Investor Presentaiton

12 (2)Scheduled date of adoption The Bank expects to adopt these revised accounting standards and guidance from the beginning of the fiscal year ending March 31, 2016. (3) Impact of adopting revised accounting standard and guidance The Bank is currently evaluating the effect of adopting these revised standards on its consolidated financial statements. 4. Loans and Bills Discounted Loans to borrowers under bankruptcy procedures and delinquent loans totaled ¥2,483 million ($24,125 thousand) and ¥17,724 million ($172,211 thousand), respectively, at March 31, 2014, and ¥2,545 million and ¥18,524 million, respectively, at March 31, 2013. A loan is placed on non-accrual status when substantial doubt as to the collect- ibility of its principal and interest is judged to exist, if payment is past due for a certain period of time, or for other reasons. Loans to borrowers in bankruptcy represent non-accrual loans, after the charge-offs of loans deemed uncollectible, to borrowers who are legally bankrupt as defined in Article 96, Paragraph 1, Subparagraphs 3 and 4 of Enforcement Ordinance of the Corporation Income Tax Law. Delinquent loans are non-accrual loans other than loans to borrowers in bankruptcy or loans on which interest payments have been deferred in order to assist the restructuring of the borrowers. Loans past due for 3 months or more totaled ¥54 million ($524 thousand) and ¥43 million at March 31, 2014 and 2013, respectively. Loans past due for 3 months or more are those whose principal or interest payments are 3 months or more past due but are not included in loans to borrower under bankruptcy procedures or delinquent loans. Restructured loans totaled ¥2,034 million ($19,762 thousand) and ¥3,621 million at March 31, 2014 and 2013, respectively. Restruc- tured loans are those on which the Bank has granted certain conces- sions, such as a reduction of the contractual interest rate or principal amount or a deferral of interest/principal payments, in order to assist the restructuring of the borrowers. Excluded from restructured loans are loans to borrowers under bankruptcy procedures, other non-accrual loans, and loans past due for 3 months or more. The total of loans to borrowers under bankruptcy procedures, other non-accrual loans, loans past due for 3 months or more and restructured loans amounted to ¥22,298 million ($216,653 thousand) and \24,734 million at March 31, 2014 and 2013, respectively. Bills discounted are accounted for as financial transactions in accordance with "Treatment of Accounting and Auditing in Applying Accounting Standard for Financial Instruments in the Banking Industry" issued by the JICPA. The Bank has rights to sell or pledge accepted banker's acceptance bills, commercial bills discounted, documentary bills and foreign exchange bought without restrictions. The face value of banker's acceptance bills, commercial bills, documentary bills acquired at discount and foreign exchange bought at a discount was ¥7,967 million ($77,409 thousand) and ¥9,108 million as of March 31, 2014 and 2013, respectively. Overdraft protection on current accounts and contracts for loan commit- ments are agreements under which the Bank and the consolidated subsidiaries are bound to extend loans up to a prearranged amount, at the request of the customer, unless the customer is in breach of contract. The unutilized balance of such contracts amounted to ¥534,367 million ($5,192,061 thousand) and ¥557,280 million as of March 31, 2014 and 2013, respectively, in which the balance of contracts that have a term of one year or less or are unconditionally cancelable at any time were ¥526,021 million ($5,110,969 thousand) and ¥550,771 million as of March 31, 2014 and 2013, respectively. Since many of these contracts are scheduled to expire without the rights having been exercised, any unutilized balance in itself does not necessarily affect the future cash flows of the Bank or its consolidated subsidiaries. A provision is included in many of these contracts which entitles the Bank and the consolidated subsidiaries to refuse the execu- tion of such loans, or to reduce the maximum amount loaned under such contracts when there is a change in the borrowers' financial situation, or when there is the necessity to secure a claim, or when other similar factors arise. In addition, the Bank and its consolidated subsidiaries obtain, if needed, real estate or securities as collateral at the time the contracts are entered into and they subsequently monitor the borrowers' financial condition periodically based on, and in accordance with, the procedures established. If deemed necessary, specific measures such as amendments to the contracts are undertaken in order to control the credit risk. 3. Other securities (as of March 31, 2014) Carrying value exceeding cost Carrying value not exceeding cost (Millions of yen) (Thousands of U.S. dollars) Type Stocks Bonds ¥ Carrying value 31,872 608,988 Cost ¥19,335 596,740 Difference Carrying value Cost Difference ¥ 12,537 $ 309,677 $ 187,864 $121,813. Japanese government bonds 411,430 405,643 12,248 5,786 5,917,100 5,798,095 119,005 3,997,570 3,941,342 56,218 Municipal bonds 112,739 107,946 4,793 1,095,404 1,048,834 46,570 Short-term bonds Corporate bonds 84,818 83,150 Other 97,440 93,476 1,667 3,964 824,115 807,909 16,197 946,754 908,239 38,515 Foreign bonds 73,324 72,028 1,296 712,436 699,844 12,592 Other 24,116 21,448 2,668 234,317 208,394 25,923 Subtotal 738,302 709,552 28,749 Stocks 1,383 1,671 (287) 7,173,552 13,437 6,894,209 279,333 16,235 (2,798) Bonds 82,204 82,343 (138) 798,717 800,068 (1,350) Japanese government bonds 58,267 58,366 (99) 566,138 567,100 (971) Municipal bonds 17,406 17,427 (20) 169,121 169,325 (204) Short-term bonds Corporate bonds 6,531 6,549 (18) 63,457 63,631 (184) Other 24,229 24,473 (243) 235,415 237,786 (2,370) Foreign bonds Other 19,562 19,782 (219) 4,666 4,690 Subtotal Total ¥ 107,818 846,120 108,487 ¥818,040 (23) (669) 190,069 45,336 192,207 (2,137) 45,569 (233) ¥28,080 $ 1,047,590 8,221,142 1,054,090 (6,509) $7,948,309 $272,833 4. Held-to-maturity bonds sold during the year ended March 31,2014 (Millions of yen) (Thousands of U.S. dollars) Cost Proceeds from sales Gain(loss) on sales Cost Corporate bonds Total ¥ ¥ 16 ¥ 16 ¥ 0 $ 156 $ Proceeds from sales 157 Gain(loss) on sales $ 1 16 \ 16 ¥ 0 $ 156 $ 157 $ 1 The sales are due to redemption of securities. 5. Other securities sold during the year ended March 31, 2014 378,542 (Millions of yen) (Thousands of U.S. dollars) Proceeds from Sales Gains on sales Losses on sales Proceeds from sales Gains on sales Losses on sales Stocks Bonds \ 3,520 \ 1,091 ¥ 54 384,923 2,679 Japanese government bonds 2,442 997 930 $ 34,201 3,740,021 $ 10,600 $ 524 26,029 9,687 3,678,021 23,727 9,036 Municipal bonds 4,681 222 45,481 2,157 0 Short-term bonds 0 0 0 Corporate bonds 1,698 13 67 16,498 126 650 Other Total 7,722 ¥396,165 251 5 75,029 2,438 48 \ 4,022 ¥ 1,057 $ 3,849,251 $ 39,078 $ 10,270 5. Securities Trading securities, marketeble securities classified as held-to-maturity debt securities and other securities at March 31, 2014 are summarized as follows: 1.Trading securities Unrealized holding gain charged to current operations (Millions of yen) ¥ 0 Unrealized holding gain charged to current operations (Thousands of U.S.dollars) $ 3 6. Securities which have readily determinable fair value are devaluated to fair value, and the difference between cost and fair value is treated as loss for the fiscal year if fair value has significantly deteriorated compared with cost and fair value is unlikely to recover up to the acquisition cost. The amount of the Impairment loss for the year ended March 31, 2013 was ¥818 million (including ¥818 million of equity securities. The amount of the Impairment loss for the year ended March 31, 2014 was ¥4 million ($38 thousand) [including ¥4 million ($38 thousand) of equity securities]. The criteria for determining whether a security's fair value has "significantly deteriorated" are: where a security whose fair value is 50% or less and where a security whose fair value exceeds 50% but is 70% or less of the acquisition cost, considering the quoted market price transition during a certain period in the past, business performance and other factors. 2. Held-to-maturity bonds (as of March 31, 2014) (Millions of yen) (Thousands of U.S. dollars) Type Carrying value Fair value Difference Carrying Value Fair value Difference Fair value exceeding carrying value Japanese government bonds ¥ \ ¥ $ $ $ Municipal bonds Short-term bonds Corporate bonds 7,005 7,133 127 68,062 69,306 1,233 Other Subtotal 7,005 7,133 127 68,062 69,306 1,233 Fair value not Japanese government bonds exceeding carrying Municipal bonds value Short-term bonds Corporate bonds Other Subtotal Total 1,603 1,566 (37) 15,575 15,215 (359) 1,603 1,566 (37) 15,575 15,215 (359) ¥ 8,609 \ 8,699 ¥ 90 $ 83,647 $ 84,521 $ 874 6. Revaluation of Land Pursuant to the "Law Concerning the Revaluation of Land" (the "Law"), land used for the Bank's business operations was revalued on March 31, 2002. The excess of the revalued aggregate market value over the total book value (carrying amount) before revaluation was included in net assets at an amount net of the related tax effect at March 31, 2002. The corresponding income taxes were included in liabilities at March 31, 2002 as deferred taxes liability on revalued land. The revaluation of the land was determined based on two method, the official prices published by the Commissioner of the National Tax Authority in accordance with Article 2, Paragraph 4 of the "Enforcement Ordinance Concerning Land Revaluation," with certain neccssary adjustments, and the appraisal by Real estate appraiser. The difference between the total fair value of land for business operation purposes, which was revalued in accordance with Article 10 of the above- mentioned law, and the total book value of the land after the revaluation was ¥4,092 million ($39,759 thousand) at March 31, 2014. 7. Shares Issued The number of shares issued and changes during the year ended March 31, 2014 and 2013 are summarized as follows: Thousands of shares Thousands of shares 2014 2013 Treasury stock Common stock issued Treasury stock Common stock issued Beginning of the year Increase during the year Decrease during the year End of the year 1,518 172,000 18*1 1,510 8*2 1*3 172,000 1,536 1,518 172,000 172,000 *1 18 thousand shares were purchased for claims by the shareholders who owned less than the trade unit (1,000 shares). *2 8 thousand shares were purchased for claims by the shareholders who owned less than the trade unit (1,000 shares). *3 1 thousand shares were sold for claims by shareholders who owned less than the trade unit (1,000) shares). 13