The transformation to a holding company structure described in this document involves securities of a Japanese company. The offer is subject to disclosure requirements of Japan thatare different from those of the United States. Financial statements included in this document, if any, have been prepared in accordance with foreign accounting standards that may not
be comparable to the financial statements of United States companies.
It may be difficult for you to enforce your rights and any claim you may have arising under the U.S. federal securities laws, since the issuer is located in Japan and some or all of its
officers and directors reside outside of the United States. You may not be able to sue a Japanese company or its officers or directors in a Japanese court for violations of the U.S.
securities laws. It may be difficult to compel a Japanese company and its affiliates to subject themselves to a U.S. court’s judgment.
You should be aware that the issuer may purchase securities otherwise than in connection with the transformation to a holding company structure, such as in the open market or
through privately negotiated purchases.
This document has been translated from the Japanese-language original for reference purposes only. In the event of any conflict or discrepancy between this document and theJapanese-language original, the Japanese-language original shall prevail in all respects.

Internet Disclosure Matters for Noticeof Convocation of the 246th Ordinary
General Meeting of Shareholders

Matters Concerning Stock Acquisition Rights of the Bank
Basic Policies Regarding Persons Who Should Control the
Determination of Financial and Business Policies of the
Bank
System for Ensuring Proper Operations
Overview of the Operational Status of the System for
Ensuring Proper Operations
Matters Concerning Specified Wholly-Owned Subsidiaries
Matters Concerning Transactions with the Parent
Company, Etc.
Statement of Changes in Shareholders’ Equity, Etc.
Notes to the Non-Consolidated Financial Statements
Consolidated Statement of Changes in Shareholders’Equity, Etc.
Notes to the Consolidated Financial Statements(From April 1, 2020 through March 31, 2021)

The Juroku Bank, Ltd.
The above will be provided to shareholders by posting on the Bank’s website (https:// www.juroku.co.jp/)
based on the provisions of laws and ordinances and Article 17 of the Articles of Incorporation.

Matters Concerning Stock Acquisition Rights of the Bank
❶ Stock acquisition rights, etc., of the Bank held by corporate officers of the Bank on thelast day of the fiscal year
First stock acquisitionrightsSecond stock acquisitionrightsThird stock acquisitionrightsDate of resolution issued by
the board of directors

June 27, 2013

June 27, 2014

June 19, 2015

Issuance Date

July 23, 2013

July 23, 2014

July 23, 2015
Directors (excluding
outside directors)
3

Category

Directors

Number of rights holders
Number of stock acquisitionrightsClass and number of shares
underlying the stockacquisition rights (Note 1)
Exercise price per share3

Directors (excluding
outside directors)
3

352

700

414

Common shares; 3,520
sharesCommon shares; 7,000
sharesCommon shares; 4,140
shares¥1
From July 24, 2013
to July 23, 2043

¥1
From July 24, 2014
to July 23, 2044

¥1
From July 24, 2015
to July 23, 2045

(Note 2)

(Note 2)

(Note 2)

Fourth stock acquisitionrightsFifth stock acquisitionrightsSixth stock acquisitionrightsJune 24, 2016

June 23, 2017

June 22, 2018

July 22, 2016

July 21, 2017

July 23, 2018

Directors (excluding
outside directors)

Directors (excluding
outside directors)

Directors (excluding
outside directors)

4

5

6

635

613

749

Common shares; 6,350
sharesCommon shares; 6,130
sharesCommon shares; 7,490
shares¥1
From July 23, 2016
to July 22, 2046

¥1
From July 22, 2017
to July 21, 2047

¥1
From July 24, 2018
to July 23, 2048

(Note 2)

(Note 2)

(Note 2)

Exercise period
Terms of exercising stockacquisition rights

Date of resolution issued by
the board of directors
Issuance Date
Category
Number of rights holders
Number of stock acquisitionrightsClass and number of shares
underlying the stockacquisition rights (Note 1)
Exercise price per share
Exercise period
Terms of exercising stockacquisition rights—1―Date of resolution issued by
the board of directors
Issuance Date
Category
Number of rights holders
Number of stock acquisitionrightsClass and number of shares
underlying the stockacquisition rights (Note 1)
Exercise price per share
Exercise period
Terms of exercising stockacquisition rights(Notes)Seventh stockacquisition rights

Eighth stock acquisitionrightsJune 21, 2019

June 19, 2020

July 23, 2019

July 22, 2020

Directors (excluding
outside directors)
6

Directors (excluding
outside directors)
6

1,002

1,174

Common shares; 10,020
sharesCommon shares; 11,740
shares¥1
From July 24, 2019
to July 23, 2049

¥1
From July 23, 2020
to July 22, 2050

(Note 2)

(Note 2)

1. Effective October 1, 2017, the Bank implemented a 1-for-10 reverse stock split of common stock, and class andnumber of shares underlying the stock acquisition rights are presented on a post-reverse stock split basis.
2. Terms of exercising stock acquisition rights(1) For those granted in a resolution dated June 19, 2015 or earlier:① The stock acquisition rights holder may only exercise stock acquisition rights all together within 10 days
from the day following the day of losing a position as a director of the Bank (if the 10th day falls on aholiday, by the following business day).
② If the stock acquisition rights holder dies, the heir of the stock acquisition rights holder may exercise thestock acquisition rights only up to the day when one year has passed from the day following the day when
the decedent died.
(2) For those granted in a resolution dated June 24, 2016 or later:① The stock acquisition rights holder may only exercise stock acquisition rights all together within 10 days
from the day following the day of losing a position as either a director or executive officer of the Bank (if the10th day falls on a holiday, by the following business day).
② If the stock acquisition rights holder dies, the heir of the stock acquisition rights holder may exercise thestock acquisition rights only up to the day when one year has passed from the day following the day when
the decedent died.

—2―❷ Stock acquisition rights, etc., of the Bank issued to employees, etc., during the fiscal
year
Eighth stock acquisitionrightsDate of resolution issued by
the board of directors
Issuance Date
Category
Number of rights holders
Number of stock acquisitionrightsClass and number of shares
underlying the stockacquisition rights (Note 1)
Exercise price per share
Exercise period
Terms of exercising stockacquisition rights

June 19, 2020
July 22, 2020
Executive officers(excluding directors)
9780
Common shares; 7,800
shares¥1
From July 24, 2019
to July 23, 2049
(Note)(Note) Terms for exercising stock acquisition rights① The stock acquisition rights holder may only exercise stock acquisition rights all together within 10 days from the
day following the day of losing a position as either a director or executive officer of the Bank (if the 10th day falls
on a holiday, by the following business day).
② If the stock acquisition rights holder dies, the heir of the stock acquisition rights holder may exercise the stockacquisition rights only up to the day when one year has passed from the day following the day when the decedent
died.

—3―

Basic Policies Regarding Persons Who Should Control the Determinationof Financial and Business Policies of the Bank
No applicable information.

System for Ensuring Proper Operations
The Bank has resolved at the board of directors the Basic Policy Related to the Establishment of anInternal Control System as follows in order to establish a system for ensuring proper operations of the
Bank and of the corporate group composed of the Bank and its affiliates.
(1) System to ensure that the execution of duties by the directors of the Bank and its affiliates complies
with all relevant laws, ordinances, regulations, and the Articles of Incorporation① The Basic Policy establishes the Bank’s commitment to serve local communities by fulfilling its
public mission as a financial institution, and to seek business growth through sound practices
founded on a broad and rational perspective.
② To implement this policy, directors and executive officers of the Bank are responsible for theestablishment of various standards including the Code of Ethics and Compliance Policy, and for
ensuring that business is conducted in accordance with these standards and that laws, ordinances,and the Articles of Incorporation are adhered to. In addition, directors and executive officers are
responsible for steadfastly confronting anti-social forces that pose a threat to social order and safety,
and establishing a system to sever all ties to these forces.
③ The Bank’s affiliates will make best efforts to pursue legitimate and fair business practices that
respond to social obligations, based on their own basic policy and management philosophy that are
adequate for the nature and scale of their business. In addition, the affiliates are responsible for theestablishment of a Code of Ethics and Compliance Policy to ensure that business is conducted inaccordance with laws and ordinances as well as social norms.
(2) System for storage and management of information related to the execution of duties by directors of
the Bank
To ensure efficient verification of proper business practices, regulations will be created and followed
regarding the handling and control of information and documents related to business operations(including electronic records); adherence to these regulations will be monitored, and regulations will
be revised when necessary.
In addition, a system will be established to enable directors and Audit & Supervisory Board Members
to view this information and documents, etc., when necessary.
(3) Risk management regulations and other structures related to risk of loss at the Bank and its affiliates① The Bank positions risk management as an important duty to ensure the soundness and safety ofbusiness, and regulations related to each type of risk, including Comprehensive Risk Management
Regulations, will be established in order to manage risks associated with the business of the Bankand its affiliates in an exhaustive and comprehensive manner. Efforts will be made to appropriately
improve the measurement, evaluation, and management of risk by following these regulations. An
independent third party will regularly evaluate the Bank’s management of major risks, and the Bank
will continually work to improve risk management level evaluations.
② In addition to designating one department to comprehensively manage risk, individual departments
will be made specifically responsible for each category of risk, ensuring effective risk management.
In addition, an organizational structure will be established, including the Integrated Risk
Management Council and Anti-Money Laundering Council chaired by the president and CEO andthe Operational Risk Management Council chaired by the director in charge of the department
responsible for comprehensive risk management. Risk management reports will be made to theboard of directors on a regular basis, or as necessary.
③ The following are risks to be managed at the Bank, and the board of directors will promptly
determine a department to deal with any newly recognized risks:credit risk, market risk, liquidity risk, operational risk, money laundering and terrorist financing risk,
and other risks that could have a serious impact on the Bank’s business.
④ In addition to establishing a Risk Management Council, the Bank’s affiliates will manage risks in aproper and comprehensive manner, and set up a system to report any issues related to risk
management to the Bank. The Internal Audit Department of the Bank will conduct auditing of theBank’s affiliates to assess their risk management.
(4) System to ensure the efficient execution of duties by directors of the Bank and its affiliates① Duties of the Bank will be executed centered on the Basic Policy and an Action Plan. A
Management Plan will be created, and guidelines based on this plan will be established for each sixmonth period.
② Progress made in implementing these plans, etc., will be reported to the board of directors in atimely manner, and steps will be taken in response as needed.

—4―③ Items that should be taken up by the board of directors of the Bank will be clearly stated inregulations such as the Board of Directors Regulations, and important items will be discussed asnecessary by the Management Council, which comprises managing directors or above and otherrelated personnel, to ensure that issues are sufficiently examined. In addition, Regulations on
Decision-Making Authority Related to Operations and the like will stipulate the appropriatedelegation of authority to subordinates based on such factors as the importance of the operation,
making the directors’ execution of duties more efficient.
④ The Bank will reinforce collaboration with its affiliates and facilitate information sharing. In
addition, the management of the Bank and representatives of its affiliates will exchange opinions ona regular basis in order to resolve various issues efficiently.
⑤ The Bank will establish regulations for top management, organizations, risk management andothers, and provide its affiliates with necessary information in order to have them create their own
systems efficiently in compliance with these regulations.
(5) System to ensure that the execution of duties by the employees of the Bank and its affiliates complies
with all relevant laws, ordinances, regulations, and the Articles of Incorporation① In addition to positioning compliance with laws and ordinances as one of our most importantbusiness responsibilities and establishing regulations such as the Code of Ethics and Compliance
Policy, the Bank will establish a department to provide overall control. In addition, a ComplianceCouncil, chaired by the president and CEO, will be created, and this council will be tasked withhandling compliance-related issues.
② In addition to establishing a Compliance Council, the Bank’s affiliates will manage and operate an
in-house compliance system appropriately and set up a system to report any compliance violation to
the Bank. The Internal Audit Department of the Bank will conduct auditing of the Bank’s affiliates
regarding their compliance with laws and ordinances, etc.
③ At the Bank and its affiliates, an in-house system will be created for reporting violations of laws
and ordinances and other compliance-related issues, and a whistle-blower system that employs an
independent lawyer to receive reports will be maintained. Efforts will be made to prevent orpromptly detect problems such as violations of laws and ordinances.
(6) System to ensure appropriate operations of the corporate group composed of the Bank and its
affiliates① An internal auditing agreement will be concluded with the Bank’s affiliates, and operations will be
audited by the Internal Audit Department of the Bank to ensure proper business operations by the
corporate group centered on the Bank. Operations at affiliates will be audited through various
activities, including appointing officers or employees of the Bank as officers of affiliates andhaving them attend the meeting of the board of directors of the affiliates.
② The management of the Bank and representatives of its affiliates will exchange opinions on aregular basis to prevent problems such as inappropriate transactions between the Bank and its
affiliates.
③ When engaging in transactions with the Bank’s affiliates and other entities, steps will be taken toverify that the terms of the transaction conform to the arms-length principle.
④ A whistle-blower system will be established at the Bank and all affiliates, making it possible forparties such as affiliate employees to make reports or seek advice.
⑤ A system will be created to ensure the reliability of the financial reporting of the corporate group
centered on the Bank.
(7) System to report matters related to the execution of duties by directors of the Bank’s affiliates to theBank① By having officers of the Bank dispatched to its affiliates, the Bank will receive reports related tothe execution of duties by directors of its affiliates at the meeting of the board of directors of theaffiliates.
② The Bank will deliberate or request reports, on a regular basis or as necessary, to accurately
understand the business operation of its affiliates, pursuant to the Group Companies Management
Regulations established by the Bank.
③ The department undertaking overall control of the Bank’s affiliates and individual departments
responsible for each affiliate will monitor the status of affiliates in a timely and appropriate manner,and promptly report any matters deemed important to the management of the Bank, while taking
necessary steps.
(8) Items related to employees whose assignment is requested by Audit & Supervisory Board Membersof the Bank to assist in their duties
An Audit & Supervisory Board Members’ Office will be created to assist the Audit & Supervisory
Board Members in the performance of their duties, and at least one appropriate full-time employee
will be assigned to work in that office. Upon obtaining the opinions of the Audit & Supervisory
Board, decisions will be made on the positions and qualifications of employees to be assigned toengage in this work, and a roster of such employees will be created.
(9) Ensuring the independence of the employees in (8) above from directors and the effectiveness of
instructions given to those employees
The appointment, transfer, and evaluation of employees who assist the Audit & Supervisory Board

Members in their duties will be subject to the approval of the Audit & Supervisory Board. Said
employees will solely comply with instructions and orders given by the Audit & Supervisory Board
Members.
(10) System for officers and employees of the Bank and its affiliates to report to Audit & Supervisory
Board Members of the Bank and a system for other reports to Audit & Supervisory Board Members
Officers and employees of the Bank and its affiliates and persons who received reports from themshall submit reports and provide information in response to requests from the Audit & Supervisory
Board or individual Audit & Supervisory Board Members. The following are the main topics of thereports and information to be provided.
① Department activities related to creating the Bank’s internal control system—5―② Activities of the Bank’s affiliates③ Matters that may inflict a significant loss on the Bank and its affiliates④ Significant accounting policies and standards and changes thereto⑤ Content of disclosed earnings, projections, and other important disclosure materials⑥ Serious violations of laws and ordinances and the like
⑦ Operation of the whistle-blower system and notifications⑧ Circulation of documents such as draft proposals and the minutes of important council andcommittee meetings⑨ Other items deemed necessary by the Audit & Supervisory Board Members(11) System to ensure that a person who made a report in accordance with (10) above does not receive
unfair treatment on the grounds of making said report
The Bank and its affiliates will prohibit the dismissal or any other disadvantageous treatment of aperson who makes a report in accordance with the preceding paragraph on the grounds of making
said report, etc., and take appropriate steps to ensure that said person will not receive unfair treatment.
(12) Matters related to treatment of expenses incurred in the execution of Audit & Supervisory Board
Members’ duties
In the event that Audit & Supervisory Board Members make a request for reimbursement of expenses
incurred in the execution of their duties, such request will be granted unless the expenses are provento be unnecessary to the execution of their duties.
(13) System to ensure effective audits by Audit & Supervisory Board Members
The representative director will regularly meet and cooperate with the Audit & Supervisory Board
Members to ensure the effectiveness of audits, and will regularly exchange opinions on management
problems and progress in auditing to ensure high accuracy.

—6―

Overview of the Operational Status of the System for Ensuring Proper
Operations
The Bank strives to maintain and operate the internal control system appropriately based on the Basic
Policy Related to the Establishment of an Internal Control System. The outline of the operational status in
the current fiscal year (246th term) is as follows.
(1) Compliance system
The Bank holds meetings of the Compliance Council (12 times) and the Compliance Committee (16times), which are advisory bodies to the board of directors, to verify whether compliance is being
properly practiced, deliberate, give directions and the like, and report the content of deliberations tothe board of directors. The Bank’s affiliates hold compliance meetings once every three months, inprinciple, to report to their board of directors, and also report any misconduct and so forth that occurs
in within their company to the Bank in a timely and appropriate manner.
(2) Risk management system
The Bank holds meetings of the Integrated Risk Management Council (2 times), the Integrated Risk
Management Committee (18 times), the Operational Risk Management Council (2 times), and theAnti-Money Laundering Council (12 times) to report to the board of directors on risk and the
management thereof. In addition, affiliates of the Bank regularly hold risk management meetings
once every three months, in principle, to report on risk management to their board of directors, andreport any problems with risk management to the Bank in a timely and appropriate manner.
(3) Ensuring proper and efficient execution of duties by directors
In addition to holding meetings of the board of directors (13 times) in the current fiscal year, theBank holds meetings of the Management Council (35 times) which is established as a decisionmaking body by delegation of authority by the board of directors.
(4) Ensuring proper operations in the Group
The Bank regularly holds information exchange meetings (10 times) with each affiliate in order tostrengthen cooperation and accurately understand their business operations, as well as discussion
meetings (4 times) between the Bank’s management and representatives of the affiliates to resolve
various issues efficiently.
(5) Ensuring the effectiveness of audits by Audit & Supervisory Board Members
The Bank holds regular meetings (three times) between the representative director and Audit &Supervisory Board Members to exchange opinions on management problems and the status of
improving the environment for Audit & Supervisory Board Members.

Matters Concerning Specified Wholly-Owned Subsidiaries
No applicable information.

Matters Concerning Transactions with the Parent Company, Etc.
No applicable information.

—7―

Statement of Changes in Shareholders’ Equity for the 246th Term (April 1, 2020 to March 31, 2021)(Unit: million yen)

Shareholders' equity
Capital surplus
Capitalstock

Balance at beginning ofcurrent period
Changes of items during
periodReversal of reserve foradvanced depreciation of
noncurrent assets
Provision of generalreserve
Distribution of surplus
ProfitPurchase of treasury
stock
Disposal of treasury
stock
Reversal of land
revaluation surplus
Net changes of items
other than shareholders’equityTotal changes of items
during period
Balance at end of current
periodCapitalreserves

Other
capitalsurplusTotal
capitalsurplusLegalretainedearnings

36,83947,815

13

47,82820,154

0

162,700

14,643

197,498

―

―

―

―

―

△0

―

0

―

―

―

―

―

―

―

10,000△10,000

―

―
―

―
―

―
―

―
―

―
―

―
―

―
―

△2,98914,106△2,98914,106

―

―

―

―

―

―

―

―

―

―

―

△1

△1

―

―

―

―

―

―

―

―

―

―

―

―

1,158

1,158

―

―

―

―

―

―

―

―

―

―

―

△1

△1

―

△0

10,0002,276

12,27536,83947,815

11

47,827

20,1540172,700

16,919209,773

Shareholders' equity
Valuationdifference
Total
Treasuryonshareholders’stockavailableequity
for-salesecurities

Balance at beginning ofcurrent period
Changes of items during
periodReversal of reserve foradvanced depreciation of
noncurrent assets
Provision of generalreserve
Distribution of surplus
ProfitPurchase of treasury
stock
Disposal of treasury
stock
Reversal of land
revaluation surplus
Net changes of items
other than shareholders’equityTotal changes of items
during period
Balance at end of current
periodRetained earnings
Other retained earnings
Reserve foradvanced
Retaineddepreciation Generalearnings
ofreservebrought
noncurrent
forwardassetsTotal
retainedearnings

Valuation and translation adjustments
Deferred
gains orlosses onhedgesLand
revaluation
surplusTotal
valuationandtranslation
adjustments

StockacquisitionrightsTotal net
assets△1,553

280,61239,799△174

13,92553,550160

334,323

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―
―

△2,98914,106

―
―

―
―

―
―

―
―

―
―

△2,98914,106

△9

△9

―

―

―

―

―

△9

26

24

―

―

―

―

―

24

―

1,158

―

―

―

―

―

1,158

―

―

19,263432△1,15818,537

8

18,54516

12,29019,263432△1,15818,537

8

30,836△1,537

292,90259,063258

12,76672,088169

365,160—8―

246th Term

Notes to the Non-Consolidated Financial Statements

Stated amounts are rounded down to the nearest million yen.

Significant Accounting Policies
1.

Valuation standards and methodology for trading securities
Trading securities are stated at fair value. (Cost of trading securities sold is calculated by the moving
average method.)
2. Valuation standards and methodology for marketable securities(1) Marketable securities are evaluated by the amortized cost method (straight-line method) using themoving average method for held-to-maturity debt securities, the cost method using the moving
average method for shares of subsidiaries, and at fair value using the year-end market price(selling cost calculated by the moving average method) for available-for-sale securities, inprinciple; however, for those for which fair value is extremely difficult to determine, the cost
method is used by the moving average method.
All valuation differences on available-for-sale securities are directly posted into net assets.
(2) Securities included in money held in trust for trading purposes are stated at fair value, andsecurities included in money held in trust for other purposes are accounted for by the same method
as for available-for-sale securities in (1) above.
3. Valuation standards and methodology for derivative transactions
Derivative transactions are stated at fair value.
4. Depreciation method for noncurrent assets(1) Premises and equipment
Depreciation of premises and equipment is calculated using the declining balance method.
The main useful lives are as follows.
Buildings
15 to 50 years
Other
4 to 20 years(2) Intangible assets
Amortization of intangible assets is calculated using the straight-line method. Software used inhouse is amortized based on the useful service life (5 years).
5. Standards for converting foreign currency-denominated assets and liabilities into Japanese yen
Foreign currency-denominated assets and liabilities are converted into yen based on the exchange rate
prevailing at the fiscal year end.
6. Standards for the booking of provisions(1) Reserve for possible loan losses
Reserve for possible loan losses is recorded as follows in accordance with the amortization andreserve standards set in advance.
Of the receivables that fall under normal loans and loans to borrowers requiring caution asprovided in the “Practical Guidelines for Self-Assessment of Assets of Banks and Other Financial
Institutions and Audit of Depreciation of and Reserve for Possible Loan Losses” (JapaneseInstitute of Certified Public Accountants Association [JICPA] Special Committee on Audit ofBanks and Other Financial Institutions Report No. 4 dated October 8, 2020, “Bank Audit Special
Committee Report No. 4”), those receivables to be closely monitored as specified in Bank Audit
Special Committee Report No. 4 are recorded with the projected future loss for the following three
years, and other receivables are recorded with the projected future loss for the following one year.
The projected future losses are calculated based on the loss ratios, which are based on the averageof actual past loss ratios for the past three years or one year, respectively. For loans such as
possible bankruptcy, the estimated amount of collateral that can be disposed of and the estimatedamount that can be recovered by guarantee are deducted from the loan amount, and the remaining
amount that is deemed necessary is recorded. For loans to borrowers in virtual bankruptcy or legal
bankruptcy, the balance is recorded after deducting the estimated amount of collateral that can bedisposed of and the estimated amount that can be recovered by guarantee from the loan amount. In
addition, for loans to potentially bankrupt borrowers or borrowers requiring caution, the reserve isdetermined as the difference between the carrying value of the loan and the present value of future
cash flows, which are discounted using the contractual interest rate in the case that future cash
flows of the principal and interest can be reasonably estimated (i.e. cash flow estimation method).
All loans are assessed by the operation-related department based on the standards for selfassessment of assets. The asset assessment management department, which is independent of therelevant operation-related department, verifies the assessment results and the internal audit
department conducts the audit.

—9―(2) Provision for bonuses
To prepare for the payment of employee bonuses, a provision for bonuses is recorded in theamount attributable to the current fiscal year out of the estimated amount of bonuses to be paid to
employees.
(3) Provision for retirement benefits
To prepare for employee retirement benefits, a provision for retirement benefits is recorded as
required based on projected benefit obligations and plan assets at the end of the fiscal year. In
addition, when calculating benefit obligations, the method of assigning the projected benefit
amount to the period up to the end of the current fiscal year is based on the benefit calculation
formula standard. Past service costs and actuarial gains and losses are reported as expenses asfollows.
Past service costs: Processed by the straight-line method based on a certain number of years (3years) within the average remaining working period of the employee at thetime the costs are incurred
Actuarial gains and losses: The amount prorated by the straight-line method based on a certain
number of years (10 years) within the average remaining working
period of employees at the time of occurrence in each fiscal year,
expensed from the fiscal year following the occurrence of each
The accounting method for unrecognized actuarial gains and losses related to retirement benefits
and unrecognized past service expenses is different from the accounting method for consolidated
financial statements.
(Additional Information)
As of October 1, 2020, the Bank revised the defined benefit corporate pension plan, including a
reduction of the interest rate. Notice of changes to the rules and regulations accompanying therevision was made on July 10, 2020.
“Accounting Procedures for Shifting between Different Retirement Benefit Programs”(Corporate Accounting Standard Implementation Guidance No. 1 dated December 16, 2016) and“Practical Treatment of Accounting Procedures for Shifting between Different Retirement Benefit
Programs” (Practical Issues Task Force No. 2 dated February 7, 2007) have been applied toaccounting treatment due to the revision.
As a result, past service costs (reduction of retirement benefit obligations) of ¥4,408 million
have been incurred, and reported as expenses (reduction of expenses) since July 2020.
(4) Provision for losses from reimbursement of inactive accounts
Provision for losses from reimbursement of inactive accounts is based on the projected amount of
future withdrawal loss based on historical reimbursement experience, in order to derecognize as
liabilities and prepare for claims of withdrawal from depositors of deposits that have recorded
profits.
(5) Provision for contingent loss
A provision for contingent losses not covered by other provisions is provided in an amountdeemed necessary based on estimated losses in the future.
7. Hedge accounting method
Interest rate risk hedging
The deferral method of hedge accounting is applied to hedging of interest rate risk associated withfinancial assets and liabilities, in accordance with “Treatment for Accounting and Auditing ofApplication of Accounting Standard for Financial Instruments in Banking Industry” (JICPA Industry
Committee Practical Guidelines No. 24 dated October 8, 2020).
In the assessment of hedge effectiveness, for hedging that offsets market fluctuations, hedged items
such as securities and hedging instruments such as interest rate swap transactions are grouped atregular (remaining) periods and evaluated.
8. Accounting treatment for consumption tax and the likeAccounting for consumption tax and local consumption tax (“Consumption Tax, Etc.”) is based on
the tax-excluded method. However, non-deductible Consumption Tax, Etc. on noncurrent assets is
included in expenses for the current fiscal year.

The Change of Indication Methods
Accounting Standard for Disclosure of Accounting Estimates (Corporate Accounting Standard No.
31 dated March 31, 2020) has been applied since the current fiscal year, and notes to Significant
Accounting Estimates are described in the Notes to the Non-Consolidated Financial Statements.

— 10 ―

Significant Accounting Estimates
1.

Reserve for possible loan losses(1) Amount recorded in financial statements for the current fiscal year
Reserve for possible loan losses ¥23,496 million(2) Information to help understand the content of significant accounting estimates for the identified
item① Calculation method
The method for calculating the reserve for possible loan losses is described in “Significant
Accounting Policies 6. Standards for the booking of provisions (1) Reserve for possible loan
losses.”② Key assumptions
Please refer to “Significant Accounting Estimates” in the consolidated financial statements.
③ Impact on financial statements for the next fiscal year
Please refer to “Significant Accounting Estimates” in the consolidated financial statements.

Notes(Balance Sheet)
1. Total amount of shares and investment of affiliated companies¥16,311 million
2. Securities loaned under unsecured consumer loan agreements (bond loan transactions) totaling¥58,328 million are included in government bonds.
3. Loans to borrowers in bankruptcy amounted to ¥2,446 million and past due loans amounted to¥63,898 million.
“Loans to borrowers in bankruptcy” are loans that did not accrue interest because substantial doubt isdeemed to exist as to the collectability of either the principal or interest due to the loan being past due
for a considerable period of time or for other reasons (excluding the amount amortized for bad debt;“Nonaccrual Loans”) and for which the reasons listed in Article 96, Paragraph 1, Subparagraphs 3 (a)to (e) of the Enforcement Ordinance of the Corporation Tax Act (Cabinet Order No. 97 of 1965) or
the reasons specified in Subparagraph 4 of the same Paragraph have occurred. “Past due loans” areNonaccrual Loans other than loans to borrowers in bankruptcy and loans of which interest payments
are deferred in order to assist the financial recovery of a debtor in financial difficulty.
4. Accruing loans past due three months or more were ¥51 million.
“Accruing loans past due three months or more” are loans for which payment of principal or interest
is delayed for three months or more from the day following the contracted payment dates. Loansclassified as loans to borrowers in bankruptcy and past due loans are excluded from accruing loans
past due three months or more.
5. Restructured loans amounted to ¥2,668 million.
“Restructured loans” are defined as loans in which financial support is provided to a borrower such as
reduction of interest rates, deferral of interest payments, extension of maturity dates, debt waiver, orother arrangement favorable to the borrower. Loans classified as loans to borrowers in bankruptcy,
past due loans, and accruing loans past due three months or more are excluded from restructuredloans.
6. The total amount of loans to borrowers in bankruptcy, loans past due, accruing loans past due threemonths or more, and restructured loans was ¥69,064 million.
The loan amounts listed from 3. to 6. above are the amounts before deduction of reserve for possible
loan losses.
7. Bills discounted are accounted for as financial transactions in accordance with “Treatment for
Accounting and Auditing of Application of Accounting Standard for Financial Instruments in
Banking Industry” (JICPA Industry Committee Practical Guidelines No. 24 dated October 8, 2020).
Commercial bills and purchased foreign exchanges received in this way provide the right to bedisposed of by selling or (re) pledging without restriction, and have a face value of ¥12,267 million.

— 11 ―

8.

Assets pledged as collateral are as follows.
Assets pledged as collateral
Securities¥659,216 million
Other assets¥56 million
Relevant liabilities to the pledged assets
Deposits¥110,381 million
Payables under repurchase agreements¥126,700 million
Payables under securities lending transactions¥29,671 million
Borrowed money¥445,092 million
In addition to the above, other assets include guarantee deposits of ¥1,509 million and central
counterparty initial margins of ¥51,849 million.
9. Overdraft contracts and commitment line contracts are agreements to make loans to customers when
applying for borrowing up to a prescribed amount, as long as there is no violation of any condition in
the contracts. The unused open commitments relating to these contracts was ¥1,327,212 million(including unused open commitments of ¥559,449 million relating to multi-purpose accounttransactions.) Of this total, the amount of unused commitments whose original contract terms were
within one year or unconditionally cancelable at any time was ¥1,292,547 million.
Since many of these commitments expire without being drawn upon, the total amount of unused
commitments does not necessarily affect the future cash flow of the Bank. Many of thesecommitments have clauses enabling the Bank to reject the loans to customers or reduce the contract
amounts of commitment in the event that the financial situation changes, there is a need to secureclaims, or other events occur. In addition, if necessary, customers may be requested to pledge
collateral such as premises and securities at the execution of the contracts. After execution, customers’
financial positions are periodically evaluated based upon internal policy, and necessary measures aretaken to manage the credit exposures, such as revising the terms of contracts or securing the claims.
10. Revaluation of land owned for business use was conducted in accordance with the Act on
Revaluation of Land (Act No. 34 of March 31, 1998). The tax equivalent to this revaluationdifference is stated in liabilities as “deferred tax liability related to revaluation,” and the amount after
deducting this is stated in net assets as “land revaluation surplus.”
Date of revaluation
March 31, 1998
Method of revaluation stipulated in Article 3, Paragraph 3 of the Act
Calculated by making
reasonable adjustments such as corrections forwidth and depth, revision due to timing of theassessment, and irregular shape correction to
the land price (road price) which is the basis
for calculating property tax amounts stipulated
in Article 2, Subparagraph 4 of the
Enforcement Ordinance of the Act on
Revaluation of Land (Cabinet Order No. 119 ofMarch 31, 1998).
Difference between the total fair value of the land for business use revaluated as stipulated in
Article 10 of the Act at the end of the current fiscal year and the total carrying value after
revaluation ¥11,362 million
11. Accumulated depreciation of premises and equipment ¥57,716 million
12. Reduced book value of premises and equipment¥989 million
13. The amount of the Bank’s guarantee obligation for those corporate bonds listed under securities thatare through private placement of securities (as defined in Article 2, Paragraph 3 of the Financial
Instruments and Exchange Act) is ¥58,790 million.
14. Total monetary debt to directors and Audit & Supervisory Board Members through transactions withdirectors and Audit & Supervisory Board Members¥192 million
15. Total of monetary claims to affiliated companies¥33,793 million
16. Total of monetary debts to affiliated companies¥37,578 million— 12 ―

(Statement of Income)
1. Income from transactions with affiliated companies
Total income related to fund management transactions¥460 million
Total income related to fees and commissions, etc.
¥629 million
Total income related to other operations and other ordinary transactions ¥97 million
Expenses from transactions with affiliated companies
Total expenses due to financing transactions¥0 million
Total expenses related to fees and commissions, etc. ¥854 million
Total expenses related to other operations and other ordinary transactions ¥979 million
2. Major impairment losses are as follows.
Location
Use
Type
AmountLand and
Gifu City
Welfare facilities¥1,511 million
buildings
Gifu City
WarehouseLand¥300 million
The above items have been reduced to the amount deemed recoverable (estimated transfer value)
because the transfer was decided in the current fiscal year in view of the current situation in which
the frequency of use is decreasing.
3. Matters concerning transactions with related parties are as follows.
Subsidiaries of the Bank
Ownership
BalanceStated capital Nature ofTransacti
Relationship
Name of Locat
ratio of
Nature ofat endTypeor capitalbusiness oron
Itemwith related
subsidiaryionvoting rights,
transactionofcontributions occupation
amountparty
etc.
periodmillion yen

JurokuSubsid Credit
iary
GuaranteeCo., Ltd.

Gifu
City

%

Credit58 guarantee
services

Guarantee of
Direct49.83
Debt
debt forIndirect16.34
guarantee
various loans

million yen

1,570,553

million yen

─(Note) Juroku Credit Guarantee Co., Ltd. guarantees various loans of the Bank, but transaction
conditions are determined in the same way as conditions for general transaction taking the credit
risk of the loan user for each loan product into consideration.
(Statement of Changes in Shareholders’ Equity, etc.)
1. Matters concerning the class and the number of shares of treasury stock(Unit: thousand shares)
Number of shares
Increase in
Decrease in
Number of sharesat the beginning number of shares number of sharesat the end of theSummaryof the current
during the current during the current
current fiscal year
fiscal year
fiscal year
fiscal year
Treasury stock
Common stock
555
4
9
551
Total
555
4
9
551
(Notes) 1.
The increase of 4,000 common stocks in the treasury stock category represents thepurchase of shares less than one unit.
2. The decrease of 9,000 common stocks in the treasury stock category represents the transfer of
9,000 shares by exercising stock option rights and the disposal of less than a thousand sharesof less than one unit in response to a demand to buy additional shares.
(Securities)
In addition to government bonds, municipal bonds, corporate bonds, shares, and other securities listed on
the balance sheet, trading securities are also included.
1. Trading securities (as of March 31, 2021)
Valuation difference included in profit andloss for the current fiscal year
(million yen)
Trading securities△5— 13 ―(Notes 1, 2)─2.

Held-to-maturity bonds (March 31, 2021)
Type

Balance sheet amount(million yen)

Fair value(million yen)

Difference(million yen)

Government
―
―
―
bonds
Municipal―――
Fair value exceeds balance sheet bonds
Corporate
amount41,12941,433
304
bonds
Other
―
―
―
Subtotal
41,12941,433
304
Government
―
―
―
bonds
Municipal―――
Fair value does not exceed balance bonds
Corporate
sheet amount
17,27917,076
△202
bonds
Other
―
―
―
Subtotal
17,27917,076△202
Total
58,40858,510101
3. Shares of subsidiaries and affiliated corporations (as of March 31, 2021)
Balance sheet amount
Fair value
Difference(million yen)(million yen)(million yen)
Shares in subsidiaries―――
Shares of affiliated―――corporations
Total
―
―
―
(Note) Shares of subsidiaries and affiliated corporations for which fair value is deemed extremely
difficult to determine
Balance sheet amount(million yen)
Shares and equity in subsidiaries
16,306
Shares of affiliated corporations―
Total
16,306
These items have no market price and their fair value is deemed extremely difficult todetermine.

— 14 ―

4.

Available-for-sale securities (as of March 31, 2021)
Balance sheet amount
Acquisition cost
DifferenceType(million yen)(million yen)(million yen)
Shares132,699
44,68288,017
Bonds
448,180445,383
2,796
Government
52,85452,519335
bonds
Balance sheet amount exceeds
Municipal
250,989
249,934
1,055
acquisition costbonds
Corporate
144,335
142,930
1,405
bonds
Other
136,362
131,491
4,871
Subtotal
717,242
621,557
95,684
Shares7,365
8,464△1,099Bonds
523,026
526,271△3,245Government
205,219
207,517△2,298bonds
Balance sheet amount does not
Municipal
229,463
230,099△635
exceed acquisition costbonds
Corporate
88,34388,654
△311
bonds
Other
227,022234,675△7,652
Subtotal
757,414
769,411△11,997
Total
1,474,657
1,390,969
83,687(Note) Available-for-sale securities for which fair value is deemed extremely difficult to determine
Balance sheet amount(million yen)
Shares5,039
Other
17,742
Total
22,782
These items are not included in available-for-sale securities in the above table because they
have no market price and their fair value is deemed extremely difficult to determine.
5. Available-for-sale securities sold during the current fiscal year (from April 1, 2020 to March 31,
2021)
Sales amount
Total gain on sale
Total loss on sale(million yen)(million yen)(million yen)
Shares22,878
4,960
874
Bonds
12,53032
102
Government bonds
9,316
18
102
Municipal bonds―――
Corporate bonds
3,214
14
―
Other
224,411
4,822
2,397
Total
259,8209,816
3,374
6. Securities for which the purpose of holding has changed
During the current fiscal year, held-to-maturity securities amounting to ¥252 million were reclassified
as available-for-sale securities due to a significant decline in the issuer’s credit worthiness. The effectof these reclassifications on the financial statements for the current fiscal year was immaterial.

— 15 ―

7.

Impairment of securities
Securities other than trading securities (excluding those securities whose fair value is extremely
difficult to determine) whose fair value significantly declined below the acquisition cost and isconsidered not likely to recover to the level of the acquisition cost are recorded on the balance sheet
at their respective fair value, and the valuation difference is treated as an impairment loss(“Impairment Recognition”) for the current fiscal year.
The amount of Impairment Recognition for the current fiscal year was ¥214 million in corporate
bonds.
The fair value is deemed to have significantly declined if the year-end fair value declined by 30% ormore from the acquisition cost for securities issued by bankrupt borrowers, virtually bankrupt
borrowers, potentially bankrupt borrowers, and borrowers who are likely to become bankrupt or who
require caution, and if the fair value declined by 50% or more from the acquisition cost for securities
issued by normal borrowers.
“Bankrupt borrowers” are issuers for which business failure has legally and formally occurred, suchas bankruptcy, special liquidation, or suspension of transactions at a clearing house; “virtuallybankrupt borrowers” are issuers facing substantial bankruptcy; “potentially bankrupt borrowers” areissuers deemed to have a high possibility of going bankrupt in the future; and “borrowers requiringcaution” are issuers for which care must be taken in future management. “Normal borrowers” areissuers other than the above-mentioned bankrupt borrowers, virtually bankrupt borrowers, potentiallybankrupt borrowers, and borrowers requiring caution.

(Money Held in Trust)
1. Money held in trust for trading purposes (as of March 31, 2021)
Balance sheet amount(million yen)

Valuation difference included in profit andloss for the current fiscal year
(million yen)

Money held in trust for trading
6,000―
purposes
2. Money held in trust to be held to maturity (as of March 31, 2021)
No applicable information.
3. Money held in trust - other (excluding trading purpose and held-to-maturity) (as of March 31, 2021)
BalanceAcquisition
sheet
Difference
Balance sheet amount
Balance sheet amount doescost
amount(millionexceeds acquisition cost
not exceed acquisition cost
(million(millionyen)(million yen)(million yen)
yen)
yen)
Other money held in
1,011
1,000
11
11
―
trust
(Note) “Balance sheet amount exceeds acquisition cost” and “Balance sheet amount does not exceed
acquisition cost” represent the breakdown of “Difference.”(Tax Effect Accounting)
The main causes for the deferred tax assets and deferred tax liabilities are as follows.
Deferred tax assets
Reserve for possible loan losses¥ 5,739 million
Securities¥ 2,391 million
Provision for retirement benefits¥1,818 million
Depreciation expense¥1,307 million
Other¥1,731 million
Deferred tax assets subtotal¥12,988 million
Valuation allowance△¥3,921 million
Deferred tax assets total¥9,066 million
Deferred tax liabilities
Valuation difference on available-for-sale securities△¥24,791 million
Gain on establishment of employee retirement benefit trust△¥954 million
Other△¥215 million
Deferred tax liabilities total△¥25,961 million
Net deferred tax liabilities△¥16,895 million— 16 ―

(Per Share Information)
Net asset value per share
Net income per share
Diluted net income per share¥9,766.19¥377.45¥376.80(Business Combinations)
Omitted because it is the same as the description in the Notes on Business Combinations in the
consolidated financial statements.
(Significant Subsequent Events)
Omitted because it is the same as the description in the Notes on Significant Subsequent Events in the
consolidated financial statements.

— 17 ―

Consolidated Statement of Changes in Shareholders’ Equity for the 246th Term (April 1, 2020 to March 31, 2021)(Unit: million yen)
Shareholders' equity
Capital surplus

Retained earnings

Treasury stock

Total shareholders’equity36,83951,435

211,678△1,553298,399

―

1,962

―

―

1,962

―

―

△2,989―△2,989――14,722―

14,722

―

―

―

△9

△9

―

△1

―

26

24

―

―

1,158

―

1,158

―

―

―

―

―

―

1,960

12,891

16

14,86836,83953,395

224,570△1,537313,268

Capital stock

Balance at beginning ofcurrent period
Changes of items during
periodChange in equity due toacquisition of shares of
consolidated subsidiaries
Distribution of surplus
Net income attributableto owners of parent
Purchase of treasury
stock
Disposal of treasury
stock
Reversal of land
revaluation surplus
Net changes of items
other than shareholders’equityTotal changes of items
during period
Balance at end of current
periodAccumulated other comprehensive income

Balance at beginning ofcurrent period
Changes of items during
periodChange in equity due toacquisition of shares of
consolidated subsidiaries
Distribution of surplus
Net income attributableto owners of parent
Purchase of treasury
stock
Disposal of treasury
stock
Reversal of land
revaluation surplus
Net changes of items
other than shareholders’equityTotal changes of items
during period
Balance at end of current
periodValuationdifferenceonavailablefor-salesecurities

Deferred
gains orlosses onhedgesLand
revaluation
surplus39,918△174

13,925△1,997

―

―

―

―

―

―

―

―

Accumulated
Total
adjustment
accumulated
for
other
retirement comprehensive
benefits
incomeStockacquisitionrights

Noncontrollinginterests

Total net
assets51,671

160

16,171

366,403

―

―

―

―

1,962

―

―

―

―

―

△2,989

―

―

―

―

―

14,722

―

―

―

―

―

―

△9

―

―

―

―

―

―

―

24

―

―

―

―

―

―

―

1,158

19,372432△1,158

5,990

24,6378△2,90821,737

19,372432△1,158

5,990

24,6378△2,90836,60559,290258

12,766

3,993

76,308169

13,263403,009— 18 ―

246th Term

Notes to the Consolidated Financial Statements

Stated amounts are rounded down to the nearest million yen.
The definitions of subsidiaries and affiliated corporations are based on Article 2, Paragraph 8 of the
Banking Act and Article 4-2 of the Order for Enforcement of the Banking Act.

Policy for Preparing the Consolidated Financial Statements
1.

Matters concerning the scope of consolidation(1) Consolidated subsidiaries
7 companies
Juroku Business Service Co., Ltd.
Juroku Research Institute Co., Ltd.
Juroku Tokai Tokyo Securities Co., Ltd.
Juroku Card Co., Ltd.
Juroku Lease Co., Ltd.
Juroku Computer Service Co., Ltd.
Juroku Credit Guarantee Co., Ltd.
(2) Non-consolidated subsidiaries
8 companies
Names of major companies
Juroku Frontier No. 3 Investment Limited Partnership
Non-consolidated subsidiaries are excluded from the scope of consolidation since by reason of theimmateriality of their assets, ordinary income, net income (amount commensurate with equity),
retained earnings (amount commensurate with equity) and accumulated other comprehensive
income (amount commensurate with equity), etc., such exclusion does not affect the reasonableinterpretation of the financial conditions and operating results of the corporate group.
2. Matters concerning the application of the equity method(1) Non-consolidated subsidiaries accounted for using the equity method
0 companies(2) Affiliated corporations accounted for using the equity method
0 companies(3) Non-consolidated subsidiaries not accounted for using the equity method
8 companies
Names of major companies
Juroku Frontier No. 3 Investment Limited Partnership
Non-consolidated subsidiaries not accounted for using the equity method are excluded from thescope of the equity method since by reason of the immateriality of their net income (amountcommensurate with equity), retained earnings (amount commensurate with equity) andaccumulated other comprehensive income (amount commensurate with equity), etc., suchexclusion does not have a significant effect on consolidated financial statements.
(4) Affiliated corporations not accounted for using the equity method
0 companies
3. Matters concerning fiscal year of consolidated subsidiaries
The year-end date of all consolidated subsidiaries is the end of March, which is the same as theconsolidated year-end date.
4. Matters concerning amortization of goodwill
Goodwill is amortized on a straight-line basis over a reasonable number of years, not exceeding 20
years, on a case-by-case basis.
5. Matters concerning accounting policy(1) Valuation standards and methodology for trading securities
Trading securities are stated at fair value. (Cost of trading securities sold is calculated by themoving average method.)(2) Valuation standards and methodology for marketable securities① Marketable securities are evaluated by the amortized cost method (straight-line method) using
the moving average method for held-to-maturity debt securities and at fair value using theconsolidated year-end market price (selling cost calculated by the moving average method) foravailable-for-sale securities, in principle; however, for those for which fair value is extremely
difficult to determine, the cost method is used by the moving average method.
All valuation differences on available-for-sale securities are directly posted into net assets.

— 19 ―

② Securities included in money held in trust for trading purposes are stated at fair value, andsecurities included in money held in trust for other purposes are accounted for by the same
method as available-for-sale securities in ① above.
(3) Valuation standards and methodology for derivative transactions
Derivative transactions are stated at fair value.
(4) Depreciation method for noncurrent assets① Premises and equipment
Depreciation of premises and equipment is calculated mainly using the declining balancemethod.
The main useful lives are as follows.
Buildings
15 to 50 years
Other
4 to 20 years② Intangible assets
Amortization of intangible assets is calculated using the straight-line method. Software used inhouse is amortized based on the useful service life (5 years) specified by the Bank and its
consolidated subsidiaries.
(5) Standards for the booking of reserve for possible loan losses
The Bank and its consolidated subsidiaries record reserves for possible loan losses as follows inaccordance with the amortization and reserve standards set in advance.
Of the receivables that fall under normal loans and loans to borrowers requiring caution asprovided in the “Practical Guidelines for Self-Assessment of Assets of Banks and Other Financial
Institutions and Audit of Depreciation of and Reserve for Possible Loan Losses” (JapaneseInstitute of Certified Public Accountants Association [JICPA] Special Committee on Audit ofBanks and Other Financial Institutions Report No. 4 dated October 8, 2020, “Bank Audit Special
Committee Report No. 4”), those receivables that require close monitoring as specified in Bank
Audit Special Committee Report No. 4 are recorded with the projected future loss for thefollowing three years, and other receivables are recorded with the projected future loss for thefollowing one year. The projected future losses are calculated by home mortgages and loans otherthan home mortgages based on the loss ratios, which are based on the average of actual past loss
ratios for the past three years or one year, respectively. For loans such as possible bankruptcy, theestimated amount of collateral that can be disposed of and the estimated amount that can berecovered by guarantee are deducted from the loan amount, and the remaining amount that isdeemed necessary is recorded. For loans to borrowers in virtual bankruptcy or legal bankruptcy,
the balance is recorded after deducting the estimated amount of collateral that can be disposed ofand the estimated amount that can be recovered by guarantee from the loan amount.
In addition, for loans to potentially bankrupt borrowers or borrowers requiring caution, the reserve
is determined as the difference between the carrying value of the loan and the present value of
future cash flows, which are discounted using the contractual interest rate (the cash flow
estimation method) in the case that future cash flows of the principal and interest can bereasonably estimated (“Loans to Which the Cash Flow Estimation Method is Applied”).
All loans are assessed by the operation-related department based on the standards for selfassessment of assets. The asset assessment management department, which is independent of therelevant operation-related department, verifies the assessment results and the internal audit
department conducts the audit.
(6) Standards for the booking of provision for bonuses
To prepare for the payment of employee bonuses, a provisions for bonuses is recorded in theamount attributable to the current consolidated fiscal year out of the estimated amount of bonuses
to be paid to employees.
(7) Standards for the booking of provision for officers’ bonuses
To prepare for the payment of bonuses for officers of consolidated subsidiaries, a provision forbonuses is recorded in the amount attributable to the current consolidated fiscal year out of theestimated amount of bonuses to be paid to officers.
(8) Standards for booking reserve for retirement benefits for officers
To prepare for the payment of retirement benefits for officers of consolidated subsidiaries, areserve for retirement benefits for officers of consolidated subsidiaries is recorded in the amount of
payment required at the end of the consolidated fiscal year based on internal regulations.
(9) Standards for booking provision for losses from reimbursement of inactive accounts
Provision for losses from reimbursement of inactive accounts is based on the projected amount of
future withdrawal loss based on historical reimbursement experience, in order to derecognize as
liabilities and prepare for claims of withdrawal from depositors of deposits that have recorded
profits.

— 20 ―

(10) Standards for booking provision for contingent loss
A provision for contingent losses not covered by other provisions is provided in an amountdeemed necessary based on estimated losses in the future.
(11) Standard for booking provision required under the Special Act
The provision required under the Special Act is a financial instruments transaction liability reservefor consolidated subsidiaries engaged in financial instruments business, and is provided to prepare
for losses arising from operational incidents incurred in relation to trading and other securities
transactions. The amount of the provision is calculated pursuant to the provisions of Article 46-5of the Financial Instruments and Exchange Act and Article 175 of the Cabinet Office Order on
Financial Instruments Business.
(12) Accounting method for retirement benefits
When calculating benefit obligations, the method of assigning the projected benefit amount to theperiod up to the end of the current consolidated fiscal year is based on the benefit calculation
formula standard. Past service costs and actuarial gains and losses are reported as expenses asfollows.
Past service costs: Processed by the straight-line method based on a certain number of years(3 years) within the average remaining working period of the employee atthe time the costs are incurred
Actuarial gains and losses: The amount prorated by the straight-line method based on a certain
number of years (10 years) within the average remaining working
period of employees at the time of occurrence in each consolidated
fiscal year is expensed from the consolidated fiscal year following
the occurrence of each.
Consolidated subsidiaries apply the simplified method in which the amount of benefits payable
assuming the voluntary retirement of employees at fiscal year-end is used as retirement benefit
obligations in the calculation of retirement benefit liabilities and retirement benefit expenses.
(Additional Information)
As of October 1, 2020, the Bank revised the defined benefit corporate pension plan, including a
reduction of the interest rate. Notice of changes to the rules and regulations accompanying therevision was made on July 10, 2020.
“Accounting Procedures for Shifting between Different Retirement Benefit Programs”(Corporate Accounting Standard Implementation Guidance No. 1 dated December 16, 2016) and“Practical Treatment of Accounting Procedures for Shifting between Different Retirement Benefit
Programs” (Practical Issues Task Force No. 2 dated February 7, 2007) have been applied toaccounting treatment due to the revision.
As a result, past service costs (reduction of retirement benefit obligations) of ¥4,408 million
have been incurred, and reported as expenses (reduction of expenses) since July 2020.
(13) Standards for converting foreign currency-denominated assets and liabilities into Japanese yen
Foreign currency-denominated assets and liabilities of the Bank and its consolidated subsidiaries
are converted into yen based on the exchange rate prevailing at the fiscal year end.
(14) Significant hedge accounting method
Interest rate risk hedging
The deferral method of hedge accounting is applied to hedging of interest rate risk associated withfinancial assets and liabilities of the Bank, in accordance with “Treatment for Accounting and
Auditing of Application of Accounting Standard for Financial Instruments in Banking Industry”(JICPA Industry Committee Practical Guidelines No. 24 dated October 8, 2020).
In the assessment of hedge effectiveness, for hedging that offsets market fluctuations, hedged
items such as securities and hedging instruments such as interest rate swap transactions aregrouped at regular (remaining) periods and evaluated.
(15) Standards for booking operating income and costs
Standards for booking income from finance lease transactions
Sales and cost of sales are recognized when lease payments are received.
(16) Accounting treatment for Consumption Tax, Etc.
The Bank and its consolidated subsidiaries account for consumption tax and local consumption tax
by the tax-exclusion method.

— 21 ―

Unapplied Accounting Standards, Etc.
• “Accounting Standard for Revenue Recognition” (Corporate Accounting Standard No. 29 dated March
31, 2020)• “Implementation Guidance on Accounting Standard for Revenue Recognition” (Corporate AccountingStandard Implementation Guidance No. 30 dated March 31, 2020)(1) Overview
The accounting standard provides comprehensive principles for revenue recognition. Revenue isrecognized based on the following five steps.
Step 1: Identify the contract(s) with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the performance obligations under the contract.
Step 5: Recognize revenue when (or as) the performance obligation is satisfied.
(2) Application date
The standard and guidance will be applied from the beginning of the year ending March 31, 2022.
(3) Impact of adoption
The impact of adopting the above standard and guidance is currently being assessed.
• “Accounting Standard for Fair Value Measurement” (Corporate Accounting Standard No. 30 dated
July 4, 2019)• “Implementation Guidance on Accounting Standard for Fair Value Measurement” (Corporate
Accounting Standard Implementation Guidance No. 31 dated July 4, 2019)(1) Overview
In order to increase the international comparability of accounting standards, “Accounting Standard
for Fair Value Measurement” and “Implementation Guidance on Accounting Standard for Fair
Value Measurement” (the “Accounting Standard for Fair Value Measurement, Etc.”) weredeveloped, and guidance and other rules were established with regard to the method for fair value
measurement. The Accounting Standard for Fair Value Measurement, Etc. will be applicable forthe fair values of the following items• Financial instruments defined in “Accounting Standard for Financial Instruments”(2) Application date
The standard and guidance will be applied from the beginning of the year ending March 31, 2022.
(3) Impact of adoption
The impact of adopting the above standard and guidance is currently being assessed.

The Change of Indication Methods
Accounting Standard for Disclosure of Accounting Estimates (Corporate Accounting Standard No.
31 dated March 31, 2020) has been applied since the current consolidated fiscal year, and notes to
Significant Accounting Estimates are described in the Notes to the Consolidated Financial Statements.

Significant Accounting Estimates
1.

Reserve for possible loan losses(1) Amount recorded in consolidated financial statements for the current consolidated fiscal year
Reserve for possible loan losses ¥25,852 million(2) Information to help understand the content of significant accounting estimates for the identified
item① Calculation method
The method for calculating the reserve for possible loan losses is described in “Notes to the
Non-Consolidated Financial Statements 5. Matters concerning accounting policy (5) Standards
for the booking of reserve for possible loan losses.”— 22 ―

② Key assumptionsa) Informed assumptions based on available information are made for projecting earnings ofdebtors to be used in determining debtor classification and in estimating future cash flows ofprincipal and interest on loans, and of debtors who are formulating business improvement
plans.
In particular, business improvement plans are prepared based on future performance forecasts
such as future sales forecasts, cost reduction estimates, and future cash flow outlook. Theirreasonability and feasibility are judged based on the trends of the industry to which the debtor
belongs and the specific business improvement measures.
b) The economic impact of COVID-19 is expected to continue in the next consolidated fiscal
year, based on the current state of the pandemic. Although the degree of impact varies
depending on the debtor, determination of debtor classification and estimating future cash
flows of principal and interest on loans is based on the assumption that the credit risk of loans,etc., of the Bank and its consolidated subsidiaries will be affected within the scope of the
expectation that the impact will continue next year. That assumption has been changed fromthe assumption at the end of the previous consolidated fiscal year that there would be a
gradual return to normal from the pandemic toward the end of the current consolidated fiscal
year.
c) Except for Loans to Which the Cash Flow Estimation Method is applied, it is assumed thatthe loss for loans to normal borrowers as a whole will be the same as that for past loans tonormal borrowers, that the loss for loans to other borrowers requiring caution as a whole willbe the same as that for past loans to other borrowers requiring caution, and that the loss forloans to borrowers to be closely monitored as a whole will be the same as that for past loans
to borrowers to be closely monitored.
③ Impact on the consolidated financial statements for the next consolidated fiscal year
If there is a change in the assumptions used in initial estimates due to a change in the external
environment including the situation surrounding COVID-19 or in the internal circumstances ofthe debtor, reserves may increase or decrease due to changes in debtor classification, changes incash flow estimates, and actual bad debt losses that differ from initial expectations, which may
have a significant impact on the consolidated financial statements.

Notes(Consolidated Balance Sheet)
1. Total investment of affiliated companies¥662 million
2. Securities loaned under unsecured consumer loan agreements (bond loan transactions) are included in“Securities” under government bonds totaling ¥58,328 million.
3. Loans (including right to recourse, etc.; the same applies to 4. and 5. below) to borrowers inbankruptcy amounted to ¥3,071 million and past due loans amounted to ¥65,607 million.
“Loans to borrowers in bankruptcy” are loans that did not accrue interest because substantial doubt isdeemed to exist as to the collectability of either the principal or interest due to the loan being past due
for a considerable period of time or for other reasons (excluding the amount amortized for bad debt;“Nonaccrual Loans”) and for which the reasons listed in Article 96, Paragraph 1, Subparagraphs 3 (a)to (e) of the Enforcement Ordinance of the Corporation Tax Act (Cabinet Order No. 97 of 1965) or
the reasons specified in Subparagraph 4 of the same Paragraph have occurred. “Past due loans” areNonaccrual Loans other than loans to borrowers in bankruptcy and loans of which interest payments
are deferred in order to assist the financial recovery of a debtor in financial difficulty.
4. Accruing loans past due three months or more were ¥51 million.
“Accruing loans past due three months or more” are loans for which payment of principal or interest
is delayed for three months or more from the day following the contracted payment dates. Loansclassified as loans to borrowers in bankruptcy and past due loans are excluded from accruing loans
past due three months or more.
5. Restructured loans amounted to ¥2,668 million.
“Restructured loans” are defined as loans in which financial support is provided to a borrower such as
reduction of interest rates, deferral of interest payments, extension of maturity dates, debt waiver, orother arrangement favorable to the borrower. Loans classified as loans to borrowers in bankruptcy,
past due loans, and accruing loans past due three months or more are excluded from restructuredloans.
6. The total amount of loans to borrowers in bankruptcy, loans past due, accruing loans past due threemonths or more, and restructured loans was ¥71,398 million.
The loan amounts listed from 3. to 6. above are the amounts before deduction of reserve for possible
loan losses.

— 23 ―

7.

Bills discounted are accounted for as financial transactions in accordance with “Treatment for
Accounting and Auditing of Application of Accounting Standard for Financial Instruments in
Banking Industry” (JICPA Industry Committee Practical Guidelines No. 24 dated October 8, 2020).
Commercial bills and purchased foreign exchanges received in this way provide the right to bedisposed of by selling or (re) pledging without restriction, and have a face value of ¥12,267 million.
8. Assets pledged as collateral are as follows.
Assets pledged as collateral
Securities¥659,216 million
Other assets¥56 million
Relevant liabilities to the pledged assets
Deposits¥110,381 million
Payables under repurchase agreements¥126,700 million
Payables under securities lending transactions¥29,671 million
Borrowed money¥445,092 million
In addition to the above, other assets include initial margins of futures markets of ¥1,477 million,
cash collateral paid for financial instruments of ¥1,602 million, guarantee deposits of ¥2,070 million,
and central counterparty initial margins of ¥51,849 million.
9. Overdraft contracts and commitment line contracts are agreements to make loans to customers when
applying for borrowing up to a prescribed amount, as long as there is no violation of any condition in
the contracts. The unused open commitments relating to these contracts was ¥1,392,876 (including
unused open commitments of ¥559,449 million relating to multi-purpose account transactions.) Of
this total, the amount of unused commitments whose original contract terms were within one year or
unconditionally cancelable at any time was ¥1,358,211 million.
Since many of these commitments expire without being drawn upon, the total amount of unused
commitments does not necessarily affect the future cash flow of the Bank and its consolidated
subsidiaries. Many of these commitments have clauses enabling the Bank and its subsidiaries to reject
the loans to customers or reduce the contract amounts of commitment in the event that the financial
situation changes, there is a need to secure claims, or other events occur. In addition, if necessary,customers may be requested to pledge collateral such as premises and securities at the execution of
the contracts. After execution, customers’ financial positions are periodically evaluated based uponinternal policy, and necessary measures are taken to manage the credit exposures, such as revising theterms of contracts or securing the claims.
10. Revaluation of land owned for business use by the Bank was conducted in accordance with the Act
on Revaluation of Land (Act No. 34 of March 31, 1998). The tax equivalent to this revaluationdifference is stated in liabilities as “deferred tax liability related to revaluation,” and the amount after
deducting this is stated in net assets as “land revaluation surplus.”
Date of revaluation
March 31, 1998
Method of revaluation stipulated in Article 3, Paragraph 3 of the Act
Calculated by making
reasonable adjustments such as corrections forwidth and depth, revision due to timing of theassessment, and irregular shape correction to
the land price (road price) which is the basis forcalculating property tax amounts stipulated in
Article 2, Subparagraph 4 of the Enforcement
Ordinance of the Act on Revaluation of Land
(Cabinet Order No. 119 of March 31, 1998).
Difference between the total fair value of the land for business use revaluated as stipulated in
Article 10 of the Act at the end of the current consolidated fiscal year and the total carrying value
after revaluation¥11,362 million
11. Accumulated depreciation of premises and equipment¥62,369 million
12. Reduced book value of premises and equipment¥989 million
13. The amount of guarantee obligation for those corporate bonds listed under securities that are throughprivate placement of securities (as defined in Article 2, Paragraph 3 of the Financial Instruments andExchange Act) is ¥58,460 million.
14. Total monetary claims to directors and Audit & Supervisory Board Members through transactions
with directors and Audit & Supervisory Board Members of the Bank
¥1 million
15. Total monetary debt to directors and Audit & Supervisory Board Members through transactions withdirectors and Audit & Supervisory Board Members of the Bank
¥192 million— 24 ―

(Consolidated Statement of Income)1. Other ordinary income includes gain on sales of shares, etc., of ¥5,439 million.
2. Major impairment losses are as follows.
Location
Use
Type
AmountGifu City
Welfare facilities
Land and buildings¥1,511 million
Gifu City
WarehouseLand¥300 million
The above items have been reduced to the amount deemed recoverable (estimated transfer value)
because the transfer was decided in the current consolidated fiscal year in view of the current
situation in which the frequency of use is decreasing.
(Consolidated Statement of Changes in Shareholders’ Equity, etc.)
1. Matters concerning the class and the number of shares of issued shares and the class and the numberof shares of treasury stock(Unit: thousand shares)
Number of shares
Increase in
Decrease in
Number of sharesat the beginning number of shares number of shares at the end of theof the current
during the current during the current
current
Summary
consolidated
consolidated
consolidated
consolidated
fiscal year
fiscal year
fiscal year
fiscal year
Issued shares
Common stock
37,924――37,924
Total
37,924――37,924
Treasury stock
Common stock
555
4
9
551
(Notes 1, 2)
Total
555
4
9
551
(Notes) 1．The increase of 4,000 common stocks in the treasury stock category represents the purchase of shares lessthan one unit.
2．The decrease of 9,000 common stocks in the treasury stock category represents the transfer of
9,000 shares by exercising stock option rights and the disposal of less than a thousand sharesof less than one unit in response to a demand to buy additional shares.
2. Matters concerning stock acquisition rights and treasury stock acquisition rights
Number of shares underlying the stock acquisition rights
Class of
Balance at the
Breakdownsharesend of the
At theIncrease
DecreaseAt the end ofof the stock
underlying
current
beginning ofduring theduring theCategory
Summary
the current
acquisition
the stockconsolidated
the current
current
current
consolidated
rightsacquisition
fiscal year
consolidated consolidated consolidated
fiscal year
rights(million yen)fiscal year
fiscal year
fiscal year
Stock
The
acquisition
169
─Bank rights as
stock options
Total
169
─

— 25 ―

3.

Matters concerning dividends(1) Dividend payment amount during the current consolidated fiscal year
Total amount of
Dividend per(Approved)
Class of shares
Reference date
Effective datedividend
share
June 19, 2020
General meeting ofCommon stock¥1,681 million¥45.00March 31, 2020
June 22, 2020
shareholders
November 9, 2020
Board of directors
Common stock¥1,308 million¥35.00 September 30, 2020 December 10, 2020
meeting
Total¥2,989 million(2) Dividends whose reference date belongs to the current consolidated fiscal year and whose effective
date is after the last day of the current consolidated fiscal year
The following has been proposed as an agenda item at the ordinary general meeting ofshareholders to be held on June 18, 2021 regarding dividends on common stock.
Class of
Total amount of Source of Dividend per(Proposed)
Reference date
Effective datesharesdividend
dividends
share
June 18, 2021
CommonRetained¥2,055 million¥55.00March 31, 2021
June 21, 2021
General meeting ofstock
earnings
shareholders(Financial Instruments)
1. Matters concerning the status of financial instruments(1) Policy for financial instruments
The Group provides banking services and comprehensive financial services including a leasing
business. The banking business which serves as the core business of the Group provides various
products and services as a financial partner for the region, offering deposit and lending services,trading and investment of securities, derivatives transactions and other financial services.
The Group has aligned its operations with the local community and raises funds from deposits
from customers, which is stable and cost-effective. The Group also raises funds by borrowing.
As for loans and bills discounted in the money management system, the Group provides financing
for local companies based on their capital demands and for individuals mainly for home mortgages.
As its main resources are bank deposits from customers, the Group aims to ensure the soundnessof the assets through appropriate credit decisions and credit ratings based on actual conditions andmanaging the credit portfolio to prevent concentrations in specific customers or industries.
In marketable securities, considering its position of being engaged in surplus fund management
relating to lending services and its responsibility as a bank to provide settlement services, theGroup’s management is centered around public bonds such as government bonds which aresuperior in liquidity and security. To build up a portfolio that is less subject to rising interest rates,
the Group also invests in risk assets, such as stocks whose performance is expected to be lesscorrelated with bonds.
The Group executes derivative transactions to meet the various needs of its customers as well as tomeet its own needs, centering on fund management and financing transactions. In tradingtransactions, the Group avoids excessive risk by restricting the type of transactions and limiting
the volume of transactions. Also, the Group will not trade a particular investment if its fair value isvolatile compared to that of the underlying assets (i.e. high leverage-effect transaction).
(2) Nature and extent of risks arising from financial instruments
The loans and bills discounted are to general business enterprises, individuals, and local publicbodies, and there is a risk (credit risk) that the value of loaned money is reduced by financial
deterioration of the borrower and a risk (interest risk) of losses due to changes in interest rates. In
securities, the Group holds domestic bonds, foreign securities, stocks, investment trusts,
investment partnerships and so forth mainly for other purposes (pure investment purposes andpolicy investment purposes). Also, the Group holds certain domestic bonds for held-to-maturity
purposes. In trading securities, the Group holds domestic bonds for trading. These items haveinterest risk, risk of changes in prices, credit risk, and market liquidity risk. Market liquidity risk
represents the risk that market trades cannot be performed due to market turmoil and that theGroup may suffer losses due to being forced to trade at significantly less favorable pricing thanusual.

— 26 ―

Deposits and borrowed money hold interest risk and cash flow risk in liquidity risk. Cash flow riskrefers to the risk that securing necessary financing becomes difficult or significantly unfavorable
financing conditions result in recording of loss due to a mismatch of periods between operations
and financing and unexpected outflows of money.
Derivative transactions related to interest are comprised of interest-rate swap agreements, cap
agreements, floor agreements, and interest futures. Derivative transactions related to currency arecomprised of exchange contracts, non-deliverable forwards (NDF), currency swap agreements,
and currency option contracts. Derivative transactions related to securities are comprised of bondfutures, options on bond futures, OTC bond options, stock index futures, options on stock index
futures, and individual security options.
The Group utilizes derivative transactions to meet customer needs and to control risk so thatinterest risk, risk of changes in prices, and foreign currency exchange risk on assets and liabilities
are not excessive. In trading transactions, the Group utilizes derivative transactions to earn a profit
and to accumulate know-how related to the transactions and understand market trends.
The derivative transactions the Group utilizes are exposed to interest risk, currency exchange risk,
the risk of change in prices, and credit risk. In utilizing derivative transactions, the Group performs
effective covering of transactions to meet customers’ needs, and in trading transactions, the Group
preliminarily establishes a risk limit to avoid exposing the Group to an excessive degree of market
risk. Transactions such as listed futures are exposed to limited credit risk and OTC transactions
such as interest swaps are assumed to have low risk since the counterparties are comprised ofhighly credible financial institutions and companies.
Certain derivatives utilized to mitigate risks from securities are recorded on the basis of hedge
accounting in accordance with “Practical Guidelines for Accounting for Financial Instruments”(JICPA Accounting Practice Committee Report No. 14; “Practical Guidelines”). The hedged items
and hedging instruments to which hedge accounting was applied in the current consolidated fiscal
year are as follows.
• Hedged items: Securities• Hedging instruments: Interest swaps
The effectiveness of hedging is evaluated by the method stipulated in the Practical Guidelines andthe like.
(3) Risk management for financial instruments① Integrated risk management
The Group has defined Integrated Risk Management Regulations to ensure the soundness ofmanagement, and has established an integrated risk management system.
The Group monitors various risks holistically including measurement by statistical methods andaims to control risks within the range of management vitality. Specifically, the Group allocatesrisk capital to credit risk, market risk, and operational risk based on Value at Risk (“VaR”)
calculations according to assumptions about the market fluctuation rate and its half year
business plan. In each operational division, the Group aims to control risk and obtain returns
within the range of risk capital. Integrated risk is managed by the Risk Management Divisionand is reported monthly to the Integrated Risk Management Council and semiannually to theboard of directors meetings. Necessary actions such as risk control are taken promptly.
② Credit risk management
The Group defines credit risk management rules such as the Credit Risk Management
Regulations to understand, manage, and take actions on credit risk appropriately.
In screening requests for loans, the Group clearly separates the credit department from theoperating department and performs strict examination and management under an industryspecific loan examination system. Also, the Group verifies the purpose of the loan, businessplans, and investment effects and fully examines the repayment resources and the certainty andvalidity of the plan.
For credit portfolio management, the Group aims to prevent concentrations in particularcustomers or industries and ensure profits commensurate with credit costs.
In addition, in order to improve credit risk, the Group seeks to implement management andbusiness restructuring support for customers experiencing difficult business conditions.
For credit risk management, the Group has defined a Credit Rating System to objectively
evaluate the degree of credit risk on an integrated scale. Credit rating is reviewed from time totime, at the end of the borrower’s fiscal year or when there are any changes in credit status.

— 27 ―

As for the level of credit risk and degree of concentration of credit granting, the Risk
Management Division manages credit risk, reports monthly to management at the Integrated
Risk Management Council, and discusses necessary actions.
③ Market risk management
The Group considers interest rate risk, risk of change in prices, and currency risk as the mainmarket risks, and in order to avoid a reduction in the value of assets held by the Group and a lossof credit by appropriately managing market risk, institutes Market Risk Management
Regulations that clarify the organizational structure and methods for identifying, assessing, andmonitoring market risk as well as methods for controlling and reducing market risk.
Under integrated risk management, the Group allocates risk capital to each business (deposit,
loan, policy investment stocks, and other securities) every six months and establishes a cap on
the investment amount, a maximum loss amount, and matters to be discussed (level of loss totrigger re-examination of approach). The department in charge handles market transactions
within these risk limits expeditiously and effectively. These risks are managed together by the
Risk Management Division and are reported monthly to the Integrated Risk Management
Council and semiannually to the board of directors meetings. Necessary actions are taken
promptly.
Regarding derivative transactions, the Group follows predetermined regulations and policies.
The market risk management department (middle office) and market administrative department(back office) manage and monitor the balance, fair value, profit and loss, and measurement ofrisk of the transactions and report to management regularly to ensure mutual supervision of risks.
Especially in trading transactions, the market risk management department (middle office)manages the positions, measurement of risk, and application of loss cut rules closely.
④ Liquidity risk management
As to liquidity risk, the Group has established Liquidity Risk Management Regulations withstable cash flows as the highest priority. Also, to be prepared for unforeseeable circumstances,
the Group has defined a Contingency Plan for Liquidity Risks and established a system thatenables a prompt and appropriate response.
(4) Supplementary explanation on matters related to fair values of financial instruments
Fair values of financial instruments are based on market prices or reasonable calculations in theabsence of market quotations. Since certain assumptions are used in the calculation of the values,
the values may differ if different assumptions are used.

— 28 ―

2.

Matters concerning the fair value of financial instruments
The amount recorded on the consolidated balance sheet as of March 31, 2021, the fair value, and thedifference between them are as follows. Unlisted stocks, etc., for which fair value is deemed
extremely difficult to determine are not included in the following table. (See Note 2.)(Unit: million yen)

(1) Cash and due from banks(2) Trading securities
Trading securities(3) Money held in trust(4) Securities
Held-to-maturity securities
Available-for-salesecurities(5) Loans and bills discounted
Reserve for possible loan losses (*1)

Balance sheet
amount947,015

Fair
value

Difference
947,015―290
12,311

290
12,311――

58,07858,178100

1,475,901

1,475,901―

4,481,149△24,554
4,456,595
6,950,193
6,072,473
28,100126,700
467,151
6,694,425

4,480,084
Assets total
6,973,782(1) Deposits
6,072,543(2) Negotiable certificates of deposit
28,100(3) Payables under repurchase agreements
126,700(4) Borrowed money
467,152
Liabilities total
6,694,496
Derivative transactions (*2)
Hedge accounting not applied(3,591)(3,591)Hedge accounting applied (*3)
368
368
Derivative transactions total(3,222)(3,222)(*1)
The general reserve for possible loan losses and the individual reserves for possible loan losses
corresponding to loans are deducted.
(*2)
Derivative transactions recorded in other assets and other liabilities are displayed collectively.
Assets and liabilities arisen from derivatives are offset against each other and stated in net, andnet liabilities are shown in parentheses.
(*3)
These are interest rate swaps designated as hedging instruments to offset fluctuations in themarket price of hedged securities, and deferral hedging is applied. “Treatment for Hedge
Accounting for Financial Instruments that Refer to LIBOR” (Practical Response Report No. 40
dated September 29, 2020) is applied to these hedging relationships.
(Note 1) Calculation method for fair values of financial instruments
Assets(1) Cash and due from banks
Because due from banks has no maturity and the fair value approximates carrying value, thecarrying value is used as the fair value.
(2) Trading securities
For securities such as bonds that are held for trading, the fair value is determined based on theprices quoted by the exchange or the financial institutions from which these securities arepurchased.

— 29 ―

23,48923,589
70
―
―
1
71
―
―
―

(3) Money held in trust
For securities managed as trust assets in a monetary trust, the fair value of equity securities isdetermined based on the prices quoted by the exchange and the fair value of bonds isdetermined based on the prices quoted by the exchange or the financial institutions from which
they are purchased.
Trusts for cash segregated as deposits for customers of consolidated subsidiaries engaged in
the financial instruments exchange business are based on the prices quoted by the financial
institutions from which they are purchased.
Information on money held in trust by classification is included in the notes on “Money Heldin Trust” below.
(4) Securities
The fair value of equity securities is determined based on the prices quoted by the exchange
and the fair value of bonds is determined based on the prices quoted by the exchange or thefinancial institutions from which they are purchased. The fair value of investment trusts isdetermined based on the publicly available price.
For privately placed guaranteed bonds held by the Bank, the fair value is calculated byestimating expected future cash flows, which are adjusted to reflect default risk of the issuer,and discounting at a risk free rate plus a certain management cost. However, the fair value ofprivately placed guaranteed bonds held by the Bank whose issuer is classified as legallybankrupt, virtually bankrupt, or potentially bankrupt is calculated based on the estimatedamount of collateral and guarantee.
Information on securities by classification is included in the notes on “Securities” below.
(5) Loans and bills discounted
For loans with variable interest rates, since the market interest rate in the short term is reflected,
the carrying value is used as the fair value because the fair value approximates the carrying
value as long as the credit status of the borrower has not changed significantly. Loans with
fixed interest rates are grouped based on type, internal rating, and period of the loan, and theirfair value is calculated by estimating expected future cash flows, which are adjusted to reflect
default risk of the borrower, and discounting at the risk free rate plus certain management costs.
However, certain consumer loans such as home mortgages are grouped based on type andperiod of the loan, and their fair value is calculated by discounting the total amount of principal
and interest at the expected rate for a similar loan. For consumer loans that mature in the shortterm (within one year), the carrying value is used as the fair value because fair value
approximates carrying value.
For loans to legally bankrupt borrowers, virtually bankrupt borrowers, and potentially bankrupt
borrowers, since the estimated uncollectable amount is calculated based on the present value of
estimated future cash flows or the estimated collection of cash from collateral and guarantee,
the fair value approximates the amount of receivables recorded on the consolidated balance
sheet on the consolidated year-end date minus the estimated uncollectable amount, so thisresult is used as fair value.
For loans that do not have repayment terms based on characteristics such as limiting loans to
the value of collateral assets, since the market value is assumed to approximate carrying value
based on the expected repayment period and interest rate conditions, the carrying value is usedas the market value.
Liabilities(1) Deposits and (2) Negotiable certificates of deposit
For demand deposits, the amount payable on demand as of the consolidated balance sheet date(i.e., the carrying amount) is considered to be the fair value. Time deposits are grouped byproduct and maturity lengths, and their fair value is calculated by discounting future cash flows
with the same interest rate as that of accepted new deposits. For deposits and negotiablecertificates of deposit that are short-term (within one year), the carrying value is used as thefair value because fair value approximates carrying value.
(3) Payables under repurchase agreements
The contract terms of payables under repurchase agreements and payables under securities
lending transactions are short (within one year), so the carrying value is used as the fair value
because fair value approximates carrying value.

— 30 ―

(4) Borrowed money
For borrowed money with variable interest rates, because market interest rates are reflected in
the short term and the credit status of the Bank and its consolidated subsidiaries has notchanged significantly since inception, fair value is considered to approximate the carrying
value, and so the carrying value is used as the fair value. For borrowed money with fixedinterest rates, the fair value is calculated by discounting the total amount of principal andinterest by an interest rate that takes into account the credit risk of the Bank and its
consolidated subsidiaries for each classification based on the type and duration of the borrowed
money. For consumer loans that mature in the short term (within one year), the carrying value
is used as the fair value because fair value approximates carrying value.
Derivative transactions
Derivative transactions are comprised of interest rate-related transactions (interest rate futures,interest rate options, interest rate swaps, etc.), currency-related transactions (exchange
contracts, currency options, currency swaps, etc.), and securities-related transactions (bondfutures, options on bond futures, etc.), and values are calculated based prices quoted by theexchange, discounted present values, option price calculation models, etc.
(Note 2) The amount recorded on the consolidated balance sheet of financial products whose fair value
is extremely difficult to determine is as follows, and is not included in “Assets (4) Securities”
in the information on fair values of financial instruments.
(Unit: million yen)
Category
Balance sheet amount
6,274①Unlisted equity securities (*1)(*2)
18,345②Investment limited partnerships and similar partnerships (*3)
Total
24,620(*1)
Fair value is not disclosed for unlisted equity stocks because fair value is deemed
extremely difficult to determine in the absence of market prices.
(*2)
In the current consolidated fiscal year, unlisted stocks were impaired by ¥2 million.
(*3)
Fair value is not disclosed for investment limited partnerships and similar partnerships
whose partnership assets are composed of unlisted stocks and other assets whose fairvalue is deemed extremely difficult to determine.
(Securities)“Trading securities” are included in addition to “Securities” on the consolidated balance sheet.
1. Trading securities (as of March 31, 2021)
Valuation difference included in profit andloss for the current consolidated fiscal year
(million yen)
Trading securities△5— 31 ―

2.

Held-to-maturity bonds (March 31, 2021)
Type

Balance sheet amount(million yen)

Fair value(million yen)

Difference(million yen)

Government
―
―
―
bonds
Municipal―――
Fair value exceeds consolidated bonds
Corporatebalance sheet amount
40,79941,102
303
bonds
Other
―
―
―
Subtotal
40,79941,102
303
Government
―
―
―
bonds
Municipal
―
―
―
bonds
Fair value does not exceed
consolidated balance sheet amount Corporate
17,27917,076
△202
bonds
Other
―
―
―
Subtotal
17,27917,076△202
Total
58,07858,178100
3. Available-for-sale securities (as of March 31, 2021)
Balance sheet amount
Acquisition cost
DifferenceType(million yen)(million yen)(million yen)
Shares133,943
45,021
88,922
Bonds
448,180445,383
2,796
Government
52,85452,519335
bonds
Consolidated balance sheet
Municipal
amount exceeds acquisition
250,989
249,934
1,055
bonds
cost
Corporate
144,335
142,930
1,405
bonds
Other
136,362
131,491
4,871
Subtotal
718,486
621,897
96,589
Shares7,365
8,464△1,099Bonds
523,026
526,271△3,245Government
205,219
207,517△2,298bonds
Consolidated balance sheet
Municipal
amount does not exceed
229,463
230,099△635
bonds
acquisition cost
Corporate
88,34388,654
△311
bonds
Other
227,022234,675△7,652
Subtotal
757,414
769,411△11,977
Total
1,475,901
1,391,308
84,592
4. Available-for-sale securities sold during the current consolidated fiscal year (from April 1, 2020 toMarch 31, 2021)
Sales amount
Total gain on sale
Total loss on sale(million yen)(million yen)(million yen)
Shares22,929
4,971
875
Bonds
12,53032
102
Government bonds
9,316
18
102
Municipal bonds―――
Corporate bonds
3,214
14
―
Other
224,411
4,822
2,397
Total
259,871
9,827
3,375

— 32 ―

5.

6.

Securities for which the purpose of holding has changed
During the current consolidated fiscal year, held-to-maturity securities amounting to ¥252 million
were reclassified as available-for-sale securities due to a significant decline in the issuer’s credit
worthiness. The effect of these reclassifications on the consolidated financial statements for thecurrent consolidated fiscal year was immaterial.
Impairment of securities
Securities other than trading securities (excluding those securities whose fair value is extremely
difficult to determine) whose fair value significantly declined below the acquisition cost and isconsidered not likely to recover to the level of the acquisition cost are recorded on the consolidatedbalance sheet at their respective fair value, and the valuation difference is treated as an impairment
loss (“Impairment Recognition”) for the current consolidated fiscal year.
The amount of Impairment Recognition for the current consolidated fiscal year was ¥214 million incorporate bonds.
The fair value is deemed to have significantly declined if the consolidated year-end fair value
declined by 30% or more from the acquisition cost for securities issued by bankrupt borrowers,
virtually bankrupt borrowers, potentially bankrupt borrowers, and borrowers who are likely to
become bankrupt or who require caution, and if the fair value declined by 50% or more from theacquisition cost for securities issued by normal borrowers.
“Bankrupt borrowers” are issuers for which business failure has legally and formally occurred, suchas bankruptcy, special liquidation, or suspension of transactions at a clearing house; “virtuallybankrupt borrowers” are issuers facing substantial bankruptcy; “potentially bankrupt borrowers” areissuers deemed to have a high possibility of going bankrupt in the future; and “borrowers requiringcaution” are issuers for which care must be taken in future management. “Normal borrowers” areissuers other than the above-mentioned bankrupt borrowers, virtually bankrupt borrowers, potentiallybankrupt borrowers, and borrowers requiring caution.

(Money Held in Trust)
1. Money held in trust for trading purposes (as of March 31, 2021)
Balance sheet amount(million yen)

Valuation difference included in profit andloss for the current consolidated fiscal
year(million yen)

Money held in trust for trading
6,000―
purposes
2. Money held in trust to be held to maturity (as of March 31, 2021)
No applicable information.
3. Money held in trust - other (excluding trading purpose and held-to-maturity) (as of March 31, 2021)
BalanceAcquisition
Consolidated balance
Consolidated balance
sheet
Difference
costsheet amount exceeds
sheet amount does notamount(million(millionacquisition costexceed acquisition cost
(millionyen)
yen)(million yen)(million yen)
yen)
Other money held in trust
6,311
6,300
11
11
―
(Note) “Consolidated balance sheet amount exceeds acquisition cost” and “Consolidated balance sheet
amount does not exceed acquisition cost” represent the breakdown of “Difference.”(Per Share Information)
Net asset value per share
Amount of income attributable to owners of parent per share
Amount of diluted net income attributable to owners of parent per share— 33 ―¥10,424.05¥393.93¥393.25

(Stock Options)
1. Expenses recorded for stock options in the current consolidated fiscal year and item names
Operating expenses¥32 million
2. Details, scale, and activity of stock options(1) Details of stock options
2013
2014
2015
stock options
stock options
stock options
Classification and
11 directors (excluding outside 10 directors (excluding outside
number of persons
11 directors
directors)
directors)
grantedNumber of stock options
Common shares in the Bank
Common shares in the Bank
Common shares in the Bank
granted by class of shares
12,620 shares
15,550 shares
9,600 shares(Note)
Date of grant
July 23, 2013
July 23, 2014
July 23, 2015
Vesting conditions
No vesting conditions
No vesting conditions
No vesting conditions
Requisite length of
No requisite length of service No requisite length of service No requisite length of service
service
From July 24, 2013
From July 24, 2014
From July 24, 2015
Exercise period
to July 23, 2043
to July 23, 2044
to July 23, 2045

Classification andnumber of persons
grantedNumber of stock options
granted by class of shares(Note)
Date of grantVesting conditions
Requisite length ofservice
Exercise period

2016
2017
2018
stock options
stock options
stock options
7 directors (excluding outside 7 directors (excluding outside 7 directors (excluding outside
directors)
directors)
directors)
8 executive officers (excluding 8 executive officers (excluding 9 executive officers (excluding
directors)
directors)
directors)
Common shares in the Bank
16,350 shares

Common shares in the Bank
12,350 shares

Common shares in the Bank
14,230 shares

July 22, 2016
No vesting conditions

July 21, 2017
No vesting conditions

July 23, 2018
No vesting conditions

No requisite length of service

No requisite length of service

No requisite length of service

From July 23, 2016 throughJuly 22, 2046

From July 22, 2017 throughJuly 21, 2047

From July 24, 2018 throughJuly 23, 2048

— 34 ―

Classification andnumber of persons
grantedNumber of stock options
granted by class of shares(Note)
Date of grantVesting conditions
Requisite length ofservice
Exercise period

2019
2020
stock options
stock options
7 directors (excluding outside 6 directors (excluding outside
directors)
directors)
9 executive officers (excluding 9 executive officers (excluding
directors)
directors)
Common shares in the Bank
18,410 shares

Common shares in the Bank
19,540 shares

July 23, 2019No vesting conditions

July 22, 2020
No vesting conditions

No requisite length of service

No requisite length of service

From July 24, 2019 throughJuly 23, 2049

From July 23, 2020 throughJuly 22, 2050

(Note) Effective October 1, 2017, the Bank implemented a 1-for-10 reverse stock split of common stock,and number of shares are presented on a post-reverse stock split basis.
(2) Scale and activity of stock options
Stock options that existed in the current consolidated fiscal year (fiscal year ending March 2021)
are covered, and the number of stock options is converted into the number of shares.
① Number of stock options
2013
2014
2015
2016
2017
2018
2019
stock
stock
stock
stock
stock
stock
stock
options
options
options
options
options
options
options
Before vesting (shares)
At the end of theprevious consolidated
―
―
―
―
―
―
4,365
fiscal year
Granted
―
―
―
―
―
―
―
Canceled
―
―
―
―
―
―
―
Vested
―
―
―
―
―
―
4,365
Outstanding
―
―
―
―
―
―
―
After vesting (shares)
At the end of theprevious consolidated
3,520
7,760
4,680
7,500
8,610
11,31013,095fiscal year
Vested
―
―
―
―
―
―
4,365
Exercised
―
760
540
1,150
1,500
1,660
2,890
Canceled
―
―
―
―
―
―
―
Outstanding
3,520
7,000
4,140
6,350
7,110
9,650
14,570(Note) Effective October 1, 2017, the Bank implemented a 1-for-10 reverse stock split of common stock,and number of shares are presented on a post-reverse stock split basis.

— 35 ―

2020
stock
options―
19,5401,370
13,787.5
4,382.5―
13,787.5
640―
13,147.5

② Price information
2013
stock
options
Exercise price (¥)
Average stock price at
exercise (¥)
Fair value price at grant
date (¥)

2014
stock
options

2015
stock
options

2016
stock
options2017
stock
options

2018
stock
options2019
stock
options2020
stock
options

1

1

1

1

1

1

1

1

―

2,065

2,065

2,065

2,044

2,044

2,034

2,002

3,650

3,200

4,640

2,390

3,170

2,587

2,068

1,670

(Note) Effective October 1, 2017, the Bank implemented a 1-for-10 reverse stock split of common stock,
and average stock price at exercise and fair value price at grant date are presented on a postreverse stock split basis.
3. Method of estimating the fair value of stock options
The method for estimating the fair value of the 2020 stock options granted in the current consolidated
fiscal year is as follows.
(1) Valuation technique used: Black-Scholes model(2) Main base values and estimate method2020 stock options
Stock price volatility(Note 1)31.476%
Estimated remaining outstanding period
3.6 years(Note 2)Estimated dividend (Note 3)¥70/share
Risk free interest rate
(Note 4)△0.153%(Notes)1． Calculated based on the actual stock price from December 16, 2016 to July 22, 2020.
2． Estimated by subtracting the current average tenure and age of directors, etc., from theaverage tenure and age of directors, etc., and using the average value of each remaining
period as the estimated remaining outstanding period.
3． Actual dividends for the past year.
4． Yield of government bonds corresponding to the estimated remaining outstanding period.
4. Method of estimating the number of stock options vested
Since it is difficult to reasonably estimate the number of future cancelations, the adopted method
reflects only the number of past cancelations.
(Business Combinations)
Transactions under common control
Acquisition of additional shares of consolidated subsidiaries by the Bank
1. Transaction overview(1) Name of party to the business combination and nature of its businesses
Name of party to the business combination
Nature of its businesses
Juroku Lease Co., Ltd.
Leasing services(2) Date of business combination
June 29, 2020
(3) Legal form of business combination
Acquisition of shares from non-controlling interests(4) Name after business combination
No change.

— 36 ―

(5) Other matters related to the transaction overview
The Bank has acquired a portion of the common stock of Juroku Lease Co., Ltd. held by noncontrolling shareholders for the purpose of strengthening the governance of the Group andimproving profitability. As a result, the ratio of voting rights in Juroku Lease Co., Ltd. held by the
Bank increased as follows.
Name
Before acquisition
After acquisition
Juroku Lease Co., Ltd.
36.28%
49.81%
2. Outline of the accounting treatment carried out
The transaction was accounted for as a transaction with non-controlling interests under common
control in accordance with “Accounting Standards for Business Combinations” (Corporate
Accounting Standards No. 21 dated January 16, 2019) and “Guidance on Accounting Standard forBusiness Combinations and Accounting Standard for Business Divestitures” (Corporate AccountingStandards Application Guideline No. 10 dated January 16, 2019).
3. Matters concerning additional acquisition of shares of subsidiaries
Acquisition cost and its breakdown
Consideration for acquisition
Cash and due from banks¥1,380 million
Acquisition cost
¥1,380 million
4. Matters concerning changes in the equity held by the Bank related to transactions with noncontrolling interests(1) Major variables of capital surplus
Additional acquisition of shares of subsidiaries(2) Amount of capital surplus increased due to transactions with non-controlling interests¥1,962 million(Significant Subsequent Events)
Establishment of a subsidiary
At the board of directors meeting held on December 18, 2020, the Bank resolved to establish a whollyowned subsidiary specializing in investment, which was established on April 1, 2021.
1. Purpose of establishment
In anticipation of a transition to a group management system centered on a holding company, theGroup has established a subsidiary specializing in investment for the purpose of contributing torevitalization of the local economy and expanding the business domain while responding toderegulation by providing new services to customers, actively supporting and nurturing startup
companies, and supporting companies working on business succession and business revitalization.
Through the investment-specialized subsidiary, the Group is examining entry into businesses related
to regional revitalization and businesses that are in line with the times, such as IT and FinTech, while
supporting customers’ core businesses more than ever and working towards sustainable growth in theregion.
2. Overview of subsidiary(1) Name
NOBUNAGA Capital Village Co., Ltd..
(2) Location
Kyowa No. 2 Building, 6-11-1, Kandamachi, Gifu City
(3) Nature of business Investment business limited partnership (fund) operation and management
All business incidental to or related to the above(4) Date established
April 1, 2021
(5) Capital stock¥50 million(6) Shareholders
The Juroku Bank, Ltd. 100%

— 37 ―