AOGIN Annual Report 2020
The Aomori Bank, Ltd.

AOGIN Annual Report 2020

AOGIN Annual Report 2020
ProﬁleAomori Bank has been serving its customers for more than 140 years and is
known aﬀectionately in the area as “AOGIN"
The Aomori Bank, Ltd. has engaged in sound business practices since its founding as the 59th National Bankin 1879. In 1943, ﬁve banks based in Aomori Prefecture subsequently merged to form the present-day
Aomori Bank. Since this time, as the region's leading ﬁnancial institution, we have continued to show strong
growth. In April 2019, we formulated our 16th three-year medium-term business plan. Based on this plan,we aim to increase corporate value and to continue growing together with the local community.
The Aomori Bank, Ltd.

●Company Name

●Date of Establishment●Paid-in Capital

October 1, 1943

19,562 million yen●Loans and Bills Discounted●Head Oﬃce

9-30, Hashimoto 1-chome, Aomori 030-8668, Japan●Date of Foundation

January 20, 1879

●Number of Outstanding Shares

1,805.3 billion yen●Number of Employees

20,512 thousand shares●Capital Adequacy Ratio

1,272●Total Assets

9.05% (Domestic Standard)●Web URL

https://www.a-bank.jp/●Number of Oﬃces

95

3,172.7 billion yen●Credit Rating

A (Japan Credit Rating Agency, Ltd.)

Contents▼Greeting …………………………………………………… 1▼Non-consolidated Financial Statements …… 11〜14▼The 16th Medium-Term Business Plan …………… 2▼Board of Directors and Executive Oﬃcers ………… 15▼AOGIN s CSR Initiatives ………………………… 3〜7▼Organization …………………………………………… 15▼Share in Aomori Prefecture and Loan Assets ……… 8▼Corporate Data ………………………………………… 16▼Financial Highlights ………………………………… 9〜10

Greeting
I would like to sincerely thank all our stakeholders for their continued support of the Aomori Bank, Ltd. I also would liketo take this opportunity to express my sympathy to those aﬀected by the spread of the novel coronavirus (COVID-19).
We would therefore like to present "AOGIN NOW-A Brief Disclosure Document for the Year Ended March 2020," andinvite you to read this booklet to further deepen your understanding of the Bank.
Although the consumption tax hike as well as typhoons and other natural disasters in ﬁscal 2019 aﬀected the economies
of Aomori Prefecture and the country as a whole, we were headed towards a gradual recovery due to strong businessperformance, favorable employment conditions and other economic indicators. It was under these circumstances thatthe economy took a turn for the worse due to the spread of novel coronavirus infections after February 2020, raisingconcerns over the risk of further future downward slides.
While our earnings growth was negative for ﬁscal year 2019, due to the coronavirus crisis, we sustained proﬁtable
operations and maintained a high capital adequacy ratio that was signiﬁcantly above the domestic standard. With thesesolid business fundamentals, we will do our utmost in 2020 to support customers who ﬁnd themselves in diﬃcult situations.
The Aomori Bank Group will continue to transform itself into a consulting bank that can meet the diverse needs of ourcustomers from a medium- to long-term perspective and in ventures that go beyond the framework of conventionalbanks in order to genuinely contribute to the creation of a prosperous and happy future for the community and for ourcustomers. By doing so, we will ensure a sustainable foundation for our business.
Finally, I sincerely ask for your continued support and loyalty.

Susumu Narita, President

1

AOGIN Annual Report 2020

The 16th Medium-Term Business Plan

The 16th Medium-TermBusiness Plan

〜Change the Future〜

Three Years that will Genuinely Change the Future of our Community, our Customers, theBank, and Our Employees
Community / Customers

Bank

Employees

Conﬁdence of the community andcustomers to consult with AOGIN
ﬁrst and expect good results

Aim of becoming a consulting
group that operates beyond theframework of conventional banks

An active, exciting and energetic
workplace culture[Plan Period] April 2019 to March 2022

VisionBe the Only One Consulting Bank that creates an aﬄuent and happy
future together with the community and our customers

Basic Strategies

Ⅰ.Practice community- and customer-ﬁrst consulting
Ⅱ.Improve human resource andorganizational capabilities

Ⅲ.Enact business reforms

Management Targets
Non-consolidated net
incomeConsolidated net
incomeRate of non-interest
incomeConsolidated return on
equity (ROE)¥3.0 billion or above¥3.2 billion or above

15 ％ or above

3 ％ or above(during the plan period)

1.
2.
3.

(during the plan period)(FY2021)(FY2021)*5% from a medium- to long-term
perspective

Number of new consulting
clients in the prefecture+1,500 or above(cumulative total during theplan period)

Rate of non-interest income = (Core gross business proﬁt - Net interest income) / Core gross business proﬁt * Non-consolidated basis
ROE = Net income / Shareholders' equity
The number of new consulting clients in the prefecture is the total of the "Net increase in the number of debtors in the prefecture as of the end ofﬁscal 2018" and the "Non-debtors in the prefecture that concluded a solution agreement with the bank (including Group companies)."2

AOGIN Annual Report 2020

AOGIN's CSR Initiatives
Please visit the following URL for our CSR report (Aomori Bank website → About Aomori Bank → CSR Initiatives)
https://www.a-bank.jp/contents/guide/aboutabank/csr/report/index.html

Creation of the FutureEver since our founding, we at AOGIN have maintained a hope for the “enduring development of Aomori Prefecture and theopportunity to grow with it together." Going forward, we will continue to engage with all of our stakeholders and generate mutual
value for the future, while also coming to grips with environmental, social, economic and other issues that aﬀect our region.

<AOGIN CSR> Activity Policies
Following its <AOGIN CSR> Activity Policies, AOGIN aims to create mutual value with our stakeholders.

Naturalenvironment[Activity Policy 1] Pass the wealth of our hometowns on to future generations[Activity Policy 2] Contribute to the sustainable growth of the local community

Local
community

Customers

AomoriBank[Activity Policy 3] Help our stakeholders build their future[Activity Policy 4] Create a fulﬁlling workplace[Activity Policy 5] Improve corporate value

Employees

Shareholders/
Investors

Our Approach to ESG and SDGs
(1) AOGIN recognizes the importance of initiatives for tackling environmental, social and governance (ESG) issues
and consider these to be of the utmost importance. We are committed to actively promoting ESG goals and SDGs
through our CSR business activities, activities that also aim to create mutual value.
(2) AOGIN provides ESG information in our CSR Report (available on our website). However, we use SDGs, which area framework common to countries throughout the world, when discussing social sustainability.

Activity Policy 1: Pass the wealth of our hometowns on to future generations
Initiatives for reforestation: Participation in the "Blue Forest Development Promotion Oﬃce" reforestation project
Aomori Prefecture is home to the Aomori hiba, the stands of whichmake up one of the “Three Beautiful Forests of Japan.” While thedemand for the prefecture's raw timber has grown signiﬁcantly,
post-logging reforestation is running behind schedule. This is causing
concern over the declining volume of timber resources as well as the
future public beneﬁts that our forests will provide.
To help solve this problem, in May 2019, we joined the "Blue Forest
Development Promotion Fund" management team. This fund subsidizes
reforestation projects carried out by forestry
business operators. Through this program, we areworking to secure forest resources for the future
and to promote sustainable forestry management.

3

AOGIN Annual Report 2020

Activity Policy 1: Passing on the wealth of our hometowns to future generations
Endeavors to promote energy conservation
To further promote measures against global warming and to strengthen energy conservation eﬀorts, we are engaged
in an "Energy Conservation Campaign." The target for ﬁscal 2020 is to reduce energy consumption by more than 1％
over ﬁscal 2019. Speciﬁcally, each one of our employees is working to reduce their use of electricity and other energy
sources by rigorously and thoroughly adhering to the campaign agenda by utilizing the Energy Conservation
Campaign Check Sheet. This sheet is based on the campaign's code of conduct, which deﬁnes energy-saving and otherpractices with regard to air conditioning, air-conditioned rooms, lighting, computers, work station terminals, photocopy machines, and so forth. Goingforward, we will continue to proactively adhere to our commitment to the Energy Conservation Campaign through our promotion of environmentallyconscious management, which includes measures to combat climate change.
Additional eﬀorts to reduce greenhouse gas emissions include our "cool biz" and “warm biz” campaigns, initiated in 2008, through which we haveencouraged our employees to dress in light, informal clothing in summer and in warm, heavy clothing in winter. During the "cool biz" campaign period
from May to the end of October, the room temperature is set to 28°
C, while as a rule the thermometer is set at 20°
C from November to the end of March
the following year.

Activity Policy 2: Contributing to the sustainable growth of the local community
Founding of a consulting company, Aomori Creation Partners
Aomori Creation Partners Co., Ltd., which we established in October 2019, began its operationsin January 2020.
In the 16th medium-term business plan that was launched in 2019, we presented our vision- "Be the Only One Consulting Bank" that creates a prosperous and happy future together
with the community and our customers -. We established the company, which is a consulting
company that provides consultations that respond to diverse customer needs and deals withbusiness as well as community-related issues. It was set up as a subsidiary to realize part ofour medium-term business plan. As a result, we can now provide medium- to long-term
support from an even broader and deeper perspective.

・Overview of Aomori Creation Partners(1)Trading name

Aomori Creation Partners Co., Ltd.

(2)Head oﬃce address

2-2-7 Shinmachi, Aomori City (4F, Aomori Bank Shinmachi Building)(3)Paid-in capital

50 million yen(4)Shareholders

The Aomori Bank, Ltd. (wholly-owned subsidiary)(5)Date of establishment

October 1, 2019

Main business
By oﬀering ever more sophisticated and higher value-added services and information, Aomori Creation Partners strives to provide management support forcustomers and to assist with regional vitalization(1) Management-related consulting services
We share many of the same management concerns as our customers and oﬀer hands-on support to help them ﬁnd optimal solutions.

(2) Consulting services for the creation of a dynamic region
The company actively participates in local government initiatives, and provides support and advice to help resolve various community issues.

4

AOGIN Annual Report 2020

Activity Policy 2: Contribute to the sustainable growth of the local community
AOGIN's "Creating the Future" SDGs private placement bondWith the purpose of contributing to the community and the realization of asustainable society, as well as helping to promote SDGs throughout the community,
we have updated the previous CSR private placement bond (a private placementbond with a donation option) and since December 2018 have been managing the"AOGIN 'Creating the Future' SDGs private placement bond."
When we issue an "AOGIN 'Creating the Future' SDGs private placement bond," wecontribute an amount equivalent of up to 0.2% of the issued bond, which in turncontributes to the 17 SDGs goals through donations of materials to schools, childwelfare facilities, local governments, and other bodies to which the issuing company
wishes to donate.
As of the end of March 2020, the cumulative issuance (including that of the former
CSR private placement bond) stands at ¥9.06 billion, and the cumulative amount of
donations is around ¥18.12 million.

Goshogawara Agriculture and Forestry High School holds its "Gonō Market"
In November 2019, the second annual "Gonō Market," hosted by the Goshogawara Agriculturaland Forestry High School (Gonō), was held in the east parking lot of our head oﬃce. There,
students sold rice, vegetables, ﬂowers and other crops they had grown with tender loving careon the school farm. They also sold processed products such as miso, jam and apple juice.
On the day of the event, volunteers from the Elm Town (Erumu-no-Machi) Branch helped to
guide traﬃc in the parking lot. Despite the bad weather, a long line had formed in front of thebooth even before it opened and the area bustled with shoppers throughout the day. Many
items quickly sold out.
This event served as a showcase for the high schoolʼs educational activities and enabled people
in the community to better understand the school and its programs. It also served as an
educational tool, helping students learn about how to best serve customers through practicalsales training.

Activity Policy 3: Helping our stakeholders build their future
Response to the spread of COVID-19
We are working to prevent the spread of COVID-19 infections by prioritizing the health and security of our customers and employees. We have therefore
established the following help desks to provide swift ﬁnancial services for our customers, including support for fund settlements and business ﬁnancing.
Going forward, we will continue to deal carefully with the situation as it evolves (as of May 2020).

(1) Business consultation help desk for cases of pneumonia brought on by COVID-19: 72 branches (70 locations)(2) Holiday telephone business consultation help desk for cases of pneumonia brought on by COVID-19: Corporate Support Division

Our oﬃces also provide consultations for individual customers regarding loan payments and other issues.
In addition, in an eﬀort to improve community sustainability in coping with disasters, we concluded a "Disaster prevention cooperation agreement" with theDevelopment Bank of Japan in March 2020 to respond to COVID-19 and other potential disasters.

5

AOGIN Annual Report 2020

Activity Policy 3: Help our stakeholders build their future
The ﬁrst crowdfunding collaboration between industry, academia and a ﬁnancial institution in Aomori Prefecture
We use the crowdfunding platforms "Makuake," "Readyfor," and"CAMPFIRE" to provide new products and services that utilize local
resources as well as to support business operators who are working
to build local brands by providing ﬁnancing and information.
In January 2020, we supported the development andcommercialization of a "light that does not disturb the sleep ofpatients but makes it possible to observe them at night as during
the daytime," a collaborative project between Kojo Technology
Co., Ltd. (Hirakawa City) and Hirosaki University, using"READYFOR College" to raise funds for the project. This was theﬁrst foray into crowdfunding in Aomori Prefecture that involved
collaboration between an industrial enterprise, a university and aﬁnancial institution. The project was successfully completed in
February 2020.

Presenting the new <AOGIN> Challenge Program
Initiative to strengthen support for business operators in the area of manufacturing
In an endeavor to strengthen manufacturing initiatives within Aomori Prefecture, we established the new

新たな挑戦を応援します"<AOGIN> Challenge Program" in December 2019. The aim of this program is to encourage businesses to utilize
advanced technologies and innovative ideas in the area of manufacturing and to assist with the rapid〉

commercialization of the results. This is to be achieved by oﬀering incentives, while at the same time providing
hands-on support in cooperation with external professional institutions from the initial concept up through〈product development and commercialization.
In March 2020, the ﬁnal meeting was held to evaluate the seven business operators who had applied for andpassed the preliminary document screening. As a result of a comprehensive evaluation of innovation,marketability, feasibility and other factors by the judges, all of the business operators who participated in thescreening were selected. We will continue to provide support to our manufacturing industries, the results ofwhich we are convinced will have a strong ripple eﬀect throughout the local economy.

Opening deposit accounts at branches using tablets
We have developed a system that uses the core banking system terminal software, BeSTA® (*)
to open deposit accounts directly from tablets, launching it at our Matsubara Dori Branch(Aomori City) in March 2020. It was the ﬁrst such trial by a regional bank in the Tohoku regionof a system that links data between tablet and core banking system terminals.
The introduction of this system will reduce the burden for customers who must ﬁll out and submit
documents when opening an account. It also promises to shorten their waiting time due to the
reduced clerical work that is made possible through data linkage with core banking systemterminals. Phasing in the number of branches that handle this system and the continued digitizationof our operations will enable us to make banking even more convenient for our customers.
BeSTA® (*) A core banking system software that supports in-bank counter and other clericalservices at branch oﬃces by working in conjunction with the core banking system. BeSTA® (*) isa registered trademark of the NTT Data Corporation.

6■新技術等による新規事業の創出を目指す取り組みを支援します■「構想・計画段階」
から「事業化（商品化）」まで一貫した「ハンズオン支援」
で実現をサポートします■事業化の進捗状況に応じて奨励金を支給します【最大150万円】

AOGIN Annual Report 2020

Activity Policy 4: Create a fulﬁlling workplace
Promoting diversity through workplace attire: Launching the “A-biz style” dress code
To create a vibrant organizational culture and encourage workplace diversity, we are promoting a more ﬂexible approach to workplace attire. In April 2020,
we established a new dress code that takes time, place, and occasion into consideration: "A-biz style."

・Creating a vibrant organizational culture
In reviewing long-standing workplace clothing customs ‒ where men are expected
to wear business suits and women, uniforms - we have taken steps to create a free
and open-minded workplace and a more vibrant organizational culture.

・Promoting diversity
To foster an organizational culture that promotes diversity as well as theactive participation of women, we have broadened, regardless of sex or rank,
the freedom of clothing choices and have enhanced our respect for theautonomy of each individual.

・Advancing the brandWe are working to overturn the stereotypical image of bank staﬀ and willcontinue to prioritize improvements in our relationships with customers.

Activity Policy 5: Improve corporate value
Measures to prevent money laundering and terrorist ﬁnancing
We consider the adoption of measures to prevent money laundering and the ﬁnancing of terrorist activities to be one of our most critical management
issues. We also recognize the need to strengthen our capacity to do so. We are therefore working to reinforce our internal management framework in orderto ensure that money laundering and other illegal activities are prevented in accordance with the Act on Prevention of Transfer of Criminal Proceeds and theForeign Exchange and Foreign Trade Act.
Furthermore, in order to clarify our procedures for the prevention of money laundering and other such illegal activities, we established a Money Launderingand Terrorist Financing Prevention Policy that provides a response framework and a management system for the Money Laundering and Terrorist Financing
Prevention Management Regulations. We also periodically hold in-house training sessions that deal with these issues. The aim of these sessions is to improveknowledge about practices that prevent money laundering in daily operations, such as bank transfers and account openings, in order to enhance the Bank's
eﬀectiveness in this ﬁeld.
We will strengthen our initiatives to prevent money laundering based on the Guidelines for Anti-Money Laundering and Combating the Financing ofTerrorism, published by the Financial Services Agency of Japan, to prevent the ﬂow of funds to criminal organizations or terrorist groups and to provide
secure, convenient ﬁnancial services.

7

AOGIN Annual Report 2020

Share of Loans and Assets in Aomori Prefecture
Share of deposits and loans in the prefecture

Ratio of deposits and loans
in Aomori Prefecture(End of March 2020)(End of March 2020)

Thanks to the strong support of our customers, we have maintained the

The Bank's ratio of deposits within Aomori Prefecture was 96.3%, most of

top share in both deposits and loans in Aomori Prefecture. This is the result

which were made by customers in Aomori Prefecture, our home region.

of having retained customer trust for the more than 140 years since ourMeanwhile, the ratio of loans made in Aomori Prefecture was 78.6%.

founding. We will continue to strive to be a trusted bank．

deposits

Shinkin Bank(cooperative regional ﬁnancial
institutions), and credit cooperatives

From outside the prefecture(¥98.0 billion)

17.9%

City banks,regional bank,second-tierregional banks

Shinkin banks (cooperative
regional ﬁnancial institutions),
and credit cooperatives

Ratio of deposits
received in Aomori
Prefecture

AOGIN
45.3%

Share of deposits
in AomoriPrefecture

From inside the prefecture

96.3%(¥2,5542 billion)

Total balance of deposit ¥2,6523 billion

36.6%

loans

For outside theprefecture(¥385.4 billion)

13.1%

City banks,regional bank,second-tierregional banks

AOGIN
45.6%

Ratio of loans
made in Aomori
Prefecture

Share of loans
in AomoriPrefecture

For inside the prefecture

78.6%(¥1,4199 billion)

41.1%

Balance of loans ¥1,8053 billion※Excluding Japan Post Bank Co., Ltd., workers' credit
unions, agricultural cooperative associations, andgovernment ﬁnancial institutions

Claims disclosed subject to the Financial
Revitalization Law(End of March 2020)

Securing claims disclosed subject to the
Financial Revitalization Law(End of March 2020)

The amount of loans that were disclosed subject to the Financial Revitalization

Of the amount of loans disclosed, excluding performing claims, 84.1%

Law at the end of the term under review decreased by ¥3.8 billion from the end of

were secured by reserves, collateral, etc.

the previous term to ¥21.1 billion. This change was due to an increase in doubtful
claims. The ratio of the amount of loans disclosed against the overall credit rose by
0.18% from the end of the previous term to 1.14%.

Claims requiring supervision(Unit: ¥100 million; %)ClaimsbalanceSecuredamountCollateralcoverage ratio

Bankrupt andsubstantiallybankrupt claims

41

41

100.0

Doubtful claims

136

116

85.3

136

Claims requiringsupervision

33

20

60.1

Total

211

177

84.1

Doubtful claims

Bankrupt claims

Ratio of disclosed claims towards the balance of loans

1.27%(Unit: ¥100 million; %)

1.14%
0.96%

225
27

211
172

33

30
162

103

35

38

41

End of March2018

End of March2019

End of March
2020* The listed amounts are abbreviated to the indicated unit. The component ratios, rates of increase or decrease, and other percentages are abbreviated to the indicatednumeric values.

8

AOGIN Annual Report 2020

Financial Highlights
Deposits

Loans

The balance of total deposits, including negotiable deposit certiﬁcates, at

The balance of total loans at the end of March 2020 was ¥1,805.3 billion

the end of March 2020 was ¥2,652.3 billion (up 1.4% from the end of the(up 2.4% from the end of the previous term). This rise was due to loans toprevious term). This was mainly due to deposits from retail customers

SMEs in the prefecture and customer loans, mainly housing loans,remaining ﬁrm.

remaining ﬁrm.

The balance of customers' assets under custody at the end of March 2020was ¥246.0 billion (down 4.6% from the end of the previous term). The
reduction is due to a signiﬁcant decrease in deposits from investment
trusts impacted by the worsening market conditions and other challenges,
despite an increase in personal pension insurance deposits, etc.

Total balance of deposits

Balance of loans
Balance (¥100 million)

Balance (¥100 million)

27,00019,00026,52326,00025,00018,00026,15025,53517,00024,00018,053
17,445

17,62416,00000
End of March 2018

End of March 2019

End of March 2020

End of March 2018

Balance of deposits from individual customers

End of March 2019

Balance of SME loans (excluding loans to individual customers)

Balance (¥100 million)

Balance (¥100 million)
5,500

18,00017,15517,00016,000End of March 2020

16,451

5,000

16,743

5,191

5,108

5,030

4,500
15,00000
End of March 2018

End of March 2019

End of March 2020

End of March 2018

Balance of assets under custody

End of March 2019

End of March 2020

Balance of customer loans
Balance (¥100 million)

Housing loan balance (¥100 million)

Balance (¥100 million)

2,600

5,000

2,546

2,581
2,460

2,400

4,698

4,500

4,399
2,200

4,000

2,000

3,500

0

4,046

4,194
3,914

3,595

0
End of March 2018

End of March 2019

End of March 2020

End of March 2018

End of March 2019

End of March 2020

* The listed amounts are abbreviated to the indicated unit. The component ratios, rates of increase or decrease, and other percentages are abbreviated to the indicatednumeric values.

9

AOGIN Annual Report 2020

Proﬁt and Loss
The net proﬁt from the Banksʼs core businesses decreased by ¥0.5 billion year-on-year to ¥4.0 billion. This was due to a reduction in fund management income
such as interest on loans and discounts and interest on securities, despite a decrease in expenditures.
Meanwhile, ordinary proﬁt declined by ¥2.9 billion year-on-year to ¥1.7 billion due to an increase in credit costs and a fall in gains on stock transactions. Net
income also declined by ¥2.0 billion year-on-year to ¥1.2 billion.

Net business income from the Bankʼs core businesses

Net business income

This is the most accurate indicator of proﬁt from the Bank's coreThis is an indicator of earning power from the Bank's core businesses,

businesses.

which include deposits, loans, and currency exchange, etc.
60

60

58
40

45

40

40

41

40
33

20
Balance (¥100 million)

20
Balance (¥100 million)0
End of Fiscal Year
March 2018

End of Fiscal Year
March 20190

End of Fiscal Year
March 2020

End of Fiscal Year
March 2018

End of Fiscal Year
March 2019

End of Fiscal Year
March 2020

Ordinary proﬁt

Net income

Net operating proﬁt is derived by adding or subtracting gains or losses on

Net income is derived by adding or subtracting extraordinary items, taxes,

shares, bad loan write-oﬀ costs, etc.

etc. to or from ordinary proﬁt.

60

60

56
47

40

40

42
32

20

20

17
Balance (¥100 million)

Balance (¥100 million)0
End of Fiscal Year
March 2018

End of Fiscal Year
March 2019

End of Fiscal Year
March 2020

120
End of Fiscal Year
March 2018

End of Fiscal Year
March 2019

End of Fiscal Year
March 2020

Capital adequacy ratio

RatingAlthough the capital adequacy ratio at the end of March 2020 declined by

The Japan Credit Rating Agency, an objective and authoritative rating

0.26% from the end of the previous term to 9.05%, owing to an increase inagency, assigned a high rating of A (Long-term Issuer Rating) to AOGIN due

loans and other reasons, it still continues to far exceed the domestic

to the Bank's exceptional record of reliability and security.

standard of 4%.

(End of March 2020)

12.00
10.00

10.08％
9.35％

10.05％
9.31％

9.78％

Japan Credit Rating
Agency (JCR)

Non-consolidated

9.05％

8.00

Consolidated

6.00

Domestic
standard: 4%

4.00
2.00
0.00

End of March2018

End of March2019

End of March
2020* The listed amounts are abbreviated to the indicated unit. The component ratios, rates of increase or decrease, and other percentages are abbreviated to the indicatednumeric values.

10

AOGIN Annual Report 2020

Non-consolidated Financial Statements
Non-consolidated Balance Sheets: The Aomori Bank, Ltd.
As of March 31, 2020 and 2019
Millions of Yen
2020

2019

Thousands of
U.S. dollars
2020

AssetsCash and due from banks
Call loans
Monetary claims bought
Money held in trust
Investment securities
Loans and bills discounted
Foreign exchange
Other assets
Tangible fixed assets
Intangible fixed assets
Prepaid pension costs
Deferred tax assets
Customers' liabilities for
acceptances and guarantees
Reserve for possible loan losses
Reserve for investment losses
Total assets
Liabilities and shareholders' equity
Liabilities
Deposits
Negotiable certificates of deposit
Call money
Payables under securities lending transactions
Borrowed funds
Foreign exchange
Other liabilities
Reserve for employees’ bonuses
Reserve for directors’ bonuses
Reserve for stock benefits
Reserve for reimbursement of deposits
Deferred tax liabilities
Deferred tax liabilities for revaluation
Acceptances and guarantees
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Total retained earnings
Legal reserve
Appropriated retained earnings
Unappropriated retained earnings
Treasury stock
Total Shareholders’ equity
Valuation and translation adjustments
Net unrealized gains (losses) on securities
Net deferred gains (losses) on hedging instruments
Revaluation reserve for land
Total Valuation and translation adjustments
Total net assets
Total liabilities and net assets

11¥393,648
15,0002,604
9,980
864,907
1,805,392
2,320
43,26920,750
1,664
3,199
1,466

¥381,633
2,555
820,9121,762,405
1,359
27,50020,529
1,859
3,100
-

$3,617,094
137,829
23,93491,708
7,947,329
16,589,103
21,320397,583
190,667
15,29229,397
13,472

15,559(6,972)¥3,172,791

16,154(6,466)(7)¥3,031,536

142,975(64,066)$29,153,643¥2,475,840
176,497
8,129
49,125
312,000
32
31,737
560
9
127
420
1,541
15,5593,071,581¥2,433,689
181,366
13,793
1,629
259,370
59
7,128
582
176
528
3,234
1,557
16,1542,919,270$22,749,616
1,621,772
74,698451,395
2,866,856
296
291,622
5,145
90
1,173
3,861
14,161
142,97528,223,667

19,562
12,91663,903
6,646
55,0002,257(791)
95,59019,562
12,916
63,972
6,646
52,0005,326(875)
95,576

179,753
118,684
587,184
61,069505,375
20,739(7,276)878,3456,836(3,670)2,453
5,618
101,209¥3,172,791

16,213(1,881)
2,356
16,689112,266¥3,031,536

62,817(33,729)
22,543
51,630929,976$29,153,643

AOGIN Annual Report 2020

Non-consolidated Income The Aomori Bank, Ltd.
Years ended March 31, 2020 and 2019
Thousands of
U.S. dollars
2020

Millions of Yen
2020
IncomeInterest on;
Loans and discounts
Securities
Other
Fees and commissions
Other income
Total income
Expenses
Interest on;
Deposits
Other
Fees and commissions
General and administrative expenses
Other expenses
Impairment losses on fixed assets
Total expenses
Income (losses) before income taxes
Income taxes
Current income taxes
Deferred income taxes
Total income taxes
Net income (Loss)2019¥16,7547,557
28
24,3406,828
2,024
33,193¥17,456
7,813
25
25,295
6,814
1,755
33,864$153,950
69,443262
223,656
62,74318,606305,006

419
374
793
4,925
23,0582,794
146
31,719

615
261
877
4,058
23,459986
9829,480

3,853
3,441
7,294
45,263211,877
25,681
1,346
291,462

1,473

4,384

13,543171
51
223¥1,250

556
561
1,117
¥3,266

1,579
476
2,055
$11,487¥160.89Cents￠56.62Yen
Net income (Loss) per share¥61.63

12

AOGIN Annual Report 2020

Non-consolidated Statements of Changes In Net Assets The Aomori Bank, Ltd.
As of March 31, 2020 and 2019
Millions of yen
Shareholders' equity
Retained earnings
Commonstock
Balances as ofMarch 31, 2019¥19,562

Capitalsurplus¥12,916

Legal reserve

Appropriatedretained earnings

Unappropriatedretainedearnings

Total retained
earnings¥6,646¥52,000¥5,326¥63,972(1,223)(1,223)

Treasury
stock

Total

(¥875)¥95,576

Changes during theaccounting period
Dividends from surplus
3,000

Appropriated retained earnings(1,223)(3,000)1,250

Net Income

1,250

1,250

Purchase of treasury stock

(2)

(2)

Disposal of treasury stock85

85

Reversal of land
revaluation excess

(96)

(96)

(96)

3,000

(3,069)

(69)

83

13

¥55,000¥2,257¥63,903(¥791)¥95,590

Changes other thanShareholders' equity (net)Total changes during
the accounting period
Balances as ofMarch 31, 2020

¥19,562¥12,916¥6,646

Thousands of U.S. dollars
Shareholders' equity
Retained earnings
Commonstock
Balances as ofMarch 31, 2019$179,753

Capitalsurplus$118,684

Total retained Treasury stockearnings

Total

Legal reserve

Appropriatedretained earnings

Unappropriatedretainedearnings$61,069$477,809$48,944$587,823(11,238)(11,238)(11,238)

27,565(27,565)
11,487

11,487($8,042)$878,218

Changes during theaccounting period
Dividends from surplus
Appropriated retained earnings

11,487Net Income
Purchase of treasury stock

(20)

(20)

Disposal of treasury stock

786

786

Reversal of land
revaluation excess
Changes other thanShareholders' equity (net)Total changes during
the accounting period
Balances as ofMarch 31, 2020

$179,753$118,684$61,069

13

(888)

(888)

(888)

27,565(28,204)

(638)

766

127

$505,375$20,739$587,184($7,276)$878,345

AOGIN Annual Report 2020

Non-consolidated Statements of Changes In Net Assets The Aomori Bank, Ltd.
As of March 31, 2020 and 2019
Millions of yen
Valuation and translation adjustments

Balances as ofMarch 31, 2019

Net unrealized
gains(losses)
on securities

Deferred
gains(losses)on hedging
instruments¥16,213(¥1,881)

Revaluation
reservefor land¥2,356

Total

Stock option
rights¥16,689

Total net assets-¥112,266

Changes during theaccounting period
Dividends from surplus(1,223)

Appropriated retained earnings
Net Income

1,250

Purchase of treasury stock(2)

Disposal of treasury stock85

Reversal of land
revaluation excess(96)

Changes other thanShareholders' equity (net)(9,377)(1,789)96(11,070)-(11,070)

Total changes during
the accounting period(9,377)(1,789)96(11,070)-(11,056)

Balances as ofMarch 31, 2020

¥6,836(¥3,670)¥2,453¥5,618-¥101,209

Thousands of U.S. dollars
Valuation and translation adjustments

Balances as ofMarch 31, 2019

Net unrealized
gains(losses)
on securities

Deferred
gains(losses)on hedging
instruments

Revaluation
reservefor land$148,984($17,284)$21,655

Total$153,354

Stock option
rightsTotal net assets-$1,031,573

Changes during theaccounting period(11,238)

Dividends from surplus
Appropriated retained earnings

11,487Net Income
Purchase of treasury stock(20)

Disposal of treasury stock

786

Reversal of land
revaluation excess(888)

Changes other thanShareholders' equity (net)(86,167)(16,445)888(101,724)-(101,724)

Total changes during
the accounting period(86,167)(16,445)888(101,724)-(101,596)

Balances as of$62,817($33,729)$22,543$51,630$929,976
March 31, 2020(*) The non-consolidated financial statements presented herein are expressed in yen and, solely for the convenience of the reader, have beentranslated into United States dollars at the rate of ￥108.83= U.S.$1, the prevailing rate as of March 31, 2020. This translation should not
be construed as a representation that all the amounts shown could be converted into U.S. dollars.

14

AOGIN Annual Report 2020

Board of Directors and Executive Oﬃcers (as of June 25, 2020)▶Director / President▶Managing Executive Oﬃcers
Tsuyoshi Tamura

Susumu Narita

Tsutomu Shikanai▶Directors /Senior Managing Executive Oﬃcers

Yo Mori

Akihiro Kawamura
Tomohiko Sasaki

Takahiro Kudo

▶Director / Managing Executive Oﬃcer▶Executive Oﬃcers

Keitaro Ishikawa

Daisuke Yatsu▶Director

Shunsuke Kasai

Naotake Atsumi

Motomi Shiratori
Yoshiaki Matsuhashi▶Directors / Audit & Supervisory Committee Members

Shin Kidachi

Akira Nakagawa
Norihisa IshidaToshisada Kushibiki
Mie Ishida

Kunihiko Yamanaka
Hayato Takahashi

Organization (as of April １, 2020)
General Meeting of Shareholders

Regional Headquarters
General Planning Division
Public Relations Oﬃce
Tokyo Liaison Oﬃce
Risk Administration Division

Board of Directors

Legal & Compliance Oﬃce

Audit & Surpervisory Committee

Business Administration Division
Customer Relation Oﬃce
Financial Products Management Oﬃce
Business Support Division

Executive Committee

Regional Development Division
Public Services Business Oﬃce
Credit Supervision Division
Treasury & International Division
Personnel Division
System Development Division
Operations Administration Division
Operations Oﬃce
General Aﬃars Division
Auditing Division
Operations Auditing Oﬃce
Audit & Supervisory Committee Oﬃce

15

AOGIN Annual Report 2020

Corporate Data (as of March 31, 2020)▶Company Name
The Aomori Bank, Ltd.
▶Head Oﬃce
9-30, Hashimoto 1-chome, Aomori 030-8668, Japan▶Web URL
https://www.a-bank.jp/▶Date of Establishment
October 1, 1943
▶Date of Foundation
January 20, 1879
▶Number of Employees
1,272▶Number of Oﬃces
95▶Paid-in Capital
19,562 million yen▶Number of Outstanding Shares
20,512 thousand shares▶Total Assets
3,172.7 billion yen▶Loans and Bills Discounted
1,805.3 billion yen▶Capital Adequacy Ratio
9.05% (Domestic Standards)▶Credit Rating
A (Japan Credit Rating Agency, Ltd.)AOGIN Annual Report 2020
Issued September 2020 The Aomori Bank, Ltd.
9-30, Hashimoto 1-chome, Aomori 030-8668, Japan telephone : 017-777-1111

16

fax : 017-777-1006