2021
ANNUAL REPORTThe Aichi Bank, Ltd.

PROFILE
Aichi Bank is a regional bank whose business base is Aichi Prefecture, the central prefecture of theTokai region, one of the country’s three main industrial areas. Since its establishment in 1910, theBank has worked to meet the diverse needs of customers in the region, based on its corporate missionof contributing to the prosperity of the community via a thorough commitment to sound management
and business growth.
Aichi Bank has a domestic service network comprising 106 branches, and also engages ininternational operations. The Bank’s head office is located in Nagoya, Aichi Prefecture, Japan’s fourthlargest prefecture by population, and an area that combines a beautiful natural environment with a richhistorical and cultural heritage.
As of March 31, 2021, the Bank had total assets of ¥3,788,132 million (US$34,216 million) on aconsolidated basis, and deposits amounting to ¥3,221,635 million (US$29,099 million). Its capital ratio,
calculated according to standards for banks operating only in Japan, stood at 9.99%.

FINANCIAL HIGHLIGHTS

Years ended March 31, 2021 and 2020
Millions of Yen

Consolidated

Thousands of U.S. Dollars

2021

2020

2021

2020

¥53,296¥53,172$481,401$480,281

Total expenses

47,32948,849427,504

441,233

Profit before income taxes

5,966

4,322

53,88839,038

Profit attributable to owners of parent

4,266

2,930

38,533

26,465¥3,221,635¥2,808,769$29,099,765$25,370,508

2,528,640

2,063,699

22,840,213

18,640,583

Securities

953,370

964,260

8,611,417

8,709,782

Total assets

3,788,132

3,246,230

34,216,710

29,321,922

246,391

209,350

2,225,553

1,890,976

For the year:

Total income

At year-end:
Deposits
Loans and bills discounted

Total net assets

Note: The U.S. dollar amounts represent translation of Japanese yen at the rate of ¥110.71 to U.S. $1.00 on March 31, 2021.

-1-

MESSAGE FROM THE MANAGEMENTBusiness and Financial Conditions

Looking back at Japan’s economy during the year ended March 31, 2021, while
weaknesses were seen in private consumption and corporate profits of nonmanufacturers affected by the global spread of the novel coronavirus disease(COVID-19), industrial production picked up on the back of increase in exports,
and the economy continued on a recovery trend.
As for the local economy of our business base, which is centered in Aichi
Prefecture, although areas such as restaurants and accommodation services
continue to be under strong downward pressure, the economy started to showa moderate upswing with export and production picking up, particularly for the
automobile industry, one of the major local industries, while private consumption
also began to recover.
Yukinori Ito, President
Looking forward, in regard to the economic outlook, while full attention should
be given to developments in the COVID-19 situation and its impact on theeconomy, as socio-economic activities are resumed while taking measures to prevent the spread of infectious
diseases, the economy is expected to pick up, supported by the effects of the economic measures under therevised budget and improvement in overseas economies.
In the financial sector, the Bank of Japan is examining the trends of the economy and the price of goods
under “quantitative and qualitative monetary easing with yield curve control” and continuing to carry out
monetary easing while holding the belief that it is important to respond to any changes in the economy, priceof goods or financial situation agilely and effectively without hesitation.
Although the Nikkei Stock Average fell as low as ¥17,818 at the beginning of April, it rose continuously
throughout the fiscal year, underpinned by the continuation of major countries’ large-scale monetary easing
policies and the effect of economic measures. Moreover, uncertainty toward the future is gradually easing due
to the development and commencement of administration of vaccinations for COVID-19, and the Nikkei Stock
Average rose temporarily above the ¥30,000 level. It then dropped due to concerns over rising U.S. long-term
interest rates, and the year-end closing price was ¥29,178, slipping below the ¥30,000 level, but still a yearon-year rise of ¥10,261.
The Bank has started the three-year “Eleventh Medium-Term Management Plan” from April 2019, underwhich we have set four basic policies of “reinforce sales capabilities & profitability,” “increase productivity,”“reinforce human resources” and “reinforce governance,” and implemented various initiatives toward our goalof being a “bank that contributes to the local community as our customers’ partner.”

Earnings

Our business results on a consolidated basis for the year ended March 31, 2021 are as follows.
Total income increased ¥124 million year on year to ¥53,296 million (US$481 million) mainly due toincreases in interest on loans and bills discounted and purchased, fees and commissions and gain on salesof equity securities. Total expenses decreased ¥1,520 million year on year to ¥47,329 million (US$427
million) mainly due to decreases in losses on sales of bonds and others and losses on sales of equity
securities. As a result, profit attributable to owners of parent increased ¥1,336 million year on year to ¥4,266
million (US$38 million).
By segment, ordinary income of the banking segment increased ¥183 million year on year to ¥44,523
million (US$402 million) and its segment profit increased ¥1,704 million to ¥5,576 million (US$50 million).
Ordinary income of the leasing segment increased ¥323 million year on year to ¥8,166 million (US$73
million), and its segment profit increased ¥245 million to ¥336 million (US$3 million).

Cash FlowsNet cash provided by operating activities increased ¥163,421 million year on year to ¥34,723 million (US$313
million). This was mainly attributable to an increase in deposits. Net cash provided by investing activities
decreased ¥23,371 million to ¥55,752 million (US$503 million). This was mainly attributable to sales andmaturities of securities. Net cash used in financing activities amounted to ¥1,100 million (US$9 million), a
decrease in cash used of ¥404 million. This was mainly due to dividends paid.
As a result, cash and cash equivalents at the end of the year amounted to ¥224,225 million (US$2,025
million), an increase of ¥89,376 million from the previous year-end.

Medium-term Strategy

The Eleventh Medium-Term Management Plan sets our vision as being a “bank that contributes to the local
community as our customers’ partner,” and we will set forth to fully “procure and operate locally” by continuing
to follow “community-based finance,” and have developed the following three points as our major roles andmissions as a regional financial institution:1) Support the growth of local companies
2) Support asset building for our individual customers3) Contribution activities for the local community
We have set four basic policies in the Eleventh Medium-Term Management Plan, “reinforce sales
capabilities & profitability,” “increase productivity,” “reinforce human resources” and “reinforce governance.”
We will demonstrate our consulting functions, which we have built up thus far, to fully support our local
customers, and contribute toward the development of the local community.

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Yukinori Ito
President

BOARD OF DIRECTORS AND CORPORATE AUDITORS
President
Yukinori Ito

Directors
Audit and Supervisory Committee Members
Masahiro Kato*1
Akira Katsuragawa*2
Toshiyasu Hayashi*2
Yasutoshi Emoto*2
Yasuo Hasegawa*2

Senior Managing Director
Nobuhiko Kuratomi
Managing Director
Hiroyasu Matsuno
Directors
Shigeru Murabayashi
Hiroaki Yoshikawa
Kenichi Taguchi
Norimasa Suzuki*1‌Standing Audit and Supervisory Committee Member*2‌Outside Audit and Supervisory Committee Member

CORPORATE DIRECTORY
Service Network
Head Office(Securities & Foreign Business Department)
14-12, Sakae 3-chome, Naka-ku, Nagoya 460-8678
Telephone: 81-52-251-3211
SWIFT: AICHJPJN
Facsimile: 81-52-262-5793

Domestic Branches

Gifu (3)Tokyo (1)Head Office
Shizuoka (1)Aichi (98)
Mie (2)
Osaka (1)Total 106 Domestic Branches
Consolidated Companies
Aigin Business Service Co., Ltd.
Aigin DC Card Co., Ltd.
Aigin Lease Co., Ltd.
Aigin Computer Service Co., Ltd.
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The Aichi Bank, Ltd.
Consolidated Financial Statements
March 31, 2021 and 2020

-4-

The Aichi Bank, Ltd. and Subsidiaries
Consolidated Balance Sheets
March 31, 2021 and 2020
Millions of yen
2021
2020
Assets:Cash and due from banks¥ 226,415
Call loans and bills purchased
590
Monetary claims bought
3,090
Trading securities
Securities
953,370
Reserve for possible losses oninvestments(0)Loans and bills discounted
2,528,640
Foreign exchange
1,975
Other assets
38,044
Tangible fixed assets
35,050Intangible fixed assets
1,002
Employee retirement benefit asset
7,461
Deferred tax assets
185
Customers’ liabilities for acceptancesand guarantees
6,014
Allowance for possible loan losses(13,708)
Total assets¥ 3,788,132-5-¥

137,6151,116
1964,260

Thousands of U.S. dollars
2021
2020

$

2,045,117
5,329
27,9108,611,417$

1,243,022
10,08098,709,782(2)
2,063,699
2,590
40,971
34,463
1,030
2,644
263

(0)
22,840,213
17,839343,636
316,592
9,050
67,392
1,671(18)
18,640,583
23,394370,074
311,290
9,303
23,882
2,375

6,299(8,724)54,322(123,818)

56,896(78,800)¥ 3,246,230$ 34,216,710$ 29,321,922

The Aichi Bank, Ltd. and Subsidiaries
Consolidated Balance Sheets (Continued)
March 31, 2021 and 2020
Millions of yen
2021
2020
Liabilities:
Deposits¥ 3,221,635
Negotiable certificates of deposit
4,100
Call money and bills sold
Security deposits received related tosecurities lending transactions
91,318Borrowings
166,852
Foreign exchange
1,460
Other liabilities
22,227
Reserve for employee bonuses
587
Reserve for bonuses to directors
35
Employee retirement benefit
683
liability
Reserve for executive retirement
benefits
35
Reserve for reimbursement ofdeposits
188
Reserve for contingencies
1,449
Deferred tax liabilities
20,484
Deferred tax liabilities forrevaluation
4,668
6,014
Acceptances and guarantees
Total liabilities
3,541,740
Net assets:
Common stock
Capital surplus
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive
incomeStock acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

Thousands of U.S. dollars
2021
2020

29,099,765
37,033-$ 25,370,508
37,03349,14680,10995,596
1,382
19,708600
43824,839
1,507,108
13,187200,7675,302
316

723,593
863,481
12,483
178,014
5,419
388

985

6,169

8,897

40

316

361

253
1,314
7,564

1,698
13,088185,023

2,285
11,86868,322

4,670
6,299
3,036,879

42,16454,322
31,991,148

42,18256,89627,430,936

18,00013,883142,074(1,055)
172,903

18,00013,883
138,933(1,071)
169,746

162,586
125,399
1,283,298(9,529)1,561,764

162,586
125,399
1,254,927(9,673)
1,533,249

68,850302
4,335
246,391¥ 3,788,132

35,131
295
4,177
209,350¥ 3,246,230

621,895
2,727
39,1562,225,553$ 34,216,710

317,324
2,664
37,7291,890,976$ 29,321,922-6-¥ 2,808,769
4,100
5,441

$

The Aichi Bank, Ltd. and Subsidiaries
Consolidated Statements of Income
For the Years Ended March 31, 2021 and 2020
Millions of yen
2021
2020

Thousands of U.S. dollars
2021
2020

Income:Interest and dividend income:Interest on loans and bills discounted
and purchased¥
Interest on and dividends from securities
Other interest and dividend income
Total interest and dividend income
Fees and commissions
Other operating income
Other income
Total income

19,1809,928
90
29,20017,106481
6,507
53,296

16,505
11,17497
27,77916,246
4,042
5,104
53,172$ 173,245
89,675812
263,752
154,511
4,344
58,775
481,401

Expenses:
Interest expense:
Interest on deposits
Interest on call money and bills soldInterest on borrowings
Other interest expense
Total interest expense
Fees and commissions
Other operating expenses
General and administrative expenses
Impairment loss on fixed assets
Other expenses
Total expenses
Profit before income taxes

250
21
60
16
351
10,4282,040
26,40950
8,049
47,329
5,966

448
223
110
16
800
10,031
4,935
26,17638
6,868
48,849
4,322

2,258
189
541
144
3,170
94,192
18,426
238,542451
72,703
427,504
53,888

4,046
2,014
993
144
7,226
90,60644,575
236,437
343
62,035441,233
39,038

1,560
4,405

1,330
2,991

14,09039,78812,01327,016

139

61

1,255

550

Income taxes
ProfitProfit attributable to noncontrolling interests
Profit attributable to owners ofparent

¥

4,266

¥

¥

2,930

$

Yen
Per share:
Basic earnings
Diluted earnings
Cash dividends¥

396.82394.46120.00-7-¥

38,533$

149,083
100,930876
250,916
146,743
36,50946,102
480,281$

26,465

U.S. dollars
272.08270.64100.00

$

3.58
3.56
1.08

$

2.45
2.44
0.90

The Aichi Bank, Ltd. and Subsidiaries
Consolidated Statements of Comprehensive Income
For the Years Ended March 31, 2021 and 2020
Millions of yen
2021
2020
ProfitOther comprehensive income:Unrealized gains (losses) on availablefor-sale securities
Deferred gains on hedges
Retirement benefit adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Non-controlling interests
Total comprehensive income

¥

4,405

¥

29,777100
3,815
33,692
38,098¥¥37,937160
38,098-8-

Thousands of U.S. dollars
2021
2020

¥

2,991

¥

(21,154)(867)(22,022)(19,030)

268,963903
34,459304,326$ 344,124(191,075)(7,831)(198,916)$ (171,890)(19,077)47(19,030)$ 342,670
1,445$ 344,124$ (172,315)424$ (171,890)¥¥$

39,788$27,016

The Aichi Bank, Ltd. and Subsidiaries
Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2021 and 2020
Millions of yen
Accumulated other comprehensive income

Shareholders’ equity
Number ofshares ofcommon stock
issuedBalance at April 1, 2019
Profit attributable to owners of parent
Cash dividends
Reversal of land revaluation increment
Treasury stock acquired, net
Transfer to capital surplus from retained
earnings
Net changes in items other thanshareholders’ equity
Balance at March 31, 2020
Profit attributable to owners of parent
Cash dividends
Reversal of land revaluation increment
Treasury stock acquired, net
Transfer to capital surplus from retained
earnings
Net changes in items other thanshareholders’ equity

10,943,240-

Balance at March 31, 2021

10,943,240

Commonstock¥

18,000-Capitalsurplus¥Retainedearnings

13,883 ¥(5)

Total
shareholders’equityTreasurystock

137,146
2,930(1,134)
(3)
-

¥

(724)
(348)

¥

168,305
2,930(1,134)(3)(353)

Net unrealized
gains onavailable-for-salesecurities¥

50,729-Deferred
gains onhedges¥Land
revaluation
increment
-

¥

8,304
-

Retirement
benefitadjustment¥(1,956)-

Total
accumulated
othercomprehensive
income¥57,077-

Stockacquisitionrights¥274-

Noncontrollinginterests
¥

4,132
-

Total
net assets¥

229,790
2,930(1,134)
(3)
(353)

-

-

5

(5)

-

-

-

-

-

-

-

-

-

-

10,943,240-

18,000-13,883(3)

138,933
4,266(1,075)(46)-(1,071)
16

169,746
4,266(1,075)(46)
13(21,140)
29,589
-

-

62
8,366
-

(867)
(2,823)-(21,945)
35,131
-

20
295
-

45
4,177
-

(21,880)
209,350
4,266(1,075)
(46)
13

-

-

3

(3)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

29,755

100

46

3,815

33,7187

158

33,883¥18,000¥13,883¥142,074¥(1,055)¥

172,903¥59,345

¥

100

¥

8,413

¥

991

¥

68,850

¥

302

¥

4,335

¥

246,391

75,006-$(17,667)-$

515,554
-

$

2,474
-

$

37,322-$ 2,075,602
26,465(10,242)(27)(3,188)

Thousands of U.S. dollars
Balance at April 1, 2019
Profit attributable to owners of parent
Cash dividends
Reversal of land revaluation increment
Treasury stock acquired, net
Transfer to capital surplus from retained
earnings
Net changes in items other thanshareholders’ equity
Balance at March 31, 2020
Profit attributable to owners of parent
Cash dividends
Reversal of land revaluation increment
Treasury stock acquired, net
Transfer to capital surplus from retained
earnings
Net changes in items other thanshareholders’ equity$ 162,586-

Balance at March 31, 2021

$ 162,586$

125,399 $(45)

1,238,786
26,465(10,242)(27)-$(6,539)(3,143)$

1,520,233
26,465(10,242)(27)(3,188)$458,215
-

$

-

$

-

45

(45)

-

-

-

-

-

-

-

-

-

-

162,586-

125,399(27)

1,254,927
38,533(9,710)(415)-(9,673)144

1,533,249
38,533(9,710)(415)
117(190,949)
267,265--560
75,566-(7,831)(25,499)-(198,220)317,324
-

180
2,664
-

406
37,729-(197,633)
1,890,976
38,533(9,710)
(415)
117

-

27

(27)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

268,765

903

415

34,459304,561

63

1,427

306,051

39,156$ 2,225,553$

125,399$

1,283,298$(9,529)$1,561,764-9-$536,040$903$

75,991

$

8,951

$

621,895

$

2,727

$

The Aichi Bank, Ltd. and Subsidiaries
Consolidated Statements of Cash Flows
For the Years Ended March 31, 2021 and 2020
Millions of yen
2020
2021
Cash flows from operating activities:
Profit before income taxes
Adjustments for:
Depreciation
Impairment loss on fixed assets
Increase in allowance for possible loan losses
Interest and dividend income
Interest expense
Decrease (increase) in trading securities
Increase in loans and bills discounted(Increase) decrease in call loans and bills
purchased
Decrease in call money and bills soldIncrease in deposits
Increase in security deposits received
related to securities lending transactions
Increase in borrowings(excluding subordinated borrowings)
Gain on securities transactions(Gain) loss on foreign currency transactions
Increase in reserve for contingencies
Interest and dividend income received
Interest expense paid
Other, net
Subtotal
Income taxes paid
Net cash provided by (used in) operating
activities

¥

5,966

¥

4,322

Thousands of U.S. dollars
2021
2020
$

53,888$39,038

1,589
50
4,983
(29,200)351
1(464,940)

1,566
38
1,245
(27,779)800(1)(259,332)

14,352451
45,009(263,752)
3,170
9(4,199,620)

14,145343
11,245(250,916)
7,226(9)(2,342,444)(2,537)(5,441)
412,866

782(10,097)
25,091(22,915)(49,146)
3,729,256

7,063(91,202)226,637

11,20954,437

101,246

491,708

71,256(3,804)(950)
134
29,919(436)
5,325
36,341(1,618)55,584(866)
944
39
28,870(938)(1,064)(126,355)(2,343)643,627(34,360)(8,580)1,210
270,246(3,938)48,098328,253(14,614)502,068(7,822)
8,526
352
260,771(8,472)(9,610)(1,141,315)(21,163)

34,723(128,698)

313,639(1,162,478)(263,673)
321,489(1,810)74(328)
55,752(377,294)
457,520(1,426)
575
(242)
(9)
79,123(2,381,654)
2,903,884(16,349)668(2,962)
503,585(3,407,948)
4,132,598(12,880)
5,193(2,185)(81)714,687

Cash flows from financing activities:
Dividends paid
Other, net
Net cash used in financing activities(1,075)(25)(1,100)(1,134)(371)(1,504)(9,710)(225)(9,935)(10,242)(3,351)(13,585)

Net increase (decrease) in cash and cash equivalents

89,375(51,080)

807,289(461,385)

Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

134,849
224,225

185,930
134,849

1,218,038$ 2,025,336

1,679,432$ 1,218,038

Cash flows from investing activities:
Purchases of securities
Proceeds from sales and maturities of securities
Purchases of tangible fixed assets
Proceeds from sales of tangible fixed assets
Purchases of intangible fixed assets
Payment for asset retirement obligations
Net cash provided by investing activities¥- 10 -¥

Basis of Presenting Consolidated Financial Statements
The consolidated financial statements of The Aichi Bank, Ltd. (the “Bank”) and its subsidiaries(collectively the “Group”) have been prepared in accordance with the provisions set forth in the Japanese
Financial Instruments and Exchange Act of Japan and its related accounting regulations and in conformity
with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different in certain
respects as to the application and disclosure requirements from International Financial ReportingStandards. The accompanying consolidated financial statements have been reformatted and translated
into English with some expanded descriptions from the consolidated financial statements of the Bank
prepared in accordance with Japanese GAAP and filed with the appropriate Local Finance Bureau of the
Ministry of Finance as required by the Financial Instruments and Exchange Act. Certain supplementary
information included in the statutory Japanese language consolidated financial statements is not presented
in the accompanying consolidated financial statements.
The translation of the Japanese yen amounts into U.S. dollar amounts is included solely for theconvenience of readers outside Japan, using the prevailing exchange rate at March 31, 2021, which was¥110.71 to U.S. $1.00. This translation should not be construed as a representation that the Japanese
yen amounts have been, could have been or could in the future be converted into U.S. dollars at this or
any other rate of exchange.
The Japanese yen amounts in the accompanying consolidated financial statements are expressed inmillions of Japanese yen and have been rounded down. U.S. dollar amounts in the accompanying
consolidated financial statements are expressed in thousands of U.S. dollars and also have been rounded
down. As a result, total amounts expressed in both Japanese yen and U.S. dollars appearing in the
consolidated financial statements thereto may not be equal to the sum of the individual amounts.
Certain comparative figures have been reclassified to conform to the current year’s presentation.

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