DAISHI HOKUETSU
INTEGRATED REPORT 2021
Disclosure for the Year Ended March 31, 2021

Contents
Message from Management

About the Daishi Hokuetsu FG

P. 02

Message from Management

P. 07

History of the Daishi Hokuetsu Bank

P. 09

Business Area

P. 11

A Process toward Sustainable Growth

P. 13

A Governance Framework to Support Sustainable GrowthP. 21

Medium-Term Management Plan

P. 31

TSUBASA Alliance

Financial Highlights / Non-Financial P. 33 Financial Highlights
Highlights

P. 36

Non-Financial Highlights

Toward the Realization of aP. 39

Initiative Policy for ESG/SDGs Declarations

Sustainable Society

P. 40

Major Initiatives based on our SDGs Declaration

To Our Shareholders

P. 54

Return to Shareholders / Shareholders
Benefits

P. 55

List of Executives / Group Companies

P. 57

Organization Chart

Company Information*As a general rule, the figures in this document have been rounded down to the nearest unit.

*The“Daishi Hokuetsu Financial Group”may be referred to below as“Daishi Hokuetsu
FG,”“FG”or“the company.”[Presentation of figures]
On January 1, 2021, the company’s wholly owned subsidiaries, Daishi Bank and Hokuetsu
Bank, merged, with Daishi Bank as the surviving company and Hokuetsu Bank as thedissolving company, with the company name changing to Daishi Hokuetsu Bank. The
figures for Daishi Hokuetsu Bank in this document are calculated in accordance with thefollowing rules from the perspective of making appropriate period comparisons for eachitem.
● Figures for the fiscal year ended March 31, 2021
Simple sum of the figures for Daishi Bank and Hokuetsu Bank for April – December
2020 and the figures for Daishi Hokuetsu Bank from January 2021 onwards.
● Figures for March 31, 2021
Figures for Daishi Hokuetsu Bank
● Figures for fiscal year ended March 31, 2019, for fiscal year ended March 31, 2020, for
March 31 2019, and for March 31, 2020 (excluding capital adequacy ratio)
Simple sum of the figures for Daishi Bank and Hokuetsu Bank
● Figures for March 31, 2019, and for March 31, 2020 (capital adequacy ratio)
Separate figures for Daishi Bank and Hokuetsu Bank

1

DAISHI HOKUETSU REPORT 2021

Message from Management

President andRepresentative Director

Michiro Ueguri

Thank you very much for your continued
support.
Despite the many restrictions imposed by
the COVID-19 pandemic, on January 1, 2021,
Daishi Bank and Hokuetsu Bank simultaneously
accomplished the merger and integration of
their systems and operations under the Daishi
Hokuetsu FG umbrella, making a smooth startas Daishi Hokuetsu Bank. We are now moving
to a new stage where all the Group’s executives
and employees are united in their ambition to
maximize the synergistic effects that this willproduce.In order to help you gain a deeper
understanding of the group, we have preparedthis integrated report, the Daishi Hokuetsu
Report 2021. We hope you will enjoy reading
about the Group’s various initiatives to achievesustainable growth alongside local communities.

DAISHI HOKUETSU REPORT 2021

2

Message from Management

Message from Management
Response to the COVID-19 Pandemic 
The COVID-19 pandemic that swept across the world has yet to be brought under control, andit continues to have a serious impact on the lives of Niigata Prefecture’s citizens, including medicalcare, welfare and education, as well as on the economic activities of businesses. Our Group has
been dealing with the situation with the utmost caution, and we will continue to put the health andsafety of our stakeholders first and strive to prevent infection. In accordance with our management
philosophy, we are committed to fulfilling our role and mission as the largest financial andinformation services group in Niigata Prefecture by providing wide-ranging support to our customers,
not only in terms of funding but also in meeting all their needs.

Review of the 1st Medium-Term Management Plan (October 2018 – March 2021) 
The 1st Medium-Term Management Plan, which was launched concurrently with ourestablishment in October 2018, addressed the company’s key business issues of“revitalizing the
local economy,”“enhancing profitability,”and“improving operational efficiency,”thereby aiming toachieve the primary objective of the merger, to“contribute to the local community.”Through thethree key measures of implementing the bank merger, strengthening organizational capabilities, andenhancing external alliances, we have strengthened our business base to maximize the synergistic
effects generated.
As a result of the speedy and concerted efforts of the entire Group, in the fiscal year ended March
31, 2021, the final year of the 1st Medium-Term Management Plan, we exceeded all nine of ourassessment targets for community contributions. Meanwhile, the application of Group companies’
expertise and networks is steadily producing results. These include increases of approximately 10%(approximately 170 billion yen) in the average balance of loans to SMEs and approximately 15%(approximately 170 billion yen) in the average balance of consumer loans, which are management
indicators of growth potential, compared to the fiscal year ended March 31, 2018, as well as anincrease of approximately 15% (approximately 2.4 billion yen) in the amount of non-interest income,a result of the expansion of the securities intermediary business with Daishi Hokuetsu Securities.
In addition, our important projects for contributing to the local community, the regional trading
company Bridge Niigata, which was established in April 2019, and the personnel placement
agency Daishi Hokuetsu Career Bridge, which commenced operations in October 2019, are both
performing well with great demand from customers. In March 2021, Bridge Niigata was selected by
the Cabinet Secretariat’s Main Office for Revitalization of Communities, People and Jobs from among
approximately 1,200 examples as one of 2020’
s“Distinctive Efforts by Financial Institutions andOther Organizations Contributing to the Revitalization of Local Communities.”
We will continue to contribute to the development of the region by fully harnessing the strengthsof our Group companies and providing a comprehensive range of convenient and highly optimized
services that meet our customers’needs.

3

DAISHI HOKUE TSU REPOR T 2021

The 2nd Medium-Term Management Plan (April 2021 – March 2024) 
Our 2nd Medium-Term Management Plan was launched in April 2021.
The business environment facing the Group is changing globally, from multiple perspectives, and at anaccelerating pace, due to such factors as a declining and aging population with a decreasing number ofchildren, a prolonged period of ultra-low interest rates caused by monetary easing policies, and intensifying
competition with new and disparate industries, coupled with the rapid progress of digital transformation.
In addition, with demands for a green society growing in tandem with the threat of climate change, as wellas the global disaster represented by the COVID-19 pandemic, society’s values are undergoing drasticchange. We are entering the era of the“new normal”— that is, an era of great change.
Given this business environment, the Group has identified three key business issues to achievesustainable growth in pursuit of our management philosophy: enhancing profitability, improving
operational efficiency, and sustaining and reinforcing a sound footing. To achieve these goals, we will buildon the relationship of trust that we have built with our stakeholders over the years, working to maximize
the following three synergistic effects:(1)“merger synergy”to enhance
profitability and reduce costs by
sharing expertise, coordinating
overlapping functions, and reallocating
management resources; (2)“groupsynergy”to provide a one-stop shop
for all the services of our Group
companies in the most effective way;and (3) “TSUBASA collaboration
synergy”to leverage the advantages ofscale and information sharing.

TSUBASA Alliance 
The TSUBASA Alliance is Japan's largest alliance of regional banks, consisting of 10 leading
institutions. With the addition of Bank of the Ryukyus and Gunma Bank in the 2021 fiscal year, a
network has been established that stretches across the Japanese archipelago in every direction,linking Hokkaido to Okinawa and the Sea of Japan to the Pacific Ocean.
In July 2020, the joint venture company TSUBASA Alliance was established as a platform toconsolidate operations and functions common to the participating banks, and in October of thesame year, the Anti-Money Laundering Center (AML Center) was established to jointly pursue moresophisticated risk management systems, including the prevention of fraudulent account transactions.
With these and other developments, the scope of thiscollaboration continues to expand.
In the 2nd Medium-Term Management Plan, we will continue
to position the TSUBASA Alliance as our“main engine”forfaster innovation, further enhancing our multifaceted and

DAISHI HOKUE TSU REPOR T 2021

4

Message from Management

multilayered partnership in all areas, including digital transformation.

Sustainability Initiatives Amid increasingly widespread awareness of Environmental, Social, and Corporate Governance(ESG) and the Sustainable Development Goals (SDGs), efforts aimed at a sustainable society,including decarbonization and other measures to combat climate change, are picking up pace bothin Japan and overseas.
In accordance with our“Policy for ESG Initiatives”and“SDGs Declarations,”the Group has beenworking proactively to resolve various issues facing local communities, including environmental
issues, support for the upbringing of the next generation, and food support for households affectedby the COVID-19 pandemic.
In May 2021, we also established the Sustainability Promotion Committee, chaired by myself,
to further bolster our sustainability initiatives, which will serve as the foundation for implementing
our corporate philosophy and implementing our medium-term management plan. The group will
work as one to promote operations that further align our business strategies with solutions toenvironmental and social issues.
In April 2021, we announced our support for the recommendations of the TCFD (Task Forceon Climate-related Financial Disclosures), which calls for appropriate disclosure of information on
the financial impact of climate change on companies. We will continue to analyze the risks andopportunities associated with climate change and make proactive efforts to disclose information inline with the recommendations.

5

DAISHI HOKUE TSU REPOR T 2021

Establishing a High-Quality Governance Framework 
In June 2021, in order to further reinforce our corporate governance framework with a view to further
improving the transparency, soundness and diversity of the Board of Directors and enhancing corporate
value over the medium to long term, the number of independent outside directors was increased byone, bringing the proportion of the company’s Board of Directors made up of independent outside
directors to over a third. The outside directors provide useful suggestions and advice based on theirexpertise in a wide range of fields, including corporate management, management theory, financial
accounting, law, and regional administration.
We also recognize that the appointment of female directors is an important issue to further ensure
diversity on the Board of Directors, and we are actively working on personnel development aimed atpromoting their early appointment.
As part of this effort, Daishi Hokuetsu
Bank has set a goal of increasing
the percentage of women in all
management positions (assistantdirector / acting branch manager andabove) to 25% or more, and as ofMarch 31, 2021, the ratio of womenin management positions, including
20 female branch managers, was
24.4%.
We will continue to reinforce ourcompliance system and strive to build
a high quality governance frameworkthat is grounded in the spirit of the
Corporate Governance Code.

Unity of purpose: a shared ambition for all the group’s executives and employees 
In the 2nd Medium-Term Management Plan, the Group has adopted“unity of purpose”as its slogan. In
order to fulfill our management philosophy, all executives and employees of the Group will work together
as one, with“unity of purpose,”in order to make a lasting contribution to the community.
We hope that you will maintain your interest in the Daishi Hokuetsu Financial Group’s activities, andthat we can count on your continued goodwill
and support.

Uni t y of Purpos e

DAISHI HOKUE TSU REPOR T 2021

J u l y 2021

6About the Daishi Hokuetsu FG

History of the Daishi Hokuestu Bank

1873

1917

1928

1973

Founded as The Fourth
National Bank of Japan

Corporate name changed
to The Daishi Bank, Ltd.

Finished construction of
its third head office

Listed on theSecond Sectionof the Tokyo
Stock Exchange

Founded in current-day
Niigata City as Japan’s thirdnational bank.

Although the name had beenchanged to Niigata Bank in 1896,
customers continued to use thenickname“Daishi”when referringto the bank. Therefore, the namewas changed to The Daishi Bank.

1878

1873

1896

1917

The head office featured
stone construction usingarchitectural styles fromancient Greece.

1928

1942

1948

1965

1878

1896

1942

1948

1965

Founded as The Sixty-NinthNational Bank of JapanFounded as The Nagaoka
Bank

Established as The
Nagaoka Sixty-Ninth Bank

Corporate namechanged to The
Hokuetsu Bank

Completed the current
head office

After the end of theBoshin War, founded incurrent-day Nagaoka
City in order to promoteeconomic growth.

Founded in current-day
Nagaoka City in conjunction
with economic growth suchas a boom in the petroleum
industry and establishment ofrailway companies.

Established via a merger
by The Sixty-Ninth Bankand The Nagaoka Bank.

In contrast to the redbricks of the former head
office, the new head office
was built in white marble.

THE HOKUETSU BANK

Corporate Logo and Corporate Color of the Daishi Hokuetsu FG
Corporate Logo

Corporate Color

Azure
Daishi Hokuetsu Financial Group
Based on the motif of geography in Niigata Prefecture, thecorporate logo uses a golden color representing bountiful harvests ofrice to express the expansive land, and uses the corporate color
azure to express the rivers which moisten that land and the vast Sea
of Japan connecting with the rest of the world.
The elliptical shape in the center of the logo was designed in theimage of islands and rice in Niigata Prefecture.
The two lines rising upwards depict how the two banks form asingle massive surge, boldly challenging changes for the future andcontinuing to contribute to regional society.

7

1973

Blue colors create positive images such as trust,sincerity, and future orientation. Among blue colors,
azure is a particularly rich and beautiful shade.
In our logo, the color azure represents the vast Sea ofJapan which borders Niigata Prefecture; the ShinanoRiver, Agano River, and other rivers which flow into the
Sea of Japan after moistening the fertile land; and theclear expanse of blue skies. This color represents how
our new financial group will continuously grow in the
future while earning the trust of regional society.

DAISHI HOKUE TSU REPOR T 2021

A merger of two regional banks with the largest and second
largest market shares in the same prefecture, a nationwide first.

October
2018
1975

1992

Listing changed to
the First Section of
the Tokyo Stock
Exchange

Completed the head
officeProfile of the Daishi Hokuetsu(as of June 25, 2021）

Completed construction of the current
head office (the fifth head office built)
by expanding and remodeling forenhancement and development offunctions and facilities.

1975

Establishment of the Daishi
Hokuetsu Financial Group

1992

Location of Principal Head Office
Functions1071-1 Higashiborimae-dori 7-bancho,
Chuo-ku, Niigata-shi
Established
October 1, 2018
Capital¥30,000 million
Listed Securities ExchangeTokyo Stock Exchange (Securities
Code: 7327)

2018

2021

January
2021

1973

New!

Birth of the Daishi Hokuetsu Bank

Listed on the First
Section of the Tokyo
Stock Exchange

Profile of the Daishi Hokuetsu(as of June 25, 2021）

Location of Principal Head Office
Functions1071-1 Higashiborimae-dori 7-bancho,
Chuo-ku, Niigata-shi
FoundedNovember 2, 1873
Capital¥32,776 million

Number of branches

206 branches and 1 liaison office (Shanghai)192
branches within Niigata Prefecture(including 5 field offices and 3 virtual branches)
14 branches outside of Niigata PrefectureGroup Companies of the Daishi Hokuetsu FG
The Daishi Guaranty

The Hokuetsu Credit
Guarantee

The Daishi Management
Consulting

The Hokugin Economic
Research Institute

The Daishi Lease

The Hokuetsu Leasing

The Daishi Computer
Service

The Daishi JCB Card

The Daishi DC Card

The Hokuetsu Card

DAISHI HOKUE TSU REPOR T 20218About the Daishi Hokuetsu FG

Business Area
Sea of Japan side designated to be created by theTreaty of Amity and Commerce Between the Unites
States and Japan concluded in 1858. From its
opening in 1869 until this very day, the Port of Niigata
has continuously been entrenching its position as aport of international trade. Today, in addition to
manufacturing, agriculture, forestry, and fisheryindustries,
Niigata Prefecture ranks first in Japan in manydifferent indexes, including for culture and education.

Niigata Prefecture is the main geographical base of
the Daishi Hokuetsu Financial Group. Located on the
Sea of Japan side of Japan’s main island of Honshu,
thanks to its geography and climate the prefecture
has long been recognized for its booming agricultureindustry and for production of foods such as riceconfectionery and processed seafood products madefrom its abundant rice, agricultural and fisheryresources. Additionally, among the first five ports inJapan including Hakodate, Yokohama, Kobe, andNagasaki, the Port of Niigata was the only port on the

Basic Data on Niigata Prefecture
Land・Population・Daily Life
Total area

Total population

12,584.24

2,223,106k㎡

Divorce ratec

Volume of sake consumed (per adult)

No.1

In Japan

9.6

No.1

In Japanℓ（per 1,000 population）

1.28

Education
No.1

In JapanHigh school advancement rate

99.58

NatureIn Japan

8,994.4

km

Number of hot spring areas

No.3

In Japan

No.3

In Japan9（with lodging facilities）

145

Skiing and snowboarding
resorts

43

25.99

%

Number of businessestablishments

Gross product（nominal）（Shinano River）

367

In Japan%

Vocational school （specializedprograms）
advancement rate

Industry and Economy

Longest river in Japan

No.1

No.1

120,495

billionRice output
No.1

In Japan

1,501

No.1

billionTulip（cut flowers）output
No.1

In Japan6billion

DAISHI HOKUE TSU REPOR T 2021

In Japan

Value of processed seafood
products shipped344

billionSource: Niigata Prefecture This-and-That Top Five inJapan, Niigata Prefecture website
Niigata Prefecture in Data: A Handbook of Indicators(FY 2020)

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Niigata Prefecture Transport Infrastructure
Niigata Prefecture can be quickly and efficiently reached from the Kanto, Kansai, and Tohoku regions
and others thanks to its outstanding high-speed transport infrastructure. Logistics business andtourist movement is also active between Niigata Prefecture and countries in Northeast Asia such as
China, South Korea and Russia.
Nihonkai Tohoku Expressway■ Political and economic connections
with Northeast Asia
● 
Airline routes connecting to northeast
China and South Korea● 
Consular offices for South Korea, China,
and Russia in the city of Niigata● 
Utilization of natural energy andresources development in Russia

Nihonkai Tohoku Expressway

Niigata Airport
Niigata
AirportNiigataPort
Niigata Port

Naoetsu Port
Hokuriku
Naoetsu Port
Expressway
Hokuriku
Expressway

Advantages of transportation network
Highways stretching out in five different directions（Kan-etsu, Hokuriku, Joshin-etsu, Ban-etsu,
and Nihonkai Tohoku）
Joetsu Shinkansen
Hokuriku Shinkansen
Conventional railroad lines such as the ShinEtsu Line,Hokuriku Line, and Uetsu LineBan-etsu
Expressway
Ban-etsu
Expressway

JoetsuShinkansen
JoetsuKan-etsu Shinkansen
Expressway

Hokuriku
Kan-etsu Expressway
Hokuriku
Shinkansen
Shinkansen Joshin-etsu
Expressway
Joshin-etsu
Expressway

Niigata Airport
Domestic routes:
8（New Chitose, Narita, Chubu Centrair
International, Komaki, Itami, KansaiInternational, Fukuoka, Naha）
International routes:
６（Seoul, Shanghai, Harbin, Khabarovsk,
Vladivostok, Taipei）

Toward Hokuriku
Toward Hokuriku
Toyama, Ishikawa

Toyama, Ishikawa

Toward Tohoku
Toward Tohoku

Toward Kanto
Toward Kanto

Toward Gunma, Saitama, Tokyo
Toward Gunma, Saitama, Tokyo
NaganoNaganoNiigata Port
Comprehensive ports, function-specific ports:
International container shipping sector
Designated as LNG (liquefied natural gas) sector
Naoetsu Port
Function-specific ports:
Designated as LNG (liquefied natural gas) sector
As of June 30, 2021

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Share of Business in Niigata Prefecture
Daishi Hokuetsu Bank has secured ahigh share of both savings deposits andloans in Niigata Prefecture.
Building on the customer trust and local
networks that we have forged over morethan 140 years of history, we will work
to maximize the synergistic effects ofthe merger as soon as possible, fulfilling
the primary objective of the merger
by making a lasting contribution to thecommunity.
*The share figures for Daishi Hokuetsu Bank are a simple sum of the
figures for Daishi Bank and Hokuetsu Bank as of March 31, 2020.

〈 Share of savings deposits 〉

Daishi
Daishi
Hokuetsu
Hokuetsu
BankBank

OthersOthers(second-tier(second-tierregional
regionalbanks,credit
banks,credit
unions,unions,etc.) etc.)

56.5
56.5
％ ％

40.0
40.0
％％

Major
Major
banks
banks

3.53.5％ ％DAISHI HOKUE TSU REPOR T 2021

〈 Share of issued loans 〉

OthersOthers(second-tier(second-tierregional
regional
Daishi
Daishi
Hokuetsu
Hokuetsu
BankBankbanks,credit
banks,credit
unions,unions,etc.) etc.)

40.1
40.1
％ ％

54.6
54.6
％％

Major
Major
banks
banks

5.35.3％ ％Source: Financial Journal (end of March 2020)10

About the Daishi Hokuetsu FG

A Process toward Sustainable GrowthBusiness Environment
Local Social Issues

Management Philosophy

Society at Large

As a trusted financial group,

ActixonPrinciples

we will continue to provide services
that live up to the expectations ofcustomers and contribute to thedevelopment of regional society.

MissionWe will boldly take on challenge tocreate new value.

Vision andApproach・Achieving a sustainable
society・Measures against global
warming and climate change・Declining population due tofewer children and an aging
society・Declining workingage population
・A dapting to the“newnormal”brought about by
COVID-19
・M aking use of a diverse
range of personnel
・A dapting to increasingly
diverse values

Financial Environment
・Prolonged ultra-low interest
rate environment
・Increased participation in thebanking business by companies
from other industries

Ideal Form

Technical Innovation

We establish ourselves as a financial and information

・P rogress of digitaltransformation

services group that receives overwhelming support by・S pread of cashless
payments

creating new value through our financial intermediaryfunction and information intermediary function, increasing
the efficiency of management, and continuing to contribute

Natural Disasters

to the growth of regional society.

・Countermeasures for natural
disasters of increasing severity

Capital to be used / Strengths of Daishi Hokuetsu FG
Financial capital●Sound financial position

Capital adequacy ratio (consolidated)：10.35%
Rating：A＋（Japan Credit Rating Agency）（Fiscal year ended March 31, 2021）●

Human capital

Healthy loan assets（fiscal year
ended March 31, 2021）

Average balance during the loan period: 4,987.1 billion yen
Rate of non-performing claims under the Financial
Reconstruction Act: 1.79% (Fiscal year ended March 31, 2021)●

Large number of employees with financial qualifications

Employees with level 2 or higher financial planner qualifications: 2,705
Securities analysts: 56

SME Management Consultants: 43（As of March 31, 2021）

A Governance Framework to
11

DAISHI HOKUE TSU REPOR T 2021

We aim to achieve sustainable growth by providing financial
services that support the growth of our customers and local
communities, and by making an ongoing contribution to thedevelopment of the region.

Enhancingprofitability

Details

25-30

Achieve synergistic effects

Top-line synergy and cost synergy●

Achieve group synergy

achieve a sustainable society, Daishi Hokuetsu
issues related to ESG (Environmental, Socialand Governance), and is working to meet thesustainably alongside local communities.

 reate new value by developing consulting
Cfunctions and implementing digital transformation●

Boost non-interest revenue●

Search for new business fields

Declaration 1 Local economies and communities

ESG and SDGs initiatives

Contribute to the

Basic Strategy Ⅱ

Improving
operational efficiency

In order to fulfill its social responsibility to help

By contributing to the SDGs, we aim to growMaximize top-line synergy by expanding
partnership in the TSUBASA alliance

●

●

●

Dramatic Improvements in Productivity

Implement new structural reforms to achievecomprehensive improvements in productivity
 aximize synergy by expanding partnershipM
in the TSUBASA alliance
Basic Strategy III

●

39-52

SDGs proposed by the United Nations.

●●

DetailsP.

FG is actively involved in resolving social●●

Five declaration for implementing
achieving the SDGs

P.

Basic Strategies
Basic Strategy I

sustainable society
ESG-based management andDaishi Hokuetsu FG 2nd Medium-Term Management Plan
Priority Business Issues

Achieving a

Developing and enhancing human resources romote organizational harmony and sharedPawareness
Enhancing consulting functions
Managing human resources to ensure thatall Group employees have a role to playrevitalization of
local economies

and communities

Declaration 2

Aging population

Support a safe andsecure lifestyle forthe elderly

Declaration 3

Financial services

Provide financial
services for leading aneven better lifestyle●

Sustaining andreinforcing a soundfooting

Basic Strategy IV●●●

Improving risk management

 onduct business operations with complianceC
as top priority
Enhance the Group’s operational management
approachD evelop more advanced risk
management
Details〈 TSUBASA Alliance 〉

P.

Declaration 4

Diversity

Promote diversity
and work-stylereformDeclaration 5 Environmental Conservation
Contribute to theprotection of a sustainable
environment

31-32

A framework for wide-area cooperation between regional banks todevelop and pursue measures that will contribute to the sustainablegrowth of local communities, more advanced financial systems, andincreased corporate value for participating banks

Social capitalIntellectual capital
Accumulating expertise throughthe TSUBASA Alliance●Provision of financial andinformation services by theGroup as a whole●●

A strong business foundation

Natural capital●

Abundant agricultural and fishery resources of Niigata Prefecture

Share of savings deposits in Niigata Prefecture: 40.0%

Rice production value: No. 1 in Japan; Rice snacks shipment value: No. 1 in Japan

Share of loans in Niigata Prefecture: 54.6%

Seafood paste products shipment value: No. 1 in Japan(As of March 31, 2020, source: The Journal of Finance)(2018, Source: Niigata Prefecture Website,“Niigata’s 5 Bests”)

Support Sustainable Growth (p.13–20)
DAISHI HOKUE TSU REPOR T 2021

12About the Daishi Hokuetsu FG

A Governance Framework to Support Sustainable Growth
Corporate GovernanceCorporate Governance Organization

Basic Philosophy of Corporate GovernanceWe recognize the strengthening and enhancement of corporate governance as important management
issue for improving financial soundness and profitability in order to establish a strong reputation andunshakable credibility from stakeholders including customers, the local community, and shareholders,and it works to enhance the functions of audits and oversight on corporate management and improve thetransparency of management activities.
Corporate Governance Guidelines and Corporate

URL

Governance Reports of the Daishi Hokuetsu FG are

https://www.dhfg.co.jp/esg/
governance/

available on our website.

Corporate Governance Organization Chart General Meeting of Shareholders

Appointment and dismissal

Appoint m e n t
a nd dism issal

Consultation and report

Audit and supervision

Board ofDirectors

Audit andSupervisory Committee

New! Committees
ALM & Risk Management Committee

Instructions
and orders

Executive Committee

Compliance Committee

Cooperation andcoordination

New!

Regional Revitalization
Promotion Committee

Audit

Secretariat of Audit andSupervisory Committee

Sustainability Committee

Accounting Auditors

Nomination andCompensation Committee

Auditing Division

ReportAudit

Corporate
Planning Division

Human Resources
Planning Division

RiskManagement Division

Regional Revitalization
Promotion Division

Group Strategy
Promotion Division

GeneralAﬀairs Division

Regional
Revitalization Division

Report and deliberation

Guidance, management and supervision

Report anddeliberation

Guidance,
management
and supervision

Audit

Audit

Subsidiaries, etc.

As of June 25, 2021

13

DAISHI HOKUE TSU REPOR T 2021

The Board of Directors 
The Board of Directors usually meets once a month, making
decisions on important business operations and basic mattersrelating to the management of the group as a whole, as well as
overseeing each director’s performance of their business duties. As
of June 30, 2021, the proportion of outside directors was 35.7%.

<Details of meetings for the fiscal year ended March 31, 2021>
Chair

The President

Composition

Proportion of outside directors: 30.7% (4 out of 13)

Number of meetings

12 (April 2020 – March 2021)<Proportion of outside directors>

October2018(at founding of
the company)

Directors

Total number of directors

13名

Directors

9名

Total number of directors

June 2021

14名

Outside directors

Proportion of outside directors

30.7％

4名

Directors（4/13）

Outside directors

9名

Outsidedirectors

Proportion of outside directors

35.7％

5名

（5/14）

Audit and Supervisory Committee 
In principle, committee meetings are held once per month. The
Committee complies with regulations such as laws, the Articles ofIncorporation, and Rules of the Audit and Supervisory Committee.
The Committee has a supervisory function similar to the Board of
Directors and also audits the business execution of directors.

<Details of meetings for the fiscal year ended March 31, 2021>
Chair

Full-time Audit and Supervisory Committee Member

Composition

Proportion of outside directors: 80.0% (4 out of 5)

Number of meetings

12 (April 2020 – March 2021)

Nomination and Compensation Committee As an advisory body to the Board of Directors, the Committee ensures opportunities for obtaining appropriate
involvement and advice from outside directors when reviewing important matters related to the appointment,
dismissal and remuneration of directors, thus strengthening fairness, transparency, and objectivity.
Agenda Items for the Nomination and Compensation Committee❶Appointment and dismissal of directors ❷Selection and dismissal of a representative director ❸Selection anddismissal of directors with special duties ❹Compensation, etc. for directors (excluding members of the Audit andSupervisory Committee) ❺Compensation, etc. for directors (members of the Audit and Supervisory Committee)❻ Succession planning ❼Other matters on which the Board of Directors has asked for advice<Details of meetings for the fiscal year ended March 31, 2021>
Committee chair

The President

Composition

Proportion of outside directors: 66.6% (4 out of 6)

Number of meetings

5 (April 2020 – March 2021)

Executive Committee 
The Executive Committee is established as management meeting
under the Board of Directors. In principle, the Committee meets twice
per month. The Committee decides on business management itemson the basis of policies decided at board meetings, manages the
progress of Group management plans and strategies, and decides on
and deliberates matters delegated from the Board of Directors.

<Chair / Participants>
Chair

The President

Members

Directors (excluding members of the Audit and Supervisory Committee)

Observers

Full-Time Audit and Supervisory Committee Members

Sustainability Committee New! Amid accelerating efforts in Japan and overseas to emphasize
sustainability, including decarbonization and other measures to combat
climate change, aiming to achieve a sustainable society, in May 2021
we launched the Sustainability Committee, chaired by the President.
Through this committee, the Group will work together to promotesustainability, which forms the foundation for fulfilling our management
philosophy and implementing the Medium-Term Management Plan.
DAISHI HOKUE TSU REPOR T 2021

<Chair / Participants>
Committee chair

The President

Members

Executive with responsibility for the Corporate Planning Department
Manager of each department of the company and bankPresidents of affiliated companies

14About the Daishi Hokuetsu FG

A Governance Framework to Support Sustainable Growth
Corporate Governance

Other Committees 
The ALM and Risk Management Committee, the Compliance Committee, and the Regional Revitalization
Promotion Committee have been established as advisory bodies to the Management Committee.

■ Topics
Evaluating the Effectiveness of the Board of Directors In order to ensure that the Board of Directors is properly able to enhance its capabilities, the board
conducts analysis and evaluation of its effectiveness, including its composition, operations, and the activities
of its directors.
For the evaluation for the fiscal year ended March 31, 2021, all directors conducted a self-assessment in the form of
a questionnaire, and after compiling the results, an analysis and evaluation were conducted at the board meeting ofApril 2021. The evaluation concluded that, for the reasons given below, the effectiveness of the Board of Directors as awhole has been maintained.
①In addition to consistently providing appropriate advice and supervision at meetings of the Board of Directors basedon their own expertise, the outside directors have engaged in wide-ranging and in-depth discussions of the company's
management issues and strategies and tactics to address those issues in the formulation of the 2nd Medium-Term
Management Plan, which started in April 2021: as such, the Board of Directors is functioning appropriately.
②Amid the COVID-19 pandemic, the Board of Directors led a successful project to merge two subsidiary banks andintegrate their systems and operations, a project which has been running smoothly ever since.
In the fiscal year ended March 31, 2021, we implemented measures to address the issues identified in
the previous year’s effectiveness evaluation. These measures included increasing the number of outside
directors to at least one-third, improving the advance explanations of Board of Directors meeting materials
given to outside directors, and securing time for deliberations on important agenda items by reviewing
deliberation methods and the content of resolutions and reports. In this way, we have confirmed thatsteady improvements are being made.
In the fiscal year ending March 31, 2022, we will consider and implement countermeasures based on
this year’s evaluation, and work to further improve the board’s effectiveness. The specific policies to be
adopted are as follows.

Policies dealing with short-term issues● Establish a system to support the activities of outside directors amid the COVID-19 crisis

Policies dealing with medium- to long-term issues● Continue to actively develop personnel with a view to appointing female directors, thereby ensuring

the diversity of the board● Continue to train successors by passing on the knowledge of the Representative Director, etc.
● E nhancethe operation of the Board of Directors and other measures to further improve theeffectiveness of the Nomination and Compensation Committee, such as by providing more
opportunities for contact between the outside directors who are members of the committee andcandidates for Representative Director (currently directors) or candidates for directors (currently
executive officers, division heads, etc.)●15

 s a response to issues surrounding sustainability, conduct more in-depth discussions at Board ofA
Directors’meetings to enhance efforts addressing ESG, the SDGs, and TCFDDAISHI HOKUE TSU REPOR T 2021

Risk Management System
The Group’s basic policy of risk management is to stably secure
profits corresponding to risk and plan the appropriate distributionof management resources, as well as to construct a system ofmutual checks and balances for the various risks faced by theGroup. This is possible by accurately recognizing and ascertaining
various risks, engaging in appropriate management and supervisionof risks, and auditing these processes related to risks.
Based on this policy, the Group has established a Risk
Management Department as a supervisory organization that
understands and manages risk comprehensively, cutting acrossorganizational boundaries.
Furthermore, the Group has established the ALM & Risk
Management Committee to comprehensively ascertain andmanage the status of ALM and risks throughout the Group, andto contribute to maintaining a healthy Group and increasing
profitability by reviewing appropriate response measures, etc.
Meetings of the ALM & Risk Management Committee are held
as necessary. Full-time members of the Audit and Supervisory
Committee attend meetings of this committee in order to provide

appropriate advice and recommendations. Minutes from meetingsof the ALM & Risk Management Committee are reported to theBoard of Directors and other entities as appropriate in an effort
to resolve and reform problems related to risk. Additionally, theAuditing Department (Internal Controls Department) is under
direct supervision of the Board of Directors and is ensured
independence from the department being audited. The Auditing
Department conducts strict audits for overall business, and verifies
the appropriateness and effectiveness of internal controls systems.
Under this risk management system, the Group implements risk
capital allocation at its subsidiary banks in order to maintainhealthy business and achieve efficient utilization of capital.
Additionally, the Group anticipates the interruption of businessdue to unexpected emergencies such as earthquakes and otherlarge-scale disasters, and defines priority business operations, etc.,
for continuity at subsidiary banks. The Group has established the
Basic Rules for Business Continuity to define timely and accurate
management and instructions for subsidiary banks, and hasconstructed a risk management system.

Diagram of Risk Management System 

Auditing Department(Internal Controls Department)

Audit andSupervisory Committee Board of Directors

ALM & Risk
Management Committee

Executive
Committee【Types of risks】

Audit

The Group s Auditing Department conducts
audits of the Group and Group companies

Risk Management Department(Risk Management Administration Division)

Credit risk

Market risk

Liquidity risk

Operational risk

Cybersecurity risk

Instructions (development of risk management systems, etc.)
Reporting & deliberation (risk status, response guidelines)

Board ofDirectors

Corporate Auditors/
Board of Corporate
Auditors

ExecutiveoﬃcerMeeting
Corporate Planning Dept
(Risk Management Administration Division)【Types of Risks】
Capital reguirement
regulatory risk, System risk,
Cybersecurity risk,
Liquidity risk,Oﬃce risk
Departments withjurisdiction by risk catego

Board ofDirectors

Board ofDirectors

Audit andSupervisory Committee

Management Meeting

Corporate
Auditors

Compliance Committee and ALM
Committee,Cybersecurity
Management Committee

Risk Management Division(Risk Management Administration Division)【Types of Risks】
Creditrisk

Marketrisk

Liquidity
risk【Types of Risks】
Operationalrisk

Cybersecurity
risk

Operational risk,
Cybersecurity risk

Departments with jurisdiction by risk category
Sales oﬃces, Head Oﬃce, Group companies

As of June 25, 2021

DAISHI HOKUE TSU REPOR T 2021

16About the Daishi Hokuetsu FG

A Governance Framework to Support Sustainable Growth
Corporate Governance

Credit Risk Management Systems Credit risk is the risk that the value of principal or interestof a loan will decrease or disappear due to bankruptcy,
deterioration of credit, etc., at a business partner to whom abank has lent money, thus resulting in a loss incurred by thebank.
The Group appropriately operates and manages credit risk
based on our regulations for credit risk management.
In the Group’s system, the Risk Management Department
serves as an organization for managing credit risk. The
Department develops regulations for credit risk management,
and plans and operates activities for analyzing, assessing, andimproving risk.
At Both Banks, screening departments which are completely
separated from sales departments perform strict loan screening
and appropriate management of problem loans. Also, the twobanks strive to maintain healthy assets through bank-wide
initiatives such as activities to support management reform atbusiness partners. Strict credit examinations and autonomous
assessments of loans, etc., are carried out through a two-levelexamination system at local sales offices and departments at
the head office. Then, the Auditing Department conducts afinal review to ensure the accuracy and appropriateness of thecredit examinations and autonomous assessments. For ourcredit portfolio, we appropriately manage credit concentration
to particular regions, industries, corporations, groups, etc.
Moreover, the two banks take measures such as quantifying
credit risk* and setting credit risk limits in accordance withequity capital.
* Quantification of credit risk is the process of using statistical methods to quantify innumerical form and estimate the amount of credit risk contained in a credit portfolio.

Market Risk Management Systems Market risk is the risk that assets and obligations may
fluctuate in value due to changes in market factors, thus
resulting in a loss incurred by the Group. Such market
factors include domestic and foreign interest rates,
valuations on securities, and foreign exchange rates.
The Group has established an ALM Operation Policyin order to adjust market risk to the appropriate
amount and secure stable income. Based on this policy,

we set limits for risk-taking, loss, etc., for securities
management.
In addition, the ALM & Risk Management Committee
discusses important issues in market risk management.
If a serious incident has occurred in management of
securities, this system ensures that details are reported
to management immediately.

L iq u id it y R i s k M a n a g e m e n t S y s t e m s 
Liquidity risk is the risk of the Group incurring a loss due
to difficulty of securing required funds during financing or
being forced to procure funds at an interest rate which
is much higher than normal (financing risk). It is also therisk of incurring a loss due to being forced to engage
in market transactions at significantly disadvantageousconditions or prices (market liquidity risk).
The Group has established the Liquidity Risk

Management Regulations at Both Banks. Management
departments involved in financing ascertain and analyze
the financing status, and engage in appropriate market
procurement asnecessary. Furthermore, in preparation for
unexpected events, the Group has established response
measures and reporting/contact systems to enable fast
response in a variety of situations in accordance with thedegree of scarcity in financing.

Operational Risk Management Systems Operational risk is the risk that the Group’s internal
administrative procedures, actions of directors or employees,
or systems operations may be inappropriate or may fail tofunction, or that other external factors will occur resulting ina loss incurred by the bank. Based on risk factors, the Group
categorizes and manages the following types of risk: 1)
administrative risk, 2) systems risk, 3) information-security risk,4) compliance risk, 5) human-error risk, 6) tangible-asset risk, 7)

17

outsourcing risk, and 8) reputation risk.
In the Group, in order to manage operational risk appropriately,
the Risk Management Department (a management supervisoryorganization) conducts activities such as making proposals on
important matters related to operational risk management,
accepting reports on operational risks from subsidiary banks andmonitoring those risks, and verifying/improving the efficacy ofmanagement systems for operational risks.

DAISHI HOKUE TSU REPOR T 2021

Cybersecurity Risk Management Systems Cybersecurity risk is the risk that the Group will incur a loss as
the result of threats on the Group’s cybersecurity from cyberattacks(the act of maliciously using an information communications network
or information system for unauthorized entry via a cyberspace,
for stealing, modifying, or destroying information, for stopping theoperation of information systems or causing incorrect operation, for
executing unauthorized programs, for conducting DDoS attacks, etc.).
In order to strengthen our response to cybersecurity, the Grouphas established a Cybersecurity Management Committee, a Basic
Policy for Cybersecurity Management, and response manuals fordifferent types of cyberattacks.
Furthermore, the Group reviews advance prevention andpredictive management of cybersecurity incidents. In the event thata cybersecurity incident occurs, the Group reviews countermeasures
for fast recovery, measures to prevent damage from spreading,measures to prevent reoccurrence, etc.
Additionally, based on instructions from the Executive Committee
and other management organizations, we recognize cybersecurity
risks as risk that must be managed throughout the entire Group, andwe work to strengthen our management of cybersecurity.

Business Continuity System 
The Group has defined rules such as Basic Rules for BusinessContinuity. Even in the event of a disaster or other unforeseen
occurrence, the Group has developed a business continuity system thatwill minimize the impact on our customers and will enable us to maintainfinancial functions by limiting the impact on the Group management.
In the event of a large-scale natural disaster or system malfunction, we
will immediately establish a Disaster Response Headquarters and workfor the recovery/continuity of business.

■ Topics

New!

Announcing our support for the recommendations of the TCFD (Task Force on Climate-related
Financial Disclosures)

In recent years, abnormal weather conditions and major natural disasters have caused extensive damage in countries aroundthe world. Japan too has seen significant damage as a result of heavy snowfall, torrential rains, and typhoons, examples of theincreasing impact of climate change on the business activities of companies.
Given these circumstances, the Group announced its support for the recommendations of the TCFD (Task Force on Climaterelated Financial Disclosures) in April 2021.
We will continue to improve our disclosure of information on climate change in accordance with the TCFD recommendations.

Governance

The Sustainability Committee, chaired by the President, was established in May 2021 to deliberate on policies andinitiatives to address environmental and social opportunities and risks, including climate change.
We have established the“Daishi Hokuetsu Financial Group ESG Initiatives Policy”to pursue environmental and social
initiatives, including climate change, on a Group-wide basis.
Meanwhile, in the“Daishi Hokuetsu Financial Group SDGs Declarations,”
we have designated environmental conservation, including measures against climate change, as one of the priority
issues to be addressed.
■ Opportunities

Strategy

In an effort to make a carbon-free society a reality, we are actively providing products and services aimed at
reducing environmental impact, such as financing for renewable energy projects and supporting customers’
investments aimed at reducing greenhouse gas emissions and improving energy efficiency.
■ Risks
In terms of risks related to climate change, we have identified both transition risks and physical risks.
Transition risks include increased credit risk for customers affected by tighter climate-related regulations.
Physical risks include an increase in credit risk due to damage to customers’assets caused by abnormal weather.
■ Scenario analysis
We will explore methods of scenario analysis to understand the impact of transition risks and physical risks on our credit portfolio.

Risk Management

We will address climate change risk within a framework of comprehensive risk management systems, including credit
risk management and operational risk management.

Indicators andTargets

We will discuss the indicators and targets going forward.

DAISHI HOKUE TSU REPOR T 2021

18

About the Daishi Hokuetsu FG

A Governance Framework to Support Sustainable Growth
Corporate GovernanceCompliance System
Compliance is one of the top management priorities at the Group. In accordance with the following Basic Policy, alldirectors and employees work to ensure management based on our Management Philosophy.

Basic Policy
１．All directors and employees in the Group always act in accordance with our Management Philosophy,
and recognize the social responsibility and public mission that must be fulfilled by our Group. Furthermore,
all directors and employees understand and follow the code of conduct regulated by the Japanese Bankers
Association.
２．The Group works to develop and establish a compliance system for maintaining trust in the Group, andfor ensuring the health and appropriateness of our business.

Compliance System 
The Group has established the Risk Management
Department as a department for overseeing
compliance. The Department engages in activities
such as formulating compliance-related measures andmonitoring the status of compliance in the Group.
In addition, the Group holds meetings of aCompliance Committee which is connected directlywith management. The Committee investigates matterssuch as the status of compliance management in theGroup, and works to develop and establish compliancesystems in the Group.
Additionally, we formulate a Compliance Program
every year as a detailed execution plan for thoroughcompliance, and work to establish compliance systems
in accordance with our Management Philosophy.

Board of Directors

Executive Committee

Compliance Committee(deliberation on important matters and status of initiatives)(Secretariat Oﬃce: Risk Management Department)

Subsidiaries, etc.

19

DAISHI HOKUE TSU REPOR T 2021

Measures to Combat Money Laundering and Financial Crimes 
The Group recognizes that the prevention of money
laundering and terrorist financing is one of the most important
responsibilities for a financial institution to perform, as well as
an important issue in terms of business strategy. As such, theGroup is working to implement systematic measures in linewith the "Basic Policy on Countermeasures against Money
Laundering and Terrorist Financing.”
We are also strengthening our efforts to protect customers’

assets from various financial crimes such as specialized fraud.
In addition, TSUBASA Alliance, Co., Ltd., which was jointly
established by Daishi Hokuetsu Bank with the participationof TSUBASA Alliance member banks, has established an AntiMoney Laundering Center (AML Center) within the company,
and work is underway to upgrade risk management systems
to prevent fraudulent account transactions.

Cutting Relations with Organized Crime 
The group has established the “Basic Policy on
Organized Crime” to protect against groups andindividuals who pursue economic interests by using
violence, force, and fraud.
We will work in closer cooperation with externalorganizations with professional expertise, such as thepolice and lawyers, and will not engage in backroom
deals with these elements nor provide them withinappropriate favors or funds.
Furthermore, we have established a system throughwhich the organization as a whole will deal withelements that pose a threat to social order and safety.
This involves taking a decisive stance of cutting off all
relations and using and to both civil and criminal legal
measures to deal appropriately with any unreasonable
demands.

Customer-oriented business operations (fiduciary duty) Daishi Hokuetsu Bank and Daishi Hokuetsu Securities
have been conducting customer-oriented initiatives in theasset management advice business in accordance with our“Basic Policy on Customer-oriented Business Operations,”
which was drawn up and announced in June 2019.
In June 2021, we also revised the basic policy to further

promote such operations.
All our executives and employees will continue to workfor the best interests of our customers, contributing to theirstable asset building by proposing appropriate products
and services that meet their investment objectives and life
cycles, and by providing easy-to-understand information.

The Basic Policy on Customer-oriented

Basic Policy

Status of Initiatives and performance Indicators (KPIs)

Business Operations and the“Status of

https://www.dhfg.co.jp/other/

https://www.dhfg.co.jp/other/fiduciary/fiduciary/pdf/210630_002.pdf

Initiatives and Key Performance Indicators(KPIs) under the Basic Policy for the Fiscal
Year Ended March 31, 2021”are posted
on our website.

DAISHI HOKUE TSU REPOR T 2021

20

About the Daishi Hokuetsu FG

Medium-Term Management Plan
Overview of the Medium-Term Management Plan
Under the 1st Medium-Term Management Plan, Daishi Hokuetsu FG worked to fortify its business base to maximize synergistic

effects, using the three key measures of implementing the bank merger, strengthening organizational capabilities, and enhancing
external alliances.

Under the 2nd Medium-Term Management Plan, which we have been pursuing since April 2021, we are working to maximize

synergistic effects and achieve consolidated net income of 20 billion yen in the final year of the plan (fiscal year ending March 31,2024). This will be done by leveraging the three synergies of“merger synergy,”“group synergy,”and“TSUBASA collaboration synergy.”

Working together in friendly
rivalry for the developmentof the local community
December 1878
THE HOKUETSU BANK

Sixty-Ninth National
Bank of Japan founded

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Fourth National Bank ofJapan foundedA

November 1873

1st Medium-Term Management Plan

2nd Medium-Term Management Plan

(October 2018 – March 2021)(April 2021 – March 2024)— From Integration of Business to Bank Merger —— After the Bank Merger —Building a foundation to maximize synergistic effects
Further fortify thebusiness base

A new stage for the merger to produce results

Consolidated net income for the fiscal year ended March 31, 2021:

10.7

Maximizing
synergistic effects

billionyen

Implement bank merger
●

●

20

billionyen

Maximize merger synergy

合併シナジーの最大化
A new bankcreated

合併シナジーの最大化
Share expertiseand coordinate overlapping functions
Reallocate business resources

Strengthening organizational capabilities●

Planned consolidated net income for the fiscal year ending March 31, 2024:

Maximize group synergy

Initiatives for three major structural reforms

合併シナジーの最大化
Establishmentof regional trading company and staffing agency

合併シナジーの最大化
Maximizethe use of groupcompany functions
Maximize TSUBASA alliance synergy

Enhance external alliances

合併シナジーの最大化
Take advantageof the scale of being
one of the largest regional banks

合併シナジーの最大化
Strengthen
partnership in
the TSUBASA Alliance

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Review of the 1st Medium-Term Management Plan (Recent Major Initiatives)
The most recent major initiatives implemented under the 1st Medium-Term Management Plan are as follows.

Basic Strategy I: Improving our Financial and Information Intermediary Functions
Multifaceted support for customers and communities that takes COVID-19 into account●Improved convenience for non-face-to-face transactionsP.48▲

・Introduction of the“Web Completion Scheme”for personal loans
●

P.22

▲

●

Provide a one-stop shop for financial services through collaboration between Group companies
P.44▲

・Launched the“Family Trust Account”,etc.

Basic Strategy II: Improving Operational Efficiency●

Use of digital technology and structural reform based on the three pillars of“business reform,”“branch reform,”and“channel reform”
P.48
P.49

▲

・Introduction of“TSUBASA Smile,”a counter reception system, at all branches
P.51

▲

・Introduction of a deposited item management system▲・Provision of the“Daishi Hokuetsu Little Bank”app for smartphones・Integration of personal loan offices, etc.

Basic Strategy III: Increasing the Sophistication of our Group Management System

21●

Implement our management philosophy and compliance-focused initiatives●

E fforts to enhance corporate governance●Initiatives for organizational harmony, etc.
DAISHI HOKUE TSU REPOR T 2021

Multifaceted support for customers and communities that takes COVID-19 into account 
Daishi Hokuetsu FG places the highest priority< Main Initiatives >on providing a stable supply of funds to the local

Establishment of“COVID-19 Consultation Counters" (all branches)●

economy, and in addition to proactively providing

Proactive provision of financial and other support to customers●

cash management support, has been taking advantage

・Niigata Prefecture funds for dealing with the COVID-19 pandemic (loans with
virtually no interest for three years)
・Donation-based private placement bonds“Private Placement Bonds Supporting
Niigata Culture and Sports”(May 2020 – December 2020)・Participation in the“Niigata Musubu Project,”which provides support throughcrowdfunding for restaurants, inns, etc.
・Implementation of the“Livelihood Support Plan”for various personal loan products
・Extended exemption period for fees to change loan conditions (from October 2020
to October 2021)of the Group’s functions to offer multifaceted support,
including holding consultations on various subsidies,match-making support for securing suppliers and sales
partners, and support for improving productivity.

In addition, in November 2020, we launched the“Niigata Food Kizuna Project,”which aims to provide
support to households that have been severely●

affected by the protracted COVID-19 outbreak, andIntroduction of multifaceted support for improved management andproductivity

・Individual consultations regarding Employment Adjustment Subsidies
・Web seminars on expanding sales channels, personnel development, and use of
subsidies・Establishment of a“New Normal Consultation Service”to support the resolution ofbusiness issues related to the COVID-19 crisis
・“Niigata Power-up Salon,”a free management consultation session held by sevenof our Group companies
・Launch of “Telework Loans”to support productivity improvements through digital
investment

is engaged in making donations to food banks and“children’s cafeterias.”

We have donated

10,000 masks and 30
million yen to Niigata
Prefecture for use inenhancing the provision●of medical care.

L aunch of the“Niigata Food Kizuna Project”to support
households with children by providing them with foodLetter of appreciation from Niigata Prefecture

Niigata Food Kizuna ProjectNiigata“Food Kizuna”Support Private Placement Bonds< SDGs Private Placement Bonds >Phase 1
From November 2020

●

●

●

S ince November 2020, Daishi Hokuetsu Bank has been conducting
the“Niigata‘Food Kizuna’Support Private Placement Bonds”(SDGs
Private Placement Bonds) initiative.
T hese private placement bonds involve the issuing company andDaishi Hokuetsu Bank jointly donating a portion of the issuance feeto the Niigata Prefectural Social Welfare Council.
T hrough the council, the money will be donated to organizations
operating“children’s cafeterias”and food banks in Niigata Prefecture,
and will be used to fund the operations of these organizations.

Bonds commissioned
Companies
Private placement bonds

SupportSupport provided:

BANK

Daishi
Hokuetsu BankChildren’s cafeterias
Food banks

103

Phase 2
From April 2021●

Alongside partner food companies, the Niigata Prefectural
Government, and the Niigata Prefecture Food Bank Liaison
Council, Daishi Hokuetsu FG is conducting a project todonate food items to households affected by COVID-19.

●

We will continue to actively pursue this project to obtainsupport from more companies and expand the scope of
its activities.

Illustration of the food donation project

Amount of donations(projected)

10,1

million yen

Project donating food items tohouseholds impacted by COVID-19

Food-relatedcompanies

Donation of food items

Niigata Prefecture
Food Bank Liaison
CouncilRequests for support(As of June 30, 2021)
ReferralCooperation

Donations to the following
organizations through the Niigata
Prefectural Social Welfare Council

Partnership

Partnership● Children’s cafeterias: 73 groups

Households in needof food support
Donation of food items

Support*Niigata PrefecturePartnercompanies

30

Publicity(As of June 30, 2021)● Food banks: 11 groups* Cooperation in food drives and publicizing activities

DAISHI HOKUE TSU REPOR T 2021

22About the Daishi Hokuetsu FG

Medium-Term Management Plan
Performance indicators (KPIs) for the 1st Medium-Term Management Plan and Assessment
Targets for Community Contributions 
Amid the prolonged low interest rate environment, the stagnation of economic activities and restrictions
on face-to-face sales activities imposed by the COVID-19 pandemic, and the merger and systems integration
between Daishi Bank and Hokuetsu Bank in January 2021, consolidated net income, which is a performanceindicator (KPI) indicating profitability, stood at 10.7 billion yen, exceeding the earnings forecast (10.5 billion yen).

■ Management Indexes (KPI)
Management Index (KPI)
Profitability

FY2020 Results

Consolidated income for the period*1(100 million yen)

Efficacy

Performance compared to forecast

+200

107

million yen

Average small and mid-sized corporate loan balance(100 million yen)

19,122

19,398Average consumer loan balance(100 million yen)

12,93013,326

Non-interest income*3(100 million yen)

204

189

Core business gross profit OHR

（％）

74.1

81.1

Consolidated ROE (shareholder capital base*4）（％）

3.2（3.3）

2.6（2.7）

（％）

9.65

10.35

*2

Growthpotential

128

FY2021 Results

Finiancial health Consolidated capital equity ratio*1. Net income attributable to parent company shareholders.For the year ended March 2019, net income includes 47,200 million yen in gain on bargain purchase due tothe corporate integration.
*2. Annual average balance before partial direct depreciation*3. Total amount of other business profits excluding fees/commissions and gains (losses) related to bonds (government bonds, etc.)*4. Calculated value subtracts valuation difference on available-for-sale securities, etc., From the net asset that is the denominator

Compared to the fiscal year ended March 31, 2018, which was before the establishment of Daishi Hokuetsu FG, the average balance of loans to SMEs
and the average balance of consumer loans both increased by more than 170 billion yen, with non-interest revenue also increasing by 2.4 billion yen.
In addition, securities intermediary revenues increased significantly to 2.6 billion yen over the fiscal year ended March 31, 2018 due to strengthened
collaboration between Group companies.

SME loan balance（100 million yen） +1,769+10.0％

Consumption loan balance（100 million yen）

Non-interest revenue（100 million yen）

+24
+14.8％+26+259.1％

19,398164
11,612(group revenue)（100 million yen）

+1,714+14.7％

17,629Securities intermediary revenue

189

37

13,326
10

Fiscal year ended March 201823

Fiscal year ended March 2021

Fiscal year ended March 2018

Fiscal year ended March 2021

Fiscal year ended March 2018

DAISHI HOKUE TSU REPOR T 2021

Fiscal year ended March 2021

Fiscal year ended March 2018

Fiscal year ended March 2021

■ Five indicators for portfolio reform
Increase the proportion of core gross business profits accounted for by“interest on loans”and“non-interest revenue”

Proportion of total loans
accounted for by SME loans

Proportion of total loans
accounted for by consumer loans

（%）

（%）

Proportion of consumer loans
accounted for by unsecured loans
（%）
+0.4％

+1.8％
+2.3％

37.1

38.9

Fiscal year ended March 2018

Fiscal year ended March 2021

Proportion of core gross business profits accounted
for by revenue from asset management advice
（%）

24.4

26.7

Fiscal year ended March 2018

Fiscal year ended March 2021

8.0

8.4

Fiscal year ended March 2018

Fiscal year ended March 2021

Proportion of core gross business profits accounted
for by revenue from financial solutions
（%）

+1.6％

All five indicators for+0.9％

portfolio reform show
7.6

9.2

Fiscal year ended March 2018

Fiscal year ended March 2021

Fiscal year ended March 2018

improvement

7.6

6.7

Fiscal year ended March 2021

■ Assessment Targets for Community Contributions
The figures for the fiscal year ended March 2021 exceeded all nine of our assessment targets forcommunity contributions, showing steady progress for the group’s initiatives.
Evaluation Indexes for Contributing to the Community

FY2021
TargetResults

Comparison with target

Top-priority index for measuringextent of contribution to community

Number of corporations doing business with the
Daishi Hokuetsu FG as their main bank

14,97015,088+118

Maintenance/increase of leaders forthe regional economy

Number of projects involving startup/restart of a business

1,300

2,350

+1,050

Corporations supported in finding a business successor

1,540

1,544

+4

Number of balance based on evaluation of business feasibility

4,500

4,878

+378

Number of balance based on evaluationof business feasibility

1,050,000
million yen

1,050,300
million yen+300 million yen

Number of corporations utilizing Guidelines for
Personal Guarantee Provided by Business Owners

5,360

7,023

+1,663

Number of business partners who
reformed their management indexes, etc.

9,322

9,953

+631

Number of projects for supporting main businesses

3,700

5,460

+1,760

Number of corporations being supported forformulation of management reform plans

620

668

+48

Support for increasing added valueof corporations

DAISHI HOKUE TSU REPOR T 2021

24

About the Daishi Hokuetsu FG

Medium-Term Management Plan
Basic and Key Strategies in the 2nd Medium-Term Management Plan

Taking into account the business environment and other factors, the 2nd Medium-Term Management Plan sets the threepriority business issues for Daishi Hokuetsu FG as enhancing profitability, improving operational efficiency, and sustaining andreinforcing a sound footing. To achieve these goals, we will work on four basic strategies: I.“achieving synergy effects,”II.“dramatic
improvements in productivity,”III.“developing and enhancing human resources,”and IV.“improving risk management.”

2nd Medium-Term Management Plan

Changes in the environment
Even faster pace of change

Priority Business Issues
Rapidly fluctuating external environment●P roliferation of 5G and rapid
progress of digitalization●

Prolonged ultra-low interest rateenvironment●

profitability

Population decline, etc.

Paradigm shifts due to digital

Improvingtransformation, COVID-19,

operational

etc.

efficiency

Changing behaviors andSustaining andissues of communities andreinforcing acustomers

25

Enhancing

DAISHI HOKUE TSU REPOR T 2021

sound footing

<Achieve three synergies to maximize synergistic effects>

Plan period: April 2021 – March 2024

Maximize merger
synergy

Basic Strategies

Maximize groupsynergy

Maximize
TSUBASA Alliancesynergy

Key Strategies●

Achieve top-line synergies and cost synergies(achieve merger synergy)

Basic Strategy I

Achieve synergistic
effects

Basic Strategy II

Dramatic improvements
in productivity
Basic Strategy III

Developing and enhancing
human resources
Basic Strategy IV

Improving risk
management●

Achieve group synergy●Maximize top-line synergy by expanding
partnership in the TSUBASA Alliance●Create new value by developing consulting
functions and implementing digital transformation●

Boost non-interest revenue●

Search for new business fields●

ESG and SDGs initiatives●

Implement new structural reforms to achieve comprehensive
improvements in productivity●

Maximize cost synergy by expanding partnership in the TSUBASA Alliance●Promote organizational harmony and shared awareness:“unity of purpose”●●

E nhancing consulting functions
Managing human resource to ensure that all group employees have a roleto play●

Conduct business operations with compliance as top priority●

Enhance the Group’s operational management approach●

Develop more advanced risk management

DAISHI HOKUE TSU REPOR T 2021

26

About the Daishi Hokuetsu FG

Medium-Term Management Plan
Basic Strategy I

Achieve synergistic effects

Key Strategies

Achieve top-line synergies (sharing expertise) —Enhancing the financial and information functions to be created—

Further portfolio reform
We will strive to maximize Daishi Hokuetsu FG’s consolidated net income by improving the six indicators for increasing the●earnings of the banking division and non-banking Group companies, and by demonstrating the Group’s all-round strengths.
<Banking Division> Increase the proportion of core net business profits accounted
for by“interest on loans”and“non-interest income”
6 Indicators for Furthering Portfolio Reform Results for<Group Company Divisions> Increase the proportion of consolidated net income in thefiscal year accounted for by“group company revenue”
Fiscal year ended
March 31, 2021

Plan for fiscal year ending
March 31, 2024 Change vs. Fiscal year ended March 31, 2021

(1) Proportion of total loans accounted for by SME loans

38.9 ％

39.5 ％

0.6 ％(2) Proportion of total loans accounted for by consumer loans

26.7 ％

28.1 ％

1.4 ％(3) Proportion of consumer loans accounted for by unsecured loans

8.4 ％

8.4 ％

0.0 ％

(4) Proportion of core gross business profits accounted for by revenue from asset management advice

9.2 ％

13.7 ％

4.5 ％(5) Proportion of core gross business profits accounted for by revenue from financial solutions

7.6 ％13.5 ％

5.9 ％(6) Consolidated to non-consolidated ratio (consolidated net income for Daishi Hokuetsu FG in the fiscal year ÷ non-consolidated net income for the bank in the fiscal year)

1.06

1.10 or over0.04 pts or over

Key Strategies

Achieving cost synergy (coordinating overlapping functions) — Substantial improvement in OHR —Substantial reductions in consolidated operating expenses of Daishi Hokuetsu FG through maximization of merger synergy and thorough cost control■ OHR (consolidated)■O perating expenses

84.7%

71.9 billion
yen

65 %range▲19pt
Fiscal year ended March 2021

Fiscal year ending March 2024

(50billion yen)

Fiscal year ended March 2021

66.8billion
yen
Fiscal year ending March 2024

Strengthen sales capabilities through reallocation of Group management resources by integrating branches, streamlining head office, and reforming sales office operations
Share expertise, coordinate overlapping functions, and reallocate management resources

Reduce system costs and other property costs●Develop consulting capabilities●

Systematically produce personnel
Branch integration ● Streamline head office●

Reform sales office operations

Human resources development
Develop human resources ● Improve skills●

27

Reallocate approx. 500 employees to core operations, etc.

p
u
o
r
G
e
h
t
e
d
i
s
t
u
O

Integrate branches, head offices, etc.

●

Reorganize Group companies in the same industry

●

p
u
o
r
G
e
h
t
e
d
i
s
n
I

Provide new added value by drawing on the functions of Group companies●Integrate Group companies

Financial services
Banking,

Non-financial services
Systems, consulting,securities, leasing,regional trading

credit cards, etc.

companies, etc.

Problem-solving for local companies suffering from personnel shortages
Enhance match-making with Daishi Hokuetsu FG personnel

DAISHI HOKUE TSU REPOR T 2021

Maximizing merger synergy

Improve operational efficiency
through new structural reforms●

Regional revitalization(Highest priority issue)

Introduce new products and services●

Integrate core systems, subsystems
and operations (2021/1)

investments

Expand sales and customer
base (leverage networks)

Integrate systems and operations●

Allocate to strategic

Develop and expand expertise●

Regional revitalization and sustainable growth of Daishi Hokuetsu FG

Solve problems
for the local
economyProvide products

and services thatmeet customers’
needs

Sustainablegrowth of Daishi
Hokuetsu FG

Key Strategies

Achieve group synergy

Achieve group synergy by maximizing the use of Group company functions●

Strengthen cooperation within the Group and enhance the core businesses of each Group company●

Increase the total number of Group customers by acquiring new customers, increasing market share, and diversifying transactions●

Strengthen the Daishi Hokuetsu FG head office structure to achieve group synergy

LeasingEnhance our proposals for various procurement methods for capital investment

Management consulting

Enhance support for business startups and business plan development

Regional trading companies

Enhance support for market development, tourism promotion, and productivity improvement

Staffing company

Enhance personnel match-making to meet companies’business challenges■ Group company revenue (total)

5.5
billion yen

2.9

2nd Medium-Termbillion yen

Expansion of new business

Enhance our proposals for meeting diverse asset management needs

areas (exploration)

Securities

Achieve
groupsynergy

Fiscal year ended March 31, 2021 Plan for fiscal year ending March 31, 2024

Management Plan

1st Medium-Term

Management Plan
Dig deeper into existing business areas（development）

Initiatives for achieving group synergy

1
●

●

2

Strengthen
governanceE s t a b l i s h n e w “ R e g i o n a l●

R eallocate Group management

Revitalization Department”to plan

resources by integrating branches,and conduct sales and regional

streamlining head office, and reforming

revitalization for the entire Groupsales office operations at the bankE stablish new “Group Strategy Promotion

Reallocate approx.

Department”to oversee and support restructuring
and business promotion for non-bank subsidiaries

3

Allocate strategic
personnel●

4

Reorganize
the GroupI mprove management

Securities collaboration

efficiency by reorganizing●

Group companies in thesame industry●

70

Staffing company

Launch a lease brokerage service through the bank●

Credit card collaboration●

Enhance support for market development, tourism
promotion, and productivity improvement

Leasing collaboration●

Explore new
business areas

Regional trading companies

Develop business with high-net-worth individuals throughcollaboration between banks and securities companies

strategic personnel to Group companies

and subsidiaries of subsidiary banks, etc.

5

Expand areasof collaboration

Enhance personnel match-making

Respond to deregulation

Strengthen cashless business●in collaboration with banks

E nter into new business areas
following deregulation (exploration)

Group Structure<Business areas>
Financial

Non-financial
Banks

Securities

Daishi Hokuetsu Bank

Daishi Hokuetsu Securities

LeasesWholly-owned subsidiary ofWholly-owned subsidiary ofDaishi Lease
Hokuetsu Leasing

Daishi Hokuetsu FG

Daishi Hokuetsu FG
Consulting

Daishi Management Consulting

Bank subsidiaries

Hokugin Economic ResearchInstitute

Credit Cards

Daishi JCB Card
Daishi DC Card
Hokuetsu Card
Bank subsidiaries

Bank subsidiaries

In April 2021, two new departments were established within
Daishi Hokuetsu FG to produce group synergy
Regional Revitalization Department

Group Strategy Promotion Department

Bank subsidiaries

Staffing

Daishi Hokuetsu Career Bridge
Wholly-owned subsidiary ofCredit Guarantee

Daishi Guaranty
Hokuetsu Credit Guarantee

Research Center ofNiigata

Daishi Hokuetsu FG
Regional trading companies

Systems

Daishi Computer
ServiceBank subsidiaries

Bridge Niigata
14.3% stake held by

NCS

4.8% stake held byDaishi Hokuetsu FG

the bank

DAISHI HOKUE TSU REPOR T 2021

28

About the Daishi Hokuetsu FG

Medium-Term Management Plan
■ Branch Integration Initiatives
The schedule for the integration of branches, which began in April 2021, has been changed from“to becompleted in approximately three years”in the original plan to“to be completed in approximately two years.”
In addition to minimizing any loss of convenience for our customers, we will further improve convenience bymeeting the various needs of our customers with extra capacity generated by improving management efficiency.
Branch integration schedule<Reference> As of March 31, 2021
Number of branches(Excluding in-branch sales offices and virtual offices)

Initial plan

Branch A

Approx. 420 employees

Branch B

made available through201

April 2021 –3

approx. years

branch integration(Total number of branches: 206)

After integration

Branch A Branch B*Integration using in-branch sales offices

Yearly implementation plan for branch integration
Revised plan

Fiscal year ending March 2022

April 2021 –Approx.

2

approx. years

Fiscal year ending March 2023

20

30

Approx.

branchesbranchesTwo-year total
Integrate

50

approx.

branches

1/4ofbranches

Basic Strategy II

Dramatic improvements in productivity

Key Strategies

Implement new structural reforms to achieve comprehensive improvements in productivity

New structural reforms based on three key areas of“sales reforms,"“sales office operations reforms,”and“head office operations reforms”
New structural

Sales

reformsreforms

Sales office

Head office

合併シナジーの最大化
operations reforms
operations reforms

Accomplish our priority
business challenges

Increase added value for customers
Dramatic improvements in productivity

EnhancingEngines for accelerating new structural reforms

Human resource development to adapt to a changing business model

Digital Transformation

Maximize merger synergy Improve consulting capabilities

TSUBASA Allianceby establishing and using a new personnel system

合併シナジーの最大化

Improve productivity throughsales reforms

29

合併シナジーの最大化

profitability
合併シナ

ジーの最大
Improving化
operational
efficiency

Radically reform administrative processes
by reforming sales office operations

Optimize head office organization
by reforming its operations

Strengthen sales capabilities

Optimize branches and channels

Apply digital transformationto achieve the“5 Nos”

(1) No back office work (2) No verification (3) No
cash management (4) No paperwork (5) No seals

Head office
operations

Improve productivity by streamlining head
office and thoroughly reforming its operations

Develop sales
stylesMake use of the web, tablets,
etc.

Improve efficiency of loanadministration at sales offices

Full operation of the new loan
support system

Centralized administrative
department

Become a profit center and expand theadded value of services for customers

Radical reform ofadministrative processes

Use of RPA, etc.

DAISHI HOKUE TSU REPOR T 2021

Basic Strategy III

Developing and enhancing human resources

Key Strategies

Promote organizational harmony and improve consulting capabilities●

Basic Strategy IV

Improving risk management

Continue measures to promote organizational harmony, led by the (newly established) Integration Promotion Office Establish the new personnel system and familiarize employees with it

Establish a framework

Enhance consulting capabilities by appropriately allocating
personnel who can work in a wide range of fields

Implementing the human resources development
cycle*

Implement a group-wide human resources strategy using transfersand exchanges among Group companies to enhance Group synergy●

Establish rank-specific training programs to foster awarenessof career building and support career development* A cycle in which improved practical skills lead to experience of success, which in turn leads to a virtuous cycle of further independent learning and challenge.
Acquisition of
professional
qualifications

Employees with level 2 or higher financial planner qualifications (cumulative total):

2,705

Securities analysts:(As of March 2021)

Key Strategies

56

SME management consultants:

43

Establish flexible and productive work styles
adapted to the“new normal”

Conduct business operations that prioritize compliance, develop the Group’s business management system

Ensure widespread awareness of our management
philosophy and the importance of compliance

Improve our credit risk control capabilities through the(newly established) Credit Risk Management Office

Further enhance governance in accordance with the Corporate
Governance Code and Corporate Governance Guidelines

Implement systematic measures to combat money
laundering and terrorist financing

Maintain and improve Daishi Hokuetsu FG’s consolidated capital adequacy ratio

Enhance cybersecurity management■『 DasH!!120 』
The first four months of the 2nd Medium-Term Management Plan, known as DasH! 120, have been identified as themost important period of activity for accelerating the initiatives of the Medium-Term Management Plan, and various
measures are being implemented quickly and intensively.
April 1, 2021

Reallocate business resources

Improve communication within and outside the Group

July 31, 2021

DasH!!120

Achieve group synergy

Complete streamlining of head office

Briefings by executives within and outside the bankEstablish new Regional Revitalization Department

Make available approx. 200 employees

Explanations to stakeholders regarding initiatives and prospects

Plan and conduct sales and regional revitalization for Daishi-Hokuetsu FG as a whole

Conduct branch integration

To be implemented monthly from April 2021
Achieve early improvements in sales capabilities
Prior consolidation and reallocation of sales staff
to surviving branches prior to branch integration

Reallocation within and outside the Group
Reallocation within and outside the Group of personnel made available throughbranch integration, streamlining of head office, and reform of sales office operations

for contributing to local communities and achieving synergy

Activities to promote organizational harmony
Continue measures to promote organizational harmony,

Establish new Group Strategy Promotion Department
Oversee and support business promotion
for Group companies (excluding banks)

led by the (newly established) Integration Promotion Office

Use personnel transfers to promote a unified mindset
Promote a unified mindset and the integration

Establish new Structural Reform Promotion Committee
Promote and oversee new structural reforms, digital transformation
strategy, and reallocation of management resourcesof skills and expertise previously acquired
Conduct transfer of approximately 1,000
employees, or about 30% of the total workforce

Intensively implement measures
Intensively implement measures to increase the volume ofwhole-group activities and develop consulting capabilities

DAISHI HOKUE TSU REPOR T 202130

About the Daishi Hokuetsu FG

TSUBASA Alliance ～ Strategic Alliances by 10 regional banks ～The TSUBASA Alliance is a framework for wide-range regional partnerships aimed at proposing andimplementing measures for contributing to sustainable regional growth, sophistication of financial systems,
increased corporation value of member bank groups, and other initiatives.
The Gunma Bank joined the alliance in December 2020. A total of ten banks now participate in the alliance.
With the addition of Gunma Bank in December 2020, the number of participating banks has expanded to 10.
Since the alliance’s inception in October 2015, we have also expanded our partnership in a wide rangeof areas, including fintech, joint systems and administration, inheritance-related business, and international
business, including the group companies of participating banks.
October 2019 Wide-area M&A partnership
January 2016 Chiba Bank
core systems migration

May 2019 Tsubasa SDGs Declarations
April 2019 Launch of Passbook App

October 2016 Alliance ininheritance-related services

October
2015 Start
of Tsubasa
Alliance
2 01
5 年1 0 月
Daishi Hokuetsu）

Bank, Chiba
Bank, Chugoku
Bank

March 2016
Expansionof memberbanks

March 2019
Expansionof memberbanks

July 2016 Established the
T&I Innovation CenterMay 2019
Expansionof memberbanks(Shiga Bank)(Musashino
Bank)(Iyo Bank, Toho
Bank, North
Pacific Bank)）

November 2018 Launch of TSUBASA Smile
April 2018 Launch of Tsubasa FinTech common
infrastructure
May 2017 Chugoku Bank core systems migration
January 2017 Daishi Hokuetsu Bank core systems migration

February 2018 Agreement on cooperative
administrative divisions(Daishi Hokuetsu Bank, Chiba Bank)

Banks Participating in the TSUBASA Alliance Location of Head Office and Branches

10

North Pacific Bank

Participating Banks(As of March 31, 2021)

The alliance forms a network thatstretches across the Japanesearchipelago, linking Hokkaido to
Okinawa and the Sea of Japan to
the Pacific Ocean.

The Toho BankThe Gunma BankThe Shiga BankThe Chiba BankThe Chugoku BankThe Ryukyu Bank

The Musashino BankThe Iyo Bank

Head Oﬃce
Branch
Head
Oﬃce
Head
Oﬃce
BranchBranch31

DAISHI HOKUE TSU REPOR T 2021

Deploying large-scale nationwide
business collaboration toleverage economies of scale

Over 90 trillion
yen in total
assets rivaling
megabanks(On a consolidated basis for the
fiscal year ended March 31, 2021)

New!
April 2020
Expansion ofmember banks

May 2021
Launch of studies
into the creationof a joint venture
to provide
remote financial
consulting
services(RyukyuBank)

July 2020
TSUBASA
Alliance Co., Ltd.

December 2020
Expansion ofmember banks

Pursuing further
synergies as thelargest alliance of(Gunma Bank)

regional banks

established■ Topics■ Topics

Establishment of TSUBASA Alliance Co., Ltd.
●We have established TSUBASA Alliance Co., Ltd. as a joint

Launch of studies into the creation of a joint venture
to provide remote financial consulting services●

Daishi Hokuetsu Bank, Chiba Bank, Chugoku Bank, andventure by the alliance’s members, and this will serve as

Nomura Holdings are exploring the establishment of a joint

a platform to promote the consolidation of operations

venture to provide remote financial consulting services.

and functions shared among the participating banks.
●

New!

●

The joint venture company to be established aims toIn addition, in October 2020, an Anti-Money Laundering

provide neutral and comprehensive consulting services

Center (AML Center) was established within the company,that transcend industry categories by combining

and work is underway to upgrade risk management

expertise in the banking and securities industries.

systems to prevent fraudulent account transactions.

Goals of the TSUBASA Alliance Collaboration

Increase the top line

Cut costs

Increase corporate value

Initiatives in the 2nd Medium-Term Management Plan
Pursuing further synergies as the largest
alliance of regional banks

Use as a“main engine”for faster innovation

DAISHI HOKUE TSU REPOR T 2021

32

Financial Highlights / Non-Financial Highlights

Financial Highlights Overview of Financial Highlights for the Year Ended March 31, 2021
Consolidated Results for the Daishi Hokuetsu Financial Group

Profit and Loss

Consolidated capital equity ratio(Unit: 100 million yen)

Year Ended
March 31, 2019

Item

Year Ended
March 31, 2020

Ordinary income

1,180

1,546

Ordinary profit

167

194

568

128

Profit attributable toowners of parent

△115

△19

△20

10.35%

Year Ended
March 31, 2021

9.65%

9.54%

1,431
175
107
Year Ended March 31, 2019 Year Ended March 31, 2020 Year Ended March 31, 2021

*Consolidated results for the first year of establishment (year ended March 31, 2019) were

calculated by adding the consolidated profit/loss of The Hokuetsu Bank after the management
integration to the full-year consolidated profit/loss of The Daishi Bank.

*Net income attributable to shareholders of the parent company (year ended March 31, 2019)
includes 47,200 million yen in gain on bargain purchase due to the corporate integration.

Daishi Hokuetsu Bank (Non-Consolidated)

Profit and Loss
Gross profit

Core business net profit¥76,400¥15,200
Gross proﬁt(100 million yen)millionOrdinary profit

millionCurrent net income

Core business net proﬁt

834

822

250

764

150

400

222

211

200

millionCurrent net income

208
153

143

147
101

100
50

152

0

0

Year ended March 31, 2019Year ended March 31, 2020

Gross profit

Total profit calculated by adding
capital income consisting of interest
income such as deposits, loans, andsecurities; fees and commissions
which are income from fees; andother business interest which isincome from other business activities.

●

Year ended March 31, 2019Year ended March 31, 2021

Despite increased revenue from asset management advisory services, grossbusiness profit decreased to 76,400 million yen (down 5,700 million yen year
on year), mainly due to a decrease in interest and dividends on securities.
Net core business profit excluding gains and losses related to governmentand other bonds decreased to 15,200 million yen (down 7,000 million yen
year on year). This was due to a decrease in gross business profit and a 1,900
million yen increase in expenses, which resulted primarily from the increasein business integration-related expenses.
These business integration-related expenses are expected to decreasesignificantly from the fiscal year ending March 31, 2022.

33

235

200

600

●

Ordinary proﬁt

million

300

1,000
800

(100 million yen)

¥14,700¥10,100

Core business net profit

Profit obtained from main businessactivities of the bank. Calculated bydeducting gains (losses) related tobonds (government bonds, etc.) fromgross profit and then subtracting
expenses such as personnel expenses
and property costs.

Year ended March 31, 2020

Year ended March 31, 2021

Ordinary profit decreased to 14,700 million yen (down
6,000 million yen year on year) due to a decrease in net
credit costs, despite a decrease in core business profit.
Current net income decreased to 10,100 million yen (down5,200 million yen year on year).

●Ordinary profit

Profit obtained from normal
operating activities. Calculated
by subtracting ordinary expenses
from ordinary profit.

DAISHI HOKUE TSU REPOR T 2021●

Current net income

Final income calculated bysubtracting extraordinary losses,
taxes, etc., from ordinary profit.

Deposits and Assets on Deposit
Deposits¥8,223,400
All branches(100 million yen)millionBranches in Niigata Prefecture

Investment trust

millionInvestment trust Insurance

10,00082,23482,00080,52180,000

8,000

8,409

74,904

Year ended March 31, 2019

2,114

2,000

73,16772,000

5,503

5,212

5,140

4,000

76,58074,880

8,155

7,750

6,000

78,00074,000Total(100 million yen)

84,00076,000¥815,500

Assets on deposit

1,604

1,788

Year ended March 31, 2020

Year ended March 31, 2021

0Year ended March 31, 2020

Year ended March 31, 2019Year ended March 31, 2021

The deposit balance (including negotiable deposits) increased to 8,223,400 million
yen, with the main increase being deposits from customers in Niigata Prefecture.

Assets on deposit rose to 815,500 million yen, a result of
proposals tailored to customers’asset management needs.

*The calculation method for insurance was unified following the merger of Daishi Bank and Hokuetsu Bank. As such, retroactively adjusted figures are shown for the
purpose of comparison with previous years.

Loans and Securities
Loans¥4,959,600(100 million yen)

60,00050,000All branches

Securities(100 million yen)

49,59625,00038,120

Domestic bonds

10,000

5,000

0

0

Year ended March 31, 2021

The loan balance was 4,959,600 million yen, mainly due

to a decrease in public-sector loans and loans to large andmedium-sized companies mainly outside Niigata Prefecture,despite a steady increase in the balance of consumer

24,942

millionForeign government bonds

Stocks24,41623,19014,971

15,00010,000Year ended March 31, 2020

Total

20,00020,000Year ended March 31, 2019

¥2,441,600

30,00038,621

37,86430,000Branches in Niigata Prefecture

51,09450,91540,000

million

15,222

14,630
4,181

3,870

1,471

Year ended March 31, 2019

1,119Year ended March 31, 2020

4,052

1,372

Year ended March 31, 2021

The securities balance was 2,441,600 million yen as we

continued to diversify our investments in domestic andforeign stocks and bonds.

loans and an increase in the balance of loans to small andmedium-sized enterprises in the prefecture due to cash
management support for customers affected by COVID-19.

Bad Debt¥91,700

Bad Debt
Substandard claims(100 million yen)

Doubtful claims

Bankrupt/substantially bankrupt claims

1,500
1,200
900
600
300
0

Non-performing loan balance based on the Financial Revitalization Act (loans reported based on

millionNon-performing loan ratio

675
50

2.0

543
81

1.6

1.42

750
42

625
81

917

1.2

41

0.8

810
64

The head offices and sales offices are working together to support management reform at ourcustomers.

（％）

1.79
1.28

the Financial Revitalization Act) was 91,700 million yen, which was 1.79% of non-performing loan.

0.40Year ended March 31, 2019 Year ended March 31, 2020 Year ended March 31, 2021

● Substandard claims
Delinquent loans of 3 months or longer and restructured loans
to substandard debtors, excluding doubtful claims and bankrupt/
substantially bankrupt claims.

Doubtful claims
Loans for which the debtor has not entered business bankruptcy, but
is experiencing worsened financial status and economic performance,
and there is a high possibility that it may not be possible to recovercapital or receive interest on the loan according to the contract.
●

Bankrupt/substantially bankrupt claims
Loans of debtors with bankrupt business due to reasons such as the start ofbankruptcy procedures, the start of reorganization procedures, or declaration forthe start of reorganization procedures, or loans to which these conditions apply.
●

DAISHI HOKUE TSU REPOR T 2021

34

Financial Highlights / Non-Financial Highlights

Financial Highlights Overview of Financial Highlights for the Year Ended March 31, 2021
The Daishi Bank / The Hokuetsu Bank Consolidated / Non-Consolidated
Status of equity ratio*A level of at least 4% is required for banks operating only in JapanThe Daishi Bank
Non-consolidated equity ratio
9.63 % 9.25 %The Hokuetsu Bank

Consolidated equity ratio

Non-consolidated equity ratio

9.43 % 9.23 %8.87 % 8.47 %Consolidated equity ratio

Year ended March 31, 2019Year ended March 31, 2020

Non-consolidated equity ratio
10.00%

9.00 % 8.69 %4％
Domestic
standard

4％
Domestic
standard

The Daishi Hokuetsu Bank
Consolidated equity ratio
9.63%

4％
Domestic
standard

Year ended March 31, 2019Year ended March 31, 2020

Year ended March 31, 2021

Ratings
The Daishi Hokuetsu FG
Japan Credit Rating Agency (JCR)AAA

The Daishi Hokuetsu BankJapan Credit Rating Agency (JCR)

Moody’
s

Aaa

AAA

AA

A＋

AA

A＋

Aa

A1

A

A

A

A

A

A2

BBB

Aー

BBB

Aー

Baa

A3

BB

BB

Ba

B

B

B

CCC

CCC

Caa

CC

CC

Ca

C

C

C

D

D
As of March 31, 2021●

Rating

The certainty of fulfillmentfor bonds (corporatebonds, etc.) issued by acorporation is evaluated by a ratings organization which is a fair third party.
The evaluation results are displayed as an easy-to-understand symbol that objectively assesses the creditworthiness and safety of the corporation.This rating is an important index.

35

DAISHI HOKUE TSU REPOR T 2021

Non-Financial Highlights
We have established the Daishi Hokuetsu Financial Group SDGs Declarations (p. 39) with the aimof helping to achieve the Sustainable Development Goals (SDGs) adopted by the United Nations.
Results from main initiatives related to the five declarations are as follows.

SDGs Declaration 1 Regional Economy/Society

Business startups or
re-startups（FY2021）

Contribute to revitalization of the local economy and community

Support for Business Succession/M&A
Number of companies supported
in business succession

Number of companies
supported in M&A（FY2021）（FY2021）

1,544

790

Number of events* held by the twobanks (cumulative since FY1992）

Support for
CulturalActivities

Support forStartups

Supportfor Growthof Next
Generation

151*Mainly consisting of classical music concerts
and rakugo (Japanese comedy) performanceswith the aim of providing local residents
with low-priced events that contribute to thepromotion of local culture and art.

2,350
Number of students being
issued scholarships
from the Daishi Hokuetsu
Scholarship Association（cumulative since FY1963）

1,218

Number of participantsin financial education
activities（cumulative since FY2014)

11,449SDGs Declaration 2 Aging Society

Number of employees certified
as Service Care-Fitters

Number of Daishi Hokuetsu Bank Awards presented
to social welfare volunteer groups and individuals

Support a safe and(As of March 31, 2021)(cumulative since FY1978)

222

464

Number of employees attending
lectures to train Dementia Supporters

Number of tulips donated tosocial welfare facilities, etc.

(As of March 31, 2021)(cumulative since FY1971)

4,999

216,260

secure lifestyle forthe elderly.

Support for the Elderly
and Social welfare

DAISHI HOKUE TSU REPOR T 2021

36

Financial Highlights / Non-Financial Highlights

Non-Financial Highlights
SDGs Declaration 3 Financial Services

SupportgrantsOverseas businessexpansion support

Number of support grants

Number of overseas businessexpansion support Projects（FY2021）

Provide financial

1,375

services for leading aneven better lifestyle.

Donation-type
Private Placement
Bonds（FY2021）580

Handling of donation-typeprivate placement bonds

Donations to local governments& educational institutions, etc.

(cumulative since FY2014）(cumulative since FY2014）

1,778

875

Bonds
commissioned

Donationrecipients

Amount commissioned

Total donations¥167,400¥164

millionmillionLoans handled(cumulative since FY2019）

Loans with Special
Provisions for
Exemption of Principal
at Earthquake
DisasterAmount loaned

Loan recipients

113 ¥16,500

millionNiigata Future Japan Stock Fund* past figuresand expected donation amount(FY2020）

NiigataFuture Japan
Stock Fund

Applications

4,754

¥7.2

million*This investment trust donates a portion of administrative expenses (trust fees) paid by customers to help create
a better future for Niigata Prefecture.

37

Total expected donations

DAISHI HOKUE TSU REPOR T 2021

SDGs Declaration 4

Diversity

Promote diversity andwork-style reform.

Work-style
ReformPromotion ofDiversity
Female manager ratio*(as of March 31, 2021）

24.4

Work hours reduced
by implementing RPA（cumulative since FY2018）％*R atio of female employees holding therank of acting branch manager,assistantdirector, or higher from among all bank
employees holding the rank of acting
branch manager, assis-tant director, or
higher.

36,494h

SDGs Declaration 5 Environmental Protection

Contribute to sustainable environmental protection

Environmental
Conservation
Number of participantsin afforestation activities（cumulative since FY2009）

3,470
Volume/Ratio of ＣＯ２
Reduction
Volume of carbon offset
through use of Green ATMs
（cumulative since August 2014）348

tResults of environmental protection
activities by Daishi Hokuetsu Magokoro Association*（cumulative since FY2012）49

Number of activities
performed

Number ofparticipants

857*The Daishi Hokuetsu Magokoro Association is anorganization operated through voluntary
participation and donations from Daishi Hokuetsu Bank executives and employees, which
engages in volunteer environmental protection and other activities in Niigata Prefecture.

Volume/ratio of CO2
reduction due to reduced
usage of power, gas, and oil

Volume of CO2 reduction
through the Item Keeping
Management System（in FY2021, compared to FY2010）（reduction in FY2020 compared to FY2019）

6.9

Reductions

2,758

t

Reduction rate

18.3

％

DAISHI HOKUE TSU REPOR T 2021t

Volume of CO2 reduction through theItem Keeping Management System（reduction in FY2020 compared to FY2019）

2.0

t

38

Toward the Realization of a Sustainable Society

Initiative Policy for ESG/SDGs Declarations
Initiative Policy for ESG
Daishi Hokuetsu FG established a policy for ESG initiatives at the time of its founding in October 2018. In
order to fulfill its social responsibility to help achieve a sustainable society, the Group aims to grow sustainably
alongside the local community by proactively addressing ESG (Environmental, Social and Governance) issues
and working to meet the SDGs (Sustainable Development Goals) proposed by the United Nations.

Environment

In order to protect the rich and beautiful natural environment of our home in Niigata Prefecture,and to contribute to the achievement of a sustainable society, the Group supports customers
who engage in environmental protection. Furthermore, as a corporate citizen, we actively holdenvironmental protection activities for the region and work to solve global environmental issues.

Society

In addition to supporting the real-life regional economy by providing a wide rangeof financial services that respond to needs of the region and society, the Group
conducts activities based on regional and social needs for contributing to growth ofregional society by utilizing management resources such as diverse human resources.

GovernanceIn order to obtain high recognition and establish unshakeable trusts from stakeholders including
customers, local residents, and shareholders, the Group will work to improve financial healthand profitability. We recognize that strengthening and enhancing corporate governance is an
important management issue, and we strive to augment auditing and supervisory functions forcorporate management, as well as to increase the transparency of management activities.

SDGs Declarations
Furthermore, in May 2019 we established the Daishi Hokuetsu Financial Group SDGs Declarations and since then, we have beenworking toward solutions to social and environmental problems in the local community in order to help it achieve sustainable growth.

39

Declaration 1

Declaration 2

Declaration 3

Regional Economy / Society

Aging Society

Financial Services

Contribute to revitalization of the

Support a safe and secure

Provide financial services for

local economy and community.

lifestyle for the elderly.

leading an even better lifestyle.

Declaration 4

Declaration 5

Diversity

Environmental Protection

Promote diversity andContribute to sustainable

work-style reform.

environmental protection.

DAISHI HOKUE TSU REPOR T 2021

Major Initiatives based on our SDGs Declaration
SDGs Declaration 1 Regional Economy / Society

Initiatives for achieving regional revitalization

Regional trading company“Bridge Niigata”initiatives
Since its launch in April 2019, Bridge Niigata has been actively operating in the three business areas of market development, tourism promotion, and productivity
improvement. In doing so, it has taken advantage of the Group’s extensive networks and built a collaborative framework in partnership with a variety of companies.
Business

Main activities

Number of products handled by the antenna shop

・Operating an“antenna shop”in the Nihonbashi area of Tokyo
Developing
markets

・O rganizing local food and product fair Niigata Marche atmajor corporate headquarters in the Tokyo metropolitan area
・Holding online business events

Promoting・Support for the implementation of a tourist information app

tourism・Support for the implementation of a multilingual translation service

Improving・Support for going paperless by introducing RPA, etc.

productivity

・Support for the introduction of attendance management systems, etc.

752

514

・Operating an e-commerce site (sales of Niigata products), etc.

（As of March 31, 2020）

Multilingual translation tool that uses QR codes（As of March 31, 2021）“Antenna shop”Bridge Niigata

Recognition from External Institutions 
Bridge Niigata’s efforts have also won high praise from external institutions. For example, in March 2021, it was
selected by the Cabinet Secretariat’s Main Office for Revitalization of Communities, People and Jobs as one of2020’
s 39“Distinctive Efforts by Financial Institutions and Other Organizations Contributing to the Revitalizationof Local Communities,”as well as receiving an award* from the Minister of State for Regional Revitalization.

Selected from among around

1,200examples*The Cabinet Secretariat’s Main Office for Revitalization of Communities, People and Jobs evaluates reports from financial
institutions nationwide on their efforts to contribute to regional development, and presents awards to pioneering examples.

Regional Trading Company“Bridge Niigata”

Cerificate of gratitude From the Cabinet office

DAISHI HOKUE TSU REPOR T 202140

Toward the Realization of a Sustainable Society

Major Initiatives based on our SDGs Declaration
SDGs Declaration 1 Regional Economy / Society

Initiatives for achieving regional revitalization

Staffing company Daishi Hokuetsu Career Bridge Initiatives
Since beginning operations in October 2019, Daishi Hokuetsu Career Bridge has seen a steady increase in the number of consultations and decisions it
receives regarding staffing.
Since April 2020, it has also run, in cooperation with Daishi Management Consulting and the Hokugin Economic Research Institute, the“HR
Development
Support Program,”a training program for companies in Niigata Prefecture.
In addition, in December 2020, it launched a "dual-occupation/side-occupation personnel matching service”to introduce companies in Niigata
Prefecture to people with highly specialized skills working dual or side jobs, mainly in the Tokyo metropolitan area. It suggests the use of personnel withdual or side occupations in order to solve the problems faced by companies in the prefecture and to actively support their growth by incorporating theexpertise and skills of these personnel.
Number of consultations on staffing（October 2019 – March 2021）
735
Of which 71 led to hirings or job offers

HR Development Support Program Information

Seminar for new employees at the HR Development Support Program

Support for Business Succession / M&As
Daishi Hokuetsu Bank is actively engaged in the“Business Succession Support Program" which provides a one-stop shop for a wide range of support to meetcustomers’needs with respect to business succession and M&As. While helping to limit business closures and providing support for business succession are essential
for regional development and revitalization, support for business creation through M&A and other methods has also become an integral part of regional financial
institutions’work. In May 2020, we established a new“M&A Platform”to provide more fine-tuned support for M&A needs, led by the managers of each branch.

Activities of the SDGs Niigata Regional Revitalization Platform
Daishi Hokuetsu Bank, alongside the Niigata Prefectural Government, Niigata University, Niigata Nippo andNiigata Hakuhodo, is working as a member of the Regional Development Platform“SDGs Niigata,”which waslaunched in April 2020 with the aim of spreading and raising awareness of the SDGs in Niigata Prefecture

わたしたちの、地域創生プラットフォーム

and promoting corporate activities aimed at meeting the SDGs. In fiscal 2020, we held a total of 10 webinars
to provide our members with information on our efforts to achieve the SDGs and ESG management amid
the COVID-19 pandemic. In addition, in March 2021, we held the“1st Niigata SDGs Awards”and presented
awards to 10 companies and organizations that are making outstanding efforts to achieve the SDGs.

にいがたを、
ずっと元気に。
Logoof the SDGs
Niigata Regional Revitalization Platform
SDGsとは、国連で採択された持続可能な世界をつくるための国際目標。
「地球上の誰一人として取り残さない」を目指す、世界的な約束です。17のゴールと169の指標が定められており、企業や地域の活動はもちろん、私たちの生活にも関わってきています。

SDGsは、ビジネスや地域活性化の鍵になる。
「地域創生プラットフォーム SDGsにいがた」は、新潟県内の経済・社会・環境と向き合い、持続可能でよりよいサイクルを生み出すため、同じ意志をもったみんなが集まれる場所。
企業、
団体、
自治体、
そして地域のネットワークを広げ、それぞれの課題に取り組めるよう後押ししていきます。

●「SDGsにいがた」が目指す3つのミッション
MI SSIO N .1

MI SSIO N .2

MI SSIO N .3

企業と地域の未来をつくる

産官学連携でビジネスチャンスも経済、社会、環境に好循環を企業の未来は地域にあり。
地域のみなさまと未来を切り拓いていきます。

産官学の連携によるイノベーションで地域創生。
ビジネスにも広げていきます。

誰にとってもよりよい経済、
社会、環境へ。
それぞれの目標が関わりあい、相乗効果を目指します。

「地域創生プラットフォーム SDGsにいがた」とは新潟県内でSDGsに基づく企業活動や地域づくりを推進していくために産官学が連携して立ち上げる会員組織です。
2020年度はその準備会として、新潟県、新潟大学、第四銀行・北越銀行、新潟博報堂、新潟日報社が推進メンバーを務めます。
（準備会事務局は新潟日報社内に設置します）"The 1st Niigata SDGs Award Ceremony"

41

DAISHI HOKUE TSU REPOR T 2021

Support for Overseas Business
The Daishi Hokuetsu banks support overseas business expansion by customers in areas such as trade and settlement with overseas
companies,establishment of overseas branches, expansion of overseas sales, overseas fund raising, and overseas equipment leasing.

Online Support Amid successive cancellations of overseas exhibitions< Online Seminar / Business Meeting Topics >due to the impact of COVID-19, we held online seminars

No.1

Overseas Expansion: Strategies for the“New Normal”～Southeast Asia Series ～providing local information and online individual business

No.2

Local Consultants Discuss Vietnam’s Present and Future

meetings with overseas buyers with the aim of providing

No.3

The World-Famous Alibaba: Online Seminar & Individual Business Meetings

opportunities to develop new overseas sales channels.

No.4

Online Individual Business Meetings for Four Southeast Asian Countries

No.5

Local Consultants Share the Secrets of Expanding into Africa

Support by overseas local staff As well as establishing a representative office in Shanghai, Daishi Hokuetsu Bank has also dispatched staff to several overseas financial
institutions with which it has partnerships to provide information on local economic trends and support business development in these countries.
*The dispatch of staff to overseas financial institutions has been temporarily suspended due to COVID-19. (As of June 30, 2021)

Daishi Hokuetsu FG Overseas Network

Vietnam

Vietcombank
HD Bank
Bank for Investment andDevelopment of Vietnam

People s Republic of China
Industrial and Commercial
Bank of China Limited
Bank of Communications
LimitedBank of China

Shanghai
Representative Oﬃce
MexicoIndia

Banco Nacional de
Mexico Sun

State Bank of India

ThailandKasikorn Bank

Philippines
Metrobank

United States (State of Hawaii)Indonesia

Central Paciﬁc Bank

Bank Negara Indonesia

Initiatives for Promoting Sports

Organizing the Life-Up Concert

Daishi Hokuetsu Bank is actively involved in the promotion of local sports, and has

In order to promote regional music and artistic culture,The

sponsored the Healthy Daishi Hokuetsu Bank Cup Volleyball Tournament for Niigata

Daishi Bank has continued to hold the Daishi Life-Up Concert toPrefecture Elementary School Students”since 1989, and the“Daishi Hokuetsu Bank Battle ofprovide high-quality music, traditional performing arts, and otherthe Flags”youth baseball tournament since 1999. Through these efforts we are doing our part

events at a low price.

to promote sports in communities while contributing to the healthy physical and emotional
growth of young boys and girls, as well as helping them form friendships through sports.

In fiscal 2020, theconcert was canceled due
to COVID-19. We will makefurther announcements
about future events when
the situation is safe foreveryone to attend.

Daishi Hokuetsu Bank Battle of the Flags youth baseball tournament

DAISHI HOKUE TSU REPOR T 2021

Daishi Hokuetsu Hall42

Toward the Realization of a Sustainable Society

Major Initiatives based on our SDGs Declaration
SDGs Declaration 1 Regional Economy / Society

Initiatives for achieving regional revitalization

Holding the Daishi Hokuetsu Academy
In order to support the physical and emotional development of children, The Daishi Bank has held the Daishi Academy
since fiscal year ended March 31, 2014.
Since the opening of the academy in fiscal 2013, more than 1,000 children have participated in the program each year,
bringing the total number of participants to 11,449 by the end of March 2021. In fiscal 2020, in order to prevent the
spread of COVID-19, we conducted classes remotely or by visiting large venues.

As of March 31, 2021

Number of participants at
Daishi Hokuetsu Academy

11,449（cumulative since FY ended March 31, 2014）
school visit

Held the Niigata Regional Championships of the 15th All-Japan High School Economics Quiz Tournament
In December 2020, we held the Niigata Regional Championships ofthe 15th All-Japan High School Economics Quiz Tournament. This year’s

As of March 31, 2021

tournament, the eighth to be held in Niigata Prefecture, was held online

Number of participants in
the Niigata tournament

in order to prevent the spread of COVID-19. With the participation of 36

395

players from 18 teams from all over the prefecture, the competition was
fierce, with the Niigata Prefectural Niigata High School team taking first（Cumulative since FY ended March 31, 2014）

place and earning a ticket to the national tournament.
The national tournament (hosted by the Association for the Promotion

Information on the Niigata Regionalof Financial Literacy) was held online in February 2021, with 32 teams

Championships of the 15th All-Japan Highthat had won their respective regional tournaments participating.

School Economics Quiz Tournament

Scholarships from the Daishi Hokuetsu Scholarship Association
The administrative office of Daishi Hokuetsu Scholarship Association has been established within Daishi Hokuetsu
Bank. The association aims to develop human resources who will contribute to society by providing assistance inthe form of scholarships with no repayment obligations to young people who graduated with outstanding academic
records from high schools in Niigata Prefecture, but are unable to attend university due to financial reasons.
The association started issuing scholarships in 1962. A total of 1,218 students have received scholarships as of Jun 2021.

As of Jun 30, 2021

Number ofscholarship recipients

Presented Banners Featuring a Traffic Safety Slogan
In order to promote traffic safety campaigns and raise awareness of

traffic ethics, we presented banners featuring a traffic safety slogan toall elementary schools and junior high schools in Niigata Prefecture.
We have conducted this project every year since fiscal 1969.
Fiscal 2020, Banners featuring a traffic safety slogan
Donation
destination

Number of
sheetsTraffic safety slogan

Elementary“Raise Your Hand, Protect Yourself, the Signal of Life”
Schools475

Junior High
“Bicycles, like Cars, Come with Responsibilities”
School

267
Ceremony to present banners

43

DAISHI HOKUE TSU REPOR T 2021

1,218

（Cumulative since FY ended March 31, 1963）

Major Initiatives based on our SDGs Declaration
SDGs Declaration 2 Aging Society

Support a safe and secure lifestyle for the elderly.

Trust Services
Launch of our Family Trust Services 
In 2019, in order to meet the needs of customers who are concerned about the future management of their assets, Daishi Hokuetsu
Bank obtained approval to engage in trust business activities, and now handles instruments relating to asset succession.
In September 2020, we started offering family trust services* in the form of a Family Trust Agency Service and a Family Trust Account.
The Family Trust Agency Service is a service to introduce specialists affiliated with Daishi Hokuetsu Bank to customers who wish to
consult about or use family trusts. In addition, a Family Trust Account can be opened at Daishi Hokuetsu Bank in order to set aside andmanage trust assets if a family trust is set up.
<Illustration of a Family Trust (Example)>

Process from consultation to establishment of a trust

FatherTrustor（the person who
entrusts the assets）

Beneficiary（the person who will receive
benefits from the assets）

１

Consultation

２

Comprehensive proposal on asset succession

３

Design the trust

４

Draw up a trust agreement * To be drawn up by a specialist

５

Execution of the trust

Son
Savings, realestate, etc.

Trust agreement

Trustee

Instruction/Supervision（person to whom theassets are entrusted）

Property benefits and allocation

Testamentary Trust Service Referral Agreements Daishi Hokuetsu Bank concluded testamentary trust service referral agreements with Niigata University, Nagaoka University of Technology, and Joetsu University of Education in December 2019,with Sutoku Health & Welfare Association in April 2020, and with the Niigata Branch of the Japanese Red Cross Society in March 2021. Through these agreements, organizations with whom wehave established agreements will refer people who want to make bequests to them to Daishi Hokuetsu Bank. The bank will then provide comprehensive support from the drafting of will documents
through to their execution, catering to customers’will and bequest-related needs while ultimately facilitating the advancement of education, healthcare, and other services in Niigata Prefecture.
<Illustration of partnerships under the concluded agreements>

Daishi Hokuetsu Bank
❺Bequests to universities, etc.

Niigata University❸Application

Nagaoka University ofTechnology❶Ask to make bequest

Joetsu University of
Education❷Introduce Daishi

Chongde Welfare
Corporation❹Support for drafting will
document, execute will

Interested customer
Hokuetsu Bank

Sutoku Health & Welfare
Association
DAISHI HOKUE TSU REPOR T 2021

44

Toward the Realization of a Sustainable Society

Major Initiatives based on our SDGs Declaration
SDGs Declaration 2 Aging Society

Support a safe and secure lifestyle for the elderly.

Initiatives to Prevent Specialized Fraud
Daishi Hokuetsu Bank is taking various measures to protect customers’valuable deposits from specialized forms of fraud that mainly target the elderly.
In order to raise awareness of the current situation regarding specialized fraud, bank employees visit welfare facilities in every local community to
conduct educational activities aimed at preventing people from falling victim, informing them of incidents and the fraud methods used.
In January 2021, in cooperation with the Niigata Police Station and a local TV station,
we conducted awareness-raising activities to prevent losses to specialized fraud, such as
by installing warning panels at ATM booths.
Beware of a specialized fraud scheme involving the integration of Daishi Hokuetsu Bank branches
Employees of Daishi Hokuetsu Bank will never take possession of your cash card or seal, nor
ask you for your cash card PIN. Please note that although our staff may take possession of yourpassbook upon your request, such as when filling out your passbook or rolling over to a new
passbook, our staff will never ask to take possession of your passbook without such a request.
Please exercise caution accordingly.
If you receive a suspicious phone call or visit, be sure to consult with the police or your bank branch.

A specialized fraud prevention event conducted by the Niigata Police Station

The Daishi Hokuetsu Bank Awards
The Daishi Hokuetsu Bank Awards were created in 1977
to support individuals and organizations that have madeoutstanding contributions to social welfare and disaster
relief in Niigata Prefecture.
As of March 31, 2021

In fiscal 2020, the award waspresented to 10 new individuals
and organizations.

Total award winners

464 groups and individuals（Cumulative since FY ended March 31, 1978）
The Daishi Hokuetsu Bank Awards ceremony

Tulip Donation Activities
Daishi Hokuetsu Bank has been donating tulips, the bank’s official flower, to social welfare
and related facilities in Niigata Prefecture since 1970. We deliver potted plants every spring
and bulbs every fall to a total of more than 130 facilities.

Stationing of Service Care-Fitters and Dementia Supporters
Daishi Hokuetsu Bank assigns specialist staff to its
branches to provide support to elderly customers andthose with physical disabilities. This allows them tocomplete procedures at the counter without difficultywhen they visit the bank.

45

Service Care-Fitters Number ofqualified persons

Total number of employees who havetaken lectures as Dementia Supporters（Certified by the Nippon
Care-Fit Education Institute）（Certified by the CommunityCare Policy Network (NPO)）

222

4,999

As of March 31, 2021

DAISHI HOKUE TSU REPOR T 2021

Major Initiatives based on our SDGs Declaration
SDGs Declaration 3 Financial Services Provide financial services for leading an even better lifestyle.
Initiatives for Donation-type and SDGs Private Placement Bonds
Daishi Hokuetsu Bank has been offering“Private Placement Bonds Supporting Niigata Culture andSports”(May 2020 – December 2020) and Niigata“Food and Job Kizuna”Support Private Placement
Bonds (November 2020 to December 2021) to support organizations affected by the new coronavirus
in Niigata Prefecture. A portion of the fees received from customers for the issuance of privately
placed bonds is donated jointly by customers and the bank to the Niigata Cultural Foundation, theNiigata Sport Association, the Niigata Prefectural Social Welfare Council, and similar organizations.
In September 2013, Daishi Hokuetsu Bank became the first bank in Japan to begin handling
donation-based private placement bonds, and as of the end of March 2021, donations had been
made to 875 organizations, bringing the total amount of donations to 164 million yen.

Examples of support provided throughdonation-based private placement bonds◦‌Private placement bonds to support child-rearing,education, and personal development◦‌Private placement bonds to advertise Niigata’s attractions◦‌P rivate placement bonds for neighborhood safety
monitoring activities◦‌P rivate placement bonds for the Nagaoka Fireworks◦‌Private placement bonds for future creation in
Joetsu and Myoko◦‌Private placement bonds to support Water PoloClub Kashiwazaki◦‌Private placement of bonds to support future
creation in Minamiuonuma, etc.
●

Number of donations

875

Total donations¥164million（Cumulative since FY ended March 31, 2014）

Information on Niigata“Food and Job Kizuna”Support Private

Information on Private Placement Bonds to Supporting

Placement Bonds

Niigata Culture and Sports

Handling of the Niigata Future Japan Stock Fund
Starting in May 2019, Daishi Hokuetsu Securities has been conducting sales for the Niigata Future Japan Stock Fund (nicknamed
Niigata no Kakehashi (Bridge to Niigata)), a donation-type investment trust for supporting the future of Niigata Prefecture.
This investment trust supports companies that contribute to the economy of Niigata Prefecture by investing a portion of its funds in“Niigata-related stocks,”which are listed companies headquartered in Niigata Prefecture. In addition, a portion of the investment
management fees (trust fees) received from customers is donated, alongside a donation from the establishing company, to support the
future development of Niigata Prefecture. In September 2020, 7,234,274 yen was donated to welfare organizations in the prefecture.
As of March 31, 2021

Niigata Future Japan
Stock Fund Applications

4,754

Total expected donations¥7.2million（Cumulative since May 2019）
Presentation Ceremony for the Niigata Future

Information about the Niigata Future Japan Stock FundJapan Stock Fund Prospectus

DAISHI HOKUE TSU REPOR T 2021

46

Toward the Realization of a Sustainable Society

Major Initiatives based on our SDGs Declaration
SDGs Declaration 3 Financial Services Provide financial services for leading an even better lifestyle.
Financing Support through the TSUBASA Alliance
Daishi Hokuetsu Bank has been actively providing financing
support through the TSUBASA Alliance, a framework for wide-areacooperation among regional banks in which the bank participates,
and in March 2021, it arranged a syndicated loan (total loan
amount: 7 billion yen) for a solar power generation project.
In cooperation with the participating banks, we will continue toactively respond to the diversifying financing needs of our customers
and contribute to the development of the local economy.

Record of loans
made through
TSUBASApartnerships

53 loans madeTotal amount of loans:¥33.9billion（As of March 31, 2021）

Handling of World Bank Sustainable Development Bonds and Green Bonds
As a joint effort between securities brokerage subsidiaries of TSUBASA Alliance member banks, Daishi Hokuetsu Securities has sold
“Sustainable Development Bonds”and“Green Bonds" issued by the World Bank on 4 occasions since September 2017.
Sustainable Development Bonds are bonds issued in international capital markets by the World Bank in its efforts to aid development
and reduce poverty in developing countries. These bonds support projects in a wide range of fields including education, health,infrastructure, public administration, agriculture, and the environment. Green Bonds are issued to support developing countries struggling
with global warming, and the funds are used to finance development projects that reduce greenhouse gas emissions and address theeffects of global warming.

Handling of Loans with Special Provisions for Exemption of Principal at Earthquake Disaster
Daishi Hokuetsu Bank offers“Loans with
Special Provisions for Principal Exemption in theevent of an Earthquake”to corporate customers
in order to support business continuity andrecovery measures if a major earthquake occurs,
and many of them use the service.

Loan statistics

113loans for¥16.5billion（As of March 31, 2021）● Main features of these loans◦‌T he principal of the borrowed loan is exempted by a predeterminedratio (either 100% or 50%) regardless of whether direct or indirect
damage is suffered when a major earthquake of intensity 6.0 or higher
occurs as measured at a predetermined seismograph station.
◦‌T he portion of the borrowed principal that is exempted becomes gain on
forgiveness of debt, covering customers financially against the financial damage
suffered in a major earthquake occurrence while also supporting their business
continuity and recovery efforts by giving them the capacity to raise funds.

Loan

Normalconditions
Corporate customers

Major

Corporate customers

Image of " Loans with Special Provisions for Exemption of Principal at Earthquake Disaster "47

Daishi Hokuetsu Bank

Loan principal
exemption

earthquake
occursLoan principal / interest
Repayment

DAISHI HOKUE TSU REPOR T 2021

Daishi Hokuetsu Bank

Enhanced Smartphone App Provision 〜Daishi Hokuetsu Little Bank〜
In November 2020, Daishi Hokuetsu Bank launched the“Daishi Hokuetsu Little Bank”smartphone app. This allows users
to check their deposit account balances and deposit/withdrawal statements using their smartphone.

Main features(1)Check your main account balance and deposit/
withdrawal statements anytime, anywhere!
●

You can check the balance and deposit/withdrawal statements
for the representative account of your Daishi Hokuetsu ID.

*The most recent three months of deposit/withdrawal statements are available to view.

(2)Notifications for set deposit and debit dates!
●

You can set up notifications for deposit and debit
dates at your convenience.

(3)Understand financial products tailored to life events!
●

Information is provided on financial products for customers’
life events, such as marriage, childbirth, and retirement.

(4)Easily linked to internet banking and theautomated savings application 「finbee」!

(5)Can be used alongside your paper passbook!

The Daishi Hokuetsu Little BankSee here

See here

for iPhone

for Android

Web Completion Scheme for Personal Loans
Daish Hokuetsu bank operates the Web Completion Scheme
for loans to individual customers (excluding some loan types
such as housing loans).
The“Web Completion Scheme”is a service that allows
customers to complete the entire process from application toborrowing on the web using a smartphone or PC. This service
is designed to improve convenience for individual customers by
eliminating the need to visit a store and fill out a contract form.
Daishi Hokuetsu Bank is running various promotional
campaigns for customers who have submitted loan applications
online. Please give our online loan services a try.

DAISHI HOKUE TSU REPOR T 2021

48

Toward the Realization of a Sustainable Society

Major Initiatives based on our SDGs Declaration
SDGs Declaration 3 Financial Services Provide financial services for leading an even better lifestyle.
TSUBASA Smile Counter Reception System
Since November 2018, Daishi Hokuetsu Bank has been using TSUBASA Smile, a seal-less and paperless counter reception system that enables customers tocomplete a variety of procedures. In January 2021, we introduced the system at all of our branches in Niigata Prefecture, excluding field offices and consulting plazas.
TSUBASA Smile counter reception system●

Handling personal loans●

Handling new savings account setup●

Handling changes to notified matters（change of name or address）●

Handling installment savings●

Handling time and savings deposits
TSUBASA Smile Counter Reception System

Going Cashless
Daishi Hokuestu Bank is working with many different smartphone-based cashless payment services provided by outsidecompanies in order to offer greater convenience for our customers by going cashless.
Illustration of how cashless payments work

Available cashless payment services
PartnerCashless payment service

PayPay Corp.

PayPay※LINE Pay Corp.

LINE Ｐａｙ※

Mizuho Bank, Ltd.

Ｊ－Ｃｏ
ｉ
ｎＰａｙ

Merpay, Inc.

MerpayWellnet Corp.

Shiharaihisho

Customersof either ofour banks

Chargedinstantly

Savings
account

Cashlesspayment
services by
variousproviders

Payments
Moneytransfers
Withdrawals
etc.

For details about cashless payment services please see each company s website※
As of June 30, 2021

*In order to ensure the safety of our customers and prevent any losses, as of July 1, 2021, we have
temporarily suspended new account registration and instant top-up (deposits) for PayPay, LINE Pay,and Shiharai-Hisho. We will announce the resumption of the service on our website in due course.

Developing Personnel with Digital Skills to Improve Financial Services
In response to the increasing pace of digital transformation and the various needs of its
customers, Daishi Hokuetsu Bank is promoting the development of personnel with specializedskills in order to further improve its products and services using digital technology.
From October 2020, we have offered online seminars (10 sessions in total) held by systemvendors and other data scientist training organizations, aiming to provide staff members withbasic knowledge of big data analysis, AI-based digital transformation, and marketing analysis.

49

DAISHI HOKUE TSU REPOR T 2021

Seminar participants

as of March 31, 2021:

64

Major Initiatives based on our SDGs Declaration
SDGs Declaration 4 Diversity

Promote diversity and work-style reform.

Efforts to Promote the Participation of Women and Seniors and to Reform Work Styles
Recognition from External Institutions 
Daishi Hokuetsu Bank has received“Platinum Kurumin”certification from the Minister of Health, Labour and Welfare, indicating that it provides a high level of support
for child rearing, as well as“Eruboshi Level III”certification, recognizing it as a company where women can actively participate. As of March 31, 2021, Daishi Hokuetsu
Bank is the only company in Niigata Prefecture to have received both the Platinum Kurumin and Eruboshi Level III certifications.
In addition, in March 2021, we were certified as an excellent enterprise (White 500) under the Certified Health & Productivity Management Outstanding Organizations
Recognition Program jointly implemented by the Ministry of Economy, Trade and Industry and the Nippon Kenko Kaigi (Japan Health Council).
We will continue to actively promote women’s participation and the reform of work styles in order to improve our human resources and organizational capabilities.
Certified for

4 consecutive
years

Platinum Kurumin logo

Eruboshi Level III

Excellent Enterprises for Health

Certification logo

and Productivity Management
2021 (White 500) logo

Efforts to Promote the Participation of Women and Seniors 
Daishi Hokuetsu Bank has been holding various seminars and enhancing training programs as part of its efforts topromote the participation of women and those aged 50 and above. In November 2020, 6 of the bank’s female employees
participated in a webinar on management held in collaboration with other TSUBASA Alliance member banks.
We are also implementing initiatives to develop the capabilities of senior employees, such as holding“second career”
development training courses. In fiscal 2020, seven training sessions were held, with a total of 218 people taking part.

Enhancing our Health Management Systems
Daishi Hokuetsu FG has established a system to more actively pursue health andproductivity management within the group, including health promotion activities and anenhanced system of medical checkups for employees.
In addition to the establishment of the Health and Productivity Management Promotion
Office within the Daishi Hokuetsu Bank clinic, we are working to enhance our healthmanagement system by expanding the age range for receiving a“One-Day Health Checkup”
from May 2020 onwards.

DAISHI HOKUE TSU REPOR T 2021

50

Toward the Realization of a Sustainable Society

Major Initiatives based on our SDGs Declaration
SDGs Declaration 5 Environmental Protection
Contribute to sustainable environmental protection.better lifestyle.

Launch of Subsidized Leases for Building a Carbon-Free Society
In June 2021, Daishi Lease was selected as a designated leasing company for the“ESG Lease Promotion Projectfor Building a Carbon-Free Society”conducted by the Ministry of the Environment. This project promotes ESG leasing
initiatives and supports the decarbonization of the entire supply chain by subsidizing a certain percentage of total lease
payments when companies introduce decarbonized equipment through leasing. Daishi Hokuetsu FG will come together asa group to promote decarbonization and other sustainability initiatives.

e
s
a
e
L
i
h
s
i
a
D

s
r
e
m
o
t
s
u
C

Reduced lease payments
under special provisions

Provision ofsubsidies approved
Performance
reportConfirmation and provision of
the subsidy amount

te
r
oc
pn
a
pn
ui
SF
fe
o
l
b
na
on
i
i
t
a
at
zs
i
n
u
aS
gr
r
o
Of

Submission of application
form for use

)
t
n
e
tm
n
en
o
mr
i
nv
r
n
e
E
v
oe
Gh
lt
a
f
no
o
y
ir
t
t
a
s
i
Nn
i
M
(

Application for
subsidies

Application for
subsidies

Provision of
the subsidies

Illustration of the ESG Lease Promotion Project for Building a Carbon-Free Society

Initiatives for Going Paperless
Switching from paper credit card statements to web-based statements As part of our efforts to reduce paper usage for environmental protection, Daishi JCB Card and Hokuetsu Card are working
to switch from paper statements to web-based statements.

* From November 2021, payment of a fee will be required to issue paper statements.

Introduction of a Deposited Item Management System 
In June 2019, Daishi Hokuetsu Bank introduced the Deposited Item
Management System, which allows staff to register deposited items ontablets when accepting and returning them, and to obtain signatures(electronic signatures) from the customers. In addition to preventing clericalerrors and improving work efficiency when accepting and returning items,
the system also helps reduce CO2 emissions by eliminating paperwork.

(As of March 31, 2021)

CO2 reductions resulting from the introduction of the Deposited Item Management System

2.0 t(Compared to fiscal 2018, cumulative total from fiscal 2019)

Green ATMs (Using Carbon Offset Function to Contribute to the Environment)
Since August 2014, Daishi Hokuetsu Bank has installed 43 Green

Carbon offset
results
as of March 31,
2021

ATMs at 20 locations in Niigata Prefecture as part of its efforts

to provide environmentally friendly products and services. Basedon the concept of“the more you use the ATM, the more you

348tcontribute to the environment,”this service uses Niigata Prefecture(total since August
2014)

credits* to offset* 20g of CO₂ per use.
1

2

In addition to winning the Minister of the Environment’s Award at

the Principles for Financial Action for the 21st Century and Carbon
Offset Awards in 2015, this initiative has been highly acclaimed

as a service that contributes to the prevention of global warming,as shown by the receipt of a letter of appreciation for the Niigata
Carbon Offset System from Niigata Prefecture in March 2021.

51

Letter of appreciation for the Niigata Carbon Offset System*1 C arbon offsetting is an approach in which greenhouse gases such as CO2 emitted indaily life or economic activities are offset through credits recognized in other areas.
*2 N iigata Credit is a program in which Niigata Prefecture approves credits (amount of
reduction/absorption of greenhouse gases) for increased CO2 absorption amounts
achieved by maintaining forests in Niigata Prefecture. These credits can be offset
against the CO2 emitted by a corporation or can be utilized in environmental activities.

DAISHI HOKUE TSU REPOR T 2021

Protecting the Crested Ibis
Daishi Hokuetsu Bank designated the internationally protected crested ibis, the Niigata
Prefectural bird, as its official bank bird in 1967. Since 1968, Daishi Hokuetsu Bank has
operated the Crested Ibis Protection Fund as an activity to protect and raise crested ibises.
For the 53 years since, funds raised from bank employees have been combined withdonations from the bank and presented to Niigata Prefecture.

As of March 31, 2021

Crested Ibis Protection
Fund Total donations¥36,479thousand（Cumulative since FY
ended March 31, 1969）

Afforestation Activities
In order to pass on the lush green forests of the region to the future, Daishi
Hokuetsu Bank is engaged in forest conservation activities. In addition to
the Daishi-Hokuetsu-no-Mori (Daishi Hokuetsu Forest) project in Agamachi,
Higashikanbara-gun, Niigata Prefecture, which we have been involved
with since fiscal 2009, we have been working on afforestation activities at
Araihama Forest Park in Tainai, Niigata Prefecture since fiscal 2017.
* In fiscal 2020, the activities were canceled in order to prevent the
spread of COVID-19.

As of March 31, 2021

Afforestation activity participants（cumulative since FY ended
March 31, 2010）

3,470

As of March 31, 2021

Tree planting statistics in Araihama Forest Park
Number of Participants

1,580

Seedlings planted

1,500

Planting area

1.5ha

（Cumulative since FY ended March 31, 2018）

Afforestation Activities

Volunteer Activities by the Daish Hokuetsu Magokoro Association
Daishi Hokuetsu Bank engages
in volunteer environmental
protection activities and donates
to environmental protection andsocial welfare groups in Niigata
Prefecture through the Daishi
Hokuetsu Magokoro Association,an organization operated throughvoluntary participation and donations
from executives and employees.
※2021年3月期は新型コロナウイルスの感染拡大防止の観点から開催を見送りました。

As of March 31, 2021

Volunteer activities by theDaishi
Hokuetsu Magokoro Association

49
Number of participants 857
Number of Activities Performed（cumulative since FY ended March 31, 2013）
Volunteer activities by the Daishi Hokuetsu Magokoro Association

DAISHI HOKUE TSU REPOR T 2021

52

To Our Shareholders

Return to Shareholders / Shareholders Benefits
Disclosure Activities
With the goal of achieving transparency and health of management,
weactively hold disclosure activities for disclosure of management
status andother information. Through these activities, we seek to create
understandingtowards our management status from stakeholders
including customers, regional residents, and shareholders.
In previous years, we have held company information sessions in

Company briefing materials URLTokyo for institutional investors. We also hold company information

https://www.dhfg.

sessions for individual investors in our main business base of Niigata

co.jp/financial/ir/
session/Prefecture.
For fiscal 2020, in order to prevent the spread of COVID-19, we havedecided not to hold a company information session. Instead, we have
distributed a video presentation of our financial results on our website.

Policy for Return to Shareholders
While considering the public nature of the banking business, in

Dividends per shareorder to reward each one of our shareholders moving forward, ourFiscal year ended
March 2021 (annual)

120 yenInterim dividend(actual)60 yenYear-end dividend(actual)60 yenbasic policy is to continue stable returns to shareholders while also
ensuring an increase in internal reserves in order to strengthen ourrevenue base.
Specifically, we aim for a shareholder return rate of approximately
40% when combining dividends and acquisition of treasury stock.
Furthermore, our policy is to work to increase ROE based onstrengthening of current net income. Our mid- to long-term goal is atleast 5%.

Major stockholders (10 largest)
Stockholders

53(As of March31,2021)
Number of Share

Percent

1

Custody Bank of Japan, Ltd.(Trust Account)

2,686 (Thousand)5.87 ％

2

The Master Trust Bank of Japan ,Ltd. (Trust Account)

2,022

4.42

3

Meiji Yasuda Life Insurance Company

1,624

3.55

4

Nippon Life Insurance Company

1,156

2.53

5

Daishi Hokuetsu Bank Employee's stockholdings

1,144

2.50

6

Tohoku Electric Power Co., Inc.

852

1.86

7

Sompo Japan Insurance Inc.

718

1.57

8

Daido Life Insurance Company

705

1.54

9

DFA INTL SMALL CAPVALUE PORTFOLIO

684

1.49

10

Oka Hidetomo

598

1.30

DAISHI HOKUE TSU REPOR T 2021

Shareholder Benefits System
We have implemented a shareholder benefits system in order to thank shareholders for theircontinued support, to increase the appeal of investing in our company’s stock, and to encourage
more people to engage in long-term ownership of our company’s stock.

Ap p l icab l e S h a r e h ol de r s Shareholders who have continuously owned at least 100 shares (1 unit) for at least one year (thesame shareholder number is listed continuously at least 3 times in the shareholder registry as ofMarch 31 and September 30 of each year), with March 31 as the date of record shall be applicable.

Contents of the Shareholder Benefits System 
Depending on the number of shares owned, the shareholder can select their desired gift from eitherof the following two catalogs.
(1) C atalog listing special local goods from Niigata Prefecture or
donations to the Hokugin Scholarship Fund(2) C atalog listing special local goods from other prefectures as
TSUBASA Alliance Joint Plan**1 The following three recipients can be chosen for a donation.
*2 Catalog listing special local goods from four regional banks participating in the TSUBASA Alliance (The
Chiba Bank: Chiba Prefecture, The Chugoku Bank: Okayama Prefecture, The Iyo Bank: Ehime Prefecture,
The Toho Bank: Fukushima Prefecture, The Gunma Bank: Gunma Pretecture).
Donation recipient

Daishi Hokuetsu
Scholarship Association

Details
The scholarship is used to provide nonrepayable financial assistance to young people
who have graduated from high school in Niigata
Prefecture with outstanding academic records,
but are unable to attend university for financial
reasons.

Niigata Prefecture
COVID-19
Countermeasures
Support Fund

Funds are used to support those engaged in
the treatment and prevention of COVID-19, andto enhance and strengthen the medical careprovision system, including countermeasuresagainst future infectious diseases.

Niigata Prefectural
Social Welfare Council[Children’s Cafeterias,
Food Banks]

Funds are used to operate children’s cafeterias
and food banks, supporting the provision of safeand nutritious meals and food to households inneed of assistance due to reduced income orunemployment.

Number of Shares Owned Amount of Gift
100 shares to less than
1,000 shares

Equivalent to2,500 yen

1,000 shares or more

Equivalent to6,000 yen

As of March 31, 2021

Donation applications to the Hokugin
Scholarship Fund from shareholders

240donors ¥1,030thousand(Cumulative since FY ended
March 31, 2018)

No t e s 
●

●

●

●

This benefits system can only be used by the shareholder.Benefits cannot be transferred, loaned, or otherwise
assigned to a third party, including family members.
For details on how to apply for the benefits services and how to use the services, please refer to the catalogs
sent to eligible shareholders.
Catalogs are sent to the addresses recorded in our shareholder registry. If you have moved please performthe change of address procedure at your securities brokerage.
 ontents, conditions, and other details of benefits are subject to change depending on factors such as
Cchanges in the finance environment. Advance notifications of such changes will be announced on the
Company website or through other mediums

DAISHI HOKUE TSU REPOR T 2021

54

Company Information

List of Executives / Group Companies
Daishi Hokuetsu Financial Group Board Members(as of June 25, 2021)

Chairman and
Representative Director

President andRepresentative Director

Fujio Namiki

Michiro Ueguri

Senior Managing andRepresentative Director

Director

Kazuyoshi Hirokawa

Makoto Takahashi

Director

Director

Ken Shibata

Takayoshi Tanaka

Director

Director

Toshiyuki Maki

Masami Watanabe

Director(Auditand Supervisory
Committee Member)

Outside Director(Audit and Supervisory
Committee Member)Yutaka Kimura

Koichi Masuda

Outside Director(Audit and Supervisory
Committee Member)

Outside Director(Audit and Supervisory
Committee Member)

Hiroshi Fukuhara

Toshizo Oda

Outside Director(Audit and Supervisory
Committee Member)

Outside Director(Audit and Supervisory
Committee Member)

Kazuaki Matsumoto

Kunio Mori

* E a c h o f t h e O u t s i d e D i r e c t o r s K o i c h i M a s u d a , H i r o s h i F u k u h a r a , T o s h i z o O d a , K a z u a k i M a t s u m o t o a n d K u n i o M o r i a r e o u t s i d e d i r e c t o r s
as definedunder Article 2, item (xv) of the Companies Act.

55

DAISHI HOKUE TSU REPOR T 2021

Directors at The Daishi Hokuetsu Bank
Chairman and
Representative Director

Senior Managing General Manager of Nagaoka
Executive Officer Head Office Sales Dept.

Katsuya Sato

President andRepresentative Director

Michiro Ueguri

Senior Managing
Director

Kazuyoshi Hirokawa

Managing Director

Makoto Takahashi

Managing Director
Managing Director

General Manager of Head Office Business Division
General Manager of Niigata Airport Office

Managing Director General Manager of Business Headquaters
Managing Director(as of June 25, 2021)

Executive Officer

General Manager of Takada Main Office,General Manager of Takada Chuo Office,General Manager of Honcho Office

Masami Watanabe
Naruhito Hosaka

General Manager of
Executive Officer Tokyo Office

Tadanori Miyakoshi

Ken Shibata

Deputy General Manager of
Executive Officer Head Office Business Division
General Manager of Consulting DivisionNobuaki Takahashi

Takayoshi Tanaka

Deputy General Manager of Business Headquarters
Executive Officer Business Development Planning Division

Takashi Ishizaka

Toshiyuki Maki

Executive Officer

General Manager ofSystems Planning Division

Kazuo Kokai

Toshiyuki Kobayashi

Executive Officer

General Manager of
Minami-Niigata Office

Masaki Kagoshima
Toru Hirota
Masaaki Tanabe

Director

Audit and Supervisory
Committee Member

Takayoshi Konomura

General Manager of
Executive Officer Personnel Division

Director (outside)

Audit and Supervisory
Committee Member

Eiichi Tsurui

Executive Officer Group Strategy Promotion Manager

Director (outside)

Audit and Supervisory
Committee Member

Katsuaki Fujikura

Overview of Group Corporations(as of July 1, 2021)

Main business activities

Date
ofestablishment

CapitalRatio of the Group’svotingrights in thesubsidiary,including
indirect ownership

BankingNovember 2,1873¥32,700 million

100.0%

Securities

August 8,1952¥600 million

100.0%

Comprehensive HR
consulting

May 24,2019¥30 million

100.0%

Credit guarantees

October 27,1978¥50 million

100.0%

Credit guarantees

August 20,1986¥210 million

100.0%The Daishi Management Consulting Co., Ltd.

Consulting and venture
capitalJune 8,1984¥20 million

100.0%The Hokugin Economic Research Institute, Ltd.

Survey research andinformation provision related
to the economy and society

July 1,1997¥30 million

50.0%

The Daishi Lease Co., Ltd.

Comprehensive leasing
services

November 11,1974¥100 million

26.0%

The Hokuetsu Leasing Co., Ltd.

Comprehensive leasing
services

November 1,1982¥100 million

100.0%The Daishi Computer Service Co., Ltd.

Computer-related
business

May 10,1976¥15 million

30.0%

The Daishi JCB Card Co., Ltd.

Credit cards and credit
guarantees

November 12,1982¥30 million

66.6%

Credit cards

March 1,1990¥30 million

70.0%

Credit cards and credit
guarantees

June 1,1983¥20.45 million

100.0%

Company

The Daishi Hokuetsu Bank, Ltd.

1071-1 Higashiborimae-dori 7-bancho, Chuo-ku, Niigata-shi

Daishi Hokuetsu Securities Co., Ltd.
8-26 Jonaicho3-chome, Nagaoka-shi

Daishi Hokuetsu Career Bridge, Co., Ltd.

Hokuetsu Daiichi Bldg., 2nd Floor 2-25 Higashi-odori1-chome, Chuo-ku, Niigata-shi

The Daishi Guaranty Co., Ltd.

Fuyu-Sha Bldg., 3rd Floor 224-1 Honcho-dori 5-bancho, Chuo-ku, Niigata-shi

The Hokuetsu Credit Guarantee Co., Ltd.

Choryo-Sha Bldg., 1st Floor 13-23 Miyabara2-chome, Nagaoka-shi

Fuyu-Sha Bldg., 2nd Floor 224-1 Honcho-dori 5-bancho, Chuo-ku, Niigata-shi

Omotemachi Bldg., 1st Floor 2-1 Omotemachi3-chome, Nagaoka-shi

2-10 Akashi2-chome, Chuo-ku, Niigata-shi

Hokuetsu Higashi Bldg., 5th Floor 9-20 Kesajiro1-chome, Nagaoka-shi

1-17 Abumi1-chome, Chuo-ku, Niigata-shi (inside the Daishi Hokuetsu Bank Business Center)

Daishi Kami-Okawa-mae Bldg., 3rd Floor 1245 Kamiokawamae-dori 8-bancho, Chuo-ku, Niigata-shi

The Daishi DC Card Co., Ltd.

Daishi Kami-Okawa-mae Bldg., 1st Floor 1245 Kamiokawamae-dori 8-bancho, Chuo-ku, Niigata-shi

The Hokuetsu Card Co., Ltd.

Hokuetsu Higashi Bldg., 4th Floor 9-20 Kesajiro1-chome, Nagaoka-shi

DAISHI HOKUE TSU REPOR T 2021

56

Company Information

Organization Chart

Organization Chart of the Daishi Hokuetsu Financial Group(as of June 25, 2021)

The Daishi Bank

The Hokuetsu Bank

57

DAISHI HOKUE TSU REPOR T 2021

Financial Data
CONTENTS 
Consolidated Balance Sheets

59

Consolidated Statements of Income

61

Consolidated Statements of Comprehensive Income

61

Consolidated Statements of Shareholders' Equity

62

Consolidated Statements of Cash Flows65

The Status of Financial Results (Consolidated)

66

Non-Consolidated Balance Sheets(Daishi Hokuetsu Bank)89

Non-Consolidated Statements of Income(Daishi Hokuetsu Bank) 90

DAISHI HOKUE TSU REPOR T 202158
Consolidated Balance SheetYears ended March 31,2021
Note:The translations of the Japanese yen amounts into US dollars are using the prevailing exchange rate at March 31, 2021,which was\110.71 to US $1.■Assets    （Millions of Yen）

(Millions of Yen)

(Thousands of U.S. Dollars)

2020



2021



¥1,236,293

¥2,055,703



―



―

13,080118,150 

3,234



29,215 

2,451,146

22,140,246 

4,937,462



44,598,160 

16,802



151,768 

147,069

1,328,417 

57,864



522,666 

17,246



155,780 

11,584



104,638 

1,167

10,548 

18,614



168,138 Cash and due from banksCall loans and bills bought4,788

Monetary claims bought13,288

Trading account securities

3,181

Securities

2,326,206

Loans and bills discounted

5,083,319

Foreign exchanges



20,472Other assets

189,980

Tangible fixed assets56,534

Intangible fixed assets

17,222

Asset for retirement benefits2,697



Deferred tax assets

16,379Customersʼ liabilities for acceptances and guarantees 

19,178












2021
$18,568,363 

Allowance for loan losses

(23,104)

(24,443)

(220,789)

Total Assets¥8,966,437

¥9,706,533

$87,675,305  ■ Liabilities（Millions of Yen）

(Thousands of U.S. Dollars)



2020



2021



Deposits

¥7,373,174



¥8,113,424

$73,285,376 

Negotiable certificates of deposit

252,208

76,876



694,391 Call money and bills sold 2,176



―



―

Payables under repurchase agreements

72,437

111,132

1,003,813 

Payables under securities lending transactions326,131

188,425

1,701,973 

Borrowed money399,232

663,603

5,994,069 

Foreign exchanges 



289



186



1,688 Borrowed money from trust account



126



202



1,828 Other liabilities 91,860

62,599

565,438 

Provision for bonuses 2,331



2,682



24,234 Provision for directorsʼ bonuses



130



127



1,152 Provision for retirement benefits 

8,945

694



6,268 Provision for directorsʼ retirement benefits



39



41



371 

Provision for reimbursement of deposits2,418



1,831



16,542 Provision for system cancellation losses



412



12



110 

Provision for contingent loss

1,265



1,401



12,655 Reserves under the special laws 



11



15



143 

Deferred tax liabilities

2,377



5,646



51,000 

Deferred tax liabilities for land revaluation 

5,236



5,169



46,697 

Acceptances and guarantees 19,178

18,614



168,138 

Total Liabilities¥8,559,984

¥9,252,687

$83,575,897 

  

 

59

(Millions of Yen)

DAISHI HOKUETSU REPORT 2021

2021



■ Net Assets
  



（Millions of Yen）

(Millions of Yen)

(Thousands of U.S. Dollars)

2020



2021



2021
 

Capital stock ¥30,000

¥30,000

Capital surplus 87,670

87,665 

Retained earnings 266,161

271,627 

Treasury stock (1,023)

(808)

 382,809388,485 

Shareholders' equity

20,596



39,948 

Deferred gains or losses on hedges (14,856)



(4,452)

 

Revaluation reserve for land

6,417



6,266

 

(6,850)



4,426

 

5,307



46,188 

Valuation difference on available-for-sale securities  

Remeasurements of defined benefit plans 
Accumulated other comprehensive income

Subscription rights to shares 



767



692



 

Non-controlling interests



17,569

18,479 

Total Net assets406,453

453,845 ¥8,966,437

¥9,706,533



Total Liabilities and Net assets



 


DAISHI HOKUETSU REPORT 2021

60

Consolidated Statements of IncomeYears ended March 31,2021

（Millions of Yen）

(Millions of Yen)

(Thousands of U.S. Dollars)

2020



2021



2021

Ordinary Income¥154,698¥143,132

Interest income

67,938

63,636



47,170

46,061

20,134

16,956

(118)

 

―



―

0









Interest on loans and discountsInterest and dividends on securitiesInterest on call loans and bills boughtInterest on receivables under resale agreementsInterest on receivables under securities borrowing transactionsInterest on deposits with banks
Other interest income

8



(13)



―





237



383








400



353



Trust fees



1



1





Fees and commissions28,292



27,968


Other ordinary income40,271



33,819

Other income18,194

17,706

Ordinary Expenses



135,288

125,631

Interest expenses



5,939



3,120



1,002

738





36



17





Interest on call money and bills sold



55



11





Interest on bills sold



391



115





Interest on payables under securities lending transactions 

1,921



378



Interest on borrowings and rediscounts



113



60





Other interest expenses



2,417



1,798



Interest on depositsInterest on negotiable certificates of deposit

Fees and commissions payments8,654



8,055



Other ordinary expenses



33,478

29,332

General and administrative expenses



69,863



71,960Other expenses



17,352



13,163

Ordinary profit

19,410

17,500

Extraordinary income





240



1,039



Gain on disposal of noncurrent assets





0



―



1,038



Gain on revision of retirement benefit plan



240





108



818







74







Extraordinary loss



Loss on disposal of noncurrent assets

33



293
521



―



4





Income before income taxes

19,542



17,721

Income taxes-current6,988



5,951



327



(992)
13,546



11,441Impairment lossTransfer to reserve for financial products transaction liabilities

Income taxes-deferred

Net incomeProfit attributable to non-controlling interests



670



646





Profit attributable to owners of parent¥12,875

¥10,795



Consolidated Statements of Comprehensive IncomeYears ended March 31,2021


（Millions of Yen）

（Millions of Yen）

(Thousands of U.S. Dollars)
2021



2020



2021



Net Income¥13,546

¥11,441103,350 

Other Comprehensive Income(31,124)



41,306



373,109 

Valuation difference on available-for-sale securities  (20,580)



19,625

177,268 (9,198)



10,404



93,976 

Remeasurements of defined benefit plans, net of tax (1,344)



11,277



101,863 Comprehensive income(17,578)



52,748

476,460 (Comprehensive income attributable to)













Comprehensive income attributable to equities of parent(18,103)



51,827Comprehensive income attributable to non-controlling interests  468,140 

525



921



8,319 Deferred gains or losses on hedges 61



DAISHI HOKUETSU REPORT 2021

Consolidated Statements of Shareholders' Equity
Years ended March 31 , 2020
Shareholders' equityBalance at March 31,2019\30,000

\87,667

\258,756

\(1,336)

\375,088

Changes of items during the period













Dividends from surplus







(5,476)



(5,476)

Profit attributable to owners of parent

12,875

12,875

Purchase of treasury stock









(5)

(5)

Disposal of treasury stock





2



317

320

Reversal of revaluation reserve for land 





6



6













Total changes of items during period ―2

7,405

312

7,721

\30,000

\87,670

\266,161

\(1,023)

\382,809

Net changes of items otherthan shareholders' equity

Balance at March 31,2020（Millions of Yen）



Capital stock Capital surplus  Retained earnings  Treasury stock  Total equity


Accumulated other comprehensive incomeValuationdifference on

Deferred gains Revaluation

Remeasurements

or losses onreserve forof defined benefit

hedgesland

plans

available-forsale securities

Total accumulated Subscription
rights toothercomprehensive

shares

Noncontrolling

Total net assetsinterests

incomeBalance at March 31,2019\41,032

\(5,657)

\6,424

\(5,505)

\36,292

\637

\17,054

\429,073

Changes of items during the period



















Dividends from surplus

















(5,476) 

Profit attributable to owners of parent















12,875

Purchase of treasury stock



 

 

 

 

 

 

 

(5)

Disposal of treasury stock

















320

Reversal of revaluation reserve for land 















6



(20,435)

(9,198)

(6)

(1,344)

(30,985)

129

514

(30,341)

Total changes of items during period (20,435)

(9,198)

(6)

(1,344)

(30,985)

129

514

(22,619)

Balance at March 31,2020

\20,596\(14,856)

\6,417

\(6,850)

\5,307

\767 

\17,569

\406,453

Net changes of items otherthan shareholders' equity

DAISHI HOKUETSU REPORT 2021

62

Consolidated Statements of Shareholders' Equity
Years ended March 31 , 2021
（Millions of Yen）



Shareholders' equity
Capital stock Capital surplus  Retained earnings  Treasury stock  Total equity\30,000

\87,670

\266,161

\(1,023)

\382,809

Changes of items during the period 

















(5,480)

(5,480)

Profit attributable to owners of parent 

10,795

10,795

Purchase of treasury stock









(5)

(5)

Disposal of treasury stock





(5)



220

214

Reversal of revaluation reserve for land 





151



151

Net changes of items other thanshareholders' equity











Total changes of items during period 

―

(5)

5,466

214

5,675

\30,000

\87,665

\271,627

\(808)

\388,485

Balance at March 31,2020

Dividends from surplus

Balance at March 31,2021


Accumulated other comprehensive incomeValuationdifference on

Deferred gains Revaluation

Remeasurements

or losses onreserve forof defined benefit

hedgesland

plans

available-forsale securities

Total accumulated Subscription
rights toothersharesTotal net assetsinterests

income\20,596\(14,856)

\6,417

\(6,850)

\5,307

\767

\17,569

\406,453

Changes of items during the period 

































(5,480)

Profit attributable to owners of parent 















10,795

Purchase of treasury stock

















(5)

Disposal of treasury stock

















214

Reversal of revaluation reserve for land 















151



19,351

10,404(151)

11,277

40,881

(75)

910

41,716

Total changes of items during period

19,351

10,404(151)

11,277

40,881

(75)

910

47,391

Balance at March 31,2021

\39,948

\(4,452)

\6,266

\4,426

\46,188

\692

\18,479

\453,845

Balance at March 31,2020

Dividends from surplus

Net changes of items other than shareholders' equity












63

comprehensive

Noncontrolling

DAISHI HOKUETSU REPORT 2021

Years ended March 31 , 2021
(Thousands of U.S. Dollars)



Shareholders' equity
Capital stock Capital surplus  Retained earnings  Treasury stock  Total equity   

Changes of items during the period 

 

 

 



 

 

Profit attributable to owners of parent  

Purchase of treasury stock 

Disposal of treasury stock 

Reversal of revaluation reserve for land  Net changes of items other thanshareholders' equity Balance at March 31,2020

Dividends from surplus

Total changes of items during period Balance at March 31,2021          

 

 

 

 

 

      

 

 

 



 

―

 

    

  


Accumulated other comprehensive incomeValuationdifference on

Deferred gains Revaluation

Remeasurements

or losses onreserve forof defined benefit

hedgesland

plans

  

available-forsale securities 

Changes of items during the period 

 

 

 



 

 

Profit attributable to owners of parent  

Purchase of treasury stock

Disposal of treasury stockTotal accumulated Subscription
rights toothercomprehensive

shares

Noncontrolling

Total net assetsinterests

income    

 

 

 

 

 

 

 



 

 

 

 

 

 



 

 

 

 

 

 

 



 

 

 



 

 

 

 



 

 

 

Reversal of revaluation reserve for land 

 

 

 

 



 

 

         

Total changes of items during period        

Balance at March 31,2021       

Balance at March 31,2020

Dividends from surplus

Net changes of items other than shareholders' equity 

DAISHI HOKUETSU REPORT 202164

Consolidated Statement of Cash FlowsYears ended March 31 , 2021

（Millions of Yen）








2020

1HWFDVKSURYLGHGE\ XVHGLQ RSHUDWLQJDFWLYLWLHV 

2021





(Thousands of U.S. Dollars)
2021





Income before income taxes \19,542

\17,721

$160,070 

Depreciation and amortization5,393



6,241



56,373 

Impairment loss 



33



521



4,706 Increase (decrease) in allowance for loan losses

2,566



1,338



12,092 

Increase (decrease) in provision for contingent loss  

134



135



1,225 



41



351



3,173 Increase (decrease) in provision for directors' bonuses  

13



(2)



(21)

Increase (decrease) in provision for retirement benefits 

689



(8,886)

(80,268)

Increase (decrease) in provision for retirement liability

1,092



(8,251)



(74,530)

Increase (decrease) in provision for directors' retirement benefits 

(2)



1



16 

Increase (decrease) in provision for reimbursement of deposits  (571)(586)



(5,299)

Increase (decrease) in provision for system cancellation losses

(45)



(400)



(3,615)

Financing income(67,938)

(63,636)



(574,806)

Financing expenses



5,939



3,120



28,183 Loss (gain) related to securities(3,570)

(5,103)

(46,097)

Loss (gain) on investments in money held in trust  

3



―



―

Foreign exchange losses (gains) 



(1)



(2)



(23)

Loss (gain) on disposal of noncurrent assets 

2,643 Increase (decrease) in provision for bonuses(165)

292



Net decrease (increase) in trading account securities 

730



(52)



(474)

Net decrease (increase) in loans and bills discounted (17,427)



145,857



1,317,470 

195,707

740,249

6,686,385 

Net increase (decrease) in negotiable certificates of deposit(27,221)

(175,332)

(1,583,711)

(34,647)



264,371

2,387,963 

320



174



1,580 Net increase (decrease) in deposit

Net increase (decrease) in borrowed money
(excluding subordinated borrowings)

 1HWGHFUHDVH LQFUHDVH LQGHSRVLW H[FOXGLQJGHSRVLW SDLGWR%DQNRI-DSDQ 
Net decrease (increase) in call loans 3,111



4,996



45,129 

Net increase (decrease) in call money (40,652)



36,517



329,849 (77,397)

(137,705)

(1,243,843)

Net decrease (increase) in foreign exchanges-assets (810)



3,669



33,148 

Net increase (decrease) in foreign exchanges-liabilities (465)(102)

(927)

Net increase (decrease) in borrowed money from trust account



126



76



690 

Revenue for finance72,369

66,516



600,821 

Payments for finance(6,285)



(3,470)

(31,343)

Other, net



315



20,075



181,337 

sub-total 30,929

908,696

8,207,897 

Income taxes paid(8,045)

(5,098)

(46,053)

Net cash provided by (used in) operating activities  

22,883



903,597

8,161,843 

Net cash provided by (used in) investment activities:











Purchase of securities(991,579)

(1,116,196)

(10,082,161)

Proceeds from sales of securities 789,399

796,067

7,190,568 Proceeds from redemption of securities 323,840

249,931

2,257,532 

Purchase of increase in money trust (2,000)



―



―

Proceeds from decrease in money trust

1,996



―



―

Purchase of property, plant and equipment (4,596)

(4,752)

(42,925)

Proceeds from sales of property, plant and equipment

74



76



694 



(6,063)

(3,647)

(32,944)

Net increase (decrease) in payables under securities
lending transactionsPurchase of intangible assets

Net cash provided by (used in) investment activities 

111,069

(78,519)



Net cash provided by (used in) financing activities:









(709,236)


Cash dividends paid (5,476)

(5,480)

(49,502)

Dividends paid to non-controlling interests 



(10)



(10)



(96)

Purchase of treasury stock 



(5)



(5)





(48)

Proceeds from sales of treasury stock 

143



1



10

Net cash provided by (used in) financing activities(5,348)

(5,495)



Effect of exchange rate change on cash and cash equivalents (49,636)
23 

1



2





128,606

819,585



7,402,994 Cash and cash equivalents at beginning of the year 

1,105,851



1,234,458



11,150,375 

Cash and cash equivalents at the end of the year \1,234,458

\2,054,043

$18,553,369 

Net increase (decrease) in cash and cash equivalents

65(Millions of Yen) 

DAISHI HOKUETSU REPORT 2021

The Status of Financial Results (Consolidated)
Notes (From April 1, 2020 to March 31, 2021)
(Basic items that form the foundation for preparationof consolidated financial results)

1. Matters regarding the scope of consolidation

(1) Consolidated subsidiaries: 13 companies Company names: The Daishi Hokuetsu Bank, Ltd., The Hokuetsu Bank, Ltd., The
Daishi Hokuetsu Career Bridge Co.,Ltd., The Daishi Hokuetsu
Securities Co.,Ltd., The Daishi Lease Co., Ltd., The Daishi
Computer Service Co., Ltd., The Daishi Guaranty Co., Ltd., The
Daishi JCB Card Co., Ltd., The Daishi DC Card Co., Ltd., The
Daishi Management Consulting Co., Ltd., Hokuetsu Leasing Co.,
Ltd., The Hokuetsu Credit Guarantee Co., Ltd., The Hokuetsu
Card Co., Ltd., The Hokugin Economic Research Institute/WG  1RWH  2Q -DQXDU\   7KH 'DLVKL %DQN /WG DQG 7KH+RNXHWVX%DQN/WGPHUJHGE\DEVRUSWLRQZLWK'DLVKL%DQNDVWKH VXUYLYLQJ FRPSDQ\ DQG +RNXHWVX %DQN DV WKH GLVVROYLQJFRPSDQ\2QWKH VDPHGD\7KH'DLVKL%DQN/WGFKDQJHGLWV
FRPSDQ\QDPHWR'DLVKL+RNXHWVX%DQN/WG
(2) Nonconsolidated subsidiaries: 3 companies Daishi Food and Agriculture Assist Fund Investment Limited
Partnership, Daishi Startup Support Fund Investment Limited
Partnership, Hokuetsu Sixth Industry Support Fund Investment
Limited Partnership.
 Nonconsolidated companies have been excluded from the scopeof consolidation since their assets, current account balance, net
profit or loss for the current term (amount corresponding toequity), retained earnings (amount corresponding to equity), andother accumulated comprehensive income (amount corresponding toequity), etc., have little relevance and will not prevent rational
judgment to be made regarding the financial status andmanagement performance of the corporate group.

2. Matters related to the application of equity method (1)Nonconsolidated subsidiaries subject to application of equity
method: None(2)Affiliated companies subject to application of equity method: None(3)Nonconsolidated subsidiaries not subject to application of equity
method: 3 companies Daishi Food and Agriculture Assist Fund Investment Limited
Partnership, Daishi Startup Support Fund Investment Limited
Partnership, Hokuetsu Sixth Industry Support Fund Investment
Limited Partnership.
 Nonconsolidated subsidiaries not subject to application of equity
method have been excluded from the scope of application ofequity method since their net profit or loss for the current term(amount corresponding to equity), retained earnings (amountcorresponding to equity), and other accumulated comprehensive
income (amount corresponding to equity), etc., do not haveimportant impact on the consolidated financial statement.(4)Affiliated companies not subject to application of equity method: None.

3. Matters related to the fiscal year, etc., of
consolidated subsidiariesThe closing date for consolidated subsidiaries is as follows:
Last day of March: 13 companies

4.Matters related to accounting policies

(1)Valuation criterion and valuation method for trading accountsecurities:
 Valuation of trading account securities is made using the market
value method (cost of securities sold is calculated mainly by themoving average method).
(2) Valuation criterion and valuation method for valuable securities(i) The amortized cost method (straightline method) using themoving average method is used for securities held forownership until maturity. For other trading accountsecurities, the market value method based on the market
price on the consolidated closing date (cost of sale to be
calculated using the moving average method) is used, as arule. However, the prime cost principle using the moving
average method is used for those for which market value isextremely difficult to ascertain.
The valuation difference for other trading account securities
is processed by the all net asset direct entry method.

(3)Valuation criterion and valuation method for derivativetransaction
 Valuation of derivative transactions is conducted using themarket value method.
(4)Depreciation method for fixed assets(i) Tangible fixed assets (excluding leased assets)

The straightline method is mainly used for tangible fixed
assets.
Major service life is as follows: Buildings:  10 to 50 years Others:  2 to 20 years(ii) Intangible fixed assets (excluding leased assets)

The straightline method is used for intangible fixed assets.
Software used by the Company is depreciated based on theusage period (5 to 9 years) determined by the Company andits consolidated subsidiaries.
(iii) Leased assets“Tangible fixed assets” and “Intangible fixed assets”
included in leased assets related to finance leases exempt
from passage of title are depreciated by the straightline
method with the lease period set to the statutory service life.
As for residual value, the guaranteed residual value shall be
used in cases in which residual value clause is included in
the lease agreement and zero for all other leases.
(5) Criteria for recording allowances for loan losses Allowances for loan losses of consolidated subsidiaries in banking
business are recorded as per the depreciation and allowance
criteria set in advance, as follows:
 Claims related to debtors who are legally insolvent, such as thosefacing bankruptcy or special liquidation (“Bankrupt debtors”) or
debtors under equivalent situations (“Effectively bankrupt
debtors”) are recorded as follows: The recorded amount is theremaining balance after deduction from the book value after
direct reduction as stated in the proviso, from the possible
marketable collateral amount and recoverable amount fromguarantees. For claims against debtors not currently insolvent
but with high risk of future insolvency (“Potentially bankrupt
debtors”), an amount judged to be necessary after
comprehensively considering the solvency of the debtor from theamount of balance, after deduction of the possible marketable
collateral amount and recoverable amount from guarantees fromthe claim amount, is recorded.
 Claims other than the above were mainly recorded based on
predictions of anticipated losses over the next one year or
anticipated losses over the next three years. Amounts ofanticipated losses were calculated by determining the loss rate
based on average values of bad debt ratio over a set period oftime in the past, according to actual bad debt over one or three
years, then adding the necessary corrections for future
predictions and other factors.
 Sales related divisions and HQ related divisions have conductedasset audits on all claims based on asset selfassessment criteria
and the assessment results have been audited by the asset
auditing division independent of the division being audited. Provided however, that for collateral and claims with guarantees
against Bankrupt debtors and Effectively bankrupt debtors, thebalance after deduction of the validated amount of collateral andthe amount expected to be recoverable from the guarantee arededucted directly from the amount of the claim as the estimateduncollectable amount, and stands at 11,148 million yen.
 An amount acknowledged to be necessary, in consideration of thepast loan loss rate for general claims and estimated uncollectableamount in consideration of individual recovery possibilities for
specific claims, such as those with default possibilities, arerecorded as allowances for loan losses of other consolidated
subsidiaries.
(6)Criteria for recording provision for bonuses In preparation for expected bonus payment to employees, theamount of the expected bonus payment pertaining to therelevant consolidated fiscal year has been recorded as a provision
for bonuses.
(7) Criteria for recording provision for directors’s bonuses In preparation for expected bonus payments to directors, theamount of the expected bonus payment pertaining to the

DAISHI HOKUETSU REPORT 2021

66

The Status of Financial Results (Consolidated)
relevant consolidated fiscal year has been recorded as provision
for director’s bonuses.

(8)Criteria for recording provision for directors’s retirement benefits In preparation for payment of retirement benefits to directors ofconsolidated subsidiaries, the amount of expected retirement
benefits for directors acknowledged to have occurred before theclosing of the current fiscal year has been recorded as provisions
for director’s retirement benefits.
(9)Criteria for recording provision for reimbursement of deposits In preparation for reimbursement of deposits from depositors fordeposits in which recording as a liability has been suspended, loss
occurring from future reimbursement claims have been
estimated, and the amount deemed necessary has beenrecorded as a provision for reimbursement of deposits.
(10)Provision IRUV\VWHPVFDQFHOODWLRQORVVLVPDGHIRUWKHHVWLPDWHG
 ORVVRQWKHFDQFHOODWLRQEHIRUHPDWXULW\RIV\VWHPVXVHGE\WKH
EDQNV 7KH'DLVKL%DQN/WGDQG7KH+RNXHWVX%DQN/WG SULRUWRWKHPHUJHUDFFRPSDQ\LQJWKHWUDQVLWLRQWRWKHV\VWHPVWREHDGRSWHGE\'DLVKL+RNXHWVX%DQN/WGDIWHUWKHPHUJHU
(11)Criteria for recording provision for contingent loss Provisions for contingent loss are recorded by estimating the loss
and recording the amount judged to be necessary, for possible
loss occurring in the future for contingent events other thanevents provided under other provisions.
(12)Criteria for recording reserves under the special laws Reserves under special laws are reserves for financial producttransaction liabilities for consolidated subsidiaries conducting
securities business. The amount calculated under the provisionsof Article 465 of the Financial Instruments and Exchange Act is
set aside to compensate for loss in incidents occurring related tosecurities future transactions, etc.
(13)Accounting method related to retirement benefits In the calculation of retirement benefit liabilities, the benefit
formula standard is adopted as the method of attributing the
expected amount of retirement benefits within the current
consolidated fiscal year. Furthermore, the methods of processing
profit and loss for prior service costs and actuarial gain or loss are
as follows:

Prior service cost: Profit and loss processing using thestraightline method for a certain numberof years (10 years) within the average
employee residual term of service at thetime of occurrence.
 Actuarial gain or loss: Profit and loss processing of theamount prorated by the straightline
method for a certain number of years (10to 12 years) within the average employee
residual term of service at the time ofoccurrence, from the following fiscal year.
 It must be noted that some consolidated subsidiaries have adopted asimplified method in the calculation of retirement benefit, in whichamount to be paid for voluntary retirement at the end of the current
term is taken as the retirement benefit liability in the calculation ofretirement benefit liability and retirement benefit cost.
(14) Criteria for conversion of foreign currency denominated assets
and liabilities into Japanese yen
 Foreign currency denominated assets and liabilities areconverted into Japanese yen using the rate of exchange on the
consolidated closing date.
(15)Criteria for recording of profits and expenses related to financelease transactions Criteria for recording profits and expenses related to financelease transactions are conducted by recording sales and cost of
sales, when lease fees are received.
(16)Important risk hedging methods
(a) Interest risk hedge
As a method of hedge accounting of interest risk occurringfrom financial assets and liabilities of consolidated
subsidiaries in the banking industry, “Individual hedge” that
directly establish correspondence between the target of thehedge with the hedging method is partially adopted on

67

assets and liabilities to conduct accounting processing bydeferred hedges. This allows the target of the hedging
method and the target of the hedge to be integrally
managed. The effectiveness of the hedge is evaluated byverification of whether the interest risk subject to hedging
has been diminished by the hedging method. In addition,
exceptional processing for interest swaps are made, andjudgment regarding the requirements for exception
processing is used in lieu of the judgment of hedge
effectiveness.(b) Exchange fluctuation risk hedging
Deferred hedge, as provided in “Handling in accounting andaudit of foreign currency denominated transactions, etc., in
the processing of accounts in the banking industry” (Special
Audit Committee Report No. 25 by The Japanese Instituteof Certified Public Accountants (JICPA) dated October 8,
2020. Hereinafter “Industrywise Audit Committee Report
No. 25”) is adopted. The effectiveness of the hedge isevaluated with currency swap transactions and exchange
swap transactions, etc., conducted with the aim ofdiminishing exchange fluctuation risks of foreign currency
denominated debts and credits and the effectiveness of thehedge is evaluated by confirming the existence of a foreign
currency position equivalent amount that matches theforeign currency denominated debts and credits, which are
the targets of the hedge.
2I WKH DERYH KHGJLQJ UHODWLRQVKLSV WKH H[FHSWLRQDOWUHDWPHQWSUHVFULEHGLQWKH3,7)LQTXHVWLRQLVDSSOLHGWRDOO
KHGJLQJUHODWLRQVKLSVLQFOXGHGLQWKHVFRSHRIDSSOLFDWLRQRI“Treatment of Hedge Accounting for Financial ,QVWUXPHQWV
that Reference LIBOR” (PITF No. 40, September 29, 2020).
7KHGHWDLOVRIWKHKHGJLQJUHODWLRQVKLSVWRZKLFKWKLV3,7)LVDSSOLHGDUHDVIROORZV+HGJHDFFRXQWLQJPHWKRGV'HIHUUDOKHGJHDFFRXQWLQJDQG
H[FHSWLRQDODFFRXQWLQJIRULQWHUHVWUDWHVZDSV+HGJLQJ LQVWUXPHQWV &XUUHQF\ VZDSV DQG LQWHUHVW UDWHVZDSV
+HGJHGLWHPV6HFXULWLHVDQGORDQV
7\SHV RI KHGJLQJ WUDQVDFWLRQV &DVK IORZ KHGJHV DQGKHGJHVDJDLQVWPDUNHWIOXFWXDWLRQV(17) Scope of funds in consolidated cashflow statements The scope of funds in consolidated cashflow statements are cash
and deposit with the Bank of Japan listed in “Cash and deposits”
in the consolidated balance sheet.
(18) Account processing of consumption tax, etc.
 The excluding tax method is mainly adopted for accountprocessing of consumption tax and local consumption tax(“Consumption tax, etc.”) by the Company and consolidated
subsidiaries. However, nondeductible consumption tax related
to tangible fixed assets is recorded as expenses in the
consolidated accounting for the current fiscal year.(Significant accounting estimates)

Items whose amount was recorded in the consolidated financial
statements for the current fiscal year based on accounting estimates,
and which may have a significant impact on the consolidated
financial statements for the following fiscal year, are given below.
(Allowance for loan losses)
1. Amounts recorded in the consolidated financial statements forthe current fiscal year Allowance for loan losses 24,443 million
yen Of this amount, the allowance for loan losses of consolidated
subsidiaries engaged in the banking business was 20,040 million
yen, and corporate customers made up the majority of theallowance for loan losses.
2. Information that contributes to understanding the nature of thesignificant accounting estimates for the identified items
(1) Method of calculation Estimated allowances for loan losses for consolidated subsidiaries
engaged in the banking business are calculated by conducting
asset assessments under the asset selfassessment criteria todetermine “debtor classifications” (normal debtors, debtors
requiring attention, debtors requiring special attention, debtors
in danger of bankruptcy, effectively bankrupt debtors, andbankrupt debtors). Depreciations and allowances are then madein accordance with the determined debtor classifications under
the depreciation and allowance criteria. These estimates include
judgments and assumptions, the key details of which are as
given below. Moreover, the method of calculation, including

DAISHI HOKUETSU REPORT 2021

The Status of Financial Results (Consolidated)assumptions for depreciation and allowances, is described in“Matters related to accounting policies (5) Criteria for recording
allowances for loan losses.”
 In order to assess the estimated recorded amount of theallowance for loan losses, consolidated subsidiaries engaged in
the banking business perform verification by considering various
factors to determine whether the assumptions used in estimating
the allowance for loan losses are reasonable and whether thebalance of the allowance for loan losses is sufficient to coverpotential future losses.
(2) Key assumptions A key assumption is the “outlook on the borrower’s future
performance when determining debtor classifications.” The“outlook on the borrower’s future performance when
determining debtor classifications” is set based on individual
assessments of each borrower’s ability to earn income.  Each time a borrower discloses financial results or events that
affect their creditworthiness occur, we evaluate their financial
position, cash flow, ability to repay based on profitability, loan
terms and conditions and their fulfillment, characteristics of theirindustry, etc., business continuity and profitability outlook, andability to repay debts based on cash flow, determining the debtor
classification by synthesizing these factors. Furthermore, in
determining the debtor classification, we consider both
qualitative and quantitative information about a borrower.
Qualitative information includes assumptions about theborrower’s technical capabilities, growth potential, and future
performance outlook. In addition, in cases where the borrowerhas drawn up a radical business restructuring plan that is highly
feasible or a business improvement plan that is reasonable andfeasible, the debtor classification will be determined by taking
into consideration the future business outlook in light of said plan.
For depreciation and allowances, we make “necessary
corrections” as described in “Matters related to accounting
policies (5) Criteria for recording allowances for loan losses,”
which includes cases where the number of periods for calculating
the bad debt ratio is expanded in light of the economic cycle, orwhere additional provisions are made based on the outlook forcollectability of receivables. However, this does not lead to adownward shift in the debtor classification. Both of thesemeasures are designed to prepare for future loan losses andinclude assumptions about the outlook for the economic
environment and the collectability of receivables.  The COVID19 pandemic is a phenomenon with broadrepercussions on the economy and corporate business activities,
and we expect these to continue for a certain amount of time into
the future. Although some borrowers have been affected bydeteriorating business performance and cash flow, and we haveincurred losses from bad debts, we have not changed the methodof estimating allowances for loan losses as of the end of thecurrent consolidated fiscal year. This is because we have taken aposition of taking the current deteriorating business performance
into account as soon as possible when determining debtor
classification, and because we expect various economic
measures to help curb deterioration in credit standing.
(3) Effect on the consolidated financial statements for the following
fiscal year If the assumptions used for the initial estimate change, such as asignificant change in the economic environment including theeffects of COVID19, the debtor classification and the estimatedamount of collateral available for disposal may change. This may
have a significant impact on the allowance for loan losses in the
consolidated financial statements for the following fiscal year.
(Yet to be applied accounting standards, etc.)

・Accounting Standard for Fair Value Measurement (ASBJ Statement
No. 30 July 4, 2019)
・Implementation Guidance on Accounting Standard for Fair Value
Measurement (ASBJ Guidance No. 31 July 4, 2019)
・Accounting Standard for Financial Instruments (ASBJ Statement No.
10 July 4, 2019)
・ Implementation Guidance on Disclosures about Fair Value of
Financial Instruments (ASBJ Guidance No. 19 March 31, 2020)
(1) Overview The Accounting Standard for Fair Value Measurement and the
Implementation Guidance on Accounting Standard for Fair Value
Measurement (collectively “Accounting Standard for Fair Value
Measurement, etc.”) were developed in order to improvecomparability with the stipulations of international accounting
standards, and guidance on methods for measuring fair value

was defined. The Accounting Standard for Fair Value
Measurement, etc. applies to the fair value of the following items.
・Financial instruments specified in Accounting Standard for Financial
Instruments The Implementation Guidance on Disclosures about Fair Value of
Financial Instruments was revised and items of note were added,
such as breakdowns of each level of fair value for financial
instruments. (2) Scheduled date of application Scheduled to apply starting at the beginning of the fiscal year
ending March 2022. (3) Impact of the application of the accounting standard, etc.
 At the time of creating these consolidated financial statements
we are assessing the financial amount of this impact.
(Change of presentation)
The “Accounting Standard for Disclosure of Accounting Estimates”(ASBJ Statement No. 31, March 31, 2020) has been applied to theconsolidated financial statements for the current consolidated fiscal
year, and notes regarding significant accounting estimates areincluded in the consolidated financial statements. However, in
accordance with the transitional treatment set forth in the proviso ofparagraph 11 of the said accounting standard, these notes do notinclude information relating to the previous consolidated fiscal year.
(Additional information)
(Partial revision of the retirement benefits scheme)
The Daishi Bank, Ltd. and The Hokuetsu Bank, Ltd., wholly owned
subsidiaries of the Company, transferred part of their defined benefit
corporate pension schemes to a defined contribution pension
scheme as part of the integration of systems associated with theirmerger on January 1, 2021. For the accounting treatment of thetransition, the Company applied the “Accounting Procedures for
Shifting between Different Retirement Benefit Programs” (ASBJ
Corporate Accounting Standards Implementation Guidance No. 1,
December 16, 2016) and the “Practical Treatment of Accounting
Procedures for Shifting between Different Retirement Benefit
Programs” (PITF No. 2, February 7, 2007), and accounted for the
portion transferred to the defined contribution pension plan as apartial termination of the retirement benefit plan. As a result, extraordinary income of 1,038 million yen was recordedin the current consolidated fiscal year.
(Consolidated Balance Sheet related)
1. Total amount of shares or contribution in nonconsolidated
subsidiaries and affiliated companies: Contribution: \410 million
2. The amount of bankrupt debtor claims and overdue claims inloans are as follows: Bankrupt debtor claims \2,063 million 
Overdue claims
\84,965 million “Bankrupt debtor claims” refers to loans which the events
indicated in a. through e. in Article 96, paragraph 1, item 3 orevents provided in item 4 of the Order for the Enforcement of the
Corporation Tax Act (Cabinet Order No. 97 of 1965) haveoccurred, for loans in which unreceived interest payment has notbeen recorded, being judged that collection of capital, interest
payment, or its settlement cannot be expected for continued
delay in the repayment of capital or payment of interest for areasonable period or for other causes (excluding portions forwhich bad debts have been written off) (“Uncollected interestnonrecorded loan”).
 Furthermore, “Overdue claims” refers to uncollected interestnonrecorded loans, other than loans in which the payment ofinterest has been given a grace period for the purpose of
assisting the Bankrupt debtor claim or management
reorganization or support.

3. The amount of loans overdue for three (3) months or longer is asfollows: 
Loans overdue for three (3) months or longer \622 million “Loans overdue for three (3) months or longer” refers to loans
where payment of interest or repayment of capital has been
delayed for three (3) months or longer, from the day following
the contract due dates, in which Bankruptcy debtor claims or
overdue claims do not apply.

4. Of the loans, those with relieved loan conditions are as follows: 
Loans with relieved loan conditions: \3,568 million

DAISHI HOKUETSU REPORT 2021

68

The Status of Financial Results (Consolidated)“Loans with relieved loan conditions” refers to loans for which a
reduction in interest, a grace period for interest payment, a grace
period for repayment of capital, debt forgiveness, or otheragreements favorable to the debtor have been made for the
purpose of assisting the debtor with management reorganizationor support, that do not fall under Bankrupt debtor claims,
overdue claims or loans overdue for three (3) months or longer.


5. The aggregate total of Bankrupt debtor claims, overdue claims,
loans overdue for three (3) months or longer, and loans withrelieved loan conditions are as follows: 
Total amount:  \91,220 million Note that the amount of loans indicated in 2. through 5. above
are the amount prior to deduction of allowance for loan loss.

6. Discounting of bills is processed as financial transaction, based on“Handling in accounting and audit regarding the application offinancial instruments accounting standards in the banking
industry” (Special Audit Committee Report No. 24 by JICPA dated
October 8, 2020). The Bank retains the right to freely dispose ofbank acceptance bills, commercial bills, documentary bills, andforeign bills bought, etc., and thus received in the form of sales or(re)mortgaging and their face value is as follows: \10,515 million
7. Assets provided as security are as follows:
 Assets provided as security  Securities
\885,612 million  Loans\133,525 million  Total
\1,019,137 million Liabilities corresponding to security assets  Deposits\ 82,086 million  Payable under repurchase agreements \111,132 million  Payables under securities lending transactions\188,425 million  Borrowed money
\655,084 million In addition to the above, the following has been tendered as a
substitute for security for foreign currency settlement,
shortterm financial transactions, or futures market transaction
deposits, etc.  Trading account securities
\22 million  Securities
\23,532 million Furthermore, financial instruments security deposits, central
clearing organization security deposits, and guarantees areincluded in Other assets and their amount are as follows.
  Financial instruments security deposits \15,562 million
\33,000 million  Central clearing organization security deposits  Guarantees
\1,393 million
8. Overdraft agreements and Commitment line agreements forloans are agreements to provide loans up to a prescribed limit,
when application for a loan has been made by customers, in theevent that there is no breach of the terms as provided for in theagreement. Unexecuted loan balances related to these
agreements are as follows:  Unexecuted loan balance\1,822,771 million
\1,734,548 million  Of which the original term of loan is within 1 year  or can be cancelled unconditionally at any time Since many of these agreements terminate without the loan
being executed, the unexecuted loan balance itself does not
impact the future cashflow of the consolidated subsidiaries
engaged in the banking business or to some of the consolidated
subsidiaries. Many of these agreements contain a clause that theconsolidated subsidiaries engaged in the banking business or tosome of the consolidated subsidiaries may refuse the loan ordecrease the limit amount in the event that applications for loans
have been made, in the event that there have been changes infinancial situation, securing of loans, and other reasonablereasons. In addition, guarantees, such as real estate, valuable
securities, etc., are secured at the time of agreement as
necessary, and the state of the customers are checked regularly(semiannually) even after the agreement in accordance with theinhouse regulations, and review of the agreement and measures
to secure credit, etc., are conducted.
9. Based on the Act on Revaluation of Land (Act No. 34 dated March
31, 1998), revaluation of businessuse land owned by Daishi
Bank was conducted. For the valuation difference, the amountequivalent to tax related to the subject valuation difference has
been recorded in Liabilities, as “Deferred tax liability related torevaluation” and the amount after deduction of this amount isrecorded in Net assets under “Land revaluation difference”.

69 Date of revaluation
March 31, 1998
Method of revaluation as provided in Article 3 paragraph 3 ofsaid Act.
 Calculated based on the method provided and publishedby the Director General of National Tax Administration
Agency to calculate the value of land on which the taxable
value for the land tax, as provided in Article 16 of theLandholding Tax Act (Act No. 69 of 1991) andestablished in the Order for Enforcement of Act on
Revaluation of Land (Order No. 119 dated March 31,
1998) Article 2 item 4, with reasonable adjustments (rateof value correction by depth, etc.) made.
 The difference between the total amount of market
value of the businessuse land revaluated as provided forin Article 10 of said Act as of the end of the term and thetotal amount of book value after revaluation of saidbusinessuse land:
 \12,508 million
10. Aggregate amount of depreciation of tangible fixed assets 
Aggregate amount of depreciation
\78,951 million
11. Amount of compressed entry of tangible fixed assets 
Amount of compressed entry
\8,110 million (Amount of compressed entry in current consolidated fiscal year)
(\― million)

12. Amount of guarantee obligation for privatelyplaced bonds(under Article 2 paragraph 3 of Financial Instrument andExchange Act) in bonds included in “Securities”.
 \140,831 million
13. Trust principal with principal compensation agreement 
Money in trust\202 million(Consolidated Statements of Income Related)
1. The following is included in Other ordinary income.
\15,733 million  Gain on sales of stocks and other securities
2. The following are included in General and administrative
expenses.  Salaries and allowances\32,225 million  Retirement benefit costs
\2,065 million 
3. The following are included in Other expenses.  Writtenoff of loans\1,906 million
\5,350 million  Loss on sales of stocks and other securities  Loss on devaluation of stocks and other securities \614 million
4. Impairment loss have been recorded for the following asset
groups. In the current consolidated fiscal year, the Company recorded
impairment losses on the following asset groups.
 Principally within Niigata PrefectureCategory

Operating

Main application

63 sales branches, etc.

Type

Land and buildings, etc.

Impairment loss

510 million yenCategory

Ownership

Main application

9 idle assets, etc.

Type

Land and buildings, etc.

Impairment loss

10 million yen

The carrying amount has been reduced to the recoverable
amount for these sales branches, etc. because of factors
including a decline in operating cash flows and a drop in land
prices, and this reduction has been recorded under extraordinary
loss as an impairment loss (521 million yen). 
The Bank’s policy for grouping assets of consolidated subsidiaries
engaged in the banking business is as follows. The grouping is based on the smallest unit used in managerial
accounting, which is the sales branch (however, sales branchareas that conduct business in cooperation with each other aregrouped by the relevant area). In addition, the asset grouping ofassets to be disposed of and idle assets, etc. is made for specificassets. The headquarters, administrative centers, social welfare
facilities, etc. that are assets involving the entire bank aregrouped as common assets. The recoverable amount used tomeasure impairment losses in the current consolidated fiscal
year is the higher of the net realizable value and the value in use.

DAISHI HOKUETSU REPORT 2021

The Status of Financial Results (Consolidated)
The net selling price is calculated mainly by deducting estimateddisposal costs from the real estate appraisal value, and the value
in use is calculated by discounting future cash flows at a given
discount rate.


2.Matters related to right to subscribe to new shares and right tosubscribe to new treasury stocks

(Consolidated Statements of Comprehensive Income
Related)

1.






















Recycling and amount of tax effects related to Other
comprehensive income(Unit: \ million)
Valuation difference on availableforsale securities
Incurred cost for this term
34,975
Recycling(7,584)
Before tax effect adjustment
27,390Tax effect amount(7,765)
Valuation difference on availableforsale securities 19,625
Deferred gains or losses on hedges
Incurred cost for this term
11,071
Recycling
3,869
Before tax effect adjustment
14,940Tax effect amount(4,536)
Deferred gains or losses on hedges
10,404Remeasurements of defined benefit plans(net of tax)
Incurred cost for this term
14,694
Recycling
1,529
Before tax effect adjustment
16,223
Tax effect amount(4,946)
Remeasurements of defined benefit plans(net of tax) 11,277
Total Other comprehensive income 41,306 shares

Number ofissuedsharesOrdinarysharesTotal
TreasurystocksOrdinarysharesTotal



Number of
decreasedsharesduring thecurrent
consolidated
fiscal term

Number ofshares at
the end of
the current
consolidated
fiscal terme as of

Beginnintargetg ofof theyear

currentright

consolid

toated

subscr

fiscalibe totheconsolidated fiscal

Incre

Decre

ase

ase

year

End ofend ofcurrenttheRema

consolid

current

rks

ated

fiscalfiscalyear(\ milli

year

on)

sharesAs
Company

Stock



692





692



optionTotal


3. Matters related to dividends
(1)Amount of dividends paid out during the current consolidated

fiscal year
 
Total
(Resolution)

Type

of

sharesamount ofDividend

dividends

per(\ million)

share (\)Reference

Effective

date

date

March 31,

June

2020

2020

September

December30, 2020

1, 2020

(Note)
Boardofdirectors,

OrdinaryMay

shares15,

2,738

60.00

2,741

60.00

1,

2020
Board

of

Directors,

Ordinary

Novembershares13, 2020

Remarks(2) Dividends for which the reference date falls within the current
consolidated fiscal year with the effective date occurring after thelast day of the current consolidated fiscal year.

Total



45,942——

45,942 45,942

——

45,942













297

2

64

236

(Note)  297

2

64

236



(Note) The breakdown of increase in the number of ordinary shares of Treasury
stocks is as follows.
Increase by purchase request of fractional unit shares
2 thousand shares
Breakdown of decrease in the number of ordinary shares of Treasury stocks is asfollows.
Transfer by exercise of stock option rights
63 thousand shares
Decrease by purchase request of fractional unit shares
0 thousand shares




















BalancCurrentnew

Number ofincreasedsharesduring thecurrent
consolidated
fiscal term

be to
new

(Consolidated Statements of Shareholders Equity
related)
1. Matters related to the type and total number of issued
shares, and type and number of Treasury stocks(Unit: 1,000 shares)
Number ofshares atthebeginning of
the current
consolidated
fiscal termright tosubscri

subscribe to new shares (shares)

to be

own oftion

Number of shares to be target of the right toofsharesBreakdClassifica

Type(Resolution)

Type ofsharesamount ofdividends(\ million)

Dividend
Sourceper

Reference

Effectiveof fund

share

date

date

March 31,

June 1,

2021

2021

(\)

(Note)
Board of

Directors,

Ordinary

May 14,

shares

2,742

Retainedearnings

60.00

2021

(Consolidated cashflow statement related)

1. Relationship between the end of term cash and cash equivalents
and the amount indicated in the account titles in the consolidatedbalance sheet  Cash and deposit account\2,055,703 million  Deposits (excluding Bank of Japan deposit) (\1,660 million)
  Cash and cash equivalents
\2,054,043 million(Lease transaction related)
Operating lease transactions <Borrower side>
 Unearned lease fees concerning irrevocable operating leasetransactions  (Unit: \ million)
One (1) year or less
70
Exceeding one (1) year
136
Total
206
 <Lender side>
 Unearned lease fees concerning irrevocable operating leasetransactions (Unit: \ million)
One (1) year or less
181
Exceeding one (1) year
287
Total
468

DAISHI HOKUETSU REPORT 2021

70

The Status of Financial Results (Consolidated)(Financial instruments related)



71

Accounting titles with little relevance have been omitted from theamounts recorded in the consolidated balance sheet.
1. Matters concerning the status of financial instruments
(1)Policy regarding approach towards financial instruments The Company group is engaged, with focus on banking business
together with financial services covering lease operations,securities operations, credit guarantee operations, credit card
operations, and others. Funds raised by deposits and negotiablecertificate of deposits are mainly managed through loans andvaluable securities.
 As the Company has financial assets and liabilities that areaccompanied by interest rate fluctuations, risks on assets andliabilities for the entire group is comprehensively grasped andcontrolled to avoid disadvantageous impact from interest rate
fluctuations. A comprehensive Asset and Liability Management(ALM) is implemented to improve profits as well as stability.
Derivative transactions are conducted as a part of the activities.
(2)Contents of financial instruments and their risks Financial assets held by the Company group are mainly loans
made to domestic companies and individuals, and are exposed tocredit risk in which recovery of capital and interest on loans could
be made difficult by bankruptcy of the customers or deteriorationof financial status. Valuable securities are mainly stocks, bonds, investment trusts,
and investment in capital of partnerships. In addition to securities
held for ownership until maturity, purely financial, and forbusiness promotion purposes, trading account securities arebonds and are held for trading. These are exposed to market
risks from fluctuation of market factors, in which the asset value
held by the Company group may be reduced, incurring loss
though credit risks of the issuing entity, domestic and overseasinterest rates, the price of valuable securities, etc., and foreignexchange rates. Of the financial liabilities of the Company group, deposits, etc.,
and marketable fund raising are exposed to liquidity risk. In
addition to the possibility of outflow of deposits or not being able
to raise necessary funds by the deterioration of the Company
group’s credibility, there is also a possibility of incurring loss by
being forced to conclude transactions under unfavorable
conditions. Derivative transactions conducted by the Company group
includes interest rate swaps, forward exchange contracts,
currency options, etc., to respond to needs to hedge risks related
to interest rates and foreign currency of the customers.
Furthermore, as a part of ALM, interest rate swap transactions,currency swap transactions, etc., are being conducted forinterest rate risk control in banking operations, as well as foradjustment of fund surplus or deficit in banking operations andfor stabilizing fund liquidity.
 In addition, in the subsidiary banks and some of the consolidated
subsidiaries, credit futures transaction, etc., aimed at pursuing
trading profits are conducted within the extent of earning powerand corporate strength. Risks generated from these derivativetransactions include credit risks in which the counterpart of thetransaction has defaulted, and market risks in which loss can begenerated by fluctuation of interest rates and currency exchange.
“Hedge accounting” is adopted for derivative transactions aimed
a hedging risks. Evaluation of the effectiveness of hedging is
made by checking that the amount of derivative transaction risk,
as a hedge method, is within the range of allowable risk amount,as provided in the operating criteria concerning hedgetransaction management, and quarterly verification of whether
the risk subject to the hedge has been diminished is conducted.
(3)Risk management structure related to financial instruments
(i)Credit risk management The Company group operates and manages credit risk in an
appropriate matter based on various rules concerning credit
risk management.
 In terms of structure, the Risk Management Department is
responsible for controlling credit risks, and maintains
various rules concerning credit risk management, as well as
for the planning and operation of analysis, evaluation, andimprovement activities.
 At Daishi Hokuetsu Bank, credit divisions, completely
detached from sales promoting divisions, conduct strict
screening and manages problematic loans appropriately. It
also aims for sound management of assets through






















management improvement support activities to customers,
etc., the approach being promoted fully across both banks.
Credit rating and self assessment of loans, etc., is strictly
enforced through a twostage assessment system, one by
the sales office and the other by the head office division. In
addition, appropriateness and validity of credit rating andselfassessment is verified in the audit conducted by the
Audit division. Regarding the credit portfolio, credit concentration
management for specific areas, industries, companies,
groups, etc., are conducted in an appropriate manner.
Furthermore, credit risk quantification (Note) is being
conducted and credit risk limits in line with total equity arebeing set.
 (Note) Credit risk quantification is to digitize and estimate
the amount of credit risk involved in the credit portfolio,using statistical methods.
(ii)Market risk management The Company group has established an operation policy for
ALM to adjust market risks to an appropriate magnitude andto secure stable income, and determines the risk limits andloss limits in valuable securities operation in line with thepolicy. Furthermore,
importantmatters
concerningrisk
management are reviewed in the ALM & Risk Management
Committee, and is prepared to promptly report any
important situation that may occur in valuable securities
operations to the management. As a rule, the Company group conducts quantitative analysis
concerning market risks for all financial instruments, mainly
using Value at Risk (VaR), and is calculated and managed by
Daishi Hokuetsu Bank respectively. Quantitative analysis is
not conduced on some of the financial instruments that havelittle impact for its amount, etc., and some of the financial
instruments of some group companies.
 Daishi Hokuetsu Bank mainly adopts VaR by historicalmethod (holding period: 120 days, confidence interval: 99%,
observation period: 1,250 days) (note that thevariancecovariance method is adopted on some of theinvestment trusts). The amount of market risk as of the endof the current consolidated fiscal year (excluding market
risks of financial instruments whose market value isextremely difficult to assess, such as nonlisted stock) is\51,357 million. A back test which compares the computed VaR and thetheoretical profit and loss (profit and loss assumed to havegenerated when the portfolio is fixed as of the timing of risk
amount measuring) is conducted to verify the validity of themeasurement model. However, VaR only indicates the amount of risk under a fixedcertainty statistically computed from past market
fluctuations, and may not be able to capture risks when themarket environment should change inconceivably. This
being the case, it is supplemented by separate stress tests,
etc.(iii)Liquidity risk management In the Company group, “Liquidity risk management rules”
have been established in each subsidiary bank to grasp andanalyze the status of financing by the administration division
responsible for financing to raise funds from the market as
necessary.
 In addition, response measures and reporting andcommunicating structure has been established in order to
conduct prompt response under various situation, in theunlikely event to match the urgency of fund needs.

(4)Supplementary explanation regarding matters concerning themarket value of financial instruments, etc.
 In addition to the prices based on market price, the market valueof financial instruments includes reasonably calculated prices inthe event that there are no market prices. In this calculation,certain presumptions are adopted and said price may differ if
calculated based on different presumptions.

2. Matters concerning the market value of financial instruments, etc.
 The amount recorded in the consolidated balance sheet, theirmarket value and the differences are as follow. Market value fornonlisted shares that is extremely difficult to grasp has not been
included in the table to follow (refer to (Note 2))

DAISHI HOKUETSU REPORT 2021

The Status of Financial Results (Consolidated)










(Unit: \ million)

Amount recorded inconsolidated balance

DifferenceMarket value(*1)

sheet
(1) Cash and due from banks
(2) Securities
Trading account securities
Held for ownership
until maturity
Other securities
(3) Loans and bills
discounted
Allowances for loan



0

0

―

27,531

27,626

94

2,415,053

2,415,053

―

4,937,462


45,710

Total Assets

9,412,864

9,458,669

45,805

(1) Deposits

8,113,424

8,113,564

(140)

76,876

76,876(0)

111,132

111,132―

188,425

188,425―

resale agreements
(4) Payables under securities
lending transactions(5) Borrowed money
Total Liabilities

663,603

663,606(3)

9,153,461

9,153,605

(144)

Derivative transactions (*3)







Hedge accounting not applied

186

186

―

(7,864)

(7,883)

(18)

(7,677)

(7,696)

(18)

Hedge accounting
applied(*4)



―



(3) Receivables under4,960,285

of deposit(22,887)

(2) Negotiable certificates

2,055,703

4,914,575

losses (*2)


2,055,703

Total derivative transactions(*1) Appraisal profit or loss is indicated in the Difference column.(*2) General and individual allowances for loan losses corresponding
to loans and bills discounted have been deducted.
(*3)Derivative transactions recorded in other assets and liabilities,
and transactions in which special processing of interest rate
swap is adopted are indicated together as a batch.
Net debts and credits generated from derivative transactions areindicated in net amount and items in which its total will be net
debt are indicated in (parenthesis).

Provisions for contingent loss corresponding to derivatives havebeen directly reduced in the consolidated balance sheet amounts
as they have little relevance.
(*4)These are interest rate swaps and currency swaps designated as
hedging instruments to fix the cash flows of loans and securities
to be hedged and to offset market fluctuations. In most cases,
deferred hedge accounting is applied. For these hedge
relationships, we have applied the “Treatment of Hedge
Accounting for Financial Instruments that Reference LIBOR”(PITF No. 40, September 29, 2020).

DAISHI HOKUETSU REPORT 2021

72

The Status of Financial Results (Consolidated)(Note 1) Calculation method for the market value of financial instruments
Assets(1) Cash and due from banks As the market price of due from banks without maturity is approximately the same as their book value, the book value is taken to be themarket value. For due from banks with maturity, as their agreed period is short (within one (1) year), and its market value is approximately
the same as their book value, the book value is taken to be the market value.
(2) Securities Price at the exchange for stocks, reference bond trading statistics published by the Japan Securities Dealers Association or the price, etc.,
indicated by the correspondent financial institution is used for bonds. Price at the exchange, published reference price or price indicated by
the correspondent financial institution is used for investment trusts. Privatelyplaced bonds guaranteed by the issuing bank with floatinginterest rate are short term and will reflect the market interest rate and are approximately the same as their book value, unless the credit
status of the issuing body has differed significantly after its execution, and therefore said book value is taken to be the market value. Market
value of privatelyplaced bonds with fixed interest rate is calculated by adding guarantee fees to the amount discounted by the interest rate
added with a credit spread on appropriate indices, such as swap interest rate, on the total sum of capital and interest, for each classification
based on type, internal rating, and period.
 Notes regarding securities by holding purposes are indicated in [(Valuable securities related)].
(3)Loans and bills discounted
 Loans and bills discounted with floating interest rates are short term and reflects the market interest rates and are approximately the sameas their book value (before deduction of general allowance for loan losses) unless the credit status of the issuing body has differedsignificantly after its execution. Therefore said book value is taken to be the market value. Those with fixed interest rates are calculated byadding guarantee fees to the amount discounted by the interest rate added with a credit spread on appropriate indices, such as swap interest
rate, on the total sum of capital and interest, for each classification based on type, internal rating, and period. The market value for thosewith short agreed period (within one (1) year) is approximately the same as their book value (before deduction of general allowance for loan
losses) and the book value is taken to be the market value. Since the estimated loan loss is calculated on claims, etc., for Bankrupt debtors, Effectively bankrupt debtors, and Potentially bankrupt
debtors based on the present value of estimated future cashflow or the expected recovery value from mortgages and guarantees, its market
value is approximately close to the amount of recorded amount of claims in the consolidated balance sheet after deduction of the recorded
amount of allowance for loan losses, this amount is taken as the market value.  For loans and bills discounted with no due date for repayment set, for special characteristics, such as restricting said loan within the extent
of security assets, its market value, from the estimated repayment period and interest rate conditions, etc., is assumed to be approximately
the book value (before deduction of general allowance for loan losses), and this is taken as the market value.
Liabilities
(1) Deposits and (2) Negotiable certificates of deposit For call deposits, the payment amount (book value) when payment request is made on the consolidated closing date is deemed to be themarket value. Furthermore, the market value of time and savings deposits and negotiable certificates of deposit is segmented by a fixed
period and their present value is calculated by discounting the future cash flow. The discount rate used is the interest rate used when
accepting new deposits. Since the market value and book value is approximately the same for those with short term deposit period (withinone (1) year), said book value is taken as the market value.(3) Receivables under resale agreements and (4) Payables under securities lending transactions Since the market value of those with short agreed period short (within one (1) year, its market value is approximately the book value, andthis is taken as the market value.
(5) Borrowed money Of borrowed money, those with floating interest rates are short term, reflecting market interest rates. Furthermore, since the credit statusof the Company and its consolidated subsidiaries have not differed much after their execution, the market value is considered to beapproximate to the book value, and the book value is taken as the market value. For those with fixed interest rates, the present value iscalculated by segmenting the total amount of capital and interest of the borrowed money into a fixed period, and discounting it with aninterest rate expected to be applied in a similar borrowing. Since the market value of those with short agreed period (within one (1) year) is approximately the book value, this is taken as the market
value.
Derivative transactions
Derivative transactions are listed in “(Derivative transactions)”.
(Note 2) The Amount of financial instruments recorded in the consolidated balance sheet of which the market value has been acknowledged to
be extremely difficult to grasp is as follows. These are not included in “Assets (2) Other securities.”
(Unit: \ million)
Segment
March 31, 2021
(i) Nonlisted stock (*1) (*2)
4,295
(ii) Investment in capital of partnerships, etc. (*3)
4,427
Total
8,722
(*1)There are no market values for nonlisted stocks and it is extremely difficult to grasp their market values and they have not been
made subject to market value disclosure.
(*2)In the current consolidated fiscal year, no impairment (\121 million) has been made for nonlisted stocks.(*3)Of investment in capital of partnerships, etc., those for which the market value is extremely difficult to grasp, such as cases in which
the partnership estate is in nonlisted stocks, have not been made subject to market value disclosure. Parts of “Other assets” areincluded in investment in capital of partnership, etc.












73



DAISHI HOKUETSU REPORT 2021

The Status of Financial Results (Consolidated)(Note 3) Expected amount of redemption of monetary claims and securities with maturity after consolidated closing date(Unit: \ million)
Exceeding 1
Exceeding 3
Exceeding 5
Exceeding 7
Exceeding 10
Within 1 year year but within
years but
years but
years but
years
3 years
within 5 years
within 7 years
within 10 years
Deposits 
1,986,960
―
―
―
―
―
Securities
249,540
347,653
456,290
270,829
483,513
346,775
Bonds to be held to26,063
165
――
1,300
―
maturity
Government bonds
26,000
―
―
―
―
―
Corporate bonds
63
165
―
―
1,300
―
Other securities with
223,476
347,488
456,290
270,829
482,213
346,775
maturity
Government bonds
69,800
112,000
51,000
3,000
42,000
253,900
Local government
22,059
24,773
163,347
140,568
265,357
21,596
bonds
Corporate bonds
42,637
122,429
89,343
23,922
12,160
14,073
Loans and bills discounted
546,999
903,809
780,307
540,613
497,974
1,081,799
(*)
Total
2,783,499
1,251,463
1,236,597
811,442
981,488
1,428,575
(*) Loans and bills discounted do not include \87,029 million in cases in which the scheduled amount of redemption cannot be foreseen nor\498,187 million without an agreed due date, against Bankrupt debtors, Substantial Bankrupt debtors, and Effective Bankrupt debtors,etc.
(Note 4) The amount of scheduled repayment of borrowed money and other interestbearing debts after the consolidated closing date(Unit: \ million)
Exceeding 1
Exceeding 3
Exceeding 5
Exceeding 7
Exceeding 10
Within 1 year year but within
years but
years but
years but
years
3 years
within 5 years
within 7 years
within 10 years
Deposits (*)7,591,811
466,294
48,756
1,986
4,576
―
Negotiable certificates of76,876
―
―
―
―
―
depositPayables under
111,132
―
―
―
―
―
repurchase agreements
Payables under securities
188,425
―
―
―
―
―
lending transaction
Borrowed money
312,022
221,435
130,110
20
13―
Total
8,280,268
687,729
178,866
2,007
4,589
―(*) Demand deposits in Deposits are included in “Within 1 year.”
(Securities related)

1.The trust beneficiary rights in “Trading account securities” and “Monetary claims bought” are also included in addition to “Securities” in the
consolidated balance sheet.
2. “Subsidiary company stocks and affiliated company stocks” are listed as notes in the financial statements.


1. Trading securities

Valuation difference included in profit and loss of the consolidated fiscal year (\4 million)

2. Bonds to be held to maturity
Amount recorded inType
consolidated balance
sheet (\ million)
Government bonds
26,003
Market value exceeds amountCorporate bonds
813
recorded in consolidated balance
sheet
Sub total
26,816
Government bonds―Market value does not exceed
amount recorded in consolidated
Corporate bonds
715
balance sheet
Sub total
715
Total
27,531Market value(\ million)
26,100
816
26,917
―
709
709
27,626

Difference(\ million)
96
3
100
―
(5)
(5)
94



DAISHI HOKUETSU REPORT 2021

74

The Status of Financial Results (Consolidated)
3. Other securitiesType
Stocks
Bonds
Government bonds
Local government
bonds
Corporate bonds
Other
Foreign bonds
Sub total
Stocks
Bonds
Government bonds
Local government
bonds
Corporate bonds
Other
Foreign bonds
Sub total

Amount recorded in consolidatedbalance sheet exceeds cost of
acquisition

Amount recorded in consolidatedbalance sheet does not exceed costof acquisition



Amount recorded inconsolidated balance
sheet (\ million)
121,945
912,744
372,906

Total

4. Bonds to be held till maturity sold during the current consolidated fiscal year
No applicable items
5. Other valuable securities sold during the current consolidated fiscal year
Type

Cost of sale (\ million)
35,432
188,800
119,019
58,481
11,299
364,517
160,913
588,750

Stocks
Bonds
Government bonds
Local government bonds
Corporate bonds
Other
Foreign bonds
Total

Acquisition cost(\ million)
68,867
903,984
367,096Difference(\ million)
53,077
8,760
5,809

358,453

356,544

1,908

181,384
481,670
322,160
1,516,360
20,443
581,993
173,975

180,342
457,440
307,005
1,430,292
23,610
588,584
178,549

1,041
24,230
15,155
86,068
(3,166)
(6,591)
(4,574)

284,863

285,474(611)

123,154
296,274
83,136
898,711
2,415,072

124,560
312,980
84,644
925,175
2,355,467

(1,406)
(16,705)
(1,508)
(26,464)
59,604

Fiscal 2020
Amount of sale (\ million)
8,235
606
97
498
9
11,913
3,776
20,754

Sales profit and loss (\ million)
662
449
415
8
25
5,223
98
6,335


6. Valuable securities with changes to the purpose of ownership
No applicable items
7. Valuable securities writtendown
For valuable securities other than trading account securities (excluding those for which market value is extremely difficult to grasp) incases in which the market value has fallen significantly from the acquisition price and the market price is not expected to return to theacquisition price, said market price is recorded in the consolidated balance sheet and the valuation difference is processed as loss for thecurrent consolidated fiscal year (“Writedown”).
The amount of Write down in the current consolidated fiscal year in \566 million (of which, \493 million is in stock, \73 million is inbonds).

The criterion of judging the market value to have “fallen significantly” is provided in the Selfassessment criteria. For bonds, Writedown
is conducted in the event that market value has fallen by 30% or more from its acquisition price or in consideration of the financial
conditions, etc., of the issuing company. For stocks and investment trusts, Writedown for the full amount is made in the case of stocks forwhich the market price as of the end of the term has fallen by 50% or more from the acquisition price, and for stocks of which the market
price has fallen by 30% or more but not exceeding 50%, Writedown is judged by the possibility of recovery of the market price, taking
into account trends in market price for a fixed period prior to the reference date and the financial conditions, etc., of the issuing company.
(Monetary trust related)


No applicable itemsThe breakdown of other securities valuation difference recorded in the consolidated balance sheet is as follows:

Amount (\ million)
Valuation difference
59,604
Other securities
59,604
Other monetary trust―
Deferred tax liabilities to be deducted
17,578
Valuation difference on availableforsale securities (before adjustment for equity)
42,025
Noncontrolling interest equivalent to be deducted
2,077
Valuation difference on availableforsale securities
39,948

(Valuation difference on availableforsale securities) 





75



DAISHI HOKUETSU REPORT 2021

The Status of Financial Results (Consolidated)(Derivative transaction related)
1.


Derivative transactions where hedge accounting has not been applied
The contract amount on the consolidated closing date or the amount equivalent to capital in contract, their market value and valuation
profit and loss, and the method of calculation of their market price, for each transaction subject type for derivative transactions where
hedge accounting has not been applied is as follows. It must be noted that the amount of contract itself does not indicate the market risk
related to the derivative transaction.
(1)
Interest rate related transactionsContract
Of which,
Valuation profit
Classifi
Market valueTypeamount, etc.
exceeding 1 year
and losscation(\ million)
(\ million)
(\ million)
(\ million)
Interest swap
Fixed receipt, floating payment
105,774
101,031
2,340
2,340
Floating receipt, fixed payment
105,774
101,031(712)
(712)
Store
Interest optionsShort commitment
―
―
―
―
Long commitment
―
―
―
―
Total
――
1,627
1,627
(Note)
1. Market valuation is made for the abovementioned transactions and the valuation profit or loss is recorded in the consolidate
balance sheet.

2. Calculation of market priceCalculation is done using discounted present value and option price computing models, etc.
(2)  Currency related transactionsContract
Of which,
Valuation profit
Classifi
Market valueTypeamount, etc.
exceeding 1 year
and losscation(\ million)
(\ million)
(\ million)
(\ million)
Currency swap
10,120
7,567
25
25
Forward exchange contract
Short commitment
56,167―
(1,667)
(1,667)
Store
Long commitment
6,448
―
203
203
Currency optionShort commitment
323,745
240,056
(1,866)
31,052
Long commitment
323,735
240,056
1,870
(25,934)

Total
――
(1,435)
3,679
  (Note)
1. Market valuation is made for the abovementioned transactions and the valuation profit or loss is recorded in the consolidate
balance sheet.

2. Calculation of market priceCalculation is done using discounted present value, etc.(3)  Stock related transactions
No applicable items(4)  Bond related transactions
No applicable items(5)  Goods related transaction
No applicable items(6) Credit and derivative transactions
No applicable items(7)  Other
Contract
Of which,
Valuation profit
Classifi
Market valueTypeamount, etc.
exceeding 1 year
and losscation(\ million)
(\ million)
(\ million)
(\ million)
Earthquake derivativeStore
Short commitment
15,710―(220)
―
Long commitment
15,710―
220―
Total
―
―
―
―

(Note) The acquisition price is used as the market price, as determination of a fair valuation amount is extremely difficult for the abovetransactions.


DAISHI HOKUETSU REPORT 2021

76

The Status of Financial Results (Consolidated)

2. 















Derivative transactions where hedge accounting has been applied
The contract amount as of the consolidated closing date or the amount equivalent to capital, market value provided under the contract,
and the method to calculate said market value, for each transaction subject type and hedge accounting method, for derivativetransactions where hedge accounting is applied are as follows: It must be noted that the amount of contract itself does not indicate themarket risk related to the derivative transaction.
(1) Interest rate related transactionsContract
Of which,Market value
Method of hedge
exceeding 1Type
Major hedge subjects amount, etc.
(\ million)
accounting(\ million)
year (\ million)
Interest swap Other securities,
Generally applied
Floating receipt,
loans and bills
92,142
92,142
(5,833)
processing method
fixed payment
discounted
Interest swap
3,000
3,000
(17)
Fixed receipt,
Exceptional interest
Loans and bills
floating paymentswap processing
discounted
Floating receipt,
151
151
(1)
fixed payment
Total
―――
(5,852)
(Note) 1. A deferred hedge was adopted as the method of hedge accounting for interest risks occurring from financial assets andliabilities.

2. Calculation of market price Calculation is done using discounted present value, etc.
(2) Currencyrelated transactions
Contract
Of which,Market value
Method of hedge
exceeding 1 year
Type
Major hedge subjects amount, etc.
(\ million)
accounting(\ million)
(\ million)
Foreign currency
Generally applied
denominatedCurrency swap
52,049
36,754
(2,030)
processing
securities, and loansmethodand bills discounted
Total―――
(2,030)
(Note) 1. Conducted primarily by deferred hedge in accordance with Special Audit Committee Report No. 25.
2. Calculation of market priceCalculation is done using discounted present value, etc.
(3) Stock related transactions
No applicable items(4)  Bond related transactions
No applicable items(Retirement benefitrelated)

1. 






2.





















77

Summary of the adopted retirement benefits scheme
The consolidated subsidiaries engaged in banking business have established a defined contribution pension plan as a definedbenefit plan,in addition to the corporate pension fund scheme and retirement allowance scheme. On January 1, 2021, a portion of the retirement
benefit corporate pension scheme was transferred to a defined contribution pension scheme.
A retirement benefit trust has been established on the defined contribution pension plan and retirement allowance scheme of consolidated
subsidiaries engaged in the banking business.
In other consolidated subsidiaries, in addition to retirement allowance schemes being established, some of the consolidated subsidiaries
have also established defined contribution pension plans.
Furthermore, liabilities related to retirement benefits and retirement benefit expenses of retirement allowance schemes held by some of
the consolidated subsidiaries are calculated using the simplified method.
In addition, consolidated subsidiaries engaged in the banking business have set up a retirement benefits trust.

Defined contribution scheme(1) Adjustment table of retirement benefit liabilities, as of the beginning and end of the term (excluding schemes adopting the simplified method)

Beginning of term retirement benefit liability balance
\75,539 millionService costs
\1,709 millionInterest costs
\187 millionActuarial gain or loss amount generated(\1,746 million)

Amount of retirement benefits paid
(\3,615 million)


Accrual of prior service costs
(\2,110 million)

Decrease due to the transfer to a defined contribution pension scheme
(\3,065 million)

Other
\69 million
End of term retirement benefit liability balance
\66,968 million(2) Adjustment table of pension assets, as of the beginning and end of the term (excluding schemes adopting the simplified method)

Beginning of term pension assets balance
\69,991 million
Anticipated operational earnings
\1,433 millionActuarial gain or loss amount generated\10,837 millionContribution from employers\814 million
Amount of retirement benefits paid
(\3,066 million)

Decrease due to transition to defined contribution pension plan(\1,527 million)

Other
\69 million
End of term pension assets balance
\78,552 million

DAISHI HOKUETSU REPORT 2021

The Status of Financial Results (Consolidated)







(3)




(4)

Adjustment table for debts related to retirement benefit liabilities as of the beginning and end of the term for schemes adopting the simplified method
Beginning of term retirement benefits related debts
\699 million
Retirement benefit costs
\57 million
Amount of retirement benefits paid
(\63 million) End of term retirement benefits related debts
\694 million 
Adjustment table for end of term balance of retirement benefit liabilities and pension assets, and debts and assets related toretirement benefits recorded in the consolidated balance sheetRetirement benefit liability of savingstype scheme
\66,968 millionPension assets(\78,552 million)
（\11,584 million）
Retirement benefit liability of nonsavingstype scheme
\694 millionNet amount of liabilities and assets recorded inthe consolidated balance sheet(\10,890 million)

(Note) Includes schemes where simplified method is adopted.















Liabilities related to retirement benefits\694 million
Assets related to retirement benefits(\11,584 million)
Net amount of liabilities and assets recorded in
the consolidated balance sheet(10,890 million）
(5)
Retirement benefit costs and its itemized breakdown    Service costs
\1,709 millionInterest costs
\187 million
Expected operational earnings
（\1,433 million）
Actuarial gain or loss processing amount\1,161 millionPrior service cost processing amount（\131 million）
Retirement benefit costs calculated by the simplified method
\57 million
Other
\115 million Retirement benefit cost related to defined benefit plan\1,666 million(Note) 
The Daishi Hokuetsu Bank, Ltd., a consolidated subsidiary, transferred a part of its defined benefit pension scheme toa defined contribution pension scheme, thus recording extraordinary income of 1,038 million yen for the current
consolidated fiscal year.(6) Retirement benefit adjustment amountThe breakdown of items recorded in the adjustment amount related to retirement benefits (before deduction of tax effects) is as follows:Prior service cost\1,979 millionActuarial gain or loss
\14,244 millionTotal
\16,223 million(Note) 
The amount of actuarial difference for the current consolidated fiscal year includes 499 million yen of reclassification
adjustment resulting from the transfer of part of the defined benefit pension scheme to a defined contribution pension
scheme.(7) Aggregate amount of adjustment related to retirement benefitsThe breakdown of items recorded in the aggregate amount of adjustment related to retirement benefits (before deduction of tax
effects) is as follows:
Unrecognized prior service cost(\2,004 million)

Unrecognized actuarial gain or loss
(\4,364 million)

Total
(\6,369 million)
(8) Matters related to pension assets(i) Ratio for each major classification in total pension assets is as follows:
Bonds
30%

Stocks42%
General life insurance account
24%

Cash and deposits
0%Other
3%

Total
100%

(Note) 
Total pension assets include 14% from retirement benefit trust established on the corporate pension plan and 23%
from retirement benefit trust established on the retirement allowance respectively, for the current consolidated fiscal
year.(ii) Method to set longterm expected rateofreturn (“ROR”)

To determine the expected longterm ROR for pension assets, consideration is given on the distribution of current andexpected pension assets, and the current and expected longterm ROR on diverse assets that comprise the pension assets.
(9) Matters regarding the basis of actuarial calculation
Major actuarial calculation basis








Discount rate


0.4%


Longterm expected RORCorporate pension fund2.0%
Retirement benefit trust
1.2% to 2.0%

Expected salary increase rate


1.2%


(Note) The expected salary increase rate for this consolidated fiscal year is expressed as a weighted average.
3. Defined contribution scheme
Amount of required contribution to defined contribution schemes of consolidated subsidiaries for the current consolidated fiscal year is\398 million.
4. Other matters relating to retirement benefits The amounts affected by the partial transfer from a defined benefit corporate pension scheme to a defined contribution pension scheme
in the current consolidated fiscal year is as follows.

Decrease in retirement benefit obligations（\3,065 million）

Assets transferred to defined contribution pension plans\1,527 million
Subtotal
（\1,538 million）

Amortization of unrecognized actuarial gain or loss
\499 million
Amortization of prior service cost
（\0 million）
Total
（\1,038 million）


DAISHI HOKUETSU REPORT 2021

78

The Status of Financial Results (Consolidated)(Stock option related)

1. Amount and accounting titles of costs recorded for stock options)

Fiscal 2020
General and administrative expenses
\138 million
2. Contents, size and fluctuation of stock options (1) Contents of stock options
Daishi Hokuetsu
Daishi Hokuetsu
Financial Group 1st
Financial Group 2nd
Stock Option
Stock Option
May 11, 2018, Board of
May 11, 2018, Board of
Resolution dateDirectors, Daishi Bank
Directors, Daishi BankClassification and3 directors of Daishi
3 directors of Daishi
numbers of granted
Bank, Ltd.
Bank, Ltd.
persons
Number of stock
7,400 ordinary shares
11,400 ordinary shares
options by type ofof the Company
of the Company
stock (Note 2)
Grant date (Note 3)
July 27, 2010
July 28, 2011
Rights finalizing
Rights finalizing
Rights finalizing
conditions notconditions notconditionsdetermined
determined
Applicable
Applicable appoint
Applicable appoint
appointment period
period not determined
period not determined
Rights exercising
October 1, 2018 to July
October 1, 2018 to July
period27, 2040
28, 2041
Daishi Hokuetsu
Daishi Hokuetsu
Financial Group 5th
Financial Group 6th
Stock Option
Stock Option
May 11, 2018, Board of
May 11, 2018, Board of
Resolution dateDirectors, Daishi Bank
Directors, Daishi BankClassification and
6 directors of Daishi
6 directors of Daishi
numbers of granted
Bank, Ltd.
Bank, Ltd.
persons
Number of stock
13,540 ordinary shares
10,220 ordinary shares
options by type of stockof the Company
of the Company
(Note 2)Grant date (Note 3)
July 30, 2014
July 30, 2015
Rights finalizing
Rights finalizing
Rights finalizing
conditions notconditions notconditionsdetermined
determined
Applicable appointment
Applicable appoint
Applicable appoint
periodperiod not determined
period not determined
October 1, 2018 to July
October 1, 2018 to July
Rights exercising period
30, 2044
30, 2045Daishi Hokuetsu
Daishi Hokuetsu
Financial Group 10th
Financial Group 11th
Stock Option
Stock Option
May 11, 2018, Board of
May 11, 2018, Board of
Resolution dateDirectors, Hokuetsu
Directors, Hokuetsu
Bank
Bank
Classification and
1 director of Hokuetsu
2 directors of Hokuetsu
numbers of granted
Bank, Ltd.
Bank, Ltd.
persons
Number of stock
1,020 ordinary shares
1,885 ordinary shares
options by type of stockof the Company
of the Company
(Note 2)Grant date (Note 3)
July 26, 2012
July 26, 2013
Rights finalizing
Rights finalizing
Rights finalizing
conditions notconditions notconditionsdetermined
determined
Applicable appointment
Applicable appoint
Applicable appoint
periodperiod not determined
period not determined
October 1, 2018 to July
October 1, 2018 to July
Rights exercising period
26, 2042
26, 2043


79

Daishi Hokuetsu
Financial Group 3rd
Stock Option
May 11, 2018, Board of
Directors, Daishi Bank

Daishi Hokuetsu
Financial Group 4th
Stock Option
May 11, 2018, Board of
Directors, Daishi Bank

4 directors of Daishi
Bank, Ltd.

5 directors of Daishi
Bank, Ltd.

16,610 ordinary sharesof the Company

13,450 ordinary sharesof the Company

July 30, 2012
Rights finalizing
conditions notdetermined
Applicable appoint
period not determined
October 1, 2018 to July30, 2042

July 30, 2013
Rights finalizing
conditions notdetermined
Applicable appoint
period not determined
October 1, 2018 to July30, 2043

Daishi Hokuetsu
Financial Group 7th
Stock Option
May 11, 2018, Board of
Directors, Daishi Bank
6 directors and 3
executive officers ofDaishi Bank, Ltd.

Daishi Hokuetsu
Financial Group 8th
Stock Option
May 11, 2018, Board of
Directors, Daishi Bank
6 directors and 5
executive officers ofDaishi Bank, Ltd.

21,420 ordinary sharesof the Company

18,050 ordinary sharesof the Company

July 29, 2016
Rights finalizing
conditions notdetermined
Applicable appoint
period not determined
October 1, 2018 to July29, 2046

July 28, 2017
Rights finalizing
conditions notdetermined
Applicable appoint
period not determined
October 1, 2018 to July28, 2047

Daishi Hokuetsu
Financial Group 12th
Stock Option
May 11, 2018, Board of
Directors, Hokuetsu
Bank

Daishi Hokuetsu
Financial Group 13th
Stock Option
May 11, 2018, Board of
Directors, HokuetsuBank

2 directors of Hokuetsu
Bank, Ltd.

6 directors of Hokuetsu
Bank, Ltd.

1,565 ordinary sharesof the Company

3,910 ordinary sharesof the Company

July 28, 2014
Rights finalizing
conditions notdetermined
Applicable appoint
period not determined
October 1, 2018 to July28, 2044

July 27, 2015
Rights finalizing
conditions notdetermined
Applicable appoint
period not determined
October 1, 2018 to July27, 2045



DAISHI HOKUETSU REPORT 2021

The Status of Financial Results (Consolidated)
Resolution date
Classification andnumbers of granted
persons
Number of stock
options by type of stock(Note 2)Grant date (Note 3)
Rights finalizing
conditionsApplicable appointment
periodRights exercising periodResolution date
Classification andnumbers of granted
persons

Number of stock
options by type of stock(Note 2)Grant date (Note 3)
Rights finalizing
conditionsApplicable appointment
periodRights exercising periodDate of resolution
Classification andnumbers of granted
persons
Number of stock
options by type of stock(Note 2)Grant date (Note 3)
Rights finalizing
conditionsApplicable appointment
periodRights exercising period(Note)



















Daishi Hokuetsu
Financial Group 14th
Stock Option
May 11, 2018, Board of
Directors, Hokuetsu
Bank

Daishi Hokuetsu
Financial Group 15th
Stock Option
May 11, 2018, Board of
Directors, Hokuetsu
Bank

6 directors of Hokuetsu
Bank, Ltd.

10 directors of
Hokuetsu Bank, Ltd.

5,250 ordinary sharesof the Company

6,875 ordinary sharesof the Company

July 27, 2016
Rights finalizing
conditions notdetermined
Applicable appoint
period not determined
October 1, 2018 to July27, 2046

July 26, 2017
Rights finalizing
conditions notdetermined
Applicable appoint
period not determined
October 1, 2018 to July26, 2047

Daishi Hokuetsu Financial Group 16th Stock Option
November 9, 2018, Board of Directors, Daishi
Hokuetsu Financial Group
8 directors of Daishi Hokuetsu Financial Group, Inc.; 8
directors of Dasishi Bank, Ltd.; 8 executive officers ofDaishi Bank Ltd.; 11 directors of Hokuetsu Bank, Ltd.
50,440 ordinary shares of the Company

Daishi Hokuetsu Financial Group 17th Stock Option
June 25, 2019, Board of Directors, Daishi Hokuetsu
Financial Group
8 directors of Daishi Hokuetsu Financial Group, Inc.;
10 directors of Dasishi Bank, Ltd.; 6 executive officersof Daishi Bank Ltd.; 9 directors of Hokuetsu Bank,
Ltd.; 2 executive officers of Hokuetsu Bank, Ltd.
65,900 ordinary shares of the Company

December 7, 2018

July 29, 2019

Rights finalizing conditions not determined

Rights finalizing conditions not determined

Applicable appoint period not determined

Applicable appoint period not determined

December 8, 2018 to December 7, 2048

July 30, 2019 to July 29, 2049

Daishi Hokuetsu Financial Group 18th Stock Option
18th issue of stock acquisition rights
Meeting of the Board of Directors on June 24, 2020
8 Directors of the Company, 8 Directors of The Daishi
Bank, Ltd., 7 Executive Officers of The Daishi Bank,
Ltd., 9 Directors of The Hokuetsu Bank, Ltd., 2
Executive Officers of The Hokuetsu Bank, Ltd.
Common stock of the Company 80,980 shares
July 31, 2020
Rights finalizing conditions not determined
Applicable appoint period not determined
August 1, 2020 – July 31, 2050

1. From the 1st to the 15th stock options, the right to subscribe to new shares issued by both Daishi Bank and Hokuetsu Bank heldby the rightsholders have been issued with the right to subscribe to new shares of the Company, accompanying the establishmentof the Company as the full parent company of both banks through the joint transfer of shares dated October 1, 2018.
2. The options have been converted to number of shares.
3. The grant dates is the initial grant date for The Daishi Bank, Ltd. and The Hokuetsu Bank, Ltd.

DAISHI HOKUETSU REPORT 2021

80

The Status of Financial Results (Consolidated)













81

(2)  Size and fluctuation of stock options
Stock options existing in the current consolidated fiscal year (year ending March 2021) have been converted to number of shares andlisted.(i) Number of stock options
Daishi Hokuetsu
Daishi Hokuetsu
Daishi Hokuetsu
Daishi Hokuetsu
Financial Group 1st
Financial Group 2nd
Financial Group 3rd
Financial Group 4th
Stock Option
Stock Option
Stock Option
Stock Option
Before rights
finalization (shares)
End of previous
consolidated financial
7,400
11,400
16,610
13,450
year
Granted
―
―
―
―
Lapsed――――Rights finalized――
2,500
3,520
Unfinalized balance
7,400
11,400
14,110
9,930
After rights finalization
(shares)
End of previous
consolidated financial
―
―
―
―
year
Rights finalized――
2,500
3,520
Rights exercised――
2,500
3,520
Lapsed――――Unexercised balance
―
―
―
―

Before rights
finalization (shares)
End of previous
consolidated financialyearGranted
LapsedRights finalized
Unfinalized balanceAfter rights finalization(shares)
End of previous
consolidated financial
year
Rights finalized
Rights exercised
LapsedUnexercised balance
Before rights finalization(shares)
End of previous
consolidated financialyearGranted
LapsedRights finalized
Unfinalized balanceAfter rights finalization(shares)
End of previous
consolidated financial
year
Rights finalized
Rights exercised
LapsedUnexercised balanceDaishi Hokuetsu
Financial Group 5th
Stock Option

Daishi Hokuetsu
Financial Group 6th
Stock Option

Daishi Hokuetsu
Financial Group 7th
Stock Option

Daishi Hokuetsu
Financial Group 8th
Stock Option









13,540

10,220

19,880

16,970――4,290
9,250

――
3,090
7,130

――
7,720
12,160――6,100
10,870









―

―

―

―

4,290
4,290
――

3,090
3,090
――

7,720
7,720
――

6,100
6,100
――Daishi Hokuetsu
Financial Group 10th
Stock Option

Daishi Hokuetsu
Financial Group 11th
Stock Option

Daishi Hokuetsu
Financial Group 12th
Stock Option

Daishi Hokuetsu
Financial Group 13th
Stock Option









1,020

1,885

1,565

2,780

―――
1,020

――
830
1,055

―
―
690
875

―
―
1,280
1,500









―

―

―

―

―
―
―
―

830
830
―
―

690
690
―
―

1,280
1,280――

DAISHI HOKUETSU REPORT 2021

The Status of Financial Results (Consolidated)
















Daishi Hokuetsu
Financial Group 14th
Stock Option

Daishi Hokuetsu
Financial Group 15th
Stock Option

Daishi Hokuetsu
Financial Group 16th
Stock Option

Daishi Hokuetsu
Financial Group 17th
Stock Option









3,730

5,515

46,820

65,900――1,720
2,010

――
2,430
3,085

――
14,090
32,730――18,390
47,510









―

―

―

―

1,720
1,720
――

2,430
1,360
―
1,070

14,090
12,510―
1,580

18,390
16,100―
2,290

Daishi Hokuetsu
Financial Group 1st
Stock Option

Daishi Hokuetsu
Financial Group 2nd
Stock Option

Daishi Hokuetsu
Financial Group 3rd
Stock Option

Daishi Hokuetsu
Financial Group 4th
Stock Option

1

1

1

1

―

―

2,218

2,238

2,860

2,360

2,110

3,000

Daishi Hokuetsu
Financial Group 5th
Stock Option

Daishi Hokuetsu
Financial Group 6th
Stock Option

Daishi Hokuetsu
Financial Group 7th
Stock Option

Daishi Hokuetsu
Financial Group 8th
Stock Option

1

1

1

1

2,238

2,238

2,238

2,238

3,690

5,110

3,430

4,900

Daishi Hokuetsu
Financial Group 10th
Stock Option

Daishi Hokuetsu
Financial Group 11th
Stock Option

Daishi Hokuetsu
Financial Group 12th
Stock Option

Daishi Hokuetsu
Financial Group 13th
Stock Option

1

1

1

1

―

2,174

2,174

2,174

1,330

1,780

1,900

2,230

Before rights finalization(shares)
End of previous
consolidated financialyearGranted
LapsedRights finalized
Unfinalized balanceAfter rights finalization(shares)
End of previous
consolidated financial
year
Rights finalized
Rights exercised
LapsedUnexercised balance
Before rights
finalization (shares)
End of previous
consolidated financialyearGranted
LapsedRights finalized
Unfinalized balanceAfter rights finalization(shares)
End of previous
consolidated financial
year
Rights finalized
Rights exercised
LapsedUnexercised balance(ii)
Daishi Hokuetsu
Financial Group 18th
Stock Option―
80,980―
6,750
74,230―
6,750
1,910
2,620
2,220

Unit price information

Rights exercise price(\)
Average share price attime of exercise (\)Average share price attime of exercise (\)
Rights exercise price(\)
Average share price attime of exercise (\)Average share price attime of exercise (\)
Rights exercise price (\)Average share price attime of exercise (\)Average share price attime of exercise (\)DAISHI HOKUETSU REPORT 2021

82

The Status of Financial Results (Consolidated)







83

Rights exercise price (\)Average share price attime of exercise (\)Average share price attime of exercise (\)
Rights exercise price (\)Average share price attime of exercise (\)Age share price attime of exercise (\)Daishi Hokuetsu
Financial Group 14th
Stock Option

Daishi Hokuetsu
Financial Group 15th
Stock Option

Daishi Hokuetsu
Financial Group 16th
Stock Option

Daishi Hokuetsu
Financial Group 17th
Stock Option

1

1

1

1

2,174

2,174

2,216

2,216

1,830

2,394

3,276

2,571

Daishi Hokuetsu
Financial Group 18th
Stock Option
1
2,174
1,765

(Note) The fair evaluated unit prices of Daishi Bank and Hokuetsu Bank shares, on the initial grant date, are listed from the 1st through15th stock options.

DAISHI HOKUETSU REPORT 2021

The Status of Financial Results (Consolidated)
3.

Fair stock option evaluated unit price estimation method
The fair evaluated unit price estimation method for stock options granted in the current consolidated fiscal year is as follows.
(1) Evaluation technique used: Black-Scholes method(2) Major basic values and estimation method
Daishi Hokuetsu Financial
Group 18th Stock Option
Stock price variability (Note 1)
33.86%
Expected remaining period
2.5 years(Note 2)
Expected dividend (Note 3)\120/share
No-risk interest rate (Note 4)(0.145％)(Note) 1.
2.
3.
4.

4.

Calculations were based on the actual stock prices of our financial group, and of Daishi Bank, Ltd. and Hokuetsu Bank, Ltd.
during the 2.5-year expected remaining period (January 31, 2018-July 30, 2020).
Estimations were produced by setting this expected remaining period as the expected tenure of directors and executive
officers of our financial group, Daishi Bank, Ltd. and Hokuetsu Bank, Ltd.
According to expected dividend for the fiscal year ended March 2021.
The yield on Japanese government bonds for the expected remaining period.

Method to estimate the stock option rights finalized numbers
Since it is difficult to rationally estimate future lapses, a method only to reflect recorded lapses has been adopted.

(Tax effect accounting related)1.

Breakdown of major causes generating deferred tax assets and deferred tax liabilities
Deferred tax assets
Allowance for loan losses\9,159 million
Retirement benefit related liabilities\3,020 million
Depreciation and amortization\2,368 million
Valuable securities amortization\1,393 million
Deffered gains or losses on hedges\1,853 million
Book value correction for fair market valuation\2,818 million
Other\5,552 million
Subtotal deferred tax assets\26,166 million
Valuation reserve related to future subtraction
temporary difference, etc., total(\5,561 million)
Subtotal valuation reserve(\5,561 million)
Total deferred tax assets\20,605 million
Deferred tax liabilities
Valuation difference on available-for-sale securities(\17,578 million)
Retirement benefit trust establishment benefit(\1,464 million)
Book value correction for fair market valuation(\4,455 million)
Other(\1,584 million)
Total deferred tax liabilities(\25,083 million)
Net amount of deferred tax assets (liabilities)(\4,478 million)

2.

Breakdown of major items causing material difference between the enacted tax rate of companies submitting consolidated financial
statements and the burden rate of corporate tax, etc., after application of tax effect accounting
The difference between enacted tax rate and corporate tax rate after tax effect accounting was five percent or less of the enacted tax rate
so it is omitted.
Breakdown of significant differences between the statutory effective tax rate and the Bankʼs effective tax rate for financial statement
purposes
Statutory effective tax rate
30.5%
(Adjusted)
Expenses including entertainment expenses not qualifying for deduction permanently
0.3%
Non-taxable dividends income(1.5%)
Inhabitant tax on per capita basis
0.6%
Increase/decrease in valuation allowance
2.9%
Other
2.5%
Bankʼs effective tax rate
35.4%

(Relating to business combination, etc,)(Merger of the Companyʼs subsidiaries)
Based on the resolution to approve the merger agreement at the extraordinary general meeting of shareholders held on September 25,
2020, as of January 1, 2021, our wholly owned subsidiaries, The Daishi Bank, Ltd. (hereinafter referred to as “Daishi Bank”) and The
Hokuetsu Bank, Ltd. (hereinafter referred to as “Hokuetsu Bank”) merged and changed the corporate name to Daishi Hokuetsu Bank, Ltd.
(hereinafter referred to as “Daishi Hokuetsu Bank”).
1. Overview of the business combination(1) Name and description of the combined company(Surviving company in absorption merger)
Name: Daishi Bank
Business activities: Banking(Dissolving company in absorption merger)
Name: Hokuetsu Bank
Business activities: Banking

DAISHI HOKUETSU REPORT 2021

84

The Status of Financial Results (Consolidated)(2) Date of business combination
Friday, January 1, 2021
(3) Legal form of business combination
Absorption merger with Daishi Bank as the surviving company and Hokuetsu Bank as the dissolving company.
(4) Name of the combined company
Daishi Hokuetsu Bank
(5) Other matters concerning the overview of transactions
The purpose of the Merger is to enable the two banks to maximize the benefits of the integration under Daishi Hokuetsu Financial Group, Inc.
and to further enhance their functions as financial and information intermediaries, thereby fulfilling the primary objective of the merger ofmaking a lasting contribution to the community.
2. Overview of accounting procedures performed
In accordance with the “Accounting Standard for Business Combinations” (ASBJ Statement No. 21, January 16, 2019) and the “Guidance on
Accounting Standards for Business Combinations and Accounting Standards for Business Divestitures” (ASBJ Corporate AccountingStandards Implementation Guidance No. 10, January 16, 2019), the transaction was treated as a transaction under common control.

(Real estate related, such as lease, etc.)

Some consolidated subsidiary companies own real estate for lease. However, their total amount is minor and has been omitted.

(Segment information, etc.)[Segment information]
1. Outline of reporting segments
The Company group consists of the Company, which is the bank holding company, and 13 consolidated subsidiaries, including The Daishi
Hokuetsu Bank, Ltd. It provides a wide range of financial instruments and services to the customers in the region,
focused on banking operations, as well as for leasing, securities, credit guarantees, credit card operations, etc., and financial information bycompanies in the group are reported regularly to the Companyʼs board of directors.
Therefore, even though the Company group consists of segments formed by the Company and each consolidated subsidiary, we haveestablished “Banking,” which accounts for the majority of all segments, “Leasing,” and “Securities” as reporting segments in view of theirimportance.
“Banking” is focused mainly on deposit operations and loan operations, with investments in securities, domestic currency operations, foreign
currency operations, and as the contact point for the sales of public bonds, investment trusts, insurance policies, etc., and is positioned as
the core of the group.
Furthermore, “Leasing” conducts integrated leasing operations, while securities operations are conducted in “Securities”.
2. The method of calculation for ordinary income, profit or loss, assets, liabilities, etc., of each reporting segment
The accounting method adopted for each reporting segments is identical to the preparation policy for consolidated financial statements.
Internal ordinary income between the segments is based on the actual amount of transaction.
3. Information regarding the amount of ordinary income, profit or loss, assets, liabilities, and other items of each reporting segment
Fiscal year ended March 31, 2020 (April 1, 2019 to March 31, 2020).
(Unit: \ million)
Reporting segment
Amountrecorded in
Other
Total
consolidate
Adjustments
Securities
Banking
Leasing
Banking
Total
d financial
statement
Ordinary income
Ordinary income from outside
128,407
21,368
4,161
153,937
4,269
158,206(3,508)
154,698
customers
Internal
ordinary
income
3,914
367
10
4,292
11,381
15,674(15,674)―
between segments
Total
132,322
21,736
4,171
158,230
15,651
173,881(19,183)
154,698
Segment profits
20,842839
1,169
22,852
8,208
31,060(11,650)
19,410
Segment assets
8,924,449
64,083
19,336
9,007,869
360,830
9,368,699(402,261)
8,966,437
Segment liabilities
8,545,250
46,387
8,176
8,599,814
22,9988,622,813(62,829)8,559,984
Other items
Depreciation costs
5,074
262
25
5,362
84
5,447
(53)
5,393
Interest income
71,756193
183
72,132
6,685
78,818(10,880)
67,938Interest expenses
5,897
162
5
6,065
18
6,084
(145)
5,939
Increase in tangible and10,237287
710,532
63
10,59564
10,660intangible fixed asset amount(Note) 1. Ordinary income is indicated instead of amount of sales used generally for corporations. “Adjustment difference” refers to thedifference between ordinary income and the recorded amount of ordinary income in the consolidated financial statement .
2.“Other” refers to are business segments not included in the reporting segments, and includes credit guarantee operations, credit card
operations, and others.
3. The amount of adjustments is as follows:(1)The adjustment amount of (\3,508 million) in ordinary income from outside customers includes ordinary income adjustment of(\3,285 million), accompanying the adoption of the purchase method.
(2) The adjustment of segment profit of (\11,650 million) is from profit adjustment accompanying purchase method andelimination of transactions between segments, etc.
(3) The adjustment of segment assets of (\402,261 million) is from profit adjustment accompanying purchase method andelimination of transactions between segments, etc.
(4)The adjustment of segment liabilities of (\62,829 million) is from adjustment accompanying purchase method and elimination oftransactions between segments, etc.
(5) The adjustment of (\53 million) in depreciation costs is the amount of adjustment, etc. for deprecation related to lease items
acquired by contracts with the Leasing segment, in segments other than the Leasing segment.
(6) The adjustment of (\10,880 million) in interest income is for elimination of transactions between segments, etc.
(7) The adjustment of (\145 million) in interest expenses is for elimination of transactions between segments, etc.
(8) The adjustment of \64 million in increase in tangible and intangible fixed asset amount is mainly the acquisition cost of lease
items acquired by contracts with the Leasing segment, in segments other than the Leasing segment.
4. Segment profit has been adjusted with ordinary income of consolidated profit and loss statement.

85

DAISHI HOKUETSU REPORT 2021

The Status of Financial Results (Consolidated)
Fiscal 2021 (April 1, 2020 through March 31, 2021)
Reporting segment
Banking
Ordinary income
Ordinary income from outside
customers
Internal
ordinary
incomebetween segments
Total
Segment profits
Segment assets
Segment liabilities
Other items
Depreciation costs
Interest income
Interest expenses
Increase in tangible andintangible fixed asset amount

Leasing

Securities
Total

Banking

Other

Total

(Unit: \ million)
Amountrecorded inconsolidate
Adjustments
d financial
statement

114,207

21,327

5,733

141,267

4,234

145,502(2,370)143,132

3,163

348

24

3,535

10,727

14,263(14,263)―

117,371

21,675

5,757

144,803

14,962

159,766(16,633)

143,132

14,791913

1,871

17,576

8,120

25,697(8,196)

17,5009,648,950

62,76527,424

9,739,141

361,145

10,100,286(393,753)

9,706,533

9,238,216

44,236

13,982

9,296,435

22,322

9,318,757(66,069)

9,252,687

5,914
65,396

254
202

21
137

6,190
65,736

83
5,752

6,273
71,488(32)(7,851)

6,241
63,636

3,084
7,985

148
261

2
9

3,236
8,256

13
30

3,249
8,286

(129)
112

3,120
8,399

(Note) 1. Ordinary income is indicated instead of amount of sales used generally for corporations. “Adjustment difference” refers to thedifference between ordinary income and the recorded amount of ordinary income in the consolidated financial statement .
2.“Other” refers to are business segments not included in the reporting segments, and includes credit guarantee operations, credit card
operations, and others.
3. The amount of adjustments is as follows:(1)The adjustment amount of (\2,370 million) in ordinary income from outside customers includes ordinary income adjustment of(\2,347 million), accompanying the adoption of the purchase method.
(2) The adjustment of segment profit of (\8,196 million) is from elimination of transactions between segments, etc.
(3) The adjustment of segment assets of (\393,753 million) is from elimination of transactions between segments, etc.
(4) The adjustment of segment liabilities of (\66,069 million) is from elimination of transactions between segments, etc.
(5) The adjustment of (\32 million) in depreciation costs is the amount of adjustment accompanying purchase method, etc. fordeprecation related to lease items acquired by contracts with the Leasing segment, in segments other than the Leasing segment.
(6) The adjustment of (\7,851 million) in interest income is for elimination of transactions between segments, etc.
(7) The adjustment of (\129 million) in interest expenses is for elimination of transactions between segments, etc.
(8) The adjustment of \112 million in increase in tangible and intangible fixed asset amount is mainly the acquisition cost of lease
items acquired by contracts with the Leasing segment, in segments other than the Leasing segment.
4. Segment profit has been adjusted with ordinary income of consolidated profit and loss statement.

DAISHI HOKUETSU REPORT 2021

86

The Status of Financial Results (Consolidated)[Related information]
Fiscal year 2020 (From April 1, 2019 through March 31, 2020)
1.
Information by each service
Loan operations

Securities
investment
operations(Unit: \ million)
Lease operations

Other

Total

Ordinary income from51,36848,08021,17734,071
154,698
outside customers(Note) Ordinary income is indicated instead of amount of sales for corporations.
2.
Information for each region(1) Ordinary income
Listing has been omitted since the amount of ordinary income of the Company group, segmented into external customers in Japanaccounts for 90% or more of the ordinary income in the consolidated statements of income.
(2) Tangible fixed assets
Listing has been omitted since the amount of tangible fixed assets of the Company group existing inside Japan accounts for 90% or moreof the tangible fixed assets of the consolidated balance sheet.
3.
Information by each major customer
Listing has been omitted since there are no specific customers whose ordinary income account for 10% or more of the consolidated
statements of income.
Fiscal year 2021 (From April 1, 2020 through March 31, 2021)
1.
Information by each service
Loan operations

Securities
investment
operations(Unit: \ million)
Lease operations

Other

Total

Ordinary income from50,75438,51021,12032,746
143,132
outside customers(Note) Ordinary income is indicated instead of amount of sales for corporations.
2.
Information for each region(1) Ordinary income
Listing has been omitted since the amount of ordinary income of the Company group, segmented into external customers in Japanaccounts for 90% or more of the ordinary income in the consolidated statements of income.
(2) Tangible fixed assets
Listing has been omitted since the amount of tangible fixed assets of the Company group existing inside Japan accounts for 90% or moreof the tangible fixed assets of the consolidated balance sheet.
3.
Information by each major customer
Listing has been omitted since there are no specific customers whose ordinary income account for 10% or more of the consolidated
statements of income.
[Information regarding impairment loss of fixed assets for each segment]
Fiscal year 2020 (From April 1, 2019 through March 31, 2020)
This information is omitted because it lacks materiality.
Fiscal year 2021 (From April 1, 2020 through March 31, 2021)

Impairment loss

Banking
518

Reporting segment
Leasing
Securities
2―(Unit: \ million)
Total
521

Other

Total

―

521

[Information concerning amortization of good will and unamortized balance by reporting segment]
No applicable items[Information concerning negative goodwill generation profit by each reporting segment]
No applicable items(Related party information)

1. Transactions with related parties(1)Transactions between consolidated companies submitting consolidated financial statements and related parties.
No applicable items(2)Transactions between consolidated subsidiaries submitting consolidated financial statements and related parties.
(a) The parent company and major shareholders (limited only to companies, etc.) of companies submitting consolidated financial
statements
No applicable items(b) Non-consolidated subsidiaries and affiliated companies of companies submitting consolidated financial statements
No applicable items(c) Companies with the same parent company as the company submitting consolidated financial statements and other affiliatedcompanies of companies submitting consolidated financial statements, etc.
No applicable items(d) Directors and major shareholders, etc. (limited only to individuals) of companies submitting consolidated financial statements,
etc.
2. Notes concerning the parent company or important affiliated companies(1) Parent company information
No applicable items(2) Summarized financial information of important affiliated companies
No applicable information

87

DAISHI HOKUETSU REPORT 2021

The Status of Financial Results (Consolidated)(Per share information)

Net assets per share\ 9,510.00
Net income per share for the current term
\ 236.28
Net income per share for the current term after adjustment
for potential voting\ 235.00(Note 1) The basis for calculation of net asset per share is as follows:
Total amount of Net assets\ 453,845 million
Amount to be deducted from net assets\ 19,171 million(of which, rights to subscribe to new shares)\ 692 million(of which, non-controlling shareholder equity)\ 18,479 million
Net asset amount at end of term concerning ordinary shares\ 434,673 million
Number of ordinary shares at the end of term used to calculate the amount of net assets per share
45,706 thousand shares(Note 2) The basis for calculation of net income per share for the current term and net profit per share for the current term after adjustment
for potential voting are as follows.
Net income per share for the current term
Net income reverting to parent company shareholders\ 10,795 million
Amount not reverting to ordinary shareholders\ -. million
Net income reverting to parent company shareholders related to ordinary shares\ 10,795 million
Average number of ordinary shares during the term
45,686 thousand shares
Net income per share for the current term after adjustment for potential voting
Amount of adjustment of net income for the current term reverting to parent company shareholders\ -. million
Increase in number of ordinary shares
250 thousand shares
Of which, rights to subscribe to new shares
250 thousand shares
Summary of potential voting shares not included for lack of diluting effects, in the calculation of net income per share for thecurrent term adjustment for potential voting.
-(Important subsequent events)
There are no applicable items

DAISHI HOKUETSU REPORT 2021

88

Non – Consolidated Balance SheetYears ended March 31,2020 and 2021
Note:The translations of the Japanese yen amounts into US dollars are using the prevailing exchange rate at March 31, 2021,which was\110.71 to US $1.■Assets

（Millions of Yen）     
Cash and due from banks

（Millions of Yen） (Thousands of U.S. Dollars）

2020



2021



2021





Daishi Hokuetsu
Bank



Daishi Hokuetsu
Bank



Daishi Bank

\1,117,430



Hokuetsu Bank
\118,411

\2,055,227

$18,564,059 

Call loans



―



4,788



―



―

Monetary claims bought13,288―

13,080118,150 

Trading account securities

1,922



1,168



3,161



28,555 Securities

1,288,308



1,030,695



2,441,677



22,054,714 

Loans and bills discounted



3,399,909



1,709,563



4,959,621



44,798,317 

Foreign exchanges



13,771

6,700



16,802



151,768 

Other assets

49,778

67,349

70,550

637,254 

Tangible fixed assets

39,857



25,723



66,845



603,786 

Intangible fixed assets

15,219

1,643



16,957



153,169 Prepaid pension cost

1,867



4,781



6,452



58,282 

4,994



6,855



―



―

Customersʼ liabilities for acceptances and guarantees 

12,499

6,678



18,614



168,138 (11,754)



(6,899)

(20,040)

(181,013)

\5,947,093

\2,977,460

\9,648,950

$87,155,184 

Deferred tax assets

Allowance for loan losses

Total Assets■Liabilities（Millions of Yen）     

Deposits

Negotiable certificates of depositCall money



Payables under repurchase agreements
Payables under securities lending transactions
Borrowed moneyForeign exchanges



Borrowed money from trust account

Other Liabilities



Provision for bonusesProvision for directorsʼ bonusesProvision for retirement benefitsProvision for reimbursement of depositsProvision for system cancellation losses

Provision for contingent loss

Deferred tax liabilities

Deferred tax liabilities for land revaluation

Acceptances and guarantees

Total Liabilities

■Net Assets

2020



2021



2021





Daishi Hokuetsu
Bank



Daishi Hokuetsu
Bank



\2,556,076

\8,132,832

$73,460,685 

171,038

94,910

90,666



818,951 

―



―

111,132

1,003,813 

188,425

1,701,973 

654,996

5,916,325 

186



1,688 202

1,828 27,240

246,048 

2,246



20,289 

95



864 

―



―

1,831



16,542 ―
25,241
212,840
380,264
173
126
21,445
1,240
81
590
1,894
268
888
―
5,236

Capital stock

Capital surplus

Retained earnings



Shareholdersʼ eguity
Valuation difference on available-for-sale securities
Deferred gains or losses on hedgesRevaluation reserve for landTotal valuation and translation adjustments

2,176
47,196
113,291
10,000
116





―
40,816
718



25



―



523



144



376




12,499

\5,669,841

―
2,462
















\32,776
18,635

110 



12,655 696



6,289 7,636



68,979 

6,678



18,614



168,138 \9,238,216

$83,445,185 （Millions of Yen） (Thousands of U.S. Dollars）

2020

2021



2021





\32,776

$296,061 

60,138

543,204 

257,446
13,919
6,417



206,033(530)

12
1,401

\2,875,513

\24,538
16,964



57,153



267,985

98,656

2,420,609 

360,900

3,259,875 

13,732

44,153



398,819 

(4,452)

(40,214)

10,132



91,518 

49,833



450,123 

19,806

(14,325)
3,883



3,290

Total net assets277,252

101,946

410,734

3,709,999 

Total Liabilities and Net assets\5,947,093

\2,977,460

\9,648,950

$87,155,184 


89



（Millions of Yen） 

Hokuetsu Bank

\4,836,011    Daishi Bank

（Millions of Yen） (Thousands of U.S. Dollars）

DAISHI HOKUETSU REPORT 2021

Non – Consolidated Statement of incomeYears ended March 31,2020 and 2021

（Millions of Yen）
    





2021





Daishi Hokuetsu
Bank



Daishi Hokuetsu
Bank

Daishi Bank
\89,562\43,033Interest income46,142



25,610Interest on call loans,QWHUHVWRQUHFHLYDEOHVXQGHUVHFXULWLHVERUURZLQJWUDQVDFWLRQV Interest on receivables under resale agreements Interest on deposits with banksInterest on interest swaps
Other interest income

Trust fees



Fees and commissions30,779
14,812
(0)
―
―
207
―
342





Hokuetsu Bank

16,186
9,350
6





―
(13)
27



―



1



15,452



52










―



8,271



\89,085



47,938

13,243



(75)



0



―



―

329




2,976

3
332



1



17,64010,959

5,903



7,309

17,007

3,247



16,196



Ordinary expenses



74,872



36,882



78,833

Interest expenses



3,615



2,279



1,916



Interest on negotiable certificates of deposit
Interest on call money




686
24
(7)




316
13



60





558



12



(5)



Interest on bills sold



656



(265)



197

Interest on payables under securities lending transactions



566



1,355



255



25



869



Interest on borrowings and rediscountsInterest on interest swaps



Other interest expenses

Fees and commissions payments
Other ordinary expenses
General and administrative expenses





74



1,614

0



5,674
10,559
42,786





0



798



(0)



4,106
3,905
23,054

433,005

Other income$804,670

34,104

Other ordinary incomeInterest on deposits

2

5,961



8,827



50,626

308,056
119,624(684)
2

28
3,001
11
159,340
66,019
146,292
712,069
17,310
5,041
113(46)
1,784
2,307
233
7,853
22
53,848
79,733
457,285

Other expenses



12,236



3,536



11,501

Ordinary profit

14,690

6,151



10,251



92,600

Extraordinary income



0



1



1,039



9,390



0



1



0



Gain on disposal of noncurrent assets
Gain on revision of retirement benefit plan
Extraordinary loss
Loss on disposal of noncurrent assets
Impairment loss



2021



Interest and dividends on securities

Ordinary income（Millions of Yen） (Thousands of U.S. Dollars）

2020



Interest on loans and discounts103,891

5



―



―



1,038



9,384



55



31



707



6,393



42



26



206




1,863

501



12



5



4,529

Income before income taxes

14,635



6,120



10,583



95,597

Income taxes-current4,498



920



3,204



28,947

Income taxes-deferred

Net income(626)



\10,763



612



\4,587

DAISHI HOKUETSU REPORT 2021

488



\6,890

4,408
$62,241

90

Daishi Hokuetsu Financial Group, Inc.
Location of principal head office functions :1071-1 Higashiborimae-dori 7-bancho, Chuo-ku, Niigata-shi, Niigata Prefecture
TEL : 025-224-7111 (representative)
URL : https://www.dhfg.co.jp/
Edited and issued by the Business Planning Division of Daishi Hokuetsu Financial Group
Issued in July 2021

This disclose uses easy-to-read
universal design font.

Daishi Hokuetsu FG and Tsubasa
alliance has set the SDGs
Declaration

The Daishi Bank and The Hokuetsu
Bank has signed the Principles for
Financial Action for the 21st Century.