floating
Receive/floating and pay/fixed
OTC interest rate swaptions:
Sell
Buy
OTC interest rate caps:
Sell
Buy

$ 1,056,755
1,044,564$

926,814914,457$

10,527(2,463)

¥

1,265
(296)

1,066

Unrealized
gains (losses)$

10,527(2,463)69,06856,586

9,902
9,902

(24)
17

327
17

22,562

20,512

22,562

20,512

(28)
28
8,057

576
(110)
8,875

Total

$

$

Notes:
1. The above derivative transactions are stated at fair value with the valuation difference being included in the
consolidated statement of income.
2. The fair values of the OTC transactions are determined using the discounted present values or option pricing
model.

40

(2) Currency-related transactions
Millions of Yen

OTC currency swaps
OTC foreign exchange contracts:
Sell
Buy
OTC currency options:
Sell
Buy

Notional amount
Maturing
Maturing
within one
after
year
one year¥ 38,623¥ 15,301
21,39010,780

398
316

(565)
320

(565)
320

28,34491

28,344

91

(464)
464
(180)

56
52
(70)

Total

OTC currency swaps
OTC foreign exchange contracts:
Sell
Buy
OTC currency options:
Sell
Buy

Fair value¥
63

Unrealized
gains (losses)¥
63¥

Thousands of U.S. Dollars
Notional amount
Maturing
Maturing
within one
after
year
Fair value
one year$ 321,408 $ 127,331 $531¥

Unrealized
gains (losses)$
531

178,001
89,710

3,315
2,631

(4,702)
2,668(4,702)
2,668

235,866

760

235,866760(3,861)
3,861(1,502)

473
440
(588)

Total

$

$

Notes:
1. The above derivative transactions are stated at fair value with the valuation difference being included in the
consolidated statement of income.
2. The fair values of the OTC transactions are determined using the discounted present values or option pricing
model.

41

Summarized below are the notional amounts and the estimated fair value of the derivative instruments outstandingat March 31, 2015, for which hedge accounting has been applied.
(1) Interest-related transactions
Millions of Yen

Method ofaccounting

Hedged item

Notional amount
Maturing
Maturing
within one
after
year
one year

Fair value

¥

¥

(17)

¥

(Note 3)(17)

Interest rate swaps:
Receive/floating and pay/fixed

Basic method

Loans and bills
discounted

Exceptional
treatment

Loans and bills
discounted

550

¥

550

Interest rate swaps:
Receive/fixed and pay/floating

46,731

39,503

Total

Thousands of U.S. Dollars

Method ofaccounting

Hedged item

Notional amount
Maturing
Maturing
within one
after
year
one year

Fair value$$

Interest rate swaps:
Receive/floating and pay/fixed

Basic method

Loans and bills
discounted

Exceptional
treatment

Loans and bills
discounted

4,576

$

4,576

(145)

Interest rate swaps:
Receive/fixed and pay/floating
Total

388,880

328,728(Note 3)$ (145)

Notes:
1. The Group basically applies the deferred method which is stipulated in “Accounting and Auditing Treatment of
Accounting Standards for Financial Instruments in Banking Industry” (JICPA Industry Audit Committee
Report No. 24).
2. The fair values of the exchange-traded transactions are based on the closing/final price at Tokyo Financial
Exchange. The fair values of the OTC transactions are determined using the discounted present values or
option pricing model.
3. Interest rate swaps that qualify for hedge accounting and meet specific matching criteria for an exceptional
treatment are accounted for as part of hedged loans and their fair values are included in the fair values of thehedged loans.
28. Segment Information
The Group’s only reporting segment is the banking business. Note that the Group conducts businesses other thanthe banking business, including a computer-related service business, an information provision service business,and credit card services. This information has been omitted because the ratio of these businesses to all segments is
not material.

42

(1) Information by service

Ordinary income from external customers

Millions of Yen
Securities
Service
Other
Total
Lending investment transactions¥ 38,646 ¥ 8,665 ¥ 13,410 ¥ 4,320 ¥ 65,043

Ordinary income from external customers

Thousands of U.S. Dollars
Securities
Service
Other
Total
Lending investment transactions$ 321,600 $ 72,109 $ 111,596 $ 35,956 $ 541,263

Note: Ordinary income is presented as counterparts of sales of companies in other industries.
(2) Information by geographical area(a) Ordinary income
Ordinary income from external customers by geographical area has been omitted as ordinary income from the domestic
operations accounted for more than 90% of the consolidated ordinary income.
(b) Tangible fixed assets
Information about tangible fixed assets by geographical area has been omitted as tangible fixed assets in Japanaccounted for more than 90% of the consolidated tangible fixed assets.
(3) Information by major customer
Information by major customer has been omitted as no single customer accounts for more than 10% of the consolidated

ordinary income.
29. Business Combination
The Company was established through the joint share transfer of Tokyo Tomin and Yachiyo on October 1, 2014.
The joint share transfer was treated as a purchase as stipulated in the applicable accounting standards for businesscombinations, with Tokyo Tomin as the acquiring company and Yachiyo as the acquired company.
1. Overview of the business combination(1) Name and business content of the acquired company
Name of company:
The Yachiyo Bank, Limited
Description of business: Banking business(2) Main reasons for the business combination
In order to utilize the regional brands that both banks have fostered up until now and achieve prompt
integration synergies from the perspective of maximizing corporate value, both banks selected the method of
establishing a joint holding company through share transfer. With this new financial group, a businessintegration has been achieved that will contribute to the local community through the provision of an advanced
consulting function, the development of products and services to support the needs of customers, further
partnerships with local governments, the promotion of unified operations of redundant operations, andimproved corporate value through the improvement of customer satisfaction, competitiveness, andmanagement efficiency.
(3) Date of the business combination
October 1, 2014
(4) Legal form of the business combination
Establishment of a joint holding company through a share transfer(5) Company name after the business combination
Tokyo TY Financial Group, Inc. (“Tokyo TY”)
43

(6) The acquired ratio of voting rights
100%(7) Main basis for deciding on the acquiring company
Tokyo Tomin was designated as the acquiring company as a result of comprehensive consideration of factors
including acquisition-deciding factors in the applicable accounting standards for business combinations andvarious other factors.
2. Period for which the acquired company’s business results are included in the consolidated financial statements
From October 1, 2014 to March 31, 2015
3. The acquisition costs for the acquired company and breakdown

Fair value at the business combination date of the shares of Tokyo TY
common stock exchanged for the shares of Yachiyo common stock held
immediately before the share transfer
Fair value of the shares of Tokyo TY common stock delivered at thebusiness combination date
Acquisition cost

Millions of Yen

Thousands of
U.S. Dollars

¥

371

$

3,093

¥

52,59452,966$437,667
440,760

4. Difference between acquisition cost of the acquired company and the sum of acquisition cost for eachtransaction leading to the acquisition
Loss on step acquisitions¥3 million ($26 thousand)
5. Transfer ratio by type of stock, the calculation method, and number of shares delivered(1) Transfer ratio by type of stock(i) 0.37 share of Tokyo TY common stock for every 1 share of Tokyo Tomin common stock(ii) 1 share of Tokyo TY common stock for every 1 share of Yachiyo common stock(2) Calculation method
The calculation of the share transfer ratio was first commissioned to multiple financial advisors as third-party
calculation institutions, and then, determined through consultation among the relevant parties based on thereports submitted by the advisors.
(3) Number of shares delivered
Common stock

29,227,826 shares

6. Major content and amount of acquisition related cost
Advisory fees and commissions¥106 million ($888 thousand)7. Amount and breakdown of assets received and liabilities assumed on the business combination date(1) Assets

Millions of Yen¥ 2,260,320
1,444,364
622,404(12,460)

Total assets received
Including, loans
Including, securities
Including, reserve for loan losses
44

Thousands of
U.S. Dollars$ 18,809,354
12,019,347
5,179,364(103,687)

(2) Liabilities

Millions of Yen
Total liabilities assumed
Including, deposits¥

2,156,770
2,122,129

Thousands of
U.S. Dollars$ 17,947,664
17,659,395

8. The amount of gain on negative goodwill and the reason for recognizing a gain on negative goodwill(1) The amount of gain on negative goodwill¥50,476 million ($420,039 thousand)(2) Reason for recognizing a gain on negative goodwill
The net amount allocated to the assets acquired and liabilities assumed exceeded the acquisition cost, and theexcess amount is recognized as a gain on negative goodwill.
9. Approximate amounts and calculation method of the impact of the business combination on the consolidated
statement of income for the fiscal year ended March 31, 2015 if the business combination had been completed
at the beginning of the fiscal year

Millions of Yen
IncomeNet income¥

19,8983,604

Thousands of
U.S. Dollars$
165,584
29,995The above estimated impact amounts were calculated by making adjustments believed to be necessary to theamounts on the consolidated statement of income of the acquired company Yachiyo for the period from April
1, 2014 to September 30, 2014.
Note that the estimated amounts have not been audited by Ernst & Young ShinNihon LLC.
30. Subsequent Events
1. Dividends
The following distribution of retained earnings of the Group, which has not been reflected in theaccompanying consolidated financial statements for the fiscal year ended March 31, 2015, was approved at theboard of directors’ meeting held on May 15, 2015 and became effective on June 10, 2015:

Dividends on common stock of Tokyo TY (¥ 30 ($0.24) per share)

Millions of Yen¥
872

Thousands of
U.S. Dollars$
7,257

2. Dissolution of consolidated subsidiary
At the board of directors’ meeting held on April 30, 2015, the Company resolved to dissolve the Company’s
consolidated subsidiary, Tomingin Office Support Center Co., Ltd., as follows.
(1) Reason for dissolution
While the dissolved subsidiary had rendered administrative clerical services to the Company’s subsidiary,Tokyo Tomin, the dissolution was resolved as part of efforts to improve the Group’s management efficiency.

45

(2) Overview of the dissolved subsidiaryTomingin Office Support Center Co., Ltd.
Outsourcing of concentrated administrative services
March 20, 1998
2-4-1 Roppongi, Minato-ku, Tokyo
Ryuichi Tanahashi¥10 million ($83 thousand)―200 shares
Wholly-owned by The Tokyo Tomin Bank, Limited
107 as of April 1, 2015
¥268 million ($2,233 thousand)¥321 million ($2,675 thousand)¥400 million ($3,334 thousand)¥9 million ($76 thousand)

1. Trade name
2. Business
3. Establishment date
4. Location of the head office
5. Representative
6. Capital―Issued and outstanding shares
7. Ownership
8. Number of employees
9. Total net assets
10. Total assets
11. Net sales
12. Net income(3) Timing of dissolution
Scheduled to be dissolved on June 30, 2015 and liquidated around the end of September 2015.
(4) The impact of the dissolution on income
The dissolution will not have a material effect on the Company’s consolidated results for the fiscal year
ending March 31, 2016.
(5) The impact of the dissolution on sales activities
The dissolution will not have a material effect on the Company’s sales activities.
3. Introduction of stock option plan
Following the resolution at the general shareholders’ meeting held on June 26, 2015 to introduce a stock
option plan, the board of directors’ meeting held on the said date resolved to grant subscription rights to sharesas stock-compensation-type stock options to the directors (excluding outside directors) of the Company and its
banking subsidiaries, in conformity with the Articles 236, 238 and 240 of the Companies Act.
The outline of the stock-compensation-type stock options is as follows:
GranteesType of stock to be issued upon exercise
Number of shares to be issued upon
exerciseAmount to be paid upon exercise
Exercise period
Condition for exercise
Transfer of subscription rights to shares
Grant of subscription rights to shares incase of restructuring

8 directors of the Company
4 directors of Tokyo Tomin
6 directors of Yachiyo
Common stock
12,000 shares (*1)¥1 ($0.00) per share
From August 3, 2015 to August 2, 2045(*2)
Acquiring the subscription rights to shares through transfer
requires the approval of the Company’s board of directors.
(*3)(*1) Numbers of shares to be issued upon exercise of the subscription rights to shares are subject to adjustment
for certain events such as a stock split, consolidation of stock, merger, divestiture or capital decrease, as
necessary.
(*2) The subscription right holders may exercise the subscription rights to shares, provided this is done on a
lump-sum basis within 10 days from the day after losing their position as a director of either of Tokyo TY,Tokyo Tomin or Yachiyo. Notwithstanding the foregoing, the holders may exercise the subscription rights
to shares on or after August 3, 2044, within one year before the expiration date, on other conditions
defined in the agreement.
46

(*3) In case of any restructuring (merger, absorption, split, share exchange or share transfer), subscription
rights to shares may be granted for new shares of the existing company, etc. applying the restructuring
ratio, according to the conditions set forth in the restructuring agreement or plan.
4. Basic agreement for management integration between ShinGinko Tokyo, Limited and the Company
Following the resolution at the board of directors’ meeting held on June 12, 2015, the Company signed a basic
agreement for management integration between ShinGinko Tokyo, Limited (representative director andpresident, Hidenori Tsunehisa, hereinafter, “ShinGinko Tokyo”) and the Company (the “Integration”), assummarized below.
(1) Basic policy of the Integration
ShinGinko Tokyo and the Company (“both companies”) aim to become the top local banking group admiredby customers in the Tokyo metropolitan area through achieving synergies.
(a)

(b)

(c)

As the largest local financial institution headquartered in Tokyo, through nurturing and supporting small
and medium-sized enterprises (SMEs) in Tokyo in collaboration with the Tokyo metropolitan
government and thereby contributing regional development, both companies will establish a
far-sighted sustainable business model as local financial institutions and strengthen competitiveness in
the Tokyo metropolitan area market as urban local banks.
Through connecting the Company’s branch network and broad SME customer base in the Tokyo
metropolitan area with the ShinGinko Tokyo’s know-how in SME support in collaboration with theTokyo metropolitan government, both companies will enhance and expand the financial service
functions to meet diversified and sophisticated customer needs.
On the back of high profitability and soundness, both companies will motivate employees and challenge
the growth strategy with sense of unity based on the spirit of mutual trust.

In addition, to promote nurturing and supporting SMEs in Tokyo, both companies will discuss extensively,
including conclusion of arrangements, collaboration with the Tokyo metropolitan government for SME
support measures, for example, promoting financing facilities for SMEs, venture support, businessreconstruction support and overseas expansion support.
(2) Form of the Integration
Both companies will consult and discuss implementation of a share exchange, targeted by April 1, 2016, in
which the Company will become a wholly-owning parent and ShinGinko Tokyo will become a wholly-owned
subsidiary (the “Share Exchange”), subject to approval at the shareholders’ meeting of both companies andpermission by the relevant authorities required for the Integration.
After the Integration, to achieve synergies, both companies will discuss inter-group reorganization, including
merger, etc. among the Company’s banking subsidiaries and ShinGinko Tokyo.
(3) Content of allotment for the Share Exchange
The content of allotment for the Share Exchange will be determined based on discussions by both companies,
taking into consideration the results of due diligence and the results of calculation by third-party calculation
institutions, both to be carried out in the future.
(4) Future time schedule
September 2015 (scheduled)
November 2015 (scheduled)
April 1, 2016 (scheduled)

Conclusion of the final agreement on the Integration (including the Share
Exchange agreement)
Extraordinary shareholders’ meeting and class shareholders’ meeting of bothcompanies (resolution to approve the Share Exchange agreement)
Effective date of the Share Exchange47

(5) Overview of ShinGinko Tokyo(as of March 31, 2015, except for the representative which is as of June 26, 2015)
1. Establishment date
April 1, 2004 (*)
2. Location of the head office
Meiho building, 1-21-1 Nishi-Shinjuku, Shinjuku-ku,
Tokyo
3. Representative
Representative director and president, Hidenori
Tsunehisa
4. BusinessBanking and trust services
5. Capital¥20,000 million ($166,430 thousand)6. Number of shares issued and outstanding
5,926,207 shares (common stock)
2,000,000 shares (class A preferred stock)
7. Total assets¥431,456 million ($3,590,380 thousand)8. Total net assets¥55,057 million ($458,159 thousand)
9. Deposits¥261,534 million ($2,176,366 thousand)
10. Loans and bills discounted¥200,706 million ($1,670,183 thousand)
11. Closing date
March 31
12. Number of employees

163 persons

13. Number of branch offices

1 office(*) This is the date of establishment as ShinGinko Tokyo by the Tokyo metropolitan government acquiring all
the shares of BNP Paribas Trust Bank. The date of establishment as a corporation was April 5, 1999.

48

The Tokyo Tomin Bank, Limited
Non-consolidated Balance Sheets (Unaudited)
As of March 31, 2015 and 2014
Millions of Yen
2014
2015
AssetsCash and due from banks
Call loans
Monetary claims bought
Trading account securities
Securities
Loans and bills discounted
Foreign exchanges
Other assets
Tangible fixed assets
Intangible fixed assets
Prepaid pension cost
Deferred tax assets
Customers’ liabilities for acceptances and guarantees
Reserve for loan losses
Total assets¥¥

Liabilities
Deposits
Negotiable certificates of deposit
Payables under securities lending transactions
Borrowed money
Foreign exchanges
Bonds payable
Other liabilities
Reserve for employees’ bonuses
Reserve for officers’ retirement benefits
Reserve for point card program
Reserve for losses from reimbursement of inactive accounts
Reserve for contingent losses
Deferred tax liabilities on land revaluation
Acceptances and guarantees
Total liabilities¥

Net assets
Common stock
Capital surplus
Stock acquisition rights
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Revaluation reserve for land
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets¥

See notes to consolidated financial statements.

49

213,293
3,442
65
177
586,219
1,828,147
5,544
12,48332,2591,850
11,607
5,597
3,133(16,508)
2,687,314¥

2,379,799
25,838140,876
7,209
138
25,60013,757
1,076
101
2
236
302
15
3,133
2,598,089¥¥

Thousands of
U.S. Dollars(Note 1)
2015

133,105
22,290192
45513,166
1,831,521
4,750
13,781
14,8682,133
9,803
11,6694,234(19,749)
2,541,812$

2,368,778
28,207
12,226
118
30,60014,247
1,101
100
2
164
369
16
4,234
2,460,167$$

1,774,933
28,650543
1,476
4,878,248
15,213,008
46,142
103,880
268,452
15,402
96,58846,58326,077(137,376)
22,362,610

19,803,611
215,012
1,172,312
59,996
1,155
213,031
114,485
8,960
847
21
1,965
2,514
127
26,077
21,620,120

48,12018,08315,36981,573

48,12018,08379
15,641(1,602)80,322400,437
150,481
127,895
678,814

7,862
(210)
7,651
89,2252,687,314

1,534
(211)
1,323
81,6452,541,812

65,425(1,749)63,676742,490
22,362,610¥$

The Tokyo Tomin Bank, Limited
Non-consolidated Statements of Income (Unaudited)
For the Years Ended March 31, 2015 and 2014
Thousands of
U.S. Dollars(Note 1)
2015

Millions of Yen
2014
2015
IncomeInterest income:Interest on loans and discounts
Interest and dividends on securities
Interest on call loans
Interest on receivables under securities borrowing transactions
Interest on due from banks
Other interest income
Fees and commissions
Other operating income
Other income
Total income¥

26,720
4,398
86
9
121
190
9,221
2,177
1,552
44,477¥28,090
3,493
129
4
63
196
8,394
2,636
1,469
44,479$222,355
36,599
720
75
1,013
1,582
76,734
18,121
12,919370,122

Expenses
Interest expense:
Interest on deposits
Interest on negotiable certificates of deposit
Interest on call money
Interest on payables under securities lending transactions
Interest on borrowed money
Interest on bonds payable
Other interest expense
Fees and commissions payments
Other operating expenses
General and administrative expenses
Other expenses
Total expenses

1,163
38
0
109
207
698
27
2,834
16
30,016
2,606
37,717

1,359
21
4
264
704
29
2,838
18
31,1983,365
39,806

9,681
317
3
911
1,727
5,810
230
23,584
136
249,780
21,687
313,871

Income before income taxes

6,759

4,672

56,250

Income taxes:
Current
Deferred
Total income taxes

255
3,021
3,277

20
429
450

2,129
25,14327,273¥

Net income
See notes to consolidated financial statements.

50

3,482

¥

4,222

$

28,977

The Yachiyo Bank, Limited
Non-consolidated Balance Sheets (Unaudited)
As of March 31, 2015 and 2014
Millions of Yen
2014
2015
AssetsCash and due from banks
Call loans
Monetary claims bought
Trading account securities
Money held in trust
Securities
Loans and bills discounted
Foreign exchanges
Other assets
Tangible fixed assets
Intangible fixed assets
Deferred tax assets
Customers’ liabilities for acceptances and guarantees
Reserve for loan losses
Total assets¥¥

Liabilities
Deposits
Negotiable certificates of deposit
Borrowed money
Foreign exchanges
Bonds with subscription rights to shares
Other liabilities
Reserve for employees’ bonuses
Reserve for officers’ retirement benefits
Reserve for losses from reimbursement of inactive accounts
Reserve for contingent losses
Deferred tax liabilities on land revaluation
Acceptances and guarantees
Total liabilities¥

Net assets
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets¥

See notes to consolidated financial statements.

51

85,46725,4952,946
429
637,916
1,466,028
2,186
4,690
30,176
1,265
4,551
3,497
(10,139)2,254,512¥

2,122,761
3,930
5,000
0
6,447
869
3,546
608
438
2,687
3,497
2,149,786¥¥

62,14044,661
2,438
342
27
628,693
1,427,267
3,145
4,680
30,476
1,860
6,615
4,215
(11,870)
2,204,692

2,079,102
3,050
170
7
5,000
5,300
877
4,712
566
508
2,961
4,215
2,106,472

Thousands of
U.S. Dollars(Note 1)
2015
$

$

$

711,221212,161
24,521
3,577
5,308,447
12,199,621
18,19639,029251,118
10,53337,871
29,100(84,372)
18,761,029

17,664,650
32,703
41,607
4
53,651
7,238
29,512
5,063
3,645
22,362
29,10017,889,540

43,73432,922
23,574
100,232

43,73432,922
20,899(1,759)95,797363,941
273,968
196,177
834,088

3,891
(12)
615
4,494
104,726
2,254,512

2,098
(16)
341
2,422
98,2202,204,692

32,384(103)
5,120
37,400871,488$ 18,761,029¥

The Yachiyo Bank, Limited
Non-consolidated Statements of Income (Unaudited)
For the Years Ended March 31, 2015 and 2014
Millions of Yen
2014
2015
IncomeInterest income:Interest on loans and discounts
Interest and dividends on securities
Interest on call loans
Interest on due from banks
Other interest income
Fees and commissions
Other operating income
Other income
Total income¥

22,356
5,861
116
75
435
5,537
2,980
3,649
41,012¥

23,069
6,191
144
23
494
4,792
3,264
2,448
40,427

Thousands of
U.S. Dollars(Note 1)
2015$

186,038
48,777
971
631
3,623
46,07624,80130,368341,288

Expenses
Interest expense:
Interest on deposits
Interest on negotiable certificates of deposit
Interest on call money
Interest on payables under securities lending transactions
Interest on borrowed money
Interest on bonds with subscription rights to sharesInterest on interest swaps
Other interest expense
Fees and commissions payments
Other operating expenses
General and administrative expenses
Other expenses
Total expenses

1,304
1
0
12
55
53
9
15
2,196
74
26,077
1,857
31,658

1,341
1
0
1
4
107
8
6
2,173
24
26,753
2,218
32,641

10,856
9
0
107
459
447
75
126
18,278621
217,006
15,455
263,446

Income before income taxes

9,354

7,786

77,842

Income taxes:
Current
Deferred
Total income taxes

2,142
1,144
3,286

1,107
553
1,660

17,832
9,519
27,352¥

Net income
See notes to consolidated financial statements.

52

6,067

¥

6,125

$

50,489