Prime Market of the Tokyo Stock Exchange︓8359

The 52nd Information Meeting
November 30, 2023

＜Inquiries＞
Planning & Coordination Dept. Investor Relations
TEL︓026-224-5512
E-mail︓ irtantou@82bank.co.jp
・This document has been prepared for information purpose only. It should not be construed as an offer or solicitation tobuy or sell any securities.
・This document includes statements concerning future business results. These statements do not guarantee futurebusiness results but contain risks and uncertainties. Please note that future business results may differ from projections
for reasons such as changes in the business environment.
・Information contained herein may be changed or revised without prior notice.
THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Overview of Hachijuni Bank
Company nameTHE HACHIJUNI BANK, LTD.

Head office

Nagano City, Nagano Prefecture

Date of establishment

Aug 1st, 1931

2

Topics◇Jun 1st Business integration with the Nagano Bank
◇Oct 1st Merged in Hachijuni System Development Co.,Ltd.

Domestic 151
Branchnetwork（in Nagano: 131, outside Nagano: 20）

Overseas

Branches: 2（Singapore, Hong Kong）
Representative offices: 2（Shanghai,
Bangkok）

No. of employees

3,072（＋31 from 3/2023）

Capital stock¥52.2bn

Issued shares

Head Office of Hachijuni Bank

513,767 thousand shares※Increased 22,664 thousand shares by issuing newshares at share exchange in Jun 2023

Head Office of Nagano Bank<For reference> Overview of Nagano Bank
Company name

THE NAGANO BANK, LTD.

Head office

Matsumoto City, Nagano Prefecture

Total assets¥13,487.2bn（+4.65% from 3/2023）

Net assets¥878.4bn（+5.14%）

Branch network

53（in Nagano: 52, outside Nagano: 1）

Deposits¥8,244.7bn（+0.71%）

No. of employees

633

Loans

¥6,273.8bn（+1.91%）

Total assets¥1,105.8bn

Consolidated: 16.77% (-1.59％ from 3/2023）
Non-consolidated: 16.86% (+0.31%)

Net asset¥21.5bn

Deposits¥1,075.1bn

Loans¥690.5bn

Total capital ratio（Basel Ⅲ）

Ratings

S&P
R&I
JCR

Global Ratings︓ A︓ A+
︓ AA

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

As of Sep 30, 2023

As of Sep 30. 2023
Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Index3

１．Outline of 1H FY2023 Financial Results

・・・・・・ 4

２．Status of Medium-Term Management Initiatives・・・23
３．Business Integration ・・・・・・・・・・・・・・・

32

４．Effort to Improve PBR

38THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

・・・・・・・・・・・・・

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

4

１．Outline of 1H FY2023 Financial Results

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Outline of 1H FY2023 Financial Results

5◆ Consolidated (¥100mn)

9/20229/2023

Consolidated gross business profit

479

524

45

Profit on interest

377

413

36

Profit on fees & commissions

85

92

7

Trading profit

6

1

-5

10

16

6

General & administrative expenses

281

316

34

Credit related expenses

18

10

-7

Gains/losses related to stocks

58

16

-42

Gains/losses on money held in trust

-13

-6

7

Ordinary profit

204

170

-33

Extraordinary gains/losses

-13

168

182

ー

173

173

131

264

133

Profit from other business transactions

Gain on negative goodwill
Profit attributable to owners of parent◆ 3/2024 Forecast (consolidated)（¥100mn）
Ordinary profit

210（-138 YoY）

Profit attributable to owners of parent

270（＋29 YoY）

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

YoY◇Profit on interest¥3.6bn increase YoY due to higher

profit at Hachijuni Bank and newconsolidation of Nagano Bank Group,etc.

◇Ordinary profit¥3.3bn decrease YoY, mainly due toa decrease in profit at Hachijuni Bank.

◇Profit attributable to owners ofparent¥13.3bn increase YoY due to gain on
negative goodwill of ¥17.3bn,
resulting from business integration.

※The three Nagano Bank Group companies
are included in the consolidated results
only for the three-month period from Jul
to Sep due to their consolidation as newconsolidated subsidiaries.
Please refer to page 21 and 22 forNagano Bank’s results.

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Review of 1H FY2023 Financial Results◆ Non-consolidated (¥100mn)

6
3/20249/20229/2023

422

434

12

851

376

385

8

743

Proﬁt on fees & commissions

52

51

-1

Proﬁt from other business transactions

-8

-3

5

-3

Gains/losses related to bonds（B）

-17

-14

2

-24

G&A expenses（C）

263

269

5

540

Actual net business proﬁt（A-C)

158

165

6

310

Core net business proﬁt（A-B-C)

176

180

4

335

Excl. gains/losses on cancellation of investment trusts

Transfer to general reserve for possible loan losses（D）

197
4

191
-1

-6
-5

ー
-1

Net business proﬁt（A-C-D)

154

166

12

310

Gains/losses related to stocks（E）

58

16

-42

67

Gains/losses on money held in trust（F）

-13

-5

7

-5

Disposal of NPL

12

4

-7

21

Ordinary proﬁt

179

148

-30

330

Extraordinary gains/losses

-11

0

12

14

1

0

-0

ー

13

0

-13

ー

117

109

-7

240

Proﬁt /losses related to securities（B+E+F）

27

-4

-32

37

Credit related expenses

17

3

-13

19

Gross business proﬁt (A）Proﬁt on interest

Temporaryprofit/losses

Gains /losses on disposal of non-current assets

Impairment losses

Proﬁt

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

YoY

Plan

◇Core net businessprofit106

Increased by ¥0.4bn YoY
due mainly to an increasein profit on interest
despite an increase in
expenses (personnel andnon-personnel costs).

◇Ordinary profit

Decreased by ¥3.0bn YoY
due to a decrease ingains/losses related tostocks, despite a decreasein credit related expenses.

◇ProfitDecreased by ¥0.7bn YoY
due to a decrease inordinary profit, despite asmaller extraordinary
losses (impairment loss of¥1.3bn was recorded in
9/2022).

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Gross Business Profit7Gross business profit increased by ¥1.2bn YoY due to increases in profit on interest andprofit from other business transactions.

◆ Gross Business Profit（¥100mn）
NET

NET

817
Profit fromobt
Profit on f&c

31
99

Profit oninterest

805

851

106

106

NET

NET

422

434

52

51

684

727

3/2022-89/2022-30
3/20239/20229/2023

YoY

376

385

8

-21

-10

11

Profit on fees &commissions

52

51

-1

Profit from otherbusiness transactions

-8

-3

5

Of which gains/losses
related to bonds

-17

-14

2

Profit on interest
Of which gains/losses oncancellation of
investment trusts

743

385

376

◆ 9/2023 Increase/Decrease Factors（¥100mn）-3-3

9/20233/2024(Plan)THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Profit on Interest

8Despite an increase in foreign currency funding costs, profit on interest increased by ¥0.8bn YoY
due to higher yields on loans and securities in the international operations and an increase in thebalance of loans and securities.

◆ Profit on interest

3/20229/2022

3/20239/2023

684

376

727

385

Interest on loans

419

231

497

291

Domestic

396

197

395

201

International

22

34

101

90

Interest & dividends
on securities

268

179

365

241

Domestic

182

110

220

135

International

86

69

145

106

Interest on deposits

-5

-10

-28

-22

Domestic

-2

-1

-1

-0

International

-3

-9

-26

-21

Interest paymenton swaps, etc.※

-33

-38

-106

-103

Domestic

-19

-8

-18

-11

International

-14

-29

-88

-91

（¥100mn）※Interest on interest swaps, interest payables under repurchase agreements, intereston payables under securities lending transactions, and other interest were included.
THE HACHIJUNI BANK,LTD. The 52nd Information Meeting◆ Yield（％）

3/20229/2022

3/20239/2023

Yield on loans

0.72

0.76

0.81

0.93

Domestic

0.71

0.68

0.68

0.67

0.77

0.83

0.89

0.88

International

0.88

2.26

3.26

5.62

Yield on securities

0.99

1.55

1.64

1.92

Domestic

0.81

1.18

1.22

1.33

International

1.79

3.14

3.37

4.44

Funding costs

0.03

0.09

0.15

0.28

Domestic

0.01

0.01

0.01

0.01

International

0.31

1.30

2.10

3.93

Excl. loans to
the Japanese
govt.

Interest margin ofinternational
operations※

9/20229/2023

YoY

Loans

0.96％

1.69%

0.73%

Securities

1.84％

0.51%

-1.33%※Interest margin was the diﬀerence between yield and funding costs.

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Loans/Deposits

9

While the annual percentage rate of in-prefecture loans were negative due to the repayment of zerozero loans, intensified competition for housing loans, and a decrease in the amount of bonds issued by
local governments and intensified competition, loans outside of the prefecture remained strong, mainly
in large cities, and overall loans maintained a positive annual growth rate.

◆ Average Balance of Loans
58,112

OutsideNagano29,440（¥100mn）

60,62660,92162,36462,611

31,72632,00733,54833,675Inside 28,671
Nagano28,90028,914

28,81528,935

3/20229/2022

3/20239/20233/202480,96382,67782,741

Outside 5,770
Nagano

6,360

6,184

5,952

6,028

Inside 72,152
Nagano74,68674,77976,72476,7133/20229/2022

3/20239/202377,9233/2024（Plan）

3/20229/2022

3/20239/20233/2024（Plan）

2.77

All offices

6.14

4.63

3.90

2.01

2.19

5.74

5.21

OutsideNagano

7.82

4.53

7.17

-6.41

-2.52

-0.29

0.07

InsideNagano

6.00

4.64

4.20

2.72

2.58

3/2022All offices

3.47

7.09

4.83

2.86

OutsideNagano

4.79

13.10

8.71

InsideNagano

2.14

1.19

0.84

3/202381,047

Inc/Decratio

Inc/Dec
ratio

9/2022（Plan）◆ Average Balance of Deposits （¥100mn）

9/2023（YoY︓％）THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

3/2024（Plan）(YoY︓％）

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Business Loans

10

The balance increased due to the resumption of capital expenditures that had been pending due to the COVID-19
pandemic and increased demand for working capital.



Although the number of customers had been on an increasing trend until the previous period as we focused on
supporting customers affected by the COVID-19 pandemic, it decreased as repayments progressed due to theresumption of economic activities following the lifting of restrictions, etc.

◆ Business Loans by District（Outstanding balance）

33,72534,83135,921◆ No. of Customers by District（¥100mn）

36,881

OutsideNaganoInsideNaganoOutsideNagano 21,189

22,36623,35024,252（No. of customers）

28,916
3,646

29,012

29,07828,630

3,701

3,762

3,738

25,27025,311

25,31624,892

3/20229/2022

3/20239/2023◆ Business Loans for SMEs※(Outstanding balance)

The ratio of SMEs loans to total business loans

InsideNagano12,5363/2022

12,4649/2022

12,5703/2023

12,6289/202325,00024,50024,00023,50023,00022,50022,00021,50021,00020,50020,00019,50019,00018,50018,00017,50017,00016,50016,00015,50015,00014,50014,00013,50013,00012,50012,00011,50011,00010,50010,000
9,500
9,000
8,500
8,000
7,500
7,000
6,500
6,000
5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0

48.4%

48.2%

48.5%

（¥100mn）

46.7%

49.0%

47.0%

45.0%

43.0%

41.0%

16,332

16,82017,447

17,238

39.0%

37.0%

35.0%

33.0%

3/20229/2022

3/20239/2023※SMEs (excl. local public entities)＋self-employed company owners
THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Personal Loans

11

Despite a decrease in new loan executions due to a decline in housing starts caused by rising home acquisition

prices and other factors, the loan balance reached a new record high.

◆ Personal Loans（Outstanding balance）
13,339

Other
loans

667

（¥100mn）

13,591

13,722

13,885

652

645

644

◆ New Increase in Housing-Related Loans（¥100mn）

9/20229/2023

YoY

718

606

-112

Floating-rate(ratio)597(83.2%)

584(96.4%)-13（13.2%）

10-year fixed
rate（ratio）

106(14.8%)

17(2.9%)-89（-11.9%）New increase

Housingrelatedloans

12,672

3/2022

12,9389/2022

13,0773/2023

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

13,2419/2023Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Profit on Fees & Commissions


12

Profit on fees & commissions decreased by ¥0.1bn YoY to ¥5.1bn due to a decrease in syndicated loan related
commissions and an increase in mortgage payment insurance premiums, despite increases in consulting related
commissions, and investment trust and insurance agency commissions.

（¥100mn）

Profit on fees &commissions

3/2022
Full
year

99

9/202252

3/2023
Full
year

106

9/202351

3/2024
Plan

106◆ Corporate Banking (Major items) ※Syndicated loans, private
placement bonds, etc.
Derivatives-related
M&A, consulting-related

80

44

89

45

―

806

Exchangebusiness

55

25

51

25

―

3/2022

Securitiesrelated business

22

9

17

10

―

<Major items>

Deposit/loanbusiness

Agency business

Fees &
commissions
payment〈 Major items〉

Fees related to
payment loans
Exchangebusiness

93

1,881

1,281

178

182

1,352

2,636

Fees &
commissions

91

187

5

12

5

―

78

38

76

41

80

57

29

57

32

―

9

3

6

3

―

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

1,594

1,506

704

549

9

（¥1mn）

3,864

672

602
444

1,006

505
9/2022548

3/202

9/2023◆ Personal Banking (Investment type products）※
Public bonds
Life & non-life insurance
Investment trusts
Financial instrumentsintermediary/introduction
Foreign currency
deposits

637

31

29

884

1,535

1,262
1,358
355
3/2022（¥1mn）

2,661

2,480

396

13

616
87
9/2022

1,220

476

18

672

151

97

3/20239/2023※Incomes from consulting business in each ﬁeld were shown in the above ﬁgures.
Incomes other than “profit on fees & commissions” such as “profit from otherbusiness transactions” were also included.
Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Investment-Type Related Income

13◆ Investment Type Income◆ Investment Type Products of Personal Banking(Outstanding balance)
5,641
Foreign currency
depositPublic bonds

Investment
trusts148
542

Financial
instruments 5,591
intermediary

76

1,791

(Bank + Hachijuni Securities)（Market price, ¥100mn）

5,962

5,688

130

79

575

118
611

111
74

59
Structured
bonds

1,970

6.6

Trust fees

3.9

Sales ofinvestment
trusts

3,075

9.9

3,175

3,057

3.5
1.5

3.6

24.8

24.4
5.0
1.8
0.8
4.0

9.0

26.6
15.3

3/20239/20233/2022◆ Investment Trust Accumulation
投信積⽴

3/20229/2022

3/20239/2023

No. of accounts

48,78551,91454,59957,75260,752

Tsumitate NISA

23,13226,01028,82232,08335,083Monthly installments(¥1mn)

1,478

1,555

1,597

1,716

1,866

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

3/2024（Plan）

9/2022

3/2023Bank

9/2022

1.0
1.8
2.4
8.4

12.6
3/2022

29.2
Hachijuni
Securities

3,084

47.3

15.9

StocksLife
insurance（¥100mn）

58.3

647

1,828

1,732

※after deduction of the Bankʼs intermediary fee

9/2023◆Offering investment trust accumulation
as an effective means of asset building tomany customers.
The number of accounts of the "Tsumitate
NISA" keeps one of the highest in Japansupporting by campaigns such as the"NISA Start Campaign" and "Tsumitama"
campaigns.
Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

General & Administrative Expenses

14

 Non personnel expenses increased ¥0.5bn YoY due to an increase in depreciation expenses from system
investment and new banknote support, as well as an increase in advertising expenses.
 Personnel expenses increased due to the revision of the personnel system, which resulted in a review ofcompensation.

◆ G&A Expenses
508
Tax

Non
personnel
expenses

Personnel
expenses

33（¥100mn）
528

536

37

35

219

212

269

20

20

107

112
272

9/20229/2022

3/20239/2023YoY

Main factors

Nonpersonnel
expenses

107

112

5

・Increase in depreciation
expenses
・Increase in advertisingexpenses
・Increase incommunication andtransportation expenses

Personnel
expenses

134

136

1

・Updated compensation
structure as a result of
personal system revision◆ Investment Amounts
3/2023270

9/2023

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

3/2024（¥100mn）
3/20249/2023（Plan）

Investment
amounts

37

23

57

Main
investments

・Introduction of
office365
・New constructionof ZEB branches
・Renewal ofsystems・Adaptation ofATMs/equipment
to new banknotes
・Renewal of PC,
etc.

・Adaptation ofATMs/equipment
to new banknotes
・Renewal ofsystems

136

134

3/2022（¥100mn）

230

263

261

◆ Main Factors of Increases in Expenses（Plan）
Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Profit/Losses Related to Securities


15

Although valuation losses on bonds and other securities (foreign bonds, investment trusts, etc.) increased due
to rising domestic and foreign interest rates, overall valuation gains on securities increased due to gains on
hedging by swaps and higher gains on stocks resulting from rising domestic stock prices compared to 3/2023.

◆ Profit/Losses Related to Securities◆ Valuation Gains/Losses on Securities（¥100mn）（¥100mn）
G/L on money held in trust

3/20229/2022

3/20239/2023

3,915

3,308

4,165

4,632

3,405

2,810

3,698

4,103

Bonds

-55

-320

-280

-564

Others

-32

-266

-73

-186

Total

3,826

2,721

3,811

3,881

Valuation G/Lon interest
rate swap with
hedge

255

534

322

660

4,081

3,255

4,133

4,541

G/L related to stocks
G/L related to bonds

Stocks

NET 36Strategic
holdings

NET 27
NET 47

86

5

21

58

NET -４

19

16
-17
-13

-46

-14
-5

-3
3/20229/2022

3/2023

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

9/2023ＮＥＴ

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Market Investment (Foreign Currency-Denominated Bonds）


16

We curbed fixed-rate bonds and invested mainly in floating-rate bonds to avoid increased valuation losses
and negative spread risk, resulting in a total realized loss of ¥0.7bn.

◆ Change in Valuation G/L and Balance◆ Profit/Losses
Total
realized P/L(Outstanding balance)
-31

9

-82

-7

（¥100mn）

Valuation G/Lbefore hedge

-127

-295

-123

-274

Valuation G/Lafter hedge

-41

-106

-48

-74

107

15
54
-18
-25

8

19
29
-15

-8

0
-1

-64

-8

65

-69

0

0
17

（¥100mn）

0
2,970

65

-84

Denominatedin Euro, etc.

737

2,717
2,417

3,137
430

213

432

-6

G/L on cancelation of asset swaps, etc.
Losses on sales of bonds
Gains on sales of bonds
Interest on swaps received/paid-195

Denominated 2,232
in USD

1,985

3/20229/2022

2,707

2,504

Funding costs
Interest on bonds

3/20229/2022

3/2023

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

9/20233/20239/2023※ Figures are based on ALM accounting and diﬀer from the ﬁgures
published in the financial statements.
Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Change in Outstanding Balance of Securities

17

While focusing on domestic bonds, we intend to restructure our portfolio by deepening diversified investments
based on macro and financial trends to secure stable interest and dividend income and flexible trading profits.
※ Figures are based on ALM accounting and diﬀer from the ﬁgures published in the ﬁnancial statements.

（Based on acquisition cost: ¥100mn）

3/20229/2022

3/20239/2023

Direction

17,92015,386

16,663

17,903

JGBs

8,256

6,820

5,703

5,208

Municipal bonds

3,076

2,409

3,417

4,199

Public bonds, corporate bonds, etc.

5,953

5,527

6,783

7,745

635

630

760

741

Domestic stocks

1,016

1,001

985

1,013

→

Domestic investment trusts, etc.

2,315

2,684

2,791

2,952

→

Foreign bonds

3,098

2,713

2,842

3,412

→

Foreign stocks

44

14

12

17

→

Foreign investment trusts, etc.

366

440

351

438

→

24,75822,23823,64525,7353.09 years

3.58 years

3.79 years

3.61 years

Domestic bonds

Beneficiary interest in trust

Total
Domestic bonds duration
1H FY2023 efforts→

2H FY2023 efforts

Bonds◇Domestic bonds
Purchased mainly short- to medium-term municipal and corporate
bonds. Sold very long-term bonds to reduce risk.
◇Foreign bonds
Purchased mainly floating-rate bonds such as CLOs, asset swap
bonds, etc.

◇DB: In a phase of a further rise in domestic bond interest rates, we will seek toincrease the balance, mainly in long-term bonds.
◇FB: While purchasing mainly floating-rate bonds such as CLOs and asset swap
bonds, etc. in order to curb the negative spread, we will also consider
purchasing fixed-rate bonds in a phase of a further rise in interest rates.

Stocks◇Secured earnings through flexible trading, mainly of domestic stocks.

◇Securing earnings through flexible trading, mainly of domestic stocks.

◇Expand diversification into J-REITs, investment trusts, etc.

◇Expanding diversified investments in J-REITs, equity-related and currency-related mutual funds, and alternative areas, while keeping a close eye onmarket conditions。

Investment
trusts, etc.

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Credit Related Expenses
◆ No. of Upgrade/Downgrade

Credit related expenses decreased by ¥1.3bn YoY,
partly due to upgrades in the ranks of theborrowers as a result of improved businessconditions.

〈General Reserve〉

We expect about ¥1.6bn of credit related
expenses in 3/2024.

194

135

Upgrade



18

188

113

（¥100mn）

3/2022-19

Disposal of
non-performing
loans

39

（More than±¥1.0bn impact）

3/2024

133

4

9

-1

151

130

9/2022

3/2023153(Forecasts)-0“Normal” to “Needattention,” downgrade within“Need attention category”

9/2023“Need attention” to“Normal,” upgrade within
Need attention category〈Disposal of NPLs（Specific Reserve）〉

19

12

12

17

21

32

41

31

4

3

0

16

16

ー

14

17

19

27

29

57

51

16

18

31
3/2022“In danger ofbankrupt” to“Bankrupt/De facto
bankrupt”

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

9/2022“Normal” or “Needattention” to “Indanger of bankrupt”
or lower

32

14
47

54

35

Downgrade

Factors oflarge
borrowers

9/2023Upgradetotal

3/20233/2022

Transfer togeneral reservefor possible
loan losses

Credit related
expenses

9/2022

Downgrade◆ Credit Related Expenses

39
3/2023“In danger ofbankrupt” or lower
to “Normal” or“Need attention”

9/2023“Bankrupt/De facto
bankrupt” to “Indanger of bankrupt”

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Non-Performing Loans, Reserve for Loan Losses◆ Non-Performing Loans

19◆ Reserve for Loan Losses（¥100mn）※Disclosure based on the Financial Revitalization Law（¥100mn）

2.00%

NPL ratio 1.74%

1.75%

1,401

1.71%

1.68%

1.80%

352

1.60%

1,201

1,001

Substandard
assets

1,061

1,068

1,074

1,077

221

184

194

188

801

389

388

367

1.40%

1.20%

1.00%

Generalreserve

187

185

185

201

203

9/2022

3/20239/2023

177

182

174
3/20220.80%

601

Doubtful
assets
401

777

828

798

826

0.60%

0.40%

201

Specific
reserve

0.20%

Bankrupt and61
quasi-bankrupt
assets3/20221（¥100mn）

55
9/202290
9/202353
3/20233/20229/2022

3/20239/2023

Substandard
assets

221

184

194

188

Doubtful assets

777

828

826

798

Bankrupt and quasibankrupt assets

61

55

53

90

1,061

1,068

1,074

1,077

Total
NPL ratio

1.74％

1.75％

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

1.71％

1.68％

0.00%

（¥100mn）

3/20229/2022

3/20239/2023General reserve

177

182

187

185

Normal

65

68

70

73

Need attention

67

62

61

55

Special attention

44

50

54

57

Specific reserve

174

185

201

203

In danger of bankrupt

154

167

185

160

Bankrupt/De facto
bankrupt

19

17

15

43

Total

352

367

388

389

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Shareholder Returns and the Reduction Plan of Strategic Shareholdings20 Numerical targets for reduction was set based on the Bank’s policy of strategic shareholdings in line with
the intent of the Corporate Governance Code.
Reduction target: 20% reduction from 3/2021 (at the start of Medium-Term Management Vision)◆ Reduction Status of Strategic Shareholdings◆ Shareholder Returns
3/2022

3/20233/2024（Plan）

78

95

98

¥16.0

¥20.0

¥20.0

ー

Interim dividend

¥6.0

¥10.0

¥10.0

¥10.0

Purchase of own shares
②

―

100

100

25＊

Shareholder returns
③＝①＋②

78

195

198

74

Profit（consolidated）④

266

241

270

Dividend payout ratio（consolidated) ①÷④

29.3%

40.0％

36.4％

53.6％

Ratio of shareholder
returns（consolidated）
③÷④

29.3％

80.9％

73.3％

81.6％

(¥100mn)
Annual dividends①

Dividend per share（full year）※Listed share at book value(excl. deemed holdings)

9/2023（For reference）
Interim dividend

49

840

（¥100mn）
788

776

771

672

Interim profit

91※※Excl. gains on negative goodwill

3/2021 3/2022 3/2023 9/2023

3/2026

Topics① Revised medium-term management targets, with annual dividends of at least ¥20 (record high) through FY2025② On Aug 25, the Bank decided to repurchase its own shares (up to ¥10bn and 12,500,000 shares) and is currently
in the process of doing so.
＊ Total value of shares repurchases as of Oct 31: ¥5.1bn
THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Outline of Group Companies Financial Results
Company name

Investment
ratio

9/2022 (¥1mn)

21

9/2023 (¥1mn)

Ordinary
profitHachijuni Securities Co., Ltd.

100.0％

10

-189

171

127

Increase due to strong sales of stocks and othersecurities backed by firm stock market conditions

Hachijuni Lease Co., Ltd.

100.0％

582

404

309

214

Decrease due to increase in credit costs, etc. despite
increase in lease and other sales

Hachijuni Card Co., Ltd

100.0％

59

39

62

37

Decrease due to higher expenses, despite increase intransaction volume

Hachijuni Credit Guarantee Co.,Ltd.

100.0％

1,173

772

962

634

Decrease due to decrease in guarantee fee income andincrease in credit-related expenses, etc.

Hachijuni System Development
Co., Ltd.

100.0％

48

32

84

52

Increase due to higher outsourcing fee income

Hachijuni Capital Co., Ltd.

41.0％

55

44

78

62

Increase due to higher interest and dividend income
from securities holdings

Hachijuni Staff Service Co., Ltd.

100.0％

-5

-4

7

3

Yamabiko Services Co., Ltd.

99.0％

21

20

-31

-41

Decrease due to a decrease in collection of transferred
receivables and increase in credit costs, etc.

Hachijuni Auto Lease Co., Ltd.

100.0％

508

334

450

296

Decrease due to decrease in gain on sales of vehicles
and increase in credit costs, etc.

Hachijuni Asset Management
Co., Ltd.

100.0％

31

20

58

39

Increase due to trust fees from managed funds, etc.

Hachijuni Investment Co., Ltd.

100.0％

33

21

23

15

Decrease due to the increase in expenses

Hachijuni Link Nagano Co., Ltd.

100.0%

ー

ー

-10

-11

The Nagano Bank, Ltd.

100.0％

816

578-3,651-11,341

Established in Oct 2022. Deficit shortly after
establishment.
Decrease due to increase in credit costs, etc. resulting
from change in accounting treatment associated withbusiness integration

The Nagagin Leasing
Corporation

88.1％

87

59

-51

-84

Decrease due to increase in credit costs resulting fromchange in accounting treatment

Nagano Card Co., Ltd.

95.0％

-14

-7

-20

-63

Decrease due to higher credit costs, impairment loss
on fixed assets, etc.

THE HACHIJUNI BANK,LTD. The 52nd Information MeetingNet
profitOrdinary
profitSpecial remarks(the Bank +subsidiaries)

Net profit

Increase mainly due to higher revenues in theplacement and recruiting business

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Outline of Nagano Bank Financial Results

22

Recorded in consolidated financial statements（¥100mn）

Apr〜JunJul〜Sep

Apr〜Sep

2023

2023

2023

◇Gross business profit (-¥0.5bn YoY）

YoY

21

26

48

-5

General & administrative expenses（C）

26
0
-4
-5
24

26
0
0
-0
23

52
1
-5
-6
48

-2
0
-2
-4
1

Actual net business proﬁt（A-C)

-3

2

-0

-7

2

3

6

-2

2

3

6

-1

5

-0

5

5

-9

2

-6

-12

4

3

7

6

0

-0

-0

-0

34

2

36

37

-39
-58
-83
-1
40

2
-5
-30
1
2

-36
-64
-113
0
42

-44
-64
-119
1
42

Gross business proﬁt（A）
Profit on interest
Profit on fees & commissions
Proﬁt from other business transactions
Gains/losses related to bonds（B）

Core net business proﬁt（A-B-C)
Excl. gains/losses on cancellation of investment
trustsTransfer to general reserve for possible loan
losses（D）

Net business proﬁt（A-C-D)
Temporaryprofit/losses

Gains/losses related to stocks（E）
Gains/losses on money held in trust（F）

Disposal of NPL

Ordinary proﬁt
Extraordinary gains/losses
Proﬁt
Proﬁt/losses related to securities（B+E+F）

Credit related expenses

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

・Profit on interest
Deceased by ¥0.2bn YoY due to thedecrease in interest and dividends on
securities in the domestic sector, etc.

・Gain/losses related to bonds

Decreased by ¥0.6bn due to the decrease ingain on sales, etc.

◇Ordinary profit (-¥4.4bn YoY）

・Credit related expenses

Increased by ¥4.2bn YoY as reserve forloan losses increased due to alignment ofself-assessment standards, etc. withthose of the Bank following the businessintegration.

◇Profit（-¥11.9bn YoY）
・Extraordinary gains

Decreased by ¥6.4bn YoY as impairment
losses of ¥4.1bn were recorded due to the
Bank's standards for impairment losses on
fixed assets.
Allowance for estimated losses of ¥2.3bn
due to future system contract
cancellations as a result of system
integration.

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

23

２．Status of Medium-Term Management Initiatives

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Status of Medium-Term Management Initiatives

Medium-Term
Management Vision 2021

24

Strengthening theLifestyle Support
Business

ProvidingComprehensive
Financial Services andFunctions・・・P26

・・・P27

Supporting Our Customers andRegions Through the Combination of
Financial Services, Non-financial
Services, and Relationships

Sustainability as theCore of Our Business・・・P25

Digital Reforms to
Operations andOrganizations
・・・P29Medium-Term Management Targets(Changed on Aug 25, 2023）

Targets

Personnel System
Reforms to Support
Growth andSatisfaction
・・・P301H FY2023 results

Annual dividend target

From FY2023 through FY2025
Annual dividend of at least ¥20 per sharefor each fiscal year

Interim dividend per share :¥10

Greenhouse gas (CO2) emissions①FY2023︓Net zero
②FY2030︓60% reduction compared to
FY2013①Achieved②Scheduled to be achieved by
the end of FY2023

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Status of Medium-Term Management Initiatives

25

Sustainability as the Core of Our BusinessGreenhouse Gas (CO2) Emissions : Achieved Net Zero for the First Time in the Banking Industry
 We achieved carbon neutrality one year
ahead of schedule by introducing energyefficient power generation, expanding thenumber of ZEB stores, increasing the use of
CO2-free electricity produced in Nagano, andacquiring Nagano Prefecture-derived carbon
credits.

◆ Greenhouse gas (CO2) emissions (Scope 1, 2)
Targets

1H FY2023 results①FY2023 : Net zero
②FY2030︓60% reduction
compared to FY2013①Net zero achieved②Scheduled to be achieved by theend of FY2023 (44.9% reduction
compared to FY2013)

Supporting Customer Sustainability Initiatives
 We provide services that support our customers' SDGs and sustainable initiatives.

◆ SDGs Initiatives Support Services
Feb 2023 (services started) ~ Sep 2023
results

Number of contracts signed: 2,220◆ Sustainable FinanceTargets

1H FY2023 results

FY2021 ~ FY2030
Cumulative total : ¥1.5tn

FY2021 ~ 1H FY2023
Cumulative total : ¥514.7bn（Environmental fields: ¥1tn）（Environmental fields: ¥251.5bn）

Social Contribution Activities
 "Hachijuni no Mori" activity

We have resumed the "Hachijuni no Mori" activity, which had been suspended due to the COVID-19
pandemic. This activity aims to conserve forests in Nagano Prefecture by picking bamboo grass,thinning trees, etc.

 Terraced rice field conservation activities (90th anniversary project)

In Jun 2023, our executives and employees planted rice in terraced rice paddies in Inakura, Ueda
City, and Obasute, Chikuma City. Harvested rice was donated to a volunteer-run cafeteria forchildren.

 Donation by personal car loan eco-type

A portion of interest earned from customers is donated to environmental conservation organizations.

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Status of Medium-Term Management Initiatives

26

Strengthening the Lifestyle Support Business
Smartphone App. "Wallet+" "Wallet+" (started in Jul 2022) not only allows users to check the balances and statements of
their registered accounts, but also enables monthly account balance management and segregateddeposit management through a dedicated account.
 It also offers convenient non-financial services such as point services and delivery of coupons thatcan be used in the community.

≪No. of cumulative total users as of the endof Sep 2023≫ 86,588 cases

Strengthen Consulting Functions for Individuals
 To meet a wide range of needs based on each customer's life plan, we offer specialized plazas for inheritance andinsurance, as well as trust products and services for individuals.
Dedicated channel

Hachijuni
Insurance Plaza
Opened in
Aug 2022

Hachijuni
Inheritance
Consultation
Plaza
Opened in
Dec 2022

It has been established within the Showadori
Branch in partnership with PG FriendlyPartners, Inc. This is the first insurance
consulting base in Japan to be jointly
operated by an insurance agency and a bank.
≪Aug 2022 ~ Sep 2023 results≫
No. of consultations: 731 (completed
contracts: 297 cases)
The Inheritance Consultation Center islocated within the Head Office Sales
Department.
≪Dec 2022 ~ Sep 2023 results≫
102 seminars, 110 individual
consultations

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

Trust products andservices for individuals

Trust
services forindividuals
Started in
Oct 2021

Cumulative total
Cases

1H FY2023
results

Relay of hearts

89

12Longevity andpeace of mind

54

18

Testamentary
trusts111

33

Estatearrangement
services

19

10

372

100

Real estate small-lot
products

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

Income(¥1mn)

144

223

All Rights Reserved.

Status of Medium-Term Management Initiatives

27

Providing Comprehensive Financial Services and Functions
Strengthen Consulting Functions for Corporate Customers
 Results of utilizing grants, M&A, syndicated loans, funds, etc. is as follows.
As a result of supporting customers with an eye on
post pandemic, we have achieved one of the highest
number of adoptions among regional banks in Japan.

◆ Assistance in applying for Business Restructuring Subsidies(from Mar 2021)

1st round

2nd

3rd

4th

5th

6th

7th

8th

9th

10th

Total

No. of application

150

104

139

129

133

75

69

48

55

41

943

No. of adoption

68

46

69

67

68

54

42

23

29

31

497

Adoption rate

45.3％

44.2％

49.6％

51.9％

51.1％

72.0％

60.8％

47.9％

52.7％

75.6％

52.7％

Amount of grant
decision (¥1mn)

1,085

766

650

422

306

127

※720

※363

※374

※960

5,773

（Fee-charged consulting）※ The amount of the grant decision for the 7th and subsequent rounds is an
estimated amount, as the grant application is in process.

◆ Syndicated loans◆ M＆A

3/2022

No. of contract
companies
Income (¥1mn)

9/2022

3/20239/2023

10

10

17

4

145

106

203

135

3/20229/2022

3/20239/2023

Amount of originatedby the Bank (¥100mn)

308

533

365

103

Income (¥1mn)

429

556

542

406

※Income included commitment fees.

◆ Business funds
Investment
results (¥1mn)（Fund amount）

Agriculture

Growth support

Growth support
No.2

Reconstruction
supportSustainability
No.1

Total

227
（1,000）

314
（500）

375
（500）

2,050
（4,195）

5,197（30,000）

8,163（36,195）

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

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All Rights Reserved.

Status of Medium-Term Management Initiatives

28

Providing Comprehensive Financial Services and Functions
Strengthening Group Functions and Expanding the Base
Hachijuni Link
Nagano Co., Ltd

Regional trading company business: Participation in overseas exhibitions (Export EXPO, FoodJapan, etc.). Exporting
Japanese sake, fruits and vegetables, etc. ≪1H results≫ No. of support customers: 84, 9 contracts
Electric power business︓On-site PPA contracts ≪1H results≫ No. of deal information: 105, 1 contract

Hachijuni
Investment Co., Ltd

Support by ＂Hachijuni Sustainability No. 1 fund＂ (¥30bn)
Since its establishment in Jan 2022, the company has invested mainly in business succession projects, an importantmanagement issue for local companies. ≪Results as of the end of Sep, 2023≫ Cumulative total of investment:¥5.1bn (business succession: ¥4.3bn, venture etc.: ¥0.8bn）

Strengthening functions
Expandingthe base

Hachijuni AssetManagement Co.,Ltd.

Improving the Group's operational performance
Since the fund operation started in Apr 2022, we have strengthened our market management capabilities in cooperation
with the Bank. ≪Total asset under management as of the end of Sep 2023≫ ¥64.7bn

Hachijuni Staff
Service Co., Ltd.

Diversify placement and intermediary functions
Responding to a wide range of local human resource needs that are becoming increasingly diversified, including the
introduction of human resources for management, foreign workers, and intermediary services for side/concurrent jobs.
≪1H results (Bank cooperation cases)≫ 52 contracts（side or concurrent jobs: 9), Leading Human Resources
Matching Project: 23 (including 8 cases of side or concurrent jobs), overseas human resources intermediation:
25 cases, 3 contracts

Hachijuni Card Co.
Ltd.

Development of credit cards for corporate customers
Develop credit card proposals for corporate customers, including various accounting systems, based on compliance withinvoice and electronic bookkeeping laws. ≪1H acquisition results≫ 2,919 customers

Hachijuni Lease Co.,Ltd.

Promote leasing that contributes to sustainable finance
Promote leases that contribute to decarbonization by utilizing subsidies from ESG leasing promotion projects, etc.
Expand new carbon-neutral commercial products such as EVs. ≪Sustainable finance 1H results (by utilizing
leases)≫ Contract amounts: ¥2.0bn, 513 contracts

Nagano Economic
Research InstituteConsulting to support application for "Nagano Prefecture SDGs Promotion Company Registration System"
Support for SDGs initiatives ≪1H results≫ 14 contracts

The Nagano Bank,Ltd.

Provided support to Nagano Bank customers as part of the Business Co-Creation Project by offering thefunctions of the Bankʼs group companies
Began providing services and functions such as temporary staffing and placement by Hachijuni Staff Service and various
consulting services by Nagano Economic Research Institute.

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

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Status of Medium-Term Management Initiatives

29

Digital Reforms to Operations and Organizations
Data Warehouse and AI Initiatives
 The DWH, which centrally manages the Bank's data, and DataRobot, a platform for building AI, enable the inhouse production of AI models.
◆DWH (Data Warehouse)
Centralized management of all data held by
the bank in chronological order over a long
period of time. Customer transaction
histories and other data are analyzed andused to develop effective sales strategies.
Each of the Judan-kai banks has alreadyintroduced this system as a joint version of
the Judan-kai system.

◆DataRobot (Decision-making AI)

×

A machine learning platform that canperform data analysis and future prediction
using AI.
Multiple algorithms are automatically
executed to build highly accurate machinelearning models in a short time.

In-house production of
AI modelCase Studies of Business Reform Using DWH and AI

ThemesStatus

Product promotion（Marketing）

Nov 2021 〜
present

Predicts and proposes products that meet customer
needs for a variety of products.

3 to 5 times more effective thanconventional methods

Forecasts of businessconditions changes（Credit control in the process）

Jul 2022 〜
present

Early identification of changes in businessconditions of business partners and prompt support.

Faster and more sophisticatedsupport for customers

Online lending（New credit screening）

Apr 2023 〜
present

Building an AI screening model that determines risk
based on historical account transfer data.

AI screening for quicker responseto screening and reduction ofmaterials to be submitted

Suspicious transaction
detection（Risk management）

Jan 2023 〜
Currently
testing

Our proprietary fraudulent transaction detection
model based on analysis of past suspicioustransactions and suspicious tactics.

Detects transactions undetectableby conventional methods,
preventing the occurrence andexpansion of damage

Business streamlining（Generative AI）

Oct 2023 〜
present

Started using Chat-GPT and other generated AI forinternal bank operations after eliminating risks.

Dramatically improve productivityof bank operations

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

Outline of implementation

Effects

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All Rights Reserved.

Status of Medium-Term Management Initiatives

30

Personnel System Reforms to Support Growth and Satisfaction
Develop Long-Term Personnel Policy In Jun 2023, we formulated a long-term personnel policy to develop human resources with high added value. We
will work to develop human resources and their environment toward the image of human resources demanded bycustomers.

Long-Term Personnel Policy
Human resource
development

In order to achieve self-fulfillment through autonomous career development and to fulfill our
corporate purpose through the execution of our management strategies, we will utilize the diverse
values and characteristics of our employees and support them in developing a versatile range of skills.

Creating an environment We will foster an organizational environment rich in diverse thinking and a customer-focused mindset
for human resource
as a foundation for developing in-demand human resources.
development

Necessary Employee Characteristics

Established Strength

Enterprising Spirit

Thinking and Acting
Independently

Initiatives to Improve Engagement
 An engagement survey was conducted in May 2023, resulting in a total
engagement score of 3.88 and a positive response rate of 73.9%.
Going forward, we will continue to engage in dialogue with staff
members and continue organizational improvement activities that willlead to improved job satisfaction.

Score

Positive
response rate

The Bank

3.88

73.9％

Other companies’
average(※)

3.63

58.7％

※Engagement survey by Recruit Management Solutions Co., Ltd.

Start Your Time (1-on-1 meeting) "Your Time (1-on-1 meetings)" was launched in Jun 2023 to promote the autonomous growth of staff members
and improve communication amid diversifying work styles. We aim to revitalize the organization by establishingregular communication opportunities between supervisors and subordinates, and by developing the abilities of eachstaff member.
THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

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Status of Medium-Term Management Initiatives

31

Personnel System Reforms to Support Growth and Satisfaction
Human Capital Situation
 Making various efforts to create an organization where every employee can experience growth and satisfaction.

Diversity

Unit

FY2020

FY2021

FY2022

1H FY2023

Person

3,159

3,067

3,041

3,072

No. of female employees

Person

1,461

1,437

1,446

1,476

Ratio of female employees

％

46.2

46.9

47.6

48.0

Average years of employment

Years

15.8

16.2

15.8

15.7

For male employees

Years

17.6

18.0

17.5

17.3

For female employees

Years

13.8

14.0

14.1

13.9

Ratio of women in management positions

％

10.8

11.5

12.5

13.3

Ratio of women in leadership positions

％

18.4

18.6

19.8

20.6

No. of employees

Work-life balance
Average days of paid leave taken
Ratio of leave used

FY2020

guidance offered
Ratio of employees with BMI of 25 or more

FY2022

1H FY2023

Days

13.9

14.3

15.9

8.0

％

72.0

74.1

81.5

40.8

Corporate health
Ratio of employees receiving special health

FY2021

FY2020

FY2021

FY2022

1H FY2023

％

49.4

86.4

78.0

－

％

20.5

19.8

18.6

－

Human resources development

FY2020

FY2021

FY2022

1H FY2023

Total annual training hours

Hours

39,431

55,21673,24755,559Average training hours per employee

Hours

12.5

18.0

24.1

18.1

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

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32

３．Business Integration

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

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Business Integration

33

Purpose of Business Integration
Hachijuni Bank and Nagano Bank implemented business merger on June 1, 2023. The two banks are engaged infurther discussion and consideration to formally merge in FY2025 (planned) with the aim of achieving "the mostsuccessful business integration of regional financial institutions in Japan."

In conjunction with the merger of the two banks, management rationalization and human resource creation will beachieved through the unification of systems and paperwork, and the consolidation of branches. Furthermore, humanresources will be reallocated to strategic areas and new business expansion, leading to growth from a medium- tolong-term perspective.

 Timeline Purpose of business integration

Sep 28, 2022 - Execution of the Basic Agreement
Jan 20, 2023 - Execution of the Share Exchange
Agreement and Business Integration
Agreement
Jun 1, 2023 - Business merger
FY2025- Formal merger of the two banks (planned)

Rationalizationof management

Creation ofhuman
resources

Strengthening
profitability

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting- Unification ofsystems andpaperwork- Consolidationof branches- Reallocationof human
resources- Sharing theknow-how ofboth banks

・Increased
management
efficiency to createhuman resources
and reduce costs
・Reallocation ofhuman resources
will lead to growthfrom a mid-to longterm perspective
・Responding to theneeds of local
customers
・Strengthen growthareas (consulting,digital, etc.)

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Business Integration

34

Business Integration Plan

Before the merger, costs (negative synergies) will precede due to increased expenses related to system
integration, but in FY2026, after the merger and beyond, costs (positive synergies) will be fully realized andthe overall synergy effect is expected to expand the profit.

In the six years following the business integration, 200 employees will be reallocated to strategic areas suchas consulting and digital, while coping with a significant natural decrease in personnel by store
rationalization and operational efficiency improvements.

 Creation and reallocation of human resources Overall synergy outlook（¥100mn）（Person）

100
80

74

60

58

40
20
0
-20

Creation andreallocation of
200 people

14-4

Naturaldecrease-1,000

-7
-33

-40
-60
-80

3/2024 3/2025 3/2026 3/2027 3/2028 3/2029
Top-line synergy

Cost (positive synergy)

Cost (negative synergy)

Overall synergy

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting(Note) The decrease in headcount is mainly due to the number of retirees,
including those reaching retirement age, exceeding the number of newhires, and intentional layoffs or other actions are not planned.
Source: Implementation plan based on the Act on Special Measures forStrengthening Financial Functions
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Business Integration

35

Progress on Synergies - Efforts Toward Reconciliation
Both banks are focusing on various efforts, both top-down and bottom-up, to integrate organizational
cultures and harmonize their staffs, which will be the basis of the integration.

 PMI activities by top management-

Management strategy meetings held 8 times
Hold management strategy meetings on an ongoing basis
to discuss ways to enhance corporate value from bothfinancial and non-financial perspectives.

-

Integration Promotion Committee: 12 meetings
The "Integration Promotion Committee," consisting of
directors from both banks, was established as a body to
discuss important matters for the promotion of businessintegration and consideration of mergers.

-

Appointed as Director in both banks

 Active staff reconciliation- Social gatherings between the two banks were held in all districts
for the purpose of reconciliation- Secondment and dual employment between the two banks

Hachijuni ⇒ Nagano
secondment : 1, dual employment : 1
Nagano ⇒ Hachijuni secondment : 7- Joint recruiting entity begins recruiting for the 2025 graduates- Joint study meeting : 224 times- Participation in joint training : 210 employees- Joint participation in summer festivals : 998 employees- Jointly hold seminars for customers : 151 participants- Accompanying visits to business loan clients : 3,311 clients（Cumulative total since Jun 2023）

Nagano Bank President appointed as Director of Hachijuni
Bank and Hachijuni Bank Chairman appointed as Director of
Nagano Bank for the purpose of strengthening governanceand promoting harmony in preparation for the merger.

- Message delivered at branch managers’ meeting(Oct 2023)

Message from the presidents of the two banks to employeesdelivered at branch managers' meeting, including thesignificance of the business integration.

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

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Business Integration

36

Progress on Synergies - Co-Creation Efforts

Upon the business integration, we have set "consulting-related human resources," "efforts to propose various
solutions," and "efforts to support management improvement" as KPIs to contribute to the revitalization of theregional economy while demonstrating top-line synergies.



The "Co-Creation Project" was initiated to support customers by mutually providing consulting functions of thetwo banks. The "Business Co-Creation Team" and "Financing Co-Creation Team" were formed to strengthen
proposals to customers and contribute to KPIs.

 Co-Creation Project (4 months results after business integration)- Business Co-Creation Team
Originated 17 deals for overseas expansion support and syndicated loans. 4 of which have been executed.
- Financing Co-Creation Team
23 borrowers were selected for joint support by the two banks. 16 of the 23 borrowers have been discussed andmoved to the implementation stage.

 KPIs: Plan/results
Consulting-related human resources(person)90
79
68

Efforts to propose various solutions(cases)
898

862

326
295

810

2022/9月
9/20222023/9月(計画)9/2023 (plan) 2023/9月(実績)
9/2023 (results)

・YoY : 132％
・Compared to the plan︓114％
THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

Efforts to support management
improvement (cases)
352

2022/9月
9/20222023/9月(計画)9/2023(plan) 2023/9月(実績)
9/2023 (results)

・YoY︓110％
・Compared to the plan︓104％

2022/9月 9/2023
2023/9月(計画)9/2022(plan) 2023/9月(実績)
9/2023 (results)

・YoY︓119％・Compared to the plan︓108％

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Business Integration

37

Progress of Synergy - Branch Consolidation


The two banks will optimize their branch network while taking customer convenience into consideration. Prior tothe merger, the two banks will work to minimize costs by consolidating branches at an early stage and provide
higher quality services through the reallocation of management resources.



In conjunction with the consolidation of branches to be implemented prior to the merger, personnel exchange
and paperwork integration will be promoted to achieve smooth integration and maximize synergies at the time of
the merger. Some branches will be jointly operated to provide one-stop services of both banks.

 Synergies from branch consolidation plan andearly implementation

 Future branch consolidation plan
Planning
period155

Nagano46

No. of branch
integrated ※1

Hachijuni

４

Nagano１ ※２

Hachijuni

４ ※３

2H FY2023

About -70

Hachijuni

1H FY2024

109
FY2022Bank

FY2023

FY2024FY2025

FY2026FY2027

Source: Basic service maintenance plan (Apr 28, 2023)

After FY2024

Currently under consideration byboth banks（Note）Branches outside of Nagano Prefecture are not included.

Cost minimization

Reconciliation throughpersonnel exchange

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

Early administrative
integration

※１
※２
※３

Number of branches to be relocated within stores and converted tojoint stores
Joint branching with Hachijuni Bank
One of the four branches will be jointly operated with Nagano Bank.

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38

４．Effort to Improve PBRTHE HACHIJUNI BANK,LTD. The 52nd Information Meeting

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Efforts to Improve PBR

39



We will work on both ROE improvement and PER improvement to improve PBR (over 1x).



We will strive to improve ROE while maintaining a balance between "soundness," "profitability," and "shareholder returns."At the same time, we will enhance disclosure of non-financial information to enhance corporate value.

◆ Direction of efforts to improve PBR
PBR◆ Relation between capitalefficiency and expected growth＝ ROE × PERPBR ⇒ Over 1x
ROE improvement
Net profit/Equity＜Direction of efforts＞
Strengthening profitability

RORA
improvement

Financialleverage
optimization

Effective capital utilization

Net profit/Risk asset

Risk asset/Equity

Risk asset control

PER improvement
1/（Capital costーExpected growth rate）

Reduction ofcapital cost

Increase of
expected
growth rate

ROE

PBR 1x7.0％

FY2027 target

5.0％

Enhancement of
non-financial capital

FY2022

2.6%

Enhanced disclosure

RORA improvement
Financial leverage optimization
Reduction of capital cost
Increase of expected
growth rate

PER

Resolution of materiality

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

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Efforts to Improve PBR

40



We aim to achieve ROE of 5% or more by FY2027, and even higher levels (7-8%) in the future.



By using ROE as a starting point and also working to improve PER, we will work to improve PBR.

◆ FY2027 target: ROE ５％◆ ROE・Consolidated profit
4.8

5.0

4.4

4.6

4.4

3.8

3.8

4.0

3.5
3.0

3.0

2.6

263 258222

267
225 221 224

241
150

174

0.0

2011

2012

2013

2014

2015

250

2016

2017

2018

2019

Right axis: Consolidated profit (\100mn)

2020

2021

100
2022
(FY)

Left axis: ROE (%)

20

15

1

15.7
13.0

12.1

11.2
10

0.6
0.5

0.5

10.2

8.1

2013

0.8

0.6

8.8
7.5

0.4

0.4

2012

11.5
8.7

0.4

2011

11.2

0.5

5

0

0.0

Mergersynergies

2.9

500

5.0
300

2.6

267

241

FY2021

FY2022右軸︓連結当期純利益（億円）
Right
axis: Consolidated profit (¥100mn)

FY2027 target

100

左軸︓ROE（％）
Left axis: ROE (%)◆ Major initiatives under consideration to improve
profitability
Strengthening profitability◆ PBR・PER
14.4

5.0

200

302

265 272

1.0

2.9

2.7

3.0
2.0

Strengthening
Impacts of rising profitability
interest rates

300

2014

2015

0.4
0.3

2016

Left axis: PER

2017

2018

0.3
2019

0.3
0.2

0.2

2020

2021

Right axis: PBRTHE HACHIJUNI BANK,LTD. The 52nd Information Meeting

0.2

0
2022
(FY)

●Effective allocation of management resources to growth regions and fields●Strengthening structured finance initiatives●Building a portfolio of securities to secure sustainable earnings

Realization of merger synergies●Top-line synergy●Cost synergy

Impacts of rising interest rates＜Loans＞●Short-term: Market interest rate-linked loans increase revenue linked toshort-term interest rates●Mid-to long-term: Improved yields on interest rate renewal＜Securities＞● Strengthening investment to capture the timing of rising interest rates● Continuing to implement asset swaps to prepare for increased valuation
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Efforts to Improve PBR◆ Strengthening profitability【Corporate banking】●Effective allocation of management resources to growth
regions and fields- Expansion of investments and loans to regions with growthpotential, such as the tourism industry●Strengthening structured finance initiatives- Strengthening the organizational system by increasing

personnel, etc., and responding to sophisticated customer needs【Personal banking】● Expand personal transactions by utilizing AI and digitalchannels- Strategic promotion to meet diversifying customer needs andexpansion of products for digital channels● Upgrading the use of locations to meet customer
needs (specialized stores)- Realization of comprehensive consulting services including asset
management, insurance, inheritance, etc.

【Sustainability initiatives】● Expand earnings through initiatives that contribute toregional sustainability- Strengthen support for business startups and revitalization
through the use of funds- Expand group earnings in new areas including regional tradingand power supply【Securities investment】● Building a portfolio of securities to ensure sustainableearnings- Portfolio construction from a mid-to long-term perspectiveby leveraging unrealized gains- Secure stable and flexible earnings by deepening diversified

investments, including alternatives, and utilizing derivatives

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting41◆ Realization of merger synergies●Top-line synergies- Increase fees and commissions revenues by reallocating personnel
to consulting services (approx. 100 employees)- Share know-how by consolidating sales personnel and strengthen
in-store consultation capabilities by shifting to specialized stores●Cost synergies- Reduction of system maintenance investment through system

integration- Reduction of investment in store maintenance throughoptimization of store network (store consolidation and shift tospecialized stores)- Decrease in allowance for loan losses due to strengthened business
improvement support to main customers of both banks＜Overall Merger Synergies Outlook＞
Synergies will be fully
realized from FY2026
after the merger.

100
80
60

58

40
20
0
-20

0

-4

74

14

-7
-33

-40
-60
-80

2022

2023

2024

Top-line synergy
Cost (negative synergy)

2025

2026

2027

2028 (FY)

Cost (positive synergy)
Overall synergy

Source: Implementation plan based on the Act on Special Measures forStrengthening Financial Functions

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Efforts to Improve PBR

42◆ Impacts of rising interest rates＜Loans＞＜Loans＞●Short-term︓18% of yen-denominated loans arelinked to sensitive market interest rates.
●Mid-to long-term︓80% of yen-denominated loans will
be subject to interest rate renewal within 3 years.

● Market interest-rate-linked loans generate approx. ¥1.0bn inadditional income when market interest rates rise by 0.1%.
● Yield improvement is also expected for mid-to long-term loans
due to an increase in the base interest rate corresponding to
the loan term at the time of renewal.

＜Securities＞●Interest rate sensitivity and duration as of the end of
Sep 2023
Yen bond 10BPV︓-¥6.1bn (incl. hedge)
Duration︓3.5 years (incl. hedge)＜Securities＞◆ Yen interest rate sensitive assets of Hachijuni Bank(as of the end of Sep 2023)●Continuing to implement asset swaps to prepare for increased
valuation losses while controlling risk volume.
●Strengthening investment in yen bonds in capturing the timingof interest rate hikes, by watching the balance between term
and interest rates.

◆ Interest rate remaining years of
yen-denominated loans
5 years 〜

Loans
44％
Approx.
¥6.0tn10%21％
Marketable
investment

Over 10 years
Market interest-rate-linked
18%

３ 〜 5 years
10%

Securities
1 〜 3 years◆ Interest rate remaining years on yen bonds

Over 5 years〜

３ 〜 5 years

13%

28％

〜 1 year

Others49%

THE HACHIJUNI BANK,LTD. The 52nd Information Meeting

13%

10%

Approx.
¥6.0tn(Excl. private placement bonds)
Bonds with hedge are included
within 1 year.

〜1 yearApprox.
¥1.7tn37%

24%
１〜 3 years
16%
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